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Schedule I - Condensed Financial Information of the Registrant | 12 Months Ended
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Dec. 31, 2022
Condensed Financial Information Disclosure [Abstract] |
Schedule I - Condensed Financial Information of the Registrant | SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT The following lists the condensed financial information for the parent company as of December 31, 2022 and 2021 and Condensed Statements of Income and Comprehensive Income and Condensed Statements of Cash Flows for each of the three years in the period ended December 31, 2022. THE WESTERN UNION COMPANY CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in millions, except per share amounts)
|  | December 31, |
|  | 2022 |  |  | 2021 |
Assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1.6 |  |  | $ | 2.1 |
Property and equipment, net of accumulated depreciation of $59.5 and $50.1, respectively |  |  | 29.6 |  |  |  | 41.4 |
Other assets |  |  | 191.1 |  |  |  | 90.0 |
Investment in subsidiaries |  |  | 4,806.4 |  |  |  | 5,450.0 |
Total assets |  | $ | 5,028.7 |  |  | $ | 5,583.5 |
Liabilities and stockholders' equity |  |  |  |  |  |
Liabilities: |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 45.7 |  |  | $ | 58.0 |
Income taxes payable |  |  | 417.8 |  |  |  | 477.4 |
Payable to subsidiaries, net |  |  | 1,283.4 |  |  |  | 1,590.3 |
Borrowings |  |  | 2,616.8 |  |  |  | 3,008.4 |
Other liabilities |  |  | 187.2 |  |  |  | 93.8 |
Total liabilities |  |  | 4,550.9 |  |  |  | 5,227.9 |
Stockholders' equity: |  |  |  |  |  |
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued |  |  | — |  |  |  | — |
Common stock, $0.01 par value; 2,000 shares authorized; 373.5 shares and 393.8 shares issued and outstanding as of December 31, 2022 and 2021, respectively |  |  | 3.7 |  |  |  | 3.9 |
Capital surplus |  |  | 995.9 |  |  |  | 941.0 |
Accumulated deficit |  |  | (353.9 | ) |  |  | (537.2 | )
Accumulated other comprehensive loss |  |  | (167.9 | ) |  |  | (52.1 | )
Total stockholders' equity |  |  | 477.8 |  |  |  | 355.6 |
Total liabilities and stockholders' equity |  | $ | 5,028.7 |  |  | $ | 5,583.5 |
See Notes to Condensed Financial Statements. THE WESTERN UNION COMPANY CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (PARENT COMPANY ONLY) (in millions)
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Revenues |  | $ | — |  |  | $ | — |  |  | $ | — |
Expenses |  |  | — |  |  |  | — |  |  |  | — |
Operating income |  |  | — |  |  |  | — |  |  |  | — |
Gain on sale of noncontrolling interest in a private company (Note 4) |  |  | — |  |  |  | 47.9 |  |  |  | — |
Interest income |  |  | 8.3 |  |  |  | — |  |  |  | — |
Interest expense |  |  | (105.7 | ) |  |  | (115.9 | ) |  |  | (158.5 | )
Other income/(expense), net |  |  | 3.1 |  |  |  | (14.7 | ) |  |  | 3.6 |
Loss before equity earnings of affiliates and income taxes |  |  | (94.3 | ) |  |  | (82.7 | ) |  |  | (154.9 | )
Equity in earnings of affiliates, net of tax |  |  | 981.1 |  |  |  | 869.1 |  |  |  | 861.7 |
Income tax benefit |  |  | 23.8 |  |  |  | 19.4 |  |  |  | 37.5 |
Net income |  |  | 910.6 |  |  |  | 805.8 |  |  |  | 744.3 |
Other comprehensive income, net of tax |  |  | — |  |  |  | 2.5 |  |  |  | 0.4 |
Other comprehensive income/(loss) of affiliates, net of tax |  |  | (115.8 | ) |  |  | 104.9 |  |  |  | 49.1 |
Comprehensive income |  | $ | 794.8 |  |  | $ | 913.2 |  |  | $ | 793.8 |
See Notes to Condensed Financial Statements. THE WESTERN UNION COMPANY CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Cash flows from operating activities |  |  |  |  |  |  |  |  |
Net cash provided by/(used in) operating activities |  | $ | (108.3 | ) |  | $ | 510.4 |  |  | $ | (79.0 | )
Cash flows from investing activities |  |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (1.7 | ) |  |  | (0.5 | ) |  |  | (1.0 | )
Proceeds from the sale of former corporate headquarters (Note 4) |  |  | — |  |  |  | — |  |  |  | 43.6 |
Proceeds from the sale of noncontrolling interest in a private company (Note 4) |  |  | — |  |  |  | 50.9 |  |  |  | — |
Purchases of non-settlement investments |  |  | (400.0 | ) |  |  | — |  |  |  | — |
Proceeds from the sale of non-settlement investments |  |  | 300.0 |  |  |  | — |  |  |  | — |
Proceeds from divestiture, net of cash divested (Note 4) |  |  | 887.2 |  |  |  | — |  |  |  | — |
Distributions received from/(capital contributed to) subsidiaries, net |  |  | 424.6 |  |  |  | 6.5 |  |  |  | (329.4 | )
Other investing activities |  |  | 1.7 |  |  |  | 0.5 |  |  |  | (2.1 | )
Net cash provided by/(used in) investing activities |  |  | 1,211.8 |  |  |  | 57.4 |  |  |  | (288.9 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |
Advances from subsidiaries, net |  |  | 15.6 |  |  |  | 289.5 |  |  |  | 1,139.5 |
Net proceeds from/(repayments of) commercial paper |  |  | (95.0 | ) |  |  | 195.0 |  |  |  | (165.0 | )
Net proceeds from issuance of borrowings |  |  | — |  |  |  | 891.7 |  |  |  | — |
Principal payments on borrowings |  |  | (300.0 | ) |  |  | (1,150.0 | ) |  |  | — |
Proceeds from exercise of options |  |  | 9.5 |  |  |  | 11.6 |  |  |  | 2.2 |
Cash dividends and dividend equivalents paid |  |  | (364.2 | ) |  |  | (381.6 | ) |  |  | (370.3 | )
Common stock repurchased |  |  | (369.9 | ) |  |  | (409.9 | ) |  |  | (239.7 | )
Make-whole premium on early extinguishment of debt |  |  | — |  |  |  | (14.3 | ) |  |  | — |
Other financing activities |  |  | — |  |  |  | 0.2 |  |  |  | (0.7 | )
Net cash provided by/(used in) financing activities |  |  | (1,104.0 | ) |  |  | (567.8 | ) |  |  | 366.0 |
Net change in cash and cash equivalents |  |  | (0.5 | ) |  |  | — |  |  |  | (1.9 | )
Cash and cash equivalents at beginning of year |  |  | 2.1 |  |  |  | 2.1 |  |  |  | 4.0 |
Cash and cash equivalents at end of year |  | $ | 1.6 |  |  | $ | 2.1 |  |  | $ | 2.1 |
Supplemental cash flow information: |  |  |  |  |  |  |  |  |
Non-cash financing activity, distribution of note from subsidiary (Note 3) |  | $ | 325.0 |  |  | $ | 556.1 |  |  | $ | 1,364.4 |
Cash paid for lease liabilities |  | $ | 15.3 |  |  | $ | 14.6 |  |  | $ | 20.7 |
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) |  | $ | — |  |  | $ | 0.9 |  |  | $ | 1.5 |
CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT THE WESTERN UNION COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS 1. Basis of Presentation The Western Union Company (the “Parent”) is a holding company that conducts substantially all of its business operations through its subsidiaries. Under a parent company only presentation, the Parent’s investments in its consolidated subsidiaries are presented under the equity method of accounting, and the condensed financial statements do not present the financial statements of the Parent and its subsidiaries on a consolidated basis. These financial statements should be read in conjunction with The Western Union Company’s consolidated financial statements. 2. Restricted Net Assets Certain assets of the Parent’s subsidiaries totaling approximately $710 million as of December 31, 2022 constitute restricted net assets, as there are legal or regulatory limitations on transferring such assets outside of the countries where the respective assets are located. Additionally, certain of the Parent’s subsidiaries must meet minimum capital requirements in some countries in order to maintain operating licenses. 3. Related Party Transactions The Parent enters into contracts with third-party vendors on behalf of its subsidiaries. Because the Parent is a holding company, as noted above, these corporate costs are incurred by the Parent, and the expenses are then allocated to its subsidiaries based primarily on the subsidiaries’ percentage of revenues compared to total revenues. All transactions described below are with subsidiaries of the Parent. The Parent has issued multiple promissory notes payable to its 100% owned subsidiary, First Financial Management Corporation, in exchange for funds distributed to the Parent. All notes pay interest at a fixed rate, may be repaid at any time without penalty, and are included within Payable to subsidiaries, net in the Condensed Balance Sheets. These promissory notes are as follows:
|  | Amount |  |  |  |  | Interest Rate |
Date Issued |  | (in millions) |  |  | Due Date |  | (per annum) |
December 1, 2020 (a) |  | $ | 93.3 |  |  | August 31, 2023 |  |  | 0.15 | %
January 1, 2021 (a) |  | $ | 289.0 |  |  | September 30, 2023 |  |  | 0.14 | %
March 1, 2021 (a) |  | $ | 244.3 |  |  | November 30, 2023 |  |  | 0.12 | %
July 1, 2022 (a) |  | $ | 170.4 |  |  | March 31, 2025 |  |  | 2.21 | %
September 1, 2022 (a) |  | $ | 70.3 |  |  | May 31, 2025 |  |  | 2.88 | %
December 31, 2022 (b) |  | $ | 210.9 |  |  | May 31, 2023 |  |  | 2.40 | %
(a) This note refinanced a note originally issued on a prior date. (b) Note is payable to the Parent's 100% owned indirect subsidiary, Western Union International Bank. On November 8, 2015, the Parent entered into a Revolving Credit Facility agreement (the “Revolver”) with its 100% owned subsidiary, RII Holdings, Inc., providing for unsecured financing facilities in an aggregate amount of $3.0 billion. On March 1, 2022, the Parent terminated this agreement in connection with the sale of the Business Solutions business, as further discussed in Note 4. As of December 31, 2021, borrowings outstanding under the Revolver were $370.0 million and the interest rate applicable for outstanding borrowings using the six-month LIBOR set on the first day of the calendar year was 0.34%. Outstanding borrowings under the Revolver were included within Payable to subsidiaries, net in the Condensed Balance Sheets as of December 31, 2021 and during the year ended December 31, 2021, portions of the outstanding balance were repaid by means of non-cash distributions by the Parent’s subsidiaries. CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT THE WESTERN UNION COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) The Parent files its United States federal consolidated income tax return on its and certain of its affiliates’ behalf. Accordingly, the Parent has recorded income taxes payable on behalf of its subsidiaries, and these income taxes payable are significant due to the enactment of the Tax Act into United States law. Excess cash generated from operations of the Parent’s subsidiaries that is not required to meet certain regulatory requirements may be periodically distributed to the Parent in the form of a distribution, although the amounts of such distributions may vary from year to year. The Parent files a consolidated United States federal income tax return and also a number of consolidated state income tax returns on behalf of its subsidiaries. In these circumstances, the Parent is responsible for remitting income tax payments on behalf of the consolidated group. The Parent’s provision for income taxes has been computed as if it were a separate tax-paying entity. 4. Divestitures and Investment Activities Divestitures On August 4, 2021, the Parent entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, "the Buyer") for cash consideration of $910.0 million. The sale is expected to be completed in three closings, with the entire cash consideration collected at the first closing and allocated to the closings on a relative fair value basis. The first closing occurred on March 1, 2022 and excluded the operations in the European Union and the United Kingdom. The second closing occurred on December 31, 2022 and included the United Kingdom operations, while the third closing is expected in the second quarter of 2023 and includes the European Union operations. As of December 31, 2022, the Parent has agreed to and paid final working capital adjustments to the Buyer and has classified the proceeds allocated to the European Union operations of approximately $104 million within Other liabilities in the Parent's Consolidated Balance Sheets. The gain on the sale from the first and second closings was recognized by the Parent's subsidiaries, and portions of the proceeds payable to the Parent's subsidiaries were settled by means of non-cash distributions by those subsidiaries. In 2020, the Parent sold its former corporate headquarters and recorded an immaterial pre-tax gain on the sale. The proceeds from this sale have been included in Cash flows from investing activities within the Parent’s Condensed Statements of Cash Flows for the year ended December 31, 2020. Investment Activities In April 2021, the Parent sold a substantial majority of the noncontrolling interest it held in a private company for cash proceeds of $50.9 million. The Parent recorded a gain of $47.9 million within Loss before equity earnings of affiliates and income taxes, during the year ended December 31, 2021. The Parent retains an immaterial equity interest in this private company. 5. Commitments, Contingencies, and Guarantees The Parent had approximately $370 million in outstanding letters of credit and bank guarantees as of December 31, 2022 primarily held in connection with regulatory requirements, certain agent agreements, and the Parent's guarantees of its subsidiaries' performance under these letters of credit and bank guarantees. In 2022, the Parent provided a $200 million guarantee to an underwriter of a surety bond, payable in the event the Parent's subsidiary defaults on its obligation. CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT THE WESTERN UNION COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) 6. Leases The Parent leases real properties primarily for use as administrative and sales offices, in addition to transportation and other equipment. The Parent determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Parent is the lessee, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease and variable non-lease components within the Parent’s lease agreements are accounted for separately. The Parent has no material leases in which the Parent is the lessor. The Parent’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-line basis. As of December 31, 2022 and 2021, the total ROU assets were $44.1 million and $56.9 million, respectively, and lease liabilities were $80.4 million and $91.3 million, respectively. The ROU assets and operating lease liabilities were included in Other assets and Other liabilities, respectively, in the Parent’s Condensed Balance Sheets. Cash paid for operating lease liabilities is recorded as Cash flows from operating activities in the Parent’s Condensed Statements of Cash Flows. Short-term and variable lease costs were not material for the years ended December 31, 2022, 2021, and 2020. The Parent’s leases have remaining terms from less than 1 year to nearly 9 years. Certain of these leases contain escalation provisions and/or renewal options, giving the Parent the right to extend the lease by up to 10 years. However, these options are not reflected in the calculation of the ROU asset and lease liability due to uncertainty surrounding the likelihood of renewal. The following table summarizes the weighted-average lease term and discount rate for operating lease liabilities as of December 31, 2022 and 2021:
|  | December 31, 2022 |  |  | December 31, 2021 |
Weighted-average remaining lease term (in years) |  |  | 7.9 |  |  |  | 8.6 |
Weighted-average discount rate |  |  | 5.5 | % |  |  | 5.3 | %
The following table represents maturities of operating lease liabilities as of December 31, 2022 (in millions):
|  | December 31, 2022 |
Due within 1 year |  | $ | 13.9 |
Due after 1 year through 2 years |  |  | 12.8 |
Due after 2 years through 3 years |  |  | 12.5 |
Due after 3 years through 4 years |  |  | 10.9 |
Due after 4 years through 5 years |  |  | 11.1 |
Due after 5 years |  |  | 39.1 |
Total lease payments |  |  | 100.3 |
Less imputed interest |  |  | (19.9 | )
Total operating lease liabilities |  | $ | 80.4 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(Schedule I)) -URI https://asc.fasb.org/extlink&oid=126898705&loc=d3e5864-122674 Reference 2: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI https://asc.fasb.org/extlink&oid=126929396&loc=d3e5283-111683 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04(a)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690 + Details
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