Western Union 2015 Annual Report Download - page 137

35
We own patents and patent applications covering various aspects of our processes and services. We have been, are and in
the future may be, subject to claims alleging that our technology or business methods infringe intellectual property rights of
others, both inside and outside the United States. Unfavorable resolution of these claims could require us to change how we
deliver a service, result in significant financial consequences, or both, which could adversely affect our business, financial
condition, results of operations, and cash flows.
Material changes in the market value or liquidity of the securities we hold may adversely affect our results of operations and
financial condition.
As of December 31, 2015, we held $1.2 billion in investment securities, the substantial majority of which are state and
municipal debt securities. The majority of this money represents the principal of money orders issued by us to consumers
primarily in the United States and money transfers sent by consumers. We regularly monitor our credit risk and attempt to
mitigate our exposure by investing in highly-rated securities and by diversifying our investments. Despite those measures, it is
possible that the value of our portfolio may decline in the future due to any number of factors, including general market conditions,
credit issues, the viability of the issuer of the security, failure by a fund manager to manage the investment portfolio consistently
with the fund prospectus or increases in interest rates. Any such decline in value may adversely affect our results of operations
and financial condition.
The trust holding the assets of our pension plan has assets totaling approximately $276.7 million as of December 31, 2015.
The fair value of these assets held in the trust are compared to the plan's projected benefit obligation of $346.0 million to
determine the pension liability of $69.3 million recorded within "Other liabilities" in our Consolidated Balance Sheet as of
December 31, 2015. We attempt to mitigate risk through diversification, and we regularly monitor investment risk on our portfolio
through quarterly investment portfolio reviews and periodic asset and liability studies. Despite these measures, it is possible that
the value of our portfolio may decline in the future due to any number of factors, including general market conditions and credit
issues. Such declines could have an impact on the funded status of our pension plan and future funding requirements.
We have substantial debt obligations that could restrict our operations.
As of December 31, 2015, we had approximately $3.2 billion in consolidated indebtedness, and we may also incur additional
indebtedness in the future.
Our indebtedness could have adverse consequences, including:
• limiting our ability to pay dividends to our stockholders or to repurchase stock consistent with our historical practices;
• increasing our vulnerability to changing economic, regulatory and industry conditions;
• limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
• limiting our ability to borrow additional funds; and
• requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing
funds available for working capital, capital expenditures, acquisitions and other purposes.
There would be adverse tax consequences associated with using certain earnings generated outside the United States to pay
the interest and principal on our indebtedness. Accordingly, this portion of our cash flow will be unavailable under normal
circumstances to service our debt obligations.
201 FORM 10 K
5 -