Western Union 2011 Annual Report Download - page 71

2012 Changes in Reportable Segments
In connection with the acquisition of TGBP, recent management changes, and other key strategic initiatives,
we will implement a new segment structure to assess performance and allocate resources, beginning in the first
quarter of 2012. The changes in our segment structure primarily relate to the separation of the Global Business
Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. A
summary of how the segments will be structured follows:
Segment Description
Consumer-to-Consumer Money transfer services between consumers, primarily through a global network of
third-party agents.
Consumer-to-Business Processing of payments from consumers to businesses and other organizations,
including utilities, auto finance companies, mortgage servicers, financial service
providers, government agencies and other businesses.
Business Solutions Business-to-business payment solutions, primarily for cross-border, cross-currency
transactions, including services provided under our existing Western Union Business
Solutions business and TGBP, which was acquired in November 2011.
Other Businesses that have not been classified into one of our other segments. These
businesses primarily include our money order and prepaid services businesses.
Capital Resources and Liquidity
Our primary source of liquidity has been cash generated from our operating activities, primarily from net
income and fluctuations in working capital. Our working capital is affected by the timing of interest payments on
our outstanding borrowings, timing of income tax payments, including our tax deposit described further in “Cash
Flows from Operating Activities,” and collections on receivables, among other items. The majority of our interest
payments are due in the second and fourth quarters which results in a decrease in the amount of cash provided by
operating activities in those quarters and a corresponding increase to the first and third quarters.
Our future cash flows could be impacted by a variety of factors, some of which are out of our control,
including changes in economic conditions, especially those impacting the migrant population and changes in
income tax laws or the status of income tax audits, including the resolution of outstanding tax matters.
A significant portion of our cash flows from operating activities has been generated from subsidiaries, some of
which are regulated entities. These subsidiaries may transfer all excess cash to the parent company for general
corporate use except for assets subject to legal or regulatory restrictions. Assets subject to legal or regulatory
restrictions, totaling approximately $230 million as of December 31, 2011, include assets outside of the United
States subject to restrictions from being transferred outside of the countries where they are located. We are also
required to maintain cash and investment balances in our regulated subsidiaries related to certain of our money
transfer and other payment obligations. Significant changes in the regulatory environment for money transmitters
could impact our primary source of liquidity.
We believe we have adequate liquidity to meet our business needs, including approximately $190 million of
tax payments we expect to make in 2012 as a result of the IRS Agreement, dividends and share repurchases,
through our existing cash balances and our ability to generate cash flows through operations. As of December 31,
2011, we had no outstanding borrowings under our $1.65 billion revolving credit facility (“Revolving Credit
Facility”) and had $297.0 million of commercial paper borrowings outstanding, which left $1,353.0 million
remaining that was available to borrow on the Revolving Credit Facility.
64