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WESTERN UNION 2006 Annual Report 80
Amounts advanced to agents
From time to time, we make advances and loans to agents.
In 2006, we signed a six year agreement with one of
our existing agents which included a four year loan of
$140.0 million to the agent, of which $20.0 million was
repaid by the agent during 2006. The terms of the loan
agreement require that a percentage of commissions
earned by the agent (52% in 2007, 61% in 2008 and
64% in 2009) be withheld by us as repayment of the
loan and the agent remains obligated to repay the loan if
commissions earned are not sufficient. We impute interest
on this below-market rate note receivable and recorded it
net of an original discount of $52.7 million. Such discount
was $37.8 million as of December 31, 2006.
|| 8. Property and Equipment
Property and equipment consists of the following (in millions):
December 31, 2006 2005
Equipment $ 245.8 $ 222.0
Leasehold improvements 32.4 27.1
Furniture and fixtures 23.9 16.6
Land and improvements 12.9 —
Buildings 71.5 —
Projects in process 2.7 0.3
389.2 266.0
Less accumulated depreciation (213.1) (183.6)
Property and equipment, net $ 176.1 $ 82.4
Amounts charged to expense for depreciation of property and equipment were $34.8 million, $32.0 million, and
$34.0 million during the years ended December 31, 2006, 2005 and 2004, respectively.
|| 9. Other Assets and
Other Liabilities
The following table summarizes the components of other assets and other liabilities (in millions):
December 31, 2006 2005
OTHER ASSETS:
Equity method investments $165.1 $150.2
Amounts advanced to agents, net of discounts 112.4 46.0
Deferred customer set up costs 45.5 46.2
Prepaid commissions 37.8 —
Accounts receivable, net 24.3 24.8
Receivable from First Data for stock option proceeds 17.8 —
Prepaid expenses 16.6 9.0
Debt issue costs 14.6 —
Derivative financial instruments 0.6 19.4
Other 68.7 46.4
Total other assets $503.4 $342.0
OTHER LIABILITIES:
Deferred revenue $ 83.3 $ 87.1
Derivative financial instruments 12.8 1.1
Due to minority interest holder — 23.8
Other 51.3 35.9
Total other liabilities $147.4 $147.9