Western Union 2009 Annual Report Download - page 38

company’s operations could have an adverse effect on our business, financial position and results of
operations.
As of December 31, 2009, we had $2,143.4 million of goodwill comprising approximately 29% of our
total assets. An impairment review of goodwill is conducted at least once a year and more frequently if events
or changes in circumstances indicate that the carrying value of the goodwill may not be recoverable. If we are
unsuccessful in integrating the businesses we have acquired or acquire in the future, or if these acquired
businesses experience declines in operating income or cash flows, adverse changes in the business climate, or
if we are unable to successfully execute our strategy for these businesses, we may be required to write down
the goodwill on our balance sheet associated with these acquisitions, which could have an impact on our
financial position and results of operations in future periods.
Our consolidated balance sheet may not contain sufficient amounts or types of regulatory capital to meet
the changing requirements of our various regulators worldwide, which could adversely affect our business,
financial position and results of operations.
We have substantial indebtedness as of December 31, 2009. Our regulators expect us to possess sufficient
financial soundness and strength to adequately support our regulated subsidiaries. In addition, although we are
not a bank holding company for purposes of United States law or the law of any other jurisdiction, as a global
provider of payments services and in light of the changing regulatory environment in various jurisdictions, we
could become subject to new capital requirements introduced or imposed by our regulators that could require
us to issue securities that would qualify as Tier 1 regulatory capital under the Basel Committee accords or
retain earnings over a period of time. Any of these requirements could adversely affect our business, financial
position and results of operations.
If we are unable to maintain our agent, subagent or global business payments networks under terms
consistent with those currently in place, or if our agents or subagents fail to comply with Western Union
business and technology standards and contract requirements or applicable laws and regulations, our
business, financial position and results of operations would be adversely affected.
Most of our consumer-to-consumer revenue is derived through our agent network. In addition, our
international agents may have subagent relationships in which we are not directly involved. Transaction
volumes at existing agent and subagent locations often increase over time and new agents and subagents
provide us with additional revenue. If agents or subagents decide to leave our network, if we are unable to
sign new agents or maintain our agent network under terms consistent with those currently in place, or if our
agents are unable to maintain relationships with or sign new subagents, our revenue and profit growth rates
may be adversely affected. Agent attrition might occur for a number of reasons, including a competitor
engaging an agent or an agent’s dissatisfaction with its relationship with us or the revenue derived from that
relationship. In addition, agents may generate fewer transactions or less revenue for various reasons, including
increased competition or changes in the economy. Because an agent is a third party that engages in a variety
of activities in addition to providing our services, it may encounter business difficulties unrelated to its
provision of our services, which could cause the agent to reduce its number of locations, hours of operation, or
cease doing business altogether.
We rely on our agents’ information systems and/or processes to obtain transaction data. If an agent or
subagent loses information, if there is a significant disruption to the information systems of an agent or
subagent, or if an agent or subagent does not maintain the appropriate controls over their systems, we may
experience reputational harm which could result in losses to the Company.
The types of enterprises that are legally authorized to act as our agents vary significantly from one
country to another. Changes in the laws affecting the kinds of entities that are permitted to act as money
transfer agents (such as changes in requirements for capitalization or ownership) could adversely affect our
ability to distribute our services and the cost of providing such services, both by us and our agents. For
example, a requirement that a money transfer provider be a bank or other highly regulated financial entity
could increase significantly the cost of providing our services in many countries where that requirement does
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