Western Union 2013 Annual Report Download - page 165

2013 FORM 10-K
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(a) Revenue for the years ended December 31, 2012 and 2011 included $238.5 million and $35.2 million, respectively, of
revenue related to Travelex Global Business Payments ("TGBP"), which was acquired in November 2011. Revenue for
the years ended December 31, 2010 and 2009 included $111.0 million and $30.8 million, respectively, of revenue related
to the Custom House Ltd. ("Custom House") acquisition in September 2009. TGBP and Custom House have subsequently
been rebranded to "Western Union Business Solutions."
(b) Operating expenses for the years ended December 31, 2011 and 2010 included $46.8 million and $59.5 million of
restructuring and related expenses, respectively, associated with a restructuring plan designed to reduce overall headcount
and migrate positions from various facilities, primarily within the United States and Europe, to regional operating centers.
(c) Operating expenses for the year ended December 31, 2009 included an accrual of $71.0 million resulting from an agreement
and settlement, which resolved all outstanding legal issues and claims with the State of Arizona and required us to fund a
multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which
California, Texas and New Mexico have participated with Arizona. The settlement agreement was signed on February 11,
2010.
(d) Interest income consists of interest earned on cash balances not required to satisfy settlement obligations and in connection
with loans previously made to certain existing agents.
(e) Interest expense primarily relates to our outstanding borrowings.
(f) In 2011, we recognized gains of $20.5 million and $29.4 million, in connection with the remeasurement of our former
equity interests in Finint, S.r.l. and Angelo Costa, S.r.l., respectively, to fair value. These equity interests were remeasured
in conjunction with our purchases of the remaining interests in these entities that we previously did not hold. Additionally,
in 2011, we recognized a $20.8 million net gain on foreign currency forward contracts entered into in order to reduce the
economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated
in foreign currencies, primarily for the TGBP acquisition. In 2009, given the increased uncertainty, at that time, surrounding
the numerous third-party legal claims associated with our receivable from the Reserve International Liquidity Fund, Ltd.,
we reserved $12.0 million representing the estimated impact of a pro-rata distribution. In 2010, we recorded a recovery
of this reserve of $6.3 million due to the final settlement of this receivable.
(g) In December 2011, we reached an agreement with the United States Internal Revenue Service ("IRS Agreement") resolving
substantially all of the issues related to the restructuring of our international operations in 2003. As a result of the IRS
Agreement, we recognized a tax benefit of $204.7 million related to the adjustment of reserves associated with this matter.
(h) Net cash provided by operating activities during the year ended December 2012 was impacted by tax payments of $92.4
million made as a result of the IRS Agreement. Net cash provided by operating activities decreased during the year ended
December 31, 2010, primarily due to a $250 million tax deposit made relating to United States federal tax liabilities,
including those arising from our 2003 international restructuring, which were previously accrued in our consolidated
financial statements. Also impacting net cash provided by operating activities during the year ended December 31, 2010
were cash payments of $71.0 million related to the agreement and settlement with the State of Arizona and other states.
(i) Capital expenditures include capitalization of contract costs, capitalization of purchased and developed software and
purchases of property and equipment.
(j) On February 11, 2014, the Board of Directors authorized $500 million of common stock repurchases through June 30,
2015. During the years ended December 31, 2013, 2012, 2011, 2010 and 2009, we repurchased 25.7 million, 51.0 million,
40.3 million, 35.6 million and 24.8 million shares, respectively.
(k) During 2013, the Board of Directors declared quarterly cash dividends of $0.125 per common share. During 2012, the
Board of Directors declared quarterly cash dividends of $0.125 per common share in the fourth quarter and $0.10 per
common share in each of the first three quarters. During 2011, the Board of Directors declared quarterly cash dividends
of $0.08 per common share in each of the last three quarters and $0.07 per common share in the first quarter. During 2010,
the Board of Directors declared quarterly cash dividends of $0.07 per common share in the fourth quarter and $0.06 per
common share in each of the first three quarters. During the fourth quarter of 2009, the Board of Directors declared an
annual cash dividend of $0.06 per common share.
(l) Consumer-to-Consumer transactions include Western Union, Vigo and Orlandi Valuta branded Consumer-to-Consumer
money transfer services worldwide.