Western Union 2009 Annual Report Download - page 124

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and 2007, the Company’s Board of Directors declared an annual dividend of $0.04 per common share
representing $28.4 million and $30.0 million, respectively, in total dividends. These amounts were paid to
shareholders of record in December of each respective year.
On February 25, 2010, our Board of Directors declared a quarterly cash dividend of $0.06 per share
payable on March 31, 2010 to shareholders of record on March 19, 2010.
Share Repurchases
During the years ended December 31, 2009, 2008 and 2007, 24.8 million, 58.1 million and 34.7 million
shares, respectively, have been repurchased for $400.0 million, $1,313.9 million and $726.5 million,
respectively, excluding commissions, at an average cost of $16.10, $22.60 and $20.93 per share, respectively.
At December 31, 2009, common stock repurchases of up to $1.0 billion have been authorized by the Board of
Directors through December 31, 2012.
During December 2007, the Company’s Board of Directors adopted resolutions to retire all of its existing
treasury stock, thereby restoring the status of the Company’s common stock held in treasury as “authorized but
unissued”. The resulting impact to the Company’s Consolidated Balance Sheet was the elimination of
$462.0 million held in “Treasury stock” and a decrease in “Common stock” of $0.2 million and “Retained
earnings” of $461.8 million. There is no change to the Company’s overall equity position as a result of this
retirement. All shares repurchased by the Company subsequent to this resolution have been and will continue
to be retired at the time such shares are reacquired.
14. 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 British pound, Canadian dollar and other currencies, related to
forecasted money transfer revenues and on money transfer settlement assets and obligations. Subsequent to the
acquisition of Custom House, the Company is also exposed to risk from derivative contracts written to its
customers arising from its cross-currency business-to-business payments 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 uses derivatives to (a) minimize its exposures related to changes in foreign currency
exchange rates and interest rates and (b) facilitate cross-currency business-to-business payments by writing
derivatives to customers and entering into offsetting derivatives with established financial institution
counterparties, or by holding sufficient foreign currency cash balances to cover those transactions. Foreign
currency forward and option contracts and interest rate swaps of varying maturities are used in these activities.
The Company executes the consumer-to-consumer derivatives with established financial institutions, with
the substantial majority of these financial institutions having credit ratings of “A-” or better from a major
credit rating agency. The Company executes global business payments derivatives mostly with small and
medium size enterprises. The credit risk inherent in both the consumer-to-consumer and global business
payments 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. The Company also monitors 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 (including termination of contracts) when
doubt arises about the counterparties’ ability to perform. 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.
110
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)