Western Union 2011 Annual Report Download - page 156

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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 $230 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, 2011, the Parent is in a stockholders’
equity position of $894.8 million, and as such, 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 Sheets as of December 31, 2011 and 2010. 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 United States 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 had $13.3 million in outstanding letters of credit and bank guarantees, including parental
guarantees for subsidiaries, as of December 31, 2011 with expiration dates through 2012. The letters of credit and
bank guarantees are primarily held in connection with credit-related dealings, which include, but are not limited
to, derivatives and foreign exchange transactions. The Company expects to renew the letters of credit and bank
guarantees prior to expiration in most circumstances.
149