Western Union 2011 Annual Report Download - page 80

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Obligations under certain contracts are usage-based and are, therefore, estimated in the above amounts.
Historically, we have not had any significant defaults of our contractual obligations or incurred significant
penalties for termination of our contractual obligations.
(h) This line item includes certain additional investments in our compliance programs along the United States
and Mexico border, which are expected to cost up to $19 million over the next two years pursuant to the
agreement and settlement with the State of Arizona and other states. This line item also includes the pending
acquisition of the French assets of TGBP. Due to pending regulatory matters, this acquisition for cash
consideration of £3 million (approximately $4.7 million based on currency exchange rates at December 31,
2011) has not been finalized as of December 31, 2011. This acquisition is expected to close in 2012, subject
to regulatory approval and satisfaction of closing conditions.
Other Commercial Commitments
We had approximately $120 million in outstanding letters of credit and bank guarantees as of December 31,
2011, with expiration dates through 2015, the majority of which contain a one-year renewal option. The letters of
credit and bank guarantees are primarily held in connection with lease arrangements and certain agent
agreements. We expect to renew the letters of credit and bank guarantees prior to expiration in most
circumstances.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of results of operations and financial condition is based on our
consolidated financial statements that have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these consolidated financial statements requires that
management make estimates and assumptions that affect the amounts reported for revenues, expenses, assets,
liabilities and other related disclosures. Actual results may or may not differ from these estimates. Our significant
accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of the Notes to
Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data.
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