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What changed in Western Union CO's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Western Union CO's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+358 added−393 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in Western Union CO's 2023 10-K

358 paragraphs added · 393 removed · 310 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

76 edited+13 added−28 removed99 unchanged
Biggest changeYear Ended December 31, 2022 2021 2020 Consumer-to-Consumer 89 % 87 % 87 % Business Solutions 5 % 8 % 8 % Other 6 % 5 % 5 % 100 % 100 % 100 % No individual country or territory outside the United States accounted for more than approximately 9% of our consolidated revenue for each of the years ended December 31, 2022, 2021, and 2020. 6 Table of Contents See Part I, Item 1A, Risk Factors, for a discussion of certain risks relating to our foreign operations.
Biggest changeAccordingly, we will no longer report Business Solutions as a separate segment in future periods. No individual country or territory outside the United States accounted for more than 10% of our consolidated revenue for each of the years ended December 31, 2023, 2022, and 2021.
We include Branded Digital transactions in these regions. By means of common processes and systems, these regions, including Branded Digital, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment. Operations Our revenues are primarily derived from consideration paid by customers to transfer money.
We include Branded Digital transactions in our regions. By means of common processes and systems, these regions, including Branded Digital, create one interconnected global network for consumer transactions, thereby constituting one Consumer Money Transfer business and one operating segment. Operations Our revenues are primarily derived from consideration paid by customers to transfer money.
Services We offer money transfer services in more than 200 countries and territories, with a number of options for sending funds that provide consumers convenience and choice, through both our retail and digital money transfer channels. • Retail money transfer - The majority of our remittances constitute retail transactions in which payment is collected by one of our agents and is available for pick-up at another agent location, usually within minutes.
Services We offer money transfer services in more than 200 countries and territories, with a number of options for sending funds that provide consumers convenience and choice, through both our retail and digital money transfer channels. • Retail - The majority of our remittances constitute retail transactions in which payment is collected by one of our agents and is available for pick-up at another agent location, usually within minutes.
We compete with a variety of remittance providers, including: • Global money transfer providers - Global money transfer providers allow consumers to send money to a wide variety of locations, in both their home countries and abroad. • Regional money transfer providers - Regional money transfer providers, or “niche” providers, provide the same services as global money transfer providers, but focus on a smaller group of geographic corridors or services within one region, such as North America to the Caribbean, Central or South America, or Western Europe to North Africa. • Digital channels - Digital money transfer service providers, including certain payment providers, allow consumers to send and receive money digitally using the internet or through mobile devices.
We compete with a variety of remittance providers, including: • Global money transfer providers - Global money transfer providers allow consumers to send money to a wide variety of locations, in both their home countries and abroad. • Regional money transfer providers - Regional money transfer providers, or “niche” providers, provide the same services as global money transfer providers, but focus on a smaller group of geographic corridors or services within one region, such as North America to the Caribbean, Central or South America, or Western Europe to North Africa. • Digital channels - Digital service providers, including certain payment providers, allow consumers to send and receive money digitally using the internet or through mobile devices.
PSD2: (i) has increased the supervisory powers granted to member states with respect to activities performed by companies such as Western Union, and our agent network, (ii) provides for customer identity verification and authentication measures, and agent monitoring responsibilities, (iii) provides member states with the ability to limit the types, nature, and amount of charges we may assess, increases customer refund rights, and (iv) increases information security and incident reporting responsibilities. 12 Table of Contents Under our PSD2 license and local EU member states’ implementing legislation and associated regulatory supervisory powers, guidelines, and regulatory technical standards, we are responsible for the regulatory compliance of our agents and their subagents.
PSD2: (i) has increased the supervisory powers granted to member states with respect to activities performed by companies such as Western Union, and our agent network, (ii) provides for customer identity verification and authentication measures, and agent monitoring responsibilities, (iii) provides member states with the ability to limit the types, nature, and amount of charges we may assess and increases customer refund rights, and (iv) increases information security and incident reporting responsibilities. 12 Table of Contents Under our PSD2 license and local EU member states’ implementing legislation and associated regulatory supervisory powers, guidelines, and regulatory technical standards, we are responsible for the regulatory compliance of our agents and their subagents.
Government agencies both inside and outside the United States may impose new or additional rules on money transfers affecting us, our agents, or their subagents, including regulations that: • prohibit, restrict, and/or impose taxes or fees on money transfer transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose additional customer identification and customer, agent, and subagent due diligence requirements; 13 Table of Contents • impose additional reporting or recordkeeping requirements or require enhanced transaction monitoring; • limit the types of entities capable of providing money transfer services, impose additional licensing or registration requirements on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our agents or their subagents; • impose minimum capital or other financial requirements on us or our agents and their subagents; • limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange; • require enhanced disclosures to our money transfer customers; • require the principal amount of money transfers originated in a country to be invested in that country or held in a trust until they are paid; • limit the number or principal amount of money transfers, which may be sent to or from a jurisdiction, whether by an individual, through one agent, or in aggregate; • impose more stringent information technology, cybersecurity, data, and operational security requirements on us or our agents and their subagents, including relating to data transfers and the use of cloud infrastructure; • impose additional risk management and related governance and oversight requirements, including relating to the outsourcing of services to other group companies or to third parties; and • prohibit or limit exclusive arrangements with our agents and subagents.
Government agencies both inside and outside the United States may impose new or additional rules on money transfers affecting us, our agents, or their subagents, including regulations that: • prohibit, restrict, and/or impose taxes or fees on money transfer transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose additional customer identification and customer, agent, and subagent due diligence requirements; • impose additional reporting or recordkeeping requirements or require enhanced transaction monitoring; • limit the types of entities capable of providing money transfer services, impose additional licensing or registration requirements on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our agents or their subagents; • impose minimum capital or other financial requirements on us or our agents and their subagents; 13 Table of Contents • limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange; • require enhanced disclosures to our money transfer customers; • require the principal amount of money transfers originated in a country to be invested in that country or held in a trust until they are paid; • limit the number or principal amount of money transfers which may be sent to or from a jurisdiction, whether by an individual, through one agent, or in aggregate; • impose more stringent information technology, cybersecurity, data, and operational security requirements on us or our agents and their subagents, including relating to data transfers and the use of cloud infrastructure; • impose additional risk management and related governance and oversight requirements, including relating to the outsourcing of services to other group companies or to third parties; and • prohibit or limit exclusive arrangements with our agents and subagents.
As the scope of consumer protection laws and regulations change, we may experience increased costs to comply and other adverse effects to our business. 14 Table of Contents Derivatives Regulations Rules adopted under the Dodd-Frank Act by the Commodity Futures Trading Commission (the “CFTC”), as well as the provisions of the European Market Infrastructure Regulation (“EMIR”) and its technical standards, which are directly applicable in the member states of the EU, have subjected most of our foreign exchange hedging transactions, including certain intercompany hedging transactions and certain of the corporate interest rate hedging transactions we may enter into in the future, to reporting, recordkeeping, and other requirements.
As the scope of consumer protection laws and regulations change, we may experience increased costs to comply and other adverse effects to our business. 14 Table of Contents Derivatives Regulations Rules adopted under the Dodd-Frank Act by the Commodity Futures Trading Commission (the “CFTC”), as well as the provisions of the European Market Infrastructure Regulation (“EMIR”) and its technical standards, which are directly applicable in the member states of the EU, have subjected certain foreign exchange hedging transactions, including certain intercompany hedging transactions and certain of the corporate interest rate hedging transactions we may enter into in the future, to reporting, recordkeeping, and other requirements.
In digital money transfer channels, consumers can generally fund transactions using a credit card, debit card, electronic funds transfer processed through the automated clearing house (“ACH”) payment system or similar system outside the United States, online banking direct payment methods, or other bank account-based payment. We also provide several options for the receipt of funds.
In digital channels, consumers can generally fund transactions using a credit card, debit card, electronic funds transfer processed through the automated clearing house (“ACH”) payment system or similar system outside the United States, online banking direct payment methods, or other bank account-based payment. We also provide several options for the receipt of funds.
In compliance with these regulations, we invest the principal of outstanding money orders, money transfers, or payments in highly-rated, investment grade securities, and our use of such investments is restricted to satisfying outstanding settlement obligations. We regularly monitor credit risk and attempt to mitigate our exposure by investing in highly-rated securities.
In compliance with these regulations, we invest some of the principal of outstanding money orders, money transfers, or payments in highly-rated, investment grade securities, and our use of such investments is restricted to satisfying outstanding settlement obligations. We regularly monitor credit risk and attempt to mitigate our exposure by investing in highly-rated securities.
For example, in early 2017, we entered into a Deferred Prosecution Agreement with the United States Department of Justice and certain United States Attorney’s Offices (the “DPA”), a Stipulated Order for Permanent Injunction and Final Judgment (the “FTC Consent Order”) with the United States Federal Trade Commission (“FTC”), a Consent to the Assessment of Civil Money Penalty with the Financial Crimes Enforcement Network (“FinCEN”) of the United States Department of Treasury (the “FinCEN Agreement”), and settlement agreements with various state attorneys general (collectively, the “Joint Settlement Agreements”), and in early 2018, we agreed to a consent order which resolved a matter with the New York State Department of Financial Services (the “NYDFS Consent Order”).
For example, in early 2017, we entered into a Deferred Prosecution Agreement with the United States Department of Justice and certain United States Attorney’s Offices (the “DPA”), a Stipulated Order for Permanent Injunction and Final Judgment (the “FTC Consent Order”) with the United States Federal Trade Commission (“FTC”), a Consent to the Assessment of Civil Money Penalty with the Financial Crimes Enforcement Network (“FinCEN”) of the United States Department of Treasury, and settlement agreements with various state attorneys general (collectively, the “Joint Settlement Agreements”), and in early 2018, we agreed to a consent order which resolved a matter with the New York State Department of Financial Services (the “NYDFS Consent Order”).
Derivatives regulations have added costs to our business, and any additional requirements, such as future registration requirements and increased regulation of derivatives contracts, will result in additional costs or impact the way we conduct our hedging activities.
Derivatives regulations have added costs to our business, and any additional requirements, such as future registration requirements and increased regulation of derivatives contracts, will likely result in additional costs or impact the way we conduct any hedging activities.
Failure by Western Union, our agents or their subagents (agents and subagents are third parties, over whom Western Union has limited legal and practical control), and certain of our service providers to comply with any of these requirements or their interpretation could result in regulatory action, the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services, the suspension or revocation of a license or registration required to provide money transfer services and/or payment services or foreign exchange products, the limitation, suspension or termination of services, changes to our business model, loss of consumer confidence, private class action litigation, and/or the seizure of our assets.
Failure by Western Union, our agents or their subagents (agents and subagents are third parties, over whom Western Union has limited legal and practical control), and certain of our service providers to comply with any of these requirements or their interpretation could result in regulatory action, the suspension or revocation of a license or registration required to provide money transfer or payment services, the limitation, suspension or termination of services, changes to our business model, loss of consumer confidence, private class action litigation, the seizure of our assets, and/or the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services.
We recognize the strategic importance of talent and diversity in our workforce and promote diversity through: • our policies and practices in hiring, promotion, and compensation; • encouraging ethical decision-making via our Code of Conduct and ethics training program; • offering diversity training programs, sponsorship, and mentoring initiatives; • unconscious bias training; • goal setting; and • providing support for grassroots affinity groups and belonging initiatives.
We recognize the strategic importance of inclusion and belonging in our workforce and promote diversity through our talent management practices: • our policies and practices in hiring, promotion, and compensation; • encouraging ethical decision-making via our Code of Conduct and ethics training program; • offering diversity training programs, sponsorship, and mentoring initiatives; • unconscious bias training; • goal setting; and • providing support for grassroots affinity groups and belonging initiatives.
We provide our agents with access to our multi-currency, real-time money transfer processing systems, which are used to originate and pay money transfers. Our systems and processes enable our agents to pay money transfers in nearly 130 currencies worldwide. Certain of our agents can pay in multiple currencies at a single location.
We provide our agents with access to our multi-currency, real-time money transfer processing systems, which are used to originate and pay money transfers. Our systems and processes enable our agents to pay money transfers in over 130 currencies worldwide. Certain of our agents can pay in multiple currencies at a single location.
For further discussion of these agreements, please see Part I, Item 1A, Risk Factors - “Our business is the subject of consent agreements with or enforcement actions by regulators.” Money Transfer and Payment Instrument Licensing and Regulation Most of our services are subject to anti-money laundering laws and regulations, including the Bank Secrecy Act in the United States, as amended (collectively, the “BSA”), and similar laws and regulations in the United States and abroad.
For further discussion of these agreements, please see Part I, Item 1A, Risk Factors - “Our business is the subject of consent agreements with, or investigations or enforcement actions by, regulators and other government authorities.” Money Transfer and Payment Instrument Licensing and Regulation Most of our services are subject to anti-money laundering laws and regulations, including the Bank Secrecy Act in the United States, as amended (collectively, the “BSA”), and similar laws and regulations in the United States and abroad.
These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and the difference between the exchange rate we set to the customer and a rate available in the wholesale foreign exchange market, as applicable.
These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, and the difference between the exchange rate we set to the customer and a rate available in the wholesale foreign exchange market, when the money transfer involves different send and receive currencies.
These also include laws and regulations regarding financial services, consumer disclosure and consumer protection, currency controls, money transfer and payment instrument licensing, payment services, credit and debit cards, electronic payments, foreign exchange hedging services, unclaimed property, the regulation of competition, consumer privacy, data protection, and information security.
These also include laws and regulations regarding financial services, consumer disclosure and consumer protection, currency controls, money transfer and payment instrument licensing, payment services, credit and debit cards, electronic payments, unclaimed property, the regulation of competition, consumer privacy, data protection, and information security.
We actively assess our new talent needs, evaluate the extent to which current staff have those critical skills, 17 Table of Contents and provide development to build these capabilities. Our recruiting team uses multiple channels to find, assess, and hire employees, including channels that focus on diverse candidates. Training and Professional Development We invest in our people and their growth.
We actively assess our new talent needs, evaluate the extent to which current staff have those critical skills, and provide development to build these capabilities. Our recruiting team uses multiple channels to find, assess, and hire employees, including channels that focus on diverse candidates. Training and Professional Development We invest in our people and their growth.
While the terms of these arrangements vary, these services are often marketed by the third-party partner and offered under the partner’s license to provide money transfer services. As a result, the regulatory requirements applicable to us under these arrangements may also vary.
While the terms of these arrangements vary, 8 Table of Contents these services are often marketed by the third-party partner and offered under the partner’s license to provide money transfer services. As a result, the regulatory requirements applicable to us under these arrangements may also vary.
Benefits generally available to all full-time employees include medical benefits, risk insurance benefits (life, disability, and accidental death and dismemberment), global adoption assistance, our employee assistance program (counseling, legal, and other professional services), paid leave, a scholarship program available to employees with college-age children, a global recognition and reward program, and business travel assistance and insurance.
Benefits generally available to all full-time employees include medical benefits, risk insurance benefits (life, disability, and accidental death and dismemberment), global adoption assistance, our 18 Table of Contents employee assistance program (counseling, legal, and other professional services), paid leave, a scholarship program available to employees with college-age children, a global recognition and reward program, and business travel assistance and insurance.
During the same period, there has also been increased public attention to the corporate use and disclosure of personal information, accompanied by legislation and regulations intended to strengthen data protection, 16 Table of Contents information security, and consumer privacy.
During the same period, there has also been increased public attention to the corporate use and disclosure of personal information, accompanied by legislation and regulations intended to strengthen data protection, information security, and consumer privacy.
Existing employees receive continuing education on these same topics every year. Engagement We assess employee engagement regularly, and our employee engagement system utilizes periodic surveys, artificial intelligence, and machine learning to help leaders better understand what our employees are thinking, what they value, and what they need.
Existing employees receive continuing education on these same topics every year. 17 Table of Contents Engagement We assess employee engagement regularly, and our employee engagement system utilizes periodic surveys, artificial intelligence, and machine learning to help leaders better understand what our employees are thinking, what they value, and what they need.
Our top 40 agents and partners globally have been with us for more than 20 years, on average, and in 2022, these long-standing relationships accounted for transactions that generated nearly 60% of our Consumer-to-Consumer revenue. No individual agent or partner accounted for greater than 10% of the segment’s revenue during all periods presented.
Our top 40 agents and partners globally have been with us for more than 20 years, on average, and in 2023, these long-standing relationships accounted for transactions that generated nearly 60% of our Consumer Money Transfer revenue. No individual agent or partner accounted for greater than 10% of the segment’s revenue during all periods presented.
Our bill payment services provide fast and convenient options to make payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, and government agencies. Generally, these bill payment services are initiated by consumers making a cash payment at an agent or a Company-operated location.
Our bill payment services provide fast and convenient options for consumers, businesses, and other organizations to make payments, including to utilities, auto finance companies, mortgage servicers, financial service providers, and government agencies. Generally, these bill payment services are initiated by consumers making a cash payment at an agent or a Company-operated location, or making a payment through westernunion.com.
For further discussion of these risks, see Part I, Item 1A, Risk Factors - “Breaches of our information security safeguards could adversely affect our ability to operate and could damage our reputation and adversely affect our business, financial condition, results of operations, and cash flows.” In connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing, and pursuant to legal obligations and authorizations, we make information available to certain United States federal, state, and foreign government agencies when required by law.
For further discussion of these risks, see Part I, Item 1A, Risk Factors - “Breaches of our information security safeguards could adversely affect our ability to operate and could damage our reputation and adversely affect our business, financial condition, results of operations, and cash flows.” In connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and other legal obligations and requests, we make information available to certain United States federal, state, and foreign government agencies.
For example, as of December 31, 2022, over 50% of our global workforce were women and 37% of senior management-level and above positions were held by women. Our leadership team has diverse backgrounds, with wide-ranging, global experience.
For example, as of December 31, 2023, over 50% of our global workforce were women and 36% of senior management-level and above positions were held by women. Our leadership team has diverse backgrounds, with wide-ranging, global experience.
These include increasingly strict legal and regulatory requirements intended to help detect and prevent money laundering, terrorist financing, fraud, and other illicit activity.
These include increasingly strict legal and regulatory requirements intended to help detect and prevent money laundering, terrorist financing, fraud, drug trafficking, human trafficking, and other illicit activity.
We provide limited money transfer and payment services to parties in Cuba, Syria and the Crimea region of Ukraine in accordance with United States laws authorizing such services, and pursuant to and as authorized by advisory opinions of, or specific or general licenses issued by, OFAC.
We provide limited money transfer and payment services to parties in Cuba, Syria, and certain regions of Ukraine in accordance with United States laws authorizing such services, and pursuant to and as authorized by advisory opinions of, or specific or general licenses issued by, OFAC.
The CCPA, CPA, and other state privacy laws impose heightened data privacy requirements on companies that collect information from residents of the particular states and create a broad set of privacy rights and remedies modeled in part on the GDPR, as discussed below.
The CCPA, CPA, and other state privacy laws impose heightened data privacy requirements on companies that collect information from residents of the particular states and create a broad set of privacy rights and remedies modeled in part on the General Data Protection Regulation (“GDPR”), as discussed below.
Distribution and Marketing Channels We offer our Consumer-to-Consumer services around the world primarily through our global network of agents and sub-agents in most countries and territories, with approximately 90% of our agent locations being located outside the United States.
Distribution and Marketing Channels We offer our Consumer Money Transfer services around the world primarily through our global network of agents and subagents in most countries and territories, with approximately 90% of our agent locations being located outside the United States.
As we continue to seek to meet the needs of our customers for fast, reliable, and convenient global money movement and payment services, with a continued focus on regulatory compliance, we are also working to provide consumers and our business clients with access to an expanding portfolio of financial services and to expand the ways our services can be accessed, including through the recent launch of our digital wallet in certain countries.
As we continue to seek to meet the needs of our customers for fast, reliable, and convenient global money movement and payment services while focusing on regulatory compliance, we are also working to provide consumers and our business clients with access to an expanding portfolio of financial services and to increase the ways our services can be accessed, including through the launch of our digital wallet in certain countries.
In select markets, consumers may stage a transaction either online or using a mobile device and subsequently pay for the transaction at one of our agent locations. 7 Table of Contents Additionally, in certain agent locations, consumers can enter a transaction at a self-service kiosk and subsequently pay for the transaction at the counter of the location. • Digital money transfer - In many countries and territories, consumers can initiate a money transfer from a Western Union branded website or mobile application or from sites and applications hosted by our third-party white label or co-branded digital partners.
Additionally, in certain agent locations, consumers can enter a transaction at a self-service kiosk and subsequently pay for the transaction at the counter of the location. 7 Table of Contents • Digital - In many countries and territories, consumers can initiate a money transfer from a Western Union branded website or mobile application or from sites and applications hosted by our third-party white label or co-branded digital partners.
McGranahan served as co-leader of the North America financial services practice from 2009 to 2016. He joined McKinsey & Company in 1992 and served in a variety of other leadership positions prior to 2009. Matt Cagwin is our Chief Financial Officer (from January 2023). Mr. Cagwin previously served as our Interim Chief Financial Officer from September 2022 to January 2023.
McGranahan served as co-leader of the North America financial services practice from 2009 to 2016. He joined McKinsey & Company in 1992 and served in a variety of other leadership positions prior to 2009. Matt Cagwin is our Executive Vice President, Chief Financial Officer (from January 2023). Mr.
Prior to that, she served as Deputy Chief Compliance Officer and U.S. Settlements Lead from 2016 to 2018 and Director of Project Management – Compliance from 2012, when she joined Western Union. Before joining Western Union, Ms.
Axelrod previously served as the Company’s Chief Auditor from 2018 to 2022. Prior to that, she served as Deputy Chief Compliance Officer and U.S. Settlements Lead from 2016 to 2018 and Director of Project Management – Compliance from 2012, when she joined Western Union. Before joining Western Union, Ms.
Cagwin served as Senior Vice President, Chief 19 Table of Contents Financial Officer – Merchant Acceptance of Fiserv, Inc. from 2019 to 2022, in the same role at First Data Corporation from 2018 to 2019, and as Senior Vice President, Corporate Controller and Chief Accounting Officer of First Data Corporation from 2014 to 2018.
Cagwin served as Senior Vice President, Chief Financial Officer – Merchant Acceptance of Fiserv, Inc. from 2019 to 2022, in the same role at First Data Corporation from 2018 to 2019, and as Senior Vice President, Corporate Controller and Chief Accounting Officer of First Data Corporation from 2014 to 2018. Prior to his roles at Fiserv and First Data, Mr.
Our talent processes endeavor to strike an appropriate balance between global scale and local responsiveness. Our development and training organization has members in many countries, so that training can be made available to all regions of our global workforce. Our employee development philosophy centers around learning and empowerment.
Our talent processes endeavor to strike an appropriate balance between global scale and local responsiveness. Our development and training organization designs or obtains training that can be made available to all regions of our global workforce. Our employee development philosophy centers around learning and empowerment.
These laws and requirements continue to evolve and may become increasingly challenging to comply with. 15 Table of Contents In the United States, federal data privacy laws such as the federal Gramm-Leach-Bliley Act and various state laws, such as the California Consumer Privacy Act (“CCPA”), the Colorado Privacy Act (“CPA”), and other data privacy and breach laws, apply to a broad range of financial institutions including money transfer providers like Western Union and to companies that provide services to or on behalf of those institutions.
In the United States, federal data privacy laws such as the federal Gramm-Leach-Bliley Act and various state laws, such as the California Consumer Privacy Act (“CCPA”), the Colorado Privacy Act (“CPA”), and other data privacy and breach laws, apply to a broad range of financial institutions including money transfer providers like Western Union and to companies that provide services to or on behalf of those institutions.
We also provide various payment and other services under many brands and product names, including Pago Fácil ® , Quick Collect ® , Quick Pay SM , Quick Cash ® , and Western Union Convenience Pay ® .
We offer money transfer services under the Western Union ® , Vigo ® , and Orlandi Valuta ® brands. We also provide various payment and other services under many brands and product names, including Pago Fácil ® , Quick Collect ® , Quick Pay SM , Quick Cash ® , and Western Union Convenience Pay ® .
Prior to his roles at Fiserv and First Data, Mr. Cagwin spent ten years at Coca-Cola Enterprises in a variety of senior management roles, including Vice President and European Controller and Vice President and Assistant Corporate Controller. Benjamin Adams is our Chief Legal Officer (from June 2022) and our Interim Chief People Officer (from February 2023).
Cagwin spent ten years at Coca-Cola Enterprises in a variety of senior management roles, including Vice President and European Controller and Vice President and Assistant Corporate Controller. Benjamin Adams is our Executive Vice President, Chief Legal Officer (from June 2022) and previously served as our Interim Chief People Officer (from February 2023 to July 2023).
As of February 23, 2023, three out of our eight executive officers were diverse, including two who were female and one who identified as Black/African-American. In addition, our Board of Directors considers diversity in gender, ethnicity, geography, background, and cultural viewpoints when selecting nominees.
As of February 22, 2024, three out of our seven executive officers were diverse, including one who was female, one who identified as Black/African-American, and one who identified as Hispanic/Latino. In addition, our Board of Directors considers diversity in gender, ethnicity, geography, background, and cultural viewpoints when selecting nominees.
Human Capital Management Our People As of December 31, 2022, our businesses employed approximately 8,900 individuals, of which approximately 1,300 employees are located inside the United States. Our employees span more than 50 countries.
Human Capital Management Our People As of December 31, 2023, our businesses employed approximately 9,000 individuals, of which approximately 1,400 employees are located inside the United States. Our employees span more than 50 countries.
As of December 31, 2022, five of our eleven directors were diverse, including three directors who were female and three directors who identified as Hispanic/Latino, Asian, or LGBTQ+. 18 Table of Contents Compensation, Benefits, and Wellness We seek to provide compensation that motivates, retains, and rewards our employees and attracts future talent.
As of December 31, 2023, six of our eleven directors were diverse, including four directors who were female and four directors who identified as Hispanic/Latino, Asian, American Indian, or LGBTQ+. Compensation, Benefits, and Wellness We seek to provide compensation that motivates, retains, and rewards our employees and attracts future talent.
The trend in this area is one of increasingly more stringent regulation, particularly with the EU’s GDPR. The GDPR imposes obligations upon our businesses and presents the risk of substantially increased penalties for non-compliance, including the possibility of not only fines but also enforcement action that may require an organization to cease certain of its data processing activities.
The GDPR imposes obligations upon our businesses and presents the risk of substantially increased penalties for non-compliance, including the possibility of not only fines but also enforcement action that may require an organization to cease certain of its data processing activities.
Item 1. B usiness Overview The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or “us”) is a leader in global money movement and payment services, providing people and businesses with fast, reliable and convenient ways to send money and make payments around the world.
Item 1. B usiness Overview The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or “us”) is a leader in cross-border, cross-currency money movement, payments, and digital financial services, empowering consumers, businesses, financial institutions, and governments with fast, reliable, and convenient ways to send money and make payments around the world.
Other Some of our services are subject to card association rules and regulations. For example, an independent standards-setting organization, the Payment Card Industry (“PCI”) Security Standards Council developed a set of comprehensive requirements concerning payment card account security through the transaction process, called the Payment Card Industry Data Security Standard (“PCI DSS”).
For example, an independent standards-setting organization, the Payment Card Industry (“PCI”) Security Standards Council developed a set of comprehensive requirements concerning payment card account security through the transaction process, called the Payment Card Industry Data Security Standard (“PCI DSS”).
Certain of our corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. The table below presents the components of our consolidated revenue.
Certain of our corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Consumer Services.
These regulatory goals, including the prevention of money laundering, terrorist financing, and identity theft, and the protection of the individual’s right to privacy, may conflict or otherwise present challenges, and the law in these areas is not consistent or settled.
These regulatory and law enforcement goals, and the protection of the individual’s right to privacy, may conflict or otherwise present challenges, and the law in these areas is not consistent or settled.
We market our services to consumers in a number of ways, directly and indirectly through our agents and their subagents, leveraging promotional activities, grassroots, direct-to-consumer communications, digital advertising, and other incentives. Our marketing strategy includes our loyalty program, which is available in certain countries and territories.
We market our services to consumers in a number of ways, directly and indirectly through our agents and their subagents, leveraging promotional activities, grassroots, direct-to-consumer communications, digital advertising, and other incentives.
Redemption activity has been insignificant to the results of our operations. 8 Table of Contents We cooperate with various partners around the world to offer a variety of branded, co-branded, and non-Western Union branded money transfer services, including services offered exclusively under the partners’ brands.
We cooperate with various partners around the world to offer a variety of branded, co-branded, and non-Western Union branded money transfer services, including services offered exclusively under the partners’ brands.
Digital channels also include digital wallets, digital currencies, including cryptocurrencies, cryptocurrency exchanges, and social media and other predominantly communication or commerce-oriented platforms that offer money transfer services. • Banks, postbanks, and post offices - Banks, postbanks, and post offices of all sizes compete with us in a number of ways, including money transfers, bank transfer and wire services, payment instrument issuances, and card-based services. • Informal networks - Informal networks enable people to transfer funds without formal mechanisms and often without compliance with government reporting requirements. • Alternative channels - Alternative channels for sending and receiving money include mail and commercial courier services and card-based options, such as ATM cards and stored-value cards. 9 Table of Contents We believe the most significant competitive factors in Consumer-to-Consumer remittances relate to the overall consumer value proposition, including brand recognition, trust, reliability, consumer experience, price, speed of delivery, distribution network, variety of send and receive payment methods, and channel options.
Digital channels also include digital wallets, digital currencies, including cryptocurrencies, cryptocurrency exchanges, and social media and other predominantly communication or commerce-oriented platforms that offer money transfer services. • Banks, postbanks, and post offices - Banks, postbanks, and post offices of all sizes compete with us in a number of ways, including money transfers, bank transfer and wire services, payment instrument issuances, and card-based services. • Informal networks - Informal networks enable people to transfer funds without formal mechanisms and often without compliance with government reporting requirements. • Alternative channels - Alternative channels for sending and receiving money include mail and commercial courier services and card-based options, such as ATM cards and stored-value cards.
Following Brexit, EMIR and the European Markets in Financial Instruments Directive (“MiFID II”) have been retained as UK law pursuant to the European Union (Withdrawal) Act 2018 UK.
Following the departure of the UK from the EU on January 31, 2020 (“Brexit”), EMIR and the European Markets in Financial Instruments Directive (“MiFID II”) have been retained as UK law pursuant to the European Union (Withdrawal) Act 2018 UK.
Following the acquisition of the Angelo Costa business by Western Union in 2011, Mr. Angelini became CEO of Angelo Costa and Finint, and then Head of Independent Channels, Europe at Western Union. Cherie Axelrod is our Chief Enterprise Risk Officer (from August 2022). Ms. Axelrod previously served as the Company’s Chief Auditor from 2018 to 2022.
Following 19 Table of Contents the acquisition of the Angelo Costa business by Western Union in 2011, Mr. Angelini became CEO of Angelo Costa and Finint, and then Head of Independent Channels, Europe at Western Union. Cherie Axelrod is our Executive Vice President, Chief Risk and Compliance Officer (from August 2022). Ms.
These activities are subject to information security, data privacy, data protection, data breach, and related laws and regulations in the United States, the EU, and many other countries in which we provide services.
These activities are subject to information security, data privacy, data protection, data breach, and related laws and regulations in the United States, the EU, and most of the other countries in which we provide services. These laws and requirements continue to evolve and may become increasingly challenging to comply with.
Our vision is to be the world leader of branded payments and accessible consumer financial services, serving the aspiring populations of the world. The Western Union ® brand is globally recognized and represents speed, reliability, trust, and convenience. Our Consumer-to-Consumer money transfer service enables people to use our well-recognized brand to send money around the world, usually within minutes.
Our goal is to offer accessible financial services that help people and communities prosper. The Western Union ® brand is globally recognized and represents speed, reliability, trust, and convenience. Our Consumer Money Transfer service enables people to use our well-recognized brand to send money around the world, usually within minutes.
However, because this entity and its Austrian subsidiary do not exercise banking powers in the United States, we are not subject to the Bank Holding Company Act in the United States.
However, because this entity and its Austrian subsidiary do not exercise banking powers in the United States, we are not subject to the Bank Holding Company Act in the United States. 16 Table of Contents Other Some of our services are subject to card association rules and regulations.
Mr. Cagwin joined the Company in July 2022 as Head of Business Unit Financial Planning and Analysis. Prior to joining the Company, Mr.
Cagwin previously served as our Interim Chief Financial Officer from September 2022 to January 2023. Mr. Cagwin joined the Company in July 2022 as Head of Business Unit Financial Planning and Analysis. Prior to joining the Company, Mr.
Information About our Executive Officers As of February 23, 2023, our executive officers consist of the individuals listed below: Name Age Position Devin McGranahan 53 President, Chief Executive Officer, and Director Matt Cagwin 48 Chief Financial Officer Benjamin Adams 51 Chief Legal Officer and Interim Chief People Officer Giovanni Angelini 53 President, Europe and Africa Cherie Axelrod 57 Chief Enterprise Risk Officer Jean Claude Farah 52 President, Middle East and Asia Pacific Gabriella Fitzgerald 51 President, North America Andrew Walker 56 Chief Operations Officer Devin McGranahan is our President and Chief Executive Officer and member of the Company's Board of Directors (from December 2021).
Information About our Executive Officers As of February 22, 2024, our executive officers consist of the individuals listed below: Name Age Position Devin McGranahan 54 President, Chief Executive Officer, and Director Matt Cagwin 49 Executive Vice President, Chief Financial Officer Benjamin Adams 52 Executive Vice President, Chief Legal Officer Giovanni Angelini 54 President, Europe and Africa Cherie Axelrod 58 Executive Vice President, Chief Risk and Compliance Officer Rodrigo Garcia Estebarena 51 President, North America Andrew Walker 57 Executive Vice President, Chief Operations Officer Devin McGranahan is our President and Chief Executive Officer and member of the Company’s Board of Directors (from December 2021).
The second closing occurred on December 31, 2022 and included the United Kingdom operations. Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 5, Divestitures, Investment Activities, and Goodwill for further information related to our Business Solutions divestiture.
The final closing for this transaction occurred on July 1, 2023. Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 4, Divestitures, Investment Activities, and Goodwill for further information related to our Business Solutions divestiture.
As of December 31, 2022, our global network included agent locations in more than 200 countries and territories and many Western Union branded or partner websites. Each location in our agent network is capable of facilitating a consumer’s use of one or more of our services, with the substantial majority offering a Western Union branded service.
Each location in our agent network is capable of facilitating a consumer’s use of one or more of our services, with the substantial majority offering a Western Union branded service. As of December 31, 2023, approximately 400,000 of our agent locations had conducted money transfer activity in the previous 12 months.
In addition to our Irish PSD2 license, which covers most of our retail money transfer business in Europe, our European digital money transfer business is managed through our Austrian banking subsidiary, which is regulated by the Austrian Financial Market Authority under the Austrian Banking Act.
Our European Union digital money transfer business is managed through our Austrian banking subsidiary, which is regulated by the Austrian Financial Market Authority under the Austrian Banking Act. Its digital money transfer business is subject to payment services regulated under PSD2 and local implementing legislation.
In view of the departure of the United Kingdom ("UK") from the EU on January 31, 2020 ("Brexit"), to ensure that our operations will continue in the UK, we set up a new payment institution to conduct money remittance in the UK, which was authorized by the Financial Conduct Authority in April 2019 and presently offers retail money transfer services via UK agents.
We also have a payment institution to conduct money remittance in the United Kingdom (“UK”), which was authorized by the Financial Conduct Authority (“FCA”) in April 2019 and presently offers retail money transfer services via UK agents and our UK Branded Digital services.
We also own a number of application programming interfaces. 10 Table of Contents Regulation Our business is subject to a wide range of laws and regulations enacted by the United States federal government, each of the states, many localities, and many other countries and jurisdictions, including the EU.
Additionally, we own patents and patent applications covering various aspects of our products and services, covering a range of technologies, including those related to money transfer, compliance analytics, fraud prevention, and mobile applications. 10 Table of Contents Regulation Our business is subject to a wide range of laws and regulations enacted by the United States federal government, each of the states, many localities, and many other countries and jurisdictions, including the European Union ( “ EU ” ).
In some markets, individual agents are independently offering specific services such as stored-value card or account payout options. While we typically perform services under the Western Union brand, in certain geographic regions, we operate under other brands targeted to the local market.
While we typically perform services under the Western Union brand, in certain geographic regions, we operate under other brands targeted to the local market, such as Vigo and Orlandi Valuta.
Consumer-to-Consumer Segment Money transfers from one consumer to another are the core of our business, representing 89% of our total consolidated revenues for 2022. A substantial majority of these transfers were cross-border transactions.
See Part I, Item 1A, Risk Factors, for a discussion of certain risks relating to our foreign operations. 6 Table of Contents Consumer Money Transfer Money transfers from one consumer to another are the core of our business, representing 92% of our total consolidated revenues for 2023. A substantial majority of these transfers were cross-border transactions.
The CFPB has created additional regulatory obligations for us and has the authority to examine and supervise us and our larger competitors, including for matters related to unfair, deceptive, or abusive acts and practices. The CFPB’s regulations implementing the remittance provisions of the Dodd-Frank Act have affected our business in a variety of areas.
The CFPB has created additional regulatory obligations for us and has the authority to further define participants in markets for consumer financial products and services and examine and supervise us and our larger competitors, including for matters related to unfair, deceptive, or abusive acts and practices.
Increasingly, data protection laws of countries outside of the United States are having a significant impact on our operations and the manner in which we provide our services. The EU has been particularly active in regulating the collection, transfer, disclosure, use, storage, and other processing of personal information, and the EU’s approach is frequently followed by other jurisdictions.
Increasingly, data protection laws of countries outside of the United States are having a significant impact on our operations and the manner in which we provide our services.
We believe this shift in consumer preference will continue, resulting in an increasing proportion of remittances being sent through digital means in the future. Competition We face robust competition in the highly fragmented Consumer-to-Consumer money transfer industry.
We are seeing increased competition from, and increased market acceptance of, electronic, mobile, and internet-based money transfer services as well as digital currencies, including cryptocurrencies. We believe this shift in consumer preference will continue, resulting in an increasing proportion of remittances being sent through digital means in the future.
Intellectual Property The Western Union trademarks and service marks and the Company’s Black & Yellow trade dress are used and/or registered worldwide and are material to our Company. We offer money transfer services under the Western Union ® , Orlandi Valuta ® , and Vigo ® brands.
For non-money transfer aspects of our consumer ecosystem, we derive income primarily from transaction fees and contractual relationships with partners such as the issuing bank for Western Union-branded prepaid cards. Intellectual Property The Western Union trademarks and service marks and the Company’s Black & Yellow trade dress are used and/or registered worldwide and are material to our Company.
In recent years, we have experienced an increasing number of data sharing requests by these agencies, particularly in connection with efforts to prevent terrorist financing or to reduce the risk of identity theft.
In recent years, we have experienced data sharing requests by these agencies, including in connection with efforts to combat money laundering, terrorist financing, fraud, drug trafficking, and human trafficking.
Other Our remaining businesses and services, which primarily consist of our bill payment services in Argentina and the United States and money order services, are included in Other, which also includes certain corporate costs such as costs related to strategic initiatives, including for the review and closing of mergers, acquisitions, and divestitures.
Consumer Services revenue is derived primarily from transaction fees paid by customers and billers and represented 7% of our total consolidated revenues for 2023. Consumer Services also includes certain corporate costs such as costs related to strategic initiatives, including for the review and closing of mergers, acquisitions, and divestitures.
Our Segments We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our segments addresses a different combination of customer groups, distribution networks, and services offered. Our segments are Consumer-to-Consumer and Business Solutions.
Our Segments We manage our business around the consumers and businesses we serve and the types of services we offer. Our segments were Consumer Money Transfer (previously Consumer-to-Consumer), Business Solutions, and Consumer Services (previously Other). As discussed above, we completed the sale of our Business Solutions business on July 1, 2023.
For further discussion of the regulatory impact on our business, see the Regulation discussion in this section, Part I, Item 1A, Risk Factors, and the Enhanced Regulatory Compliance section in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations .
For further discussion of the regulatory impact on our business, see the Regulation discussion in this section, Part I, Item 1A, Risk Factors. Additionally, our ability to enter into or maintain exclusive arrangements with our agents has been and may continue to be challenged by both regulators and certain of our current and prospective agents.
In addition, in limited countries, we write foreign currency forward and option contracts for customers to facilitate future payments. We believe that brand strength and reach of our global network, convenience, reliability, and value for the price paid have been important to our business.
We believe that brand strength and reach of our global network, convenience, reliability, and value have been important to our business. As of December 31, 2023, our global network included agent locations in more than 200 countries and territories and many Western Union branded websites.
As of December 31, 2022, approximately 400,000 of our agent locations had conducted money transfer activity in the previous 12 months. On August 4, 2021, we entered into an agreement to sell our Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the "Buyer").
On August 4, 2021, we entered into an agreement to sell our Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, “the Buyer”), and the final closing occurred on July 1, 2023. Accordingly, we no longer report Business Solutions revenues and operating expenses after July 1, 2023.
All businesses and other services that have not been classified in these segments are reported as Other, which primarily includes our bill payment services which facilitate payments from consumers to businesses and other organizations and our money order services.
Our Consumer Services segment includes our bill payment services which facilitate payments for consumers, businesses, and other organizations, as well as our money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets.
Mr. Farah joined Western Union in 1999 as Marketing Manager, Middle East & North Africa. From 1999 to 2013, Mr. Farah held a variety of progressively responsible positions with the Company, including Regional Director, Regional Vice President, and Senior Vice President for the Middle East, Pakistan and Afghanistan region. Mr. Farah started his career in 1995 with Renault SA.
Mr. Estebarena joined Western Union in 2008 as Business Development Regional Director. From 2008 to 2014, Mr. Estebarena held a variety of progressively responsible positions with the Company, including Director of Business Development Stored Value LACA and Director Product Management & New Channels LACA. Andrew Walker is our Executive Vice President, Chief Operations Officer (from April 2022). Previously, Mr.
Removed
The sale is expected to be completed in three closings, the first of which occurred on March 1, 2022. The second closing occurred on December 31, 2022, and the third closing is expected in the second quarter of 2023.
Added
The table below presents the components of our consolidated revenue: Year Ended December 31, 2023 2022 2021 Consumer Money Transfer 92 % 89 % 87 % Business Solutions (a) 1 % 5 % 8 % Consumer Services 7 % 6 % 5 % 100 % 100 % 100 % (a) On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to the Buyer, and the final closing for this transaction occurred on July 1, 2023.
Removed
Our Business Solutions services facilitate payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The significant majority of our Business Solutions business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments.
Added
We offer a variety of methods for consumers to initiate transactions. In select markets, consumers may stage a transaction either online or using a mobile device and subsequently pay for the transaction at one of our agent locations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, failure by Western Union, our agents or their subagents (agents and subagents are third parties, over whom Western Union has limited legal and practical control), and service providers to comply with any of these requirements or their interpretation could result in the suspension or revocation of a license or registration required to provide money transfer, payment or foreign exchange services, the limitation, suspension, or termination of services, changes to our business model, loss of consumer confidence, the seizure of our assets, and/or the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services.
Biggest changeFailure by Western Union, our agents or their subagents (agents and subagents are third parties, over whom Western Union has limited legal and practical control), and certain of our service providers to comply with any of these requirements or their interpretation could result in regulatory action, the suspension or revocation of a license or registration required to provide money transfer or payment services, the limitation, suspension or termination of services, changes to our business model, loss of consumer confidence, private class action litigation, the seizure of our assets, and/or the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services. 34 Table of Contents We are subject to regulations imposed by the Foreign Corrupt Practices Act (the “FCPA”) in the United States and similar laws in other countries, such as the Bribery Act in the UK, which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials for the purpose of obtaining or retaining business.
The prospect of reduced job opportunities, especially in retail, healthcare, construction, hospitality, and technology industries, or weakness in the regional economies could adversely affect the number of money transfer transactions, the principal amounts transferred and correspondingly our results of operations.
The prospect of reduced job opportunities, especially in the retail, healthcare, construction, hospitality, and technology industries, or weakness in regional economies could adversely affect the number of money transfer transactions, the principal amounts transferred and correspondingly our results of operations.
If consumer advocacy groups are able to generate widespread support for actions that are detrimental to our business, then our business, financial condition, results of operations, and cash flows could be adversely affected.
If consumer advocacy groups are able to generate widespread support for actions that are detrimental to our business, then our financial condition, results of operations, and cash flows could be adversely affected.
Similar to the Western Union ® trademarks, the Orlandi Valuta ® , Vigo ® , Pago Fácil ® , Quick Collect ® , Quick Pay SM , Quick Cash ® , Western Union Convenience Pay ® , and other trademarks and service marks are also important to our Company and a loss of the service mark or trademarks or a diminution in the perceived quality associated with these names could harm our business.
Similar to the Western Union ® trademarks, the Vigo ® , Orlandi Valuta ® , Pago Fácil ® , Quick Collect ® , Quick Pay SM , Quick Cash ® , Western Union Convenience Pay ® , and other trademarks and service marks are also important to our Company, and a loss of the service mark or trademarks or a diminution in the perceived quality associated with these names could harm our business.
Thus, the risk of adverse regulatory action against Western Union because of actions by our agents or their subagents and the costs to monitor our agents or their subagents in those areas has increased. The regulations implementing the remittance provisions of the Dodd-Frank Act also impose responsibility on us for any related compliance failures of our agents and their subagents.
Thus, the risk of adverse regulatory action against Western Union because of actions by our agents or their subagents and the costs to monitor our agents or their subagents in those areas has increased. The regulations implementing the remittance provisions of the Dodd-Frank Act also impose responsibility on us for any related compliance failures of our agents.
Changes mandated by laws which make Western Union responsible for acts of its agents and their subagents while they are providing the Western Union money transfer service increase our risk of regulatory liability and our costs to monitor our agents’ or their subagents’ performance. 37 Table of Contents Although most of our Orlandi Valuta and Vigo branded agents also offer money transfer services of our competitors, many of our Western Union branded agents have agreed to offer only our money transfer services.
Changes mandated by laws which make Western Union responsible for acts of its agents and their subagents while they are providing the Western Union money transfer service increase our risk of regulatory liability and our costs to monitor our agents’ or their subagents’ performance. 37 Table of Contents Although most of our Vigo and Orlandi Valuta branded agents also offer money transfer services of our competitors, many of our Western Union branded agents have agreed to offer only our money transfer services.
Our competitors include consumer money transfer companies, banks and 23 Table of Contents credit unions (including interbank partnerships), card associations, web-based services, mobile money transfer services, payment processors, card-based payments providers such as issuers of e-money, travel cards or stored-value cards, informal remittance systems, automated teller machine providers and operators, phone payment systems (including mobile phone networks), postal organizations, retailers, check cashers, mail and courier services, currency exchanges, and digital currencies, including cryptocurrencies and cryptocurrency exchanges.
Our competitors include consumer money transfer companies, banks and credit unions (including interbank partnerships), card associations, web-based services, mobile money transfer services, payment processors, card-based payments providers such as issuers of e-money, travel cards or stored-value cards, digital 23 Table of Contents wallets, informal remittance systems, automated teller machine providers and operators, phone payment systems (including mobile phone networks), postal organizations, retailers, check cashers, mail and courier services, currency exchanges, and digital currencies, including cryptocurrencies and cryptocurrency exchanges.
The GDPR, LGPD, and PIPL impose obligations and present the risk of substantially increased penalties for non-compliance, including the possibility of not only fines but also enforcement action that may require an organization to cease certain of its data processing activities. Such penalties could have a material adverse effect on our financial condition, results of operations, and cash flows.
The GDPR, LGPD, PIPL, and DPDPA impose obligations and present the risk of substantially increased penalties for non-compliance, including the possibility of not only fines but also enforcement action that may require an organization to cease certain of its data processing activities. Such penalties could have a material adverse effect on our financial condition, results of operations, and cash flows.
Further, as a result of Brexit, including under the terms of any new regulatory authorizations we have and may obtain, we could be required to comply with differing regulatory requirements in the UK as a result of divergence from established EU regulation. This could make it more costly for us to provide our services.
As a result of Brexit, including under the terms of any new regulatory authorizations we have and may obtain, we could be required to comply with differing regulatory requirements in the UK as a result of divergence from established EU regulation. This could make it more costly for us to provide our services.
With respect to these reserves, our income tax expense would include: (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue and (ii) any difference from the Company’s tax position as recorded in the financial statements and the final resolution of a tax issue during the period.
With respect to these reserves, our income tax expense would include: (i) any changes in tax reserves arising from material changes in the facts and circumstances (i.e., new information) surrounding a tax issue during the period and (ii) any difference from our tax position as recorded in the financial statements and the final resolution of a tax issue during the period.
Because an agent is a third-party that engages in a variety of activities in addition to providing our services, it may encounter business difficulties unrelated to its provision of our services, which could cause the agent to reduce its number of locations, hours of operation, or cease doing business altogether.
Because an agent is a third-party that engages in a variety of activities in addition to providing our services, it may encounter business difficulties unrelated to its provision of our services, which could cause the agent to reduce its number of locations and/or hours of operation, or cease doing business altogether.
The global economy has experienced in recent years, and may experience, downturns, volatility and disruption, and we face certain risks relating to such events, including: • Demand for our services could soften, including due to low consumer confidence, high unemployment, high inflation, changes in foreign exchange rates, reduced global trade, including from trade disruptions or trade restrictions, or other events, such as civil unrest, war, terrorism, natural disasters, including those related to climate change, or public health emergencies or epidemics.
The global economy has experienced in recent years, and may experience, downturns, volatility and disruption, and we face certain risks relating to such events, including: • Demand for our services could soften, including due to low consumer confidence, high unemployment, high inflation, changes in foreign exchange rates, changes in monetary policy, reduced global trade, including from trade disruptions or trade restrictions, or other events, such as civil unrest, war, terrorism, natural disasters, including those related to climate change, or public health emergencies or epidemics.
Derivatives regulations have added costs to our business, and any additional requirements, such as future registration requirements and increased regulation of derivatives contracts, will result in additional costs or impact the way we conduct our hedging activities.
Derivatives regulations have added costs to our business, and any additional requirements, such as future registration requirements and increased regulation of derivatives contracts, will likely result in additional costs or impact the way we conduct any hedging activities.
Our regulatory status and the regulatory status of our agents and their subagents could affect our and their ability to offer our services. For example, we and our agents and their subagents rely on bank accounts to provide our Consumer-to-Consumer money transfer services. We also rely on bank accounts to provide our payment services.
Our regulatory status and the regulatory status of our agents and their subagents could affect our and their ability to offer our services. For example, we and our agents and their subagents rely on bank accounts to provide our Consumer Money Transfer and payment services.
Rules adopted under the Dodd-Frank Act by the CFTC, as well as the provisions of the EMIR and its technical standards, which are directly applicable in the member states of the EU, have subjected most of our foreign exchange hedging transactions, including certain intercompany hedging transactions and certain of the corporate interest rate hedging transactions we may enter into in the future, to reporting, recordkeeping, and other requirements.
Rules adopted under the Dodd-Frank Act by the CFTC, as well as the provisions of the EMIR and its technical standards, which are directly applicable in the member states of the EU, have subjected certain foreign exchange hedging transactions, including certain intercompany hedging transactions and certain of the corporate interest rate hedging transactions we may enter into in the future, to reporting, recordkeeping, and other requirements.
In many of these markets, our foreign currency exposure is limited because most transactions are receive transactions, and we currently reimburse the substantial majority of our agents in United States dollars, Mexican pesos, or euros for the payment of these transactions. However, in certain of these developing markets we settle transactions in local currencies and generate revenue from send transactions.
In many of these markets, our foreign currency exposure is limited because most transactions are receive transactions, and we currently reimburse the significant majority of our agents in United States dollars, Mexican pesos, or euros for the payment of these transactions. However, in certain of these developing markets we settle transactions in local currencies and generate revenue from send transactions.
In addition, we have historically implemented and will likely continue to implement price reductions from time to time in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently.
In addition, we have historically implemented and will likely continue to implement price reductions from time to time, including in 2023, in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently.
Further, even if we respond well to these challenges, the business and financial models offered by many of these alternatives, more technology-reliant means of money transfer and electronic payment solutions may be less advantageous to us than our traditional cash/agent model or our current electronic money transfer model.
Further, even if we respond well to these challenges, the business and financial models offered by many of these alternative, more technology-reliant means of money transfer and electronic payment solutions may be less advantageous to us than our traditional cash/agent model or our current electronic money transfer model.
The significant majority of our Consumer-to-Consumer money transfer activity and our walk-in bill payment and money order activity is conducted through agents that provide our services to consumers at their retail locations. These agents sell our services, collect funds from consumers, and are required to pay the proceeds from these transactions to us.
The significant majority of our Consumer Money Transfer activity and our bill payment and money order activity is conducted through agents that provide our services to consumers at their retail locations. These agents sell our services, collect funds from consumers, and are required to pay the proceeds from these transactions to us.
The requirements imposed by these laws and regulations, which often differ materially among the many jurisdictions in which we operate and may impact our business operations, are designed to protect the privacy 28 Table of Contents and security of personal information, to prevent that information from being inappropriately accessed, used or disclosed, and to protect financial services providers and other regulated entities and their customers, as well as information technology systems, from cyber attacks.
The requirements imposed by these laws and regulations, which often differ materially among the many jurisdictions in which we operate and may impact our business operations, are designed to protect the privacy and security of personal information, to prevent that information from being inappropriately accessed, used, or disclosed, and to protect financial services providers and other regulated entities and their customers, as well as information technology systems, from cyber attacks.
We have an ongoing program to help us comply with those laws. These laws are evolving and are frequently unclear and inconsistent among various jurisdictions, making compliance challenging. In addition, we are subject to audits with regard to our escheatment practices.
We have an ongoing program designed to help us comply with those laws. These laws are evolving and are frequently unclear, subject to interpretation, and inconsistent among various jurisdictions, making compliance challenging. In addition, we are subject to audits with regard to our escheatment practices.
Failure to comply with existing or future data privacy and security laws, regulations, and requirements to which we are subject or could become subject, including by reason of inadvertent disclosure of confidential information, could result in fines, sanctions, penalties, or other adverse consequences and loss of consumer confidence, which could materially adversely affect our results of operations, overall business, and reputation.
Failure to comply with existing or future 39 Table of Contents data privacy and security laws, regulations, and requirements to which we are subject or could become subject, including by reason of inadvertent disclosure of confidential information, could result in fines, sanctions, penalties, or other adverse consequences and loss of consumer confidence, which could materially adversely affect our results of operations, overall business, and reputation.
In addition, any work stoppages or other labor actions by employees, the significant majority of whom are located outside the United States, could adversely affect our business. 29 Table of Contents We receive services from third-party vendors that would be difficult to replace if those vendors ceased providing such services adequately or at all.
In addition, any work stoppages or other labor actions by employees, the significant majority of whom are located outside the United States, could adversely affect our business. We receive services from third-party vendors that would be difficult to replace if those vendors ceased providing such services adequately or at all.
The requirements under the PSD/PSD2, the Dodd-Frank Act, and similar legislation enacted or proposed in other countries have resulted and will likely continue to result in increased compliance costs, and in the event we or our agents are unable to comply, could have an adverse impact on our business, financial condition, results of operations, and cash flows.
The requirements under PSD, the Dodd-Frank Act, and similar legislation enacted or proposed in other countries have resulted and will likely continue to result in increased compliance costs, and in the event we or our agents or their subagents are unable to comply, could have an adverse impact on our business, financial condition, results of operations, and cash flows.
Our services are subject to increasingly strict legal and regulatory requirements, including those related to detecting and preventing money laundering, countering terrorist financing, fraud, and other illicit activity, and administering economic and trade sanctions. The interpretation of those requirements by judges, regulatory bodies and enforcement agencies may change quickly and with little notice.
Our services are subject to increasingly strict legal and regulatory requirements, including those related to detecting and preventing money laundering, countering terrorist financing, fraud, drug trafficking, human trafficking, and other illicit activity, and administering economic and trade sanctions. The interpretation of those requirements by judges, regulatory bodies and enforcement agencies may change quickly and with little notice.
For instance, our regulators specify the amount and composition of eligible assets that certain of our subsidiaries must hold in order to satisfy our outstanding settlement obligations. These regulators could further restrict the type of instruments that qualify as permissible investments or require our regulated subsidiaries to 40 Table of Contents maintain higher levels of eligible assets.
For instance, our regulators specify the amount and composition of eligible assets that certain of our subsidiaries must hold in order to satisfy our outstanding settlement obligations. These regulators could further restrict the type of instruments that qualify as permissible investments or require our regulated subsidiaries to maintain higher levels of eligible assets.
Most recently, the OECD, through an association of almost 140 countries known as the “inclusive framework,” has announced a consensus around further changes in traditional international tax principles 31 Table of Contents (“BEPS 2.0”) to address, among other things, perceived challenges presented by global digital commerce (“Pillar 1”) and the perceived need for a minimum global effective tax rate of 15% (“Pillar 2”).
In 2021, the OECD, through an association of almost 140 countries known as the “inclusive 31 Table of Contents framework,” announced a consensus around further changes in traditional international tax principles (“BEPS 2.0”) to address, among other things, perceived challenges presented by global digital commerce (“Pillar 1”) and the perceived need for a minimum global effective tax rate of 15% (“Pillar 2”).
In August 2022, the U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) which, among other provisions, implemented a 15% minimum tax on book income of certain large corporations. Based on our evaluation of the IRA, we do not believe we will be subject to the 15% book minimum tax in 2023.
In August 2022, the U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) which, among other provisions, implemented a 15% minimum tax on book income of certain large corporations. Based on our evaluation of the IRA, we do not believe we will be subject to the 15% book minimum tax in the near term.
These laws and requirements continue to evolve and may become increasingly difficult to comply with. For example, the FTC continues to investigate the privacy practices of many companies and has brought numerous enforcement actions, resulting in significant fines and multi-year agreements governing the settling companies’ privacy practices. In addition, the U.S.
These laws and requirements continue to evolve and may become increasingly difficult to comply with. For example, the FTC continues to investigate the privacy practices of many companies and has brought numerous enforcement actions, resulting in significant fines and multi-year agreements governing the settling companies’ privacy practices.
Acquisitions often involve additional or increased risks including, for example: • realizing the anticipated financial benefits from these acquisitions and where necessary, improving internal controls of these acquired businesses; • managing geographically separated organizations, systems and facilities; • managing multi-jurisdictional operating, tax and financing structures; • integrating personnel with diverse business backgrounds and organizational cultures; • integrating the acquired technologies into our Company; • complying with regulatory requirements, including those particular to the industry and jurisdiction of the acquired business; • obtaining and enforcing intellectual property rights in some foreign countries; • entering new markets with the services of the acquired businesses; and • general economic and political conditions, including legal and other barriers to cross-border investment in general, or by United States companies in particular.
Acquisitions often involve additional or increased risks including, for example: • realizing the anticipated financial benefits from these acquisitions and where necessary, improving internal controls of these acquired businesses; • complying with regulatory requirements, including those particular to the industry and jurisdiction of the acquired business; • managing multi-jurisdictional operating and financing structures, including complexities associated with the investment and return of capital and the understanding and calculation of tax obligations; • managing geographically separated organizations, systems and facilities and integrating personnel with diverse business backgrounds and organizational cultures; • integrating the acquired technologies into our Company; • obtaining and enforcing intellectual property rights in some foreign countries; • entering new markets with the services of the acquired businesses; and • general economic and political conditions, including legal and other barriers to cross-border investment in general, or by United States companies in particular.
These developments have had, and we believe will continue to have, an adverse effect on our business, financial condition, and results of operations, and in turn may result in additional litigation or other actions. For more information, please see Part II, Item 8, Financial Statements and Supplementary Data , Note 6, Commitments and Contingencies. 41 Table of Contents Item 1B.
These developments have had, and we believe will continue to have, an adverse effect on our business, financial condition, and results of operations, and in turn may result in additional litigation or other actions. For more information, please see Part II, Item 8, Financial Statements and Supplementary Data , Note 5, Commitments and Contingencies. 42 Table of Contents Item 1B.
Risks Relating to Our Business and Industry • Demand for our services is dependent on a number of factors that could be materially impacted by adverse changes in the global economy, including related to pandemics. • We operate in highly competitive and rapidly evolving industries and face competition from a wide variety of service providers. • Our business depends on consumer confidence, which could be adversely affected by a number of factors, many of which are outside of our control. • Our Consumer-to-Consumer business is highly dependent on our ability to maintain our agent network under terms consistent with or more advantageous than those currently in place. • Our industry is subject to rapid and significant technological changes. • We are a global company and accordingly are subject to a number of risks related to our international operations. • As a company that transfers and retains large amounts of confidential and personal information, we are exposed to risks relating to ensuring such information is not improperly used or disclosed. • Our ability to provide reliable service largely depends on the efficient and uninterrupted operation of our computer information systems and those of our service providers. • We may not realize all of the anticipated benefits from restructuring and related initiatives. • We face credit, liquidity, and fraud risks from our agents, consumers, businesses, and third-party processors. • Changes in tax laws, or their interpretation, or unfavorable resolution of tax contingencies could adversely affect our tax expense. • Our ability to remain competitive depends in part on our ability to protect our trademarks, patents, copyrights, and other intellectual property rights and to defend ourselves against potential intellectual property infringement claims.
Risks Relating to Our Business and Industry • Demand for our services is dependent on a number of factors that could be materially impacted by adverse changes in the global economy. • We operate in highly competitive and rapidly evolving industries and face competition from a wide variety of service providers. • Our business depends on consumer confidence and migration patterns, which could be adversely affected by a number of factors, many of which are outside of our control. • Our Consumer Money Transfer business is highly dependent on our ability to maintain our agent network under terms consistent with or more advantageous than those currently in place. • Our industry is subject to rapid and significant technological changes. • We are a global company and accordingly are subject to a number of risks related to our international operations. • As a company that transfers and retains large amounts of confidential and personal information, we are exposed to risks relating to ensuring such information is not improperly used or disclosed. • Our ability to provide reliable service largely depends on the efficient and uninterrupted operation of our computer information systems and those of our service providers. • We may not realize all of the anticipated benefits from restructuring and related initiatives. • We face credit, liquidity, and fraud risks from our agents, consumers, businesses, and third-party processors. • Changes in tax laws, including as a result of the Pillar 2 Directive defined and discussed below, or their interpretation, and unfavorable resolution of tax contingencies could adversely affect our tax expense. • Our ability to remain competitive depends in part on our ability to protect our trademarks, patents, copyrights, and other intellectual property rights and to defend ourselves against potential intellectual property infringement claims.
For example, in recent years we have made significant additional investments in our compliance programs based on the rapidly evolving and increasingly complex global regulatory and enforcement environment and our internal reviews. These additional investments relate to enhancing our compliance capabilities, including our consumer protection efforts.
For many years we have made significant additional investments in our compliance programs based on the rapidly evolving and increasingly complex global regulatory and enforcement environment and our internal reviews. These additional investments relate to enhancing our compliance capabilities, including our consumer protection efforts.
We have subsidiaries in Brazil and Austria that are subject to 34 Table of Contents banking regulations. Our Austrian banking subsidiary is also subject to regulation, examination, and supervision by the NYDFS. We also operate through a small number of licensed payment institutions in the EU.
We have subsidiaries in Brazil and Austria that are subject to banking regulations. Our Austrian banking subsidiary is also subject to regulation, examination, and supervision by the NYDFS. We also operate through a small number of licensed payment institutions in the EU.
For example, the Joint Settlement Agreements and the NYDFS Consent Order subjected us to heightened requirements relating to agent oversight, which resulted in and may continue to result in agent attrition, and certain agents decided to leave our network due to reputational concerns related to the Joint Settlement Agreements and the NYDFS Consent Order.
For example, the Joint Settlement Agreements and the NYDFS Consent Order subjected us to heightened requirements relating to agent oversight, which resulted in agent attrition, and certain agents decided to leave our network due to reputational concerns related to the Joint Settlement Agreements and the NYDFS Consent Order.
In our various bill payment services, we provide services for making one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies.
In our various bill payment services, we provide services for consumers, businesses, and other organizations to make one-time or recurring payments, including to utilities, auto finance companies, mortgage servicers, financial service providers, and government agencies.
Any such decline in value may adversely affect our results of operations and financial condition. We have substantial debt and other obligations that could restrict our operations. As of December 31, 2022, we had approximately $2.6 billion in consolidated indebtedness, and we may also incur additional indebtedness in the future.
Any such decline in value may adversely affect our results of operations and financial condition. We have substantial debt and other obligations that could restrict our operations. As of December 31, 2023, we had approximately $2.5 billion in consolidated indebtedness, and we may also incur additional indebtedness in the future.
For example, in the EU, Western Union is responsible for the compliance of our agents and their subagents when they are acting on behalf of Western Union Payment Services Ireland Limited, which is regulated by the Central Bank of Ireland.
For example, in the EU, Western Union is responsible for the compliance of our agents when they are acting on behalf of Western Union Payment Services Ireland Limited, which is regulated by the Central Bank of Ireland.
In addition, we may experience greater dis-synergies than expected, the impact of the divestiture on our revenue growth may be larger than projected, and some divestitures may be dilutive to earnings. There can be no assurance whether the strategic benefits and expected financial impact of the divestiture will be achieved.
In addition, we may experience greater dis-synergies than expected, the impact of the divestiture on our revenue growth may be larger than projected, and some divestitures may be dilutive to earnings, including the sale of our Business Solutions business. There can be no assurance whether the strategic benefits and expected financial impact of the divestiture will be achieved.
If our third-party vendors were unwilling or unable to provide us with these services in the future, due to labor shortages or otherwise, our business and operations could be adversely affected. Risks Relating to Acquisitions, Divestitures, and Restructuring Activities Acquisitions and integration of new businesses create risks and may affect operating results.
If our third-party vendors were unwilling or unable to provide us with these services in the future, due to system outages, labor shortages, or otherwise, our business and operations could be adversely affected. 29 Table of Contents Risks Relating to Acquisitions, Divestitures, and Restructuring Activities Acquisitions and integration of new businesses create risks and may affect operating results.
In many jurisdictions where Western Union is licensed to offer money transfer services, the license holder is responsible for ensuring the agent’s compliance with the rules that govern the money transfer service.
In many jurisdictions where Western Union is licensed to offer money transfer services, the license holder is responsible for ensuring the agent’s or their subagent’s compliance with the rules that govern the money transfer service.
For example, on July 28, 2017, the NYDFS informed the Company that the facts set forth in the Deferred Prosecution Agreement (the “DPA”) with the DOJ and with certain other United States Attorney’s Offices regarding the Company’s anti-money laundering programs over the 2004 through 2012 period gave the NYDFS a basis to take additional enforcement action.
For example, on July 28, 2017, the NYDFS informed the Company that the facts set forth in the DPA with the DOJ and with certain other United States Attorney’s Offices regarding the Company’s anti-money laundering programs over the 2004 through 2012 period gave the NYDFS a basis to take additional enforcement action.
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, 2022, we held $1.3 billion in investment securities, the majority of which are state and municipal debt securities.
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, 2023, we held $1.5 billion in investment securities, the majority of which are state and municipal debt securities.
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.
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 an investment manager to manage the investment portfolio consistently with investment mandates, or increases in interest rates.
Most of our Consumer-to-Consumer revenue is derived through our agent network. Some of our international agents have subagent relationships in which we are not directly involved.
Most of our Consumer Money Transfer revenue is derived through our agent network. Some of our international agents have subagent relationships in which we are not directly involved.
Laws and regulations to which we are, or may in the future, be subject to including by virtue of the introduction of new products or acquisitions, include those related to: financial services generally, banking, anti-money laundering, countering the financing of terrorism, sanctions and anti-fraud, anti-bribery, anti-corruption, consumer disclosure and consumer protection, currency controls, money transfer and payment instrument licensing, payment services, credit and debit cards, electronic payments, foreign exchange hedging services and the sale of spot, forward, and option currency contracts, cryptocurrency licensing and other regulations, prepaid access, taxation, accessibility, unclaimed property, the regulation of competition, consumer privacy, data protection and information security, cybersecurity, operational security, outsourcing, risk management, environmental, sustainability and governance reporting, including climate and social governance-related reporting, and other governance requirements applicable to regulated financial service providers.
Laws and regulations to which we are, or may in the future, be subject to, including by virtue of the introduction of new products or acquisitions, include those related to: financial services generally, banking, anti-money laundering, countering the financing of terrorism, sanctions and anti-fraud, anti-bribery, anti-corruption, countering drug trafficking and human trafficking, consumer disclosure and consumer protection, currency controls, money transfer and payment instrument licensing, payment services, credit and debit cards, electronic payments, cryptocurrency licensing and other regulations, prepaid access, taxation, accessibility, unclaimed property, the regulation of competition, consumer privacy, data protection and information security, cybersecurity, operational security, outsourcing, risk management, environmental, sustainability, and governance reporting, including climate and social governance-related reporting, and other governance requirements applicable to regulated financial service providers.
We have established contingency reserves for a variety of material, known tax exposures. As of December 31, 2022, the total amount of unrecognized tax benefits was a liability of $237.2 million, including accrued interest and penalties, net of related items. Our reserves reflect our judgment as to the resolution of the issues involved if subject to judicial review.
We have established contingency reserves for a variety of material, known tax exposures. As of December 31, 2023, the total amount of unrecognized tax benefits was a liability of $244.8 million, including accrued interest and penalties, net of related items. Our reserves reflect our judgment as to the resolution of the issues involved if subject to judicial review.
For example, in October 2022, we announced an operating expense redeployment program which aims to redeploy approximately $150 million in expenses in our cost base over the next 5 years, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people costs. We may implement additional initiatives in future periods.
For example, in October 2022, we announced an operating expense redeployment program which aims to redeploy approximately $150 million in expenses in our cost base through 2027, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people costs. We may implement additional initiatives in future periods.
Currently in the United States, approximately 30 states are conducting a multi-year audit of our escheatment practices through a contracted third-party auditor. We have also commenced a contemporaneous internal review as part of our participation in Delaware’s voluntary disclosure program.
Recently in the United States, approximately 30 states conducted a multi-year audit of our escheatment practices through a contracted third-party auditor. We have also commenced a contemporaneous internal review as part of our participation in Delaware’s voluntary disclosure program.
Any of these eventualities could materially and adversely affect our business, financial condition, results of operations, and cash flows. 36 Table of Contents Regulatory initiatives and changes in laws, regulations, industry practices and standards, and third-party policies affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services could require changes in our business model and increase our costs of operations, which could adversely affect our financial condition, results of operations, and liquidity.
Regulatory initiatives and changes in laws, regulations, industry practices and standards, and third-party policies affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services could require changes in our business model and increase our costs of operations, which could adversely affect our financial condition, results of operations, and liquidity.
Risks Relating to Our Regulatory and Litigation Environment • Our services are subject to increasingly strict legal and regulatory requirements, including those intended to help detect and prevent money laundering, terrorist financing, fraud, and other illicit activity. • The laws and regulations governing our business are frequently changing and evolving and could require changes in our business model and increase our costs of operations. • The changes in our compliance program required by the consent orders and settlement agreements to which we are party have had, and may continue to have, adverse effects on our business. • Western Union is, and may in the future be, the subject of litigation, including purported class action litigation, and regulatory actions, which could result in material settlements, judgments, fines, or penalties. 21 Table of Contents There are many factors that affect our business, financial condition, results of operations, and cash flows, some of which are beyond our control.
Risks Relating to Our Regulatory and Litigation Environment • Our services are subject to increasingly strict legal and regulatory requirements, including those intended to help detect and prevent money laundering, terrorist financing, fraud, drug trafficking, human trafficking, and other illicit activity. • The laws and regulations governing our business are frequently changing and evolving and could require changes in our business model and increase our costs of operations. • The changes in our compliance program required by the consent orders and settlement agreements to which we are party have had, and may continue to have, adverse effects on our business. • Western Union is, and may in the future be, the subject of litigation, including purported class action litigation, and governmental investigations and enforcement actions, which could result in material settlements, judgments, 21 Table of Contents fines, or penalties.
Our indebtedness and tax obligations 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 or tax obligations, thereby reducing funds available for working capital, capital expenditures, acquisitions, and other purposes.
Our indebtedness and tax obligations 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 or tax obligations, thereby reducing funds available for working capital, capital expenditures, acquisitions, and other purposes. 33 Table of Contents Failure to attract, retain, and develop the key employees we need to support our objectives could have a material adverse impact on our business.
Under the Payment Services Directive (“PSD”), as amended by a revised Payment Services Directive known as PSD2, and the 4 th and 5 th Anti-Money Laundering Directive in the EU, our operating companies that are licensed in the EU have increasingly become directly subject to reporting, recordkeeping, and anti-money laundering regulations, and agent oversight and monitoring requirements, as well as broader supervision by EU member states.
Under the EU Payment Services Directives, as amended (together “PSD”), and the EU Anti-Money Laundering Directives as amended, our operating companies that are licensed in the EU have increasingly become directly subject to reporting, recordkeeping, and anti-money laundering regulations, and agent oversight and monitoring requirements, as well as broader supervision by EU member states.
The CFPB has created additional regulatory obligations for us and has the authority to examine and supervise us and our larger competitors, including for matters related to unfair, deceptive, or abusive acts and practices (“UDAAP”), the Electronic Funds Transfer Act (“EFTA”), and Regulation E.
The CFPB has created additional regulatory obligations for us and has the authority to further define participants in markets for consumer financial products and services and examine and supervise us and our larger competitors, including for matters related to unfair, deceptive, or abusive acts and practices (“UDAAP”), the Electronic Funds Transfer Act (“EFTA”), and Regulation E.
If we or our reporting units do not generate operating cash flows at levels consistent with our expectations, we may be required to write down the goodwill on our balance sheet, which could have a significant adverse impact on our financial condition and results of operations in future periods.
We have acquired and may acquire businesses both inside and outside the United States. If we or our reporting units do not generate operating cash flows at levels consistent with our expectations, we may be required to write down the goodwill on our balance sheet, which could have a significant adverse impact on our financial condition and results of operations.
Qualified individuals with experience in our industry are in high demand and we have faced and will continue to face competition globally to attract and retain a diverse workforce with skills that are critical to our success.
Much of our success depends on our ability to attract, retain, and develop key employees. Qualified individuals with experience in our industry are in high demand and we have faced and will continue to face competition globally to attract and retain a diverse workforce with skills that are critical to our success.
For example, in 2018, the EU implemented the GDPR, and other countries have enacted similar legislation, such as Brazil’s General Data Protection Law (“LGPD”), which became effective in 2020, and China’s Personal Information Protection Law ("PIPL"), which became effective in November 2021.
For example, in 2018, the EU implemented the GDPR, and other countries have enacted similar legislation, such as Brazil’s General Data Protection Law (“LGPD”), which became effective in 2020, China’s Personal Information Protection Law (“PIPL”), which became effective in November 2021, and India’s Digital Personal Data Protection Act (DPDPA) passed in August of 2023.
In addition, although we are not a bank holding company for purposes of United States law or the law of any other jurisdiction, as a global provider of payment services and in light of the changing regulatory environment in various jurisdictions, we could become subject to new capital requirements introduced or imposed by our regulators that could require us to raise capital immediately or retain earnings over a period of time.
In addition, as a global provider of payment services and in light of the changing regulatory environment in various jurisdictions, we could become subject to new capital requirements introduced or imposed by our regulators that could require us to raise capital immediately or retain earnings over a period of time.
Existing, new, and proposed legislation relating to financial services providers and consumer protection in various jurisdictions around the world has affected and may continue to affect the manner in which we provide our services; see risk factor "The Dodd-Frank Act, the Electronic Funds Transfer Act and Regulation E, as well as the regulations required by these Acts and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other government authorities, could adversely affect us and the scope of our activities and could adversely affect our financial condition, results of operations, and cash flows.
Existing, new, and proposed legislation relating to financial services providers and consumer protection in various jurisdictions around the world has affected and may continue to affect the manner in which we provide our services; see risk factor “ The Dodd-Frank Act, the Electronic Funds Transfer Act and Regulation E, as well as the regulations required by these Acts and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other government authorities, could adversely affect us and the scope of our activities and could adversely affect our financial condition, results of operations, and cash flows. ” Recently proposed and enacted legislation related to financial services providers and consumer protection in various jurisdictions around the world and at the federal and state level in the United States has subjected and may continue to subject us to additional regulatory oversight, mandate additional consumer disclosures and remedies, including refunds to consumers, or otherwise impact the manner in which we provide our services.
As a company that provides global financial services primarily to consumers, we are, and may in the future be, subject to litigation, including purported class action litigation, and regulatory actions alleging violations of consumer protection, anti-money laundering, sanctions, securities laws, and other laws, both foreign and domestic.
As a company that provides global financial services primarily to consumers, we are, and may in the future be, subject to litigation, including purported class action litigation, and governmental investigations and enforcement actions alleging violations of consumer protection, anti-money laundering, sanctions, drug trafficking, human trafficking, securities laws, and other laws, both foreign and domestic, including those related to the facilitation of illegal, improper or fraudulent activity.
These regulatory goals, including the prevention of money laundering, terrorist financing, and identity theft, and the protection of the individual’s right to privacy, may conflict or otherwise present challenges, and the law in these areas is not consistent or settled.
These regulatory and law enforcement goals, and the protection of the individual’s right to privacy, may conflict or otherwise present challenges, and the law in these areas is not consistent or settled.
Recently, we have had one retail agent stop offering our services and another communicate they were moving away from cash-based services at their retail locations. These changes have impacted and will continue to adversely impact our revenue.
Recently, we have had a significant retail agent stop offering our services, and another stopped offering cash-based services at their retail locations. These changes have impacted and will continue to adversely impact our revenue.
For example, in March 2022, we suspended our operations in Russia and Belarus, due to the Russia/Ukraine conflict (the "Conflict"), which has had an adverse effect on our business, financial condition, results of operations, and cash flows.
For example, in March 2022, we suspended our operations in Russia and Belarus, due to the Russia/Ukraine conflict (the “Conflict”), which has had an adverse effect on our business, financial condition, results of operations, and cash flows. The Conflict has had and is expected to continue to have broader implications to our overall business, including reduced transaction activity in Ukraine.
Further, we believe increasingly strict legal and regulatory requirements and increased regulatory investigations and enforcement, any of which could occur or intensify as a result of the Joint Settlement Agreements, are likely to continue to result in changes to our business, as well as increased costs, supervision, and examination for both ourselves and our agents and subagents.
Further, we believe increasingly strict legal and regulatory requirements and increased regulatory investigations and enforcement are likely to continue to result in changes to our business, as well as increased costs, supervision, and examination for both ourselves and our agents and subagents.
Risks Relating to Consent Agreements and Litigation Our business is the subject of consent agreements with or enforcement actions by regulators. In early 2017, the Company entered into Joint Settlement Agreements with the DOJ, certain United States Attorney’s Offices, the FTC, FinCEN, and various state attorneys general to resolve the respective investigations of those agencies.
In early 2017, the Company entered into Joint Settlement Agreements with the DOJ, certain United States Attorney’s Offices, the FTC, FinCEN, and various state attorneys general to resolve the respective investigations of those agencies.
Consumer protection principles continue to evolve globally, and new or enhanced consumer protection laws and regulations may be adopted. Governmental agencies tasked with enforcing consumer protection laws or regulations are communicating more frequently and coordinating their efforts to protect consumers.
Governmental agencies tasked with enforcing consumer protection laws or regulations are communicating more frequently and coordinating their efforts to protect consumers.
In addition, in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and pursuant to legal obligations and authorizations, Western Union makes information available to certain United States federal, state, and foreign government agencies when required by law.
In addition, in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and other legal obligations and requests, we make information available to certain United States federal, state, and foreign government agencies.
Further, political changes and trends such as populism, economic nationalism, protectionism, and negative sentiment towards multinational companies could result in laws or regulations that adversely impact our ability to conduct business in certain jurisdictions.
Further, political changes and trends such as populism, economic nationalism, protectionism, and negative sentiment towards multinational companies could result in laws or regulations that adversely impact our ability to conduct business in certain jurisdictions. 36 Table of Contents Any of these eventualities could materially and adversely affect our business, financial condition, results of operations, and cash flows.
Further, any failure to have in place and execute an effective succession plan for key employees could harm our business. 33 Table of Contents Risks Relating to Our Regulatory and Litigation Environment As described under Part I, Item 1, Business , our business is subject to a wide range of laws and regulations enacted by the United States federal government, each of the states (including licensing requirements), many localities and many other countries and jurisdictions.
Risks Relating to Our Regulatory and Litigation Environment As described under Part I, Item 1, Business , our business is subject to a wide range of laws and regulations enacted by the United States federal government, each of the states (including licensing requirements), many localities and many other countries and jurisdictions.
We continually evaluate the performance and strategic fit of all of our businesses and may sell businesses or product lines. For example, on August 4, 2021, we entered an agreement to sell our Business Solutions business, as previously discussed.
We continually evaluate the performance and strategic fit of all of our businesses and may sell businesses or product lines. For example, on July 1, 2023, we completed the sale of our Business Solutions business, as previously discussed.
The safeguards we have designed to help prevent future security incidents and systems disruptions and to comply with applicable legal requirements may not be successful, and we may experience material security incidents, disruptions, or other problems in the future.
The safeguards we have designed to help prevent future security incidents and systems disruptions and to comply with applicable legal requirements may not be successful, and we may experience material security incidents, disruptions, or other problems in the future. For more information on our policies and procedures surrounding cybersecurity, see Part I, Item 1C, Cybersecurity.
As a result, our agents could reduce their numbers of locations or hours of operation or cease doing business altogether.
As a result, our agents could reduce their numbers of locations or hours of operation or cease doing business altogether. • Our exposure to receivables from our agents, consumers, and businesses could impact us.
If an agent becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to pay money order, money transfer or payment services 27 Table of Contents proceeds to us, we must nonetheless pay the money order or complete the money transfer or payment services on behalf of the consumer.
If an agent becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to pay money order, money transfer or payment services proceeds to us, we must nonetheless pay the money order or complete the money transfer or payment services on behalf of the consumer. 27 Table of Contents The liquidity of our agents and other parties we transact with directly, including merchant acquirers, is necessary for our business to remain strong and to continue to provide our services.
Additional financial strength requirements imposed on our regulated subsidiaries or significant changes in the regulatory environment for money transfer providers could impact our primary source of liquidity. Any change or increase in these regulatory requirements or guidelines could have a material adverse effect on our business, financial condition, and results of operations.
Additional financial strength requirements imposed on our regulated subsidiaries or significant changes in the regulatory environment for money transfer providers could impact our primary source of liquidity.
In addition, legal or enforcement actions against compliance and other personnel in the money transfer industry may affect our ability to attract and retain key employees.
In addition, legal or enforcement actions against compliance and other personnel in the money transfer industry may affect our ability to attract and retain key employees. Further, any failure to have in place and execute an effective succession plan for key employees could harm our business.
Legislation that has been enacted or proposed in other jurisdictions could have similar effects. The remittance industry, including Western Union, has come under increasing scrutiny from government regulators and others in connection with its ability to prevent its services from being abused by people seeking to defraud others.
The remittance industry, including Western Union, remains under scrutiny from government regulators and others in connection with its ability to prevent its services from being abused by people seeking to defraud others.
These governments may decide to change the terms under which they allow post offices to offer remittances and other financial services.
Many of our agents outside the United States are post offices, which are often owned and operated by national governments. These governments may decide to change the terms under which they allow post offices to offer remittances and other financial services.
The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or to detect for significant periods of time. Additionally, transactions undertaken through our websites or other digital channels may create risks of fraud, hacking, unauthorized access or acquisition, and other deceptive practices.
The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are also constantly 28 Table of Contents changing and evolving and may be difficult to anticipate or to detect for significant periods of time.
As the merchant of these transactions, we may bear the financial risk of the full amount sent in some of the fraudulent transactions. Issuers of credit and debit cards may also incur losses due to fraudulent transactions through our distribution channels and may elect to block transactions by their cardholders in these channels with or without notice.
Issuers of credit and debit cards may also incur losses due to fraudulent transactions through our distribution channels and may elect to block transactions by their cardholders in these channels with or without notice. We may be subject to additional fees or penalties if the amount of chargebacks exceeds a certain percentage of our transaction volume.
Notwithstanding, if the Company fails to comply with its continuing obligations under the Joint Settlement Agreements, it could face criminal prosecution, civil litigation, significant fines, damage awards, or other regulatory consequences. Any or all of these outcomes could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.
Notwithstanding, if the Company fails to comply with its continuing obligations under the Joint Settlement Agreements, it could face criminal prosecution, civil litigation, significant fines, damage awards, or other regulatory consequences.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeWe also operate shared service centers in Lithuania, Costa Rica, India, and the Philippines. Our facilities are shared and primarily used for operational, sales, and administrative purposes in support of our Consumer-to-Consumer and Business Solutions segments, and other services.
Biggest changeWe also operate shared service centers in Lithuania, Costa Rica, India, and the Philippines. Our facilities are shared and primarily used for operational, sales, and administrative purposes in support of our Consumer Money Transfer and Consumer Services segments.
Legal P roceedings The information required by this Item 3 is incorporated herein by reference to the discussion in Part II, Item 8, Financial Statements and Supplementary Data, Note 6, Commitments and Contingencies. Item 4. Mine Safety Disclosures Not applicable. 42 Table of Contents PART II
Legal P roceedings The information required by this Item 3 is incorporated herein by reference to the discussion in Part II, Item 8, Financial Statements and Supplementary Data, Note 5, Commitments and Contingencies. Item 4. Mine Safety Disclosures Not applicable. 44 Table of Contents PART II
Item 2. Properties Properties and Facilities As of December 31, 2022, we occupied facilities in nearly 45 countries. All of these facilities were leased. Our office in Denver, Colorado serves as our corporate headquarters. Our offices in Dublin, Ireland and Barbados represent key operational and leadership locations.
Item 2. Properties Properties and Facilities As of December 31, 2023, we occupied facilities in approximately 40 countries. All of these facilities were leased. Our office in Denver, Colorado serves as our corporate headquarters. Our offices in Dublin, Ireland and Barbados represent key operational and leadership locations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeA 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.
Biggest changeA 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. (c) The average price paid per share excludes a 1% excise tax due under the Inflation Reduction Act of 2022.
Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 17, Stock-Based Compensation Plans, and Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information related to our equity compensation plans.
Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 16, Stock-Based Compensation Plans, and Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information related to our equity compensation plans.
(b) On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024, of which $648.2 million remained available as of December 31, 2022. In certain instances, management has historically established and may continue to establish prearranged written plans pursuant to Rule 10b5‑1.
(b) On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024, of which $348.2 million remained available as of December 31, 2023. In certain instances, management has historically established and may continue to establish prearranged written plans pursuant to Rule 10b5‑1.
Dividend Policy and Share Repurchases During 2022 and 2021, the Board of Directors declared quarterly cash dividends of $0.235 per common share. The dividends were payable on December 30, September 30, June 30, and March 31 for 2022 and December 31, September 30, June 30, and March 31 for 2021.
Dividend Policy and Share Repurchases During 2023 and 2022, the Board of Directors declared quarterly cash dividends of $0.235 per common share. The dividends were payable on December 29, September 29, June 30, and March 31 for 2023 and December 30, September 30, June 30, and March 31 for 2022.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the symbol “WU.” There were 2,915 stockholders of record as of February 17, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the symbol “WU.” There were 2,824 stockholders of record as of February 16, 2024.
These payments will adversely affect our cash flow and liquidity and may adversely affect future share repurchases. On February 7, 2023, the Board of Directors declared a quarterly cash dividend of $0.235 per common share payable on March 31, 2023. Item 6. [ Reserved] 43 Table of Contents
These payments will adversely affect our cash flow and liquidity and may adversely affect future share repurchases. On February 6, 2024, the Board of Directors declared a quarterly cash dividend of $0.235 per common share payable on March 29, 2024. Item 6. [ Reserved] 45 Table of Contents
The following table sets forth stock repurchases for each of the three months of the quarter ended December 31, 2022: Approximate Dollar Total Number of Shares Value of Shares that Purchased as Part of May Yet Be Purchased Total Number of Average Price Publicly Announced Under the Plans or Period Shares Purchased (a) Paid per Share Plans or Programs (b) Programs (in millions) October 1 - 31 102,097 $ 13.47 — $ 823.2 November 1 - 30 5,891,930 $ 13.75 5,888,977 $ 742.2 December 1 - 31 6,802,617 $ 13.86 6,783,007 $ 648.2 Total 12,796,644 $ 13.81 12,671,984 (a) 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.
The following table sets forth stock repurchases for each of the three months of the quarter ended December 31, 2023: Approximate Dollar Total Number of Shares Value of Shares that Purchased as Part of May Yet Be Purchased Total Number of Average Price Publicly Announced Under the Plans or Period Shares Purchased (a) Paid per Share (c) Plans or Programs (b) Programs (in millions) October 1 - 31 3,938,810 $ 12.82 3,899,822 $ 498.2 November 1 - 30 6,831,025 $ 11.86 6,820,302 $ 417.3 December 1 - 31 5,836,292 $ 11.89 5,810,834 $ 348.2 Total 16,606,127 $ 12.10 16,530,958 (a) These amounts represent both shares authorized by our 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.
Removed
In connection with the IRA, there will be a 1% excise tax on net share repurchases made after December 31, 2022, which will increase our cost to repurchase shares in future periods.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe expect that our results of operations will continue to be negatively impacted by this Conflict into 2023. 45 Table of Contents The following table sets forth our consolidated results of operations for the years ended December 31, 2022 and 2021: Year Ended December 31, (in millions, except per share amounts) 2022 2021 % Change Revenues $ 4,475.5 $ 5,070.8 (12 )% Expenses: Cost of services 2,626.4 2,896.4 (9 )% Selling, general, and administrative 964.2 1,051.3 (8 )% Total expenses 3,590.6 3,947.7 (9 )% Operating income 884.9 1,123.1 (21 )% Other income/(expense): Gain on divestiture of business 248.3 — (a) Gain on sale of noncontrolling interest in a private company — 47.9 (a) Pension settlement charges — (109.8 ) (a) Interest income 13.9 1.4 (a) Interest expense (101.0 ) (105.5 ) (4 )% Other expense, net (37.5 ) (21.7 ) (a) Total other income/(expense), net 123.7 (187.7 ) (a) Income before income taxes 1,008.6 935.4 8 % Provision for income taxes 98.0 129.6 (24 )% Net income $ 910.6 $ 805.8 13 % Earnings per share: Basic $ 2.35 $ 1.98 19 % Diluted $ 2.34 $ 1.97 19 % Weighted-average shares outstanding: Basic 387.2 406.8 Diluted 388.4 408.9 (a) Calculation not meaningful.
Biggest changeRevenues associated with the Russia and Belarus operations, including transactions sent from, into, and within these countries for the year ended December 31, 2022 were approximately $28 million. 47 Table of Contents The following table sets forth our consolidated results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, (in millions, except per share amounts) 2023 2022 % Change Revenues $ 4,357.0 $ 4,475.5 (3 )% Expenses: Cost of services 2,671.7 2,626.4 2 % Selling, general, and administrative 867.8 964.2 (10 )% Total expenses 3,539.5 3,590.6 (1 )% Operating income 817.5 884.9 (8 )% Other income/(expense): Gain on divestiture of business 18.0 248.3 (a) Interest income 15.6 13.9 13 % Interest expense (105.3 ) (101.0 ) 4 % Other expense, net — (37.5 ) (a) Total other income/(expense), net (71.7 ) 123.7 (a) Income before income taxes 745.8 1,008.6 (26 )% Provision for income taxes 119.8 98.0 22 % Net income $ 626.0 $ 910.6 (31 )% Earnings per share: Basic $ 1.69 $ 2.35 (28 )% Diluted $ 1.68 $ 2.34 (28 )% Weighted-average shares outstanding: Basic 370.8 387.2 Diluted 371.8 388.4 (a) Calculation not meaningful.
With respect to these reserves, our income tax expense would include: (i) any changes in tax reserves arising from material changes in facts and circumstances (i.e., new information) surrounding a tax issue during the period, and (ii) any difference from our tax position as recorded in the financial statements and the final resolution of a tax issue during the period.
With respect to these reserves, our income tax expense would include: (i) any changes in tax reserves arising from material changes in the facts and circumstances (i.e., new information) surrounding a tax issue during the period, and (ii) any difference from our tax position as recorded in the financial statements and the final resolution of a tax issue during the period.
A Consumer-to-Consumer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows is determined based upon the region where the money transfer is initiated.
A Consumer Money Transfer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows is determined based upon the region where the money transfer is initiated.
While we believe that our reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed our related reserve.
While we believe that our reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed our related reserve.
Our Revolving Credit Facility requires us to maintain a consolidated adjusted Earnings before Interest, Taxes, Depreciation, and Amortization ("EBITDA") interest coverage ratio of greater than 3:1 (ratio of consolidated adjusted EBITDA, defined as net income/(loss) plus the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) any other non-cash deductions, losses or charges made in determining net income/(loss) for such period, and (vi) extraordinary, non-recurring, or unusual losses or charges (including costs and expenses of litigation included in operating income), minus extraordinary, non-recurring or unusual gains provided that the amount added back to net income (or net loss) for such extraordinary, non-recurring or unusual losses, expenses or charges may not exceed 10% of adjusted EBITDA, in each case determined in accordance with United States generally accepted accounting principles for such period, to interest expense) for each period comprising the four most recent consecutive fiscal quarters.
Our Revolving Credit Facility requires us to maintain a consolidated adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) interest coverage ratio of greater than 3:1 (ratio of consolidated adjusted EBITDA, defined as net income/(loss) plus the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) any other non-cash deductions, losses or charges made in determining net income/(loss) for such period, and (vi) extraordinary, non-recurring, or unusual losses or charges (including costs and expenses of litigation included in operating income), minus extraordinary, non-recurring or unusual gains provided that the amount added back to net income (or net loss) for such extraordinary, non-recurring or unusual losses, expenses or charges may not exceed 10% of adjusted EBITDA, in each case determined in accordance with United States generally accepted accounting principles for such period, to interest expense) for each period comprising the four most recent consecutive fiscal quarters.
These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of “A-” or better from a major credit rating agency. Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 8, Settlement Assets and Obligations for more details regarding investment securities.
These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of “A-” or better from a major credit rating agency. Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 7, Settlement Assets and Obligations for more details regarding investment securities.
Certain of our notes (including our notes due in 2023, 2025, 2026, 2031, and 2040) include a change of control triggering event provision, as defined in the terms of the notes.
Certain of our notes (including our notes due in 2025, 2026, 2031, and 2040) include a change of control triggering event provision, as defined in the terms of the notes.
In addition, the interest rates payable on our notes due in 2023, 2025, 2026, and 2031 can be impacted by our credit ratings.
In addition, the interest rates payable on our notes due in 2025, 2026, and 2031 can be impacted by our credit ratings.
We expect to renew many of our letters of credit and bank guarantees prior to expiration. 58 Table of Contents Critical Accounting Policies and Estimates Management’s discussion and analysis of results of operations and financial condition is based on our consolidated financial statements that have been prepared in accordance with GAAP.
We expect to renew many of our letters of credit and bank guarantees prior to expiration. 60 Table of Contents Critical Accounting Policies and Estimates Management’s discussion and analysis of results of operations and financial condition is based on our consolidated financial statements that have been prepared in accordance with GAAP.
Term Loan Facility On December 18, 2018, we entered into an amended and restated term loan facility providing for up to $950.0 million in borrowings and extending the final maturity of the facility to January 2024 (the "Term Loan Facility"). In the first quarter of 2021, we repaid $650.0 million of the Term Loan Facility.
Term Loan Facility On December 18, 2018, we entered into an amended and restated term loan facility providing for up to $950.0 million in borrowings and extending the final maturity of the facility to January 2024 (the “Term Loan Facility”). In the first quarter of 2021, we repaid $650.0 million of the Term Loan Facility.
The results of operations should be read in conjunction with the discussion of our segment results of operations, which provide more detailed discussions concerning certain components of the Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated.
The results of operations should be read in conjunction with the discussion of our segment results of operations, which provides more detailed discussions concerning certain components of the Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated.
Included in each region’s transaction and revenue percentages in the tables below are Branded Digital transactions for the years ended December 31, 2022 and 2021. Where reported separately in the discussion below, Branded Digital consists of 100% of the transactions conducted and funded through that channel.
Included in each region’s transaction and revenue percentages in the tables below are Branded Digital transactions for the years ended December 31, 2023 and 2022. Where reported separately in the discussion below, Branded Digital consists of 100% of the transactions conducted and funded through that channel.
Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility.
Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility.
These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the year ended December 31, 2022 compared to the prior year.
These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the year ended December 31, 2023 compared to the prior year.
These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and the difference between the exchange rate we set to the customer and a rate available in the wholesale foreign exchange market, as applicable.
These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, and the difference between the exchange rate we set to the customer and a rate available in the wholesale foreign exchange market, when the money transfer involves different send and receive currencies.
Consumer-to-Consumer cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated.
Consumer Money Transfer cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated.
We are also subject to certain provisions in many 55 Table of Contents of our notes and certain of our derivative contracts, which could require settlement or collateral posting in the event of a change in control combined with a downgrade below investment grade, as further described below.
We are also subject to certain provisions in many of our notes and certain of our derivative contracts, which could require settlement or collateral posting in the event of a change in control combined with a downgrade below investment grade, as further described below.
The below information has been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as otherwise noted.
The below information has been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as 46 Table of Contents otherwise noted.
As of December 31, 2022 and 2021, we had no outstanding borrowings under our Revolving Credit Facility. If the amount available to borrow under the Revolving Credit Facility decreased, or if the Revolving Credit Facility were eliminated, the cost and availability of borrowing under the commercial paper program may be impacted.
As of December 31, 2023 and 2022, we had no outstanding borrowings under the facility. If the amount available to borrow under the Revolving Credit Facility decreased, or if the Revolving Credit Facility were eliminated, the cost and availability of borrowing under the commercial paper program may be impacted.
Such resolution could materially increase or decrease income tax expense in our consolidated financial statements in future periods and could impact our operating cash flows. A significant proportion of our profits are foreign-derived. For the years ended December 31, 2022 and 2021, 95% and 106%, respectively, of our pre-tax income was derived from foreign sources.
Such resolution could materially increase or decrease income tax expense in our consolidated financial statements in future periods and could impact our operating cash flows. A significant proportion of our profits are foreign-derived. For the years ended December 31, 2023 and 2022, 105% and 95%, respectively, of our pre-tax income was derived from foreign sources.
Our consolidated interest coverage ratio was 11:1 for the year ended December 31, 2022. For the year ended December 31, 2022, we were in compliance with our debt covenants. A violation of our debt covenants could impair our ability to borrow, and outstanding amounts borrowed could become due, thereby restricting our ability to use our excess cash for other purposes.
Our consolidated interest coverage ratio was 10:1 for the year ended December 31, 2023. For the year ended December 31, 2023, we were in compliance with our debt covenants. A violation of our debt covenants could impair our ability to borrow, and outstanding amounts borrowed could become due, thereby restricting our ability to use our excess cash for other purposes.
For discussion of our consolidated results of operations and segment results for the year ended December 31, 2021 compared to the same period in 2020, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022.
For discussion of our consolidated results of operations and segment results for the year ended December 31, 2022 compared to the same period in 2021, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023.
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, excluded the operations in the European Union and the United Kingdom, and resulted in a gain of $151.4 million.
The sale was 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, excluded the operations in the European Union and the United Kingdom, and resulted in a gain of $151.4 million.
As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided. Our revenues and operating income for the year ended December 31, 2022 were impacted by fluctuations in the United States dollar compared to foreign currencies.
As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided. Our revenues for the year ended December 31, 2023 were impacted by fluctuations in the United States dollar compared to foreign currencies.
During the year ended December 31, 2022, we incurred $10.0 million and $7.7 million of exit costs associated with the suspension of our Russia and Belarus operations and the Business Solutions divestiture, respectively. These exit costs are primarily related to severance and non-cash impairments of property and equipment, an operating lease right-of-use asset, and other intangible assets.
During the year ended December 31, 2022, we incurred $10.0 million and $7.7 million of exit costs associated with the suspension of our Russia and Belarus operations and the Business Solutions divestiture, respectively. These exit costs were primarily related to severance and non-cash impairments of property and equipment, an operating lease ROU asset, and other intangible assets.
By means of common processes and systems, these regions, including Branded Digital, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment. Transaction volume is the primary generator of revenue in our Consumer-to-Consumer segment.
By means of common processes and systems, these regions, including Branded Digital transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer Money Transfer business and one operating segment. 51 Table of Contents Transaction volume is the primary generator of revenue in our Consumer Money Transfer segment.
This tax charge, combined with our other 2017 United States taxable income and tax attributes, resulted in a 2017 United States federal tax liability of approximately $800 million, of which approximately $478 million remained as of December 31, 2022. We elected to pay this liability in periodic installments through 2025.
This tax charge, combined with our other 2017 United States taxable income and tax attributes, resulted in a 2017 United States federal tax liability of approximately $800 million, of which approximately $358 million remained as of December 31, 2023. We elected to pay this liability in periodic installments through 2025.
Notes For a discussion regarding the terms and maturities of our notes, please refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 16, Borrowings. Credit Ratings and Debt Covenants The credit ratings on our debt are an important consideration in our overall business, managing our financing costs, and facilitating access to additional capital on favorable terms.
Notes For a discussion regarding the terms and maturities of our notes, please refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 15, Borrowings. 57 Table of Contents Credit Ratings and Debt Covenants The credit ratings on our debt are an important consideration in our overall business, managing our financing costs, and facilitating access to additional capital on favorable terms.
Recent Accounting Pronouncements Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 2, Summary of Significant Accounting Policies for further discussion. 61 Table of Contents
Recent Accounting Pronouncements Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 2, Summary of Significant Accounting Policies for further discussion.
Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. As of December 31, 2022 and 2021, we had $180.0 million and $275.0 million in commercial paper borrowings outstanding, respectively.
Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. As of December 31, 2023 and 2022, we had $364.9 million and $180.0 million in commercial paper borrowings outstanding, respectively.
The lower number of shares outstanding for the year ended December 31, 2022 compared to the prior year is due to stock repurchases exceeding stock issuances under our stock compensation programs. 48 Table of Contents Segment Discussion We manage our business around the consumers and businesses we serve and the types of services we offer.
The lower number of shares outstanding for the year ended December 31, 2023 compared to the prior year is due to stock repurchases exceeding stock issuances under our stock compensation programs. Segment Discussion We manage our business around the consumers and businesses we serve and the types of services we offer.
The purpose of our Revolving Credit Facility, which is diversified through a group of 19 participating institutions, is to provide general liquidity and to support our commercial paper program, which we believe enhances our short-term credit rating. The largest commitment from any single financial institution within the total committed balance of $1.5 billion is approximately 11%.
The purpose of our Revolving Credit Facility, which is diversified through a group of 16 participating institutions, is to provide general liquidity and to support our commercial paper program, which we believe enhances our short-term credit rating. The largest commitment from any single financial institution within the total committed balance of $1.25 billion is approximately 14%.
Other Commercial Commitments We had approximately $390 million in outstanding letters of credit and bank guarantees as of December 31, 2022 primarily held in connection with regulatory requirements, lease arrangements, and certain agent agreements.
Other Commercial Commitments We had approximately $150 million in outstanding letters of credit and bank guarantees as of December 31, 2023 primarily held in connection with regulatory requirements, lease arrangements, and certain agent agreements.
We have established contingency reserves for a variety of material, known tax exposures. As of December 31, 2022, the total amount of tax contingency reserves was $237.2 million, including accrued interest and penalties, net of related items. Our tax reserves reflect our judgment as to the resolution of the issues involved if subject to judicial review or other settlement.
We have established contingency reserves for a variety of material, known tax exposures. As of December 31, 2023, the total amount of tax contingency reserves was $244.8 million, including accrued interest and penalties, net of related items. Our tax reserves reflect our judgment as to the resolution of the issues involved if subject to judicial review or other settlement.
We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, and our $1.5 billion revolving credit facility (“Revolving Credit Facility”), which expires in January 2025 and supports our commercial paper program.
We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, and our $1.25 billion revolving credit facility (“Revolving Credit Facility”), which expires in November 2028 and supports our commercial paper program.
If an event described above occurs and causes us to recognize a goodwill impairment charge, it would impact our reported earnings in the period such charge occurs. The carrying value of goodwill as of December 31, 2022 was $2,096.0 million, which represented approximately 25% of our consolidated assets.
If an event described above occurs and causes us to recognize a goodwill impairment charge, it would impact our reported earnings in the period such charge occurs. The carrying value of goodwill as of December 31, 2023 was $2,034.6 million, which represented approximately 25% of our consolidated assets.
We maintain a portion of these settlement assets in highly liquid investments, classified as Cash and cash equivalents within Settlement assets, to fund settlement obligations. 53 Table of Contents Investment securities, classified within Settlement assets on the Consolidated Balance Sheets, were $1,333.4 million and $1,398.9 million as of December 31, 2022 and 2021, respectively, and consist primarily of highly-rated state and municipal debt securities.
We maintain a portion of these settlement assets in highly liquid investments, classified as Cash and cash equivalents within Settlement assets, to fund settlement obligations. 55 Table of Contents Investment securities, classified within Settlement assets on the Consolidated Balance Sheets, were $1,458.1 million and $1,333.4 million as of December 31, 2023 and 2022, respectively, and consist primarily of highly-rated state and municipal debt securities.
On October 31, 2022, we amended our Revolving Credit Facility to transition away from the London Interbank Offered Rate and allow us to draw loans payable based upon the Secured Overnight Financing Rate, the Euro Interbank Offered Rate, or the Sterling Overnight Index Average.
On October 31, 2022, we amended the facility to transition away from the London Interbank Offered Rate (“LIBOR”) and allow us to draw loans payable based upon the Secured Overnight Financing Rate (“SOFR”), the Euro Interbank Offered Rate, or the Sterling Overnight Index Average.
Our Board of Directors declared quarterly cash dividends of $0.235 per common share in all four quarters of 2022 and 2021, representing $361.6 million and $380.5 million in total dividends, respectively. These amounts were paid to shareholders of record in the respective quarter the dividend was declared.
Our Board of Directors declared quarterly cash dividends of $0.235 per common share in all four quarters of 2023 and 2022, representing $346.1 million and $361.6 million in total dividends, respectively. These amounts were paid to shareholders of record in the respective quarter the dividend was declared.
For additional information, please refer to Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . 56 Table of Contents Capital Expenditures The total aggregate amount paid for contract costs, purchases of property and equipment, and purchased and developed software was $208.2 million and $214.6 million in 2022 and 2021, respectively.
For additional information, please refer to Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . 58 Table of Contents Capital Expenditures The total aggregate amount paid for purchased and developed software, contract costs, and purchases of property and equipment was $147.8 million and $208.2 million in 2023 and 2022, respectively.
As of December 31, 2022, all investments with a single issuer and each individual security represented less than 10% of our investment securities portfolio. Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2022 decreased to $581.6 million from $1,045.3 million for the year ended December 31, 2021.
As of December 31, 2023, all investments with a single issuer and each individual security represented less than 10% of our investment securities portfolio. Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2023 increased to $783.1 million from $581.6 million for the year ended December 31, 2022.
Earnings Per Share During the years ended December 31, 2022 and 2021, basic earnings per share were $2.35 and $1.98, respectively, and diluted earnings per share were $2.34 and $1.97, respectively. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding.
Earnings Per Share During the years ended December 31, 2023 and 2022, basic earnings per share were $1.69 and $2.35, respectively, and diluted earnings per share were $1.68 and $2.34, respectively. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding.
Year Ended December 31, 2022 Constant Revenue Currency Growth / Foreign Revenue (Decline) Exchange Growth (a) / Transaction as Reported - Translation (Decline) - Growth/ (GAAP) Impact (Non-GAAP) (Decline) Consumer-to-Consumer regional growth/(decline): North America (United States & Canada) ("NA") (4 )% 0 % (4 )% (5 )% Europe and Russia/CIS ("EU & CIS") (20 )% (5 )% (15 )% (25 )% Middle East, Africa, and South Asia ("MEASA") (4 )% (2 )% (2 )% (1 )% Latin America and the Caribbean ("LACA") 4 % (3 )% 7 % 5 % East Asia and Oceania ("APAC") (13 )% (4 )% (9 )% (12 )% Total Consumer-to-Consumer growth: (9 )% (3 )% (6 )% (10 )% Branded Digital (b) (3 )% (2 )% (1 )% 0 % (a) Constant currency revenue growth/(decline) assumes that revenues denominated in foreign currencies are translated to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.
Year Ended December 31, 2023 Constant Revenue Currency Growth / Foreign Revenue (Decline) Exchange Growth (a) / Transaction as Reported - Translation (Decline) - Growth/ (GAAP) Impact (Non-GAAP) (Decline) Consumer Money Transfer regional growth/(decline): North America (United States & Canada) ("NA") (5 )% 0 % (5 )% 5 % Europe and CIS ("EU & CIS") (11 )% 0 % (11 )% (6 )% Middle East, Africa, and South Asia ("MEASA") 31 % (1 )% 32 % 6 % Latin America and the Caribbean ("LACA") 8 % (1 )% 9 % 7 % East Asia and Oceania ("APAC") (7 )% (2 )% (5 )% 1 % Total Consumer Money Transfer growth/(decline): 0 % (1 )% 1 % 2 % Branded Digital (b) 0 % 0 % 0 % 11 % (a) Constant currency revenue growth/(decline) assumes that revenues denominated in foreign currencies are translated to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.
Financing Resources As of December 31, 2022, we had the following outstanding borrowings (in millions): Commercial paper $ 180.0 Notes: 4.250% notes due 2023 (a) 300.0 2.850% notes due 2025 (a) 500.0 1.350% notes due 2026 (a) 600.0 2.750% notes due 2031 (a) 300.0 6.200% notes due 2036 (a) 500.0 6.200% notes due 2040 (a) 250.0 Total borrowings at par value 2,630.0 Debt issuance costs and unamortized discount, net (13.2 ) Total borrowings at carrying value (b) $ 2,616.8 (a) The difference between the stated interest rate and the effective interest rate is not significant.
Financing Resources As of December 31, 2023, we had the following outstanding borrowings (in millions): Commercial paper $ 364.9 Notes: 2.850% notes due 2025 (a) 500.0 1.350% notes due 2026 (a) 600.0 2.750% notes due 2031 (a) 300.0 6.200% notes due 2036 (a) 500.0 6.200% notes due 2040 (a) 250.0 Total borrowings at par value 2,514.9 Debt issuance costs and unamortized discount, net (10.3 ) Total borrowings at carrying value (b) $ 2,504.6 (a) The difference between the stated interest rate and the effective interest rate is not significant.
Earnings per share for the year ended December 31, 2022 compared to the prior year were impacted by the previously described factors impacting net income and a lower number of shares outstanding.
Earnings per share for the year ended December 31, 2023 compared to the prior year were impacted by the previously described factors impacting net income, partially offset by a lower number of average shares outstanding.
(b) As of December 31, 2022, our weighted-average effective rate on total borrowings was approximately 3.9%. 54 Table of Contents Commercial Paper Program Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility.
(b) As of December 31, 2023, our weighted-average effective rate on total borrowings was approximately 4.0%. 56 Table of Contents Commercial Paper Program Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility.
Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes. 46 Table of Contents The following table sets forth our consolidated revenue results for the years ended December 31, 2022 and 2021: Year Ended December 31, (dollars in millions) 2022 2021 % Change Revenues, as reported - (GAAP) $ 4,475.5 $ 5,070.8 (12 )% Foreign currency impact (a) 4 % Divestitures impact (b) 4 % Revenue change, constant currency adjusted, excluding Business Solutions - (Non-GAAP) (4 )% (a) Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in a decrease to revenues of $185.5 million for the year ended December 31, 2022 when compared to foreign currency rates in the prior year.
Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes. 48 Table of Contents The following table sets forth our consolidated revenue results for the years ended December 31, 2023 and 2022: Year Ended December 31, (dollars in millions) 2023 2022 % Change Revenues, as reported - (GAAP) $ 4,357.0 $ 4,475.5 (3 )% Foreign currency impact (a) 4 % Divestitures impact (b) 3 % Adjusted revenues - (Non-GAAP) 4 % (a) Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in a decrease to revenues of $143.3 million for the year ended December 31, 2023 when compared to foreign currency rates in the prior year.
Each of our segments addresses a different combination of consumer groups, distribution networks, and services offered. Our segments are Consumer-to-Consumer and Business Solutions. On August 4, 2021, we entered into an agreement to sell our Business Solutions business, as discussed above.
Each of our segments addressed a different combination of customer groups, distribution networks, and services offered. Our segments were Consumer Money Transfer, Business Solutions, and Consumer Services. On August 4, 2021, we entered into an agreement to sell our Business Solutions business, as discussed above.
The initial qualitative assessment includes comparing the overall financial performance of the reporting unit against the planned results. Additionally, each reporting unit’s fair value is assessed under certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-specific events.
The initial qualitative assessment includes 61 Table of Contents comparing the overall financial performance of the reporting unit against the planned results. Additionally, each reporting unit’s fair value is assessed based on current and expected events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-specific events.
Income Taxes Our effective tax rates on pre-tax income were 9.7% and 13.9% for the years ended December 31, 2022 and 2021, respectively.
Income Taxes Our effective tax rates on pre-tax income were 16.1% and 9.7% for the years ended December 31, 2023 and 2022, respectively.
Our commercial paper borrowings as of December 31, 2022 had a weighted-average annual interest rate of approximately 4.6% and a weighted-average term of approximately 3 days. During the years ended December 31, 2022 and 2021, the average commercial paper balance outstanding was $192.9 million and $140.0 million, respectively, and the maximum balance outstanding was $725.0 million and $575.0 million, respectively.
Our commercial paper borrowings as of December 31, 2023 had a weighted-average annual interest rate of approximately 5.6% and a weighted-average term of approximately 3 days. During the years ended December 31, 2023 and 2022, the average commercial paper balance outstanding was $276.7 million and $192.9 million, respectively, and the maximum balance outstanding was $885.0 million and $725.0 million, respectively.
However, between the first and third closings, we are required to pay the Buyer a measure of the profits from these operations, while we owned them, adjusted for other charges, and this expense is recognized in Other income/(expense), net in the Consolidated Statements of Income.
However, between the first and final closings, we were required 50 Table of Contents to pay the Buyer a measure of the profits from these operations, while we owned them, adjusted for other charges, and this expense was recognized in Other expense, net in the Consolidated Statements of Income.
Under the terms of the law, we owe 15% of the original liability in 2023, with 20% and 25% of the tax owed in 2024 and 2025, respectively. During the years ended December 31, 2022 and 2021, we made installment payments of $63.7 million and $63.4 million, respectively.
Under the terms of the law, we owe 20% and 25% of the original liability in 2024 and 2025, respectively. During the years ended December 31, 2023 and 2022, we made installment payments of $119.5 million and $63.7 million, respectively.
Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, negatively impacted revenue by 3% for the year ended December 31, 2022 compared to the prior year. Constant currency revenue decreased 6% for the year ended December 31, 2022.
Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, negatively impacted revenue by 1% for the year ended December 31, 2023 compared to the prior year.
(b) Business Solutions revenues included in our results were $196.9 million and $421.8 million for the years ended December 31, 2022 and 2021, respectively.
(b) Business Solutions revenues included in our results were $29.7 million and $196.9 million for the years ended December 31, 2023 and 2022, respectively.
Our tax contingency reserves for our uncertain tax positions as of December 31, 2022 were $237.2 million, including accrued interest and penalties, net of related items.
Our tax contingency reserves for our uncertain tax positions as of December 31, 2023 were $244.8 million, including accrued interest and penalties, net of related items.
The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Consumer-to-Consumer 89 % 87 % Business Solutions 5 % 8 % Other 6 % 5 % 100 % 100 % Consumer-to-Consumer Segment The following table sets forth our Consumer-to-Consumer segment results of operations for the years ended December 31, 2022 and 2021: Year Ended December 31, (dollars and transactions in millions) 2022 2021 % Change Revenues $ 3,993.5 $ 4,394.0 (9 )% Operating income $ 765.1 $ 977.6 (22 )% Operating income margin 19 % 22 % Key indicator: Consumer-to-Consumer transactions 274.1 305.9 (10 )% 49 Table of Contents Our Consumer-to-Consumer money transfer service facilitates money transfers sent from our retail agent locations worldwide and our Branded Digital services.
The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Consumer Money Transfer 92 % 89 % Business Solutions 1 % 5 % Consumer Services 7 % 6 % 100 % 100 % Consumer Money Transfer The following table sets forth our Consumer Money Transfer segment results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, (dollars and transactions in millions) 2023 2022 % Change Revenues $ 4,005.0 $ 3,993.5 0 % Operating income $ 750.8 $ 765.1 (2 )% Operating income margin 19 % 19 % Key indicator: Consumer Money Transfer transactions 279.4 274.1 2 % Our Consumer Money Transfer service facilitates money transfers sent from our retail agent locations worldwide and our Branded Digital services.
As of December 31, 2022, we had no outstanding borrowings on our Revolving Credit Facility and $180.0 million of outstanding borrowings on the commercial paper program.
As of December 31, 2023, we had no outstanding borrowings on our Revolving Credit Facility and $364.9 million of outstanding borrowings on the commercial paper program.
In addition, Cash provided by operating activities for the year ended December 31, 2022 was negatively impacted by higher income taxes paid, including those related to the gain on the sale of the Business Solutions business. Cash provided by operating activities is also impacted by fluctuations in our working capital balances, among other factors.
In addition, cash provided by operating activities for the year ended December 31, 2022 was negatively impacted by higher income taxes paid, including those related to the gain on the sale of the Business Solutions business.
Proceeds from our commercial paper borrowings were used for general corporate purposes and working capital needs. Revolving Credit Facility On December 18, 2018, we entered into a credit agreement providing for unsecured financing facilities in an aggregate amount of $1.5 billion, including a $250.0 million letter of credit sub-facility, with a final maturity date of January 8, 2025.
Revolving Credit Facility On December 18, 2018, we entered into a credit agreement providing for unsecured financing facilities in an aggregate amount of $1.5 billion, including a $250.0 million letter of credit sub-facility, with a final maturity date of January 8, 2025.
Historically, we have not had any significant defaults on our contractual obligations or incurred significant penalties for termination of our contractual obligations. We have no material off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Our consumers transferred $93.6 billion and $104.1 billion in Consumer-to-Consumer cross-border principal for the years ended December 31, 2022 and 2021, respectively.
Our consumers transferred $101.7 billion and $93.6 billion in cross-border principal for the years ended December 31, 2023 and 2022, respectively.
During the year ended December 31, 2022, we also incurred $21.8 million of costs associated with our operating expense redeployment program, as described above, primarily related to severance and non-cash impairments of an operating lease right-of-use asset and property and equipment.
During the years ended December 31, 2023 and 2022, we incurred $29.5 million and $21.8 million, respectively, of costs associated with our operating expense redeployment program, as described above, primarily related to severance, expenses associated with streamlining our organizational and legal structure and non-cash impairments of operating lease right-of-use (“ROU”) assets and property and equipment.
(b) As noted above, Branded Digital revenues are included in the regions. 50 Table of Contents The table below sets forth regional revenues as a percentage of our Consumer-to-Consumer revenue for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Consumer-to-Consumer revenue as a percentage of segment revenue: NA 40 % 37 % EU & CIS 28 % 32 % MEASA 16 % 15 % LACA 10 % 9 % APAC 6 % 7 % Branded Digital, which is included in the regional percentages above, represented approximately 22% and 20% of our Consumer-to-Consumer revenues for the years ended December 31, 2022 and 2021, respectively.
The table below sets forth regional revenues as a percentage of our Consumer Money Transfer revenue for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Consumer Money Transfer revenue as a percentage of segment revenue: NA 37 % 40 % EU & CIS 25 % 28 % MEASA 21 % 16 % LACA 11 % 10 % APAC 6 % 6 % Branded Digital, which is included in the regional percentages above, represented approximately 22% of our Consumer Money Transfer revenues for both the years ended December 31, 2023 and 2022.
See “Risk Factors” and “Forward-Looking Statements.” Overview We are a leading provider of money movement and payment services, operating in two business segments: • Consumer-to-Consumer - Our Consumer-to-Consumer operating segment facilitates money transfers, which are primarily sent from our retail agent locations worldwide or through websites and mobile devices. Our money transfer service is provided through one interconnected global network.
See “Risk Factors” and “Forward-Looking Statements.” Overview We are a leading provider of cross-border, cross-currency money movement, payments, and digital financial services and have operated in the following business segments: • Consumer Money Transfer - Our Consumer Money Transfer operating segment (previously Consumer-to-Consumer) facilitates money transfers, which are primarily sent from our retail agent locations worldwide or through websites and mobile devices.
Disruptions to contractual relationships, significant declines in cash flows or transaction volumes associated with contracts, or other issues significantly impacting the future cash flows associated with the contract would cause us to evaluate the recoverability of the asset and could result in an impairment charge.
Disruptions to contractual relationships, significant actual or expected declines in cash flows or transaction volumes associated with contracts or software applications, or the discontinued use of a software application would cause us to evaluate the recoverability of the asset and could result in an impairment charge.
The table below sets forth revenue and transaction changes by geographic region compared to the prior year. Additionally, due to the significance of our Consumer-to-Consumer segment to our overall results, we have also provided constant currency results for our Consumer-to-Consumer segment revenues. Consumer-to-Consumer segment constant currency revenue growth/(decline) is a non-GAAP financial measure, as further discussed in Revenues Overview above.
The table below sets forth revenue and transaction changes by geographic region compared to the prior year. Additionally, due to the significance of our Consumer Money Transfer segment to our overall results, we have also provided constant currency results for our Consumer Money Transfer segment revenues.
Certain of our corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other.
Certain of our corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Consumer Services. Additional information regarding our segments is provided in the Segment Discussion below.
Operating Expenses Overview Operating expense redeployment program On October 20, 2022, we announced an operating expense redeployment program which aims to redeploy approximately $150 million in expenses in our cost base over the next 5 years, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people costs.
Operating Expenses Overview Operating expense redeployment program On October 20, 2022, we announced an operating expense redeployment program which aims to redeploy approximately $150 million in expenses in our existing cost base through 2027, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people strategy. We believe these changes will allow us to invest in strategic initiatives.
Cost of services decreased for the year ended December 31, 2022 compared to the prior year primarily due to a decrease in Consumer-to-Consumer money transfer agent commissions, which generally vary with revenues, and a decrease associated with the Business Solutions divestiture, as discussed above, partially offset by increased investments in information technology.
Cost of services increased for the year ended December 31, 2023 compared to the prior year primarily due to increased agent commissions, which generally vary with revenues, as well as increased investment in information technology, and increased other variable expenses, including bank fees and credit and non-credit losses, partially offset by a decrease associated with the Business Solutions divestiture.
Business Solutions revenues included in our Consolidated Statements of Income were $196.9 million and $421.8 million, and direct operating expenses, excluding corporate allocations, were $140.3 million and $317.7 million for the years ended December 31, 2022 and 2021, respectively.
The related income tax expense on this income was also passed to the Buyer. Business Solutions revenues included in our Consolidated Statements of Income were $29.7 million and $196.9 million, and direct operating expenses, excluding corporate allocations, were $26.1 million and $140.3 million for the years ended December 31, 2023 and 2022, respectively.
As of December 31, 2022, goodwill of $1,980.7 million and $61.4 million resides in our Consumer-to-Consumer and Business Solutions reporting units, respectively, while the remaining $53.9 million resides in 60 Table of Contents Other. For the years ended December 31, 2022 and 2021, we did not record any goodwill impairments.
As of December 31, 2023, goodwill of $1,980.7 million resides in our Consumer Money Transfer reporting unit, while the remaining $53.9 million resides in Consumer Services. For the years ended December 31, 2023 and 2022, we did not record any goodwill impairments.
Additional information on our segments is provided in the Segment Discussion below. 44 Table of Contents Results of Operations The following discussion of our consolidated results of operations and segment results refers to the year ended December 31, 2022 compared to the same period in 2021.
Results of Operations The following discussion of our consolidated results of operations and segment results refers to the year ended December 31, 2023 compared to the same period in 2022.
We incurred $2.7 million and $19.1 million of Cost of services and Selling, general, and administrative expenses, respectively, related to this program for the year ended December 31, 2022. Cost of Services Cost of services primarily consists of agent commissions, which represented approximately 60% of total cost of services for the year ended December 31, 2022.
We incurred $2.7 million and $19.1 million of Cost of services and Selling, general, and administrative expenses, respectively, related to this program for the year ended December 31, 2022, and we have incurred $51.3 million of total expenses under this program from inception through December 31, 2023.
This service is available for international cross-border transfers and, in certain countries, intra-country transfers. • Business Solutions - Our 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.
Our Business Solutions operating segment facilitated payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.
On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024. As of December 31, 2022, $648.2 million remained available under this share repurchase program.
Share Repurchases and Dividends On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024.
Consumer-to-Consumer cross-border principal is a metric used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances.
Consumer Money Transfer cross-border principal is a metric used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances. 52 Table of Contents Revenues Consumer Money Transfer revenue remained flat and transactions increased 2% for the year ended December 31, 2023 compared to the prior year.
Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested.
Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested. Shares excluded from the diluted earnings per share calculation were 9.7 million and 8.0 million for the years ended December 31, 2023 and 2022, respectively.
The second closing, which occurred on December 31, 2022 and included the United Kingdom operations, resulted in a gain of $96.9 million. The third closing, which is currently expected to occur in the second quarter of 2023 pending required regulatory approvals, includes the European Union operations.
The second closing, which occurred on December 31, 2022 and included the United Kingdom operations, resulted in a gain of $96.9 million. The final closing, which occurred on July 1, 2023 and included the European Union operations, resulted in a gain of $18.0 million.
The operations of the Business Solutions business to be sold in the third closing will continue to be included in Revenues and Operating income after the second closing.
The operations of the Business Solutions business sold in the final closing were included in Revenues and Operating income after the second closing and have completely transitioned to the Buyer as of the final closing.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeApproximately $1.6 billion of these assets bear interest at floating rates. These assets primarily include cash in banks, money market investments, state and municipal variable-rate securities, and reverse repurchase agreements and are included in our Consolidated Balance Sheets within Cash and cash equivalents, Settlement assets, and Other assets.
Biggest changeApproximately $1.3 billion of these assets bear interest at floating rates. These assets primarily include cash in banks, money market investments, and state and municipal variable-rate securities and are included in our Consolidated Balance Sheets within Cash and cash equivalents and Settlement assets.
We are also exposed to credit risk related to receivable balances from agents in the money transfer, walk-in bill payment, and money order settlement process. We perform a credit review before each agent signing and conduct periodic analyses of agents and certain other parties we transact with directly.
We are also exposed to credit risk related to receivable balances from agents in the money transfer, bill payment, and money order settlement process. We perform a credit review before each agent signing and conduct periodic analyses of agents and certain other parties we transact with directly.
We use longer-term foreign currency forward contracts to help mitigate risks associated with changes in foreign currency exchange rates on revenues denominated primarily in the euro, and, to a lesser degree, the British pound, the Canadian dollar, and other currencies.
We use longer-term foreign currency forward contracts to help mitigate risks associated with changes in foreign currency exchange rates on revenues denominated in the euro, and, to a lesser degree, the Canadian dollar, the British pound, and other currencies.
The foreign currency exposure that does exist is limited by the fact that the majority of transactions are paid by the next day after they are initiated, and agent settlements occur within a few days in most instances.
The foreign currency exposure that does exist is limited by the fact that the significant majority of transactions are paid by the next day after they are initiated, and agent settlements occur within a few days in most instances.
In certain consumer money transfer and bill payment transactions involving different send and receive currencies, we generate revenue based on the difference between the exchange rate set by us to the consumer or business and a rate available in the wholesale foreign exchange market, helping to provide protection against currency fluctuations.
In certain consumer money transfer transactions involving different send and receive currencies, we generate revenue based on the difference between the exchange rate set by us to the consumer or business and a rate available in the wholesale foreign exchange market, helping to provide protection against currency fluctuations.
We have classified these investments as available-for-sale within Settlement assets in the Consolidated Balance Sheets, and accordingly, recorded these instruments at their fair value with the net unrealized gains and losses, net of the applicable deferred income tax effect, being added to or deducted from our Total stockholders' equity in our Consolidated Balance Sheets.
We have classified these investments as available-for-sale within Settlement assets in the Consolidated Balance Sheets, and accordingly, recorded these instruments at their fair value with the net unrealized gains and losses, excluding credit related losses, net of the applicable deferred income tax effect, being added to or deducted from our Total stockholders' equity in our Consolidated Balance Sheets.
In addition, we are exposed to losses directly from consumer transactions, particularly through our digital channels, where transactions are originated through means other than cash and are therefore subject to “chargebacks,” insufficient funds, or other collection impediments, such as fraud, which are anticipated to increase as digital channels become a greater proportion of our money transfer business.
In addition, we are exposed to losses directly from consumer transactions, particularly through our digital channels, where transactions are originated through means other than cash 64 Table of Contents and are therefore subject to “chargebacks,” insufficient funds, or other collection impediments, such as fraud, which are anticipated to increase as digital channels become a greater proportion of our money transfer business.
As of December 31, 2022, a hypothetical uniform 10% strengthening or weakening in the value of the United States dollar relative to all other currencies in which our net income is generated would have resulted in a decrease/increase to pre-tax annual income of approximately $40 million, based on our forecast of unhedged exposure to foreign currency at that date.
As of December 31, 2023, a hypothetical uniform 10% strengthening or weakening in the value of the United States dollar relative to all other currencies in which our net income is generated would have resulted in a decrease/increase to pre-tax annual income of approximately $28 million, based on our forecast of unhedged exposure to foreign currency at that date.
The same 100 basis point increase/decrease in interest rates, if applied to our cash and investment balances on December 31, 2022 that bear interest at floating rates, would result in an offsetting increase/decrease to annual pre-tax income of approximately $16 million.
The same 100 basis point increase/decrease in interest rates, if applied to our cash and investment balances on December 31, 2023 that bear interest at floating rates, would result in an offsetting increase/decrease to annual pre-tax income of approximately $13 million.
A hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to annual pre-tax income of approximately $2 million based on borrowings that are sensitive to interest rate fluctuations, net of the impact of hedges, on December 31, 2022.
A hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to annual pre-tax income of approximately $4 million based on borrowings that are sensitive to interest rate fluctuations, net of the impact of hedges, on December 31, 2023.
Our losses have been less than 2% of our consolidated revenues in all periods presented. 63 Table of Contents
Our losses have been less than 2% of our consolidated revenues in all periods presented. 65 Table of Contents
From time to time, we use interest rate swaps designated as hedges to vary the percentage of fixed to floating rate debt, subject to market conditions, although there were no such swaps outstanding as of December 31, 2022. As of December 31, 2022, our weighted-average effective rate on total borrowings was approximately 3.9%.
From time to time, we use interest rate swaps designated as hedges to vary the percentage of fixed to floating rate debt, subject to market conditions, although there were no such swaps outstanding as of December 31, 2023. As of December 31, 2023, our weighted-average effective rate on total borrowings was approximately 4.0%.
As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income. Interest Rates We invest in several types of interest-bearing assets, with a total value as of December 31, 2022 of approximately $2.7 billion.
As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income. 63 Table of Contents Interest Rates We invest in several types of interest-bearing assets, with a total value as of December 31, 2023 of approximately $2.6 billion.
As interest rates rise, the fair value of these fixed-rate interest-bearing securities will decrease; conversely, a decrease to interest rates would result in an increase to the fair values of the 62 Table of Contents securities.
As interest rates rise, the fair values of these fixed-rate interest-bearing securities will decrease; conversely, a decrease to interest rates would result in an increase to the fair values of the securities.
Borrowings under our commercial paper program mature in such a short period that the financing is also effectively floating rate. As of December 31, 2022, there were $180.0 million in outstanding borrowings under our commercial paper program.
Borrowings under our commercial paper program mature in such a short period that the financing is effectively floating rate. As of December 31, 2023, there were $364.9 million in outstanding borrowings under our commercial paper program.

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