Western Union 2010 Annual Report Download - page 24

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applicable law and best practices, the ingenuity of criminal fraudsters, combined with the potential susceptibility to
fraud by consumers during economically difficult times, make the prevention of consumer fraud a significant and
challenging problem. Our failure to continue to help prevent such frauds, an increase in government enforcement
activity or a change in laws or their interpretation could have an adverse effect on our business, financial position
and results of operations.
Difficult conditions in the global financial markets, the global economic crisis and continued financial market
disruptions could adversely affect our business, financial condition and results of operations.
The global capital and credit markets have experienced unprecedented volatility and disruption in recent years
and we face certain risks if such events reoccur, including:
• Our agents or clients could experience reduced sales or business as a result of a deterioration in economic
conditions. As a result, our agents could reduce their numbers of locations or hours of operation, or cease
doing business altogether. Businesses using our services may make fewer cross-currency payments or may
have fewer customers making payments to them through us, particularly businesses in those industries that
may be more affected by an economic downturn.
• Our revolving credit facility with a consortium of banks is one source for funding liquidity needs and also
backs our commercial paper program. If any of the banks participating in our credit facility fails to fulfill its
lending commitment to us, our short-term liquidity and ability to support borrowings under our commercial
paper program could be adversely affected.
• We may be unable to refinance our existing indebtedness as it becomes due or we may have to refinance on
unfavorable terms, which could require us to dedicate a substantial portion of our cash flow from operations
to payments on our debt, thereby reducing funds available for working capital, capital expenditures,
acquisitions, share repurchases and other purposes.
• The market value of the securities in our investment portfolio may substantially decline. The impact of that
decline in value may adversely affect our results of operations and financial condition.
• The derivative financial instruments that we use reduce our exposure to various market risks including
changes in interest rates and foreign exchange rates. Our counterparties to our derivative instruments may fail
to honor their obligations, which could expose us to risks we had sought to mitigate. That failure could have
an adverse effect on our financial condition and results of operations.
• We aggregate our foreign exchange exposures in our Business Solutions business, including the exposure
generated by the derivative contracts we write to our customers as part of our cross-currency payments
business, and typically hedge the net exposure through offsetting contracts with established financial
institution counterparties. If our customers fail to honor their obligations or if the counterparties to our
offsetting positions fail to honor their obligations, our business, financial position and results of operations
could be adversely affected.
• Our exposure to receivables from our agents, consumers and businesses could impact us. For more
information on this risk, see risk factor, “We face credit, liquidity and fraud risks from our agents,
consumers and businesses that could adversely affect our business, financial position and results of
operations.”
• The third-party service providers on whom we depend may experience difficulties in their businesses, which
may impair their ability to provide services to us and have a potential impact on our own business. The impact
of a change or temporary stoppage of services may have an adverse effect on our business, results of
operations and financial condition.
• Banks upon which we rely to conduct our businesses could fail. This could lead to our inability to access
funds and/or credit losses for us and could adversely impact our ability to conduct our business.
• If market disruption and volatility occurs, we could experience difficulty in accessing capital and our
business, financial condition and results of operations could be adversely impacted.
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