Western Union 2013 Annual Report Download - page 244

2013 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
134
15. Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
December 31, 2013 December 31, 2012
Due in less than one year:
Floating rate notes (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 300.0
6.500% notes (effective rate of 5.7%) due 2014 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.0 500.0
Due in greater than one year (b):
Floating rate notes due 2015 (c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.0 —
2.375% notes due 2015 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.0 250.0
5.930% notes due 2016 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000.0 1,000.0
2.875% notes (effective rate of 2.0%) due 2017 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.0 500.0
3.650% notes due 2018 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.0 400.0
3.350% notes (effective rate of 3.4%) due 2019 (e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.0 —
5.253% notes due 2020 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324.9 324.9
6.200% notes due 2036 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.0 500.0
6.200% notes due 2040 (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.0 250.0
Other borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 5.8
Total borrowings at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,230.6 4,030.7
Fair value hedge accounting adjustments, net (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 20.2
Unamortized discount, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.5)(21.7)
Total borrowings at carrying value (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,213.0 $ 4,029.2
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(a) The floating rate notes due in March 2013 were repaid using the Company's cash, including cash generated from operations
and proceeds from the Company's issuance of the fixed rate notes due 2015 and 2017.
(b) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments
on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage
its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge
accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be
reclassified as reductions to or increases in "Interest expense" in the Consolidated Statements of Income over the life of
the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.
(c) On August 22, 2013, the Company issued $250.0 million of aggregate principal amount of unsecured floating rate notes
due August 21, 2015 ("2015 Floating Rate Notes"). Interest is payable quarterly at a per annum rate equal to three-month
LIBOR plus 1.0% (1.2% at December 31, 2013) and is reset quarterly. See below for additional detail relating to the debt
issuance.
(d) The difference between the stated interest rate and the effective interest rate is not significant.
(e) On November 22, 2013, the Company issued $250.0 million of aggregate principal amount of 3.350% unsecured fixed
rate notes due 2019 ("2019 Notes"). The interest rate on the 2019 Notes may be adjusted under certain circumstances as
described below.
(f) As of December 31, 2013, the Company’s weighted-average effective rate on total borrowings was approximately 4.6%.
The Company’s maturities of borrowings at par value as of December 31, 2013 are $500.0 million in 2014, $500.0 million in
2015, $1.0 billion in 2016, $500.0 million in 2017, $400.0 million in 2018, and approximately $1.3 billion thereafter.
The Company’s obligations with respect to its outstanding borrowings, as described above, rank equally.