Western Union 2011 Annual Report Download - page 30

Difficult conditions in global financial markets, global economic downturns and financial market disruptions
could adversely affect our business, financial condition and results of operations.
The global capital and credit markets have experienced in recent years, and in the future may experience,
unprecedented volatility and disruption and we face certain risks relating to such events, 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 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 condition and results of
operations.”
• 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 counterparties to the derivative financial instruments that we use to reduce our exposure to various
market risks, including changes in interest rates and foreign exchange rates, 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 condition and results of
operations 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, dividends, and other purposes.
• 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.
• 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 business could fail or be unable to satisfy their obligations to us.
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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