Western Union 2011 Annual Report Download - page 38

The trust holding the assets of our pension plan has assets totaling approximately $301.7 million as of
December 31, 2011. The fair value of these assets held in the trust are compared to the plan’s projected benefit
obligation to determine the pension liability of $112.7 million recorded within “Other liabilities” in our
Consolidated Balance Sheet as of December 31, 2011. We attempt to mitigate risk through diversification, and
we regularly monitor investment risk on our portfolio through quarterly investment portfolio reviews and
periodic asset and liability studies. Despite these measures, it is possible that the value of our portfolio may
decline in the future due to any number of factors, including general market conditions and credit issues. Such
declines could have an impact on the funded status of our pension plan and future funding requirements.
We have substantial debt obligations that could restrict our operations.
As of December 31, 2011, we had approximately $3.6 billion in consolidated indebtedness, and we may also
incur additional indebtedness in the future.
Our indebtedness could have adverse consequences, including:
• limiting our ability to pay dividends to our stockholders;
• increasing our vulnerability to changing economic, regulatory and industry conditions;
• limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business
and the industry;
• limiting our ability to borrow additional funds; and
• requiring 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 and other
purposes.
There would be adverse tax consequences associated with using certain earnings generated outside the United
States to pay the interest and principal on our indebtedness. Accordingly, this portion of our cash flow will be
unavailable under normal circumstances to service our debt obligations.
Risks Related to Our Regulatory and Litigation Environment
As described under Item 1 of Part I, our business is subject to a wide range of laws and regulations enacted by
the United States federal government, each of the states (including licensing requirements), many localities and
many other countries and jurisdictions, such as the European Union. Regulations to which we are subject include
financial services regulations, consumer disclosure and consumer protection laws, currency control regulations,
money transfer, payment instrument, and foreign exchange derivative licensing regulations, unclaimed property
laws, competition laws and laws covering consumer privacy, data protection and information security. The
failure by us, our agents or subagents to comply with any such laws or regulations could have an adverse effect
on our business, financial condition and results of operations and could seriously damage our reputation and
brands, and result in diminished revenue and profit and increased operating costs.
Our business is subject to a wide range of laws and regulations intended to help detect and prevent money
laundering, terrorist financing, fraud and other illicit activity. Failure by us, our agents or our subagents to
comply with those laws and regulations could have an adverse effect on our business, financial condition and
results of operations.
Our services are subject to an increasingly strict set of legal and regulatory requirements intended to help
detect and prevent money laundering, terrorist financing, fraud, and other illicit activity. The interpretation of
those requirements by judges, regulatory bodies and enforcement agencies is changing, often quickly and with
31