WESTERN UNION CO, 10-Q filed on 5/4/2021
Quarterly Report
v3.21.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2021
Apr. 30, 2021
Document and Entity Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2021  
Entity File Number 001-32903  
Entity Registrant Name Western Union CO  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-4531180  
Entity Address, Address Line One 7001 EAST BELLEVIEW AVENUE  
Entity Address, City or Town Denver  
Entity Address, State or Province CO  
Entity Address, Postal Zip Code 80237  
City Area Code 866  
Local Phone Number 405-5012  
Title of 12(b) Security Common Stock, $0.01 Par Value  
Trading Symbol WU  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   409,252,217
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0001365135  
Amendment Flag false  
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF INCOME    
Revenues $ 1,210.0 $ 1,190.0
Type of Revenue us-gaap:ServiceMember us-gaap:ServiceMember
Expenses:    
Cost of services $ 706.0 $ 683.4
Type of Cost of Service us-gaap:ServiceMember us-gaap:ServiceMember
Selling, general, and administrative $ 271.2 $ 273.4
Total expenses 977.2 956.8
Operating income 232.8 233.2
Other income/(expense):    
Interest income 0.4 1.6
Interest expense (28.4) (32.9)
Other expense, net (1.9)  
Total other expense, net (29.9) (31.3)
Income before income taxes 202.9 201.9
Provision for income taxes 21.1 25.2
Net income $ 181.8 $ 176.7
Earnings per share:    
Basic (USD per share) $ 0.44 $ 0.43
Diluted (USD per share) $ 0.44 $ 0.42
Weighted-average shares outstanding:    
Basic (shares) 411.7 414.3
Diluted (shares) 414.3 418.3
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME    
Net income $ 181.8 $ 176.7
Other comprehensive income, net of reclassifications and tax (Note 10):    
Unrealized gains/(losses) on investment securities (13.0) 5.7
Unrealized gains on hedging activities 28.9 20.7
Defined benefit pension plan adjustments 2.5 2.3
Total other comprehensive income 18.4 28.7
Comprehensive income $ 200.2 $ 205.4
v3.21.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Assets    
Cash and cash equivalents $ 1,502.6 $ 1,428.2
Settlement assets 3,638.2 3,821.4
Property and equipment, net of accumulated depreciation of $665.7 and $659.9, respectively 144.9 150.4
Goodwill 2,566.6 2,566.6
Other intangible assets, net of accumulated amortization of $1,064.7 and $1,044.6, respectively 523.0 505.0
Other assets 905.7 1,024.7
Total assets 9,281.0 9,496.3
Liabilities:    
Accounts payable and accrued liabilities 513.3 500.9
Settlement obligations 3,638.2 3,821.4
Income taxes payable 933.1 928.9
Deferred tax liability, net 187.2 188.9
Borrowings 3,230.5 3,067.2
Other liabilities 559.9 802.4
Total liabilities 9,062.2 9,309.7
Commitments and contingencies (Note 7)
Stockholders' equity/(deficit):    
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
Common stock, $0.01 par value; 2,000 shares authorized; 409.8 shares and 411.2 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively 4.1 4.1
Capital surplus 904.0 885.1
Accumulated deficit (548.2) (543.1)
Accumulated other comprehensive loss (141.1) (159.5)
Total stockholders' equity 218.8 186.6
Total liabilities and stockholders' equity $ 9,281.0 $ 9,496.3
v3.21.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)
shares in Millions, $ in Millions
Mar. 31, 2021
Dec. 31, 2020
Assets    
Accumulated Depreciation on Property Plant and Equipment $ 665.7 $ 659.9
Accumulated Amortization on Other Intangible Assets $ 1,064.7 $ 1,044.6
Stockholders' Equity:    
Preferred stock, par value (USD per share) $ 1.00 $ 1.00
Preferred stock, shares authorized 10.0 10.0
Preferred stock, shares issued 0.0 0.0
Common stock, par value (USD per share) $ 0.01 $ 0.01
Common stock, shares authorized 2,000.0 2,000.0
Common stock, shares issued 409.8 411.2
Common stock, shares outstanding 409.8 411.2
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash flows from operating activities    
Net income $ 181.8 $ 176.7
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 12.8 16.5
Amortization 40.6 41.7
Other non-cash items, net 30.3 20.8
Increase/(decrease) in cash resulting from changes in:    
Other assets (46.9) (23.1)
Accounts payable and accrued liabilities (35.8) (109.3)
Income taxes payable 5.5 (2.8)
Other liabilities (12.5) (8.1)
Net cash provided by operating activities 175.8 112.4
Cash flows from investing activities    
Payments for capitalized contract costs (78.3) (21.5)
Payments for internal use software (9.9) (7.9)
Purchases of property and equipment (8.7) (6.3)
Proceeds from the sale of former corporate headquarters   44.2
Purchases of non-settlement related investments (0.9)  
Proceeds from maturity of non-settlement related investments 0.5 0.3
Other investing activities 1.1  
Net cash (used in)/provided by investing activities (96.2) 8.8
Cash flows from financing activities    
Cash dividends and dividend equivalents paid (96.7) (92.4)
Common stock repurchased (Note 10) (84.5) (237.1)
Net repayments of commercial paper (80.0) (160.0)
Net proceeds from issuance of borrowings 892.6  
Principal payments on borrowings (650.0)  
Proceeds from exercise of options 8.1 1.0
Other financing activities 0.1 (0.7)
Net cash used in financing activities (10.4) (489.2)
Net change in cash, cash equivalents, and restricted cash 69.2 (368.0)
Cash, cash equivalents, and restricted cash at beginning of period 1,447.4 1,456.8
Cash, cash equivalents, and restricted cash at end of period 1,516.6 1,088.8
Supplemental cash flow information:    
Interest paid 19.6 18.2
Income taxes paid 15.0 23.1
Restricted cash at end of period (included in Other assets) 14.0 16.0
Internal use software capitalized but not yet paid $ 42.0 $ 4.3
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) - USD ($)
shares in Millions, $ in Millions
Adoption of new accounting pronouncements
Accumulated Deficit
Adoption of new accounting pronouncements
Common Stock
Capital Surplus
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total
Beginning balance at Dec. 31, 2019 $ (0.6) $ (0.6) $ 4.2 $ 841.2 $ (675.9) $ (209.0) $ (39.5)
Beginning balance (shares) at Dec. 31, 2019     418.0        
Increase/(Decrease) in Stockholders' Equity [Roll Forward]              
Net income         176.7   176.7
Stock-based compensation       12.5     12.5
Common stock dividends and dividend equivalents declared         (93.3)   (93.3)
Repurchase and retirement of common shares     $ (0.1)   (235.1)   (235.2)
Repurchase and retirement of common shares (shares)     (9.2)        
Shares issued under stock-based compensation plans       1.0     1.0
Shares issued under stock-based compensation plans (shares)     2.1        
Other comprehensive income (Note 10)           28.7 28.7
Ending balance at Mar. 31, 2020     $ 4.1 854.7 (828.2) (180.3) (149.7)
Ending balance (shares) at Mar. 31, 2020     410.9        
Beginning balance at Dec. 31, 2020     $ 4.1 885.1 (543.1) (159.5) $ 186.6
Beginning balance (shares) at Dec. 31, 2020     411.2       411.2
Increase/(Decrease) in Stockholders' Equity [Roll Forward]              
Net income         181.8   $ 181.8
Stock-based compensation       10.8     10.8
Common stock dividends and dividend equivalents declared         (97.9)   (97.9)
Repurchase and retirement of common shares         (89.0)   (89.0)
Repurchase and retirement of common shares (shares)     (3.7)        
Shares issued under stock-based compensation plans       8.1     8.1
Shares issued under stock-based compensation plans (shares)     2.3        
Other comprehensive income (Note 10)           18.4 18.4
Ending balance at Mar. 31, 2021     $ 4.1 $ 904.0 $ (548.2) $ (141.1) $ 218.8
Ending balance (shares) at Mar. 31, 2021     409.8       409.8
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) (Parentheticals) - $ / shares
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT)    
Common stock dividends (USD per share) $ 0.235 $ 0.225
v3.21.1
Business and Basis of Presentation
3 Months Ended
Mar. 31, 2021
Business and Basis of Presentation  
Business and Basis of Presentation

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Basis of Presentation

Business

The Western Union Company ("Western Union" or the "Company") is a leader in global money movement and payment services, providing people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. The Western Union® brand is globally recognized. The Company’s services are available through a network of agent locations in more than 200 countries and territories and also through money transfer transactions conducted and funded through websites and mobile applications marketed under the Company’s brands (“westernunion.com”) and transactions initiated on internet and mobile applications hosted by the Company’s third-party white label or co-branded digital partners (together with westernunion.com, “Digital Money Transfer”). 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 which are sent from retail agent locations worldwide or through websites and mobile devices, including Digital Money Transfer services. The Company’s money transfer service is provided through one interconnected global network. This service is available for international cross-border transfers and, in certain countries, intra-country transfers.
Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other organizations and individuals. The majority of the segment’s business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments.

All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services. The Company’s other services, in addition to certain corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. See Note 15 for further information regarding the Company’s segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2020, the amount of these net asset limitations totaled approximately $680 million.

Various aspects of the Company’s services and businesses are subject to United States federal, state, and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows

for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of March 31, 2021 and December 31, 2020 and for all periods presented.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2021 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Recently Adopted Accounting Pronouncements

On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an adjustment to the January 1, 2020 balance of Accumulated deficit in the Condensed Consolidated Balance Sheets, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. Refer to Note 9 for additional information and the related disclosures.

v3.21.1
Revenue
3 Months Ended
Mar. 31, 2021
Revenue  
Revenue

2. Revenue

The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company recognized $1,166.3 million and $1,122.6 million in revenues from contracts with customers for the three months ended March 31, 2021 and 2020, respectively. There were no material upfront costs incurred to obtain contracts with customers during these same periods. Under the Company’s loyalty programs, which are primarily offered

in its money transfer services, the Company must fulfill loyalty program rewards earned by customers. The loyalty program redemption activity has been and continues to be insignificant to the Company’s results of operations, and the Company has immaterial contract liability balances, which primarily relate to its customer loyalty programs and other services. Contract asset balances related to customers were also immaterial as of the periods presented, as the Company typically receives payment of consideration from its customers prior to satisfying performance obligations under the customer contracts. In addition to revenue generated from contracts with customers, the Company recognizes revenue from other sources, including the sale of derivative financial instruments and investment income generated on settlement assets primarily related to money transfer and money order services.

The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Revenues from consumer money transfers are included in the Company’s Consumer-to- Consumer segment, revenues from foreign exchange and payment services are included in the Company’s Business Solutions segment, and revenues from consumer bill payments and other services are not included in the Company’s segments and are reported as Other. See Note 15 for further information on the Company’s segments.

Consumer Money Transfers

For the Company’s money transfer services, customers agree to the Company’s terms and conditions at the time of initiating a transaction. In a money transfer, the Company has one performance obligation as the customer engages the Company to perform one integrated service which typically occurs within minutes — collect the customer’s money and make funds available for payment to a designated person in the currency requested. Therefore, the Company recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of the Company’s terms and conditions and payment information has been received by the Company, (ii) the Company has agreed to process the money transfer, (iii) the Company has provided the customer a unique transaction identification number, and (iv) funds are available to be picked up by the customer’s designated receiving party. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated.

Foreign Exchange and Payment Services

For the Company’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with the Company to provide payment services on the customer’s behalf. In the majority of the Company’s foreign exchange and payment services, the Company makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, the Company recognizes revenue on foreign exchange and payment services when this performance obligation has been fulfilled. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market.

Consumer Bill Payments and Other

The Company offers bill payments and other services that vary by contractual features, including the types and amounts of fixed charges and with respect to how fees are billed and collected. The identification of the contract with the customer for revenue recognition purposes is consistent with these features for each of the Company’s bill payment and other services. As with consumer money transfers, customers engage the Company to perform one integrated service — collect money from the consumer and process the transaction, thereby providing billers with real-time or near real-time information regarding consumer payments and simplifying the billers’ collection efforts.

Management has determined that the substantial majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the three months ended March 31, 2021 and 2020 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated.

Three Months Ended March 31, 2021

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

386.6

$

21.2

$

18.6

$

14.5

$

440.9

Europe and Russia/CIS

 

338.7

 

34.3

 

1.1

 

0.4

 

374.5

Middle East, Africa, and South Asia

 

159.7

 

0.5

 

0.1

 

 

160.3

Latin America and the Caribbean

 

86.7

 

0.8

 

17.7

 

1.8

 

107.0

East Asia and Oceania

 

66.7

 

16.6

 

0.3

 

 

83.6

Revenues from contracts with customers

$

1,038.4

$

73.4

$

37.8

$

16.7

$

1,166.3

Other revenues (a)

 

12.5

 

23.1

 

3.0

 

5.1

 

43.7

Total revenues

$

1,050.9

$

96.5

$

40.8

$

21.8

$

1,210.0

Three Months Ended March 31, 2020

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

384.8

$

22.2

$

22.7

$

14.4

$

444.1

Europe and Russia/CIS

 

300.9

 

31.5

 

0.8

 

0.7

 

333.9

Middle East, Africa, and South Asia

 

156.9

 

0.5

 

0.1

 

 

157.5

Latin America and the Caribbean

 

84.4

 

0.6

 

23.8

 

2.1

 

110.9

East Asia and Oceania

 

59.1

 

16.8

 

0.3

 

 

76.2

Revenues from contracts with customers

$

986.1

$

71.6

$

47.7

$

17.2

$

1,122.6

Other revenues (a)

 

29.3

 

26.8

 

5.3

 

6.0

 

67.4

Total revenues

$

1,015.4

$

98.4

$

53.0

$

23.2

$

1,190.0

(a)Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources.
v3.21.1
Earnings Per Share
3 Months Ended
Mar. 31, 2021
Earnings Per Share  
Earnings Per Share

3. Earnings Per Share

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

Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the

restricted stock and options per unit were above the Company’s average share price during the periods and their effect was anti-dilutive, were 1.4 million and 1.1 million for the three months ended March 31, 2021 and 2020, respectively.

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

Three Months Ended

March 31, 

    

2021

    

2020

Basic weighted-average shares outstanding

 

411.7

 

414.3

Common stock equivalents

 

2.6

 

4.0

Diluted weighted-average shares outstanding

 

414.3

 

418.3

v3.21.1
Investment Activities
3 Months Ended
Mar. 31, 2021
Investment Activities  
Investment Activities

4. Investment Activities

On November 21, 2020, the Company entered into an agreement to acquire an ownership interest in Saudi Digital Payments Company (“stc pay”), a subsidiary of Saudi Telecom Company and one of the Company’s Consumer-to- Consumer digital white label partners. Under the terms of the agreement, the Company has agreed to invest up to approximately $200 million for up to a 15% investment in stc pay, and this transaction is expected to close in the second quarter of 2021. In conjunction with the transaction, the Company and stc pay have also agreed to extend and expand the terms of their commercial agreement.

The Company expects to measure this investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments in stc pay.

On April 12, 2021, the Company sold a substantial majority of the shares it held as a minority investor in a private company for cash proceeds of $50.9 million. The Company recorded a gain of approximately $48 million within Other income/(expense), net in the second quarter of 2021. The Company will continue to measure the retained portion of this investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments.  

v3.21.1
Restructuring-Related Expenses
3 Months Ended
Mar. 31, 2021
Restructuring-Related Expenses  
Restructuring-Related Expenses

5. Restructuring-Related Expenses

During the three months ended March 31, 2020, the Company incurred $10.5 million of expenses related to a restructuring initiative approved by the Company’s Board of Directors on August 1, 2019. All expenses for this initiative had been incurred as of December 31, 2020, and substantially all have been and will continue to be paid in cash. For the three months ended March 31, 2020, $0.9 million and $9.6 million of these expenses were included in Cost of services and Selling, general, and administrative, respectively, in the Condensed Consolidated Statements of Income. While certain of the expenses may be identifiable to the Company’s segments, primarily to the Company’s Consumer-to-Consumer segment, the expenses are excluded from the Company’s segment operating income results as they are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker (“CODM”) for purposes of performance assessment and resource allocation. These expenses are specific to this initiative; however, the types of expenses related to this initiative are similar to expenses that the Company has previously incurred and can reasonably be expected to incur in the future.

As of March 31, 2021 and December 31, 2020, the total restructuring-related accrual was $14.5 million and $26.2 million, respectively. These amounts are included in Accounts payable and accrued liabilities in the Company’s Condensed Consolidated Balance Sheets.

v3.21.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2021
Fair Value Measurements  
Fair Value Measurements

6. Fair Value Measurements

Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring basis, by balance sheet line item (in millions):

Fair Value Measurement Using

Total

March 31, 2021

    

Level 1

    

Level 2

    

Fair Value

Assets:

 

  

 

  

 

  

Settlement assets:

 

  

 

  

 

  

Measured at fair value through net income:

 

  

 

  

 

  

Money market funds

$

15.7

$

$

15.7

Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):

 

  

  

  

State and municipal debt securities

1,272.5

1,272.5

State and municipal variable-rate demand notes

 

 

231.5

 

231.5

Corporate debt securities

52.6

52.6

United States government agency mortgage-backed securities

 

 

48.3

 

48.3

Other assets:

 

  

 

 

  

Derivatives

 

 

323.5

 

323.5

Total assets

$

15.7

$

1,928.4

$

1,944.1

Liabilities:

 

  

 

  

 

  

Other liabilities:

Derivatives

$

$

270.3

$

270.3

Total liabilities

$

$

270.3

$

270.3

Fair Value Measurement Using

Total

December 31, 2020

    

Level 1

    

Level 2

    

Fair Value

Assets:

 

  

 

  

 

  

Settlement assets:

 

  

 

  

 

  

Measured at fair value through net income:

 

  

 

  

 

  

Money market funds

$

13.1

$

$

13.1

Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):

 

  

  

  

State and municipal debt securities

1,303.9

1,303.9

State and municipal variable-rate demand notes

 

 

562.1

 

562.1

Corporate and other debt securities

 

 

72.8

 

72.8

United States government agency mortgage-backed securities

51.8

51.8

Other assets:

 

  

 

  

 

  

Derivatives

 

 

453.3

 

453.3

Total assets

$

13.1

$

2,443.9

$

2,457.0

Liabilities:

 

  

 

  

 

  

Other liabilities:

Derivatives

$

$

430.3

$

430.3

Total liabilities

$

$

430.3

$

430.3

There were no material, non-recurring fair value adjustments or transfers between Level 1 and Level 2 measurements during the three months ended March 31, 2021 and 2020.

Other Fair Value Measurements

The carrying amounts for many of the Company’s financial instruments, including certain cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and obligations approximate fair value due to their short maturities. The Company’s borrowings are classified as Level 2 within the valuation hierarchy, and the aggregate fair value of these borrowings was based on quotes from multiple banks. Fixed-rate notes are carried in the Company’s Condensed Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par. As of March 31, 2021, the carrying value and fair value of the Company’s borrowings were $3,230.5 million and $3,450.6 million, respectively (see Note 12). As of December 31, 2020, the carrying value and fair value of the Company’s borrowings were $3,067.2 million and $3,348.0 million, respectively.

v3.21.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2021
Commitments and Contingencies  
Commitments and Contingencies

7. Commitments and Contingencies

Letters of Credit and Bank Guarantees

The Company had approximately $430 million in outstanding letters of credit and bank guarantees as of March 31, 2021 primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent agreements. The Company expects to renew its letters of credit and bank guarantees prior to expiration in most circumstances.

Litigation and Related Contingencies

The Company is subject to certain claims and litigation that could result in losses, including damages, fines, and/or civil penalties, which could be significant, and in some cases, criminal charges. The Company regularly evaluates the status of legal matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each legal matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made. Unless otherwise specified below, the Company believes that there is at least a reasonable possibility that a loss or additional loss may have been incurred for each of the matters described below.

For those matters that the Company believes there is at least a reasonable possibility that a loss or additional loss may have been incurred and can reasonably estimate the loss or potential loss, the reasonably possible potential litigation losses in excess of the Company’s recorded liability for probable and estimable losses was approximately $30 million as of March 31, 2021. For the remaining matters, management is unable to provide a meaningful estimate of the possible loss or range of loss because, among other reasons: (i) the proceedings are in preliminary stages; (ii) specific damages have not been sought; (iii) damage claims are unsupported and/or unreasonable; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; or (vi) novel legal issues or unsettled legal theories are being asserted.

The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established liability or the range of reasonably possible loss.

Shareholder Derivative Action

On January 16, 2020, Stanley Lieblein filed a shareholder derivative complaint in the Court of Chancery of the State of Delaware naming the Company’s President and Chief Executive Officer, certain current and former directors, and a former executive officer as individual defendants and the Company as a nominal defendant (the “Delaware Complaint”). Mr. Lieblein had previously filed a shareholder derivative action asserting related claims in the United States District Court for the District of Colorado, which was subsequently consolidated with multiple pending related derivative actions. Following the filing of multiple amended complaints, the United States Court of Appeals for the Tenth Circuit affirmed dismissal of the consolidated derivative action on April 16, 2019 on the ground that the plaintiffs did not have standing to proceed on behalf of the Company without making a demand on the Company’s Board of Directors. The consolidated derivative action is described in further detail in the Company’s prior disclosures.

On August 1, 2019, Mr. Lieblein made a written demand on the Company’s Board of Directors to investigate and address alleged misconduct related to the Company’s anti-fraud and anti-money laundering (“AML”) compliance programs, including certain alleged misconduct at issue in the consolidated derivative action. The Company’s Board of Directors formed a special committee to evaluate Mr. Lieblein’s demand together with a related shareholder demand (the “Demand Letters”), and the special committee’s investigation was still ongoing at the time Mr. Lieblein filed the Delaware Complaint. Mr. Lieblein alleges that he filed the Delaware Complaint prior to the completion of the special committee’s investigation because of concerns regarding the statute of limitations on some of the claims asserted. Mr. Lieblein agreed to stay the action until December 31, 2020, pending completion of the special committee’s investigation. Within 60 days after December 31, 2020, Mr. Lieblein was required either to specify whether the Delaware Complaint will serve as the operative complaint in the action or file an amended complaint.

The Delaware Complaint filed by Mr. Lieblein on January 16, 2020 includes allegations that the director and officer defendants declined to implement effective anti-fraud and AML compliance systems after receiving numerous red flags indicating prolonged willful illegality, condoned executive officers’ obstruction of efforts by various regulators to impose an effective compliance system on the Company, approved executive compensation packages for management that were not aligned with development of effective anti-fraud and AML compliance programs, allowed management to fail to timely report known or likely impropriety by Company employees or agents to regulatory authorities, failed to require management to adopt a risk assessment for all very high risk areas, refused to remedy the board’s oversight of executive officers, and, in effect, refused Mr. Lieblein’s shareholder demand and related request for tolling agreements.

It also includes allegations that the officer defendants declined to ensure that the Company implemented effective anti-fraud and AML compliance programs after receiving red flags that those programs were inadequate, allowed Company agents to willfully ignore anti-fraud and AML recording and reporting requirements for a prolonged period, opposed efforts by various regulators to implement effective anti-fraud and AML complaint programs, caused the Company to fail to comply with its obligations under settlements with regulators, and knowingly exposed the Company to criminal and civil sanctions.

The special committee completed its investigation in early December 2020 and, on the basis of its findings, recommended that the Company’s Board of Directors reject the Demand Letters and direct the Company to oppose any effort to assert claims based on or related to the Demand Letters on behalf of the Company, that no action on behalf of the Company should be brought or pursued against any of the current or former officers or directors of the Company based on the Demand Letters, and that none of the corporate governance reforms raised in the Demand Letters is necessary or appropriate. On December 16, 2020, the Board of Directors resolved to adopt the recommendations of the special committee. The Board of Directors further resolved, among other things, that none of the asserted claims has factual or legal merit. The Company thereafter informed Mr. Lieblein and the other shareholders who sent the Demand Letters that their demands have been rejected. On February 12, 2021, one of the shareholders who sent a Demand Letter sent the Company a request to inspect books and records related to the consideration of the Demand Letters pursuant to Section 220 of the Delaware General Corporation Law.

On February 25, 2021, Mr. Lieblein filed a Stipulation and Proposed Order Regarding Voluntary Dismissal of the Delaware Complaint. The Delaware Court of Chancery reviewed and entered the Proposed Order on the same day. The Delaware Complaint and the associated action therefore has been dismissed and is now over. The dismissal is with prejudice as to Mr. Lieblein, the named plaintiff, only. The Company will oppose any future action by the other shareholders who sent the Demand Letters.

Other Matters

In October 2015, Consumidores Financieros Asociación Civil para su Defensa, an Argentinian consumer association, filed a purported class action lawsuit in Argentina’s National Commercial Court No. 19 against the Company’s subsidiary Western Union Financial Services Argentina S.R.L. (“WUFSA”). The lawsuit alleges, among other things, that WUFSA’s fees for money transfers sent from Argentina are excessive and that WUFSA does not provide consumers with adequate information about foreign exchange rates. The plaintiff is seeking, among other things, an order requiring WUFSA to reimburse consumers for the fees they paid and the foreign exchange revenue associated with money transfers sent from Argentina, plus punitive damages. The complaint does not specify a monetary value of the claim or a time period. In November 2015, the Court declared the complaint formally admissible as a class action. The notice of claim was served on WUFSA in May 2016, and in June 2016 WUFSA filed a response to the claim and moved to dismiss it on statute of limitations and standing grounds. In April 2017, the Court deferred ruling on the motion until later in the proceedings. The process for notifying potential class members has been completed and the case proceeded to the evidentiary stage. The case will be stayed until (i) the Attorney-General instructs the Prosecutor to continue to litigate the claims on behalf of the plaintiff (during the time the registration of Consumidores Financieros before the Secretary of Commerce remains suspended); or (ii) the parties report to the Court that the plaintiff recovered its legal capacity. Due to the stage of this matter, the Company is unable to predict the outcome or the possible loss or range of loss, if any, associated with this matter. WUFSA intends to defend itself vigorously.

In addition to the principal matters described above, the Company is a party to a variety of other legal matters that arise in the normal course of the Company’s business. While the results of these other legal matters cannot be predicted with certainty, management believes that the final outcome of these matters will not have a material adverse effect either individually or in the aggregate on the Company’s financial condition, results of operations, or cash flows.

v3.21.1
Related Party Transactions
3 Months Ended
Mar. 31, 2021
Related Party Transactions  
Related Party Transactions

8. Related Party Transactions

The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents commissions for money transfer and other services provided on the Company’s behalf. Commission expense recognized for these agents for the three months ended March 31, 2021 and 2020 totaled $13.2 million and $12.6 million, respectively.

v3.21.1
Settlement Assets and Obligations
3 Months Ended
Mar. 31, 2021
Settlement Assets and Obligations  
Settlement Assets and Obligations

9. Settlement Assets and Obligations

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

Settlement assets and obligations consisted of the following (in millions):

    

March 31, 2021

Settlement assets:

 

  

Cash and cash equivalents

$

764.0

Receivables from agents, Business Solutions customers, and others

 

1,323.9

Less: Allowance for credit losses

(54.6)

Receivables from agents, Business Solutions customers, and others, net

1,269.3

Investment securities

 

1,604.9

Total settlement assets

$

3,638.2

Settlement obligations:

 

  

Money transfer, money order, and payment service payables

$

2,872.6

Payables to agents

 

765.6

Total settlement obligations

$

3,638.2

    

December 31, 2020

Settlement assets:

 

  

Cash and cash equivalents

$

695.7

Receivables from agents, Business Solutions customers, and others

 

1,188.3

Less: Allowance for credit losses

(53.2)

Receivables from agents, Business Solutions customers, and others, net

1,135.1

Investment securities

 

1,990.6

Total settlement assets

$

3,821.4

Settlement obligations:

 

  

Money transfer, money order, and payment service payables

$

2,902.9

Payables to agents

 

918.5

Total settlement obligations

$

3,821.4

Allowance for Credit Losses

On January 1, 2020, the Company adopted a new accounting standard related to the estimation of the allowance for credit losses, as discussed in Note 1. However, due to the short-term nature of the Company’s receivables and the Company’s historical and expected collections practice, the adoption did not have a material impact on the Company’s financial position or results of operations.

Receivables from agents and others primarily represent funds collected by such agents, but in transit to the Company, and were $1,184.0 million and $1,081.2 million as of March 31, 2021 and December 31, 2020, respectively. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Business Solutions receivables totaled $85.3 million and $53.9 million as of March 31, 2021 and December 31, 2020, respectively. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis.

The Company establishes and monitors an allowance for credit losses related to receivables from agents and others, and Business Solutions customers. The Company estimates the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions. Given the short-term nature of these receivables, the Company does not expect the impact of forecasted economic conditions on its allowance for credit losses to be significant. The Company has estimated credit losses based on information known as of March 31, 2021.

The following tables summarize the activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers for the three months ended March 31, 2021 and 2020 (in millions):

Agents and

Business Solutions

Others

Customers

Allowance for credit losses as of January 1, 2021

$

49.3

$

3.9

Current period provision for expected credit losses (a)

2.3

1.5

Write-offs charged against the allowance

(3.3)

(0.4)

Recoveries of amounts previously written off

1.9

Impacts of foreign currency exchange rates and other

(0.5)

(0.1)

Allowance for credit losses as of March 31, 2021

$

49.7

$

4.9

Agents and

Business Solutions

Others

Customers

Allowance for credit losses as of January 1, 2020

$

20.4

$

4.5

Current period provision for expected credit losses (a)

8.1

0.2

Write-offs charged against the allowance

(1.7)

(1.0)

Recoveries of amounts previously written off

0.3

Impacts of foreign currency exchange rates and other

(1.2)

Allowance for credit losses as of March 31, 2020

$

25.9

$

3.7

(a)Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit related. For the three months ended March 31, 2021 and 2020, the Company recognized $13.7 million and $9.2 million, respectively, of losses that were not credit related.

In addition, from time to time, the Company has made advances to its agents. The Company generally owes settlement funds payable to these agents that offset these advances. These amounts advanced to agents are included within Other assets in the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2021 and December 31, 2020, amounts advanced to agents were $140.0 million and $135.9 million, respectively, and the related allowances for credit losses were immaterial.

Investment Securities

Investment securities included in Settlement assets in the Company’s Condensed Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. Variable-rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week but have varying maturities through 2057. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory requirements.

The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification.

Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and the amortized cost basis. The Company’s provision for credit losses on its available-for-sale securities during the three months ended March 31, 2021 and 2020 and the related allowance for credit losses as of March 31, 2021 and December 31, 2020 were immaterial.

The components of investment securities are as follows (in millions):

    

    

    

Gross

    

Gross

    

Net

 

Amortized

 

Fair

 

Unrealized

 

Unrealized

 

Unrealized

March 31, 2021

Cost

Value

 

Gains

 

Losses

Gains/(Losses)

Settlement assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents:

 

  

 

  

 

  

 

  

 

  

Money market funds

$

15.7

$

15.7

$

$

$

Available-for-sale securities:

 

 

 

 

 

  

State and municipal debt securities (a)

 

1,218.3

 

1,272.5

 

55.0

 

(0.8)

 

54.2

State and municipal variable-rate demand notes

 

231.5

 

231.5

 

 

 

Corporate debt securities

51.9

52.6

0.8

(0.1)

0.7

United States government agency mortgage-backed securities

 

46.6

 

48.3

 

1.7

 

 

1.7

Total available-for-sale securities

 

1,548.3

 

1,604.9

 

57.5

 

(0.9)

 

56.6

Total investment securities

$

1,564.0

$

1,620.6

$

57.5

$

(0.9)

$

56.6

    

    

    

Gross

    

Gross

    

Net

 

Amortized

 

Fair

 

Unrealized

 

Unrealized

 

Unrealized

December 31, 2020

Cost

Value

 

Gains

 

Losses

 

Gains/(Losses)

Settlement assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents:

 

  

 

  

 

  

 

  

 

  

Money market funds

$

13.1

$

13.1

$

$

$

Available-for-sale securities:

 

 

 

 

 

  

State and municipal debt securities (a)

1,234.1

1,303.9

69.8

69.8

State and municipal variable-rate demand notes

 

562.1

 

562.1

 

 

 

Corporate and other debt securities

 

71.6

 

72.8

 

1.2

 

 

1.2

United States government agency mortgage-backed securities

50.3

51.8

1.5

1.5

Total available-for-sale securities

 

1,918.1

 

1,990.6

 

72.5

 

 

72.5

Total investment securities

$

1,931.2

$

2,003.7

$

72.5

$

$

72.5

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

The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of March 31, 2021 (in millions):

Fair Value

Due within 1 year

$

122.6

Due after 1 year through 5 years

 

663.6

Due after 5 years through 10 years

 

500.9

Due after 10 years

 

317.8

Total

$

1,604.9

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable-rate demand notes. Variable-rate demand notes, having a fair value of $15.0 million, $0.9 million, and $215.6 million are included in the "Due after 1 year through 5 years," "Due after 5 years through 10 years," and "Due after 10 years," categories, respectively, in the table above.

v3.21.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2021
Stockholders' Equity  
Stockholders' Equity

10. Stockholders’ Equity

Accumulated Other Comprehensive Loss

The following table details reclassifications out of Accumulated other comprehensive loss (“AOCL”) and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Condensed Consolidated Statements of Income.

Amounts Reclassified from AOCL to Net Income

Three Months Ended

 

Income Statement

March 31, 

 

Income for the period (in millions)

Location

    

2021

    

2020

    

Accumulated other comprehensive loss components:

Gains/(losses) on investment securities:

Available-for-sale securities

Revenues

$

(0.1)

$

0.6

Income tax expense

Provision for income taxes

(0.2)

Total reclassification adjustments related to investment securities, net of tax

(0.1)

0.4

Gains/(losses) on cash flow hedges:

Foreign currency contracts

Revenues

(6.1)

6.6

Interest rate contracts

Interest expense

(0.2)

(0.2)

Interest rate contracts

Other expense, net

0.7

Income tax expense

Provision for income taxes

(0.1)

Total reclassification adjustments related to cash flow hedges, net of tax

 

(5.6)

 

6.3

Amortization of components of defined benefit plans:

Actuarial loss

Other expense, net

(3.1)

(3.0)

Income tax benefit

Provision for income taxes

 

0.6

 

0.7

Total reclassification adjustments related to defined benefit plans, net of tax

 

(2.5)

 

(2.3)

Total reclassifications, net of tax

$

(8.2)

$

4.4

The following tables summarize the components of AOCL, net of tax on the accompanying Condensed Consolidated Balance Sheets (in millions):

Investment

Hedging

Foreign Currency

Defined Benefit

 

Securities

Activities

Translation

Pension Plan

Total

 

As of December 31, 2020

$

58.3

$

(30.5)

$

(101.2)

$

(86.1)

$

(159.5)

Unrealized gains/(losses)

 

(16.0)

 

24.2

 

 

 

8.2

Tax benefit/(expense)

 

2.9

 

(0.9)

 

 

 

2.0

Amounts reclassified from AOCL into earnings, net of tax

 

0.1

 

5.6

 

 

2.5

 

8.2

As of March 31, 2021

$

45.3

$

(1.6)

$

(101.2)

$

(83.6)

$

(141.1)

Investment

Hedging

Foreign Currency

Defined Benefit

 

Securities

Activities

Translation

Pension Plan

Total

 

As of December 31, 2019

$

24.7

$

(3.6)

$

(101.2)

$

(128.9)

$

(209.0)

Unrealized gains

 

7.2

 

27.3

 

 

 

34.5

Tax expense

 

(1.1)

 

(0.3)

 

 

 

(1.4)

Amounts reclassified from AOCL into earnings, net of tax

 

(0.4)

 

(6.3)

 

 

2.3

 

(4.4)

As of March 31, 2020

$

30.4

$

17.1

$

(101.2)

$

(126.6)

$

(180.3)

Cash Dividends Paid

During the three months ended March 31, 2021 and 2020, the Company’s Board of Directors declared quarterly cash dividends of $0.235 and $0.225 per common share, respectively, representing $96.6 million and $92.4 million in total dividends, which were paid on March 31, 2021 and March 31, 2020, respectively.

Share Repurchases

During the three months ended March 31, 2021 and 2020, 3.1 million and 8.5 million shares were repurchased for $75.0 million and $217.4 million, respectively, excluding commissions, at an average cost of $24.24 and $25.45, respectively. These amounts represent shares authorized by the Board of Directors for repurchase under publicly announced authorizations. As of March 31, 2021, $707.6 million remained available under the share repurchase authorization approved by the Company’s Board of Directors through December 31, 2021. The amounts included in the Common stock repurchased line in the Company’s Condensed Consolidated Statements of Cash Flows represent both shares authorized by the Board of Directors for repurchase under publicly announced authorizations and shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested.

v3.21.1
Derivatives
3 Months Ended
Mar. 31, 2021
Derivatives  
Derivatives

11. 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, the British pound, and other currencies, related to forecasted revenues and settlement assets and obligations, as well as on certain foreign currency denominated cash and other asset and liability positions. The Company is also exposed to risk from derivative contracts, primarily from customer derivatives, arising from its cross-currency Business Solutions payment operations. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (ii) facilitate cross-currency Business Solutions payments by writing derivatives to customers.

The Company executes derivatives with established financial institutions; the substantial majority of these financial institutions have a credit rating of "A-" or higher from a major credit rating agency. Customer derivatives written by the Company’s Business Solutions operations primarily involve small and medium size enterprises. The primary credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis, while also monitoring the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action when doubt arises about the counterparties’ ability to perform. These actions may include requiring Business Solutions customers to post or increase collateral, and for all counterparties, the possible termination of the related contracts. The Company’s hedged foreign currency exposures are in liquid currencies; consequently, there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.

Foreign Currency Derivatives

The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to help mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. As of March 31, 2021, these foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation and thus time value is excluded from the assessment of effectiveness. The initial value of the excluded components is amortized into Revenues within the Company’s Condensed Consolidated Statements of Income.

The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a few days 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 at inception, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability positions. None of these contracts are designated as accounting hedges.

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2021 and December 31, 2020 were as follows (in millions):

March 31, 2021

Contracts designated as hedges:

    

Euro

$

414.4

Canadian dollar

136.9

British pound

 

71.9

Australian dollar

61.7

Swiss franc

42.4

Japanese yen

38.6

Other (a)

 

28.9

Contracts not designated as hedges:

 

Euro

$

404.5

British pound

 

116.8

Mexican peso

 

76.0

Indian rupee

 

69.7

Canadian dollar

 

58.1

Philippine peso

47.4

Australian dollar

47.0

Russian ruble

35.3

Japanese yen

32.0

Other (a)

151.6

December 31, 2020

Contracts designated as hedges:

    

Euro

$

428.9

Canadian dollar

 

131.9

British pound

 

71.9

Australian dollar

 

58.3

Swiss franc

 

41.1

Japanese yen

36.6

Other (a)

 

29.5

Contracts not designated as hedges:

 

  

Euro

$

533.0

British pound

 

153.9

Mexican peso

105.0

Indian rupee

 

81.0

Canadian dollar

 

71.5

Australian dollar

 

68.1

Japanese yen

 

39.6

Philippine peso

35.2

Russian ruble

31.2

Indonesian rupiah

29.1

Swedish krona

 

26.0

Other (a)

 

151.5

(a)Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million.

Business Solutions Operations

The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from the Company’s cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $84.5 million and $87.5 million for the three months ended March 31, 2021 and 2020, respectively, and were included in Revenues in the Company’s Condensed Consolidated Statements of Income. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the significant majority of these derivative contracts have a duration at inception of less than one year.

The aggregate equivalent United States dollar notional amount of derivative customer contracts held by the Company in its Business Solutions operations was approximately $8.0 billion as of March 31, 2021 and December 31, 2020. The significant majority of customer contracts are written in the following currencies: the United States dollar, euro, and the Canadian dollar.

Interest Rate Hedging

Periodically, the Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term, variable-rate payments in order to manage its overall exposure to interest rate fluctuations. The Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within Borrowings in the Condensed Consolidated Balance Sheets. Interest expense in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

During the fourth quarter of 2020, the Company entered into two treasury locks to partially fix the treasury yield component associated with the refinance of unsecured notes set to expire in 2022. The notional amounts of these treasury locks were $100.0 million and $150.0 million and were designated as cash flow hedges at the time the agreements were executed.

These treasury locks were terminated in the first quarter of 2021 in conjunction with the issuance of $600.0 million of aggregate principal amount of 1.350% unsecured notes due in 2026 (“2026 Notes”). The Company received a total of $3.3 million upon termination, of which $2.6 million was deferred as a component of AOCL and will be amortized to Interest expense in the Condensed Consolidated Statements of Income over the term of the 2026 Notes. As a portion of the forecasted interest payments on the 2026 Notes will occur outside the time period originally specified at designation of the treasury locks as cash flow hedges, $0.7 million was recognized in Other expense, net in the Condensed Consolidated Statements of Income, upon termination.

Balance Sheet

The following table summarizes the fair value of derivatives reported in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (in millions):

Derivative Assets

Derivative Liabilities

Fair Value

Fair Value

Balance Sheet

    

March 31, 

    

December 31, 

    

Balance Sheet

    

March 31, 

    

December 31, 

Location

2021

2020

Location

2021

2020

Derivatives designated as hedges:

  

 

  

 

  

 

  

 

  

 

  

Foreign currency cash flow hedges

Other assets

$

22.0

$

9.1

 

Other liabilities

$

11.7

$

24.9

Interest rate cash flow hedges

Other assets

Other liabilities

0.1

Total derivatives designated as hedges

  

$

22.0

$

9.1

 

  

$

11.7

$

25.0

Derivatives not designated as hedges:

  

 

  

 

  

 

  

 

  

 

  

Business Solutions operations - foreign currency (a)

Other assets

$

295.0

$

441.4

 

Other liabilities

$

255.7

$

402.5

Foreign currency

Other assets

 

6.5

 

2.8

 

Other liabilities

 

2.9

 

2.8

Total derivatives not designated as hedges

  

$

301.5

$

444.2

 

  

$

258.6

$

405.3

Total derivatives

  

$

323.5

$

453.3

 

  

$

270.3

$

430.3

(a)In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business.

The fair values of derivative assets and liabilities, associated with contracts that include netting language that the Company believes to be enforceable, have been netted in the following tables to present the Company’s net exposure with these counterparties. The Company’s rights under these agreements generally allow for transactions to be settled on a net basis, including upon early termination, which could occur upon the counterparty’s default, a change in control, or other conditions.

In addition, certain of the Company’s other agreements include netting provisions, the enforceability of which may vary from jurisdiction to jurisdiction, depending on the circumstances. Due to the uncertainty related to the enforceability of these provisions, the derivative balances associated with these agreements are included within "Derivatives that are not or may not be subject to master netting arrangement or similar agreement" in the following tables. In certain circumstances, the Company may require its Business Solutions customers to maintain collateral balances which may mitigate the risk associated with potential customer defaults.

The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2021 and December 31, 2020 (in millions):

Offsetting of Derivative Assets

    

    

Gross

    

Net Amounts

    

Derivatives

    

Gross

Amounts Offset

Presented

Not Offset

Amounts of

 in the Condensed

 in the Condensed

 in the Condensed

Recognized

Consolidated

Consolidated

Consolidated

March 31, 2021

Assets

Balance Sheets

Balance Sheets

Balance Sheets

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

157.4

$

$

157.4

$

(128.1)

$

29.3

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

 

166.1

 

  

 

  

 

  

 

  

Total

$

323.5

 

  

 

  

 

  

 

  

December 31, 2020

 

  

 

  

 

  

 

  

 

  

Derivatives subject to a master netting arrangement or similar agreement

$

165.1

$

$

165.1

$

(155.1)

$

10.0

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

 

288.2

 

  

 

  

 

  

 

  

Total

$

453.3

 

  

 

  

 

  

 

  

Offsetting of Derivative Liabilities

    

    

Gross

    

Net Amounts

    

Derivatives

    

Gross

Amounts Offset

Presented

Not Offset

Amounts of 

 in the Condensed

 in the Condensed

 in the Condensed

Recognized

Consolidated

Consolidated

Consolidated

March 31, 2021

Liabilities

Balance Sheets

Balance Sheets

Balance Sheets

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

203.1

$

$

203.1

$

(128.1)

$

75.0

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

 

67.2

 

  

 

  

 

  

 

  

Total

$

270.3

 

  

 

  

 

  

 

  

December 31, 2020

 

  

 

  

 

  

 

  

 

  

Derivatives subject to a master netting arrangement or similar agreement

$

356.2

$

$

356.2

$

(155.1)

$

201.1

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

 

74.1

 

  

 

  

 

  

 

  

Total

$

430.3

 

  

 

  

 

  

 

  

Income Statement

Cash Flow and Fair Value Hedges

The effective portion of the change in fair value of derivatives that qualify as cash flow hedges is recorded in AOCL in the Company’s Condensed Consolidated Balance Sheets. Generally, amounts are recognized in income when the related forecasted transaction affects earnings.

The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31, 

    

2021

    

2020

Foreign currency derivatives (a)

$

20.9

$

27.3

Interest rate derivatives

3.3

(a)For the three months ended March 31, 2021 and 2020, gains/(losses) of $(0.7) million and $3.5 million, respectively, represent amounts excluded from the assessment of effectiveness and recognized in other comprehensive income, for which an amortization approach is applied.

The following table presents the location and amounts of pre-tax net gains/(losses) from fair value and cash flow hedging relationships recognized in the Condensed Consolidated Statements of Income for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31, 

2021

2020

Interest

Other

Interest

Revenues

Expense

Expense, net

Revenues

Expense

Total amounts presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded

$

1,210.0

$

(28.4)

$

(1.9)

$

1,190.0

$

(32.9)

The effects of fair value and cash flow hedging:

 

  

 

  

 

  

 

  

 

  

Gain/(loss) on cash flow hedges:

 

  

 

  

 

  

 

  

 

  

Foreign currency derivatives:

 

  

 

  

 

  

 

  

 

  

Gains/(losses) reclassified from AOCL into earnings

 

(6.1)

 

 

 

6.6

 

Amount excluded from effectiveness testing recognized in earnings based on an amortization approach

 

1.9

 

 

 

3.5

 

Interest rate derivatives:

Gains/(losses) reclassified from AOCL into earnings

 

(0.2)

 

0.7

 

(0.2)

Undesignated Hedges

The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Condensed Consolidated Statements of Income on derivatives for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended

March 31, 

Derivatives (a)

    

Location

2021

    

2020

Foreign currency derivatives (b)

 

Selling, general, and administrative

$

16.0

$

29.2

(a)

The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(b)The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above and included in Selling, general, and administrative in the Condensed Consolidated Statements of Income, were $(21.8) million and $(51.0) million for the three months ended March 31, 2021 and 2020, respectively.

All cash flows associated with derivatives are included in Cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

Based on March 31, 2021 foreign exchange rates, an accumulated other comprehensive pre-tax loss of $3.0 million related to the foreign currency forward contracts is expected to be reclassified into Revenues within the next 12 months.

v3.21.1
Borrowings
3 Months Ended
Mar. 31, 2021
Borrowings  
Borrowings

12. Borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

    

March 31, 2021

    

December 31, 2020

Commercial paper (a)

$

$

80.0

Notes:

 

  

 

  

3.600% notes due 2022 (b)

 

500.0

 

500.0

4.250% notes due 2023 (b)

 

300.0

 

300.0

2.850% notes due 2025 (b)

500.0

500.0

1.350% notes due 2026 (effective rate of 1.5%) (c)

600.0

2.750% notes due 2031 (effective rate of 2.9%) (d)

300.0

6.200% notes due 2036 (b)

 

500.0

 

500.0

6.200% notes due 2040 (b)

 

250.0

 

250.0

Term loan facility borrowing (effective rate of 1.5%) (e)

 

300.0

 

950.0

Total borrowings at par value

 

3,250.0

 

3,080.0

Debt issuance costs and unamortized discount, net

 

(19.5)

 

(12.8)

Total borrowings at carrying value (f)

$

3,230.5

$

3,067.2

(a)Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s revolving credit facility. The commercial paper notes may have maturities of up to 397 days from date of issuance. As of March 31, 2021, the Company had no commercial paper borrowings.
(b)The difference between the stated interest rate and the effective interest rate is not significant.
(c)On March 9, 2021, the Company issued the 2026 Notes, as defined in Note 11, Derivatives.
(d)On March 9, 2021, the Company issued $300.0 million of aggregate principal amount of 2.750% unsecured notes due in 2031 (“2031 Notes”).
(e)Proceeds from the 2026 Notes and 2031 Notes and cash, including cash generated from operations, were used to repay $650.0 million of the term loan facility in the first quarter of 2021.
(f)As of March 31, 2021, the Company’s weighted-average effective rate on total borrowings was approximately 3.6%.

The following summarizes the Company’s maturities of notes and term loan at par value as of March 31, 2021 (in millions):

Due within 1 year

    

$

500.0

Due after 1 year through 2 years

 

Due after 2 years through 3 years

 

600.0

Due after 3 years through 4 years

 

500.0

Due after 4 years through 5 years

 

600.0

Due after 5 years

 

1,050.0

Total

$

3,250.0

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

On April 1, 2021, the Company repaid the 3.6% unsecured notes due in 2022 for total consideration of $514.3 million, excluding accrued interest, using proceeds from the 2026 Notes and 2031 Notes and cash, including cash generated from operations. The cost associated with the repayment was recorded to Other income/(expense), net, in the second quarter of 2021.

Notes

On March 9, 2021, the Company issued $600.0 million and $300.0 million of aggregate principal amounts of 1.350% and 2.750% unsecured notes due March 15, 2026 and March 15, 2031, respectively. Interest with respect to these notes is

payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. If a change of control triggering event occurs, holders of the 2026 Notes and 2031 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 2026 Notes and the 2031 Notes, in whole or in part, at any time prior to February 15, 2026 and December 15, 2030, respectively, at the greater of par or a price based on the applicable treasury rate plus 15 and 25 basis points, respectively. The Company may redeem the 2026 Notes and the 2031 Notes at any time after February 15, 2026 and December 15, 2030, respectively, at a price equal to par, plus accrued interest.

v3.21.1
Income Taxes
3 Months Ended
Mar. 31, 2021
Income Taxes  
Income Taxes

13. Income Taxes

The Company’s provision for income taxes for the three months ended March 31, 2021 and 2020 is based on the estimated annual effective tax rate, in addition to discrete items. The Company’s effective tax rates on pre-tax income were 10.4% and 12.5% for the three months ended March 31, 2021 and 2020, respectively. The decrease in the Company’s effective tax rate for the three months ended March 31, 2021 compared to the prior period was primarily due to changes in the composition between higher-taxed and lower-taxed foreign earnings and an increase in discrete tax benefits. The Company derives its pre-tax income from both foreign and domestic sources. 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.

Uncertain Tax Positions

The Company has established contingency reserves for a variety of material, known tax exposures. The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review or other settlement. While the Company believes its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e. new information) surrounding a tax issue and (ii) any difference from the Company’s tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax expense in the Company’s consolidated financial statements in future periods and could impact operating cash flows.

Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s consolidated financial statements and are reflected in Income taxes payable in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March 31, 2021 and December 31, 2020 was $338.2 million and $340.7 million, respectively, excluding interest and penalties. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $327.3 million and $329.2 million as of March 31, 2021 and December 31, 2020, respectively, excluding interest and penalties.

The Company recognizes interest and penalties with respect to unrecognized tax benefits in Provision for income taxes in its Condensed Consolidated Statements of Income and records the associated liability in Income taxes payable in its Condensed Consolidated Balance Sheets. The Company recognized immaterial amounts of interest and penalties during both the three months ended March 31, 2021 and 2020. The Company has accrued $27.6 million and $28.6 million for the payment of interest and penalties as of March 31, 2021 and December 31, 2020, respectively.

The Company and its subsidiaries file tax returns for the United States, for multiple states and localities, and for various non-United States jurisdictions, and the Company has identified the United States as its major tax jurisdiction, as the income tax imposed by any one foreign country is not material to the Company. The Company’s United States federal income tax returns since 2017 are eligible to be examined. The Internal Revenue Service (“IRS”) commenced an examination of the Company’s United States consolidated income tax returns for 2017 and 2018 during 2020. The IRS anticipates completion of the examination phase in 2022.

v3.21.1
Stock-Based Compensation Plans
3 Months Ended
Mar. 31, 2021
Stock-Based Compensation Plans  
Stock-Based Compensation Plans

14. Stock-Based Compensation Plans

For the three months ended March 31, 2021 and 2020, the Company recognized stock-based compensation expense of $10.8 million and $12.5 million, respectively, resulting from stock options, restricted stock units, performance-based restricted stock units and deferred stock units in the Condensed Consolidated Statements of Income.

During the three months ended March 31, 2021, the Company granted 0.5 million options at a weighted-average exercise price of $23.91 and 2.7 million performance-based restricted stock units and restricted stock units at a weighted-average grant date fair value of $23.63. As of March 31, 2021, the Company had 5.0 million outstanding options at a weighted-average exercise price of $19.46, of which 3.8 million options were exercisable at a weighted-average exercise price of $18.42. The Company had 7.3 million outstanding performance-based restricted stock units (based on target performance) and restricted stock units at a weighted-average grant date fair value of $22.26 as of March 31, 2021.

v3.21.1
Segments
3 Months Ended
Mar. 31, 2021
Segments  
Segments

15. Segments

As further described in Note 1, the Company classifies its business into two segments: Consumer-to-Consumer and Business Solutions. Operating segments are defined as components of an enterprise that engage in business activities, about which separate financial information is available that is evaluated regularly by the Company’s CODM in allocating resources and assessing performance.

The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The segment includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. The Company includes Digital Money Transfer transactions in its regions, including transactions from the Company’s arrangements with financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. By means of common processes and systems, these regions, including Digital Money Transfer transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment.

The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other organizations and individuals.

All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services.

Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily based on a percentage of the segments’ revenue compared to total revenue.

The following table presents the Company’s segment results for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended

March 31, 

    

2021

    

2020

    

Revenues:

 

  

 

  

 

Consumer-to-Consumer

$

1,050.9

$

1,015.4

Business Solutions

 

96.5

 

98.4

Other

 

62.6

 

76.2

Total consolidated revenues

$

1,210.0

$

1,190.0

Operating income:

 

  

 

  

Consumer-to-Consumer

$

206.1

$

209.9

Business Solutions

 

12.6

 

13.9

Other

 

14.1

 

19.9

Total segment operating income

 

232.8

 

243.7

Restructuring-related expenses (Note 5)

 

 

(10.5)

Total consolidated operating income

$

232.8

$

233.2

v3.21.1
Business and Basis of Presentation (Policies)
3 Months Ended
Mar. 31, 2021
Business and Basis of Presentation  
Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows

for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of March 31, 2021 and December 31, 2020 and for all periods presented.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2021 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an adjustment to the January 1, 2020 balance of Accumulated deficit in the Condensed Consolidated Balance Sheets, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. Refer to Note 9 for additional information and the related disclosures.

Revenue Recognition

The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Earnings Per Share

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

Investment Securities

Investment securities included in Settlement assets in the Company’s Condensed Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. Variable-rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week but have varying maturities through 2057. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory requirements.

The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification.

Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and the amortized cost basis. The Company’s provision for credit losses on its available-for-sale securities during the three months ended March 31, 2021 and 2020 and the related allowance for credit losses as of March 31, 2021 and December 31, 2020 were immaterial.

Foreign Currency - Derivatives

Foreign Currency Derivatives

The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to help mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. As of March 31, 2021, these foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation and thus time value is excluded from the assessment of effectiveness. The initial value of the excluded components is amortized into Revenues within the Company’s Condensed Consolidated Statements of Income.

The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a few days 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 at inception, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability positions. None of these contracts are designated as accounting hedges.

Foreign Currency - Business Solutions

Business Solutions Operations

The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from the Company’s cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $84.5 million and $87.5 million for the three months ended March 31, 2021 and 2020, respectively, and were included in Revenues in the Company’s Condensed Consolidated Statements of Income. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the significant majority of these derivative contracts have a duration at inception of less than one year.

Interest Rate Hedging

Interest Rate Hedging

Periodically, the Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term, variable-rate payments in order to manage its overall exposure to interest rate fluctuations. The Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within Borrowings in the Condensed Consolidated Balance Sheets. Interest expense in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

v3.21.1
Revenue (Tables)
3 Months Ended
Mar. 31, 2021
Revenue  
Disaggregation of revenue earned from contracts with customers

Management has determined that the substantial majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the three months ended March 31, 2021 and 2020 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated.

Three Months Ended March 31, 2021

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

386.6

$

21.2

$

18.6

$

14.5

$

440.9

Europe and Russia/CIS

 

338.7

 

34.3

 

1.1

 

0.4

 

374.5

Middle East, Africa, and South Asia

 

159.7

 

0.5

 

0.1

 

 

160.3

Latin America and the Caribbean

 

86.7

 

0.8

 

17.7

 

1.8

 

107.0

East Asia and Oceania

 

66.7

 

16.6

 

0.3

 

 

83.6

Revenues from contracts with customers

$

1,038.4

$

73.4

$

37.8

$

16.7

$

1,166.3

Other revenues (a)

 

12.5

 

23.1

 

3.0

 

5.1

 

43.7

Total revenues

$

1,050.9

$

96.5

$

40.8

$

21.8

$

1,210.0

Three Months Ended March 31, 2020

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

384.8

$

22.2

$

22.7

$

14.4

$

444.1

Europe and Russia/CIS

 

300.9

 

31.5

 

0.8

 

0.7

 

333.9

Middle East, Africa, and South Asia

 

156.9

 

0.5

 

0.1

 

 

157.5

Latin America and the Caribbean

 

84.4

 

0.6

 

23.8

 

2.1

 

110.9

East Asia and Oceania

 

59.1

 

16.8

 

0.3

 

 

76.2

Revenues from contracts with customers

$

986.1

$

71.6

$

47.7

$

17.2

$

1,122.6

Other revenues (a)

 

29.3

 

26.8

 

5.3

 

6.0

 

67.4

Total revenues

$

1,015.4

$

98.4

$

53.0

$

23.2

$

1,190.0

(a)Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources.
v3.21.1
Earnings Per Share (Tables)
3 Months Ended
Mar. 31, 2021
Earnings Per Share  
Schedule of diluted weighted-average shares outstanding

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

Three Months Ended

March 31, 

    

2021

    

2020

Basic weighted-average shares outstanding

 

411.7

 

414.3

Common stock equivalents

 

2.6

 

4.0

Diluted weighted-average shares outstanding

 

414.3

 

418.3

v3.21.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2021
Fair Value Measurements  
Schedule of assets and liabilities by balance sheet line item measured on a recurring basis

The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring basis, by balance sheet line item (in millions):

Fair Value Measurement Using

Total

March 31, 2021

    

Level 1

    

Level 2

    

Fair Value

Assets:

 

  

 

  

 

  

Settlement assets:

 

  

 

  

 

  

Measured at fair value through net income:

 

  

 

  

 

  

Money market funds

$

15.7

$

$

15.7

Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):

 

  

  

  

State and municipal debt securities

1,272.5

1,272.5

State and municipal variable-rate demand notes

 

 

231.5

 

231.5

Corporate debt securities

52.6

52.6

United States government agency mortgage-backed securities

 

 

48.3

 

48.3

Other assets:

 

  

 

 

  

Derivatives

 

 

323.5

 

323.5

Total assets

$

15.7

$

1,928.4

$

1,944.1

Liabilities:

 

  

 

  

 

  

Other liabilities:

Derivatives

$

$

270.3

$

270.3

Total liabilities

$

$

270.3

$

270.3

Fair Value Measurement Using

Total

December 31, 2020

    

Level 1

    

Level 2

    

Fair Value

Assets:

 

  

 

  

 

  

Settlement assets:

 

  

 

  

 

  

Measured at fair value through net income:

 

  

 

  

 

  

Money market funds

$

13.1

$

$

13.1

Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income):

 

  

  

  

State and municipal debt securities

1,303.9

1,303.9

State and municipal variable-rate demand notes

 

 

562.1

 

562.1

Corporate and other debt securities

 

 

72.8

 

72.8

United States government agency mortgage-backed securities

51.8

51.8

Other assets:

 

  

 

  

 

  

Derivatives

 

 

453.3

 

453.3

Total assets

$

13.1

$

2,443.9

$

2,457.0

Liabilities:

 

  

 

  

 

  

Other liabilities:

Derivatives

$

$

430.3

$

430.3

Total liabilities

$

$

430.3

$

430.3

v3.21.1
Settlement Assets and Obligations (Tables)
3 Months Ended
Mar. 31, 2021
Settlement Assets and Obligations  
Schedule of settlement assets and obligations

Settlement assets and obligations consisted of the following (in millions):

    

March 31, 2021

Settlement assets:

 

  

Cash and cash equivalents

$

764.0

Receivables from agents, Business Solutions customers, and others

 

1,323.9

Less: Allowance for credit losses

(54.6)

Receivables from agents, Business Solutions customers, and others, net

1,269.3

Investment securities

 

1,604.9

Total settlement assets

$

3,638.2

Settlement obligations:

 

  

Money transfer, money order, and payment service payables

$

2,872.6

Payables to agents

 

765.6

Total settlement obligations

$

3,638.2

    

December 31, 2020

Settlement assets:

 

  

Cash and cash equivalents

$

695.7

Receivables from agents, Business Solutions customers, and others

 

1,188.3

Less: Allowance for credit losses

(53.2)

Receivables from agents, Business Solutions customers, and others, net

1,135.1

Investment securities

 

1,990.6

Total settlement assets

$

3,821.4

Settlement obligations:

 

  

Money transfer, money order, and payment service payables

$

2,902.9

Payables to agents

 

918.5

Total settlement obligations

$

3,821.4

Schedule of activity in the allowance for credit losses

The following tables summarize the activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers for the three months ended March 31, 2021 and 2020 (in millions):

Agents and

Business Solutions

Others

Customers

Allowance for credit losses as of January 1, 2021

$

49.3

$

3.9

Current period provision for expected credit losses (a)

2.3

1.5

Write-offs charged against the allowance

(3.3)

(0.4)

Recoveries of amounts previously written off

1.9

Impacts of foreign currency exchange rates and other

(0.5)

(0.1)

Allowance for credit losses as of March 31, 2021

$

49.7

$

4.9

Agents and

Business Solutions

Others

Customers

Allowance for credit losses as of January 1, 2020

$

20.4

$

4.5

Current period provision for expected credit losses (a)

8.1

0.2

Write-offs charged against the allowance

(1.7)

(1.0)

Recoveries of amounts previously written off

0.3

Impacts of foreign currency exchange rates and other

(1.2)

Allowance for credit losses as of March 31, 2020

$

25.9

$

3.7

(a)Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit related. For the three months ended March 31, 2021 and 2020, the Company recognized $13.7 million and $9.2 million, respectively, of losses that were not credit related.
Schedule of components of investment securities

The components of investment securities are as follows (in millions):

    

    

    

Gross

    

Gross

    

Net

 

Amortized

 

Fair

 

Unrealized

 

Unrealized

 

Unrealized

March 31, 2021

Cost

Value

 

Gains

 

Losses

Gains/(Losses)

Settlement assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents:

 

  

 

  

 

  

 

  

 

  

Money market funds

$

15.7

$

15.7

$

$

$

Available-for-sale securities:

 

 

 

 

 

  

State and municipal debt securities (a)

 

1,218.3

 

1,272.5

 

55.0

 

(0.8)

 

54.2

State and municipal variable-rate demand notes

 

231.5

 

231.5

 

 

 

Corporate debt securities

51.9

52.6

0.8

(0.1)

0.7

United States government agency mortgage-backed securities

 

46.6

 

48.3

 

1.7

 

 

1.7

Total available-for-sale securities

 

1,548.3

 

1,604.9

 

57.5

 

(0.9)

 

56.6

Total investment securities

$

1,564.0

$

1,620.6

$

57.5

$

(0.9)

$

56.6

    

    

    

Gross

    

Gross

    

Net

 

Amortized

 

Fair

 

Unrealized

 

Unrealized

 

Unrealized

December 31, 2020

Cost

Value

 

Gains

 

Losses

 

Gains/(Losses)

Settlement assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents:

 

  

 

  

 

  

 

  

 

  

Money market funds

$

13.1

$

13.1

$

$

$

Available-for-sale securities:

 

 

 

 

 

  

State and municipal debt securities (a)

1,234.1

1,303.9

69.8

69.8

State and municipal variable-rate demand notes

 

562.1

 

562.1

 

 

 

Corporate and other debt securities

 

71.6

 

72.8

 

1.2

 

 

1.2

United States government agency mortgage-backed securities

50.3

51.8

1.5

1.5

Total available-for-sale securities

 

1,918.1

 

1,990.6

 

72.5

 

 

72.5

Total investment securities

$

1,931.2

$

2,003.7

$

72.5

$

$

72.5

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

Schedule of contractual maturities of investment securities within Settlement assets

The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of March 31, 2021 (in millions):

Fair Value

Due within 1 year

$

122.6

Due after 1 year through 5 years

 

663.6

Due after 5 years through 10 years

 

500.9

Due after 10 years

 

317.8

Total

$

1,604.9

v3.21.1
Stockholders' Equity (Tables)
3 Months Ended
Mar. 31, 2021
Stockholders' Equity  
Schedule of reclassifications out of Accumulated other comprehensive loss

The following table details reclassifications out of Accumulated other comprehensive loss (“AOCL”) and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Condensed Consolidated Statements of Income.

Amounts Reclassified from AOCL to Net Income

Three Months Ended

 

Income Statement

March 31, 

 

Income for the period (in millions)

Location

    

2021

    

2020

    

Accumulated other comprehensive loss components:

Gains/(losses) on investment securities:

Available-for-sale securities

Revenues

$

(0.1)

$

0.6

Income tax expense

Provision for income taxes

(0.2)

Total reclassification adjustments related to investment securities, net of tax

(0.1)

0.4

Gains/(losses) on cash flow hedges:

Foreign currency contracts

Revenues

(6.1)

6.6

Interest rate contracts

Interest expense

(0.2)

(0.2)

Interest rate contracts

Other expense, net

0.7

Income tax expense

Provision for income taxes

(0.1)

Total reclassification adjustments related to cash flow hedges, net of tax

 

(5.6)

 

6.3

Amortization of components of defined benefit plans:

Actuarial loss

Other expense, net

(3.1)

(3.0)

Income tax benefit

Provision for income taxes

 

0.6

 

0.7

Total reclassification adjustments related to defined benefit plans, net of tax

 

(2.5)

 

(2.3)

Total reclassifications, net of tax

$

(8.2)

$

4.4

Schedule of components of accumulated other comprehensive income/(loss), net of tax

The following tables summarize the components of AOCL, net of tax on the accompanying Condensed Consolidated Balance Sheets (in millions):

Investment

Hedging

Foreign Currency

Defined Benefit

 

Securities

Activities

Translation

Pension Plan

Total

 

As of December 31, 2020

$

58.3

$

(30.5)

$

(101.2)

$

(86.1)

$

(159.5)

Unrealized gains/(losses)

 

(16.0)

 

24.2

 

 

 

8.2

Tax benefit/(expense)

 

2.9

 

(0.9)

 

 

 

2.0

Amounts reclassified from AOCL into earnings, net of tax

 

0.1

 

5.6

 

 

2.5

 

8.2

As of March 31, 2021

$

45.3

$

(1.6)

$

(101.2)

$

(83.6)

$

(141.1)

Investment

Hedging

Foreign Currency

Defined Benefit

 

Securities

Activities

Translation

Pension Plan

Total

 

As of December 31, 2019

$

24.7

$

(3.6)

$

(101.2)

$

(128.9)

$

(209.0)

Unrealized gains

 

7.2

 

27.3

 

 

 

34.5

Tax expense

 

(1.1)

 

(0.3)

 

 

 

(1.4)

Amounts reclassified from AOCL into earnings, net of tax

 

(0.4)

 

(6.3)

 

 

2.3

 

(4.4)

As of March 31, 2020

$

30.4

$

17.1

$

(101.2)

$

(126.6)

$

(180.3)

v3.21.1
Derivatives (Tables)
3 Months Ended
Mar. 31, 2021
Derivatives  
Schedule of notional amounts of foreign currency forward contracts

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2021 and December 31, 2020 were as follows (in millions):

March 31, 2021

Contracts designated as hedges:

    

Euro

$

414.4

Canadian dollar

136.9

British pound

 

71.9

Australian dollar

61.7

Swiss franc

42.4

Japanese yen

38.6

Other (a)

 

28.9

Contracts not designated as hedges:

 

Euro

$

404.5

British pound

 

116.8

Mexican peso

 

76.0

Indian rupee

 

69.7

Canadian dollar

 

58.1

Philippine peso

47.4

Australian dollar

47.0

Russian ruble

35.3

Japanese yen

32.0

Other (a)

151.6

December 31, 2020

Contracts designated as hedges:

    

Euro

$

428.9

Canadian dollar

 

131.9

British pound

 

71.9

Australian dollar

 

58.3

Swiss franc

 

41.1

Japanese yen

36.6

Other (a)

 

29.5

Contracts not designated as hedges:

 

  

Euro

$

533.0

British pound

 

153.9

Mexican peso

105.0

Indian rupee

 

81.0

Canadian dollar

 

71.5

Australian dollar

 

68.1

Japanese yen

 

39.6

Philippine peso

35.2

Russian ruble

31.2

Indonesian rupiah

29.1

Swedish krona

 

26.0

Other (a)

 

151.5

(a)Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million.
Schedule of fair value of derivatives

The following table summarizes the fair value of derivatives reported in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (in millions):

Derivative Assets

Derivative Liabilities

Fair Value

Fair Value

Balance Sheet

    

March 31, 

    

December 31, 

    

Balance Sheet

    

March 31, 

    

December 31, 

Location

2021

2020

Location

2021

2020

Derivatives designated as hedges:

  

 

  

 

  

 

  

 

  

 

  

Foreign currency cash flow hedges

Other assets

$

22.0

$

9.1

 

Other liabilities

$

11.7

$

24.9

Interest rate cash flow hedges

Other assets

Other liabilities

0.1

Total derivatives designated as hedges

  

$

22.0

$

9.1

 

  

$

11.7

$

25.0

Derivatives not designated as hedges:

  

 

  

 

  

 

  

 

  

 

  

Business Solutions operations - foreign currency (a)

Other assets

$

295.0

$

441.4

 

Other liabilities

$

255.7

$

402.5

Foreign currency

Other assets

 

6.5

 

2.8

 

Other liabilities

 

2.9

 

2.8

Total derivatives not designated as hedges

  

$

301.5

$

444.2

 

  

$

258.6

$

405.3

Total derivatives

  

$

323.5

$

453.3

 

  

$

270.3

$

430.3

(a)In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business.
Schedule of gross and net fair value of derivative assets

The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2021 and December 31, 2020 (in millions):

Offsetting of Derivative Assets

    

    

Gross

    

Net Amounts

    

Derivatives

    

Gross

Amounts Offset

Presented

Not Offset

Amounts of

 in the Condensed

 in the Condensed

 in the Condensed

Recognized

Consolidated

Consolidated

Consolidated

March 31, 2021

Assets

Balance Sheets

Balance Sheets

Balance Sheets

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

157.4

$

$

157.4

$

(128.1)

$

29.3

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

 

166.1

 

  

 

  

 

  

 

  

Total

$

323.5

 

  

 

  

 

  

 

  

December 31, 2020

 

  

 

  

 

  

 

  

 

  

Derivatives subject to a master netting arrangement or similar agreement

$

165.1

$

$

165.1

$

(155.1)

$

10.0

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

 

288.2

 

  

 

  

 

  

 

  

Total

$

453.3

 

  

 

  

 

  

 

  

Schedule of gross and net fair value of derivative liabilities

Offsetting of Derivative Liabilities

    

    

Gross

    

Net Amounts

    

Derivatives

    

Gross

Amounts Offset

Presented

Not Offset

Amounts of 

 in the Condensed

 in the Condensed

 in the Condensed

Recognized

Consolidated

Consolidated

Consolidated

March 31, 2021

Liabilities

Balance Sheets

Balance Sheets

Balance Sheets

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

203.1

$

$

203.1

$

(128.1)

$

75.0

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

 

67.2

 

  

 

  

 

  

 

  

Total

$

270.3

 

  

 

  

 

  

 

  

December 31, 2020

 

  

 

  

 

  

 

  

 

  

Derivatives subject to a master netting arrangement or similar agreement

$

356.2

$

$

356.2

$

(155.1)

$

201.1

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

 

74.1

 

  

 

  

 

  

 

  

Total

$

430.3

 

  

 

  

 

  

 

  

Schedule of amount and location of gains/(losses) from hedging activities

The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31, 

    

2021

    

2020

Foreign currency derivatives (a)

$

20.9

$

27.3

Interest rate derivatives

3.3

(a)For the three months ended March 31, 2021 and 2020, gains/(losses) of $(0.7) million and $3.5 million, respectively, represent amounts excluded from the assessment of effectiveness and recognized in other comprehensive income, for which an amortization approach is applied.

The following table presents the location and amounts of pre-tax net gains/(losses) from fair value and cash flow hedging relationships recognized in the Condensed Consolidated Statements of Income for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31, 

2021

2020

Interest

Other

Interest

Revenues

Expense

Expense, net

Revenues

Expense

Total amounts presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded

$

1,210.0

$

(28.4)

$

(1.9)

$

1,190.0

$

(32.9)

The effects of fair value and cash flow hedging:

 

  

 

  

 

  

 

  

 

  

Gain/(loss) on cash flow hedges:

 

  

 

  

 

  

 

  

 

  

Foreign currency derivatives:

 

  

 

  

 

  

 

  

 

  

Gains/(losses) reclassified from AOCL into earnings

 

(6.1)

 

 

 

6.6

 

Amount excluded from effectiveness testing recognized in earnings based on an amortization approach

 

1.9

 

 

 

3.5

 

Interest rate derivatives:

Gains/(losses) reclassified from AOCL into earnings

 

(0.2)

 

0.7

 

(0.2)

Undesignated Hedges

The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Condensed Consolidated Statements of Income on derivatives for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended

March 31, 

Derivatives (a)

    

Location

2021

    

2020

Foreign currency derivatives (b)

 

Selling, general, and administrative

$

16.0

$

29.2

(a)

The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(b)The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above and included in Selling, general, and administrative in the Condensed Consolidated Statements of Income, were $(21.8) million and $(51.0) million for the three months ended March 31, 2021 and 2020, respectively.
v3.21.1
Borrowings (Tables)
3 Months Ended
Mar. 31, 2021
Borrowings  
Schedule of outstanding borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

    

March 31, 2021

    

December 31, 2020

Commercial paper (a)

$

$

80.0

Notes:

 

  

 

  

3.600% notes due 2022 (b)

 

500.0

 

500.0

4.250% notes due 2023 (b)

 

300.0

 

300.0

2.850% notes due 2025 (b)

500.0

500.0

1.350% notes due 2026 (effective rate of 1.5%) (c)

600.0

2.750% notes due 2031 (effective rate of 2.9%) (d)

300.0

6.200% notes due 2036 (b)

 

500.0

 

500.0

6.200% notes due 2040 (b)

 

250.0

 

250.0

Term loan facility borrowing (effective rate of 1.5%) (e)

 

300.0

 

950.0

Total borrowings at par value

 

3,250.0

 

3,080.0

Debt issuance costs and unamortized discount, net

 

(19.5)

 

(12.8)

Total borrowings at carrying value (f)

$

3,230.5

$

3,067.2

(a)Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s revolving credit facility. The commercial paper notes may have maturities of up to 397 days from date of issuance. As of March 31, 2021, the Company had no commercial paper borrowings.
(b)The difference between the stated interest rate and the effective interest rate is not significant.
(c)On March 9, 2021, the Company issued the 2026 Notes, as defined in Note 11, Derivatives.
(d)On March 9, 2021, the Company issued $300.0 million of aggregate principal amount of 2.750% unsecured notes due in 2031 (“2031 Notes”).
(e)Proceeds from the 2026 Notes and 2031 Notes and cash, including cash generated from operations, were used to repay $650.0 million of the term loan facility in the first quarter of 2021.
(f)As of March 31, 2021, the Company’s weighted-average effective rate on total borrowings was approximately 3.6%.
Schedule of maturities of borrowings

The following summarizes the Company’s maturities of notes and term loan at par value as of March 31, 2021 (in millions):

Due within 1 year

    

$

500.0

Due after 1 year through 2 years

 

Due after 2 years through 3 years

 

600.0

Due after 3 years through 4 years

 

500.0

Due after 4 years through 5 years

 

600.0

Due after 5 years

 

1,050.0

Total

$

3,250.0

v3.21.1
Segments (Tables)
3 Months Ended
Mar. 31, 2021
Segments  
Schedule of segment results

The following table presents the Company’s segment results for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended

March 31, 

    

2021

    

2020

    

Revenues:

 

  

 

  

 

Consumer-to-Consumer

$

1,050.9

$

1,015.4

Business Solutions

 

96.5

 

98.4

Other

 

62.6

 

76.2

Total consolidated revenues

$

1,210.0

$

1,190.0

Operating income:

 

  

 

  

Consumer-to-Consumer

$

206.1

$

209.9

Business Solutions

 

12.6

 

13.9

Other

 

14.1

 

19.9

Total segment operating income

 

232.8

 

243.7

Restructuring-related expenses (Note 5)

 

 

(10.5)

Total consolidated operating income

$

232.8

$

233.2

v3.21.1
Business and Basis of Presentation - Narrative (Details)
$ in Millions
3 Months Ended
Mar. 31, 2021
country
Dec. 31, 2020
USD ($)
Business and Basis of Presentation    
Number of countries and territories where services are primarily available through a network of agent locations (more than) | country 200  
Net assets subject to limitations | $   $ 680
ASU 2016-13    
Business and Basis of Presentation    
Change in accounting principle due to adopted Accounting Standards Update true  
Transition option elected us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember  
v3.21.1
Revenue - Narrative - (Details)
$ in Millions
3 Months Ended
Mar. 31, 2021
USD ($)
item
Mar. 31, 2020
USD ($)
Revenue    
Revenues from contracts with customers | $ $ 1,166.3 $ 1,122.6
Consumer money transfers    
Revenue    
Revenues from contracts with customers | $ $ 1,038.4 986.1
Number of performance obligations | item 1  
Number of integrated services involved in a transaction | item 1  
Consumer bill payments    
Revenue    
Revenues from contracts with customers | $ $ 37.8 $ 47.7
Number of integrated services involved in a transaction | item 1  
v3.21.1
Revenue - Disaggregation of revenue - (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Revenue    
Revenues from contracts with customers $ 1,166.3 $ 1,122.6
Other revenues 43.7 67.4
Revenues 1,210.0 1,190.0
Consumer money transfers    
Revenue    
Revenues from contracts with customers 1,038.4 986.1
Other revenues 12.5 29.3
Revenues 1,050.9 1,015.4
Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 73.4 71.6
Other revenues 23.1 26.8
Revenues 96.5 98.4
Consumer bill payments    
Revenue    
Revenues from contracts with customers 37.8 47.7
Other revenues 3.0 5.3
Revenues 40.8 53.0
Other services    
Revenue    
Revenues from contracts with customers 16.7 17.2
Other revenues 5.1 6.0
Revenues 21.8 23.2
North America    
Revenue    
Revenues from contracts with customers 440.9 444.1
North America | Consumer money transfers    
Revenue    
Revenues from contracts with customers 386.6 384.8
North America | Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 21.2 22.2
North America | Consumer bill payments    
Revenue    
Revenues from contracts with customers 18.6 22.7
North America | Other services    
Revenue    
Revenues from contracts with customers 14.5 14.4
Europe and Russia/CIS    
Revenue    
Revenues from contracts with customers 374.5 333.9
Europe and Russia/CIS | Consumer money transfers    
Revenue    
Revenues from contracts with customers 338.7 300.9
Europe and Russia/CIS | Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 34.3 31.5
Europe and Russia/CIS | Consumer bill payments    
Revenue    
Revenues from contracts with customers 1.1 0.8
Europe and Russia/CIS | Other services    
Revenue    
Revenues from contracts with customers 0.4 0.7
Middle East, Africa, and South Asia    
Revenue    
Revenues from contracts with customers 160.3 157.5
Middle East, Africa, and South Asia | Consumer money transfers    
Revenue    
Revenues from contracts with customers 159.7 156.9
Middle East, Africa, and South Asia | Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 0.5 0.5
Middle East, Africa, and South Asia | Consumer bill payments    
Revenue    
Revenues from contracts with customers 0.1 0.1
Latin America and the Caribbean    
Revenue    
Revenues from contracts with customers 107.0 110.9
Latin America and the Caribbean | Consumer money transfers    
Revenue    
Revenues from contracts with customers 86.7 84.4
Latin America and the Caribbean | Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 0.8 0.6
Latin America and the Caribbean | Consumer bill payments    
Revenue    
Revenues from contracts with customers 17.7 23.8
Latin America and the Caribbean | Other services    
Revenue    
Revenues from contracts with customers 1.8 2.1
East Asia and Oceania    
Revenue    
Revenues from contracts with customers 83.6 76.2
East Asia and Oceania | Consumer money transfers    
Revenue    
Revenues from contracts with customers 66.7 59.1
East Asia and Oceania | Foreign exchange and payment services    
Revenue    
Revenues from contracts with customers 16.6 16.8
East Asia and Oceania | Consumer bill payments    
Revenue    
Revenues from contracts with customers $ 0.3 $ 0.3
v3.21.1
Earnings Per Share (Details) - shares
shares in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Earnings Per Share    
Outstanding options to purchase shares of stock excluded from the diluted earnings per share calculation 1.4 1.1
Calculation of diluted weighted-average shares outstanding    
Basic weighted-average shares outstanding 411.7 414.3
Common stock equivalents 2.6 4.0
Diluted weighted-average shares outstanding 414.3 418.3
v3.21.1
Investment Activities (Details) - USD ($)
$ in Millions
Apr. 12, 2021
Nov. 21, 2020
Saudi Digital Payments Company    
Investment Activities    
Investment in Saudi Digital Payments Company   $ 200.0
Investment (as a percent)   15.00%
Digital Currency Group, Inc. | Subsequent Event    
Investment Activities    
Proceeds from shares sold $ 50.9  
Gain on sale of minority investment $ 48.0  
v3.21.1
Restructuring-Related Expenses - (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2021
Dec. 31, 2020
Restructuring-related expenses      
Expenses $ 10.5    
Restructuring-related accrual   $ 14.5 $ 26.2
Cost of services      
Restructuring-related expenses      
Expenses 0.9    
Selling, general and administrative      
Restructuring-related expenses      
Expenses $ 9.6    
v3.21.1
Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Assets:    
Settlement assets $ 3,638.2 $ 3,821.4
Derivatives 323.5 453.3
Liabilities:    
Derivatives 270.3 430.3
Recurring    
Assets:    
Derivatives 323.5 453.3
Total assets 1,944.1 2,457.0
Liabilities:    
Derivatives 270.3 430.3
Total liabilities 270.3 430.3
Recurring | Money market funds    
Assets:    
Settlement assets 15.7 13.1
Recurring | State and municipal debt securities    
Assets:    
Settlement assets 1,272.5 1,303.9
Recurring | State and municipal variable rate demand notes    
Assets:    
Settlement assets 231.5 562.1
Recurring | United States government agency mortgage-backed securities    
Assets:    
Settlement assets 48.3 51.8
Recurring | Corporate debt securities    
Assets:    
Settlement assets 52.6  
Recurring | Corporate and other debt securities    
Assets:    
Settlement assets   72.8
Recurring | Level 1    
Assets:    
Total assets 15.7 13.1
Recurring | Level 1 | Money market funds    
Assets:    
Settlement assets 15.7 13.1
Recurring | Level 2    
Assets:    
Derivatives 323.5 453.3
Total assets 1,928.4 2,443.9
Liabilities:    
Derivatives 270.3 430.3
Total liabilities 270.3 430.3
Recurring | Level 2 | State and municipal debt securities    
Assets:    
Settlement assets 1,272.5 1,303.9
Recurring | Level 2 | State and municipal variable rate demand notes    
Assets:    
Settlement assets 231.5 562.1
Recurring | Level 2 | United States government agency mortgage-backed securities    
Assets:    
Settlement assets 48.3 51.8
Recurring | Level 2 | Corporate debt securities    
Assets:    
Settlement assets $ 52.6  
Recurring | Level 2 | Corporate and other debt securities    
Assets:    
Settlement assets   $ 72.8
v3.21.1
Fair Value Measurements - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Fair Value Adjustments      
Amount of assets transferred from Level 1 to Level 2 within Fair Value Measurements $ 0.0 $ 0.0  
Amount of assets transferred from Level 2 to Level 1 within Fair Value Measurements 0.0 0.0  
Amount of liabilities transferred from Level 1 to Level 2 within Fair Value Measurements 0.0 0.0  
Amount of liabilities transferred from Level 2 to Level 1 within Fair Value Measurements 0.0 0.0  
Carrying Value      
Other Fair Value Measurements      
Borrowings 3,230.5   $ 3,067.2
Level 2 | Fair Value      
Other Fair Value Measurements      
Borrowings 3,450.6   $ 3,348.0
Non-recurring      
Fair Value Adjustments      
Non-recurring asset fair value adjustments 0.0 0.0  
Non-recurring liability fair value adjustments $ 0.0 $ 0.0  
v3.21.1
Commitments and Contingencies - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2020
Mar. 31, 2021
Commitments and Contingencies    
Letters of credit outstanding and bank guarantees   $ 430
Delaware Complaint    
Commitments and Contingencies    
Period plaintiffs may file an amended complaint 60 days  
Pending Litigation    
Commitments and Contingencies    
Range of possible loss, portion not accrued   $ 30
v3.21.1
Related Party Transactions - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Equity Method Investee    
Related Party Transactions    
Commission expense $ 13.2 $ 12.6
v3.21.1
Settlement Assets and Obligations - Settlement Assets and Obligations (Details) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Settlement assets:    
Cash and cash equivalents $ 764.0 $ 695.7
Receivables from agents, Business Solutions customers, and others 1,323.9 1,188.3
Less: Allowance for credit losses (54.6) (53.2)
Receivables from agents, Business Solutions customers, and others, net 1,269.3 1,135.1
Investment securities 1,604.9 1,990.6
Total settlement assets 3,638.2 3,821.4
Settlement obligations:    
Money transfer, money order, and payment service payables 2,872.6 2,902.9
Payables to agents 765.6 918.5
Total settlement obligations $ 3,638.2 $ 3,821.4
v3.21.1
Settlement Assets and Obligations - Receivables from selling agents and Business Solutions customers (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Receivables      
Receivables from agents, Business Solutions customers, and others, net $ 1,269.3   $ 1,135.1
Summary of activity in allowance for credit losses      
Allowance for credit losses, Beginning Balance 53.2    
Allowance for credit losses, Ending Balance 54.6    
Losses from chargebacks or fraud that are not credit-related 13.7 $ 9.2  
Advances to agents 140.0   135.9
Receivables from agents and others      
Receivables      
Receivables from agents, Business Solutions customers, and others, net 1,184.0   1,081.2
Summary of activity in allowance for credit losses      
Allowance for credit losses, Beginning Balance 49.3 20.4  
Current period provision for expected credit losses 2.3 8.1  
Write-offs charged against the allowance (3.3) (1.7)  
Recoveries of amounts previously written off 1.9 0.3  
Impacts of foreign currency exchange rates and other (0.5) (1.2)  
Allowance for credit losses, Ending Balance 49.7 25.9  
Receivables from Business Solutions customers      
Receivables      
Receivables from agents, Business Solutions customers, and others, net 85.3   $ 53.9
Summary of activity in allowance for credit losses      
Allowance for credit losses, Beginning Balance 3.9 4.5  
Current period provision for expected credit losses 1.5 0.2  
Write-offs charged against the allowance (0.4) (1.0)  
Impacts of foreign currency exchange rates and other (0.1)    
Allowance for credit losses, Ending Balance $ 4.9 $ 3.7  
v3.21.1
Settlement Assets and Obligations - Components of Investment Securities (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Investment Securities    
Variable rate demand notes, maximum maturity year 2057  
Cash and cash equivalents    
Amortized Cost $ 1,502.6 $ 1,428.2
Available-for-sale securities:    
Amortized Cost 1,548.3 1,918.1
Fair Value 1,604.9 1,990.6
Gross Unrealized Gains 57.5 72.5
Gross Unrealized Losses (0.9)  
Net Unrealized Gains/ (Losses) 56.6 72.5
Amortized Cost 1,564.0 1,931.2
Fair Value 1,620.6 2,003.7
Gross Unrealized Gains 57.5 72.5
Gross Unrealized Losses (0.9)  
Net Unrealized Gains/ (Losses) 56.6 72.5
Money market funds | Settlement Assets    
Cash and cash equivalents    
Amortized Cost 15.7 13.1
Fair Value 15.7 13.1
State and municipal debt securities    
Available-for-sale securities:    
Amortized Cost 1,218.3 1,234.1
Fair Value 1,272.5 1,303.9
Gross Unrealized Gains 55.0 69.8
Gross Unrealized Losses (0.8)  
Net Unrealized Gains/ (Losses) 54.2 69.8
State and municipal variable rate demand notes    
Available-for-sale securities:    
Amortized Cost 231.5 562.1
Fair Value 231.5 562.1
Corporate and other debt securities    
Available-for-sale securities:    
Amortized Cost   71.6
Fair Value   72.8
Gross Unrealized Gains   1.2
Net Unrealized Gains/ (Losses)   1.2
Corporate debt securities    
Available-for-sale securities:    
Amortized Cost 51.9  
Fair Value 52.6  
Gross Unrealized Gains 0.8  
Gross Unrealized Losses (0.1)  
Net Unrealized Gains/ (Losses) 0.7  
United States government agency mortgage-backed securities    
Available-for-sale securities:    
Amortized Cost 46.6 50.3
Fair Value 48.3 51.8
Gross Unrealized Gains 1.7 1.5
Net Unrealized Gains/ (Losses) $ 1.7 $ 1.5
v3.21.1
Settlement Assets and Obligations - Contractual Maturities of Debt Securities (Details) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Fair Value    
Due within 1 year $ 122.6  
Due after 1 year through 5 years 663.6  
Due after 5 years through 10 years 500.9  
Due after 10 years 317.8  
Total 1,604.9 $ 1,990.6
State and municipal variable rate demand notes    
Fair Value    
Due after 1 year through 5 years 15.0  
Due after 5 years through 10 years 0.9  
Due after 10 years 215.6  
Total $ 231.5 $ 562.1
v3.21.1
Stockholders' Equity - Amounts Reclassified from AOCL (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, net of tax $ (8.2) $ 4.4
Investment Securities    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, Provision for income taxes   (0.2)
Reclassification from AOCL, net of tax (0.1) 0.4
Investment Securities | Revenue    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, before tax (0.1) 0.6
Hedging Activities    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, Provision for income taxes   (0.1)
Reclassification from AOCL, net of tax (5.6) 6.3
Hedging Activities | Foreign currency contracts | Revenue    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, before tax (6.1) 6.6
Hedging Activities | Interest rate contracts | Interest Expense    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, before tax (0.2) (0.2)
Hedging Activities | Interest rate contracts | Other expense, net    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, before tax 0.7  
Defined benefit plans    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, Provision for income taxes 0.6 0.7
Reclassification from AOCL, net of tax (2.5) (2.3)
Defined benefit plans | Other expense, net    
Accumulated other comprehensive income (loss)    
Reclassification from AOCL, before tax $ (3.1) $ (3.0)
v3.21.1
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance $ 186.6 $ (39.5)
Amounts reclassified from AOCL into earnings, net of tax 8.2 (4.4)
Ending balance 218.8 (149.7)
Investment Securities    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance 58.3 24.7
Unrealized gains/(losses) (16.0) 7.2
Tax benefit/(expense) 2.9 (1.1)
Amounts reclassified from AOCL into earnings, net of tax 0.1 (0.4)
Ending balance 45.3 30.4
Hedging Activities    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance (30.5) (3.6)
Unrealized gains/(losses) 24.2 27.3
Tax benefit/(expense) (0.9) (0.3)
Amounts reclassified from AOCL into earnings, net of tax 5.6 (6.3)
Ending balance (1.6) 17.1
Foreign Currency Translation    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance (101.2) (101.2)
Ending balance (101.2) (101.2)
Defined benefit plans    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance (86.1) (128.9)
Amounts reclassified from AOCL into earnings, net of tax 2.5 2.3
Ending balance (83.6) (126.6)
Total AOCL    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]    
Beginning balance (159.5) (209.0)
Unrealized gains/(losses) 8.2 34.5
Tax benefit/(expense) 2.0 (1.4)
Amounts reclassified from AOCL into earnings, net of tax 8.2 (4.4)
Ending balance $ (141.1) $ (180.3)
v3.21.1
Stockholders' Equity - Cash Dividends Paid (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash Dividends Paid    
Common stock dividends (USD per share) $ 0.235 $ 0.225
Cash dividends paid $ 96.6 $ 92.4
v3.21.1
Stockholders' Equity - Share Repurchases (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Share Repurchases    
Stock repurchased and retired, publicly announced authorizations (shares) 3.1 8.5
Stock repurchased and retired, publicly announced authorizations, value excluding commissions $ 75.0 $ 217.4
Stock repurchased and retired, publicly announced authorizations, average cost per share excluding commissions (USD per share) $ 24.24 $ 25.45
Authorized through December 31, 2021    
Share Repurchases    
Remaining amount available under share repurchase authorization through December 31, 2021 $ 707.6  
v3.21.1
Derivatives - Narrative (Details)
$ in Millions
3 Months Ended
Mar. 31, 2021
USD ($)
Mar. 31, 2020
USD ($)
Mar. 09, 2021
USD ($)
Dec. 31, 2020
USD ($)
derivative
Derivatives        
Total borrowings at par value $ 3,250.0     $ 3,080.0
Accumulated other comprehensive pre-tax gain (loss) to be reclassified into revenue within the next 12 months (3.0)      
3.600% notes due 2022        
Derivatives        
Total borrowings at par value $ 500.0     $ 500.0
Stated interest rate (as a percent) 3.60%     3.60%
1.350% notes due 2026        
Derivatives        
Total borrowings at par value $ 600.0   $ 600.0  
Stated interest rate (as a percent) 1.35%   1.35%  
Business Solutions        
Derivatives        
Foreign exchange revenues $ 84.5 $ 87.5    
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022        
Derivatives        
Number of derivative instruments held | derivative       2
Cash payment received for terminated swap agreement 3.3      
Deferred gain on termination of treasury locks 2.6      
Gain on derivative recognized in Other income/(expense), net $ 0.7      
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022 | Interest Rate Swap Contract 1        
Derivatives        
Notional amounts       $ 100.0
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022 | Interest Rate Swap Contract 2        
Derivatives        
Notional amounts       150.0
Designated as hedges | Foreign currency contracts        
Derivatives        
Derivative policy - contract maturity period maximum 36 months      
Derivative policy - targeted weighted-average maturity 1 year      
Maximum remaining maturity of foreign currency derivatives 24 months      
Derivative weighted-average maturity 1 year      
Not designated as hedges | Foreign currency contracts | Business Solutions        
Derivatives        
Notional amounts $ 8,000.0     $ 8,000.0
Minimum | Not designated as hedges | Uncollected settlement assets and obligations        
Derivatives        
Foreign currency forward contracts maturity range 2 days      
Maximum | Not designated as hedges | Uncollected settlement assets and obligations        
Derivatives        
Foreign currency forward contracts maturity range 1 month      
Maximum | Not designated as hedges | Foreign currency contracts | Business Solutions        
Derivatives        
Foreign currency forward contracts maturity range 1 year      
Maximum | Not designated as hedges | Foreign currency denominated cash and other asset and other liability positions        
Derivatives        
Foreign currency forward contracts maturity range 1 year      
v3.21.1
Derivatives - Notional Amounts of Foreign Currency Forward Contracts (Details) - Foreign currency contracts - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Designated as hedges | Euro    
Notional amounts of foreign currency forward contracts    
Notional amounts $ 414.4 $ 428.9
Designated as hedges | British pound    
Notional amounts of foreign currency forward contracts    
Notional amounts 71.9 71.9
Designated as hedges | Canadian dollar    
Notional amounts of foreign currency forward contracts    
Notional amounts 136.9 131.9
Designated as hedges | Australian dollar    
Notional amounts of foreign currency forward contracts    
Notional amounts 61.7 58.3
Designated as hedges | Swiss franc    
Notional amounts of foreign currency forward contracts    
Notional amounts 42.4 41.1
Designated as hedges | Japanese yen    
Notional amounts of foreign currency forward contracts    
Notional amounts 38.6 36.6
Designated as hedges | Other    
Notional amounts of foreign currency forward contracts    
Notional amounts 28.9 29.5
Not designated as hedges | Euro    
Notional amounts of foreign currency forward contracts    
Notional amounts 404.5 533.0
Not designated as hedges | British pound    
Notional amounts of foreign currency forward contracts    
Notional amounts 116.8 153.9
Not designated as hedges | Mexican peso    
Notional amounts of foreign currency forward contracts    
Notional amounts 76.0 105.0
Not designated as hedges | Indian rupee    
Notional amounts of foreign currency forward contracts    
Notional amounts 69.7 81.0
Not designated as hedges | Canadian dollar    
Notional amounts of foreign currency forward contracts    
Notional amounts 58.1 71.5
Not designated as hedges | Australian dollar    
Notional amounts of foreign currency forward contracts    
Notional amounts 47.0 68.1
Not designated as hedges | Japanese yen    
Notional amounts of foreign currency forward contracts    
Notional amounts 32.0 39.6
Not designated as hedges | Philippine peso    
Notional amounts of foreign currency forward contracts    
Notional amounts 47.4 35.2
Not designated as hedges | Russian ruble    
Notional amounts of foreign currency forward contracts    
Notional amounts 35.3 31.2
Not designated as hedges | Indonesian rupiah    
Notional amounts of foreign currency forward contracts    
Notional amounts   29.1
Not designated as hedges | Swedish krona    
Notional amounts of foreign currency forward contracts    
Notional amounts   26.0
Not designated as hedges | Other    
Notional amounts of foreign currency forward contracts    
Notional amounts 151.6 151.5
Maximum individual currency exposure within various other currencies $ 25.0 $ 25.0
v3.21.1
Derivatives - Fair Value of Derivatives (Details) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Fair Value of Derivatives    
Derivative Assets $ 323.5 $ 453.3
Derivative Liabilities 270.3 430.3
Designated as hedges    
Fair Value of Derivatives    
Derivative Assets 22.0 9.1
Derivative Liabilities 11.7 25.0
Designated as hedges | Other assets | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Assets 22.0 9.1
Designated as hedges | Other liabilities | Interest rate contracts    
Fair Value of Derivatives    
Derivative Liabilities   0.1
Designated as hedges | Other liabilities | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Liabilities 11.7 24.9
Not designated as hedges    
Fair Value of Derivatives    
Derivative Assets 301.5 444.2
Derivative Liabilities 258.6 405.3
Not designated as hedges | Other assets | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Assets 6.5 2.8
Not designated as hedges | Other liabilities | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Liabilities 2.9 2.8
Not designated as hedges | Business Solutions | Other assets | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Assets 295.0 441.4
Not designated as hedges | Business Solutions | Other liabilities | Foreign currency contracts    
Fair Value of Derivatives    
Derivative Liabilities $ 255.7 $ 402.5
v3.21.1
Derivatives - Gross and Net Fair Value of Derivative Assets and Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2021
Dec. 31, 2020
Offsetting of Derivative Assets    
Gross Amounts of Recognized Assets $ 157.4 $ 165.1
Net Amounts Presented in the Condensed Consolidated Balance Sheets 157.4 165.1
Derivatives Not Offset in the Condensed Consolidated Balance Sheets (128.1) (155.1)
Net Amounts 29.3 10.0
Derivatives that are not or may not be subject to master netting arrangement or similar agreement 166.1 288.2
Total 323.5 453.3
Offsetting of Derivative Liabilities    
Gross Amounts of Recognized Liabilities 203.1 356.2
Net Amounts Presented in the Condensed Consolidated Balance Sheets 203.1 356.2
Derivatives Not Offset in the Condensed Consolidated Balance Sheets (128.1) (155.1)
Net Amounts 75.0 201.1
Derivatives that are not or may not be subject to master netting arrangement or similar agreement 67.2 74.1
Total $ 270.3 $ 430.3
v3.21.1
Derivatives - Unrealized Gains/(Losses) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Foreign currency contracts    
Derivatives    
Gain/(Loss) recognized in OCI $ 20.9 $ 27.3
Gains/(losses) excluded from effectiveness testing recognized in other comprehensive income (0.7) $ 3.5
Interest rate contracts    
Derivatives    
Gain/(Loss) recognized in OCI $ 3.3  
v3.21.1
Derivatives - Gains/(Losses) from Hedging Activities (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Gains/(Losses) from Derivatives    
Revenues $ 1,210.0 $ 1,190.0
Interest expense (28.4) (32.9)
Other expense, net (1.9)  
Cash Flow Hedges | Foreign currency contracts | Revenue    
Cash Flow and Fair Value Hedges    
Gains/(losses) reclassified from AOCL into earnings (6.1) 6.6
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach 1.9 3.5
Cash Flow Hedges | Interest rate contracts | Interest Expense    
Cash Flow and Fair Value Hedges    
Gains/(losses) reclassified from AOCL into earnings (0.2) $ (0.2)
Cash Flow Hedges | Interest rate contracts | Other expense, net    
Cash Flow and Fair Value Hedges    
Gains/(losses) reclassified from AOCL into earnings $ 0.7  
v3.21.1
Derivatives - Undesignated Hedges (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash Flow and Fair Value Hedges    
Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities $ (21.8) $ (51.0)
Not designated as hedges | Selling, general and administrative    
Cash Flow and Fair Value Hedges    
Gain/(Loss) recognized in Income on Foreign currency derivatives $ 16.0 $ 29.2
v3.21.1
Borrowings - Outstanding Borrowings (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 09, 2021
Dec. 31, 2020
Outstanding Borrowings      
Total borrowings at par value $ 3,250.0   $ 3,080.0
Debt issuance costs and unamortized discount, net (19.5)   (12.8)
Total borrowings at carrying value $ 3,230.5   3,067.2
Weighted-average effective interest rate (as a percent) 3.60%    
Repayment of long-term debt $ 650.0    
Commercial paper      
Outstanding Borrowings      
Total borrowings at par value 0.0   80.0
Maximum borrowing capacity $ 1,500.0    
Maximum days to maturity 397 days    
3.600% notes due 2022      
Outstanding Borrowings      
Total borrowings at par value $ 500.0   $ 500.0
Stated interest rate (as a percent) 3.60%   3.60%
4.250% notes due 2023      
Outstanding Borrowings      
Total borrowings at par value $ 300.0   $ 300.0
Stated interest rate (as a percent) 4.25%   4.25%
2.850% notes due 2025      
Outstanding Borrowings      
Total borrowings at par value $ 500.0   $ 500.0
Stated interest rate (as a percent) 2.85%   2.85%
1.350% notes due 2026      
Outstanding Borrowings      
Total borrowings at par value $ 600.0 $ 600.0  
Stated interest rate (as a percent) 1.35% 1.35%  
Effective interest rate (as a percent) 1.50%    
2.750% notes due 2031      
Outstanding Borrowings      
Total borrowings at par value $ 300.0 $ 300.0  
Stated interest rate (as a percent) 2.75% 2.75%  
Effective interest rate (as a percent) 2.90%    
6.200% notes due 2036      
Outstanding Borrowings      
Total borrowings at par value $ 500.0   $ 500.0
Stated interest rate (as a percent) 6.20%   6.20%
6.200% notes due 2040      
Outstanding Borrowings      
Total borrowings at par value $ 250.0   $ 250.0
Stated interest rate (as a percent) 6.20%   6.20%
Term loan facility borrowing (effective rate of 1.4%)      
Outstanding Borrowings      
Total borrowings at par value $ 300.0   $ 950.0
Effective interest rate (as a percent) 1.50%    
Repayment of long-term debt $ 650.0    
v3.21.1
Borrowings - Maturity Schedule of Borrowings (Details)
$ in Millions
Mar. 31, 2021
USD ($)
Borrowings maturities at par value  
Due within 1 year $ 500.0
Due after 2 years through 3 years 600.0
Due after 3 years through 4 years 500.0
Due after 4 years through 5 years 600.0
Due after 5 years 1,050.0
Total $ 3,250.0
v3.21.1
Borrowings - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Apr. 01, 2021
Mar. 09, 2021
Mar. 31, 2021
Dec. 31, 2020
Outstanding Borrowings        
Repayment of long-term debt     $ 650.0  
Total borrowings at par value     3,250.0 $ 3,080.0
3.600% notes due 2022        
Outstanding Borrowings        
Total borrowings at par value     $ 500.0 $ 500.0
Stated interest rate (as a percent)     3.60% 3.60%
3.600% notes due 2022 | Subsequent Event        
Outstanding Borrowings        
Repayment of long-term debt $ 514.3      
Stated interest rate (as a percent) 3.60%      
1.350% notes due 2026        
Outstanding Borrowings        
Total borrowings at par value   $ 600.0 $ 600.0  
Stated interest rate (as a percent)   1.35% 1.35%  
Redemption price (as a percent)   101.00%    
2.750% notes due 2031        
Outstanding Borrowings        
Total borrowings at par value   $ 300.0 $ 300.0  
Stated interest rate (as a percent)   2.75% 2.75%  
Redemption price (as a percent)   101.00%    
v3.21.1
Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Unrecognized Tax Benefits      
Effective tax rate 10.40% 12.50%  
Unrecognized tax benefits, excluding interest and penalties $ 338.2   $ 340.7
Unrecognized tax benefits that, if recognized, would affect the effective tax rate 327.3   329.2
Interest and penalties, accrued $ 27.6   $ 28.6
v3.21.1
Stock Compensation Plans (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Stock-Based Compensation Plans    
Stock-based compensation expense $ 10.8 $ 12.5
Options granted (shares) 0.5  
Options granted exercise price (in dollars per share) $ 23.91  
Performance-based restricted stock units and Restricted stock units granted (in shares) 2.7  
Performance-based restricted stock units and Restricted stock units weighted average grant date fair value (in dollars per share) $ 23.63  
Number of options outstanding (in shares) 5.0  
Exercise price of options outstanding (in dollars per share) $ 19.46  
Number of options exercisable (in shares) 3.8  
Exercise price of options exercisable (in dollars per share) $ 18.42  
Number of non-vested Performance-based restricted stock units and Restricted stock units (in shares) 7.3  
Grant date fair value of Performance-based restricted stock units and Restricted stock units (in dollars per share) $ 22.26  
v3.21.1
Segments - Narrative (Details) - Operating Segments
3 Months Ended
Mar. 31, 2021
segment
region
customer
Segments  
Number of operating segments | segment 2
Consumer-to-Consumer  
Segments  
Number of consumers in money transfer | customer 2
Number of geographic regions in segment | region 5
v3.21.1
Segments - Reportable Segments Results (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Revenues:    
Total consolidated revenues $ 1,210.0 $ 1,190.0
Operating income:    
Total operating income 232.8 233.2
Restructuring-related expenses   (10.5)
Operating Segments    
Operating income:    
Total operating income 232.8 243.7
Operating Segments | Consumer-to-Consumer    
Revenues:    
Total consolidated revenues 1,050.9 1,015.4
Operating income:    
Total operating income 206.1 209.9
Operating Segments | Business Solutions    
Revenues:    
Total consolidated revenues 96.5 98.4
Operating income:    
Total operating income 12.6 13.9
Operating Segments | Other    
Revenues:    
Total consolidated revenues 62.6 76.2
Operating income:    
Total operating income $ 14.1 $ 19.9