Western Union 2013 Annual Report Download - page 238

2013 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
128
Cash Dividends Paid
Cash dividends paid for the years ended December 31, 2013, 2012 and 2011 were $277.2 million, $254.2 million and $194.2
million, respectively. Dividends per share declared quarterly by the Company's Board of Directors during the years ended 2013,
2012 and 2011 were as follows:
Year Q1 Q2 Q3 Q4
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.125 $ 0.125 $ 0.125 $ 0.125
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.10 $ 0.10 $ 0.10 $ 0.125
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.07 $ 0.08 $ 0.08 $ 0.08
On February 21, 2014, the Company's Board of Directors declared a quarterly cash dividend of $0.125 per share payable on
March 31, 2014.
Share Repurchases
During the years ended December 31, 2013, 2012 and 2011, 25.7 million, 51.0 million and 40.3 million shares, respectively,
have been repurchased for $393.6 million, $771.9 million and $800.0 million, respectively, excluding commissions, at an average
cost of $15.29, $15.12 and $19.83 per share, respectively.
On February 11, 2014, the Board of Directors authorized $500 million of common stock repurchases through June 30, 2015.
14. Derivatives
The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro,
and to a lesser degree the Canadian dollar, British pound, Australian dollar, Swiss franc, and other currencies, related to forecasted
money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from
derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. Additionally,
the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt.
The Company uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest
rates and (b) facilitate cross-currency Business Solutions payments by writing derivatives to customers.
The Company executes derivatives with established financial institutions, with the substantial majority of these financial
institutions having credit ratings of "A-" or better from a major credit rating agency. The Company also writes Business Solutions
derivatives mostly with small and medium size enterprises. The primary credit risk inherent in derivative agreements represents
the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a
review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis. The Company also monitors
the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able
to fully satisfy their obligations under the agreements, but takes action (including termination of contracts) when doubt arises about
the counterparties' ability to perform. The Company's hedged foreign currency exposures are in liquid currencies; consequently,
there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.
Foreign Currency — Consumer-to-Consumer
The Company's policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception
and a targeted weighted-average maturity of approximately one year, to mitigate some of the risk that changes in foreign currency
exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related
to its business. As of December 31, 2013, the Company's longer-term foreign currency forward contracts had maturities of a
maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash
flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during
the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge
that are excluded from the measure of effectiveness are recognized immediately in "Derivative gains/(losses), net" within the
Company's Consolidated Statements of Income.