Western Union 2009 Annual Report Download - page 136

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The Company’s reportable segments are reviewed separately below because each reportable segment
represents a strategic business unit that offers different products and serves different markets. The business
segment measurements provided to, and evaluated by, the Company’s CODM are computed in accordance with
the following principles:
• The accounting policies of the reportable segments are the same as those described in the summary of
significant accounting policies.
• Corporate and other overhead is allocated to the segments primarily based on a percentage of the
segments’ revenue compared to total revenue.
• Expenses incurred in connection with mergers and acquisitions are included in “Other.”
• During the year ended December 31, 2009, the Company recorded an accrual of $71.0 million for an
anticipated agreement and settlement with the State of Arizona, which has not been allocated to the
segments. On February 11, 2010, the Company signed an agreement and settlement which resolved all
outstanding legal issues and claims with the State and requires the Company to fund a multi-state
not-for-profit organization promoting safety and security along the United States and Mexico border,
in which California, Texas and New Mexico will participate with Arizona. While this item was
identifiable to the Company’s consumer-to-consumer segment, it was not included in the measurement
of segment operating profit provided to the CODM for purposes of assessing segment performance
and decision making with respect to resource allocation. For additional information on the settlement
accrual, refer to Note 6.
• Restructuring and related activities of $82.9 million for the year ended December 31, 2008 were not
allocated to the segments. While these items were identifiable to the Company’s segments, they were
not included in the measurement of segment operating profit provided to the CODM for purposes of
assessing segment performance and decision making with respect to resource allocation. For additional
information on restructuring and related activities refer to Note 4.
• In connection with the change in control of First Data, the Company incurred an accelerated stock-
based compensation vesting charge of $22.3 million during the year ended December 31, 2007. Of the
$22.3 million charge, $18.9 million, $3.0 million and $0.4 million were allocated to the
consumer-to-consumer, global business payments and other segments, respectively.
• All items not included in operating income are excluded.
122
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)