Western Union 2009 Annual Report Download - page 103

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Company also evaluates impairment issues associated with restructuring activities when the carrying amount
of the assets may not be fully recoverable. Restructuring and related expenses consist of direct and incremental
costs associated with restructuring and related activities, including severance, outplacement and other
employee related benefits; facility closure and migration of the Company’s IT infrastructure; other expenses
related to relocation of various operations to existing Company facilities and third-party providers, including
hiring, training, relocation, travel and professional fees. Also included in facility closure expenses are non-cash
expenses related to fixed asset and leasehold improvement write-offs and acceleration of depreciation and
amortization. For more information on the Company’s restructuring and related expenses see Note 4,
“Restructuring and Related Expenses.”
New Accounting Pronouncements
On January 1, 2010, the Company adopted new accounting requirements for the consolidation of variable
interest entities. Variable interest entities are those entities that require additional financial support beyond that
provided by traditional equity holders. The new consolidation guidance will require consideration of whether
the Company has the power to direct the activities that most significantly impact each entities’ economic
performance. The Company has not yet completed its assessment of this guidance; however, the impact of
adopting these new requirements is not expected to have a significant impact on the Company’s consolidated
financial position, results of operations and cash flows.
3. Acquisitions
Custom House, Ltd.
On September 1, 2009, the Company acquired Canada-based Custom House, a provider of international
business-to-business payment services, for $371.0 million. The acquisition of Custom House has allowed the
Company to enter the international business-to-business payments market. Custom House facilitates cross-
border, cross-currency payment transactions. These payment transactions are conducted through various
channels including the telephone and internet. The significant majority of Custom House’s revenue is from
exchanges of currency at the spot rate enabling customers to make cross-currency payments. In addition, this
business writes foreign currency forward and option contracts for their customers to facilitate future payments.
The duration of these derivatives contracts is generally nine months or less. The results of operations for
Custom House have been included in the Company’s consolidated financial statements from the date of
acquisition, September 1, 2009.
89
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)