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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Western Union Company | NYSE:WU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.45 | 3.46% | 13.45 | 13.42 | 13.08 | 13.11 | 4,053,586 | 01:00:00 |
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
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September 30, 2016
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¨
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
20-4531180
(I.R.S. Employer
Identification No.)
|
12500 EAST BELFORD AVENUE
ENGLEWOOD, CO
(Address of principal executive offices)
|
|
80112
(Zip Code)
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Large accelerated filer
þ
|
|
Accelerated filer
¨
|
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
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PAGE
NUMBER
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months Ended September 30,
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Nine Months Ended
September 30, |
||||||||||||
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2016
|
|
2015
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|
2016
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|
2015
|
||||||||
Revenues:
|
|
|
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|
|
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|
||||||||
Transaction fees
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$
|
960.4
|
|
|
$
|
994.9
|
|
|
$
|
2,840.7
|
|
|
$
|
2,931.8
|
|
Foreign exchange revenues
|
381.5
|
|
|
372.3
|
|
|
1,105.8
|
|
|
1,072.4
|
|
||||
Other revenues
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35.9
|
|
|
32.0
|
|
|
104.7
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|
|
99.5
|
|
||||
Total revenues
|
1,377.8
|
|
|
1,399.2
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|
4,051.2
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|
4,103.7
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||||
Expenses:
|
|
|
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|
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|
||||||||
Cost of services
|
822.9
|
|
|
817.2
|
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2,424.2
|
|
|
2,388.4
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|
||||
Selling, general and administrative
|
276.6
|
|
|
277.5
|
|
|
829.8
|
|
|
887.7
|
|
||||
Total expenses
|
1,099.5
|
|
|
1,094.7
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3,254.0
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|
3,276.1
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||||
Operating income
|
278.3
|
|
|
304.5
|
|
|
797.2
|
|
|
827.6
|
|
||||
Other income/(expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
1.1
|
|
|
3.0
|
|
|
2.7
|
|
|
8.4
|
|
||||
Interest expense
|
(41.4
|
)
|
|
(42.2
|
)
|
|
(122.9
|
)
|
|
(127.1
|
)
|
||||
Derivative gains, net
|
0.3
|
|
|
1.4
|
|
|
2.2
|
|
|
2.4
|
|
||||
Other income/(expense), net
|
1.7
|
|
|
(1.3
|
)
|
|
0.8
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|
|
(6.4
|
)
|
||||
Total other expense, net
|
(38.3
|
)
|
|
(39.1
|
)
|
|
(117.2
|
)
|
|
(122.7
|
)
|
||||
Income before income taxes
|
240.0
|
|
|
265.4
|
|
|
680.0
|
|
|
704.9
|
|
||||
Provision for income taxes
|
23.1
|
|
|
33.1
|
|
|
71.8
|
|
|
79.4
|
|
||||
Net income
|
$
|
216.9
|
|
|
$
|
232.3
|
|
|
$
|
608.2
|
|
|
$
|
625.5
|
|
Earnings per share:
|
|
|
|
|
|
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|
||||||||
Basic
|
$
|
0.45
|
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|
$
|
0.46
|
|
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$
|
1.24
|
|
|
$
|
1.21
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|
Diluted
|
$
|
0.44
|
|
|
$
|
0.45
|
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$
|
1.23
|
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|
$
|
1.20
|
|
Weighted-average shares outstanding:
|
|
|
|
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|
||||||||
Basic
|
487.0
|
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|
509.6
|
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492.4
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|
515.3
|
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||||
Diluted
|
490.3
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|
513.2
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495.5
|
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|
519.4
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Cash dividends declared per common share
|
$
|
0.16
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$
|
0.155
|
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$
|
0.48
|
|
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$
|
0.465
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
216.9
|
|
|
$
|
232.3
|
|
|
$
|
608.2
|
|
|
$
|
625.5
|
|
Other comprehensive income/(loss), net of tax (Note 7):
|
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|
|
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|
||||||||
Unrealized gains/(losses) on investment securities
|
(2.1
|
)
|
|
3.7
|
|
|
4.6
|
|
|
(2.1
|
)
|
||||
Unrealized losses on hedging activities
|
(12.1
|
)
|
|
(4.2
|
)
|
|
(39.2
|
)
|
|
(1.8
|
)
|
||||
Foreign currency translation adjustments
|
0.6
|
|
|
(3.9
|
)
|
|
(3.5
|
)
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(8.2
|
)
|
||||
Defined benefit pension plan adjustments
|
1.7
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|
1.6
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5.1
|
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|
4.7
|
|
||||
Total other comprehensive loss
|
(11.9
|
)
|
|
(2.8
|
)
|
|
(33.0
|
)
|
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(7.4
|
)
|
||||
Comprehensive income
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$
|
205.0
|
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$
|
229.5
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$
|
575.2
|
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$
|
618.1
|
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|
September 30, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,280.7
|
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$
|
1,315.9
|
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Settlement assets
|
3,389.0
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|
3,308.7
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|
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Property and equipment, net of accumulated depreciation of $587.2 and $538.2, respectively
|
224.4
|
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|
231.8
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|
||
Goodwill
|
3,162.3
|
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|
3,163.8
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|
||
Other intangible assets, net of accumulated amortization of $955.4 and $884.4, respectively
|
693.4
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|
705.0
|
|
||
Other assets (Note 1)
|
768.9
|
|
|
724.0
|
|
||
Total assets
|
$
|
9,518.7
|
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|
$
|
9,449.2
|
|
Liabilities and Stockholders' Equity
|
|
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|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
557.4
|
|
|
$
|
606.6
|
|
Settlement obligations
|
3,389.0
|
|
|
3,308.7
|
|
||
Income taxes payable
|
235.8
|
|
|
211.5
|
|
||
Deferred tax liability, net
|
272.8
|
|
|
272.6
|
|
||
Borrowings (Note 1)
|
3,224.8
|
|
|
3,215.9
|
|
||
Other liabilities
|
451.3
|
|
|
429.0
|
|
||
Total liabilities
|
8,131.1
|
|
|
8,044.3
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 4)
|
|
|
|
||||
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|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 2,000 shares authorized; 485.2 shares and 502.4 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively
|
4.9
|
|
|
5.0
|
|
||
Capital surplus
|
628.7
|
|
|
566.5
|
|
||
Retained earnings
|
930.9
|
|
|
977.3
|
|
||
Accumulated other comprehensive loss
|
(176.9
|
)
|
|
(143.9
|
)
|
||
Total stockholders' equity
|
1,387.6
|
|
|
1,404.9
|
|
||
Total liabilities and stockholders' equity
|
$
|
9,518.7
|
|
|
$
|
9,449.2
|
|
|
Nine Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
608.2
|
|
|
$
|
625.5
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
55.0
|
|
|
49.6
|
|
||
Amortization
|
142.9
|
|
|
151.6
|
|
||
Other non-cash items, net
|
62.0
|
|
|
32.8
|
|
||
Increase/(decrease) in cash resulting from changes in:
|
|
|
|
||||
Other assets
|
(41.8
|
)
|
|
(118.2
|
)
|
||
Accounts payable and accrued liabilities
|
(50.2
|
)
|
|
41.1
|
|
||
Income taxes payable
|
25.6
|
|
|
33.5
|
|
||
Other liabilities
|
20.2
|
|
|
(11.7
|
)
|
||
Net cash provided by operating activities
|
821.9
|
|
|
804.2
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Capitalization of contract costs
|
(85.9
|
)
|
|
(110.5
|
)
|
||
Capitalization of purchased and developed software
|
(39.7
|
)
|
|
(30.5
|
)
|
||
Purchases of property and equipment
|
(51.4
|
)
|
|
(65.7
|
)
|
||
Purchases of non-settlement related investments and other
|
(44.1
|
)
|
|
(111.2
|
)
|
||
Proceeds from maturity of non-settlement related investments and other
|
22.7
|
|
|
—
|
|
||
Purchases of held-to-maturity non-settlement related investments
|
(39.7
|
)
|
|
—
|
|
||
Proceeds from held-to-maturity non-settlement related investments
|
4.2
|
|
|
—
|
|
||
Net cash used in investing activities
|
(233.9
|
)
|
|
(317.9
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Cash dividends paid
|
(235.1
|
)
|
|
(238.5
|
)
|
||
Common stock repurchased (Note 7)
|
(419.8
|
)
|
|
(441.9
|
)
|
||
Principal payments on borrowings
|
—
|
|
|
(250.0
|
)
|
||
Proceeds from exercise of options and other
|
31.7
|
|
|
75.3
|
|
||
Net cash used in financing activities
|
(623.2
|
)
|
|
(855.1
|
)
|
||
Net change in cash and cash equivalents
|
(35.2
|
)
|
|
(368.8
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,315.9
|
|
|
1,783.2
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,280.7
|
|
|
$
|
1,414.4
|
|
Supplemental cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
88.4
|
|
|
$
|
91.5
|
|
Income taxes paid
|
$
|
46.8
|
|
|
$
|
51.3
|
|
•
|
Consumer-to-Consumer
- The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through websites and mobile devices.
|
•
|
Consumer-to-Business
- The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The
significant majority
of the segment's revenue was generated in the United States during all periods presented, with the remainder primarily generated in Argentina.
|
•
|
Business Solutions
- The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The
majority
of the segment's business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Basic weighted-average shares outstanding
|
487.0
|
|
|
509.6
|
|
|
492.4
|
|
|
515.3
|
|
Common stock equivalents
|
3.3
|
|
|
3.6
|
|
|
3.1
|
|
|
4.1
|
|
Diluted weighted-average shares outstanding
|
490.3
|
|
|
513.2
|
|
|
495.5
|
|
|
519.4
|
|
|
Fair Value Measurement Using
|
|
Assets/
Liabilities at
Fair
Value
|
||||||||||||
September 30, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Settlement assets:
|
|
|
|
|
|
|
|
||||||||
State and municipal debt securities
|
$
|
—
|
|
|
$
|
969.9
|
|
|
$
|
—
|
|
|
$
|
969.9
|
|
State and municipal variable rate demand notes
|
—
|
|
|
108.2
|
|
|
—
|
|
|
108.2
|
|
||||
Corporate and other debt securities
|
—
|
|
|
39.9
|
|
|
—
|
|
|
39.9
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
366.1
|
|
|
—
|
|
|
366.1
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
1,484.1
|
|
|
$
|
—
|
|
|
$
|
1,484.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
278.4
|
|
|
$
|
—
|
|
|
$
|
278.4
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
278.4
|
|
|
$
|
—
|
|
|
$
|
278.4
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurement Using
|
|
Assets/
Liabilities at
Fair
Value
|
||||||||||||
December 31, 2015
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Settlement assets:
|
|
|
|
|
|
|
|
||||||||
State and municipal debt securities
|
$
|
—
|
|
|
$
|
1,052.5
|
|
|
$
|
—
|
|
|
$
|
1,052.5
|
|
State and municipal variable rate demand notes
|
—
|
|
|
42.9
|
|
|
—
|
|
|
42.9
|
|
||||
Corporate and other debt securities
|
—
|
|
|
67.2
|
|
|
—
|
|
|
67.2
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
396.3
|
|
|
—
|
|
|
396.3
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
1,558.9
|
|
|
$
|
—
|
|
|
$
|
1,558.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
283.7
|
|
|
$
|
—
|
|
|
$
|
283.7
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
283.7
|
|
|
$
|
—
|
|
|
$
|
283.7
|
|
|
2016
|
|
2015
|
||||
Settlement assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,153.7
|
|
|
$
|
1,075.7
|
|
Receivables from selling agents and Business Solutions customers
|
1,117.3
|
|
|
1,070.4
|
|
||
Investment securities
|
1,118.0
|
|
|
1,162.6
|
|
||
|
$
|
3,389.0
|
|
|
$
|
3,308.7
|
|
Settlement obligations:
|
|
|
|
||||
Money transfer, money order and payment service payables
|
$
|
2,449.1
|
|
|
$
|
2,428.5
|
|
Payables to agents
|
939.9
|
|
|
880.2
|
|
||
|
$
|
3,389.0
|
|
|
$
|
3,308.7
|
|
September 30, 2016
|
Amortized
Cost
|
|
Fair
Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net
Unrealized
Gains
|
||||||||||
Settlement assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal debt securities (a)
|
$
|
951.8
|
|
|
$
|
969.9
|
|
|
$
|
19.1
|
|
|
$
|
(1.0
|
)
|
|
$
|
18.1
|
|
State and municipal variable rate demand notes
|
108.2
|
|
|
108.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Corporate and other debt securities
|
38.8
|
|
|
39.9
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||||
|
1,098.8
|
|
|
1,118.0
|
|
|
20.2
|
|
|
(1.0
|
)
|
|
19.2
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign corporate debt securities
|
44.8
|
|
|
44.9
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
|
$
|
1,143.6
|
|
|
$
|
1,162.9
|
|
|
$
|
20.3
|
|
|
$
|
(1.0
|
)
|
|
$
|
19.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
Amortized
Cost
|
|
Fair
Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net
Unrealized
Gains/ (Losses)
|
||||||||||
Settlement assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal debt securities (a)
|
$
|
1,040.3
|
|
|
$
|
1,052.5
|
|
|
$
|
14.2
|
|
|
$
|
(2.0
|
)
|
|
$
|
12.2
|
|
State and municipal variable rate demand notes
|
42.9
|
|
|
42.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Corporate and other debt securities
|
67.3
|
|
|
67.2
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
|
1,150.5
|
|
|
1,162.6
|
|
|
14.2
|
|
|
(2.1
|
)
|
|
12.1
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign corporate debt securities
|
9.3
|
|
|
9.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
1,159.8
|
|
|
$
|
1,171.9
|
|
|
$
|
14.2
|
|
|
$
|
(2.1
|
)
|
|
$
|
12.1
|
|
(a)
|
The majority of these securities are fixed rate instruments.
|
|
Fair
Value
|
||
Due within 1 year
|
$
|
132.6
|
|
Due after 1 year through 5 years
|
538.4
|
|
|
Due after 5 years through 10 years
|
322.9
|
|
|
Due after 10 years
|
124.1
|
|
|
|
$
|
1,118.0
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Unrealized gains on investment securities, beginning of period
|
$
|
14.5
|
|
|
$
|
3.1
|
|
|
$
|
7.8
|
|
|
$
|
8.9
|
|
Unrealized gains/(losses)
|
(2.1
|
)
|
|
5.7
|
|
|
10.1
|
|
|
(1.6
|
)
|
||||
Tax (expense)/benefit
|
0.8
|
|
|
(2.0
|
)
|
|
(3.6
|
)
|
|
0.7
|
|
||||
Reclassification of gains into "Other revenues"
|
(1.2
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
(1.8
|
)
|
||||
Tax expense related to reclassifications
|
0.4
|
|
|
—
|
|
|
1.1
|
|
|
0.6
|
|
||||
Net unrealized gains/(losses) on investment securities
|
(2.1
|
)
|
|
3.7
|
|
|
4.6
|
|
|
(2.1
|
)
|
||||
Unrealized gains on investment securities, end of period
|
$
|
12.4
|
|
|
$
|
6.8
|
|
|
$
|
12.4
|
|
|
$
|
6.8
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains on hedging activities, beginning of period
|
$
|
14.3
|
|
|
$
|
51.0
|
|
|
$
|
41.4
|
|
|
$
|
48.6
|
|
Unrealized gains/(losses)
|
(1.2
|
)
|
|
17.3
|
|
|
(7.4
|
)
|
|
55.7
|
|
||||
Tax (expense)/benefit
|
(0.5
|
)
|
|
(3.0
|
)
|
|
1.8
|
|
|
(5.7
|
)
|
||||
Reclassification of gains into "Transaction fees"
|
(7.9
|
)
|
|
(14.9
|
)
|
|
(26.1
|
)
|
|
(40.4
|
)
|
||||
Reclassification of gains into "Foreign exchange revenues"
|
(3.6
|
)
|
|
(6.1
|
)
|
|
(11.4
|
)
|
|
(16.4
|
)
|
||||
Reclassification of losses into "Interest expense"
|
0.9
|
|
|
0.9
|
|
|
2.7
|
|
|
2.7
|
|
||||
Tax expense related to reclassifications
|
0.2
|
|
|
1.6
|
|
|
1.2
|
|
|
2.3
|
|
||||
Net unrealized losses on hedging activities
|
(12.1
|
)
|
|
(4.2
|
)
|
|
(39.2
|
)
|
|
(1.8
|
)
|
||||
Unrealized gains on hedging activities, end of period
|
$
|
2.2
|
|
|
$
|
46.8
|
|
|
$
|
2.2
|
|
|
$
|
46.8
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, beginning of period
|
$
|
(70.1
|
)
|
|
$
|
(53.5
|
)
|
|
$
|
(66.0
|
)
|
|
$
|
(49.2
|
)
|
Foreign currency translation adjustments
|
(0.4
|
)
|
|
(3.9
|
)
|
|
(4.3
|
)
|
|
(8.2
|
)
|
||||
Tax benefit
|
1.0
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
||||
Net foreign currency translation adjustments
|
0.6
|
|
|
(3.9
|
)
|
|
(3.5
|
)
|
|
(8.2
|
)
|
||||
Foreign currency translation adjustments, end of period
|
$
|
(69.5
|
)
|
|
$
|
(57.4
|
)
|
|
$
|
(69.5
|
)
|
|
$
|
(57.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension plan adjustments, beginning of period
|
$
|
(123.7
|
)
|
|
$
|
(124.1
|
)
|
|
$
|
(127.1
|
)
|
|
$
|
(127.2
|
)
|
Reclassification of losses into "Cost of services"
|
2.7
|
|
|
2.9
|
|
|
8.0
|
|
|
8.6
|
|
||||
Tax benefit related to reclassifications and other
|
(1.0
|
)
|
|
(1.3
|
)
|
|
(2.9
|
)
|
|
(3.9
|
)
|
||||
Net defined benefit pension plan adjustments
|
1.7
|
|
|
1.6
|
|
|
5.1
|
|
|
4.7
|
|
||||
Defined benefit pension plan adjustments, end of period
|
$
|
(122.0
|
)
|
|
$
|
(122.5
|
)
|
|
$
|
(122.0
|
)
|
|
$
|
(122.5
|
)
|
Accumulated other comprehensive loss, end of period
|
$
|
(176.9
|
)
|
|
$
|
(126.3
|
)
|
|
$
|
(176.9
|
)
|
|
$
|
(126.3
|
)
|
Contracts designated as hedges:
|
|
||
Euro
|
$
|
380.6
|
|
British pound
|
136.9
|
|
|
Canadian dollar
|
96.5
|
|
|
Australian dollar
|
45.7
|
|
|
Swiss franc
|
41.8
|
|
|
Other
|
82.4
|
|
|
Contracts not designated as hedges:
|
|
||
Euro
|
$
|
286.7
|
|
British pound
|
62.1
|
|
|
Australian dollar
|
50.6
|
|
|
Canadian dollar
|
48.7
|
|
|
Singapore dollar
|
34.6
|
|
|
Indian rupee
|
29.2
|
|
|
Japanese yen
|
29.2
|
|
|
Mexican peso
|
26.4
|
|
|
Other (a)
|
123.6
|
|
(a)
|
Comprised of exposures to
18
different currencies. None of these individual currency exposures is greater than $
25 million
.
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||
|
Balance Sheet
Location
|
|
September 30,
2016 |
|
December 31,
2015 |
|
Balance Sheet
Location
|
|
September 30,
2016 |
|
December 31,
2015 |
||||||||
Derivatives — hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate fair value hedges
|
Other assets
|
|
$
|
18.4
|
|
|
$
|
7.6
|
|
|
Other liabilities
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Foreign currency cash flow hedges
|
Other assets
|
|
26.2
|
|
|
59.7
|
|
|
Other liabilities
|
|
10.6
|
|
|
2.4
|
|
||||
Total
|
|
|
$
|
44.6
|
|
|
$
|
67.3
|
|
|
|
|
$
|
10.7
|
|
|
$
|
2.4
|
|
Derivatives — undesignated:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business Solutions operations — foreign currency (a)
|
Other assets
|
|
$
|
320.0
|
|
|
$
|
326.1
|
|
|
Other liabilities
|
|
$
|
265.7
|
|
|
$
|
277.1
|
|
Foreign currency
|
Other assets
|
|
1.5
|
|
|
2.9
|
|
|
Other liabilities
|
|
2.0
|
|
|
4.2
|
|
||||
Total
|
|
|
$
|
321.5
|
|
|
$
|
329.0
|
|
|
|
|
$
|
267.7
|
|
|
$
|
281.3
|
|
Total derivatives
|
|
|
$
|
366.1
|
|
|
$
|
396.3
|
|
|
|
|
$
|
278.4
|
|
|
$
|
283.7
|
|
(a)
|
In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in increases in the Company's derivative assets and liabilities that may exceed the growth in the underlying derivatives business.
|
September 30, 2016
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts Presented
in the Condensed Consolidated Balance Sheets
|
|
Derivatives Not Offset
in the Condensed Consolidated Balance Sheets
|
|
Net Amounts
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
198.2
|
|
|
$
|
—
|
|
|
$
|
198.2
|
|
|
$
|
(143.6
|
)
|
|
$
|
54.6
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
167.9
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
366.1
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
224.3
|
|
|
$
|
—
|
|
|
$
|
224.3
|
|
|
$
|
(119.2
|
)
|
|
$
|
105.1
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
172.0
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
396.3
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts Presented
in the Condensed Consolidated Balance Sheets
|
|
Derivatives Not Offset
in the Condensed Consolidated Balance Sheets
|
|
Net Amounts
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
163.1
|
|
|
$
|
—
|
|
|
$
|
163.1
|
|
|
$
|
(143.6
|
)
|
|
$
|
19.5
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
115.3
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
278.4
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
169.6
|
|
|
$
|
—
|
|
|
$
|
169.6
|
|
|
$
|
(119.2
|
)
|
|
$
|
50.4
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
114.1
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
283.7
|
|
|
|
|
|
|
|
|
|
|
|
Gain/(Loss) Recognized in Income on
Derivatives
|
|
|
|
Gain/(Loss) Recognized in Income on
Related Hedged Item (a)
|
|
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||||||||
|
|
Income
Statement
Location
|
|
Amount
|
|
|
|
Income
Statement
Location
|
|
Amount
|
|
Income
Statement
Location
|
|
Amount
|
||||||||||||||||||
Derivatives
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
Hedged
Item
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|||||||||||||||
Interest rate contracts
|
|
Interest expense
|
|
$
|
(2.6
|
)
|
|
$
|
10.5
|
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
5.0
|
|
|
$
|
(7.3
|
)
|
|
Interest expense
|
|
$
|
(0.2
|
)
|
|
$
|
0.2
|
|
Total gain/(loss)
|
|
|
|
$
|
(2.6
|
)
|
|
$
|
10.5
|
|
|
|
|
|
|
$
|
5.0
|
|
|
$
|
(7.3
|
)
|
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.2
|
|
|
|
Gain/(Loss) Recognized in Income on
Derivatives
|
|
|
|
Gain/(Loss) Recognized in Income on
Related Hedged Item (a)
|
|
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||||||||
|
|
Income
Statement
Location
|
|
Amount
|
|
|
|
Income
Statement
Location
|
|
Amount
|
|
Income
Statement
Location
|
|
Amount
|
||||||||||||||||||
Derivatives
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
Hedged
Item
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|||||||||||||||
Interest rate contracts
|
|
Interest expense
|
|
$
|
12.8
|
|
|
$
|
21.1
|
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
(5.1
|
)
|
|
$
|
(11.3
|
)
|
|
Interest expense
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
Total gain/(loss)
|
|
|
|
$
|
12.8
|
|
|
$
|
21.1
|
|
|
|
|
|
|
$
|
(5.1
|
)
|
|
$
|
(11.3
|
)
|
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
|
Gain/(Loss) Recognized
|
|
Gain/(Loss) Reclassified
|
|
Gain/(Loss) Recognized in Income on
|
||||||||||||||||||||||
|
|
in OCI on Derivatives
|
|
from Accumulated OCI into Income
|
|
Derivatives (Ineffective Portion and Amount
|
||||||||||||||||||||||
|
|
(Effective Portion)
|
|
(Effective Portion)
|
|
Excluded from Effectiveness Testing) (b)
|
||||||||||||||||||||||
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
||||||||||||||||||
Derivatives
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||||||
Foreign currency contracts
|
|
$
|
(1.2
|
)
|
|
$
|
17.3
|
|
|
Revenue
|
|
$
|
11.5
|
|
|
$
|
21.0
|
|
|
Derivative
gains, net |
|
$
|
0.2
|
|
|
$
|
0.6
|
|
Interest rate contracts (c)
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
Interest expense
|
|
—
|
|
|
—
|
|
||||||
Total gain/(loss)
|
|
$
|
(1.2
|
)
|
|
$
|
17.3
|
|
|
|
|
$
|
10.6
|
|
|
$
|
20.1
|
|
|
|
|
$
|
0.2
|
|
|
$
|
0.6
|
|
|
|
Gain/(Loss) Recognized
|
|
Gain/(Loss) Reclassified
|
|
Gain/(Loss) Recognized in Income on
|
||||||||||||||||||||||
|
|
in OCI on Derivatives
|
|
from Accumulated OCI into Income
|
|
Derivatives (Ineffective Portion and Amount
|
||||||||||||||||||||||
|
|
(Effective Portion)
|
|
(Effective Portion)
|
|
Excluded from Effectiveness Testing) (b)
|
||||||||||||||||||||||
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
||||||||||||||||||
Derivatives
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||||||
Foreign currency contracts
|
|
$
|
(7.4
|
)
|
|
$
|
55.7
|
|
|
Revenue
|
|
$
|
37.5
|
|
|
$
|
56.8
|
|
|
Derivative
gains, net |
|
$
|
2.9
|
|
|
$
|
0.6
|
|
Interest rate contracts (c)
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
(2.7
|
)
|
|
(2.7
|
)
|
|
Interest expense
|
|
—
|
|
|
—
|
|
||||||
Total gain/(loss)
|
|
$
|
(7.4
|
)
|
|
$
|
55.7
|
|
|
|
|
$
|
34.8
|
|
|
$
|
54.1
|
|
|
|
|
$
|
2.9
|
|
|
$
|
0.6
|
|
|
Gain/(Loss) Recognized in Income on Derivatives (d)
|
||||||||||||||||
|
Income Statement Location
|
|
Amount
|
||||||||||||||
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Derivatives
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Foreign currency contracts (e)
|
Selling, general and administrative
|
|
$
|
0.2
|
|
|
$
|
15.1
|
|
|
$
|
(14.3
|
)
|
|
$
|
31.2
|
|
Foreign currency contracts (f)
|
Derivative gains, net
|
|
0.1
|
|
|
0.8
|
|
|
(0.7
|
)
|
|
1.8
|
|
||||
Total gain/(loss)
|
|
|
$
|
0.3
|
|
|
$
|
15.9
|
|
|
$
|
(15.0
|
)
|
|
$
|
33.0
|
|
(a)
|
The gain/(loss) of
$5.0 million
and
$(7.3) million
in the three months ended
September 30, 2016
and
2015
, respectively, consisted of a gain/(loss) in value on the debt of
$2.8 million
and
$(10.7) million
, respectively, and amortization of hedge accounting adjustments of
$2.2 million
and
$3.4 million
, respectively. The loss of
$5.1 million
and
$11.3 million
in the
nine
months ended
September 30, 2016
and
2015
, respectively, consisted of a loss in value on the debt of
$12.9 million
and
$21.9 million
, respectively, and amortization of hedge accounting adjustments of
$7.8 million
and
$10.6 million
, respectively.
|
(b)
|
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
|
(c)
|
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Condensed Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Condensed Consolidated Statements of Income over the life of the related notes.
|
(d)
|
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
|
(e)
|
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivatives activity as displayed above and included in "Selling, general and administrative" in the Condensed Consolidated Statements of Income were
$(2.9) million
and
$(17.5) million
for the three months ended
September 30, 2016
and
2015
, respectively, and
$3.8 million
and
$(39.0) million
for the
nine
months ended
September 30, 2016
and
2015
, respectively.
|
(f)
|
The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Notes:
|
|
|
|
||||
5.930% notes due 2016 (a) (b)
|
$
|
1,000.0
|
|
|
$
|
1,000.0
|
|
2.875% notes due 2017 (a)
|
500.0
|
|
|
500.0
|
|
||
3.650% notes (effective rate of 4.3%) due 2018
|
400.0
|
|
|
400.0
|
|
||
3.350% notes due 2019 (a)
|
250.0
|
|
|
250.0
|
|
||
5.253% notes due 2020 (a)
|
324.9
|
|
|
324.9
|
|
||
6.200% notes due 2036 (a)
|
500.0
|
|
|
500.0
|
|
||
6.200% notes due 2040 (a)
|
250.0
|
|
|
250.0
|
|
||
Other borrowings
|
5.4
|
|
|
5.5
|
|
||
Total borrowings at par value
|
3,230.3
|
|
|
3,230.4
|
|
||
Fair value hedge accounting adjustments, net (c)
|
12.7
|
|
|
7.6
|
|
||
Unamortized discount and debt issuance costs (d)
|
(18.2
|
)
|
|
(22.1
|
)
|
||
Total borrowings at carrying value (e)
|
$
|
3,224.8
|
|
|
$
|
3,215.9
|
|
(a)
|
The difference between the stated interest rate and the effective interest rate is not significant.
|
(b)
|
These notes were repaid in October 2016 using proceeds from the Company's delayed draw term loan facility, cash, including cash generated from operations, and proceeds from commercial paper borrowings, as discussed below.
|
(c)
|
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 Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of i
nterest to differ from the notes’ stated rate.
|
(d)
|
On January 1, 2016, the Company adopted an accounting pronouncement that requires capitalized debt issuance costs to be presented as a reduction to the carrying value of debt, with adoption retrospective for periods previously presented. The adoption of this standard resulted in a reduction of
$9.7 million
to the carrying value of borrowings as of December 31, 2015.
|
(e)
|
As of
September 30, 2016
, the Company’s weighted-average effective rate on total borrowings was approximately
5.0%
.
|
Due within 1 year
|
$
|
1,005.4
|
|
Due after 1 year through 2 years
|
900.0
|
|
|
Due after 2 years through 3 years
|
250.0
|
|
|
Due after 3 years through 4 years
|
324.9
|
|
|
Due after 5 years
|
750.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Consumer-to-Consumer:
|
|
|
|
|
|
|
|
||||||||
Transaction fees
|
$
|
791.4
|
|
|
$
|
820.4
|
|
|
$
|
2,337.0
|
|
|
$
|
2,412.7
|
|
Foreign exchange revenues
|
290.3
|
|
|
276.1
|
|
|
825.2
|
|
|
789.1
|
|
||||
Other revenues
|
17.2
|
|
|
16.4
|
|
|
49.9
|
|
|
50.9
|
|
||||
|
1,098.9
|
|
|
1,112.9
|
|
|
3,212.1
|
|
|
3,252.7
|
|
||||
Consumer-to-Business:
|
|
|
|
|
|
|
|
||||||||
Transaction fees
|
149.4
|
|
|
154.1
|
|
|
447.6
|
|
|
457.1
|
|
||||
Foreign exchange and other revenues
|
6.3
|
|
|
6.0
|
|
|
18.4
|
|
|
18.7
|
|
||||
|
155.7
|
|
|
160.1
|
|
|
466.0
|
|
|
475.8
|
|
||||
Business Solutions:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange revenues
|
85.3
|
|
|
90.6
|
|
|
264.6
|
|
|
266.0
|
|
||||
Transaction fees and other revenues
|
11.9
|
|
|
10.6
|
|
|
32.6
|
|
|
30.8
|
|
||||
|
97.2
|
|
|
101.2
|
|
|
297.2
|
|
|
296.8
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
26.0
|
|
|
25.0
|
|
|
75.9
|
|
|
78.4
|
|
||||
Total consolidated revenues
|
$
|
1,377.8
|
|
|
$
|
1,399.2
|
|
|
$
|
4,051.2
|
|
|
$
|
4,103.7
|
|
Operating income/(loss):
|
|
|
|
|
|
|
|
||||||||
Consumer-to-Consumer (a)
|
$
|
257.1
|
|
|
$
|
283.3
|
|
|
$
|
723.7
|
|
|
$
|
780.1
|
|
Consumer-to-Business (b)
|
14.2
|
|
|
26.2
|
|
|
54.8
|
|
|
49.3
|
|
||||
Business Solutions
|
3.4
|
|
|
(2.7
|
)
|
|
10.9
|
|
|
(1.0
|
)
|
||||
Other
|
3.6
|
|
|
(2.3
|
)
|
|
7.8
|
|
|
(0.8
|
)
|
||||
Total consolidated operating income
|
$
|
278.3
|
|
|
$
|
304.5
|
|
|
$
|
797.2
|
|
|
$
|
827.6
|
|
(a)
|
For the three and nine months ended September 30, 2016, Consumer-to-Consumer operating income included
$15 million
and
$30 million
, respectively, for accruals related to the FTC matter, described further in Note 4.
|
(b)
|
For the nine months ended September 30, 2015, Consumer-to-Business operating income included
$35.3 million
of expenses related to a settlement agreement between the Consumer Financial Protection Bureau and one of the Company's subsidiaries, Paymap, Inc.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Consumer-to-Consumer
- The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. Our multi-currency, real-time money transfer service is viewed by us as one interconnected global network where a money transfer can be sent from one location to another, around the world. Our money transfer services are available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through websites and mobile devices.
|
•
|
Consumer-to-Business
- The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The significant majority of the segment's revenue was generated in the United States during all periods presented, with the remainder primarily generated in Argentina.
|
•
|
Business Solutions
- The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment's business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, we write foreign currency forward and option contracts for customers to facilitate future payments.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
(in millions, except per share amounts)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction fees
|
$
|
960.4
|
|
|
$
|
994.9
|
|
|
(3
|
)%
|
|
$
|
2,840.7
|
|
|
$
|
2,931.8
|
|
|
(3
|
)%
|
Foreign exchange revenues
|
381.5
|
|
|
372.3
|
|
|
2
|
%
|
|
1,105.8
|
|
|
1,072.4
|
|
|
3
|
%
|
||||
Other revenues
|
35.9
|
|
|
32.0
|
|
|
12
|
%
|
|
104.7
|
|
|
99.5
|
|
|
5
|
%
|
||||
Total revenues
|
1,377.8
|
|
|
1,399.2
|
|
|
(2
|
)%
|
|
4,051.2
|
|
|
4,103.7
|
|
|
(1
|
)%
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services
|
822.9
|
|
|
817.2
|
|
|
1
|
%
|
|
2,424.2
|
|
|
2,388.4
|
|
|
1
|
%
|
||||
Selling, general and administrative
|
276.6
|
|
|
277.5
|
|
|
0
|
%
|
|
829.8
|
|
|
887.7
|
|
|
(7
|
)%
|
||||
Total expenses
|
1,099.5
|
|
|
1,094.7
|
|
|
0
|
%
|
|
3,254.0
|
|
|
3,276.1
|
|
|
(1
|
)%
|
||||
Operating income
|
278.3
|
|
|
304.5
|
|
|
(9
|
)%
|
|
797.2
|
|
|
827.6
|
|
|
(4
|
)%
|
||||
Other income/(expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
1.1
|
|
|
3.0
|
|
|
(64
|
)%
|
|
2.7
|
|
|
8.4
|
|
|
(68
|
)%
|
||||
Interest expense
|
(41.4
|
)
|
|
(42.2
|
)
|
|
(2
|
)%
|
|
(122.9
|
)
|
|
(127.1
|
)
|
|
(3
|
)%
|
||||
Derivative gains, net
|
0.3
|
|
|
1.4
|
|
|
(76
|
)%
|
|
2.2
|
|
|
2.4
|
|
|
(8
|
)%
|
||||
Other income/(expense), net
|
1.7
|
|
|
(1.3
|
)
|
|
(a)
|
|
|
0.8
|
|
|
(6.4
|
)
|
|
(a)
|
|
||||
Total other expense, net
|
(38.3
|
)
|
|
(39.1
|
)
|
|
(2
|
)%
|
|
(117.2
|
)
|
|
(122.7
|
)
|
|
(4
|
)%
|
||||
Income before income taxes
|
240.0
|
|
|
265.4
|
|
|
(10
|
)%
|
|
680.0
|
|
|
704.9
|
|
|
(4
|
)%
|
||||
Provision for income taxes
|
23.1
|
|
|
33.1
|
|
|
(30
|
)%
|
|
71.8
|
|
|
79.4
|
|
|
(9
|
)%
|
||||
Net income
|
$
|
216.9
|
|
|
$
|
232.3
|
|
|
(7
|
)%
|
|
$
|
608.2
|
|
|
$
|
625.5
|
|
|
(3
|
)%
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.45
|
|
|
$
|
0.46
|
|
|
(2
|
)%
|
|
$
|
1.24
|
|
|
$
|
1.21
|
|
|
2
|
%
|
Diluted
|
$
|
0.44
|
|
|
$
|
0.45
|
|
|
(2
|
)%
|
|
$
|
1.23
|
|
|
$
|
1.20
|
|
|
3
|
%
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
487.0
|
|
|
509.6
|
|
|
|
|
492.4
|
|
|
515.3
|
|
|
|
||||||
Diluted
|
490.3
|
|
|
513.2
|
|
|
|
|
495.5
|
|
|
519.4
|
|
|
|
(a)
|
Calculation not meaningful.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Consumer-to-Consumer
|
80
|
%
|
|
80
|
%
|
|
79
|
%
|
|
79
|
%
|
Consumer-to-Business
|
11
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
Business Solutions
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||
(dollars and transactions in millions)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction fees
|
$
|
791.4
|
|
|
$
|
820.4
|
|
|
(4
|
)%
|
|
$
|
2,337.0
|
|
|
$
|
2,412.7
|
|
|
(3
|
)%
|
Foreign exchange revenues
|
290.3
|
|
|
276.1
|
|
|
5
|
%
|
|
825.2
|
|
|
789.1
|
|
|
5
|
%
|
||||
Other revenues
|
17.2
|
|
|
16.4
|
|
|
5
|
%
|
|
49.9
|
|
|
50.9
|
|
|
(2
|
)%
|
||||
Total revenues
|
$
|
1,098.9
|
|
|
$
|
1,112.9
|
|
|
(1
|
)%
|
|
$
|
3,212.1
|
|
|
$
|
3,252.7
|
|
|
(1
|
)%
|
Operating income
|
$
|
257.1
|
|
|
$
|
283.3
|
|
|
(9
|
)%
|
|
$
|
723.7
|
|
|
$
|
780.1
|
|
|
(7
|
)%
|
Operating income margin
|
23
|
%
|
|
25
|
%
|
|
|
|
23
|
%
|
|
24
|
%
|
|
|
||||||
Key indicator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer-to-Consumer transactions
|
67.8
|
|
|
66.6
|
|
|
2
|
%
|
|
199.2
|
|
|
194.1
|
|
|
3
|
%
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
|
Revenue Growth/(Decline), as Reported - (GAAP)
|
|
Foreign Exchange Translation Impact
|
|
Constant Currency Revenue Growth/(Decline) (a) - (Non-GAAP)
|
|
Transaction Growth/(Decline)
|
|
Revenue Growth/(Decline), as Reported - (GAAP)
|
|
Foreign Exchange Translation Impact
|
|
Constant Currency Revenue Growth/(Decline) (a) - (Non-GAAP)
|
|
Transaction Growth/(Decline)
|
||||||||
Consumer-to-Consumer regional growth/(decline):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
North America
|
6
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
7
|
%
|
|
5
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
7
|
%
|
Europe and CIS
|
(2
|
)%
|
|
(3
|
)%
|
|
1
|
%
|
|
2
|
%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
0
|
%
|
|
3
|
%
|
Middle East and Africa
|
(10
|
)%
|
|
(2
|
)%
|
|
(8
|
)%
|
|
(9
|
)%
|
|
(6
|
)%
|
|
(2
|
)%
|
|
(4
|
)%
|
|
(6
|
)%
|
Asia Pacific ("APAC")
|
(4
|
)%
|
|
(1
|
)%
|
|
(3
|
)%
|
|
(5
|
)%
|
|
(4
|
)%
|
|
(3
|
)%
|
|
(1
|
)%
|
|
(4
|
)%
|
Latin America and the Caribbean ("LACA")
|
3
|
%
|
|
(5
|
)%
|
|
8
|
%
|
|
12
|
%
|
|
(1
|
)%
|
|
(6
|
)%
|
|
5
|
%
|
|
12
|
%
|
Total Consumer-to-Consumer growth/(decline):
|
(1
|
)%
|
|
(2
|
)%
|
|
1
|
%
|
|
2
|
%
|
|
(1
|
)%
|
|
(2
|
)%
|
|
1
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
westernunion.com (b)
|
26
|
%
|
|
(2
|
)%
|
|
28
|
%
|
|
29
|
%
|
|
20
|
%
|
|
(2
|
)%
|
|
22
|
%
|
|
26
|
%
|
(a)
|
Constant currency revenue growth assumes that revenues denominated in foreign currencies are translated to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior periods.
|
(b)
|
Westernunion.com revenues have also been included in each region, as described earlier.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Consumer-to-Consumer revenue as a percentage of segment revenue:
|
|
|
|
|
|
|
|
||||
North America
|
29
|
%
|
|
27
|
%
|
|
28
|
%
|
|
27
|
%
|
Europe and CIS
|
26
|
%
|
|
26
|
%
|
|
26
|
%
|
|
26
|
%
|
Middle East and Africa
|
19
|
%
|
|
21
|
%
|
|
20
|
%
|
|
21
|
%
|
APAC
|
14
|
%
|
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
LACA
|
12
|
%
|
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction fees
|
$
|
149.4
|
|
|
$
|
154.1
|
|
|
(3
|
)%
|
|
$
|
447.6
|
|
|
$
|
457.1
|
|
|
(2
|
)%
|
Foreign exchange and other revenues
|
6.3
|
|
|
6.0
|
|
|
4
|
%
|
|
18.4
|
|
|
18.7
|
|
|
(2
|
)%
|
||||
Total revenues
|
$
|
155.7
|
|
|
$
|
160.1
|
|
|
(3
|
)%
|
|
$
|
466.0
|
|
|
$
|
475.8
|
|
|
(2
|
)%
|
Operating income
—
(GAAP)
|
$
|
14.2
|
|
|
$
|
26.2
|
|
|
(46
|
)%
|
|
$
|
54.8
|
|
|
$
|
49.3
|
|
|
11
|
%
|
Paymap Settlement Agreement
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
35.3
|
|
|
|
||||||
Operating income, excluding Paymap Settlement Agreement — (Non-GAAP)
|
$
|
14.2
|
|
|
$
|
26.2
|
|
|
|
|
$
|
54.8
|
|
|
$
|
84.6
|
|
|
|
||
Operating income margin — (GAAP)
|
9
|
%
|
|
16
|
%
|
|
|
|
12
|
%
|
|
10
|
%
|
|
|
||||||
Operating income margin, excluding Paymap Settlement Agreement — (Non-GAAP)
|
9
|
%
|
|
16
|
%
|
|
|
|
12
|
%
|
|
18
|
%
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange revenues
|
$
|
85.3
|
|
|
$
|
90.6
|
|
|
(6
|
)%
|
|
$
|
264.6
|
|
|
$
|
266.0
|
|
|
(1
|
)%
|
Transaction fees and other revenues
|
11.9
|
|
|
10.6
|
|
|
12
|
%
|
|
32.6
|
|
|
30.8
|
|
|
6
|
%
|
||||
Total revenues
|
$
|
97.2
|
|
|
$
|
101.2
|
|
|
(4
|
)%
|
|
$
|
297.2
|
|
|
$
|
296.8
|
|
|
0
|
%
|
Operating income/(loss)
|
$
|
3.4
|
|
|
$
|
(2.7
|
)
|
|
(a)
|
|
|
$
|
10.9
|
|
|
$
|
(1.0
|
)
|
|
(a)
|
|
Operating income/(loss) margin
|
4
|
%
|
|
(3
|
)%
|
|
|
|
4
|
%
|
|
0
|
%
|
|
|
(a)
|
Calculation not meaningful.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
(dollars in millions)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues
|
$
|
26.0
|
|
|
$
|
25.0
|
|
|
4
|
%
|
|
$
|
75.9
|
|
|
$
|
78.4
|
|
|
(3
|
)%
|
Operating income/(loss)
|
$
|
3.6
|
|
|
$
|
(2.3
|
)
|
|
(a)
|
|
|
$
|
7.8
|
|
|
$
|
(0.8
|
)
|
|
(a)
|
|
(a)
|
Calculation not meaningful.
|
•
|
Income taxes
|
•
|
Derivative financial instruments
|
•
|
Other intangible assets
|
•
|
Goodwill
|
•
|
Legal contingencies
|
|
/s/ Ernst & Young LLP
|
Denver, Colorado
|
|
November 1, 2016
|
|
Period
|
|
Total Number of
Shares Purchased*
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs**
|
|
Remaining Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs (In millions)
|
||||||
July 1 - 31
|
|
398,240
|
|
|
$
|
19.86
|
|
|
392,900
|
|
|
$
|
386.5
|
|
August 1 - 31
|
|
3,306,432
|
|
|
$
|
21.07
|
|
|
3,299,000
|
|
|
$
|
317.0
|
|
September 1 - 30
|
|
389,873
|
|
|
$
|
20.48
|
|
|
359,779
|
|
|
$
|
309.7
|
|
Total
|
|
4,094,545
|
|
|
$
|
20.89
|
|
|
4,051,679
|
|
|
|
*
|
These amounts represent both shares authorized by the Board of Directors for repurchase under a publicly announced authorization, as described below, as well as shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested.
|
**
|
On February 10, 2015, the Board of Directors authorized $1.2 billion of common stock repurchases through December 31, 2017, of which $309.7 million remained available as of September 30, 2016. In certain instances, management has historically and may continue to establish prearranged written plans pursuant to Rule 10b5-1. A Rule 10b5-1 plan permits us to repurchase shares at times when we may otherwise be unable to do so, provided the plan is adopted when we are not aware of material non-public information.
|
|
|
The Western Union Company (Registrant)
|
|
|
|
|
|
Date:
|
November 1, 2016
|
By:
|
/s/ Hikmet Ersek
|
|
|
|
Hikmet Ersek
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
Date:
|
November 1, 2016
|
By:
|
/s/ Rajesh K. Agrawal
|
|
|
|
Rajesh K. Agrawal
|
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Date:
|
November 1, 2016
|
By:
|
/s/ Amintore T.X. Schenkel
|
|
|
|
Amintore T.X. Schenkel
|
|
|
|
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)
|
Exhibit
Number
|
|
Description
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
15
|
|
Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
|
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1 Year Western Union Chart |
1 Month Western Union Chart |
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