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68
WESTERN UNION 2007 Annual Report
2007
Fair Market
Principal Value % of Total
Plan Corporate Bond Holdings (in millions) (in millions) Plan Assets
Allstate Corporation corporate bond $0.8 $0.8 0.20%
Hasbro Inc. corporate bond $0.2 $0.2 0.05%
Mellon FDG corporate bond $0.3 $0.3 0.08%
New York Life Insurance Company corporate bond $0.4 $0.4 0.10%
2006
Fair Market
Shares Value % of Total
Plan Corporate Stock Holdings (in thousands) (in millions) Plan Assets
Altria Group, Inc. common stock 11.4 $0.9 0.21%
First Data Corporation common stock* 14.9 $0.3 0.08%
The Western Union Company common stock 14.9 $0.3 0.07%
Bank of New York Company Inc. common stock 23.6 $0.8 0.20%
Fair Market
Principal Value % of Total
Plan Corporate Bond Holdings (in millions) (in millions) Plan Assets
Allstate Corporation corporate bond $0.5 $0.6 0.14%
Kraft Foods corporate bond $0.6 $0.7 0.16%
New York Life Insurance Company corporate bond $0.8 $0.8 0.19%
* Western Union was a segment of First Data prior to the Spin-off, as discussed in Note 1.
Certain members of the Company’s Board of Directors and man-
agement are affi liated with companies whose securities are held
in Western Union’s pension trust, which is managed by indepen-
dent asset managers. In addition, the pension trust holds securities
in companies that provide services for the Company’s pension
plans. Therefore, these affi liated companies are considered related
parties. The following table details plan assets invested in these
related party securities as of September 30, 2007 and 2006:
The maturities of debt securities at September 30, 2007 range
from less than one year to 80 years with a weighted-average
maturity of 14 years.
The assets of the Company’s defi ned benefi t plans are man-
aged in a third party master trust. The investment policy and
allocation of the assets in the master trust are overseen by the
Company’s Investment Council. Western Union employs a total
return investment approach whereby a mix of equities and fi xed
income investments are used in an effort to maximize the long-
term return of plan assets for a prudent level of risk. Risk tolerance
is established through careful consideration of plan liabilities and
plan funded status. The investment portfolio contains a diversifi ed
blend of equity and fi xed-income investments. Furthermore,
equity investments are diversifi ed across U.S. and non-U.S. stocks,
as well as securities deemed to be growth, value, and small and
large capitalizations. Other assets, primarily private equity, are
used judiciously in an effort to enhance long-term returns while
improving portfolio diversifi cation. Investment risk is measured
and monitored on an ongoing basis through quarterly investment
portfolio reviews, annual liability measurements, and periodic
asset and liability studies.
The estimated future benefi t payments are expected to be
$44.3 million in 2008, $43.1 million in 2009, $41.9 million in 2010,
$40.7 million in 2011, $39.5 million in 2012 and $175.9 million
in 2013 through 2017.
Western Union administers a post-retirement health care plan
to union employees that was in effect when First Data acquired
FFMC. Generally, retired employees bear the entire cost of the
premiums. Western Union also offers a short-term disability plan
for union employees. The Company’s obligations pursuant to
these plans are immaterial.
||
10. Operating Lease Commitments
Western Union leases certain real properties for use as customer
service centers and administrative and sales offi ces. Western
Union also leases data communications terminals, computers
and offi ce equipment. Certain of these leases contain renewal
options and escalation provisions. Total rent expense under
operating leases was $31.6 million, $29.2 million and $28.6
million during the years ended December 31, 2007, 2006 and
2005, respectively.
As of December 31, 2007, the minimum aggregate rental
commitments under all noncancelable operating leases, net of
sublease income commitments aggregating $8.0 million through
2012, are as follows (in millions):
Year Ending December 31,
2008 $22.7
2009 15.4
2010 11.4
2011 8.6
2012 7.5
Thereafter 19.5
Total future minimum lease payments $85.1