Western Union 2009 Annual Report Download - page 143

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CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
THE WESTERN UNION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation
The Western Union Company (“the Parent”) is a holding company that conducts substantially all of its
business operations through its subsidiaries. Under a parent company only presentation, the Parent’s
investments in its consolidated subsidiaries are presented under the equity method of accounting, and the
condensed financial statements do not present the financial statements of the Parent and its subsidiaries on a
consolidated basis. These financial statements should be read in conjunction with The Western Union
Company’s consolidated financial statements.
2. Restricted Net Assets
Certain assets of the Parent’s subsidiaries totaling approximately $190 million constitute restricted net
assets, as there are legal or regulatory limitations on transferring such assets outside of the countries where the
respective assets are located, or because they constitute undistributed earnings of affiliates of the Parent
accounted for under the equity method of accounting. As of December 31, 2009, the Parent is in a
stockholders’ equity position of $353.5 million, and as such, all of the restricted net assets of the Parent’s
subsidiaries currently exceeds 25% of the consolidated net assets of the Parent and its subsidiaries, thus
requiring this Schedule I, “Condensed Financial Information of the Registrant.”
3. Related Party Transactions
Excess cash generated from operations of the Parent’s subsidiaries that is not required to meet certain
regulatory requirements is paid periodically to the Parent and is reflected as “Payable to subsidiaries, net” in
the Condensed Balance Sheet as of December 31, 2009. The Parent’s subsidiaries periodically distribute excess
cash balances to the Parent in the form of a dividend, although the amounts of such dividends may vary from
year to year.
The Parent files a consolidated U.S. federal income tax return, and also a number of consolidated state
income tax returns on behalf of its subsidiaries. In these circumstances, the Parent is responsible for remitting
income tax payments on behalf of the consolidated group. The Parent’s provision for income taxes has been
computed as if it were a separate tax-paying entity.
4. Commitments and Contingencies
The Parent provides guarantees of the performance on property leases to its subsidiaries for properties
located in various facilities in the United States and Mexico.
The Company provides a parental guarantee to one of its subsidiaries for letters of credit to certain
agents. These letters of credit are amended quarterly. As of December 31, 2009, $2.4 million of letters of
credit were outstanding.
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