Western Union 2012 Annual Report Download - page 47

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With respect to taxes and other liabilities that could be imposed as a result of a final determination that is inconsistent with
the anticipated tax consequences of the Spin-off (as set forth in the private letter ruling and relevant tax opinion) (“Spin-off Related
Taxes”), we, one of our affiliates or any person that, after the Spin-off, is an affiliate thereof, will be liable to First Data for any
such Spin-off Related Taxes attributable solely to actions taken by or with respect to us. In addition, we will also be liable for 50%
of any Spin-off Related Taxes (i) that would not have been imposed but for the existence of both an action by us and an action by
First Data or (ii) where we and First Data each take actions that, standing alone, would have resulted in the imposition of such
Spin-off Related Taxes. We may be similarly liable if we breach certain representations or covenants set forth in the tax allocation
agreement. If we are required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it
likely would have an adverse effect on our business, financial condition, results of operations and cash flows.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Properties and Facilities
As of December 31, 2012, we have offices in nearly 60 countries, which includes five owned facilities and approximately 25
United States and 400 international leased properties. Our owned facilities include our corporate headquarters located in Englewood,
Colorado.
Our owned and leased facilities are used for operational, sales and administrative purposes in support of our Consumer-to-
Consumer, Consumer-to-Business, and Business Solutions segments and are all currently being utilized. In certain locations, our
offices include customer service centers, where our employees answer operational questions from agents and customers. Our office
in Dublin, Ireland serves as our international headquarters.
We believe that our facilities are suitable and adequate for our current business; however, we periodically review our facility
requirements and may acquire new facilities and update existing facilities to meet the needs of our business or consolidate and
dispose of or sublet facilities which are no longer required.
ITEM 3. LEGAL PROCEEDINGS
On March 20, 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney's Office
for the Central District of California (“USAO”) seeking documents relating to Shen Zhou International (“US Shen Zhou”), a
former Western Union agent located in Monterey Park, California. The principal of US Shen Zhou was indicted in 2010 and is
currently awaiting trial in U.S. v. Zhi He Wang (SA CR 10-196, C.D. Cal.). Concurrent with the government's service of the
subpoena, the government notified the Company that it is a target of an ongoing investigation into structuring and money laundering.
Since March 20, 2012, the Company has received additional subpoenas from the USAO seeking additional documents relating to
US Shen Zhou, materials relating to certain other former and current agents and other materials relating to the Company's anti-
money laundering compliance policies and procedures. The government's investigation is ongoing and the Company may receive
additional requests for information as part of the investigation. The Company continues to cooperate fully with the government.
The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which
could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the
Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory
consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.
In the fourth quarter of 2011 and in the third quarter of 2012, Western Union received Civil Investigative Demands from
certain state attorneys general who have initiated an investigation into whether the Company took adequate steps to help prevent
consumer fraud from 2010 to 2011. The Civil Investigative Demands seek information and documents relating to consumer fraud
complaints that the Company has received and the Company's procedures to help identify and prevent fraudulent transfers. Due
to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range
of loss, if any, which could be associated with any possible civil claims that might be brought by one or more of the states. Should
such claims be brought, the Company could face significant fines, damage awards, or regulatory consequences, or compulsory
changes in our business practices, that could have a material adverse effect on our business, financial condition, and results of
operations.