Western Union Annual Report 2020

FY2020 Annual Report · Western Union

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2020

Notice of 2021 Annual Meeting
of Stockholders, Proxy Statement
and 2020 Annual Report

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3/18/21 3:36 AM

2020 Highlights

A banner year for digital,
transcending borders and
currencies

Western Union continued towards our vision to
be the leader in cross-border, cross-currency
money movement and payments with a year of
unprecedented digital growth. Even amid difficult
global economic conditions, we made strides
opening our platform to leading e-commerce,
telecom and financial services partners. We continue
to execute on our strategy to become a more
diversified payments company, adding incremental
customers and expanding our addressable market.
We believe that our business outperformed the
market with cross border principal growth of 12%,
in contrast to the World Bank’s 2020 market forecast
for a 7% decline.

Digital Performance*
Digital presence in more than
75 countries and territories

2020

2019

Transaction growth

81%

Revenues

26%

>$850M >$600M

Up 38%

29% of transactions,
20% of revenue

WU.com

WU.com customers up 29% to 8.6 million

80%+ of new WU.com users are new to
the company*

12% increase in transactions and 25% increase
in principal per customer

80% access WU.com via mobile devices

WU.com app downloaded 3x more than any
peer money transfer company’s in 2020**

Global Financial Network

200 countries and territories

Payout in 130+ currencies

Account payout into billions of bank accounts,
millions of digital wallets, and cards in
120 countries

Real-time account payout in 100 countries

550,000 retail locations in urban, rural, and
remote areas

Financial Performance

$4.8 billion in revenue

$878 million operating cash flow

$587 million returned to shareholders through
dividends and share repurchases

For C2C (up from 16% and 14%, respectively, in 2019)

All figures as of December 31, 2020

*C2C

*Have not transacted with Western Union in the prior 12 months
**Data provided by mobile app marketing firm Sensor Tower

Transfer Agent and Registrar

Stockholders with questions concerning their stock holdings or

dividends or with address changes should contact:

Company Stock Performance

Trademarks, Service Marks and Trade Names

The Western Union and WU names, logos and related trademarks

and service marks, owned by Western Union Holdings, Inc., are

registered and/or used in the U.S. and many foreign countries. All other

trademarks, service marks, logos and trade names referenced in this

material are the property of their respective owners.

The following graph shows the five-year comparison of cumulative

total shareholder return, calculated on a dividend reinvested basis,

for (i) our common stock, (ii) the Standard & Poor’s Composite – 500

Stock Index (the “S&P 500 Index”), and (iii) the Standard & Poor’s

Composite – 500 Financials Index (the “S&P 500 Financials Index”),

an independently prepared index that includes companies in the

financial services industry. Pursuant to rules of the U.S. Securities and

Exchange Commission, the comparison assumes $100 was invested

on December 31, 2015 in our common stock and in each of the indices.

Data points on the graph are annual. Historic stock price performance is

not necessarily indicative of future stock price performance.

The Western Union Company

S&P 500 Index

S&P 500 Financials Index

2015

2016

2017

2018

2019

2020

Corporate Governance

To review the Company’s corporate governance guidelines, Board

committee charters and codes of business conduct and ethics, please

visit the “Corporate Governance” section on the “Investor Relations”

page of our website at www.westernunion.com.

Corporate Information

Corporate Headquarters

7001 East Belleview Avenue, Denver, CO 80237

+1-720-332-1000

+1-866-405-5012

EQ Shareowner Services

PO Box 64874

St Paul MN 55164-0874

www.shareowneronline.com

Overnight Mail:

Shareowner Services

1110 Centre Pointe Curve, Suite 101

Mendota Heights, MN 55120-4100

Shareowner Relations Phone Numbers:

+1-651-450-4064

+1-800-468-9716

$250

$200

$150

$100

$50

Independent Registered Public Accounting Firm

Ernst & Young LLP

370 17th Street, Suite 3300

Denver, CO 80202

Financial Information and Reports

The Company routinely issues press releases and quarterly and annual

financial reports. To receive this information please write the Company

at: Western Union, Investor Relations, 7001 East Belleview Avenue

HQ-14, Denver, CO 80237, call +1-866-405-5012 or visit the “Investor

Relations” section of our website at www.westernunion.com.

A copy of The Western Union Company 2020 Annual Report on Form

10-K filed with the U.S. Securities and Exchange Commission will be

furnished to stockholders without charge (except charges for providing

exhibits) upon request to the Company. Analysts and investors seeking

additional information about the Company can contact the Investor

Relations Department at +1-866-405-5012. For more information about

The Western Union Company, please visit the Company’s website at

www.westernunion.com.

Shareholders of Record

There were

3,082

stockholders of record as of March 24, 2021.

Annual Meeting

The annual meeting of stockholders of The Western Union Company

(“Annual Meeting”) will be held on Friday, May 14, 2020 at 8:00 a.m.

Mountain Time. Due to the continued public health impact of the

coronavirus (COVID-19) pandemic and to support the health and well-

being of our stockholders, the Annual Meeting will be a completely

virtual meeting of stockholders, which will be conducted online via

live webcast. You will be able to attend the Annual Meeting by pre-

registering prior to the meeting at www.proxydocs.com/WU (for

Registered Holders) and www.proxydocs.com/brokers/WU (for

Beneficial Owners).

A Message from the CEO

Dear fellow stockholders,

Moving money across borders—
at speed, at scale, and with
reliability—requires the strategic
harmonization of people, innovation
and technology. If 2020 tested our
capacity for this increasingly complex
undertaking, I am proud to say we
succeeded.

As COVID-19 upended lives and challenged
governments, businesses, and communities, our
customers provided critical support for loved ones
across the globe, becoming the frontline workers
of economic security. Our employees showed great
resilience in facilitating the continued flow of financial
support across borders, while working remotely.
Our stakeholders can be proud that we upheld our
responsibilities and emerged leaner, stronger, with an
even sharper focus on our role as a global leader and
market shaper.

Throughout 2020, Western Union tapped into our
innovative spirit, our strong global network, and
the power of our technology. By quickly adapting
our business strategy to meet the moment and our
customers’ needs, we were able to do what we do
best: build bridges between people and businesses, by
moving money to and from nearly every corner of the
earth.

As we mark our 170th anniversary, I’m struck by the
sustained legacy of our company’s purpose. At our
core, we have always been bridge-builders. In our
earliest days, this meant creating a cross-continental
telegraph system. In 2020, it meant more cloud-based
applications, the further opening of our cross-border
platform, and high-impact services like doorstep
delivery of money transfers in certain countries. These
innovations made it possible for our almost 150 million
customers in over 200 countries and territories to send

Hikmet Ersek
President, Chief Executive Officer,
and Director

and receive funds from almost anywhere, as a global
pandemic raged.

When the year began, we had embarked on a new
global strategy designed to advance our position as a
leading cross-border, cross-currency money movement
and payments platform. This strategy involved
creating stronger relationships with consumers and
opening our platform to forge new partnerships with
businesses across industries, allowing them to expand
into new markets and better serve customers. This
plan, coupled with our WU Way agile mindset and
enterprise-wide, smart workplaces, was foundational
to our navigation of 2020’s challenges, including the
abrupt transition to remote work. Our results affirmed
that we are on the right track and well-positioned to
navigate challenging times.

In 2020, we delivered exceptional growth in the digital
channels of our consumer money transfer segment
(C2C). Our C2C principal growth exceeded market
forecasts and we expanded our addressable
market through strong momentum in our third-party
partnerships to produce solid financial results.

Notice of 2021 Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report

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3/24/21 3:41 AM

A Message from the CEO

Western Union generated $4.8 billion in revenue and
$878 million of operating cash flow. We returned more
than $587 million to stockholders through dividends
and share repurchases and announced in February
2021 a 4 percent increase in our quarterly dividend.
The resilience of our business, coupled with prudent
management of costs and capital, enabled us to
deliver more than $50 million in annual costs savings
in 2020, and we remain on track to achieve our stated
goal of $150 million in annual efficiencies by 2022. Our
continued focus on efficiency has allowed us to deliver
solid profitability while simultaneously reinvesting in
initiatives to drive long-term growth.

Winning in Digital

When we set out to build a robust, resilient platform
capable of meeting our customers’ manifold needs, no
one could have imagined that a highly communicable
virus would so dramatically alter human habits.
Our platform’s digital underpinnings and processes
accommodated the remarkable increase in digital
traffic, validating both our strategy and our execution.

Our customers’ adaptability drove our overarching
success story of 2020: exceptional digital performance.
Lockdowns and social distancing measures prompted
many customers to use our digital channels for the
first time. We supported them in several countries
through measures including personalized phone or
video “concierge services,” which walked them through
the process.

Our digital channels also drew many first-time
Western Union customers. New customers returned
to westernunion.com again and again and sent more
transactions per customer on average than in previous
years. This loyalty bodes well for the future of our
cross-border consumer ecosystem strategy, as we seek
to leverage the direct relationships with our unique
customer base to offer tailored services to these ‘dual
belongers’ with connections to nearly every country in
the world.

Overall, our digital money transfer revenues grew by
38 percent in 2020, surpassing $850 million and, as
of February 10 when we provided our 2021 financial
outlook, was tracking toward becoming a $1 billion
digital business in 2021. We grew our cross-border
principal in our consumer business by 12 percent in
2020, exceeding World Bank forecasts.

Leading Innovation in an Evolving Landscape

Our global financial network currently connects billions
of bank accounts, millions of digital wallets and cards,
and over half a million retail locations. We strive to
continue growing until we become the world’s largest
network of networks.

To this end, we accelerated our digital transformation
by upgrading our platform, moving more applications
to the cloud, and leveraging the power of data
analytics to introduce more tailored offerings to
customers, for example. We continued to evolve
customer-facing applications like WU.com and
extended our account, wallet, and card payout to 120
countries, of which 100 have real-time capabilities.

We also expanded our digital partnership business,
which allows other organizations to use our platform to
serve their customers. This is a key component of our
strategy for becoming a more diversified payments
company. Digital partnerships with existing companies
including Sber, the Russian banking giant, and stc
pay, a leading digital wallet service in Saudi Arabia,
continued to deliver revenue growth. We also entered
into a definitive agreement to acquire a minority
stake in stc pay, which we anticipate will strengthen
our presence in the Gulf region. We recently entered a
new partnership with Ant Group, the parent company
of China’s leading digital payment platform Alipay, to
help Chinese users receive global remittances directly
in their bank accounts. Additionally, we teamed up
with NH Investment & Securities, one of the largest
investment and securities companies in South Korea,
to integrate our cross-border capabilities into the
portfolio of financial services offered to NH I&S’s
account holders.

We expanded our retail partnerships with companies

ranging from Walmart U.S., the world’s largest retailer,

to Cebuana Lhuillier, a large microfinancial services

company in the Philippines. In 2020 we added almost

100 new agents, with nearly 20,000 new locations

worldwide.

Western Union Business Solutions also made great

strides: growing our education business in key markets

and enhancing the student experience, enabling

companies to grow their business globally through our

WU EDGE platform, and establishing key partnerships

to diversify our revenue streams. New payments

partners include Belgium’s Isabel Group, providing

worldwide connectivity to its multi-banking platform,

and the London Stock Exchange’s ELITE platform, to

bring business support and capital raising for fast-

growing private companies.

Serving with Purpose for 170 Years

For 170 years we have seen our role not just in terms

of goals expressed on a balance sheet, but in the

context of our larger contributions to society. Against

the backdrop of COVID-19 and worldwide protests

against racial and social injustice, our determination

to be a global force to champion for greater inclusive

economic prosperity felt especially urgent.

This purpose is embedded in our core business, which

helps to build and sustain emerging economies

worldwide. The Oxford Economics report The

Remittance Effect: A Lifeline for Developing Economies

Through the Pandemic and Into Recovery describes

the particularly “crucial” role that remittances have

played in alleviating poverty throughout the pandemic

and recovery period.

We believe we can be more successful when we

embrace high ethical standards, address unmet

social needs in our communities, and promote the

well-being of our customers, employees, partners,

and the environment.

We strongly supported our employees in 2020 by

transitioning to work-from-home to protect their safety

and investing millions of dollars in initiatives to foster

health and well-being. We were recognized with our

inclusion in the Bloomberg Gender-Equality Index and

the Human Rights Campaign’s Corporate Equality

Index (which evaluates LGBTQ-inclusive policies and

practices). We also have strengthened our efforts

Notice of 2021 Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report

A Message from the CEO

We expanded our retail partnerships with companies
ranging from Walmart U.S., the world’s largest retailer,
to Cebuana Lhuillier, a large microfinancial services
company in the Philippines. In 2020 we added almost
100 new agents, with nearly 20,000 new locations
worldwide.

Western Union Business Solutions also made great
strides: growing our education business in key markets
and enhancing the student experience, enabling
companies to grow their business globally through our
WU EDGE platform, and establishing key partnerships
to diversify our revenue streams. New payments
partners include Belgium’s Isabel Group, providing
worldwide connectivity to its multi-banking platform,
and the London Stock Exchange’s ELITE platform, to
bring business support and capital raising for fast-
growing private companies.

Serving with Purpose for 170 Years

For 170 years we have seen our role not just in terms
of goals expressed on a balance sheet, but in the
context of our larger contributions to society. Against
the backdrop of COVID-19 and worldwide protests
against racial and social injustice, our determination
to be a global force to champion for greater inclusive
economic prosperity felt especially urgent.

This purpose is embedded in our core business, which
helps to build and sustain emerging economies
worldwide. The Oxford Economics report The
Remittance Effect: A Lifeline for Developing Economies
Through the Pandemic and Into Recovery describes
the particularly “crucial” role that remittances have
played in alleviating poverty throughout the pandemic
and recovery period.

We believe we can be more successful when we
embrace high ethical standards, address unmet
social needs in our communities, and promote the
well-being of our customers, employees, partners,
and the environment.

We strongly supported our employees in 2020 by
transitioning to work-from-home to protect their safety
and investing millions of dollars in initiatives to foster
health and well-being. We were recognized with our
inclusion in the Bloomberg Gender-Equality Index and
the Human Rights Campaign’s Corporate Equality
Index (which evaluates LGBTQ-inclusive policies and
practices). We also have strengthened our efforts

to ensure that employees of all ethnic backgrounds
enjoy the same hiring, advancement, and leadership
opportunities.

The Western Union Foundation remains another
important forum for giving back. In 2020, the
Foundation supported COVID-19 relief efforts
worldwide and continued its work on Opportunity
Beyond Borders, supporting education and training for
underserved youth.

Finally, we issued our second Environmental, Social
and Governance (ESG) Report, detailing our efforts to
combine strong stockholder value with good corporate
citizenship. I hope you will look for our third annual ESG
Report, which will be issued this summer.

A Reflection and a Look Ahead

One of the key lessons of 2020 is that global problems
require global solutions. As we move toward a post-
COVID future, it bears remembering that the vaccines
we are counting on were developed by scientists from
diverse backgrounds across the globe sharing their
work and their knowledge in pursuit of something none
of them could achieve alone.

As Western Union strives to be the world’s premier
solution for transferring funds and, by extension,
advancing opportunity, we are encouraged by our
Company’s response to 2020’s explosive digital
growth. We are proud of our employees’ fortitude
and resilience. As always, we are inspired by our
customers—many of them frontline essential workers—
who kept loved ones afloat while grappling with
challenges of their own.

As we mark our 170th anniversary, we are hopeful
that 2021 will be a pivotal year of growth and bridge-
building. During this promising year, we will draw on
our most innovative and most foundational strengths
and capabilities to further connect economies,
geographies, and cultures—and to become an even
more vital link in the global economic chain.

Hikmet Ersek
President, Chief Executive Officer,
and Director

Overall, our digital money transfer revenues grew by

38 percent in 2020, surpassing $850 million and, as

of February 10 when we provided our 2021 financial

outlook, was tracking toward becoming a $1 billion

digital business in 2021. We grew our cross-border

principal in our consumer business by 12 percent in

2020, exceeding World Bank forecasts.

Leading Innovation in an Evolving Landscape

Our global financial network currently connects billions

of bank accounts, millions of digital wallets and cards,

and over half a million retail locations. We strive to

continue growing until we become the world’s largest

network of networks.

To this end, we accelerated our digital transformation

by upgrading our platform, moving more applications

to the cloud, and leveraging the power of data

analytics to introduce more tailored offerings to

customers, for example. We continued to evolve

customer-facing applications like WU.com and

extended our account, wallet, and card payout to 120

countries, of which 100 have real-time capabilities.

We also expanded our digital partnership business,

which allows other organizations to use our platform to

serve their customers. This is a key component of our

strategy for becoming a more diversified payments

company. Digital partnerships with existing companies

including Sber, the Russian banking giant, and stc

pay, a leading digital wallet service in Saudi Arabia,

continued to deliver revenue growth. We also entered

into a definitive agreement to acquire a minority

stake in stc pay, which we anticipate will strengthen

our presence in the Gulf region. We recently entered a

new partnership with Ant Group, the parent company

of China’s leading digital payment platform Alipay, to

help Chinese usersreceive global remittances directly

in their bank accounts. Additionally, we teamed up

with NH Investment & Securities, one of the largest

investment and securities companies in South Korea,

to integrate our cross-border capabilities into the

portfolio of financial services offered to NH I&S’s

account holders.

Notice of 2021 Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report

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2020

Notice of 2021 Annual Meeting
of Stockholders, Proxy Statement
and 2020 Annual Report

8419_Western_Union_2021_AR_PRINT_v12.3.indd 4

3/17/21 4:57 PM

THE WESTERN UNION COMPANY
7001 E. Belleview Avenue
Denver, Colorado 80237

April 1, 2021

DEAR STOCKHOLDER:

You are cordially invited to attend the 2021 virtual Annual Meeting of Stockholders (the “Annual Meeting”) of The Western Union
Company (the “Company”), to be held at 8:00 a.m., Mountain Time, on Friday, May 14, 2021. Due to the continued public health
impact of the coronavirus (COVID-19) pandemic and to support the health and well-being of our stockholders, the Annual
Meeting will be a completely virtual meeting of stockholders, which will be conducted online via live webcast. You will be able
to attend the Annual Meeting by pre-registering prior to the meeting at www.proxydocs.com/WU (for Registered Holders) and
www.proxydocs.com/brokers/WU (for Beneficial Owners).

The attached notice and Proxy Statement contain details of the business to be conducted at the Annual Meeting. In addition,
the Company’s 2020 Annual Report, which is being made available to you along with the Proxy Statement, contains information
about the Company and its performance. Directors and certain officers of the Company will attend the Annual Meeting.

Your vote is important! Whether or not you plan to attend the Annual Meeting, please read the Proxy Statement and then vote
at your earliest convenience by telephone, Internet, tablet or smartphone, or request a proxy card to complete, sign, date and
return by mail. Using the telephone, Internet, tablet or smartphone voting systems, or mailing your completed proxy card, will
not prevent you from voting during the Annual Meeting if you are a stockholder of record and wish to do so.

On behalf of the Board of Directors, I would like to express our appreciation for your continued interest in the Company.

Regards,

Hikmet Ersek
President, Chief Executive Officer and Director

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YOUR VOTE IS IMPORTANT!

PLEASE PROMPTLY VOTE BY TELEPHONE, INTERNET, TABLET OR SMARTPHONE, OR REQUEST A PROXY CARD TO
COMPLETE, SIGN, DATE AND RETURN BY MAIL SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH
YOUR WISHES AND SO THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. YOUR PROMPT ACTION WILL AID
THE COMPANY IN REDUCING THE EXPENSE OF PROXY SOLICITATION.

NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

THE WESTERN UNION COMPANY
7001 E. BELLEVIEW AVENUE
DENVER, COLORADO 80237
(866) 405-5012

NOTICE OF 2021 ANNUAL MEETING
OF STOCKHOLDERS

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

When:
May 14, 2021
at 8:00 a.m. Mountain Time

Where:
Via webcast by pre-registering before
the Annual Meeting begins at
www.proxydocs.com/WU (for Registered
Holders) and www.proxydocs.com/brokers/
WU (for Beneficial Owners)

Record Date:
March 24, 2021

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the
information you should consider, and you should read the entire Proxy Statement before voting.

ITEMS OF BUSINESS
1

Election of Directors named in this Proxy Statement to serve as members of
the Company’s Board of Directors until the Company’s 2022 Annual Meeting
of Stockholders
Hold an advisory vote to approve executive compensation
Ratify the selection of Ernst & Young LLP as our independent registered public
accounting firm for 2021
Vote on the stockholder proposal described in the accompanying Proxy
Statement, if properly presented at the Annual Meeting
Transact any other business as may properly come before the Annual Meeting
or any postponement or adjournment of the Annual Meeting

2
3

BOARD’S
RECOMMENDATION
FOR each director
nominee

FURTHER
INFORMATION
Page 15

FOR
FOR

AGAINST

Page 67
Page 69

Page 71

HOW TO ATTEND THE VIRTUAL ANNUAL MEETING

Due to the continued public health impact of the coronavirus (COVID-19) pandemic and to support the health and well-being of
our stockholders, the Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted online via
live webcast. You will not be able to attend the Annual Meeting physically. You are entitled to participate in the Annual Meeting
if you owned shares of our common stock as of the close of business on March 24, 2021.

In order to attend the Annual Meeting, you must pre-register at www.proxydocs.com/WU (for Registered Holders) and
www.proxydocs.com/brokers/WU (for Beneficial Owners) before the meeting begins. Upon completing your pre-registration,
you will receive further instructions via email one hour prior to the start of the Annual Meeting, including your unique link
that will allow you access to the meeting. You will need the control/identification number included on your Notice of Internet
Availability of Proxy Materials or Proxy Card to complete your pre-registration. You will be able to submit questions during the
pre-registration process and fifteen minutes prior to and during the Annual Meeting.

The Annual Meeting webcast will begin promptly at 8:00 a.m. Mountain Time, on May 14, 2021. Online access will begin at
7:45 a.m., Mountain Time, and we encourage you to access the meeting prior to the start time. You will not be able to attend
the Annual Meeting if you don’t have Internet access or if you have not pre-registered in advance of the meeting time at
www.proxydocs.com/WU (for Registered Holders) and www.proxydocs.com/brokers/WU (for Beneficial Owners).

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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

We will also make a replay of the Annual Meeting viewable to anyone interested as soon as practical after the Annual Meeting
on our investor relations website at http://ir.westernunion.com/investor-relations.

Even if you plan to participate in the Annual Meeting online, we recommend that you also vote by proxy as described further in
“The Proxy Process and Stockholder Voting” on pages 2-5 so that your vote will be counted if you later decide not to participate
in the Annual Meeting.

Live questions may be submitted online during the Annual Meeting, at one or more designated times. You may also submit
questions in advance of the Annual meeting during the pre-registration process and fifteen minutes prior to the Annual Meeting.
We reserve the right to edit or reject all questions we deem profane or otherwise inappropriate.

Technical assistance will be available one hour prior to and during the Annual Meeting. If you encounter any difficulties accessing
the webcast or during the Annual Meeting, please call the technical support number that will be included in the Annual Meeting
access email that pre-registered stockholders will receive one hour prior to the meeting.

WHO CAN ATTEND AND VOTE

Our stockholders of record on March 24, 2021 are entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment or postponement that may take place. A list of stockholders entitled to vote at the Annual Meeting will be available
for examination by any stockholder during the Annual Meeting via the link included in the Annual Meeting access email that pre-
registered stockholders will receive one hour prior to the meeting and for ten days prior to the Annual Meeting at our principal
executive offices located at 7001 E. Belleview Avenue, Denver, Colorado 80237.

YOUR VOTE IS EXTREMELY IMPORTANT.

TELEPHONE
Beneficial Owners call toll
free at 1-800-454-8683

INTERNET
Beneficial Owners visit
www.proxyvote.com

Registered Holders call toll
free at 1-866-883-3382

Registered Holders visit
www.proxypush.com/wu

BY MAIL
Request a paper
proxy card to
complete, sign,
date and return

BY TABLET OR
SMARTPHONE
Beneficial Owners vote
your shares online with
your tablet or smartphone
by scanning the QR code
above.

Registered Holders vote
your shares online with
your tablet or smartphone
by scanning the QR code
on your Proxy Card.

LIVE WEBCAST
Attend the Annual Meeting
online by pre-registering
before the meeting begins
at www.proxydocs.com/
WU (for Registered Holders)
and www.proxydocs.com/
brokers/WU (for Beneficial
Owners).

Registered Holders, vote
your shares by submitting
an electronic ballot on the
webcast.

voting

Beneficial Owners, follow
the
instructions
provided by your broker
or agent setting forth how
your shares may be voted.

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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

The Company’s Proxy Statement and Annual Report to Stockholders are available at www.proxyvote.com or www.proxydocs.
com/brokers/wu for Beneficial Owners and www.proxydocs.com/wu for Registered Holders. To access such proxy materials,
you will need the control/identification numbers provided to you in your Notice of Internet Availability of Proxy Materials or your
Proxy Card.

We appreciate your prompt vote. After reading the Proxy Statement, please vote at your earliest convenience, by telephone,
Internet, tablet or smartphone, or request a proxy card to complete, sign, date and return by mail. If you decide to attend the
Annual Meeting and would prefer to vote during the Annual Meeting, your proxy will be revoked automatically and only your vote
during the Annual Meeting will be counted. If you own shares as a Registered Holder, rather than through a broker or agent, you
may cast your vote during the Annual Meeting by submitting an electronic ballot on the webcast during the Annual Meeting. If
you own shares as a Beneficial Owner through a broker or agent, you will need to follow the voting instructions provided by your
broker or agent setting forth how your shares may be voted.

Please note that all votes cast via telephone, Internet, tablet or smartphone must be cast prior to 11:59 p.m., Eastern Time on
Thursday, May 13, 2021. For shares held in The Western Union Company Incentive Savings Plan, direction regarding how to vote
such shares must be received, if by mail, on or before Tuesday, May 11, 2021.

By Order of the Board of Directors

Caroline Tsai
Chief Legal Officer and Corporate Secretary

April 1, 2021

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Table of Contents

Proxy Summary ....................................................................................................................

Proxy Statement ..................................................................................................................

The Proxy Process and Stockholder Voting ..................................................................

Board of Directors Information.........................................................................................

Proposal 1—Election of Directors ....................................................................................

Corporate Governance ........................................................................................................
Summary of Corporate Governance Practices ............................................................................................
Independence of Directors ...............................................................................................................................
Board Leadership Structure and Role in Risk Oversight ............................................................................
Committees of the Board of Directors ...........................................................................................................
Chief Executive Officer Succession Planning ...............................................................................................
Communications with the Board of Directors ..............................................................................................
Board Attendance at Annual Meeting of Stockholders ..............................................................................
Presiding Director of Non-Management Director Meetings ......................................................................
Nomination of Directors ...................................................................................................................................
Submission of Stockholder Proposals...........................................................................................................
Code of Ethics.....................................................................................................................................................

Compensation of Directors ...............................................................................................

Report of the Audit Committee ........................................................................................

Compensation and Benefits Committee Report ..........................................................

Compensation Discussion and Analysis .......................................................................
Executive Summary ..........................................................................................................................................
Establishing and Evaluating Executive Compensation ...............................................................................
The Western Union 2020 Executive Compensation Program ...................................................................

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17
18
19
24
24
24
24
24
25
25

32
32
36
41

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Executive Compensation ...................................................................................................
2020 Summary Compensation Table ............................................................................................................
2020 All Other Compensation Table ..............................................................................................................
2020 Grants of Plan-Based Awards Table ...................................................................................................
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table .......................
2020 Outstanding Equity Awards at Fiscal Year-End Table .......................................................................
2020 Option Exercises and Stock Vested Table ...........................................................................................
2020 Nonqualified Deferred Compensation Table ......................................................................................
Potential Payments upon Termination or Change-In-Control ..................................................................
Payments upon Termination or Change-in-Control Tables .......................................................................
Risk Management and Compensation ..........................................................................................................

CEO Pay Ratio .......................................................................................................................

Proposal 2—Advisory Vote to Approve Executive Compensation ............................

Proposal 3—Ratification of Selection of Auditors ........................................................

Proposal 4—Stockholder Proposal Regarding Stockholder Right to Act by

Written Consent ...............................................................................................................

Equity Compensation Plan Information .........................................................................

Stock Beneficially Owned by Directors, Executive Officers and

Our Largest Stockholders .............................................................................................

Certain Transactions and Other Matters .......................................................................

52
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57
60
60
61
63
65

Annex A ..................................................................................................................................
Reconciliation of Non-GAAP Measures .......................................................................................................

A-1
A-1

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PROXY SUMMARY

2021 ANNUAL MEETING OF STOCKHOLDERS OF THE WESTERN UNION COMPANY (the ”Company,” “Western Union,” “we,”
“our,” or “us”)
When:
May 14, 2021
at 8:00 a.m. Mountain Time

Record Date:
March 24, 2021

Where:
Via webcast by pre-registering before the
Annual Meeting begins at www.proxydocs.
com/WU (for Registered Holders) and
www.proxydocs.com/brokers/WU (for
Beneficial Owners)

MEETING AGENDA AND VOTING MATTERS

ITEM MANAGEMENT PROPOSALS
1

Election of Directors named in this Proxy Statement to serve as members
of the Company’s Board of Directors until the Company’s 2022 Annual
Meeting of Stockholders
Advisory Vote to Approve Executive Compensation
Ratify the Selection of Ernst & Young LLP as our independent registered
public accounting firm for 2021

2
3

BOARD VOTE
RECOMMENDATION
FOR each director
nominee

PAGE REFERENCE
(FOR MORE DETAIL)
15

FOR
FOR

67
69

ITEM STOCKHOLDER PROPOSAL
4

Stockholder proposal regarding stockholder action by written consent

BOARD VOTE
RECOMMENDATION
AGAINST

PAGE REFERENCE
(FOR MORE DETAIL)
71

INFORMATION ABOUT OUR BOARD (PAGE 6)

91%

INDEPENDENT

MEMBERS

64%

CEO EXPERIENCE

73%

REGULATED
INDUSTRY/
GOVERNMENT
EXPERIENCE

82%

GLOBAL
OPERATIONS
EXPERIENCE

3 Female
1 Latinx
1 Asian*
1 LGBTQ+

45%

DIVERSITY

* Asian Female

2021 Proxy Statement | i

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PROXY SUMMARY

MEMBERS OF OUR BOARD OF DIRECTORS

Martin I. Cole
Independent

Hikmet Ersek

Richard A. Goodman
Independent

Age 64

Age 60

Age 72

Director Since 2015

Director Since 2010

Director Since 2012

Committee(s)

• Compensation and Benefits

• None

Committee

• Compliance Committee

Betsy D. Holden
Independent

Age 65

Director Since 2006

• Audit Committee
• Compensation and Benefits

Committee

Jeffrey A. Joerres
Independent

Michael A. Miles, Jr.
Independent

Age 61

Director Since 2015

Chairman of the Board

Age 59

Director Since 2006

Committee(s)

• Compensation and Benefits

Committee

• Audit Committee

• Corporate Governance, ESG, and
Public Policy Committee Chair

• Compensation and Benefits

Committee Chair

• Corporate Governance, ESG, and

Public Policy Committee

Timothy P. Murphy
Independent

Joyce A. Phillips
Independent

Jan Siegmund
Independent

Age 59

Age 58

Age 56

Director Since 2020

Director Since 2019

Committee(s)

• Audit Committee
• Compliance Committee Chair

• Compensation and Benefits

Committee

• Corporate Governance, ESG, and

Public Policy Committee

• Audit Committee Chair
• Compliance Committee

Angela A. Sun
Independent

Solomon D. Trujillo
Independent

Age 46

Age 69

Director Since 2018

Director Since 2012

Committee(s)

• Audit Committee
• Compliance Committee

ii | The Western Union Company

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PROXY SUMMARY

GOVERNANCE HIGHLIGHTS (PAGE 16)

✓ Annual Election of Directors
✓ Proxy Access
✓ Majority Vote Standard in Uncontested Elections
✓ Stockholder Right to Call Special Meetings at 10% Ownership Threshold
✓ No Stockholder Rights Plan (“Poison Pill”)
✓ No Supermajority Voting Provisions in the Company’s Organizational Documents
✓ Independent Board, Except Our Chief Executive Officer (“CEO”)
✓ Independent Non-Executive Chairman
✓ Independent Board Committees
✓ Confidential Stockholder Voting
✓ Board Committee Authority to Retain Independent Advisors
✓ Robust Codes of Conduct
✓ Board Committee Oversight of Environmental, Social, and Governance (“ESG”) Matters
✓ Robust Stock Ownership Guidelines for Senior Executives and Directors
✓ Prohibition Against Pledging and Hedging of Company Stock by Senior Executives and Directors
✓ Regular Stockholder Engagement

CORE COMPONENTS OF 2020 EXECUTIVE COMPENSATION (PAGE 42)

• Base Salary - Fixed compensation component payable in cash
• Annual Incentive Awards - Variable compensation component payable in cash based on performance against annually

established performance objectives

• Performance-Based Restricted Stock Units (“PSUs”) - Restricted stock units vest based on the Company’s achievement
of financial performance objectives and the Company’s relative total stockholder return (“TSR”) versus the Standard & Poor’s
500 Index (“S&P 500 Index”)

• Restricted Stock Units (“RSUs”) - RSUs generally cliff vest on the third anniversary of the date of grant based on continued

service during the vesting period

• Stock Options - For our CEO, non-qualified stock options granted with an exercise price equal to fair market value on the
date of grant that expire ten years after grant and become exercisable in 25% annual increments over a four-year vesting
period

2021 Proxy Statement | iii

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PROXY SUMMARY

KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM (PAGE 32)

WHAT WE DO

% Pay-for-performance and at-risk compensation.

A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”),
with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives
informed by our Company’s strategy. For 2020, performance-based compensation comprised approximately 83% of the
targeted annual compensation for our CEO and, on average, approximately 62% of the targeted annual compensation
for our other named executive officers (“NEOs”). The remaining components of our NEOs’ 2020 targeted annual
compensation consisted of base salary and service-based RSUs, with the Compensation and Benefits Committee (the
“Compensation Committee”) viewing RSUs as at-risk as their value fluctuates based on our stock price performance.

% Align compensation with stockholder interests.

Performance measures for incentive compensation are linked to the overall performance of the Company and are
designed to be aligned with the creation of long-term stockholder value.

% Emphasis on future pay opportunity vs. current pay.

Our long-term incentive awards are equity-based, use multi-year vesting provisions to encourage retention, and are
designed to align our NEOs’ interests with long-term shareholder interests. For 2020, long-term equity compensation
comprised approximately 74% of the targeted annual compensation for our CEO and, on average, approximately 59% of
the targeted annual compensation for our other NEOs.

% Mix of performance metrics.

The Company utilizes a mix of performance metrics that emphasize both absolute performance goals, which provide the
primary links between incentive compensation and the Company’s strategic operating plan and financial results, and a
relative performance goal, which measures Company performance in comparison to the S&P 500 Index.

% Stockholder engagement.

The Compensation Committee chair and members of management engage with stockholders regularly to discuss and
understand their perceptions or concerns regarding our executive compensation program.

% “Clawback” policy.

The Company may recover incentive compensation paid to certain officers in the event of an accounting restatement
or if such officers engaged in detrimental conduct, as defined in the clawback policy. In addition, the Company may
recover incentive compensation paid to certain officers for conduct that is determined to have contributed to material
compliance failures, subject to applicable laws.

% Robust stock ownership guidelines.

We require our executive officers to own a meaningful amount of Company stock to align them with long-term stockholder
interests (6x base salary in the case of our CEO and 3x base salary for our other NEOs).

% Consider ESG metrics in compensation program.

Our annual incentive program incorporates ESG metrics relating to employee engagement and compliance. With respect
to compliance, each NEO is evaluated on what the NEO has done to ensure that the NEO’s business or department is in
compliance with applicable U.S. laws, with a failing score in compliance resulting in bonus ineligibility for the NEO for the
applicable year.

% Three-year performance period for PSUs.
% Outside and independent compensation consultant retained by the Compensation Committee.
% “Double trigger” severance benefits in the event of a change-in-control.
% Maximum payout caps for annual cash incentive compensation and PSUs.

iv | The Western Union Company

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PROXY SUMMARY

WHAT WE DON’T DO

✘ No repricing or buyout of underwater stock options.

None of our equity plans permit the repricing or buyout of underwater stock options or stock appreciation rights without
stockholder approval, except in connection with certain corporate transactions involving the Company.

✘ No change-in-control tax gross ups for individuals promoted or hired after April 2009.

Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments based on Compensation
Committee action in 2009.

✘ Prohibition against pledging and hedging of Company securities by senior executives and directors.

Please see “Summary of Corporate Governance Practices” for additional details.

✘ No dividends or dividend equivalents are paid on unvested or unearned PSUs or RSUs.

✘ No service-based defined benefit pension plan.

CHIEF EXECUTIVE OFFICER COMPENSATION

The following chart illustrates our CEO pay philosophy
of heavily weighting targeted CEO compensation toward
variable, performance-based pay elements.

CEO 2020 TOTAL TARGET DIRECT COMPENSATION

Base Salary
Annual Incentive
TSR PSUs
Financial PSUs
Stock Options
RSUs

10%

15%

16%

15%

37%
ce-Based C o m p
At-Risk Compen s a t i o

%
3

n s ation 8

n 9

Since a significant portion of Mr. Ersek’s compensation is
both performance-based and at-risk, we are providing the
following supplemental graph to compare Mr. Ersek’s total
target direct compensation to the compensation “realizable”
by him for each of 2018, 2019 and 2020. For the cumulative
period of 2018 to 2020, realizable pay was approximately 33%
lower than total target direct compensation for that period
primarily due to lower achievement against pre-established
performance targets, including as a result of the impact of
the COVID-19 pandemic.

We believe the “realizable” compensation and its relationship
to total target direct compensation in each of the years
and over the three-year cumulative period are reflective
of the Compensation Committee’s emphasis on “pay-for-
performance” in that differences between realizable pay and
total target direct compensation, as well as fluctuations year-
over-year are primarily the result of our stock performance
and our varying levels of achievement against pre-established
performance goals under our annual incentive plan for senior
executives (the “Annual Incentive Plan”) and our Long-Term
Incentive Plan.

2021 Proxy Statement | v

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PROXY SUMMARY

s
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$35,000

$28,000

$21,000

$14,000

$7,000

CEO TOTAL TARGET DIRECT COMPENSATION
VERSUS TOTAL REALIZABLE COMPENSATION(1)

$26.78

$21.94

$17.06

$9,700

$7,305

$9,700

$7,833

$11,035

$5,082

Target
Pay(2)

Realizable
Pay(3)

Target
Pay(2)

Realizable
Pay(3)

Target
Pay(2)

Realizable
Pay(3)

2018

2019

2020

Stock Price

$28

$21

$14

Options

RSUs

PSUs

Bonus

Base Salary

Closing stock price on the last trading day of each year

(1)

(2)

(3)

This graph and the total target direct compensation and total realizable compensation reported in this graph provide supplemental information
regarding the compensation paid to Mr. Ersek and should not be viewed as a substitute for the 2020 Summary Compensation Table.

Amounts reported in the calculation of total target direct compensation consist of (a) annualized base salary, (b) target annual incentive
opportunities for Mr. Ersek under the Annual Incentive Plan with respect to each of the years shown and (c) the target grant values of the long-
term incentives granted to Mr. Ersek under the Long-Term Incentive Plan with respect to each of the years shown.

Amounts reported in the calculation of total realizable compensation consist of (a) annualized base salary, (b) actual annual incentive payments
received by Mr. Ersek under the Annual Incentive Plan with respect to each of the years shown, (c) the value realized from the exercise of stock
options and for unexercised stock options, the difference between the exercise price and the closing stock price on the last trading day of 2020,
reported in the year granted, (d) the value realized upon vesting of PSUs on the vesting date and the value of unvested PSUs based on the
closing stock price on the last trading day of 2020 and estimated performance as of December 31, 2020, each reported in the year granted, and
(e) the value of unvested RSUs based on the closing stock price on the last trading day of 2020, each reported in the year granted.

vi | The Western Union Company

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PROXY STATEMENT

The Board of Directors (the “Board of Directors” or the
“Board”) of The Western Union Company (“Western Union” or
the “Company”) is, on the Company’s behalf, soliciting your
proxy to vote at the 2021 Annual Meeting of Stockholders (the
“Annual Meeting”) to be held on May 14, 2021 at 8:00 a.m.,
Mountain Time, and any adjournment or postponement of the
Annual Meeting. Due to the continued public health impact
of the coronavirus (COVID-19) pandemic and to support
the health and well-being of our stockholders, the Annual
Meeting will be a completely virtual meeting of stockholders.
You will be able to attend the Annual Meeting via live webcast
by pre-registering before the Annual Meeting begins at
www.proxydocs.com/WU
(for Registered Holders) and
www.proxydocs.com/brokers/WU (for Beneficial Owners).

In accordance with U.S. Securities and Exchange Commission
(the “SEC”) rules and regulations, instead of mailing a printed
copy of our proxy materials to each stockholder of record or
beneficial owner, we furnish proxy materials, which include
this Proxy Statement and the accompanying Proxy Card,
Notice of Meeting, and Annual Report to Stockholders,
to our stockholders over the Internet unless otherwise
instructed by the stockholder. If you received a Notice of
Internet Availability of Proxy Materials by mail and would like
to receive a printed copy of our proxy materials, you should
follow the instructions for requesting such materials included
in the Notice of Internet Availability of Proxy Materials.

The Notice of Internet Availability of Proxy Materials was first
mailed on April 1, 2021 to all stockholders of record as of
March 24, 2021 (the “Record Date”). The only voting securities

of the Company are shares of the Company’s common stock,
$0.01 par value per share (the “Common Stock”), of which
there were 410,300,765 shares outstanding as of the Record
Date. The closing price of the Company’s Common Stock on
the Record Date was $24.24 per share.

The Company’s Annual Report to Stockholders, which
contains consolidated financial statements for the year
ended December 31, 2020 (the “2020 Annual Report”),
accompanies this Proxy Statement. You also may obtain
a copy of the Company’s Annual Report on Form 10-K for
the year ended December 31, 2020 that was filed with the
SEC, without charge, by writing to Investor Relations, The
Western Union Company, 7001 E. Belleview Avenue, WU-
HQ-14, Denver, Colorado 80237, or by calling (866) 405-
5012. Requests may also be directed to westernunion.
ir@westernunion.com. If you would like to receive a copy
of any exhibits listed in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2020, please
call (866) 405-5012 or submit a request in writing to
Investor Relations at the above address, and the Company
will provide you with the exhibits upon the payment of a
nominal fee (which fee will be limited to the expenses we
incur in providing you with the requested exhibits). The
Company’s Annual Report on Form 10-K for the year ended
December 31, 2020 and these exhibits are also available in
the “Investor Relations” section of www.westernunion.com.
This Proxy Statement and the 2020 Annual Report are also
available on the SEC’s website at sec.gov.

2021 Proxy Statement | 1

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THE PROXY PROCESS AND STOCKHOLDER VOTING

Q WHY DID I RECEIVE THESE MATERIALS?

A Our Board of Directors has made these materials

available to you on the Internet or, upon your request,
has delivered printed versions of these materials to
you by mail, in connection with the Board’s solicitation
of proxies for use at our Annual Meeting, which will
take place on May 14, 2021, or any adjournment or
postponement thereof. Our stockholders are invited
to attend the Annual Meeting and are requested
to vote on the proposals described in this Proxy
Statement.

Q WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE

NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS OR SET OF PROXY MATERIALS?

A This means you hold shares of the Company in more

than one way. For example, you may own some
shares directly as a Registered Holder and other
shares through a broker or you may own shares
through more than one broker. In these situations,
Internet
you may receive multiple Notices of
Availability of Proxy Materials or, if you request proxy
materials to be delivered to you by mail, Proxy Cards.
It is necessary for you to vote, sign, and return all of
the Proxy Cards or follow the instructions for any
alternative voting procedure on each of the Notices
of Internet Availability of Proxy Materials you receive
in order to vote all of the shares you own. If you
request proxy materials to be delivered to you by
mail, each Proxy Card you receive will come with
its own prepaid return envelope; if you vote by mail,
make sure you return each Proxy Card in the return
envelope that accompanied that Proxy Card.

Q WHY DID MY HOUSEHOLD RECEIVE ONLY ONE

COPY OF THE NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIALS OR PROXY MATERIALS?

A In addition to furnishing proxy materials electronically,

we take advantage of the SEC’s “householding” rules
to reduce the delivery cost of materials. Under such
rules, only one Notice of Internet Availability of Proxy
Materials or, if you have requested paper copies, only
one set of proxy materials is delivered to multiple
stockholders sharing an address unless we have
received contrary instructions from one or more of
the stockholders. If you are a stockholder sharing
an address and wish to receive a separate Notice of
Internet Availability of Proxy Materials or copy of the
proxy materials, you may so request by contacting

2 | The Western Union Company

the Broadridge Householding Department by
phone at 1-866-540-7095 or by mail to Broadridge
Householding Department, 51 Mercedes Way,
Edgewood, NY 11717. A separate copy of the proxy
materials will be promptly provided following receipt
of your request, and you will receive separate materials
in the future. If you currently share an address with
another stockholder but are nonetheless receiving
separate copies of the materials, you may request
delivery of a single copy in the future by contacting
the Broadridge Householding Department at the
number or address shown above.

Q DOES MY VOTE MATTER?

A YES! We are required to obtain stockholder approval

for the election of directors and other important
matters. Each share of Common Stock is entitled to
one vote and every share voted has the same weight.
In order for the Company to obtain the necessary
stockholder approval of proposals, a “quorum” of
stockholders (a majority of the issued and outstanding
shares entitled to vote) must be represented at the
Annual Meeting in person or by proxy. Stockholders
attending the Annual Meeting via webcast are
deemed to be present “in person”. If a quorum is not
obtained, the Company must adjourn or postpone
the Annual Meeting and solicit additional proxies;
this is an expensive and time-consuming process
that is not in the best interest of the Company or its
stockholders. Since few stockholders can spend the
time to attend the Annual Meeting, voting by proxy
is important to obtain a quorum and complete the
stockholder vote.

Q HOW DO I VOTE?

@ By Telephone or Internet—You may vote your

shares via telephone as instructed on the Proxy Card,
or the Internet as instructed on the Proxy Card or the
Notice of Internet Availability of Proxy Materials. The
telephone and Internet procedures are designed to
authenticate your identity, to allow you to vote your
shares, and confirm that your instructions have been
properly recorded.

The telephone and Internet voting facilities will close at
11:59 p.m., Eastern Time, on May 13, 2021.

THE PROXY PROCESS AND STOCKHOLDER

VOTING

By Mail—If you request paper Proxy Cards
by telephone or Internet, you may elect to vote by
mail. If you elect to do so, you should complete, sign,
and date each Proxy Card you receive, indicating
your voting preference on each proposal, and
return each Proxy Card in the prepaid envelope
that accompanied each Proxy Card. If you return a
signed and dated Proxy Card but you do not indicate
your voting preferences, your shares will be voted
in accordance with the recommendations of the
Board of Directors. By returning your signed and
dated Proxy Card or providing instructions by the
alternative voting procedure in time to be received for
the Annual Meeting, you authorize Hikmet Ersek and
Caroline Tsai to act as your proxies (the “Proxies”) to
vote your shares of Common Stock as specified.

By Tablet or Smartphone—If you are
a Beneficial Owner, you may vote your shares
online with your tablet or smartphone by scanning
the QR code above. If you are a Registered Holder,
you may vote your shares online with your tablet
or smartphone by scanning the QR code on your
Proxy Card. The ability to vote in this way by tablet or
smartphone will expire at 11:59 p.m., Eastern Time,
on May 13, 2021.

During the Annual Meeting--You may vote

during the Annual Meeting.

Pre-register—In order to attend the Annual Meeting,
you must pre-register to attend the webcast at
www.proxydocs.com/WU (for Registered Holders)
and www.proxydocs.com/brokers/WU (for Beneficial
Owners) prior to the meeting. Upon completing your
pre-registration, you will receive further instructions
via email one hour prior to the start of the Annual
Meeting, including a unique link that will allow you
access to the meeting. You will need the control/
identification number included on your Notice of
Internet Availability of Proxy Materials or Proxy
Card to complete your registration. You will be able
to submit questions during the pre-registration
process and fifteen minutes prior to and during the
Annual Meeting.

Voting—If you are a Registered Holder, you may cast
your vote by submitting an electronic ballot on the
webcast during the Annual Meeting.

If you are a Beneficial Owner, you may cast your vote
during the Annual Meeting by following the voting
instructions provided by your broker or agent setting
forth how your shares may be voted.

THE PROXY PROCESS AND STOCKHOLDER VOTING

For shares held in The Western Union Company
Incentive Savings Plan (the “ISP”), that plan’s trustee
will vote such shares as directed. If no direction is given
on how to vote such shares to the trustee by mail on
or before May 11, 2021 or by Internet, telephone, tablet
or smartphone by 11:59 p.m., Eastern Time, on May 13,
2021, the trustee will vote your shares held in that ISP in
the same proportion as the shares for which it receives
instructions from all other participants in the ISP.

Q HOW MANY VOTES ARE REQUIRED TO APPROVE A

PROPOSAL?

A The Company’s By-Laws (the “By-Laws”) require that

directors be elected by the majority of votes cast with
respect to such director in uncontested elections (the
number of shares voted “for” a director must exceed
the number of votes cast “against” that director with
abstentions and broker non-votes not counted as
votes “for” or “against”). In a contested election (a
situation in which the number of nominees exceeds
the number of directors to be elected), the standard
for election of directors will be a plurality of the shares
represented in person or by proxy at any such meeting
and entitled to vote on the election of directors.
Stockholders attending the virtual Annual Meeting via
webcast are deemed to be present “in person”.

The advisory vote to approve executive compensation
(Proposal 2), the ratification of Ernst & Young LLP’s
selection as independent registered public accounting
firm for 2021 (Proposal 3), and the stockholder
proposal regarding stockholder right to act by written
consent (Proposal 4) each require the affirmative vote
of a majority of the shares of Common Stock present
in person or represented by proxy at the Annual
Meeting and entitled to vote thereon. Stockholders
attending the virtual Annual Meeting via webcast are
deemed to be present “in person”.

Q WHAT IS THE EFFECT OF NOT VOTING?

A It depends on how ownership of your shares is

registered and the proposal to be voted upon. If
you own shares as a Registered Holder, rather than
through a broker, your unvoted shares will not be
represented at the Annual Meeting and will not
count toward the quorum requirement. Except as
described below regarding your broker’s ability to
vote your shares on certain matters, and assuming
a quorum is obtained, your unvoted shares will not
affect whether a proposal is approved or rejected.

If you own shares as a Beneficial Holder through a broker
and do not vote, your broker may represent your shares
at the meeting for purposes of obtaining a quorum. As
described in the answer to the following question, in the
absence of your voting instruction, your broker may or
may not be authorized to vote your shares.

2021 Proxy Statement | 3

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THE PROXY PROCESS AND STOCKHOLDER VOTING

Q IF I DON’T VOTE, WILL MY BROKER VOTE FOR ME?

A If you own your shares as a Beneficial Holder through

a broker and you don’t vote, your broker may vote your
shares in its discretion on some “routine matters.” With
respect to other proposals, however, your broker may
not be able to vote your shares for you. With respect
to these proposals, the aggregate number of unvoted
shares is reported as the “broker non-vote.” A “broker
non-vote” share will not affect the determination of
whether the matter is approved. The Company believes
that the proposal to ratify Ernst & Young LLP’s selection
as independent registered public accounting firm for
2021 (Proposal 3) set forth in this Proxy Statement is a
routine matter on which brokers will be permitted to vote
shares on your behalf, even without voting instructions.
If your broker votes these shares on your behalf, your
shares will be counted as present for purposes of
establishing a quorum at the Annual Meeting.

Other than Proposal 3, the Company believes that all
proposals set forth in this Proxy Statement are not
considered routine matters and brokers will not be able
to vote on behalf of their clients if no voting instructions
have been furnished. Please vote your shares on all
proposals.

Q HOW ARE ABSTENTIONS TREATED?

A Whether you own your shares as a Registered Holder

or as a Beneficial Holder, abstentions are counted
toward the quorum requirement and have the same
effect as votes “against” a proposal, other than the
proposal to elect directors (Proposal 1), on which
they have no effect.

Q IF I OWN MY SHARES THROUGH A BROKER, HOW

IS MY VOTE RECORDED?

A Brokers typically own shares of Common Stock for

many stockholders. In this situation, the Registered
Holder on the Company’s stock register is the broker
or its nominee. This often is referred to as holding
shares in “Street Name.” The Beneficial Holders
of such shares do not appear in the Company’s
stockholder register. If you hold your shares in Street
Name, and elect to vote via telephone, Internet, tablet
or smartphone, your vote will be submitted to your
broker. If you request paper Proxy Cards and elect
to vote by mail, the accompanying return envelope
is addressed to return your executed Proxy Card to
your broker. Shortly before the Annual Meeting, each
broker will total the votes submitted by telephone,
Internet, tablet or smartphone or mail by the
Beneficial Holders for whom it holds shares and

4 | The Western Union Company

submit a Proxy Card reflecting the aggregate votes
of such Beneficial Holders. If you would like to vote at
the Annual Meeting see “How Do I Vote? – During the
Annual Meeting” above.

Q IS MY VOTE CONFIDENTIAL?

A In accordance with

the Company’s Corporate
Governance Guidelines, the vote of any stockholder will
not be revealed to anyone other than a non-employee
tabulator of votes or an independent election inspector
(the “Inspector of Election”), except (i) as necessary
to meet applicable legal and stock exchange listing
requirements, (ii) to assert claims for or defend claims
against the Company, (iii) to allow the Inspector of
Election to certify the results of the stockholder vote,
(iv) in the event a proxy, consent, or other solicitation
in opposition to the voting recommendation of the
Board of Directors takes place, (v) if a stockholder has
requested that his or her vote be disclosed, or (vi) to
respond to stockholders who have written comments
on Proxy Cards.

Q CAN I REVOKE MY PROXY AND CHANGE MY VOTE?

A Yes. You have the right to revoke your proxy at

any time prior to the time your shares are voted.
If you are a Registered Holder, your proxy can be
revoked in several ways: (i) by delivery of a written
revocation to the Corporate Secretary, The Western
Union Company, 7001 E. Belleview Avenue, Denver,
Colorado 80237, by 11:59 p.m., Eastern Time, on May
13, 2021, (ii) by timely submission of another valid
proxy bearing a later date (including through any
alternative voting procedure described on the Notice
of Internet Availability of Proxy Materials or Proxy
Card), or (iii) by voting during the Annual Meeting. If
your shares are held by a broker, you must contact
your broker in order to revoke your proxy. See “How
do I Vote?” above for additional information about
how to timely submit another proxy.

Q WILL ANY OTHER BUSINESS BE TRANSACTED AT

THE MEETING? IF SO, HOW WILL MY PROXY BE
VOTED?

A Management does not know of any business to be

transacted at the Annual Meeting other than those
matters described in this Proxy Statement. The
period specified in the Company’s By-Laws for

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submitting additional proposals to be considered
at the Annual Meeting has passed and there are no
such proposals to be considered. However, should
any other matters properly come before the Annual
Meeting, and any adjournments and postponements
thereof, shares with respect to which voting authority
has been granted to the Proxies will be voted by the
Proxies in accordance with their judgment.

Q WHO COUNTS THE VOTES?

A Votes will be counted and certified by the Inspector

of Election, who is an employee of Equiniti Trust
Company, the Company’s Transfer Agent and
Registrar (“Equiniti”). If you are a Registered Holder,
your telephone, Internet, tablet, or smartphone
vote is submitted, or your executed Proxy Card is
returned, directly to Equiniti for tabulation. As noted
above, if you hold your shares as a Beneficial Holder,
your broker returns a single Proxy Card to Equiniti on
behalf of its clients.

THE PROXY PROCESS AND STOCKHOLDER VOTING

Q HOW MUCH DOES THE PROXY SOLICITATION

COST?

A The Company has engaged the firm of MacKenzie

Partners, Inc., 1407 Broadway, New York, NY 10018,
to assist in distributing and soliciting proxies for
a fee of approximately $20,000, plus expenses.
However, the proxy solicitor fee is only a small
fraction of the total cost of the proxy process. A
significant expense in the proxy process is printing
and mailing the proxy materials. The Company will
also reimburse brokers, fiduciaries, and custodians
for their costs in forwarding proxy materials to
Beneficial Holders of our Common Stock. Proxies
also may be solicited on behalf of the Company by
directors, officers, or employees of the Company
in person or by mail, telephone, email, or facsimile
transmission. No additional compensation will
be paid to such directors, officers, or employees
for soliciting proxies. The Company will bear the
entire cost of solicitation of proxies, including the
preparation, assembly, printing, and mailing of the
Notice of Internet Availability of Proxy Materials, and
this Proxy Statement and the accompanying Proxy
Card, Notice of Meeting, and 2020 Annual Report.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

The Company’s Proxy Statement and 2020 Annual Report are available at www.proxyvote.com or www.proxydocs.com/brokers/
WU for Beneficial Holders and www.proxydocs.com/wu for Registered Holders. To access such materials, you will need the
control/identification numbers provided to you in your Notice of Internet Availability of Proxy Materials or your Proxy Card.

IMPORTANT INFORMATION CONCERNING THE WESTERN UNION COMPANY
ANNUAL MEETING ON MAY 14, 2021

• Due to the continued public health concerns regarding the
coronavirus (COVID-19) pandemic, the Annual Meeting
will be a completely virtual meeting of stockholders,
which will be conducted online via live webcast.

• Online access begins: 7:45 a.m., Mountain Time.

• Meeting begins: 8:00 a.m., Mountain Time.

• Stockholders as of the close of business on the Record
Date are entitled to participate in the Annual Meeting.

• You will be able to participate in the Annual Meeting online
by pre-registering before the Annual Meeting begins at
www.proxydocs.com/WU (for Registered Holders) and
www.proxydocs.com/brokers/WU (for Beneficial Owners).
You will need the control/identification number included
on your Notice of Internet Availability of Proxy Materials
or Proxy Card to register for the Annual Meeting. Upon
completing your pre-registration, you will receive further
instructions via email one hour prior to the start of the
Annual Meeting, including your unique link that will allow
you access to the meeting.

• You will be able to vote your shares during the Annual
Meeting by submitting an electronic ballot on the
webcast if you are a Registered Holder, or by following
the voting instructions provided by your broker or agent
setting forth how your shares may be voted if you are a
Beneficial Owner.

• You will be able to submit questions during the registration
process and fifteen minutes prior to and during the Annual
Meeting.

• We encourage you to access the Annual Meeting prior
to the start time. Please allow ample time to log in and
establish your connectivity.

• Visit www.proxyvote.com or www.proxydocs.com/
brokers/WU (for Beneficial Owners) or www.proxydocs.
com/wu (for Registered Holders) in advance of the
Annual Meeting where you can access copies of our
proxy statement and 2020 Annual Report.

2021 Proxy Statement | 5

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BOARD OF DIRECTORS INFORMATION

In accordance with applicable Delaware law, the business
of the Company is managed under the direction of its Board
of Directors. Pursuant to the Company’s Certificate of
Incorporation, the Board of Directors is to consist of not less
than one nor more than 15 directors. All directors’ terms will
expire at the Annual Meeting. At the Annual Meeting, director
nominees will stand for election for one-year terms, expiring
at the 2022 Annual Meeting of Stockholders.

During 2020, the Board of Directors met nine times (not
including committee meetings). Each of the directors
attended at least 75 % of the aggregate number of meetings
of the Board and Board committees on which they served
during 2020.

CEO Experience

Regulated Industry/

Government

Financial Literacy

Emerging Markets

Global Operational

Experience

MARTIN I. COLE
Chairman of the Board of Magnitude Software Inc.

Age 64

Committee(s) Compensation and Benefits Committee,
Compliance Committee

Director Since 2015

Term Expires 2021

Other Public Directorship Western Digital Corporation

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Cole has served as Chairman of the Board of Magnitude Software Inc., a provider of enterprise
application data integration and analytics solutions to businesses, since August 2020 and served
as its Interim Chief Executive Officer from July 2020 to August 2020. Previously, Mr. Cole served
as the Chairman of the Board of Directors and Interim Chief Executive Officer of Cloudera, Inc.,
an enterprise data cloud company from August 2019 to January 2020, and served as a director
of Cloudera, Inc. from 2014 to 2020. Prior to Mr. Cole’s appointment as Chairman of the Board of
Directors and Interim Chief Executive Officer of Cloudera, Inc., Mr. Cole served as Chief Executive of
the Technology Group at Accenture plc (“Accenture”), a professional services company, from 2012
until his retirement from Accenture in 2014. During his career at Accenture, Mr. Cole also served as
the Chief Executive of the Communications, Media & Technology Operating Group from 2006 to
2012, Chief Executive of the Government Operating Group from 2004 to 2006, Managing Partner of
the Outsourcing and Infrastructure Delivery Group from 2002 to 2004 and Partner in the Outsourcing
and Government Practices Group from 1989 to 2002. Mr. Cole joined Accenture in 1980. In addition
to serving as a director of Magnitude Software Inc., Mr. Cole has been a director of Western Digital
Corporation since 2014 and had been a director (from 2014 to 2020), lead independent director (from
2016 to 2020), and chairman (from 2019 to 2020) of Cloudera Inc.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Cole brings to the Board experience as a former chief executive and chairman of the board
of directors of an enterprise data cloud company and a provider of enterprise application data
integration and analytics solutions, and as a former executive officer of a multinational management
consulting, technology services, and outsourcing company, serving in various practice groups,
including outsourcing and infrastructure, government services and technology. Mr. Cole also
brings to the Board his experience as a member of the board of directors of a large multinational
manufacturer of computer storage products and solutions and a software company.

6 | The Western Union Company

BOARD OF DIRECTORS INFORMATION

HIKMET ERSEK
President and Chief Executive Officer

Age 60

Director Since 2010
Other Public Directorships None

Committee(s) None
Term Expires 2021

CEO Experience

Regulated Industry/

Government

Financial Literacy

Emerging Markets

Global Operational

Experience

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Ersek has served as the Company’s President and CEO since 2010. Also during 2010 and
prior to his current role, Mr. Ersek served as the Company’s Chief Operating Officer. From 2008 to
2010, Mr. Ersek served as the Company’s Executive Vice President and Managing Director, Europe,
Middle East, Africa and Asia Pacific Region. From 2006 to 2008, Mr. Ersek served as the Company’s
Executive Vice President and Managing Director, Europe/Middle East/Africa/South Asia. Prior to
2006, Mr. Ersek held various positions of increasing responsibility with the Company. Prior to joining
Western Union in 1999, Mr. Ersek was with GE Capital and Europay/MasterCard specializing in
European payment systems and consumer finance.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Ersek is the only Director who is also an executive of the Company. Mr. Ersek provides insight
as the Company’s leader, and from his prior roles as the Company’s Chief Operating Officer and
leader in the Company’s Europe, Middle East, Africa and Asia Pacific region, a significant area for
the Company. Mr. Ersek provides many years of international consumer payment sales, marketing,
distribution, and operations insight from his experience with the Company, GE Capital, and Europay/
MasterCard.

RICHARD A. GOODMAN
Former Chief Financial Officer and Executive Vice President, Global Operations, PepsiCo Inc.

Age 72

Committee(s) Audit Committee, Compensation and
Benefits Committee

Director Since 2012

Term Expires 2021

Other Public Directorship Adient plc

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
From 2010 to 2011, Mr. Goodman served as Executive Vice President, Global Operations of PepsiCo
Inc. (“PepsiCo”), a global food and beverage company. Prior to that, Mr. Goodman was PepsiCo’s
Chief Financial Officer from 2006 to 2010. From 2003 until 2006, Mr. Goodman was Senior Vice
President and Chief Financial Officer of PepsiCo International. Mr. Goodman served as Senior Vice
President and Chief Financial Officer of PepsiCo Beverages International from 2001 to 2003, and as
Vice President and General Auditor of PepsiCo from 2000 to 2001. Before joining PepsiCo in 1992,
Mr. Goodman was with W.R. Grace & Co. in a variety of senior financial positions. Mr. Goodman
served as a director of Johnson Controls, Inc. from 2008 to 2016, Kindred Healthcare Inc. from 2014
until 2018, privately-held Toys “R” Us from 2011 until 2019, and Pattern Energy Group, Inc. from 2018
until 2020. He currently serves as a director of Adient plc.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Goodman brings to the Board experience as the chief financial officer and executive of a large,
U.S.-based global company that manufactures, markets, and distributes a broad range of consumer
goods. Mr. Goodman has experience with complex capital structures and brings to the Board a
management perspective with regard to consumer products, global operations and mergers and
acquisitions. Mr. Goodman also brings to the Board his experience as a board member of both a
global diversified industrial company and a global retailer.

CFO Experience

Financial Literacy

Eligible for Audit

Committee Financial
Expert

Emerging Markets

Global Operational

Experience

2021 Proxy Statement | 7

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BOARD OF DIRECTORS INFORMATION

BETSY D. HOLDEN
Former Senior Advisor to McKinsey & Company and Former Co-CEO of Kraft Foods Inc.

Age 65

Committee(s) Compensation and Benefits Committee, Audit

Committee

Director Since 2006

Term Expires 2021

Other Public Directorships Dentsply Sirona Inc. and National Retail Properties, Inc.

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Ms. Holden served as Senior Advisor to McKinsey & Company, a global management consulting
company, from 2007 to 2020 leading strategy, marketing and board effectiveness initiatives for
consumer goods, healthcare, and financial services clients. Prior to that, Ms. Holden spent 25
years in marketing and line positions in consumer goods. Ms. Holden served as President, Global
Marketing and Category Development of Kraft Foods Inc. from 2004 to 2005, Co-Chief Executive
Officer of Kraft Foods Inc. from 2001 to 2003, and President and Chief Executive Officer of Kraft
Foods North America from 2000 to 2003. Ms. Holden began her career at General Foods in 1982.
Ms. Holden currently serves as a Director of Dentsply Sirona and National Retail Properties, Inc. She
has served on nine public boards over the last 20 years, including Diageo Plc (from 2009 to 2018),
Time, Inc. (from 2014 to 2018), and Catamaran Corporation (from 2012 to 2015).

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Ms. Holden brings to the Board experience as a Chief Executive Officer of a large global public
company and as a board member and former consultant to multiple, large international companies.
She is familiar with the challenges of operating in a highly regulated industry. She brings extensive
corporate governance experience across multiple industries. Ms. Holden has held numerous
leadership roles in marketing and product management both as an executive and as a consultant,
successfully implementing growth strategies and innovative marketing plans to win in competitive
industries.

JEFFREY A. JOERRES
Non-Executive Chairman of the Board of Directors

Age 61

Committee(s) Corporate Governance, ESG, and Public
Policy Committee Chair

Director Since 2015

Term Expires 2021

Other Public Directorships Artisan Partners Asset Management Inc. and ConocoPhillips

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Joerres served as the Executive Chairman of ManpowerGroup Inc. (“ManpowerGroup”), a
provider of workforce solutions, from 2014 to 2015. From 1999 to 2014, Mr. Joerres served as Chief
Executive Officer of ManpowerGroup and from 2001 to 2014, he served as its Chairman of the
Board. Mr. Joerres joined ManpowerGroup in 1993, and also served as Vice President of Marketing
and Senior Vice President of European Operations and Marketing and Major Account Development.
Mr. Joerres served as a director of Artisan Funds, Inc. from 2001 to 2011 and of Johnson Controls
International plc from 2016 to 2017. Mr. Joerres currently serves as a director of Artisan Partners
Asset Management Inc. and ConocoPhillips.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Joerres brings to the Board experience as the former chief executive officer and executive
chairman of a large, U.S.-based global company that delivers workforce solutions around the
world. Mr. Joerres also brings to the Board his prior experience as a board member of both a global
diversified industrial company and the Federal Reserve Bank of Chicago.

CEO Experience

Regulated Industry/

Government

Financial Literacy

Emerging Markets

Global Operational
Experience

CEO Experience

Financial Literacy

Global Operational

Experience

Regulated Industry/

Government

Emerging Markets

8 | The Western Union Company

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BOARD OF DIRECTORS INFORMATION

MICHAEL A. MILES, JR.
Advisory Director, Berkshire Partners and Former President and Chief Operating Officer, Staples, Inc.

Age 59

Committee(s) Compensation and Benefits Committee

Chair, Corporate Governance, ESG, and Public
Policy Committee

Director Since 2006
Other Public Directorships None

Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Since 2013, Mr. Miles has served as an Advisory Director for Berkshire Partners, a private equity firm.
Previously, he was President and Chief Operating Officer of Staples, Inc., an office products provider,
from 2006 until 2013, and Chief Operating Officer from 2003 to 2006. Prior to that, Mr. Miles was Chief
Operating Officer, Pizza Hut for Yum! Brands, Inc. from 2000 to 2003. From 1996 to 1999, he served
Pizza Hut as Senior Vice President of Concept Development & Franchise. Mr. Miles also serves on
the boards of Portillo’s, a Chicago-based restaurant chain, and Access Information Management, a
Boston-based records management company.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Miles has experience as an executive of an international consumer goods retailer with large
acquisitions outside of the United States and franchise distribution networks, which are similar to
the Company’s agent network. Mr. Miles also brings U.S. and global operational expertise to the
Board discussions.

TIMOTHY P. MURPHY
President and Chief Executive Officer of Consortium Networks
Age 59

Committee(s) Compliance Committee Chair, Audit

Director Since 2020
Other Public Directorships None

Committee

Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Murphy has served as President and Chief Executive Officer of Consortium Networks, a
cybersecurity and networking company since 2019. Previously, he served as President of Thomson
Reuters Special Services, a wholly-owned subsidiary of Thomson Reuters (“TRSS”), from 2015 to
2019. TRSS provides management consulting services to help customers with intelligence collection
and analysis, network analysis, insider threat, and global risk management solutions. Mr. Murphy
currently serves as Chairman of the Board of Directors for TRSS from 2019. From 1988 to 2011, Mr.
Murphy served in the United States Federal Bureau of Investigation (the “FBI”), where he held various
positions of increasing responsibility until retiring from the FBI in 2011 as Deputy Director.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Murphy has substantial global law enforcement, cybersecurity, intelligence, counterterrorism,
and business and operational experience gained through his time at the FBI and as president
and chief executive officer of a cybersecurity and networking company. Mr. Murphy also brings
experience in intelligence collection and analysis, network analysis, and insider threat and global risk
management gained during his tenure with TRSS.

Financial Literacy

Global Operational

Experience

CEO Experience

CFO Experience

Financial Literacy

Regulated Industry/

Government

2021 Proxy Statement | 9

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BOARD OF DIRECTORS INFORMATION

JOYCE A. PHILLIPS
Founder and Chief Executive Officer of EqualFuture Corp.

Age 58

Director Since 2020
Other Public Directorships None

Committee(s) Compensation and Benefits Committee,
Corporate Governance, ESG, and Public
Policy Committee

Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Ms. Phillips is Founder and Chief Executive Officer of EqualFuture Corp., a fintech startup based
in San Francisco that delivers affordable personal financial wellness platforms via a SaaS model
to individuals and businesses, since 2017. Previously, Ms. Phillips was CEO of Australia and New
Zealand Banking Group Limited’s Global Wealth Division from 2012 to 2016 and Group Managing
Director of Innovation and Marketing from 2009 to 2016. Ms. Phillips also served as President and
Chief Operating Officer of American Life Insurance Co., a subsidiary of American International
Group, and Global Head of International Retail Banking at Citigroup. Earlier in her career she also held
management roles at GE Capital and Western Union. Ms. Phillips served on the Board of Directors of
Reinsurance Group of America from 2014 to 2017.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Ms. Phillips brings substantial global experience in banking, financial services, insurance, innovation
and marketing in her 30+ year career. Ms. Phillips has held senior executive roles with global and
regional responsibilities with Citigroup, American International Group and Australia and New Zealand
Banking Group Limited, and as Founder and Chief Executive Officer of a fintech start up that delivers
affordable personal financial wellness platforms to individuals and businesses. Ms. Phillips also
brings experience in serving a wide range of consumer financial needs through innovation and new
technologies.

JAN SIEGMUND
Chief Financial Officer of Cognizant Technology Solutions Corporation

Age 56

Committee(s) Audit Committee Chair, Compliance

Director Since 2019
Other Public Directorships None

Committee

Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Siegmund has served as Chief Financial Officer of Cognizant Technology Solutions Corporation,
a professional services company, since September 2020. Prior to that, Mr. Siegmund served as
Corporate Vice President and Chief Financial Officer of Automatic Data Processing, Inc. (“ADP”), a
global provider of cloud-based human capital management solutions, from 2012 to 2019. Prior to
his appointment as Chief Financial Officer in 2012, he served as President, Added Value Services
and Chief Strategy Officer of ADP from 2009 to 2012. Prior to that time, Mr. Siegmund held various
positions of increasing responsibility with ADP. Mr. Siegmund joined ADP in 1999.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Siegmund brings to the Board experience as Chief Financial Officer of a professional services
provider and former Chief Financial Officer and Chief Strategy Officer of a global provider of cloud-
based human capital management solutions. Mr. Siegmund also gained experience across a variety
of industries at McKinsey & Company.

CEO Experience

Financial Literacy

Regulated Industry/

Government

Emerging Markets

Global Operational
Experience

CFO Experience

Financial Literacy

Eligible for Audit

Committee Financial
Expert

Global Operational
Experience

10 | The Western Union Company

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BOARD OF DIRECTORS INFORMATION

ANGELA A. SUN
Chief Operations Officer & Partner, Alpha Edison

Age 46

Director Since 2018
Other Public Directorships None

Committee(s) Audit Committee, Compliance Committee
Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Ms. Sun has served as Chief Operations Officer and Partner of Alpha Edison, a venture capital firm,
since 2019. Previously, Ms. Sun served as Global Head of Strategy and Corporate Development
for Bloomberg L.P. from 2014 to 2017, where she led new business development, and acquisitions
and commercial partnerships across the company’s media, financial products, enterprise and
data businesses. From 2008 to 2014, Ms. Sun served as Chief-of-Staff to the former Bloomberg
CEO. Prior to joining Bloomberg, L.P., Ms. Sun served as a Senior Policy Advisor in the Bloomberg
Administration where she oversaw a citywide portfolio of economic development agencies and led
urban planning and real estate development projects. From 2001 to 2005, Ms. Sun served as a
management consultant at McKinsey & Company, where she focused on the Financial Services
and Healthcare sectors. Prior to McKinsey, from 1996 to 1998, Ms. Sun was an investment banker
at J.P. Morgan and in 2001 was a Visiting Associate at the Henry L. Stimson Center, a non-partisan
international security and defense analysis think tank in Washington, D.C.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Ms. Sun brings to the board substantial operations management experience and valuable insight
into the technology industry. Ms. Sun also has extensive strategic, operational, and government
experience from her time in the Bloomberg Administration and at Bloomberg L.P. Ms. Sun also
gained financial services experience at McKinsey & Company and J.P. Morgan.

SOLOMON D. TRUJILLO
Founder and Chairman, Trujillo Group, LLC

Age 69

Director Since 2012
Other Public Directorship None

Committee(s) Audit Committee, Compliance Committee
Term Expires 2021

PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS
Mr. Trujillo founded Trujillo Group, LLC, a business that provides consulting and venture capital
services, and has served as its chairman since 2003. Mr. Trujillo also served as the Chief Executive
Officer and as director of Telstra Corporation Limited, Australia’s largest media-communications
enterprise, from 2005 to 2009. From 2003 to 2004, Mr. Trujillo was Orange SA’s Chief Executive
Officer. Earlier in his career, Mr. Trujillo was President and Chief Executive Officer of US West
Communications and President, Chief Executive Officer and Chairman of the Board of US West Inc.
Mr. Trujillo previously served as a director of WPP plc from 2010 to 2020, Target Corporation from
1994 to 2014, ProAmerica Bank from 2009 until 2016, and Fang Holdings Ltd. (formerly SouFun
Holdings Limited) from 2014 until 2017.

EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP
POSITION ON THE COMPANY’S BOARD*
Mr. Trujillo is an international business executive with experience as a chief executive officer of global
companies in the telecommunications, media, and cable industries headquartered in the United
States, the European Union, and the Asia-Pacific region. He has global operations experience and
provides the Board with substantial international experience and expertise in the retail, technology,
media, and communications industries.

Financial Literacy

Regulated Industry/

Government

CEO Experience

Regulated Industry/

Government

Financial Literacy

Emerging Markets

Global Operational
Experience

The Board selects director nominees on the basis of experience, integrity, skills, diversity, ability to make independent
analytical inquiries, understanding of the Company’s business environment, and willingness to devote adequate time to
Board duties, all in the context of an assessment of the perceived needs of the Board at a given point in time. In addition
to the individual attributes of each of the directors described above, the Company highly values the collective business
experience and qualifications of the directors. We believe that the diversity of experiences, viewpoints, and perspectives
of our directors result in a Board with the commitment and energy to advance the interests of our stockholders.

2021 Proxy Statement | 11

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BOARD OF DIRECTORS INFORMATION

DIRECTOR SKILLS, QUALIFICATIONS, AND CHARACTERISTICS

The following matrix is provided to illustrate the skills, qualifications, and characteristics of our Board of Directors.

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Skills and Qualifications

CEO Experience

CFO Experience

Financial Literacy

Audit Committee Financial Expert

Regulated Industry/Government Experience

Emerging Markets Experience

Global Operational Experience

Gender

Female

Male

Race and Ethnicity

Caucasian

Latinx

Asian

Other

LGBTQ+

Age

Tenure

KEY EXPERIENCE

64% CEO and Emerging Markets Experience

73% Regulatory Industry/Government Experience

82% Global Operational Experience

100% Financially Literate

12 | The Western Union Company

91%

INDEPENDENT

MEMBERS

BOARD OF DIRECTORS INFORMATION

DIVERSITY BALANCE

GENDER BALANCE

3 Female
1 Latinx
1 Asian*
1 LGBTQ+

45%

DIVERSITY

27%

FEMALE

AGE BALANCE

70+

40-50

Male

TENURE BALANCE

10+ Years

Female

1-5 Years

61 years

AVERAGE AGE

7 years

AVERAGE TENURE

50-60

6-10 Years

60-70

* Asian Female

DIVERSITY, EQUITY, AND INCLUSION

We believe diversity is a core strength at Western Union
and consider it an asset in fostering the Company’s core
values to be globally minded, purpose driven, trustworthy
and respectful. We envision a culture of global unity and
connection, contributing to a world where our diversity is
celebrated.

It starts with our leadership and manifests throughout our
global workforce and our Board.

The diversity of the people who work at Western Union
represents our commitment to creating and maintaining a
versatile and global workforce where everyone is treated fairly,
with trust and respect, while also rewarding and recognizing
individuals based on high-quality results and effectiveness.

The Board is actively engaged in the review of women in
leadership practices. Specifically, the Compensation and
Benefits Committee reviews the results of Western Union’s
organizational health, talent reviews and engagement
surveys.

A Few Selected Key Facts

- The Board includes three women, and three directors who

identify as Latinx, Asian, or LGBTQ+.

- One third of our executive officers are women.

- Over 35% of our senior-management level and above

positions are held by women.

- Western Union’s approximately 11,000 employees reside

in more than 50 countries and over 50% are women.

- The Company consistently reviews and updates salary
ranges and performs internal pay equity reviews as to
some of our populations, and, in 2020, we conducted
a global gender pay review covering all employees. We
use this data to support our commitment to equal pay
for equal work by making appropriate adjustments in the
compensation cycle.

2021 Proxy Statement | 13

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BOARD OF DIRECTORS INFORMATION

- Western Union is intentional about designing programs
that support diversity and cultivating talent. For example,
Western Union ensures program participation is gender
balanced to optimize learning and accelerate development
of women.

We strive for diverse slates and interview panels both
internally and externally in our recruitment practices for
employees.

For more information on our diversity efforts and practices,
please see our latest ESG report (the “ESG Report”), which
can be found on the Company’s investor relations website:
http://ir.westernunion.com/investor-relations/ESG/default.
aspx, and the Human Capital Management section of our
Annual Report on Form 10-K for the year ended December
31, 2020. The information in the Company’s ESG Reports is
not incorporated by reference into, and does not form part of,
this Proxy Statement.

14 | The Western Union Company

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PROPOSAL 1
ELECTION OF DIRECTORS

At the 2021 Annual Meeting, all director nominees will be
elected for one-year terms.

The terms of each director if elected or re-elected, as the
case may be, will expire at the 2022 Annual Meeting of
Stockholders. Each director will hold office until his or
her successor has been elected and qualified or until the
director’s earlier resignation or removal. (See the “Board of
Directors Information” section of this Proxy Statement for
information concerning all nominees.)

The Company’s By-Laws require that directors be elected
by the majority of votes cast with respect to such director
in uncontested elections (the number of shares voted “for” a
director must exceed the number of votes cast “against” that
director, with abstentions and broker non-votes not counted
as cast either “for” or “against”). In a contested election (a
situation in which the number of nominees exceeds the
number of directors to be elected), the standard for election
of directors will be a plurality of the shares represented in
person or by proxy at any such meeting and entitled to vote on
the election of directors. Stockholders attending the Annual
Meeting via webcast are deemed to be present “in person”.

Under the Company’s By-Laws, if an incumbent director is not
elected, the director will promptly tender his or her resignation
to the Board of Directors. The Corporate Governance, ESG,
and Public Policy Committee, or such other committee as
may be designated by the Board of Directors, will make a
recommendation to the Board of Directors as to whether to
accept or reject the resignation of such incumbent director,
or whether other action should be taken. The Board of
Directors will act on the resignation, taking into account the
Corporate Governance, ESG, and Public Policy Committee’s

recommendation, and publicly disclose (by a press release,
a filing with the SEC or other broadly disseminated means
of communication) its decision regarding the tendered
resignation and the rationale behind the decision within 90
days following certification of the election results. If such
incumbent director’s resignation is not accepted by the
Board of Directors, such director will continue to serve until
the next annual meeting and until his or her successor is
duly elected or his or her earlier resignation or removal. In the
case of a vacancy, the Board of Directors may appoint a new
director as a replacement, may leave the vacancy unfilled or
may reduce the number of directors on the Board.

Your shares will be voted as you instruct via the voting
procedures described on the Proxy Card or the Notice of
Internet Availability of Proxy Materials, or as you specify on
your Proxy Card(s) if you elect to vote by mail. If unforeseen
circumstances (such as death or disability) require the Board
of Directors to substitute another person for any of the
director nominees, your shares will be voted for that other
person.

THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE TO RE-ELECT MR. COLE, MR. ERSEK, MR.
GOODMAN, MS. HOLDEN, MR. JOERRES, MR. MILES,
MS. SUN, MR. TRUJILLO, MR. SIEGMUND, AND
MR. MURPHY, AND TO ELECT MS. PHILLIPS, EACH
TO SERVE UNTIL THE 2022 ANNUAL MEETING OF
STOCKHOLDERS OR UNTIL HIS OR HER RESPECTIVE
SUCCESSOR IS ELECTED AND QUALIFIED.

2021 Proxy Statement | 15

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CORPORATE GOVERNANCE

SUMMARY OF CORPORATE GOVERNANCE PRACTICES

The Board of Directors believes that strong corporate
governance is key to long-term stockholder value creation.
Over the years, our Board of Directors has responded to
evolving governance standards by enhancing our practices
to best serve the interests of the Company’s stockholders,
including:

✓ Annual election of directors.

✓ Proxy access. Our By-Laws permit qualifying stockholders
or groups of qualifying stockholders that have each
beneficially owned at least 3% of the Company’s Common
Stock for three years to nominate up to the greater of (x)
two or (y) an aggregate of 20% of the members of the
Board and have information and supporting statements
regarding those nominees included in the Company’s
Proxy Statement.

✓ Majority vote standard in uncontested elections. In an
uncontested election, each director must be elected by a
majority of votes cast, rather than by a plurality.

✓ Stockholder right to call special meetings at 10%

ownership threshold.

✓ No stockholder rights plan (“poison pill”).

✓ No supermajority voting provisions in the Company’s

organizational documents.

✓ Independent Board, except our CEO. Our Board is
comprised of all independent directors, except our CEO.

✓ Independent non-executive chairman. The Chairman
of the Board of Directors is a non-executive independent
director.

✓ Independent Board committees. All of our Board
Committees are made up of independent directors. Each
standing committee operates under a written charter that
has been approved by the Board.

✓ Confidential stockholder voting. The Company’s
Corporate Governance Guidelines provide that the vote
of any stockholder will not be revealed to anyone other
than a non-employee tabulator of votes or an independent
election inspector, except under circumstances set forth
in the Company’s Corporate Governance Guidelines.

16 | The Western Union Company

✓ Board Committee authority to retain

independent
advisors. Each Board Committee has the authority to
retain independent advisors.

✓ Robust codes of conduct. The Company is committed
to operating its business with honesty and integrity and
maintaining the highest level of ethical conduct. These
absolute values are embodied in our Code of Conduct and
require that every customer, employee, agent and member
of the public be treated accordingly. The Company Code
of Conduct applies to all employees, but the Company’s
senior financial officers are also subject to an additional
code of ethics, reflecting the Company’s commitment to
maintaining the highest standards of ethical conduct. In
addition, the Board of Directors is subject to a Directors’
Code of Conduct.

✓ Board oversight of ESG matters. The Board oversees
Western Union’s ESG strategy development. To assist the
Board with its oversight duties:

{{ The Corporate Governance, ESG, and Public Policy
Committee is responsible for reviewing and advising
the Board with respect to ESG matters related to the
Company.

{{ The Audit Committee oversees ESG internal controls
and process as well as integration of ESG in the
Company’s enterprise risk management framework.

{{ The Compensation and Benefits Committee oversees
the alignment of the Company’s ESG strategy with
compensation practices.

{{ The Compliance Committee evaluates executive
performance of the Company’s ESG compensation
metric related to compliance.

The Company has produced an ESG Report annually
since 2018 and intends to continue to do so. The ESG
Report for fiscal year 2019 can be found on the Company’s
relations website: http://ir.westernunion.com/
investor
investor-relations/ESG/default.aspx. The information in the
Company’s ESG Reports is not incorporated by reference
into, and does not form part of, this Proxy Statement.

CORPORATE GOVERNANCE

✓ Robust stock ownership guidelines for senior executives
and directors. Robust stock ownership requirements
for our senior executives and directors strongly link the
interests of management and the Board with those of
stockholders.

✓ Prohibition against pledging and hedging of Company
stock. The Company’s insider trading policies prohibit the
Company’s executive officers and directors from pledging
the Company’s securities and prohibit all employees
(including executive officers) and directors from engaging
in hedging or short-term speculative trading of the
Company’s securities, including, without limitation, short
sales or put or call options involving the Company’s
securities. Please see “Compensation of Directors—

the Company’s Securities” and

of
“Compensation
Discussion and Analysis—The Western Union Executive
Compensation Program—Prohibition Against Pledging
and Hedging of the Company’s Securities,” below.

✓ Regular stockholder engagement. The Company
regularly seeks to engage with its stockholders to better
understand their perspectives.

You can learn more about our corporate governance by
visiting the “Investor Relations, Corporate Governance”
portion of the Company’s website, www.westernunion.com,
or by writing to the attention of: Investor Relations, The
Western Union Company, 7001 E. Belleview Avenue, WU-
HQ-14, Denver, Colorado 80237.

INDEPENDENCE OF DIRECTORS

The Board of Directors has adopted Corporate Governance
Guidelines, which contain the standards that the Board
of Directors uses to determine whether a director
is
independent. A director is not independent under these
categorical standards if:

- The director is, or has been within the last three years,
an employee of Western Union, or an immediate family
member of the director is, or has been within the last three
years, an executive officer of Western Union.

- The director has received, or has an immediate family
member who has received, during any 12-month period
within the last three years, more than $120,000 in direct
compensation from Western Union, other than director
and committee fees and pension or other forms of
deferred compensation for prior service (provided such
compensation is not contingent in any way on continued
service).

- (i) The director is a current partner or employee of a firm
that is Western Union’s internal or external auditor; (ii) the
director has an immediate family member who is a current
partner of such a firm; (iii) the director has an immediate
family member who is a current employee of such a firm
and personally works on Western Union’s audit; or (iv) the
director or an immediate family member was within the
last three years a partner or employee of such firm and
personally worked on Western Union’s audit within that
time.

- The director or an immediate family member is, or has
been within the last three years, employed as an executive
officer of another company where any of Western Union’s
present executive officers at the same time serves or
served on that company’s compensation committee.

- The director is a current employee, or an immediate family
member is a current executive officer, of a company
that has made payments to, or received payments from,
Western Union for property or services in an amount
which, in any of the last three fiscal years, exceeded
the greater of $1 million or 2% of such other company’s
consolidated gross revenues.

- The director is a current employee, or an immediate family
member is a current executive officer, of a company which
was indebted to Western Union, or to which Western Union
was indebted, where the total amount of either company’s
indebtedness to the other, in any of the last three fiscal
years, exceeded 5% or more of such other company’s total
consolidated assets.

- The director or an immediate family member is a current
officer, director, or trustee of a charitable organization
(or an affiliated charitable
where Western Union’s
foundation’s) annual discretionary charitable contributions
to the charitable organization, in any of the last three fiscal
years, exceeded the greater of $1 million or 2% of such
charitable organization’s consolidated gross revenues.

The Board has reviewed the independence of the current
directors under the Company’s categorical standards and
the rules of the New York Stock Exchange (the “NYSE”) and
found Mr. Cole, Mr. Goodman, Ms. Holden, Mr. Joerres, Mr.
Miles, Mr. Murphy, Ms. Phillips, Mr. Siegmund, Ms. Sun, and
Mr. Trujillo to be independent.

2021 Proxy Statement | 17

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CORPORATE GOVERNANCE

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK
OVERSIGHT

The Board has a non-executive Chairman. This position is
independent from management. The Chairman sets the
agendas for and presides over the Board meetings, as well as
meetings of the independent directors. Our CEO is a member
of the Board and participates in its meetings. The Board
believes that this leadership structure is appropriate for the
Company at this time because it allows for independent
oversight of management,
increases management
accountability, and encourages an objective evaluation of
management’s performance relative to compensation.

The Board regularly devotes time during its meetings to review
and discuss the most significant risks facing the Company
and management’s process for identifying, prioritizing, and
responding to those risks. During these discussions, the
CEO, the Chief Legal Officer, the Chief Financial Officer, the
Chief Compliance Officer (the “CCO”), the President, Product
and Platform, the Chief Information Security Officer, the
Chief Privacy and Data Governance Officer, the Chief Risk
Officer and the Chief Internal Auditor present management’s
process for assessment of risks, a description of the most
significant risks facing the Company, and any mitigating
factors, plans, or policies in place to address and monitor
those risks. The Board has also delegated certain risk
oversight responsibilities to its committees.

Consistent with the NYSE listing standards, to which the
Company is subject, the Audit Committee bears responsibility
for oversight of the Company’s policies with respect to
risk assessment and risk management and must discuss
with management the major risk exposures facing the
Company and the steps the Company has taken to monitor
and control such exposures. The Audit Committee is also
responsible for assisting Board oversight of the Company’s
compliance with legal and regulatory requirements, which
represent many of the most significant risks the Company
faces. During the Audit Committee’s discussion of risk, the
Company’s CEO, Chief Financial Officer, Chief Legal Officer,
CCO, President, Product and Platform, the Chief Information
Security Officer, the Chief Privacy and Data Governance

Officer, Chief Risk Officer, and Chief Internal Auditor present
information and participate in discussions with the Audit
Committee regarding risk and risk management. Risks
discussed regularly include those related to global economic
and political trends, business and financial performance,
legal and regulatory matters, cybersecurity, data privacy,
competition, legislative developments, and other matters. In
2020, the Audit Committee worked closely with the Chief Risk
Officer and other members of management to oversee the
management of risks to the Company related to the COVID-19
pandemic,
including organizational resilience, effective
management reporting, and return to office protocols.

While the Board committee with primary oversight of
risk is the Audit Committee, the Board has delegated to
other committees the oversight of risks within their areas
of responsibility and expertise. For example, in light of
the breadth and number of responsibilities that the Audit
importance of the
Committee must oversee, and the
evaluation and management of the Company’s compliance
programs, policies, and key risk exposures associated with
anti-money laundering (“AML”), sanctions, anti-corruption,
fraud prevention, consumer protection, and privacy laws,
including investigations or other matters that may arise
in relation to such laws, the Board formed the Compliance
Committee in 2013 to assist the Audit Committee and the
Board with oversight of those areas. This function was
previously performed by the Corporate Governance, ESG,
and Public Policy Committee. Oversight of privacy matters
was formally added to the Compliance Committee charter
in February, 2021. The Compliance Committee reports
regularly on these matters to the Board and Audit Committee
and during the Compliance Committee’s meetings, each
of the Chief Legal Officer, CCO, and Chief Privacy Officer
regularly present and participate in discussions. In addition,
the Compensation Committee oversees the risks associated
including
with the Company’s compensation practices,
an annual review of the Company’s risk assessment of its
compensation policies and practices for its employees and
the Company’s succession planning process.

18 | The Western Union Company

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COMMITTEES OF THE BOARD OF DIRECTORS

The current members of each Board Committee are indicated in the table below.

CORPORATE GOVERNANCE

Corporate
Governance, ESG &
Public Policy

Audit

Compensation
& Benefits

Compliance

Director

Martin I. Cole

Hikmet Ersek

Richard A. Goodman

Betsy D. Holden

Jeffrey A. Joerres ★

Michael A. Miles, Jr.

Timothy P. Murphy(1)

Joyce A. Phillips

Jan Siegmund

Angela A. Sun

Solomon D. Trujillo

★ Chairman of the Board

Committee Chair

Member

(1)

On September 23, 2020, the Board appointed Mr. Murphy Chair of the Compliance Committee.

2021 Proxy Statement | 19

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CORPORATE GOVERNANCE

BOARD AND COMMITTEE GOVERNING DOCUMENTS

Each committee operates under a charter approved by
the Board. The Company’s Audit Committee Charter,
Compensation and Benefits Committee Charter, Corporate
Governance, ESG, and Public Policy Committee Charter,
Compliance Committee Charter, and Corporate Governance

Guidelines are available without charge through the “Investor
Relations, Corporate Governance” portion of the Company’s
website, www.westernunion.com, or by writing to the attention
of: Investor Relations, The Western Union Company, 7001 E.
Belleview Avenue, WU-HQ-14, Denver, Colorado 80237.

Audit Committee

“During 2020, the Audit Committee continued to oversee financial reporting,
internal audit and legal and regulatory matters, with a strong focus on the
Company’s controls and culture of compliance, particularly in light of the
COVID-19 pandemic. The Committee is continuing to focus on these areas and
risk management and mitigation in 2021, with an emphasis on the evolving
cybersecurity, technology, and data privacy regulatory environment.”

Jan Siegmund, Committee Chair

Additional Committee Members: Richard A. Goodman, Betsy D. Holden, Timothy P. Murphy, Angela A. Sun, and Solomon
D. Trujillo

Meetings Held in 2020: 8

Primary Responsibilities: Pursuant to its charter, the Audit Committee assists the Board of Directors in fulfilling its
oversight responsibilities with respect to:

•

integrity of the Company’s consolidated financial statements;

• compliance with legal and regulatory requirements;

• the independent registered public accounting firm’s qualifications, independence and compensation; and

• performance of the Company’s internal audit function and independent registered public accounting firm.

Independence: Each member of the Audit Committee meets the independence requirements of our Corporate Governance
Guidelines, the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as the Board has
determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate,
knowledgeable, and qualified to review financial statements. The Board has designated each of Mr. Goodman and Mr.
Siegmund as a “financial expert” as defined by Item 407(d) of Regulation S-K.

Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves
on the audit committees of more than two other public companies, unless the Board determines that such simultaneous
service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit
Committee members serve on more than two other public company audit committees.

20 | The Western Union Company

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CORPORATE GOVERNANCE

Compensation and Benefits Committee

“In 2020, the Compensation and Benefits Committee continued to focus on
pay-for-performance to set the foundation for the long-term strength and
performance of the Company through the Company’s executive compensation
program. The Compensation and Benefits Committee also continued to focus on
organizational health, with emphasis on the impact of the COVID-19 pandemic,
with a view to maintaining and enhancing employee well-being and overall
effectiveness of the Company.”

Michael A. Miles, Jr., Committee Chair

Additional Committee Members: Martin I. Cole, Richard A. Goodman, Betsy D. Holden, and Joyce A. Phillips

Meetings Held in 2020: 6

Primary Responsibilities: Pursuant to its charter, the Compensation Committee has the authority to administer, interpret,
and take any actions it deems appropriate in connection with any incentive compensation or equity-based plans of the
Company, any salary or other compensation plans for officers and other key employees of the Company, and any employee
benefit or fringe benefit plans, programs or policies of the Company. Among other things, the Compensation Committee
is responsible for:

•

in consultation with senior management, establishing the Company’s general compensation philosophy, and overseeing
the development and implementation of compensation and benefits policies;

• reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive
officers, evaluating the performance of the CEO and other executive officers in light thereof, and setting compensation
levels and other benefits for the CEO (with the ratification by the independent directors of the Board) and other executive
officers based on this evaluation;

• overseeing the Company’s regulatory compliance with respect to compensation matters;

• reviewing and making recommendations to the Board regarding severance or similar termination agreements with the

Company’s CEO or to any person being considered for promotion or hire into the position of CEO;

• approving grants and/or awards of options, restricted stock, restricted stock units, and other forms of equity-based

compensation under the Company’s equity-based plans;

• reviewing with management and preparing an annual report regarding the Company’s Compensation Discussion and

Analysis to be included in the Company’s Proxy Statement and Annual Report;

•

in consultation with the CEO, reviewing management succession planning;

• reviewing and recommending to the Board of Directors compensation for non-employee directors; and

• periodically reviewing the overall effectiveness of the Company’s principal strategies related to human capital

management, recruiting, retention, career development, and diversity.

The Compensation Committee has the authority to delegate all or a portion of its duties and responsibilities to a
subcommittee and, in some situations, may also delegate its authority and responsibility with respect to certain
compensation and benefit plans and programs to one or more employees.

Independence: Each member of the Compensation Committee meets the independence requirements of our Corporate
Governance Guidelines, the NYSE, the Exchange Act and such other independence or other requirements as may be
applicable from time to time, and as the Board has determined, has no material relationship with the Company.

2021 Proxy Statement | 21

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CORPORATE GOVERNANCE

Compliance Committee

“The Compliance Committee shares with regulators the goals of protecting
consumers and the integrity of the global money transfer network and remains at
the forefront of the Company’s focus on the execution and enhancement of the
Company’s compliance policies and procedures. This focus was reflected in the
dismissal in 2020 of the Company’s 2017 Deferred Prosecution Agreement with
the United States Department of Justice and the completion of the term of the
independent compliance auditor appointed under the 2017 Consent Order with
the United States Federal Trade Commission.”

Timothy P. Murphy, Committee Chair

Additional Committee Members: Martin I. Cole, Jan Siegmund, Angela A. Sun, and Solomon D. Trujillo

Meetings Held in 2020: 4

Primary Responsibilities: Pursuant to its charter, the Compliance Committee assists the Audit Committee and the Board
in fulfilling the Board’s oversight responsibility for the Company’s compliance with legal and regulatory requirements.
Among other things, the Compliance Committee is responsible for reviewing and discussing with management:

• the Company’s compliance programs, policies and key risk exposures relating to AML laws, sanctions, anti-corruption,
fraud prevention, consumer protection, and privacy laws, including establishing procedures to be apprised of material
investigations or other material matters that may arise in relation to such laws; and

•

legal, compliance or other regulatory matters that may have a material effect on the Company’s business, financial
statements or compliance policies, including material notices to or inquiries received from governmental agencies.

Independence: Each voting member of the Compliance Committee meets the independence requirements of our Corporate
Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship
with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent
from the Company.

22 | The Western Union Company

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CORPORATE GOVERNANCE

Corporate Governance, ESG, and Public Policy Committee

“With a continued focus on board refreshment, the Committee successfully
added and on-boarded two new directors to the Board in 2020, with the objective
of further enhancing the skills, experience, diversity, and effectiveness of the
Board. The Committee also continued to focus on oversight of the Company’s
ESG disclosures and strategy development.”

Jeffrey A. Joerres, Committee Chair

Additional Committee Members: Michael A. Miles, Jr., and Joyce A. Phillips

Meetings Held in 2020: 5

Primary Responsibilities: Pursuant to its charter, the Corporate Governance, ESG, and Public Policy Committee is
responsible for:

• recommending to the Board of Directors criteria for Board and committee membership;

• considering, in consultation with the Chairman of the Board and the CEO, and recruiting candidates to fill positions on

the Board of Directors;

• evaluating current directors for re-nomination to the Board of Directors;

• recommending director nominees to the Board of Directors;

• recommending to the Board of Directors appointments to committees of the Board of Directors;

• recommending to the Board of Directors corporate governance guidelines, reviewing the Corporate Governance
Guidelines at least annually, and recommending modifications to the Corporate Governance Guidelines to the Board of
Directors;

• advising the Board of Directors with respect to the charters, structure and operations of the various committees of the

Board of Directors and qualifications for membership thereon;

• overseeing the development and implementation of an orientation and continuing education program for directors;

• establishing and implementing self-evaluation procedures for the Board of Directors and its committees;

• reviewing stockholder proposals submitted for inclusion in the Company’s Proxy Statement;

• reviewing the Company’s related persons transaction policy, and as necessary, reviewing specific related person

transactions; and

• reviewing and advising the Board of Directors regarding public policy and ESG matters that are relevant to the Company

or the industries in which the Company operates.

Independence: Each member of the Corporate Governance, ESG, and Public Policy Committee meets the independence
requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined,
has no material relationship with the Company.

2021 Proxy Statement | 23

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CORPORATE GOVERNANCE

CHIEF EXECUTIVE OFFICER SUCCESSION PLANNING

The Company’s Board of Directors has developed a
governance framework for CEO succession planning that is
intended to provide for a talent-rich leadership organization
that can drive the Company’s strategic objectives. Under its
governance framework, the Board of Directors:

- Reviews succession planning for the CEO on an annual
basis. As part of this process, the CEO reviews the annual
performance of each member of the management team

with the Board and the Board engages in a discussion with
the CEO and the Chief People Officer regarding each team
member and the team member’s development;

- Maintains a confidential plan to address any unexpected
short-term absence of the CEO and identifies candidates
who could act as interim CEO in the event of any such
unexpected absence; and

- Ideally three to five years before the retirement of the
current CEO, manages the succession process and
determines the current CEO’s role in that process.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Any stockholder of the Company or other interested party who
desires to contact the non-management directors either as a
group or individually, or Mr. Ersek in his capacity as a director,
may do so by writing to: The Western Union Company, Board
of Directors, 7001 E. Belleview Avenue, Denver, Colorado
80237. Communications that are intended specifically for non-
management directors should be addressed to the attention of

the Chairperson of the Corporate Governance, ESG, and Public
Policy Committee. All communications will be forwarded to
the Chairperson of the Corporate Governance, ESG, and Public
Policy Committee unless the communication is specifically
addressed to another member of the Board, in which case, the
communication will be forwarded to that director.

BOARD ATTENDANCE AT ANNUAL MEETING OF
STOCKHOLDERS

Although the Company does not have a formal policy
regarding attendance by members of the Board of Directors
it
at the Company’s Annual Meeting of Stockholders,

encourages directors to attend. All members of the Board of
Directors serving at the time attended the Company’s 2020
Annual Meeting of Stockholders.

PRESIDING DIRECTOR OF NON-MANAGEMENT DIRECTOR
MEETINGS

The non-management directors meet in regularly scheduled executive sessions without management. The Chairman of the
Board of Directors is the presiding director at these meetings.

NOMINATION OF DIRECTORS

The Company’s Board of Directors
is responsible for
nominating directors for election by the stockholders and
filling any vacancies on the Board that may occur. The
Corporate Governance, ESG, and Public Policy Committee
is responsible for identifying, screening, and recommending
candidates to the Board for Board membership. The
Corporate Governance, ESG, and Public Policy Committee

does not have any single method for identifying director
candidates, but will consider candidates suggested by a wide
range of sources, including by any stockholder, director, or
officer of the Company. Ms. Phillips, who was appointed as a
member of the Board in July 2020, was recommended to the
Corporate Governance, ESG, and Public Policy Committee by
a third-party executive search firm.

24 | The Western Union Company

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DIRECTOR QUALIFICATIONS, REQUIREMENTS, AND EVALUATIONS

CORPORATE GOVERNANCE

General criteria for the nomination of director candidates
include experience, high ethical standards and integrity, skills,
diversity, ability to make independent analytical inquiries,
understanding of the Company’s business environment,
and willingness to devote adequate time to Board duties–
all in the context of an assessment of the perceived needs
of the Board at that point in time. In exercising its director
nomination responsibilities, the Corporate Governance, ESG,
and Public Policy Committee considers diversity in gender,
ethnicity, geography, background, and cultural viewpoints
when considering director nominees, given the global nature
of the Company’s business. However, the Board has not
adopted a formal policy governing director diversity.

Our Corporate Governance Guidelines also require that
a director retire effective at the next annual meeting of
stockholders following the time such director reaches the
age of 74. The Board may waive this requirement for one
year if it determines it is in the best interests of our Company.
Each director is expected to ensure that other existing and
planned future commitments do not materially interfere with
the member’s service as a Board or Committee member.

STOCKHOLDER NOMINEES

The Corporate Governance, ESG, and Public Policy
Committee will consider candidates for election to the
Board suggested in writing by a stockholder and will make
a recommendation to the Board using the same criteria as
it does in evaluating candidates submitted by members of
the Board of Directors. Any such suggestions should be
submitted to the Corporate Secretary, The Western Union
Company, 7001 E. Belleview Avenue, Denver, Colorado
80237. If the Company receives such a suggestion, the
Company may request additional information from the
candidate to assist in its evaluation.

Pursuant to our Corporate Governance Guidelines, we
evaluate the overall effectiveness of the Board annually. The
Board together with the Corporate Governance, ESG, and
Public Policy Committee conducts annual self-evaluations
including an
of Board and committee performance,
evaluation of the effectiveness of the nomination process.
In addition, the Board conducts annual evaluations of each
individual independent director.

Stockholders may submit nominations
for director
candidates by giving notice to the Corporate Secretary, The
Western Union Company, 7001 E. Belleview Avenue, Denver,
Colorado 80237. The requirements for the submission of

such stockholder nominations are set forth in Article II of the
Company’s By-Laws, which are available on the “Investor
Relations, Corporate Governance” section of the Company’s
website, www.westernunion.com.

SUBMISSION OF STOCKHOLDER PROPOSALS

Stockholder proposals,
including stockholder director
nominations, requested to be included in the Company’s Proxy
Statement for its 2022 Annual Meeting of Stockholders must
be received by the Company not later than November 29, 2021
and comply with the requirements of Rule 14a-8, if applicable,
and the Company’s proxy access By-laws, as applicable. Even if
a proposal or director nomination is not submitted in time to be
considered for inclusion in the Company’s Proxy Statement for
its 2022 Annual Meeting of Stockholders, a proper stockholder

proposal or director nomination may still be considered at the
Company’s 2022 Annual Meeting of Stockholders, but only
if the proposal or nomination is received by the Company no
sooner than January 14, 2022 and no later than February 13,
2022 and otherwise complies with the Company’s By-Laws.
All proposals or nominations a stockholder wishes to submit
at the meeting should be directed to the Corporate Secretary,
The Western Union Company, 7001 E. Belleview Avenue,
Denver, Colorado 80237.

CODE OF ETHICS

The Company’s Director’s Code of Conduct, Code of Ethics for
Senior Financial Officers, Reporting Procedure for Accounting
and Auditing Concerns, Professional Conduct Policy for
Attorneys, and the Code of Conduct are available without
charge through the “Investor Relations, Corporate Governance”
section of the Company’s website, www.westernunion.com, or

by writing to the attention of: Investor Relations, The Western
Union Company, 7001 E. Belleview Avenue, WU-HQ-14, Denver,
Colorado 80237. In the event of an amendment to, or a waiver
from, the Company’s Code of Ethics for Senior Financial Officers,
the Company intends to post such information on its website,
www.westernunion.com.

2021 Proxy Statement | 25

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COMPENSATION OF DIRECTORS

The following table provides information regarding the compensation of our outside directors for 2020. Mr. Ersek, our President
and CEO, does not receive additional compensation for his service as a director and has been excluded from the table.

NAME
Martin I. Cole
Richard A. Goodman
Betsy D. Holden
Jeffrey A. Joerres
Roberto G. Mendoza(6)
Michael A. Miles, Jr.
Timothy Murphy(7)
Joyce A. Phillips(8)
Jan Siegmund
Angela A. Sun
Frances Fragos Townsend(9)
Solomon D. Trujillo

Footnotes:

2020 DIRECTOR COMPENSATION

FEES EARNED
OR PAID IN
CASH ($000)
$110.0
$115.0
$115.0
$125.0(1)
$38.7
$115.0
$81.2
$52.8
$120.0
$110.0
$46.1
$110.0

STOCK
AWARDS
($000)(2)
$160.0
$160.0
$160.0
$360.0
$160.0
$160.0
$61.6
$80.4
—
$120.0
$160.0
$80.0

OPTION
AWARDS
($000)(3)
—
—
—
—
—
—
$61.6
—
$160.0
$40.0
—
$80.0

ALL OTHER
COMPENSATION
($000)(4)
$45.0
$25.0
$30.0
$2.0
—
—
$2.0
—
$15.0
$25.0
—
—

TOTAL
($000)(5)
$315.0
$300.0
$305.0
$487.0
$198.7
$275.0
$206.4
$133.2
$295.0
$295.0
$206.1
$270.0

(1)

(2)

(3)

(4)

Mr. Joerres elected to receive his annual retainer fee for 2020 in the form of equity compensation as described below under “—Equity Compensation.”

The amounts in this column represent the value of stock units granted to director as annual equity grants. Stock awards consist of fully vested
stock units that are settled in shares of Common Stock and may be subject to a deferral election consistent with Section 409A of the Internal
Revenue Code. The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with
Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic
718”). See Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020
for a discussion of the relevant assumptions used in calculating these amounts.

The amounts in this column represent the value of stock options granted to directors as an annual equity grant. The amounts shown in
this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See Note 17 to the
Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of the
relevant assumptions used in calculating these amounts.

All Other Compensation represents matches under the Company’s gift matching program that the Company made in 2020. Outside directors
are eligible to participate in the Company’s gift matching program on the same terms as Western Union’s executive officers and employees. As
noted below, contributions made or directed to be made to an eligible organization, up to an aggregate amount of $25,000 per calendar year, will
be matched by the Company. Matching contributions to various charities were made in 2020 on behalf of the following directors Messrs. Cole,
Goodman, Joerres, Murphy, and Siegmund, and Mss. Holden and Sun. Contributions up to $100,000 per calendar year that a director makes to
the Western Union Foundation without designating a recipient organization will be matched by the Company $2 for every $1 contributed.

(5)

As of December 31, 2020, each outside director had outstanding the following number of stock units and options:

NAME
Martin I. Cole
Richard A. Goodman
Betsy D. Holden
Jeffrey A. Joerres
Roberto G. Mendoza
Michael A. Miles, Jr.
Timothy Murphy
Joyce A. Phillips
Jan Siegmund
Angela A. Sun
Frances Fragos Townsend
Solomon D. Trujillo

STOCK UNITS
8,686
58,849
95,498
108,708
73,868
133,491
3,237
3,709
—
13,624
51,012
33,652

OPTIONS
9,208
36,814
—
11,448
79,178
—
20,084
—
40,599
22,620
39,833
157,756

(6) Mr. Mendoza retired from the Board effective May 14, 2020.

(7) Mr. Murphy was appointed to the Board effective March 24, 2020.

(8) Ms. Phillips was appointed to the Board effective July 1, 2020.

(9) Ms. Fragos Townsend did not stand for reelection at the Company’s 2020 Annual Meeting of Stockholders and ceased to be a director on May 14, 2020.

26 | The Western Union Company

DETERMINATION OF DIRECTOR COMPENSATION

COMPENSATION OF DIRECTORS

The Compensation Committee
for
recommending to the Board the compensation of the
Company’s outside directors. As part of this process, the
Compensation Committee reviews the outside director
compensation program annually to evaluate whether it is

responsible

competitive with market practices by considering input from
Meridian regarding the Company’s historical practices with
respect to outside director compensation as well as market
data for the same peer group used for determining executive
compensation.

CASH COMPENSATION

In 2020, each outside director (other than our Non-Executive
Chairman) received the following cash compensation for
service on our Board and committees of our Board (prorated
for partial years of service):

- an annual Board retainer fee of $85,000;

- an annual committee chair retainer fee of $30,000
for the chairpersons of the Audit Committee and
the Compliance Committee and $25,000 for the

chairpersons of
the Compensation and Benefits
Committee and the Corporate Governance, ESG and
Public Policy Committee; and

- an annual committee member retainer fee of $15,000 for
non-chair members of the Audit Committee (increased
from $10,000, effective January 1, 2020) and $10,000
for non-chair members of each other committee of our
Board.

EQUITY COMPENSATION

The 2020 outside director equity awards were granted
pursuant to our Long-Term Incentive Plan. The purpose of
these awards is to advance the interests of the Company
and its stockholders by encouraging stock ownership by
our outside directors and by helping the Company attract,
motivate, and retain highly qualified outside directors.

In 2020, all of our outside directors (other than our Non-
Executive Chairman) were eligible to receive an annual equity
grant with a value of $160,000 for service on our Board and
committees of our Board (prorated for incoming directors
joining during the year). After considering market data from
Meridian, the annual equity grant value was increased from
$140,000 in 2019 in order to further align the Company’s
director compensation with the median of the peer group used
for evaluating 2019 executive compensation decisions.

The 2020 equity grant will be settled in shares of common
stock. Beginning in 2021, the annual equity grants to the
outside directors will have a one-year vesting requirement,
subject to pro-rata vesting for a qualifying departure from the
Board. This change was made after the Committee reviewed
relevant market data as part of its regular evaluation of Board
pay practices.

For 2020, each outside director has the choice of electing to
receive such director’s annual retainer fees described above
in the form of (a) all cash, (b) a combination of cash, fully
vested stock options, and/or fully vested stock units, (c) all
fully vested stock options, (d) all fully vested stock units, (e) a
combination of 75% fully vested stock options and 25% fully
vested stock units, (f) a combination of 50% fully vested stock
options and 50% fully vested stock units, or (g) a combination
of 75% fully vested stock units and 25% fully vested stock
options. Each outside director may also elect to receive such
director’s annual equity grant in the form of any of the above
alternatives, other than alternatives that include cash.

COMPENSATION OF OUR NON-EXECUTIVE CHAIRMAN

In 2020, our Non-Executive Chairman received the following
compensation in lieu of the compensation described above
for our other outside directors:

- an annual retainer fee of $125,000; and

- an annual equity grant with a value of $360,000.

2021 Proxy Statement | 27

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COMPENSATION OF DIRECTORS

Our Non-Executive Chairman has the choice to receive his
annual retainer fee in the forms discussed above under “—
Equity Compensation.” Beginning in 2021, the Non-Executive

Chairman annual equity grant will also have a one-year
vesting condition, subject to pro-rata vesting for a qualifying
departure from the Board.

CHARITABLE CONTRIBUTIONS

Outside directors may participate in the Company’s gift
matching program on the same terms as the Company’s
executive officers and employees. Under this program,
contributions up to $100,000 per calendar year that the
director makes to the Western Union Foundation (the
“Foundation”) without designating a recipient organization

will be matched by the Company $2 for every $1 contributed.
Contributions made or directed to be made to an eligible
organization, as defined in the program, up to an aggregate
amount of $25,000 per calendar year will be equally matched
by the Company through the Foundation.

REIMBURSEMENTS

Directors are reimbursed for their expenses incurred by
attending Board, committee, and stockholder meetings,
including those for travel, meals, and lodging. Occasionally, a
spouse or other guest may accompany directors on corporate
aircraft when the aircraft is already scheduled for business

purposes and can accommodate additional passengers. In
those cases, there is no aggregate incremental cost to the
Company and, as a result, no amount is reflected in the 2020
Director Compensation table.

INDEMNIFICATION AGREEMENTS

Each outside director has entered
into a Director
Indemnification Agreement with
to
indemnification procedures. Consistent with the
clarify
indemnification rights already provided to directors of the
Company in the Company’s Certificate of Incorporation,
each agreement provides that the Company will indemnify

the Company

and hold harmless each outside director to the fullest extent
permitted or authorized by the General Corporation Law of
the State of Delaware in effect on the date of the agreement
or as such laws may be amended or replaced to increase the
extent to which a corporation may indemnify its directors.

EQUITY OWNERSHIP GUIDELINES

Each outside director is expected to maintain an equity
investment in Western Union equal to five times his or her
annual cash retainer, which must be achieved within five
years of the director’s initial election to the Board. The
holdings that generally may be counted toward achieving
the equity investment guidelines include outstanding stock
awards or units, shares obtained through stock option

exercises, shares owned jointly with or separately by the
director’s spouse, shares purchased on the open market, and
outstanding stock options received in lieu of cash retainer
fees. As of the Record Date, all outside directors have met
or, within the applicable period, are expected to meet, these
equity ownership guidelines.

PROHIBITION AGAINST PLEDGING AND HEDGING OF THE COMPANY’S SECURITIES

The Company’s
the
Company’s directors from pledging the Company’s securities
or engaging in hedging or short-term speculative trading

Insider Trading Policy prohibits

of the Company’s securities, including, without limitation,
short sales or put or call options involving the Company’s
securities.

28 | The Western Union Company

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee
is currently comprised of six
independent directors and operates under a written charter
adopted by the Board. The Audit Committee reviews the
charter at least annually, reviewing it last in February 2021.
The charter is available through the “Investor Relations,
Corporate Governance” portion of the Company’s website,
www.westernunion.com.

independent public accounting firm. In addition, the Audit
Committee is involved in the lead audit partner selection
process.

During fiscal year 2020, the Audit Committee fulfilled its duties
and responsibilities as outlined in its charter. Specifically, the
Audit Committee, among other actions:

and

identified

independent

firm qualifications

registered public accounting

The Board has the ultimate authority
for effective
corporate governance, including the role of oversight of
the management of the Company. The Audit Committee’s
purpose is to assist the Board in fulfilling its oversight
responsibilities with respect to the Company’s consolidated
registered public
financial statements,
accounting
independence,
performance of the Company’s internal audit function
and
firm,
and other matters
in the Audit Committee
Charter. The Audit Committee relies on the expertise and
knowledge of management, the internal auditors and the
independent registered public accounting firm in carrying
out its responsibilities. Management is responsible for the
preparation, presentation, and integrity of the Company’s
consolidated financial statements, accounting and financial
reporting principles, internal control over financial reporting
and disclosure controls, and procedures designed to ensure
compliance with accounting standards, applicable laws,
and regulations. In addition, management is responsible
for objectively reviewing and evaluating the adequacy,
effectiveness, and quality of the Company’s system of
internal control. The Company’s independent registered
public accounting firm, Ernst & Young LLP, is responsible
for performing an independent audit of the consolidated
financial statements and for expressing an opinion on the
conformity of those financial statements with United States
generally accepted accounting principles. The Company’s
independent registered public accounting firm is also
responsible for expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting.

The Audit Committee engages in an annual evaluation of
the independent public accounting firm’s qualifications,
assessing the firm’s quality of service, the firm’s sufficiency of
resources, the quality of the communication and interaction
with the firm, and the firm’s independence, objectivity,
and professional skepticism. In evaluating and selecting
the Company’s independent registered public accounting
firm, the Audit Committee considers, among other things,
historical and recent performance of the firm, an analysis of
known significant legal or regulatory proceedings related to
the firm, recent Public Company Accounting Oversight Board
(the “PCAOB”) reports regarding the firm, industry experience,
audit fee revenues, audit approach, and the independence of
the firm. The Audit Committee also periodically considers
the advisability and potential impact of selecting a different

- reviewed and discussed with management and the
independent
the
Company’s quarterly earnings press releases, consolidated
financial statements, and related periodic reports filed
with the SEC;

registered public accounting

firm

- reviewed with management, the independent registered
internal auditor,
firm and
public accounting
management’s assessment of the effectiveness of the
Company’s internal control over financial reporting, and
the effectiveness of the Company’s internal control over
financial reporting;

the

- reviewed with

the

independent

registered public
accounting firm, management, and the internal auditor,
as appropriate, the audit scope and plans of both the
independent registered public accounting firm and internal
auditor;

- reviewed with

registered public
accounting firm the critical audit matters expected in their
report for the 2020 audit;

independent

the

in periodic executive sessions with each of
firm,
independent registered public accounting

- met
the
management, and the internal auditor;

- received the written disclosures and the annual letter from
Ernst & Young LLP provided to us pursuant to PCAOB
Ethics and Independence Rule 3526, Communication with
Audit Committees Concerning Independence, concerning
their independence and discussed with Ernst & Young LLP
their independence; and

- reviewed and pre-approved all fees paid to Ernst & Young
LLP, as described in Proposal 3–Ratification of Selection
of Auditors, and considered whether Ernst & Young LLP’s
provision of non-audit services to the Company was
compatible with the independence of the independent
registered public accounting firm.

The Audit Committee has reviewed and discussed with
the Company’s management and independent registered
public accounting firm the Company’s audited consolidated
financial statements and related footnotes for the fiscal year
ended December 31, 2020, and the independent registered
public accounting firm’s report on those financial statements.
Management represented to the Audit Committee that the
Company’s financial statements were prepared in accordance
with United States generally accepted accounting principles.

2021 Proxy Statement | 29

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REPORT OF THE AUDIT COMMITTEE

We have discussed with Ernst & Young LLP the matters
required to be discussed with the Audit Committee by the
applicable requirements of the PCAOB and the SEC. Such
communications
items, matters
include, among other
relating to the conduct of an audit of the Company’s
consolidated financial statements under the standards
of the PCAOB. This review included a discussion with
independent registered public
management and
accounting
the
the quality
acceptability) of the Company’s accounting principles, the
reasonableness of significant estimates and judgments,

the
firm about

(not merely

and the disclosures in the Company’s financial statements,
including the disclosures relating to critical accounting
policies.

In reliance on the review and discussions described above,
we recommended to the Board of Directors, and the Board
approved, that the audited consolidated financial statements
and management’s assessment of the effectiveness of
internal control over financial reporting be included in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2020 for filing with the SEC.

Audit Committee*

Jan Siegmund (Chairperson)
Martin I. Cole
Richard A. Goodman
Betsy D. Holden
Angela A. Sun
Solomon D. Trujillo

Mr. Cole left the Audit Committee after the approval of the Report of the Audit Committee, and Timothy P. Murphy joined the Audit Committee
after such approval.

30 | The Western Union Company

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COMPENSATION AND BENEFITS
COMMITTEE REPORT

The Compensation and Benefits Committee has reviewed
and discussed the Company’s Compensation Discussion
and Analysis with management and based on such
review and discussion, the Compensation and Benefits

Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in the
Company’s Proxy Statement and its Annual Report on Form
10-K for the fiscal year ended December 31, 2020.

Compensation and Benefits Committee*

Michael A. Miles, Jr. (Chair)
Betsy D. Holden
Richard A. Goodman
Joyce Phillips

Martin I. Cole joined the Compensation and Benefits Committee after the approval of this Compensation and Benefits Committee Report.

2021 Proxy Statement | 31

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COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

BUSINESS OVERVIEW

The Western Union Company provides people and
businesses with fast, reliable, and convenient ways to send
money and make payments around the world. Western Union
offers its services in more than 200 countries and territories.
Our business is complex: our regulatory environment is
disparate and developing; our consumers are different from
those addressed by traditional financial services firms; and
our agent and client relationships are numerous and varied.

Managing these complexities is at the center of Western
Union’s success, and our leadership must be capable of
supporting our Company’s goals amid this complexity.

The Company’s key strategic priorities for 2020 are set forth
in the chart below. The performance goals and objectives
under our annual incentive and long-term incentive programs
were designed to support these strategic priorities.

Strategic Priorities

Strengthening our
consumer money
transfer and
payments businesses

Continued
emphasis on
digital expansion

Creating operating
efficiencies

Generating and
deploying strong
cash flow for our
stockholders

Selected Results(1)

GAAP revenue of $4.8 billion,
down 9% from 2019; Constant
currency revenue and excluding
divestitures, down 3%
from 2019(2), (3)

In 2020, the Company returned
$587 million to stockholders
consisting of $217 million of
share repurchases and $370
million of dividends

Operating income in 2020 of
$967 million, or $1,051 million
adjusted operating income,
compared to $934 million or
$1,066 million adjusted
operating income in 2019(2), (3)

Operating income margin in
2020 of 20%, or adjusted
operating income margin of
20.8%, compared to 17.6% or
20.1% adjusted operating
income margin in 2019(2), (3)

Digital Money Transfer(4) revenues
increased 38% from 2019 on
transaction growth of 81%; WU.com
revenues, a subset of Digital Money
Transfer, increased 27% from 2019
on transaction growth of 44%

The Company’s 2019 Restructur-
ing Initiative generated expense
savings of more than $50 million
and we expect to generate approx-
imately $100 million of expense
savings in 2021, which is our
estimate and subject to change

Please see our 2020 Annual Report on Form 10-K for more information regarding our performance.

(1)

(2)

(3)

Our results during 2020 were negatively impacted by the COVID-19 pandemic, which led to various government instituted actions such as
lockdowns, stay-at-home orders, travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of the virus.

See Annex A for a reconciliation of measures that are not based on accounting principles generally accepted in the United States (“GAAP”) to
the comparable GAAP measure.

In May 2019, we sold our United States electronic bill payments business known as “Speedpay” and Paymap Inc. (“Paymap”). For the year
ended December 31, 2019, Speedpay revenues included in our results were $125.4 million and direct operating expenses were $98.2 million. For
the year ended December 31, 2019, Paymap revenues included in our results were $5.3 million and direct operating expenses were $2.2 million.

32 | The Western Union Company

(4)

Consumer-to-Consumer segment money transfer transactions conducted and funded through websites and mobile applications marketed
under our brands (“westernunion.com”) and transactions initiated on the internet and mobile applications hosted by our third-party white label
or co-branded digital partners.

COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE COMPENSATION FRAMEWORK

The Company’s executive compensation framework reinforces our executive compensation philosophy and objectives and
includes the following:

WHAT WE DO

% Pay-for-performance and at-risk compensation.

A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with
emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed
by our Company’s strategy. For 2020, performance-based compensation comprised approximately 83% of the targeted annual
compensation for our CEO and, on average, approximately 62% of the targeted annual compensation for our other NEOs. The
remaining components of our NEOs’ 2020 targeted annual compensation consisted of base salary and service-based RSUs, with
the Compensation Committee viewing RSUs as at-risk as their value fluctuates based on our stock price performance.

% Align compensation with stockholder interests.

Performance measures for incentive compensation are linked to the overall performance of the Company and are
designed to be aligned with the creation of long-term stockholder value.

% Emphasis on future pay opportunity vs. current pay.

% Mix of performance metrics.

The Company utilizes a mix of performance metrics that emphasize both absolute performance goals, which provide
the primary links between incentive compensation and the Company’s strategic operating plan and financial results, and
a relative performance goal, which measures Company performance in comparison to the S&P 500 Index.

% Stockholder engagement.

The Compensation Committee chair and members of management engage with stockholders regularly to discuss and
understand their perceptions or concerns regarding our executive compensation program.

% “Clawback” policy.

% Robust stock ownership guidelines.

% Consider ESG metrics in compensation program.

Our annual incentive program incorporates ESG metrics relating to employee engagement and compliance. With respect to
compliance, each NEO is evaluated on what the NEO has done to ensure that the NEO’s business or department is in compliance
with applicable U.S. laws, with a failing score in compliance resulting in bonus ineligibility for the NEO for the applicable year.

2021 Proxy Statement | 33

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COMPENSATION DISCUSSION AND ANALYSIS

WHAT WE DON’T DO

✘ No repricing or buyout of underwater stock options.

✘ No change-in-control tax gross-ups for individuals promoted or hired after April 2009.

Mr. Ersek is the only Company employee who remains eligible for change-in-control tax gross-up payments based on
Compensation Committee action in 2009.

✘ Prohibition against pledging and hedging of Company securities by senior executives and directors.

Please see “Summary of Corporate Governance Practices” for additional details.

✘ No dividends or dividend equivalents paid on unvested or unearned PSUs or RSUs.
✘ No service-based defined benefit pension plan.

CHIEF EXECUTIVE OFFICER COMPENSATION

In February 2020, Mr. Ersek’s 2020 base salary and long-
term incentive award target were increased as compared
to 2019. Specifically, Mr. Ersek’s base salary was increased
by 5% and the target grant value of his long-term incentive
award was increased from $7,000,000 to $8,200,000. Mr.
Ersek’s annual incentive target opportunity, as a percentage
of base salary, remained unchanged from 2019. Prior to
2020, Mr. Ersek’s annual base salary was last increased in
2012 and his target grant value for his long-term incentive
award was last increased in 2016. The Compensation
Committee approved (and the independent members of the
Board ratified) these increases, with emphasis on long-term
incentive compensation, to reflect Mr. Ersek’s performance
and to bring his compensation further in line with peer market
data. Following Mr. Ersek’s 2020 compensation increases,
Mr. Ersek’s 2020 compensation continued to be aligned
with median compensation for chief executive officers in the
2020 peer group, based on the most recent publicly available
information, as compiled by the Compensation Committee’s
independent consultant.

For 2020 performance, Mr. Ersek received an annual incentive
payout of $874,700, reflecting achieved performance of 49%
of target, as further described on pages 43-45. Mr. Ersek’s
annual incentive payout was based on (i) the Company not
achieving the revenue and operating income performance
goals under the 2020 Annual Incentive Plan due to the impact
of the COVID-19 pandemic, and (ii) the Company’s out-
performance in 2020 relative to pre-established strategic
performance metrics related to WU.com revenue, digital
revenue, and the 2019 Board-approved plan to improve the
Company’s operating model, business processes, and cost
structure (the “WU Way Next Generation Initiative”). The
Committee believed the Company’s strategic achievements
were reflective of the Company’s successful execution of
its strategic operating plan with respect to these objectives,

including multi-year investments made by the Company
in its digital platform and offerings that enabled the
Company to adapt to changes in its business in response
to the COVID-19 pandemic. In addition, 2020 was the final
performance year of the 2018 PSU grants, with the Financial
PSUs and TSR PSUs vesting at 60% and 79% of target,
respectively.

In 2020, Mr. Ersek’s long-term incentive allocation continued
to be comprised of 50% Financial PSUs, 20% TSR PSUs,
20% stock options and 10% service-based RSUs. Further
information with respect to the 2020 long-term incentive
awards can be found on pages 45-49.

Mr. Ersek’s 2020 total target direct compensation (which
includes base salary, target bonus opportunity and the
2020 LTI grant value) was weighted significantly toward
variable and performance-based incentive pay over fixed
pay, and long-term, equity-based pay over annual cash
compensation, because the Compensation Committee
desired to tie a significant level of Mr. Ersek’s compensation
to the performance of the Company. The percentage of
compensation delivered in the form of performance-based
compensation is higher for Mr. Ersek than compared to our
other NEOs because the Compensation Committee believes
that the CEO’s leadership is one of the key drivers of the
Company’s success and that a greater percentage of the
CEO’s total compensation should be variable as a reflection
of the Company’s level of performance. Market data provided
by the Compensation Committee’s independent consultant
supported this practice as well.

The following chart illustrates our CEO pay philosophy
of heavily weighting targeted CEO compensation toward
variable, performance-based pay elements.

34 | The Western Union Company

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CEO 2020 TOTAL TARGET DIRECT COMPENSATION

Base Salary
Annual Incentive
TSR PSUs
Financial PSUs
Stock Options
RSUs

10%

15%

16%

37%

nce-Based Co m p
At-Risk Compen s a t i

15%

n s ation 83

n 9

Since a significant portion of Mr. Ersek’s compensation is
both performance-based and at-risk, we are providing the
following supplemental graph to compare Mr. Ersek’s total

COMPENSATION DISCUSSION AND ANALYSIS

target direct compensation to the compensation “realizable”
by him for each of 2018, 2019 and 2020. For the cumulative
period of 2018 to 2020, realizable pay was approximately 33%
lower than total target direct compensation for that period
primarily due to lower achievement against pre-established
performance targets, including as a result of the impact of
the COVID-19 pandemic.

We believe the “realizable” compensation and its relationship
to total target direct compensation in each of the years
and over the three-year cumulative period are reflective of
the Compensation Committee’s emphasis on “pay-for-
performance” in that differences between realizable pay and
total target direct compensation, as well as fluctuations year-
over-year, are primarily the result of our stock performance
and our varying levels of achievement against pre-established
performance goals under our Annual Incentive Plan and our
Long-Term Incentive Plan.

s
d
n
a
s
u
o
h
t
n
I

$35,000

$28,000

$21,000

$14,000

$7,000

CEO TOTAL TARGET DIRECT COMPENSATION
VERSUS TOTAL REALIZABLE COMPENSATION(1)

$26.78

$21.94

$17.06

$9,700

$7,305

$9,700

$7,833

$11,035

$5,082

Target
Pay(2)

Realizable
Pay(3)

Target
Pay(2)

Realizable
Pay(3)

Target
Pay(2)

Realizable
Pay(3)

2018

2019

2020

Stock Price

$28

$21

$14

Options

RSUs

PSUs

Bonus

Base Salary

Closing stock price on the last trading day of each year

(1)

(2)

(3)

2020 SAY ON PAY VOTE

The Company received approximately 89% support for its
“say on pay” vote at the Company’s 2020 Annual Meeting
of Stockholders and an average support level of 93% for the
Company’s “say on pay” votes over the last five years. After
considering the 2020 “say on pay” results, the committee

determined that the Company’s executive compensation
philosophy, compensation objectives, and compensation
elements continued to be appropriate and did not make any
specific changes to the Company’s executive compensation
program in response to the 2020 “say on pay” vote.

2021 Proxy Statement | 35

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COMPENSATION DISCUSSION AND ANALYSIS

STOCKHOLDER ENGAGEMENT

Management and the Compensation Committee Chair
regularly reach out to stockholders to better understand their
views on the Company’s executive compensation program,
the “say on pay” vote and our executive compensation
disclosure. In 2020, the Company reached out to stockholders
who held approximately 78% of the Company’s outstanding
the Company’s executive
common stock

to discuss

compensation program and held discussions with all
stockholders who accepted the Company’s invitation. Over
the past few years, the committee and management have
found these discussions to be very helpful in their ongoing
evaluation of the Company’s executive compensation
program, and intend to continue to obtain this feedback in
the future.

ESTABLISHING AND EVALUATING EXECUTIVE
COMPENSATION

INTRODUCTION

This Compensation Discussion and Analysis describes how
the Compensation Committee determined 2020 executive
compensation, the elements of our executive compensation
program and the compensation of each of our NEOs.

The information provided should be read together with the
information presented in the “Executive Compensation”
section of this Proxy Statement. For 2020, the NEOs were:

Hikmet Ersek
President and
Chief Executive Officer

Raj Agrawal
Chief Financial
Officer

Michelle Swanback
President, Product
and Platform

Jean Claude Farah
President, Global
Network

Khalid Fellahi
President, Consumer
Money Transfer

36 | The Western Union Company

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COMPENSATION DISCUSSION AND ANALYSIS

OUR EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES

The Compensation Committee has adopted the following compensation objectives and guiding principles to align the
Company’s incentive compensation program with the Company’s overall executive compensation philosophy:

Our Executive Compensation Philosophy

The Compensation Committee believes the Company’s executive compensation program should reward actions and
behaviors that build a foundation for the long-term strength and performance of the Company, while also rewarding the
achievement of short-term performance goals informed by the Company’s strategy.

• Align executive goals and compensation with stockholder interests

• Attract, retain and motivate outstanding executive talent

Objectives

• Pay-for-performance – Hold executives accountable and reward them for achieving financial, strategic

and operating goals

• Pay-for-Performance: Pay is significantly performance-based and at-risk, with emphasis on
variable pay to reward short- and long-term performance measured against pre-established
objectives informed by the Company’s strategy.

Guiding
Principles

• Align Compensation with Stockholder Interests: Link incentive payouts with the overall
performance of the Company, including achievement of financial and strategic objectives, as well
as individual performance and contributions, to create long-term stockholder value.

• Stock Ownership Guidelines: Our program requires meaningful stock ownership by our executives

to align them with long-term stockholder interests.

• Emphasis on Future Pay Opportunity vs. Current Pay: Our long-term incentive awards are delivered
in the form of equity-based compensation with multi-year vesting provisions to encourage retention.

• Hire, Retain and Motivate Top Talent: Offer market-competitive compensation which clearly links
payouts to actual performance, including rewarding appropriately for superior results, facilitating
the hire and retention of high-caliber individuals with the skills, experience and demonstrated
performance required for our Company.

• Principled Programs: Structure our compensation programs considering corporate governance

best practices and in a manner that is understandable by our participants and stockholders.

THE BOARD OF DIRECTORS AND THE COMPENSATION COMMITTEE

The Board of Directors oversees the goals and objectives of
the Company and the CEO, evaluates succession planning
with respect to the CEO and evaluates the CEO’s performance.
The Compensation Committee supports the Board by:

• Establishing the Company’s compensation philosophy;

• Overseeing the development and implementation of the

Company’s compensation and benefits policies;

• Reviewing and approving corporate goals and objectives
relevant to the compensation of the CEO and other
executive officers;

• Approving the compensation levels of each of the

executive officers;

• Approving the compensation of the CEO, with ratification

by the independent directors of the Board; and

• Overseeing critical role development and succession
efforts by providing strategic direction as the Board
identifies key executive skills and experience priorities.

The Compensation Committee’s responsibilities under its
charter are further described in the “Corporate Governance—
Committees of the Board of Directors” section of this Proxy
Statement.

2021 Proxy Statement | 37

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COMPENSATION DISCUSSION AND ANALYSIS

The CEO, while not a member of the Compensation
Committee, attended portions of each meeting of the
Compensation Committee in 2020 to contribute to and
understand the committee’s oversight of, and decisions
relating to, executive compensation. The CEO did not attend
portions of the meetings relating to his compensation. The
Compensation Committee regularly conducts executive
sessions without management present.

COMPENSATION CONSULTANTS

The Compensation Committee also engages in an ongoing
dialog with the CEO and the committee’s independent
consultant in the evaluation and establishment of the
elements of our executive compensation program. Further,
the committee received input from the Chief People Officer
in making executive compensation decisions.

During 2020, Meridian continued to provide executive
and director compensation consulting services to the
Compensation Committee.

Meridian
is retained by and reports directly to the
Compensation Committee and participates in committee
meetings. Meridian informs the committee on market trends,
as well as regulatory issues and developments and how
they may impact the Company’s executive compensation
program. Meridian also:

• Participates in the design of the executive compensation
program to help the committee evaluate the linkage
between pay and performance;

• Reviews market data and advises the committee regarding
the compensation of the Company’s executive officers;

• Reviews and advises the committee regarding outside

director compensation; and

• Performs an annual risk assessment of the Company’s
compensation program, as described in the “Executive
Compensation—Risk Management and Compensation”
section of this Proxy Statement.

Meridian does not provide any other services to the
Company. The Compensation Committee has assessed
the independence of Meridian pursuant to the NYSE rules
and the Company concluded that the work performed by
Meridian for the Compensation Committee did not raise any
conflict of interest.

During 2020, management retained the services of Willis
Towers Watson PLC (“WTW”) to assist the Company in
evaluating the Company’s annual and long-term incentive
programs. The Compensation Committee has assessed
the independence of WTW pursuant to the NYSE rules and
the Company concluded that WTW’s work did not raise any
conflict of interest.

SETTING 2020 COMPENSATION

In late 2019, the Compensation Committee, working with
Meridian and the CEO, engaged in a detailed review of the
Company’s executive compensation program to evaluate
whether the design and levels of each compensation element
were:

• Appropriate

to support

the Company’s strategic

performance objectives;

• Consistent with the philosophy and objectives described
under “—Our Executive Compensation Philosophy and
Objectives” above; and

• Reasonable when compared to market pay practices (see

“—Market Comparison” below).

For 2020, the Compensation Committee retained the overall
structure and design of the 2019 executive compensation
program. Accordingly, for 2020, the Company’s executive

compensation program continued to be significantly weighted
towards performance-based compensation and continued to
include a diversified mix of long-term incentive awards.

The Compensation Committee set the annual and long-
term incentive targets for the 2020 executive compensation
program in February 2020. The Compensation Committee
believed at the time that the performance targets were
rigorous yet achievable, and therefore established the targets
so that they would be achieved, at the target performance
level, if the Company successfully executed against its
operating plan for 2020 and the 2020-2022 performance
period. Because these targets were set in February 2020,
these targets were set prior to the time when the Company
could have anticipated or known the impact of the impending
COVID-19 pandemic. The Compensation Committee did
not make any changes in these targets in response to the
COVID-19 pandemic.

38 | The Western Union Company

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With respect to setting 2020 compensation levels, Mr. Ersek
presented to the Compensation Committee his evaluation
and recommendation for each of the other NEOs and their
respective salary, annual bonus targets, and long-term
incentive award targets. Mr. Ersek based his assessments on
a number of factors, including but not limited to: individual
performance and relative contributions to the Company’s
success; the performance of the executive’s respective
business unit or functional area; retention considerations;
market data; compensation history; and internal equity. After
consideration and discussion, the Committee reviewed and
approved Mr. Ersek’s 2020 recommendations for the NEOs
other than himself.

MARKET COMPARISON

For 2020, the Compensation Committee considered market
pay practices when setting executive compensation, but
did not target percentile ranks of specific compensation
elements or total target direct compensation against the
market data. Instead, the committee used market data to
assess the overall competitiveness and reasonableness of
the Company’s executive compensation program.

While the Compensation Committee considers relevant
market pay practices when setting executive compensation,
it does not believe it is appropriate to establish compensation
levels based only on market practices. The Compensation
Committee believes that compensation decisions are
complex and require a deliberate review of Company and
individual performance and peer compensation levels. The
factors that influence the amount of compensation awarded
include, but are not limited to:

• Market competition for a particular position;

• Experience and past performance inside or outside the

Company;

• Role and responsibilities within the Company;

• Tenure with the Company and associated institutional

knowledge;

• Long-term potential with the Company;

•

Innovative thinking and leadership;

• Money transfer or financial services industry expertise;

• Personal performance and contributions;

• Succession planning;

• Past and future performance objectives; and

• Value of the position within the Company.

COMPENSATION DISCUSSION AND ANALYSIS

Also in early 2020, Mr. Ersek submitted a self-evaluation to
the Compensation Committee. The committee shared Mr.
Ersek’s goals for the year and his self-evaluation with the
independent members of the Board, who then evaluated Mr.
Ersek’s performance in 2019 based on his actual performance
versus such goals. In setting Mr. Ersek’s 2020 compensation,
the committee considered this evaluation, market data
regarding chief executive officer compensation
levels
provided by Meridian, and a tally sheet of Mr. Ersek’s historical
and current compensation data. No member of management,
including Mr. Ersek, made any recommendations regarding
Mr. Ersek’s compensation or participated in the portions of
the Compensation Committee meeting or in the meeting
of the independent directors of the Board during which Mr.
Ersek’s compensation was determined or ratified.

As further discussed below, the committee considered
market data from both an executive compensation peer
group and a general industry compensation survey, but did
not assign a specific weight to either data source.

The Compensation Committee believes that the Company’s
executive compensation peer group should reflect the markets
in which the Company competes for business, executive talent
and capital. Accordingly, the Company’s peer group includes
companies meeting either of the following criteria:

• Global brands providing virtual products or services; or

• Companies involved with payment and/or processing

services.

In 2019, Meridian was asked to re-evaluate the Company’s
peer group. Based on this review, in September 2019,
the Compensation Committee approved changes to the
Company’s peer group to further align the median revenues
of the peer group with the Company’s revenues and to
include additional peers that, similar to the Company, have
significant non-U.S. revenues. As a result, the Compensation
Committee added eBay Inc., Intercontinental Exchange, Inc.,
and Sabre Corporation and removed Intuit Inc. and Navient
Corporation. The Compensation Committee also approved
the removal of Worldpay, Inc. due to its acquisition in 2019.

The executive compensation peer group used for evaluating
2020 compensation decisions consisted of the companies
below. Meridian compiled compensation information from
the peer group based on the publicly filed documents of each
member of the peer group. Based on the information below,
the Company estimates that it is between the 50th and 75th
percentile of the peer group in terms of revenues, below the
25th percentile of the peer group in terms of operating income,
and below the 25th percentile of the peer group in terms of
market capitalization.

2021 Proxy Statement | 39

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COMPENSATION DISCUSSION AND ANALYSIS

PEER GROUP
Ameriprise Financial
Broadridge Financial Solutions, Inc.
CME Group Inc.
Comerica Incorporated
Discover Financial Services
eBay Inc.
Euronet Worldwide, Inc.
Fidelity National Information Services, Inc.
Fiserv, Inc.
FleetCor Technologies, Inc.
Global Payments Inc.
Intercontinental Exchange, Inc.
MoneyGram International, Inc.
Nasdaq, Inc.
Northern Trust Corporation
PayPal Holdings, Inc.
Sabre Corporation
State Street Corporation
Total System Services, Inc.**
25th Percentile
50th Percentile
75th Percentile

2019
REVENUES*
(IN MILLIONS)
$12,890
$4,353
$4,858
$3,275
$8,228
$10,800
$2,750
$10,333
$10,187
$2,649
$4,912
$5,202
$1,285
$4,262
$6,088
$17,772
$3,975
$11,702
N/A
$4,047
$5,057
$10,297

2019
OP INCOME*
(IN MILLIONS)
$3,038
$574
$2,656
$1,570
$3,931
$2,398
$475
$1,760
$1,884
$1,289
$1,047
$2,720
$36
$1,137
$1,944
$2,790
$380
$3,091
N/A
$1,070
$1,822
$2,704

MARKET CAP
(AS OF 12/31/2019)
(IN MILLIONS)
$21,105
$14,163
$71,931
$10,343
$26,588
$29,376
$8,513
$85,485
$78,616
$24,969
$54,868
$51,536
$150
$17,555
$22,510
$127,012
$6,146
$28,763
N/A
$15,011
$25,779
$54,035

∗

∗∗

All data was compiled by Meridian who obtained peer company financial market intelligence from S&P CapitalIQ. The data generally represents
revenue and operating income for the most recent four quarters available to Meridian at the time Meridian compiled the data in January 2020.
Operating income may reflect measures not in conformity with GAAP.

While compensation data for Total Systems Services, Inc. was included in our peer group analysis, full-year 2019 financial and employee data
was not compiled for Total System Services, Inc. due to its acquisition in September 2019.

The Compensation Committee also referenced general
industry compensation survey data in evaluating executive
pay in order to consider a broader perspective on market
practices. To assist the committee in its review of the general
industry compensation survey data, Meridian extracts
compensation information from the surveys with respect
to companies with annual revenues generally ranging from
$3 billion to $6 billion. For the 2020 compensation review,
Meridian compiled compensation data from general industry
compensation surveys provided by WTW (which included
data from companies with annual revenues between $3
billion and $6 billion), and peer group data taken directly
from peer group proxy statements or from the Equilar Top
25 database. Executive positions were matched to the peer

group proxy data and third-party survey data based on job
title, functional matches, and pay rank.

Use of Tally Sheets

The Compensation Committee reviews
tally sheets
that present historical and current compensation data,
valuations of future equity vesting, value of option exercises
in the past five years, as well as analyses for hypothetical
terminations and retirements to allow the Compensation
Committee to consider the Company’s obligations under
such circumstances. The tally sheets provide additional
context for the committee in determining and assessing
NEO compensation.

40 | The Western Union Company

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COMPENSATION DISCUSSION AND ANALYSIS

THE WESTERN UNION 2020 EXECUTIVE
COMPENSATION PROGRAM

Pay-For-Performance and At-Risk Compensation

The principal components of the Company’s 2020 annual
executive compensation program were annual base salary,
annual incentive awards, and long-term incentive awards
in the form of PSUs, stock options (for the CEO) and RSUs.
The Compensation Committee designed the 2020 executive
compensation program so that performance-based pay
elements (Annual Incentive Plan awards, PSUs and, if

applicable, stock options) would constitute a significant
portion of the executive compensation awarded, determined
at target levels. The following charts illustrate the mix of the
targeted annual compensation for the CEO and the average
targeted annual compensation for the other NEOs, and the
portion of that compensation that is performance-based
and/or at-risk. For purposes of these charts, the percentage
of targeted annual compensation was determined based on
the annual base salary and target incentive opportunities
applicable to the NEO as of December 31, 2020.

CEO 2020 TOTAL TARGET DIRECT COMPENSATION

NEO 2020 TOTAL TARGET DIRECT COMPENSATION

Base Salary
Annual Incentive
TSR PSUs
Financial PSUs
Stock Options
RSUs

10%

15%

16%

Base Salary
Annual Incentive
TSR PSUs
Financial PSUs
RSUs

18%

20%

37%
ce-Based C o m p
At-Risk Compen s a t i o

%
3

15%

n s ation 8

n 9

29%

12%
ce-Based C o m p
At-Risk Compen s a t i o

%
2

21%

n s ation 6

n 8

2021 Proxy Statement | 41

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COMPENSATION DISCUSSION AND ANALYSIS

ELEMENTS OF 2020 EXECUTIVE COMPENSATION PROGRAM

The following table lists the material elements of the Company’s 2020 executive compensation program for the Company’s
NEOs. The committee believes that the design of the Company’s executive compensation program focuses on performance-
based compensation elements, provides alignment with the Company’s short- and long-term financial and strategic priorities
at the time through the annual and long-term incentive programs, and provides alignment with stockholder interests.

Fixed

At-Risk /
Performance-Based

Base Salary

Annual Incentive Awards

PSUs

Stock Options (CEO only)

RSUs

Fixed
compensation
component
payable in cash.

Variable compensation
component payable in cash
based on performance
against annually established
performance objectives.

Establish a pay
foundation at
competitive
levels to
attract and
retain talented
executives.

Motivate and reward
executives for performance
on key financial, strategic
and/or individual performance
goals over the year.

Hold our executives
accountable, with payouts
based on actual performance
against pre-established and
communicated performance
goals.

Non-qualified stock
options granted with an
exercise price equal to fair
market value on the date of
grant that expire 10 years
after grant and become
exercisable in 25% annual
increments over a four-year
vesting period.

The value of stock options
is dependent on our stock
price over the option term.

Align interests of the
CEO with those of our
stockholders by focusing
on long-term stock price
appreciation over the option
term.

PSUs vest based on the
Company’s achievement
of multi-year financial
performance objectives and
the Company’s relative TSR
performance.

The value of PSUs is also
dependent on our stock price
over the performance period.

Financial PSUs accrue
dividend equivalents, with
dividend equivalents paid
only to the extent the
underlying shares vest.

TSR PSUs do not
accrue and pay dividend
equivalents.
Align the interests of
executives with those of our
stockholders by focusing
the executives on the
Company’s financial and
TSR performance over a
multi-year period.

Hold our executives
accountable, with payouts
varying from target based
on actual performance
against pre-established and
communicated performance
goals.

Experience,
job scope,
responsibilities,
market data,
internal equity,
and individual
performance.

Internal pay equity, market
practice, corporate and
individual performance.

Internal pay equity, market
practice and individual
performance.

Cash payouts ranging from
0% to 175% of target based on
the achievement of financial
and strategic goals, with an
additional +/- 25% modifier
for participants other than
the CEO based on individual
performance with respect
to personalized objectives,
including business unit goals.

Financial PSUs: Vesting
ranging from 0% to 200%
of target based on revenue
and operating margin over
the 2020-2022 performance
period.

TSR PSUs: Vesting ranging
from 0% to 200% of target
based on the Company’s
TSR performance relative
to the S&P 500 Index over
the 2020-2022 performance
period.

s
c

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RSUs generally cliff vest
on the third anniversary
of the date of grant
based on continued
service during the
vesting period.

The value of RSUs is
dependent on our stock
price over the vesting
period.

RSUs accrue dividend
equivalents, with
dividend equivalents
paid only to the extent
the underlying shares
vest.

Competitive with market
practices in order to
attract and retain top
executive talent.

Align the interests of
executives with those
of our stockholders by
focusing the executives
on long-term
objectives over a multi-
year vesting period,
with the value of the
award fluctuating
based on stock price
performance.
Internal pay equity,
market practice
and individual
performance.

See the “Setting 2020 Compensation” section for further information regarding the determination of 2020 compensation levels.

42 | The Western Union Company

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COMPENSATION DISCUSSION AND ANALYSIS

Each of Western Union’s 2020 executive compensation program elements is described in further detail below.

Base Salary

Our philosophy is that base salaries should meet the objectives of attracting and retaining the executives needed to lead the
business. Base salary is a fixed compensation component payable in cash. In February 2020, Messrs. Ersek and Agrawal
received base salary increases of approximately 5% and 3%, respectively, in order to further align their total compensation
levels with the market data. Mr. Ersek’s last increase in base salary was in 2012. None of our other NEOs received a base salary
increase during 2020. Ms. Swanback’s base salary was established at the time she joined the Company in January 2020 based
on market data, considering the scope of her role and responsibilities within the organization.

The following table sets forth each NEO’s 2019 and 2020 base salary levels as of December 31 of each year:

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

Annual Incentive Compensation

Our Annual Incentive Plan is designed to motivate and reward
our NEOs for achieving short-term performance objectives.
We believe the program supports our “pay-for-performance”
culture.

Target payout opportunities under the Annual Incentive Plan
are expressed as a percentage of a participant’s annual base
salary. For 2020, the Compensation Committee increased
the target bonus opportunity for Mr. Farah from 90% to
110% of base salary and for Mr. Fellahi from 100% to 110%
of base salary to further align their short-term incentive
compensation with market data and the Company’s internal
pay practices. As a percentage of base salary, none of our other
NEOs received an Annual Incentive Plan target increase with
respect to 2020. Ms. Swanback’s target bonus opportunity
was established at the time she joined the Company in
January 2020 based on market data, considering the scope
of her role and responsibilities within the organization.

Potential payouts range from 0% to 175% of target based on the
achievement of pre-established financial and strategic goals.
Because the committee believes that individual objectives
are indicators of the executive’s success in fulfilling the
executive’s responsibilities, the total payout under the Annual
Incentive Plan for the NEOs other than the CEO is subject to
a +/- 25% modifier based on the committee’s assessment
versus individual performance goals. Payouts for the NEOs
(other than the CEO) are capped at 200% of each individual’s
target bonus opportunity, with the CEO’s payout capped at
175% of his target bonus opportunity.

2019 BASE
SALARY ($000)
$1,000.0
$630.0
N/A
$500.0
$500.0

2020 BASE
SALARY ($000)
$1,050.0
$650.0
$625.0
$500.0
$500.0

The Annual Incentive Plan is based on the achievement of
financial and strategic goals weighted at 70% and 30%,
respectively. The weighting of the performance measures
reflects the desire of the Compensation Committee to tie
a significant portion of annual incentive compensation
to performance measures that the committee believes
are meaningful to and readily accessible by our investors,
while at the same time emphasizing strategic performance
objectives focused on the Company’s growth imperatives.

Financial Performance and Goal Setting. Consistent with prior
years, the Compensation Committee set the annual incentive
targets for the 2020 Annual Incentive Plan in February 2020.
Under the Annual Incentive Plan, the committee required a
year-over-year growth rate of 2.8% for total revenue and 7.0%
for operating profit in order for the NEOs to earn a target payout
with respect to the financial component of the Annual Incentive
Plan. The Compensation Committee believed at the time that
the performance targets were rigorous yet achievable, and
therefore established the targets so that they would be achieved,
at the target performance level, if the Company successfully
executed against its operating plan for 2020. Because these
targets were set in February 2020, these targets were set prior
to the time when the Company could have anticipated or known
the impact of the impending COVID-19 pandemic. As a result,
due to the impact of the COVID-19 pandemic, the Company did
not achieve the revenue and operating income performance
goals under the 2020 Annual Incentive Plan.

2021 Proxy Statement | 43

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COMPENSATION DISCUSSION AND ANALYSIS

Total Revenue
Operating Income
Overall Achievement

2019
COMPARATIVE
RESULTS*
$5,161M
$1,035M

TARGET GROWTH RATE
FROM 2019 RESULTS
2.8%
7.0%

2020 TARGET*
$5,305M
$1,107M

2020 ACTUAL
RESULTS*
$4,918M
$1,031M

ACHIEVEMENT(%)
0%
0%
0%

2020 target and actual results exclude Argentina inflation and are shown at constant currency, calculated assuming no changes in the currency
exchange rates from 2019 currency exchange rates. For comparative purposes, the 2019 Comparative Results for Revenue and Operating Income
represent 2019 actual results under the Annual Incentive Plan, but adjusted to exclude Speedpay and Paymap due to the 2019 dispositions of such
businesses. The performance grid provided payout opportunities for performance ranging from $5,202M to $5,460M for revenue and $1,076M to
$1,138M for operating profit.

When the financial and strategic performance measures were
established, and consistent with prior years, the committee
determined that the effect of currency fluctuations, acquisitions
and divestitures, including related costs, restructuring, and
other significant charges not included in the Company’s
internal 2020 financial plan should be excluded from both
the establishment of goals as well as the determination of
payout calculations to more closely align with the underlying
operating performance of the business.

As it had in previous years, the Compensation Committee
set the 2020 financial performance goals by establishing a
grid based on the Company’s revenue and operating income.
These performance measures were used in order to tie annual
incentive compensation to measures of the Company’s
the committee deemed
financial performance
meaningful to and readily accessible by our investors.

that

The Compensation Committee established the performance
goal grid and corresponding payout percentages based upon
input from management regarding the Company’s expected
performance in the upcoming year, which did not take into
account the impact of the COVID-19 global pandemic, the
extent of which was not foreseen at the time. The committee
designed the grid to encourage strong, focused performance
by our executives. The 2020 performance goal grid provided
a payout of 100% of target if the Company achieved its
internal operating plan at the time for operating income and
revenue, with a maximum initial payout level of 175% of target
if revenue and operating income grew by 5.8% and 10.0%,
respectively, as compared to 2019 actual performance.

Strategic Performance and Goal Setting. Participants in
the 2020 Annual Incentive Plan had 30% of their award
opportunity tied to the achievement of pre-established
performance objectives based upon
the Company’s
strategic operating plan, with a focus on the Company’s
growth imperatives (as measured by WU.com revenue
and digital revenue generated from third parties providing
the Company’s money transfer services, weighted 10%),
compliance execution objectives
(weighted 10%) and
corporate efficiency and cost-savings under the WU Way
Next Generation Initiative (weighted 10%). Performance
levels of the objectives were designed to be achievable, but
required the coordinated, cross-functional focus and effort
of the executives. For 2020, the Company outperformed
the strategic performance metrics with respect to WU.com

44 | The Western Union Company

revenue, digital revenue, and the WU Way Next Generation
Initiative. The Committee believed the Company’s strategic
achievements were reflective of the Company’s successful
execution of its strategic operating plan with respect to these
objectives, including multi-year investments made by the
Company in its digital platform and offerings that enabled
the Company to adapt to changes in its business in response
to the COVID-19 pandemic. Based on the achievement of the
strategic performance objectives, the committee certified a
payout equal to 163% of each NEO’s target allocated to the
strategic performance objectives.

Individual Performance Modifier and Goal Setting. Other
than for Mr. Ersek, each NEO’s payout under the 2020 Annual
Incentive Plan was subject to a +/- 25% modifier based on
individual and business
the committee’s assessment of
unit performance. In making its assessment, the committee
considered the recommendations of the CEO based on his review
of the performance of each NEO against the individual objectives
established by the committee at the beginning of the year.

The committee believes
the performance objectives
established for each NEO are indicators of the executive’s
success in fulfilling the executive’s responsibilities to the
Company and support the Company’s strategic operating plan.
The committee also believes that including an assessment
of contributions towards the Company’s WU Way Next
Generation Initiative, compliance initiatives, and leadership
objectives reinforces these objectives as priorities throughout
the organization. The performance levels of the individual and
business unit objectives were designed to be achievable, but
required strong and consistent performance by the executive.

In early 2021, the Compensation Committee approved the
application of the individual performance modifier for each
of the NEOs other than Mr. Ersek. Specific achievements
considered by the Compensation Committee in applying the
individual modifier included business continuity planning
and execution, the Company’s strong employee engagement
surveys, expansion of the Western Union network, increased
operational efficiencies, management of agent closures
during the pandemic, execution of emergency regulatory
approvals for product offerings needed by customers
during the pandemic, execution of transition to work from
home in many different countries, and enhancement to the
agent contract renewal process. Based on the committee’s

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COMPENSATION DISCUSSION AND ANALYSIS

assessment of individual and business unit performance, the
committee approved individual performance modifiers for
the NEOs other than Mr. Ersek ranging from -4% to 11%.

Compliance Evaluation. The Company considers evaluation
criteria related to compliance in its executive bonus system so
that each Company executive is evaluated on what the executive
has done to ensure that the executive’s business or department
is in compliance with applicable U.S. laws. A failing score in

compliance, including with respect to anti-money laundering
and anti-fraud programs, will make the executive ineligible for
any bonus for that year. In addition, the 2020 award agreements
under the Annual Incentive Plan are subject to the Company’s
clawback policy, which specifically authorizes the clawback of
annual incentive payments due to compliance failures. In early
2021, the Compensation Committee determined that each NEO
met the compliance-related evaluation criteria established by
the Company and therefore determined that each NEO remained
eligible for a bonus with respect to 2020.

NEO Payouts Under the 2020 Annual Incentive Plan. The following table sets forth each NEO’s 2020 target award opportunity
expressed (i) as a percentage of 2020 base salary and (ii) in dollars and the annual incentive payouts received by each NEO.

EXECUTIVE

Hikmet Ersek

Raj Agrawal

Michelle Swanback
Jean Claude Farah

Khalid Fellahi

TARGET
BONUS
AS A %
OF BASE
SALARY

170%

100%

100%
110%

110%

TARGET
AWARD
OPPORTUNITY
($000)

CORPORATE
OBJECTIVES
PAYOUT
($000)

STRATEGIC
OBJECTIVES
PAYOUT AT
163% OF TARGET
($000)

$1,785.0

$650.0

$625.0
$550.0

$550.0

$0
$0

$874.7

$318.5

$306.3
$269.5

$269.5

FINAL
BONUS
($000)*

$874.7

$377.0

$375.0
$324.5

$247.5

Includes application of individual performance modifier noted above.

Long-Term Incentive Compensation

The objectives for the long-term incentive awards for 2020
were to:

• Align the interests of our executives with the interests of
our stockholders by focusing on objectives that result in
stock price appreciation;

•

Increase cross-functional executive focus in the coming
years on key performance metrics through Financial PSUs;

• Amplify executive focus on stockholder returns through

TSR PSUs; and

• Retain the services of executives through multi-year

vesting provisions.

The Company’s shareholder-approved long-term incentive
plan allows the Compensation Committee to award various
forms of long-term incentive grants, including stock options,
RSUs, performance-based equity and performance-based
cash awards. The Compensation Committee approves all
equity grants made to our senior executives, with the equity
grants made to the CEO ratified by the independent directors
of the Board. When making regular annual equity grants,
the Compensation Committee’s practice is to approve them
during the first quarter of each year as part of the annual
compensation review. In addition to the factors listed in
the table under “Elements of 2020 Executive Compensation

Program,” the Compensation Committee also considers
dilution of the Company’s outstanding shares when making
equity grants.

2020 Annual Long-Term Incentive Awards. In early 2020,
the Compensation Committee granted the NEOs long-term
incentive awards under the Long-Term Incentive Plan. For
2020, the Compensation Committee approved (and the
independent members of the Board ratified) an increase in the
target grant value of Mr. Ersek’s long-term incentive award
in order to more closely align his compensation with the
market data and reflect his performance. Mr. Ersek’s target
grant value for his long-term incentive award had not been
adjusted since 2016. In addition, for 2020, the Compensation
Committee approved an increase in the target grant value of
Mr. Fellahi’s long-term incentive award as his 2019 long-term
incentive award was sized based on the position he held at
the time of the 2019 grant, with the 2020 long-term incentive
award sized based on market data as well as internal
pay equity. None of our other NEOs received a long-term
incentive award target increase with respect to 2020. Ms.
Swanback’s target grant value was established at the time
she joined the Company in January 2020 based on market
data, considering the scope of her role and responsibilities
within the organization.

The following table sets forth the target award value, as of
the date of grant, of the 2020 long-term incentive awards
received by each NEO:

2021 Proxy Statement | 45

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COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

TARGET GRANT
VALUE ($000)
$8,200.0
$2,400.0
$2,200.0
$1,050.0
$1,500.0

Once the target grant value is set for each NEO, the grant value is then allocated among PSUs, RSUs and stock options, as
applicable. In 2020, the committee granted the long-term incentive allocation indicated below:

CEO 2020 LONG-TERM INCENTIVE AWARDS

OTHER NEO 2020 LONG-TERM INCENTIVE AWARDS

RSUs
Financial PSUs
TSR PSUs
Stock Options

10%

20%

Company TSR
performance
measured
over a 3-year
performance period

50%

Revenue
and Operating
Margin growth
goals over a 3-year
performance period

The committee believes that this mix is appropriate because it
is designed to align the interests of our NEOs with the interests
of our stockholders, drive long-term performance with respect
to strategic measures, support retention of our NEOs and align
with market practices as reported by Meridian.

Financial PSUs. The 2020 Financial PSU awards will vest if
and only to the extent that specific performance goals for
revenue and operating margin are met during the three-
year cumulative performance period. This represents a
modification from the 2019 Financial PSUs, which vest based
on achievement of performance goals for revenue and EBIT.
The committee approved the use of revenue and operating
margin, with each goal weighted evenly, in order to ensure
balance of both revenue and efficient long-term profit growth
and shareholder value creation. The Company replaced the
EBIT metric used in 2019 with operating margin as such goal
was viewed as more strongly aligned with the Company’s
corporate strategy and provided an appropriate balance to
the Company’s other performance metrics in both the annual
incentive and long-term incentive programs.

The performance objectives under the 2020 Financial PSUs
are based on:

• a targeted constant currency compound annual growth
impact of

rate (“CAGR”) for revenue, excluding the
Argentina inflation; and

• operating margin, each measured over the cumulative

three-year performance period.

46 | The Western Union Company

RSUs
Financial PSUs
TSR PSUs

Company TSR
performance
measured
over a 3-year
performance
period

20%

30%

50%

Revenue and
Operating Margin
growth goals
over a 3-year
performance period

Under the terms of the awards, as much as 200% of the
targeted Financial PSUs may be earned based on the
Company’s performance with respect to the revenue and
operating margin performance objectives over the three-
year performance period. In addition, in order to vest in the
award, the award recipient must remain employed through
the third anniversary of the grant date (February 2023),
except as otherwise provided under the Company’s Executive
Severance Policy or the Long-Term Incentive Plan and related
award agreement.

Because these targets were set in February 2020, these
targets were set prior to the time when the Company could
have anticipated or known the impact of the impending
COVID-19 pandemic. The PSU performance goals were
designed at the time to be challenging but achievable with
the coordinated, cross-functional focus and effort of the
executives.

The Compensation Committee utilized revenue as an element
in both the Company’s Annual Incentive Plan and long-
term incentive program. When designing the Company’s
2020 executive compensation program, the Compensation
Committee evaluated a range of performance metrics
for purposes of the Company’s incentive programs and
considered input from management and Meridian. Based
on such review, the Compensation Committee determined
that revenue continues to be viewed as a core driver of the
Company’s performance and stockholder value creation and
should remain a component in both the Annual Incentive

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Plan (measured over one year) and long-term incentive
program (measured over three years). In recognition of the
Company’s use of revenue in both the annual and long-
term incentive programs, the Compensation Committee
continued its historical practice of supplementing the primary
performance measures under the Annual Incentive Plan and
long-term incentive program with additional performance
measures in order to strike an appropriate balance with
respect to incentivizing top-line growth, profitability, non-
financial business imperatives and stockholder returns over
both the short-term and long-term horizons.

COMPENSATION DISCUSSION AND ANALYSIS

Similar to the Annual Incentive Plan, when the financial
performance objectives were established for the Financial
PSUs, the committee determined that the effect of currency
fluctuations, acquisitions and divestitures, including related
costs, restructuring, and other significant charges not
included in the Company’s internal financial plans should be
excluded from the payout calculations. Consistent with the
Company’s historical practices, under this plan design, the
performance results for the Financial PSUs will be calculated
using the prior year’s currency exchange rates.

The following table sets forth each NEO’s threshold, target and maximum award opportunity with respect to the 2020 Financial
PSU:

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

2020 FINANCIAL PSU AWARD OPPORTUNITY
TARGET
154,717
45,767
41,953
20,023
28,605

THRESHOLD
77,359
22,884
20,977
10,012
14,303

MAXIMUM
309,434
91,534
83,906
40,046
57,210

TSR PSUs. In 2020, the Company continued to grant TSR
PSUs to enhance focus on stockholder returns. These TSR
PSUs require the Company to achieve 60th percentile relative
TSR performance versus the S&P 500 Index over a three-year
performance period in order to earn target payout, with 30th
percentile relative TSR performance resulting in threshold
payout and 90th percentile relative TSR performance

resulting in maximum payout. This portion of the award is
also subject to the participant’s continued service through
the third anniversary of the grant date (February 2023),
except as otherwise provided under the Company’s Executive
Severance Policy or the Long-Term Incentive Plan and related
award agreement.

The following table sets forth each NEO’s threshold, target and maximum award opportunities with respect to the 2020 TSR
PSUs:

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

2020 TSR PSU AWARD OPPORTUNITY
TARGET
72,184
21,958
20,129
9,607
13,724

THRESHOLD
36,092
10,979
10,065
4,804
6,862

MAXIMUM
144,368
43,916
40,258
19,214
27,448

Annual RSU Awards. Service-vesting RSUs are granted to
our NEOs to support retention and alignment of our NEOs’
interests with the interests of our stockholders. The annual
RSU grants vest 100% on the third anniversary of the grant

date, subject to the NEO’s continued service or as otherwise
provided for under the Company’s Executive Severance
Policy or the Long-Term Incentive Plan and related award
agreement.

The following table sets forth each NEO’s 2020 annual RSU grant:

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

ANNUAL RSU GRANT
30,944
27,460
25,172
12,014
17,163

2021 Proxy Statement | 47

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COMPENSATION DISCUSSION AND ANALYSIS

Stock Option Award. With respect to Mr. Ersek, stock options
are granted to further emphasize the achievement of long-term
objectives and encourage long-term value creation as the stock
options will have value to Mr. Ersek only if the Company’s stock
price appreciates from the date of grant. The stock options
vest in 25% annual increments over four years, subject to Mr.
Ersek’s continued service or as otherwise provided for under
the Company’s Executive Severance Policy or the Long-Term
Incentive Plan and related award agreement, and have a 10-
year term. The committee believes that the Company’s 2020
long-term incentive design supports retention and represents
a balanced reflection of stockholder returns and financial
performance. For 2020, Mr. Ersek received options representing
the right to purchase 414,142 shares of the Company’s common
stock, subject to the satisfaction of the underlying service-
based vesting conditions.

2018 PSU Awards. Under the terms of the 2018 PSUs, 2020
represented the final year of the three-year performance
period for the 2018 Financial PSUs and the 2018 TSR PSUs.
The 2018 Financial PSUs vested based on the extent to which
the Company’s CAGR for revenue and EBIT met certain
goals over a cumulative three-year performance period
(weighted 70% and 30%, respectively). The 2018 TSR PSUs
vested based on the Company’s achievement of relative
TSR performance versus the S&P 500 Index over a three-
year performance period. Based on performance over the
three-year performance period, as described further below,
the 2018 PSUs vested as follows for each of the participating
NEOs:

EXECUTIVE(1)
Hikmet Ersek
Raj Agrawal
Jean Claude Farah
Khalid Fellahi

2018 TARGET
FINANCIAL PSUs
(#)
174,217
59,732
26,133
17,422

2018 EARNED
FINANCIAL PSUs
(#)
104,531
35,840
15,680
10,454

2018 TARGET
TSR PSUs
(#)
66,163
22,663
9,916
6,611

2018 EARNED
TSR PSUs
(#)
52,269
17,904
7,834
5,223

(1) Ms. Swanback commenced employment with the Company in early 2020 and, accordingly, did not receive 2018 PSUs.

The 2018 Financial PSU and 2018 TSR PSU performance
objectives and the achievement levels are set forth in the
tables below. While the performance periods for the 2018
PSUs concluded as of December 31, 2020, these awards
remained subject to service-based vesting conditions until
the third anniversary of the grant date (February 2021).
Pursuant to the terms of the underlying award agreements
and consistent with the adjustment methodology used in
prior years, the Compensation Committee excluded from
the 2018 Financial PSU payout calculations charges incurred
pursuant to settlement agreements with the United States
Department of Justice, certain United States Attorney’s
Offices, the United States Federal Trade Commission,
the Financial Crimes Enforcement Network of the United
States Department of the Treasury, and various state
attorneys general (the “Joint Settlement Agreements”) and
costs associated with a January 4, 2018 consent order,
which resolved a matter with the New York Department

of Financial Services relating to facts set forth in the Joint
Settlement Agreements after considering that the conduct
at issue occurred mainly from 2004 to 2012 and that the
Company had since taken substantial remedial measures
and implemented compliance enhancements to improve its
anti-fraud and anti-money laundering programs. In addition,
the committee excluded from the payout calculations costs
incurred in connection with the Company’s WU Way program
in 2017 and the WU Way Next Generation Initiative in 2019
and 2020, the savings associated with the WU Way Next
Generation Initiative in 2020, and a 2017 goodwill impairment
relating to our Business Solutions reporting unit. The
committee viewed these as significant items not indicative
of the Company’s day-to-day performance. Finally, for the
2018 payout calculation, revenue and operating income were
adjusted to exclude Speedpay and Paymap due to the 2019
dispositions of these businesses.

2018 FINANCIAL PSUs
(PERFORMANCE PERIOD 2018-2020)

PERFORMANCE OBJECTIVES

2018 FINANCIAL PSU PERFORMANCE GOALS

Targeted constant currency compound
annual growth rate for revenue and EBIT
over the three-year performance period

Revenue growth rate: 3.5%
EBIT growth rate: 4.0%

ACTUAL PERFORMANCE*
Revenue growth
rate = 1.1% achievement

EBIT growth
rate = 3.0% achievement

Overall Attainment Level 60%

At constant currency, calculated assuming no changes in the currency exchange rates from the prior year’s currency exchange rates.

48 | The Western Union Company

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COMPENSATION DISCUSSION AND ANALYSIS

2018 TSR PSUs
(PERFORMANCE PERIOD 2018-2020)

PERFORMANCE GOALS

PERFORMANCE OBJECTIVE

TSR relative to S&P 500 Index*

THRESHOLD
30th percentile

TARGET
60th percentile

MAXIMUM
90th percentile

ACTUAL PERFORMANCE
48th percentile

Overall Attainment Level 79%

Relative TSR performance for purposes of the 2018 TSR PSUs was calculated based on the terms of the 2018 TSR PSU award agreement,
which requires using a beginning stock price calculated as the average company closing stock price for all trading days during December 2017
and an ending stock price calculated as the average company closing stock price for all trading days during December 2020. In determining
the TSR for the companies in the S&P 500 Index, the S&P companies comprising the S&P Index on December 31, 2020 were used.

Other Elements of Compensation

To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees,
we provide the benefits listed in the following table to our U.S.-based employees:

BENEFIT OR PERQUISITE

401(k) Plan
Supplemental Incentive Savings Plan (a nonqualified defined
contribution plan)
Severance and Change-in-Control Benefits (Double-Trigger)
Health and Welfare Benefits
Limited Perquisites

severance

arrangements with

Severance and Change-in-Control Benefits. The Company
has an Executive Severance Policy for our executive officers.
The policy helps accomplish the Company’s compensation
philosophy of attracting and retaining exemplary talent. The
committee believes it is appropriate to provide executives
with the rewards and protections afforded by the Executive
Severance Policy. The policy reduces the need to negotiate
individual
departing
executives and protects our executives from termination
for circumstances not of their doing. The committee also
believes the policy promotes management independence
and helps retain, stabilize, and focus the executive officers
in the event of a change-in-control. In the event of a change-
in-control, the policy’s severance benefits are payable only
upon a “double trigger.” This means that severance benefits
are triggered only when an eligible executive is involuntarily
terminated (other than for cause, death, or disability), or
terminates his or her own employment voluntarily for “good
reason” (including a material reduction in title or position,
reduction in base salary or bonus opportunity or an increase
in the executive’s commute to his or her current principal
working location of more than 50 miles without consent)
within 24 months after the date of a change-in-control.
Severance benefits under the policy are conditioned upon the
executive executing an agreement and release that includes,
among other things, non-competition and non-solicitation
restrictive covenants and a release of claims against the
Company.

NAMED
EXECUTIVE
OFFICERS
✔
✔

OTHER
OFFICERS
AND KEY
EMPLOYEES
✔
✔

✔
✔

✔

✔
✔

✔

ALL FULL-TIME
AND REGULAR
PART-TIME
EMPLOYEES

✔

✔
✔

In addition, the Executive Severance Policy prohibits excise
tax gross-up payments on change-in-control benefits for
those individuals who became executives of the Company
after April 2009. Mr. Ersek is the only Company employee
who remains eligible for these excise tax gross-up payments
because he became an executive of the Company prior to
2009.

As noted below, Mr. Farah is subject to an employment
agreement, which is a customary practice for executives
located in the United Arab Emirates (“UAE”). Under the terms
of Mr. Farah’s employment agreement, he is required to receive
three months’ notice of termination of employment or, in lieu
of such notice, three months of pay. In addition, Mr. Farah is
also eligible for statutory end of service gratuity/severance
amounts in accordance with local law. Any amounts due
to Mr. Farah under the Executive Severance Policy will be
reduced by any end of service gratuity/severance paid under
the terms of his employment agreement or as required by
local law.

the

Please see
“Executive Compensation—Potential
Payments Upon Termination or Change-in-Control” section
of this Proxy Statement for further information regarding
the Executive Severance Policy, including the treatment of
awards upon qualifying termination events or a change-in-
control.

2021 Proxy Statement | 49

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COMPENSATION DISCUSSION AND ANALYSIS

Employment Arrangements. The Company generally
executes an offer of employment before an executive joins
the Company. This offer describes the basic terms of the
executive’s employment, including his or her start date,
starting salary, annual incentive target and long-term incentive
award target. The terms of the executive’s employment are
based thereafter on sustained good performance rather than
contractual terms, and the Company’s policies, such as the
Executive Severance Policy, will apply as warranted.

In late 2019, the Company and Ms. Swanback entered into
an offer of employment outlining the basic of terms of Ms.
Swanback’s employment. In addition to setting forth Ms.
Swanback’s start date, starting salary, annual incentive target,
long-term incentive award target and eligibility to participate
in the Executive Severance Policy, Ms. Swanback’s offer of
employment also included cash and RSU sign-on awards.
Ms. Swanback received a cash sign-on award in the amount
of $500,000, which was subject to pro-rata repayment
in the event Ms. Swanback voluntarily resigned from the
Company or was terminated for cause prior to the one-year
anniversary of her start date. Ms. Swanback also received a
one-time RSU award of 94,340 RSUs with a target grant date
fair value of $2,500,000, with the RSUs scheduled to vest in
two substantially equal installments on the first and second
anniversaries of the grant date, subject to Ms. Swanbank’s
continued employment through the applicable vesting date
or as otherwise provided for under the Company’s Executive
Severance Policy or the Long-Term Incentive Plan and the
related award agreement. Ms. Swanback’s new hire equity
award was granted as compensation for amounts that she
would forfeit with her prior employer by accepting a position
with the Company.

Under certain circumstances, the Compensation Committee
recognizes that special arrangements with respect to an
executive’s employment may be necessary or desirable.
For example, Mr. Ersek, the Company, and a subsidiary of
the Company entered into agreements in November 2009
relating to his 2009 promotion to Chief Operating Officer,
which were amended effective September 2010 to reflect
his 2010 promotion to President and CEO. Employment
contracts are a competitive market practice in Austria where
Mr. Ersek resided at the time he assumed his position as Chief
Operating Officer and the Compensation Committee believes
the terms of his agreements are consistent with those for
similarly situated executives in Austria. Additionally, Mr. Farah
and a subsidiary of the Company entered into an employment
contract in June 2008 with respect to Mr. Farah’s employment
with the Company. Employment contracts are a competitive
market practice in the UAE where Mr. Farah resides, and the
Compensation Committee believes the terms of his contract
are consistent with those for similarly situated executives in
the UAE. Please see the “Executive Compensation—Narrative
to Summary Compensation Table and Grants of Plan-Based
Awards Table—Employment Arrangements” section of this
Proxy Statement for a description of the material terms of
the employment agreements with Messrs. Ersek and Farah.

50 | The Western Union Company

Retirement Savings Plans. The Company executives on
U.S. payroll are eligible for retirement benefits through a
qualified defined contribution 401(k) plan, the Incentive
Savings Plan, and a nonqualified defined contribution
plan, the Supplemental Incentive Savings Plan (“SISP”).
The SISP provides a vehicle for additional deferred
compensation with matching contributions from the
Company. We maintain the Incentive Savings Plan and
the SISP to encourage our employees to save some
percentage of their cash compensation for their eventual
retirement. Mr. Ersek participates in the qualified defined
contribution retirement plan made available to eligible
employees in Austria. The committee believes that these
types of savings plans are consistent with competitive pay
practices, and are an important element in attracting and
retaining talent in a competitive market. Please see the
2020 Nonqualified Deferred Compensation Table in the
“Executive Compensation” section of this Proxy Statement
for further information regarding the Company’s retirement
savings plans.

Benefits and Perquisites. The Company’s global benefit
philosophy for employees, including executives, is to provide
a package of benefits consistent with local practices and
competitive within individual markets. While employed with
the Company, each of our NEOs participates in the health
and welfare benefit plans and fringe benefit programs
generally available to all other Company employees in the
individual market in which they are located. For example, Mr.
Farah resides in the UAE where it is customary to provide
certain fringe benefits, including annual housing, education,
transportation, health and wellness and
technology
allowances.

its NEOs with

The Company provided
limited, yet
competitive perquisites and other personal benefits that
the Compensation Committee believes are consistent
with the Company’s philosophy of attracting and retaining
exemplary executive talent and, in some cases, such as the
annual physical examination, the Company provides such
personal benefits because the committee believes they are
in the interests of the Company and its stockholders. The
committee periodically reviews the levels of perquisites and
other personal benefits provided to NEOs.

During 2018, the Company hired an outside security provider to
perform a comprehensive security assessment with respect
to certain Company personnel, including Mr. Ersek. Based
on its security assessment, the outside security provider
recommended certain home security services continue to
be provided to Mr. Ersek and that Mr. Ersek continue to use
corporate aircraft for certain business and personal travel.
Accordingly, the Company paid for certain security services
for Mr. Ersek and corporate aircraft for certain personal travel.
Because the Company believes it is in the best interests of the
Company and its stockholders to protect Mr. Ersek against
possible security threats to him and his family members,
the Company requires that Mr. Ersek accept such personal

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security protection. The Company also believes that the costs
of this security are appropriate and necessary. Although the
Company does not consider Mr. Ersek’s security services
to be a perquisite or other personal benefit for the reasons
described above, the Company has reported the costs
related to security services for Mr. Ersek as well as the costs
of corporate aircraft for personal travel in the “2020 All Other
Compensation Table.” Occasionally, Mr. Ersek’s spouse or
other guests may accompany him on corporate aircraft when
the aircraft is already scheduled for business purposes and
can accommodate additional passengers. In those cases,
there is no additional aggregate incremental cost to the
Company and, as a result, no amount is reflected in the “2020
All Other Compensation Table.” Also, in connection with the
Company’s sponsorship of certain events and partnerships
with various organizations and venues, certain perquisites,
including tickets and parking access, are made available to
officers and employees of the Company, including Mr. Ersek
and the other NEOs. These perquisites have no additional
aggregate incremental cost to the Company, and therefore,
no amount is reflected in the “2020 All Other Compensation
Table.”

COMPENSATION DISCUSSION AND ANALYSIS

Please see the “2020 All Other Compensation Table” in the
“Executive Compensation” section of this Proxy Statement
for further information regarding benefits and perquisites
received by our NEOs in 2020.

Stock Ownership Guidelines

To align our executives’
interests with those of our
stockholders and to assure that our executives own
meaningful levels of Company stock throughout their
tenures with the Company, the Compensation Committee
established stock ownership guidelines that require each of
the NEOs to own shares of the Company’s common stock
worth a specified multiple of base salary. Under the stock
ownership guidelines, the executives must retain, until the
required ownership guideline levels have been achieved and
thereafter if required to maintain the required ownership
levels, at least 50% of after-tax shares resulting from the
vesting of RSUs, including PSUs. The chart below shows
the salary multiple guidelines and the equity holdings that
count towards the requirement as of the Record Date. Each
NEO has met, or is progressing towards meeting, his or her
respective ownership guideline.

EXECUTIVE
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

GUIDELINE
6x salary
3x salary
3x salary
3x salary
3x salary

STATUS
Meets guideline
Meets guideline
Must hold 50% of after-tax shares until guideline is met
Meets guideline
Meets guideline

WHAT COUNTS TOWARD
THE GUIDELINE
✔ Company securities owned personally
✔ Shares held in any Company benefit plan
✔ After-tax value of service-based restricted stock awards and RSUs

WHAT DOES NOT COUNT
TOWARD THE GUIDELINE
✘ Stock options
✘ PSUs

Prohibition Against Pledging and Hedging of the
Company’s Securities

insider

trading policies prohibit

the
The Company’s
Company’s executive officers and directors from pledging the
Company’s securities, and prohibit all Company employees,
including executive officers, and directors from engaging in
hedging or short-term speculative trading of the Company’s
securities, including, without limitation, short sales or put or
call options involving the Company’s securities.

Clawback Policy

The Company maintains a clawback policy under which the
Company may, in the Committee’s discretion and subject
to applicable law, “clawback” incentive compensation paid
to certain officers of the Company (generally defined as
an individual subject to Section 16 of the Exchange Act as
well as the Company’s CCO) in the event of an accounting

restatement or if such officer engaged in detrimental
conduct, as defined in the clawback policy. In addition, the
Company is permitted under the clawback policy, in the
Committee’s discretion and subject to applicable laws, to
clawback incentive compensation paid to such officers for
conduct that is determined to have directly contributed to
material compliance failures resulting in a failure to comply
with applicable laws or regulations. Under this policy, if the
Committee determines that
is
subject to clawback, the Company, subject to the direction
of the Committee, has broad discretion to effect recovery
of such amounts, including requiring a cash payment,
canceling outstanding or deferred awards, reducing future
compensation, seeking recovery of any gain or profit realized
by the officer on the sale or other disposition of any equity-
based awards, or other appropriate means. The Company
continues to monitor this policy to ensure that it is consistent
with applicable laws, including any requirements under the
Dodd-Frank Wall Street Reform and Consumer Protection
Act (the “Dodd-Frank Act”).

incentive compensation

2021 Proxy Statement | 51

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EXECUTIVE COMPENSATION

The following table contains compensation information for our NEOs for the fiscal year ended December 31, 2020 and, to
the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 2019 and
December 31, 2018.

2020 SUMMARY COMPENSATION TABLE

NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($000)(4)

SALARY
($000)(1)

BONUS
($000)(2)

OPTION
AWARDS
($000)(3)

STOCK
AWARDS
($000)(3)
6,560.0 1,640.0 874.7
5,600.0 1,400.0 1,700.0
5,148.5 1,400.0 1,390.6
2,400.0 —
2,400.0 —
2,193.6 —
500.0 4,700.0 —
N/A
N/A
N/A
N/A
1,050.0 —
1,050.0 —
959.7
—
1,500.0 —
1,200.0 —
N/A

377.0
718.2
534.2
375.0
N/A
N/A
324.5
486.0
354.6
247.5
427.9
N/A

N/A
N/A

27.8
N/A

YEAR
2020 1,041.7 —
2019 1,000.0 —
2018 1,000.0 —
2020 646.7 —
2019 630.0 —
2018 630.0 —
2020 606.1
2019 N/A
2018 N/A
2020 500.0 —
2019 500.0 —
2018 500.0 —
2020 500.0 —
2019 451.7
2018 N/A

N/A

CHANGE IN
PENSION VALUE
AND NON-
QUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($000)
—
—
—
—
—
—
—
N/A
N/A
—
—
—
—
—
N/A

ALL OTHER
COMPENSATION
($000)(5)
220.0
399.5
236.2
86.7
56.5
73.7
44.4
N/A
N/A
174.4
179.4
176.3
234.3
128.1
N/A

TOTAL
($000)
10,336.4
10,099.5
9,175.3
3,510.4
3,804.7
3,431.5
6,225.5
N/A
N/A
2,048.9
2,215.4
1,990.6
2,481.8
2,235.5
N/A

NAME AND
PRINCIPAL
POSITION
Hikmet Ersek(6)

President and Chief
Executive Officer

Raj Agrawal

Chief Financial
Officer

Michelle Swanback

President, Product
and Platform

Jean Claude Farah(7)
President, Global
Network

Khalid Fellahi
President,
Consumer Money
Transfer

Footnotes:

(1)

(2)

(3)

(4)

(5)

Except with respect to salary adjustments in connection with promotions, any salary adjustments are effective as of March of each reporting
year.

The amount reported in this column for Ms. Swanback for 2020 represents a cash sign-on bonus, which was subject to pro-rata repayment in
the event Ms. Swanback voluntarily resigned from the Company or was terminated for cause prior to the one-year anniversary of her start date.

The amounts reported in these columns for 2020 represent equity grants to the NEOs under the Long-Term Incentive Plan. The amounts
reported in these columns are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The
amounts included in the Stock Awards column for the PSUs granted during 2020 are calculated based on the probable satisfaction of the
performance conditions for such awards as of the date of grant. Assuming the highest level of performance is achieved for the 2020 Financial
PSUs, the maximum value of the 2020 Financial PSUs would be as follows: Mr. Ersek - $8,200; Mr. Agrawal - $2,400; Ms. Swanback - $2,200,
Mr. Farah - $1,050; and Mr. Fellahi - $1,500. Under FASB ASC Topic 718, the vesting condition related to the TSR PSUs is considered a market
condition and not a performance condition. Accordingly, there is no grant date fair value below or in excess of the amount reflected in the table
above for the NEOs that could be calculated and disclosed based on achievement of the underlying market condition. Dividend equivalents
with respect to the 2020 Financial PSUs and 2020 RSUs will be paid to the extent the underlying PSUs and RSUs are earned. See Note 17 to
the Consolidated Financial Statements included in our Annual Report on Form 10-K for the years ended December 31, 2020, 2019 and 2018,
respectively, for a discussion on the relevant assumptions used in calculating the amounts reported for the applicable year.

For 2020, the amounts reflect the actual cash bonus received under the Annual Incentive Plan.

Amounts included in this column for 2020 are set forth by category in the 2020 All Other Compensation Table below.

52 | The Western Union Company

EXECUTIVE COMPENSATION

(6)

(7)

For 2020, Mr. Ersek’s salary is denominated in U.S. dollars but is paid to or on behalf of Mr. Ersek in euros, based on a conversion rate
determined prior to payment each quarter. Contributions made to the Austrian retirement plan on behalf of Mr. Ersek are denominated in
euros and converted to U.S. dollars for disclosure in the proxy. The conversion rates of .894374, .895656, .888968, and .84168 were applied for
quarters one, two, three, and four, respectively.

For 2020, Mr. Farah’s salary is denominated in U.S. dollars but is paid to or on behalf of Mr. Farah in Emirati dirham, based on a conversion rate
of 0.272242. Contributions made to the CFE retirement fund on behalf of Mr. Farah are denominated in euros and converted to U.S. dollars for
disclosure in the proxy. The conversion rates of 1.093514, 1.099771, 1.181927, and 1.163379 were applied for quarters one, two, three, and four,
respectively.

2020 ALL OTHER COMPENSATION TABLE

PERQUISITES
& OTHER
PERSONAL
BENEFITS
($000)(1)
117.3
26.4
—
145.1
60.5

TAX
REIMBURSEMENTS
($000)
—
1.7
—
—
91.4

COMPANY
CONTRIBUTIONS
TO DEFINED
CONTRIBUTION
PLANS
($000)(2)
77.4
55.6
42.9
8.3
80.1

INSURANCE
PREMIUMS
($000)
25.3
3.0
1.5
21.0
2.3

TOTAL
($000)
220.0
86.7
44.4
174.4
234.3

NAME
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

Footnotes:

(1)

Amounts shown in this column for Mr. Ersek include the incremental cost or valuation of personal jet usage ($113.2), car service/allowances,
and executive security costs. Following a comprehensive security assessment conducted by an independent security firm in 2018, the Board
of Directors advised Mr. Ersek to utilize the Company’s leased aircraft for personal travel at the Company’s expense. Those personal travel
expenses reported in this column were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued
for payment or paid directly to the third-party vendor from which the Company leases corporate aircraft. For Mr. Agrawal, the amounts in this
column include PTO Payout ($24.2). For Mr. Farah, the amounts in this column include housing ($108.9), education, Company reimbursement
of gym expenses and transportation allowances. For Mr. Fellahi, the amounts in this column include costs related to reward and recognition
point cards and PTO payout ($56.3).

(2)

Amounts shown in this column represent (i) contributions made by the Company on behalf of each of the NEOs, except for Messrs. Ersek and
Farah, to the Company’s Incentive Savings Plan and/or the Supplemental Incentive Savings Plan, (ii) contributions made by the Company on
behalf of Mr. Ersek to the Company’s defined contribution plan in Austria, the Victoria Volksbanken Pensionskassen AG, and (iii) contributions
made by the Company on behalf of Mr. Farah to the CFE retirement fund.

2021 Proxy Statement | 53

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EXECUTIVE COMPENSATION

The following table summarizes awards made to our NEOs in 2020.

2020 GRANTS OF PLAN-BASED AWARDS TABLE

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ESTIMATED
POSSIBLE
PAYOUTS UNDER
NON-EQUITY
INCENTIVE PLAN
AWARDS(1)

GRANT
DATE

APPROVAL
DATE

TARGET
($000)

MAXIMUM
($000)

1,785.0 3,123.8

ESTIMATED FUTURE
PAYOUTS UNDER EQUITY
INCENTIVE PLAN AWARDS
TARGET
(#)

THRESHOLD
(#)

MAXIMUM
(#)

ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES
OF STOCK
OR UNITS
(#)

ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
(#)(2)

EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS
($/Sh)

GRANT
DATE FAIR
VALUE OF
STOCK
AND
OPTION
AWARDS
($000)(3)

2/20/2020 2/20/2020

2/19/2020 2/19/2020

1/13/2020 12/20/2019

2/19/2020 2/19/2020

650.0

1,300.0

625.0

1,250.0

550.0

1,100.0

550.0

1,100.0

77,359(4)

154,717(4) 309,434(4)

36,092(5)

72,184(5) 144,368(5)

22,884(4)

45,767(4)

91,534(4)

10,979(5)

21,958(5)

43,916(5)

20,977(4)

10,065(5)

41,953(4)

83,906(4)

20,129(5)

40,258(5)

10,012(4)

20,023(4)

40,046(4)

4,804(5)

9,607(5)

19,214(5)

14,303(4)

6,862(5)

28,605(4)

57,210(4)

13,724(5)

27,448(5)

30,944(6)

27,460(6)

94,340(6)

25,172(6)

12,014(6)

17,163(6)

$4,100.0

$1,640.0

$820.0

414,142

$26.50

$1,640.0

$1,200.0

$480.0

$720.0

$1,100.0

$440.0

$2,500.0

$660.0

$525.0

$210.0

$315.0

$750.0

$300.0

$450.0

NAME

Hikmet
Ersek

Raj
Agrawal

Michelle
Swanback

Jean
Claude
Farah

Khalid
Fellahi

Footnotes:

(1)

(2)

(3)

These amounts consist of the target and maximum cash award levels set in 2020 under the Annual Incentive Plan. The amount actually
paid to each NEO is included in the Non-Equity Incentive Plan Compensation column in the 2020 Summary Compensation Table. Please see
“Compensation Discussion and Analysis” for further information regarding the Annual Incentive Plan.

This amount represents stock options granted under the Long-Term Incentive Plan to Mr. Ersek. These options vest in 25% increments on each
of the first through fourth year anniversaries of the date of grant; provided that Mr. Ersek is still employed by the Company on the applicable
vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. Please see “Compensation
Discussion and Analysis” for further information regarding this award.

The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718
and, in the case of the PSUs, are based upon the probable outcome of the applicable performance conditions. See Note 17 to the Consolidated
Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of the relevant
assumptions used in calculating the amounts.

54 | The Western Union Company

EXECUTIVE COMPENSATION

(4)

(5)

(6)

These amounts represent the threshold, target and maximum Financial PSUs granted under the Long-Term Incentive Plan. These Financial
PSUs are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023), subject to the achievement of threshold
revenue and operating margin performance goals over a three-year performance period. Please see “Compensation Discussion and Analysis”
for further information regarding this award. The Financial PSU award includes cash dividend equivalent rights entitling the recipient to cash
dividend equivalents for dividends paid with respect to Company common stock subject to the award during the PSU vesting period. The cash
dividend equivalents are subject to the same vesting conditions as the underlying Financial PSUs.

These amounts represent the threshold, target and maximum TSR PSUs granted under the Long-Term Incentive Plan. These TSR PSUs are
scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023) based on the Company’s relative TSR performance
versus the S&P 500 Index over a three-year performance period. Please see “Compensation Discussion and Analysis” for further information
regarding this award.

These amounts represent RSUs granted under the Long-Term Incentive Plan to the NEOs. Ms. Swanback’s RSUs granted on January 13,
2020 vest 50% on each of the first and second anniversaries of the date of grant, and the remaining RSUs reported in this column vest
100% on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023), in each case provided that the executive is still employed by the
Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. Please
see “Compensation Discussion and Analysis” for further information regarding these RSU grants. Each RSU award includes cash dividend
equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to the Company common stock subject to
the award during the RSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying RSUs.

NARRATIVE TO SUMMARY COMPENSATION TABLE AND
GRANTS OF PLAN-BASED AWARDS TABLE

EMPLOYMENT ARRANGEMENTS

As noted in the “Compensation Discussion and Analysis,”
the Company generally executes an offer of employment
prior to the time an executive joins the Company which
describes the basic terms of the executive’s employment,
including his or her start date, starting salary, bonus target,
and long-term incentive award target. The terms of the
executive’s employment are based thereafter on sustained
good performance rather than contractual terms, and the
Company’s policies, such as the Executive Severance Policy,
will determine the benefits to be received by senior executives,
including our NEOs, upon termination of employment from
the Company. Please see the “—Potential Payments Upon
Termination or Change-in-Control” section for a description
of the policy.

As noted in the “Compensation Discussion and Analysis,”
under certain circumstances, the Compensation Committee
recognizes that special arrangements with respect to an
executive’s employment may be necessary or desirable.
Accordingly, during 2020, Messrs. Ersek and Farah were
each party to an employment agreement, which reflects
competitive practices in the employment locations of Messrs.
Ersek and Farah at the time the respective agreement became
effective. The terms of Messrs. Ersek and Farah’s employment
agreements provide for (i) eligibility to participate in an
annual incentive program and Long-Term Incentive Plan and
(ii) eligibility to participate in retirement, health, and welfare
benefit programs on the same basis as similarly situated
employees in Austria and the UAE, respectively. Messrs.
Ersek and Farah’s employment agreements also include non-
competition, non-solicitation, and confidentiality provisions.

AWARDS

In 2020, the Compensation Committee granted annual equity
grants under the Long-Term Incentive Plan consisting of
(i) 50% Financial PSUs (vesting based on both revenue and
operating margin goals), 20% TSR PSUs, 20% stock options,
and 10% service-based RSUs for Mr. Ersek, and (ii) 50%
Financial PSUs (vesting based on both revenue and operating
margin goals), 20% TSR PSUs, and 30% service-based RSUs
for the other NEOs. Please see the “Compensation Discussion
and Analysis” section of this Proxy Statement for further

information regarding the 2020 long-term incentive awards,
including the performance metrics applicable to the 2020
PSUs. Ms. Swanback also received a one-time RSU award
in connection with her commencement of employment with
the Company.

At its February 2020 meeting, the Compensation Committee
established performance objectives to be considered
under the Annual Incentive Plan for the 2020 plan year.

2021 Proxy Statement | 55

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EXECUTIVE COMPENSATION

As discussed in the “Compensation Discussion and Analysis”
section of this Proxy Statement, participants are eligible to
receive a cash payout ranging from 0% to 175% of target
based on the achievement of pre-established corporate
financial and strategic goals. The total payout under the
Annual Incentive Plan for the NEOs other than Mr. Ersek
is subject to a +/- 25% modifier based on the committee’s

assessment of individual performance with respect to key
performance indicators relating to individual business unit
transformation goals, leadership and compliance. Please
see the “Compensation Discussion and Analysis” section
of this Proxy Statement for more information regarding the
annual incentive awards, including the performance metrics
applicable to such awards.

SALARY AND BONUS IN PROPORTION TO TOTAL COMPENSATION

this Proxy Statement,

As noted in the “Compensation Discussion and Analysis”
section of
the Compensation
Committee heavily weighted total direct compensation
toward performance-based elements, which include annual
incentive compensation, PSUs and stock options, in order to
hold executives accountable and reward them for the results
of the Company. Our Compensation Committee structured
the compensation program to give our NEOs substantial

alignment with stockholders, while also permitting the
committee to incentivize the NEOs to pursue performance
that it believes increases stockholder value. Please see
the “Compensation Discussion and Analysis” section of
this Proxy Statement for a description of the objectives
of our compensation program and overall compensation
philosophy.

56 | The Western Union Company

N
O
T
C
E
O
F
2
0
2
1
A
N
N
U
A
L
M
E
E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

The following table provides information regarding outstanding option awards and unvested stock awards held by each of the
NEOs on December 31, 2020.

EXECUTIVE COMPENSATION

2020 OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END TABLE

OPTION AWARDS

STOCK AWARDS

NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE
414,142(2)

411,765(3)

191,781(4)

103,551(5)

NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE

NAME

Hikmet Ersek —

137,255

191,781

310,651

422,961

336,135

303,798

400,810

233,859

Raj Agrawal 84,034

65,823

134,063

86,843

24,796

16,895

44,818

10,127

33,401

28,157

Michelle
Swanback

Jean Claude
Farah

26.50

17.63

20.09

19.99

18.19

19.27

15.99

17.86

21.00

19.27

15.99

14.00

17.86

16.49

21.00

19.27

15.99

17.86

21.00

EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1)

$3,394.5

EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#)
154,717(13)

72,184(14)

$1,583.7

198,526(15)

$4,355.7

MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1)

$678.9

$871.1

$764.5

NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#)
30,944(6)

OPTION
EXERCISE
PRICE ($)

OPTION
EXPIRATION
DATE

2/20/2030

2/21/2029

39,706(7)

2/22/2028

34,844(8)

2/22/2027

104,531(9)

$2,293.4

105,343(16) $2,311.2

2/19/2026

52,269(10)

$1,146.8

2/19/2025

2/20/2024

2/23/2022

2/24/2021

2/19/2025

27,460(6)

2/20/2024

40,359(7)

2/20/2023

35,839(8)

2/23/2022

35,840(9)

9/15/2021

17,904(10)

2/24/2021

$602.4

$885.5

$786.3

$392.8

45,767(13)

$1,004.1

21,958(14)

$481.8

67,265(15)

$1,475.8

34,783(16)

$763.2

25,172(6)

$552.3

41,953(13)

94,340(17)

$2,069.8

20,129(14)

$920.5

$441.6

2/19/2025

12,014(6)

2/20/2024

17,657(7)

2/23/2022

15,680(8)

2/24/2021

15,680(9)

7,834(10)

$263.6

$387.4

$344.0

$171.9

20,023(13)

$439.3

9,607(14)

29,429(15)

15,218(16)

$210.8

$645.6

$333.9

2021 Proxy Statement | 57

N
O
T
C
E
O
F
2
0
2
1
A
N
N
U
A
L
M
E
E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

EXECUTIVE COMPENSATION

OPTION AWARDS

STOCK AWARDS

NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE

NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE

OPTION
EXERCISE
PRICE ($)

OPTION
EXPIRATION
DATE

NAME

MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1)

NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#)

Khalid Fellahi 28,012

16,895

19.27

21.00

2/19/2025

17,163(6)

2/24/2021

11,772(7)

10,453(8)

10,454(9)

5,223(10)

7,179(11)

2,824(12)

$376.5

$258.3

$229.3

$229.4

$114.6

$157.5

$62.0

EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1)

EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#)

28,605(13)

13,724(14)

19,619(15)

10,145(16)

$627.6

$301.1

$430.4

$222.6

Footnotes:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

The market value of shares or units of stock that have not vested reflects the closing stock price of $21.94 per share on December 31, 2020.

These options were awarded on February 20, 2020, and vest in 25% increments on each of the first through fourth year anniversaries of the
date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant
to the Executive Severance Policy or Long-Term Incentive Plan.

These options were awarded on February 21, 2019, and vest in 25% increments on each of the first through fourth year anniversaries of the date
of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to
the Executive Severance Policy or Long-Term Incentive Plan.

These options were awarded on February 22, 2018, and vest in 25% increments on each of the first through fourth year anniversaries of the date
of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to
the Executive Severance Policy or Long-Term Incentive Plan.

These options vested on February 22, 2021.

Represents RSUs that are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023); provided that the executive
is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term
Incentive Plan.

Represents RSUs that are scheduled to vest on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022); provided that the executive
is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term
Incentive Plan.

Represents RSUs that vested on February 21, 2021 (or, in the case of Mr. Ersek, February 22, 2021).

Represents PSUs that vested on February 21, 2021 (or, in the case of Mr. Ersek, February 22, 2021) based on the Company’s revenue and EBIT
performance during the 2018-2020 performance period.

(10) Represents PSUs that vested on February 21, 2021 (or, in the case of Mr. Ersek, February 22, 2021) based on the Company’s TSR performance

relative to the S&P 500 Index over the 2018–2020 performance period.

(11) Represents RSUs that were awarded on November 7, 2019 and which vest on the second year anniversary of the date of grant; provided that
the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or
Long-Term Incentive Plan.

(12) Represents RSUs that were awarded on March 7, 2019 and which vest on the second year anniversary of the date of grant; provided that the
executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or
Long-Term Incentive Plan.

58 | The Western Union Company

N
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C
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F
2
0
2
1
A
N
N
U
A
L
M
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E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

EXECUTIVE COMPENSATION

(13) Represents PSUs that are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023) based on the Company’s
revenue and operating margin performance over the 2020–2022 performance period; provided that the executive is still employed by the
Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In
accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance
goals.

(14) Represents PSUs that are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023) based on the Company’s
TSR performance relative to the S&P 500 Index over the 2020–2022 performance period; provided that the executive is still employed by
the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In
accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance
goals.

(15) Represents PSUs that are scheduled to vest on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022) based on the Company’s
revenue and EBIT performance over the 2019–2021 performance period; provided that the executive is still employed by the Company on the
vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC
executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals.

(16) Represents PSUs that are scheduled to vest on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022) based on the Company’s
TSR performance relative to the S&P 500 Index over the 2019–2021 performance period; provided that the executive is still employed by
the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In
accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance
goals.

(17) Represents RSUs that were awarded on January 13, 2020, and which vest in 50% increments on each of the first and second year anniversaries
of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for
pursuant to the Executive Severance Policy or Long-Term Incentive Plan.

2021 Proxy Statement | 59

N
O
T
C
E
O
F
2
0
2
1
A
N
N
U
A
L
M
E
E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

EXECUTIVE COMPENSATION

The following table provides information concerning the exercise of stock options and vesting of stock awards during 2020 for
each of the NEOs.

2020 OPTION EXERCISES AND STOCK VESTED TABLE

NAME

Hikmet Ersek

Raj Agrawal

Michelle Swanback

Jean Claude Farah

Khalid Fellahi

OPTION AWARDS

STOCK AWARDS

NUMBER OF
SHARES
ACQUIRED ON
EXERCISE
(#)

VALUE
REALIZED
ON
EXERCISE
($)

NUMBER OF
SHARES
ACQUIRED ON
VESTING
(#)

—

24,553

—

$268,584

—

292,902

105,311

—

55,290

46,863

VALUE
REALIZED
ON VESTING
($)

$7,548,085

$2,713,864

—

$1,424,823

$1,160,818

The following table provides information regarding compensation that has been deferred by our NEOs pursuant to the terms of
our Supplemental Incentive Savings Plan.

2020 NONQUALIFIED DEFERRED COMPENSATION TABLE

EXECUTIVE
CONTRIBUTIONS
IN LAST FY
($000)(1)

REGISTRANT
CONTRIBUTIONS
IN LAST FY
($000)(2)

AGGREGATE
EARNINGS
IN LAST FY
($000)

AGGREGATE
WITHDRAWALS/
DISTRIBUTIONS
($000)

—

69.5

53.6

—

44.2

31.5

—

272.4

7.0

—

AGGREGATE
BALANCE
AT LAST
FYE
($000)(3)

—

1,772.0

92.1

—

NAME

Hikmet Ersek

Raj Agrawal

Michelle Swanback

Jean Claude Farah

Khalid Fellahi

Footnotes:

(1)

(2)

(3)

These amounts represent deferrals of the NEO’s salary and compensation received under the Annual Incentive Plan and are included in the
“Salary” and “Non-Equity Incentive Plan Compensation” columns in the 2020 Summary Compensation Table.

These amounts are included in the “All Other Compensation” column in the 2020 Summary Compensation Table.

Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation
for 2019 and 2018 (in $000s): Mr. Agrawal–$207.9.

60 | The Western Union Company

N
O
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C
E
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F
2
0
2
1
A
N
N
U
A
L
M
E
E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

EXECUTIVE COMPENSATION

INCENTIVE SAVINGS PLAN

We maintain a defined contribution retirement plan (the
“Incentive Savings Plan” or “ISP”) for our employees on
United States payroll, including each of our NEOs other than
Messrs. Ersek and Farah. The ISP is structured with the
intention of qualifying under Section 401(a) of the Internal
Revenue Code. Under the ISP, participants are permitted to
make contributions up to the maximum allowable amount
under the Internal Revenue Code. In addition, we make
matching contributions equal to 100% of the first 3% of
eligible compensation contributed by participants and 50%
of the next 2% of eligible compensation contributed by
participants. For 2020, each participating NEO was eligible

to receive a Company contribution equal to 4% of his or her
eligible compensation. During 2020, Mr. Ersek participated
in the qualified retirement savings plan made available to
eligible employees in Austria. During 2020, Mr. Farah and Mr.
Fellahi participated in the Caisse des Français de l’Etranger
(the “CFE Retirement Fund”), which provides for continued
coverage under the French State Social Security System for
French citizens who work outside of France. On behalf of
the employee, the CFE Retirement Fund contributes to the
National Retirement Insurance Fund (“CNAV”) allowing the
employee to receive pension benefits from the CNAV upon
retirement.

SUPPLEMENTAL INCENTIVE SAVINGS PLAN

We maintain a nonqualified supplemental incentive savings
plan (the “SISP”) for certain of our employees on U.S. payroll,
including each of our NEOs other than Messrs. Ersek and
Farah. Under the SISP, participants may defer up to 80%
of their salaries, including commissions and incentive
compensation (other than annual bonuses), and may make
a separate election to defer up to 80% of any annual bonuses
and up to 100% of any performance-based cash awards
they may earn. The SISP also provides participants the
opportunity to receive credits for matching contributions
equal to the difference between the matching contributions
that a participant could receive under the ISP but for the
contribution and compensation limitations imposed by the
Internal Revenue Code, and the matching contributions
allowable to the participant under the ISP. Participants
are generally permitted to choose from among the mutual
funds available for investment under the ISP for purposes

of determining the imputed earnings, gains, and losses
applicable to their SISP accounts. The SISP is unfunded.
Participants may specify the timing of the payment of their
accounts by choosing either a specified payment date or
electing payment upon separation from service (or a date
up to five years following separation from service), and in
either case may elect to receive their accounts in a lump
sum or in annual or quarterly installments over a period of
up to ten years. With respect to each year’s contributions
and imputed earnings, the participant may make a separate
distribution election. Subject to the requirements of Section
409A of the Internal Revenue Code, applicable Internal
Revenue Service guidance, and the terms of the SISP,
participants may receive an early payment in the event of
a severe financial hardship and may make an election to
delay the timing of their scheduled payment by a minimum
of five years.

POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL

EXECUTIVE SEVERANCE POLICY

We maintain the Executive Severance Policy for the
payment of certain benefits to senior executives, including
our NEOs, upon termination of employment from the
Company and upon a change-in-control of the Company.
Under the Executive Severance Policy, an eligible executive
will become eligible for benefits if (i) prior to a change-in-
control, he or she is involuntarily terminated by the Company
other than on account of death or disability or for cause,

or (ii) after a change-in-control, he or she is involuntarily
terminated by the Company other than on account of
death or disability or for cause, or he or she terminates
employment voluntarily for “good reason” (which may arise
from a material reduction in title or position, reduction in
base salary or bonus opportunity or an increase in the
executive’s commute to his or her current principal working
location of more than 50 miles without consent) within

2021 Proxy Statement | 61

N
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C
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2
0
2
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A
N
N
U
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N
G
O
F
S
T
O
C
K
H
O
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D
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S
A
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D
P
R
O
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Y
S
T
A
T
E
M
E
N
T

EXECUTIVE COMPENSATION

24 months after the date of the change-in-control. Under
the Executive Severance Policy, a change-in-control is
generally defined to include:

• The acquisition by a person or entity of 35% or more of
either the outstanding shares of the Company or the
combined voting power of such shares, with certain
exceptions;

• An unapproved change in a majority of the Board members

within a 24-month period; and

• Certain corporate

restructurings,
mergers, dissolution and liquidation.

including certain

The Executive Severance Policy provided for the following
severance and change-in-control benefits as of December
31, 2020:

• A severance payment equal to the senior executive’s base
pay plus target bonus for the year in which the termination
occurs (the “base severance pay”) multiplied by 1.5
(multiplied by two in the case of the CEO and all senior
executives who terminate for an eligible reason within 24
months following a change-in-control). For terminations
prior to a change-in-control a senior executive employed
by the Company for 12 months or less would be entitled to
receive a severance payment equal to the base severance
pay and, for every month employed in excess of 12
months, an additional severance payment equal to a pro
rata portion of the base severance pay, up to a maximum
severance payment equal to the senior executive’s base
severance pay, multiplied by 1.5 (multiplied by two in the
case of the CEO).

• A cash payment equal to the lesser of (i) the senior
executive’s prorated target bonus under the Annual
Incentive Plan for the year in which the termination occurs
and (ii) the maximum bonus which could have been paid
to the senior executive under the Annual Incentive Plan
for the year in which the termination occurs, based on
actual Company performance during such year. No bonus
will be payable unless the Compensation Committee
certifies that the performance goals under the Annual
Incentive Plan have been achieved for the year in which
the termination occurs (except for eligible terminations
following a change-in-control).

• A lump sum payment equal to the difference between
active employee health care premiums and continuation
coverage premiums for 18 months of coverage.

• At the discretion of the Compensation Committee,
outplacement benefits may be provided to the executive.

• All awards made pursuant to our Long-Term Incentive
that are performance-based,
Plan,
generally will become fully vested and exercisable if a

including

those

62 | The Western Union Company

senior executive is involuntarily terminated without cause
or terminates employment for good reason, in either case,
within 24 months following a change-in-control. In such
event, the right to exercise stock options will continue
for 24 months (36 months in the case of the CEO) after
the senior executive’s termination (but not beyond the
applicable expiration date for the stock options).

•

If a senior executive is involuntarily terminated without
cause and no change-in-control has occurred, awards
granted pursuant to our Long-Term
Incentive Plan
generally will vest on a prorated basis based on the period
served during the vesting period, and stock options will
remain exercisable until the end of severance period
under the Executive Severance Policy, but not beyond the
applicable expiration date for the stock options.

• With respect to all executives other than the CEO, any
benefits triggered by a change-in-control are subject to
an automatic reduction to avoid the imposition of excise
taxes under Section 4999 of the Internal Revenue Code in
the event such reduction would result in a better after-tax
result for the executive.

• For individuals who were senior executives on or before
April 30, 2009 (only our CEO), if benefits payable after a
change-in-control exceed 110% of the maximum amount
of such benefits that would not be subject to the excise
tax imposed by Section 4999 of the Internal Revenue
Code, an additional cash payment in an amount that,
after payment of all taxes on such benefits (and on such
amount), provides the senior executive with the amount
necessary to pay such tax. If the benefits so payable do
not exceed such 110% threshold, the amount thereof will
be reduced to the maximum amount not subject to such
excise tax. Mr. Ersek is the only Company employee who
remains eligible for excise tax gross-up payments.

is conditioned upon

The provision of severance benefits under the Executive
the executive
Severance Policy
executing an agreement and release which
includes,
among other things, non-competition and non-solicitation
restrictive covenants, as well as a release of claims against
the Company. These restrictive covenants vary in duration,
but generally do not exceed two years.

As noted earlier, Mr. Farah is subject to an employment
agreement, which is a customary practice for executives
located in the UAE. Under the terms of Mr. Farah’s employment
agreement, he is required to receive three months’ notice
of termination of employment or, in lieu of such notice,
three months of pay. In addition, Mr. Farah is also eligible
for statutory end of service gratuity/severance amounts in
accordance with local law. Any amounts due to Mr. Farah
under the Executive Severance Policy will be reduced by any
end of service gratuity/severance paid under the terms of his
employment agreement or as required by local law.

N
O
T
C
E
O
F
2
0
2
1
A
N
N
U
A
L
M
E
E
T
N
G
O
F
S
T
O
C
K
H
O
L
D
E
R
S
A
N
D
P
R
O
X
Y
S
T
A
T
E
M
E
N
T

We have quantified the potential payments to our NEOs upon termination under various termination circumstances in the tables
set forth below. These tables assume that the covered termination took place on December 31, 2020.

EXECUTIVE COMPENSATION

PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL TABLES

TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1)

LONG-TERM INCENTIVES(5)

NAME
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

SEVERANCE
($000)(2)
6,544.6
2,977.0
1,625.0
2,424.5
2,347.5

WELFARE
BENEFITS
($000)(3)
41.7
25.2
25.2
—
25.2

STOCK
OPTIONS
($000)
2,331.4
—
—
—
—

PSUs
($000)
15,085.3
4,904.0
1,362.1
2,145.5
1,925.7

RSUs
($000)
2,314.5
2,274.2
2,622.1
995.0
1,083.6

DEU
ACCRUAL
($000)
572.1
248.9
145.3
103.8
107.3

GROSS-UP
($000)(4)
—
—
—
—
—

TOTAL
($000)
26,889.6
10,429.3
5,779.7
5,668.8
5,489.3

INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE

LONG-TERM INCENTIVES(5)

NAME
Hikmet Ersek
Raj Agrawal
Michelle Swanback
Jean Claude Farah
Khalid Fellahi

NAME
Hikmet Ersek
Raj Agrawal

Michelle Swanback
Jean Claude Farah
Khalid Fellahi

NAME
Hikmet Ersek
Raj Agrawal
Khalid Fellahi

Footnotes:

SEVERANCE
($000)(2)
6,544.6
2,327.0
1,625.0
1,899.5
1,822.5

WELFARE
BENEFITS
($000)(3)
41.7
25.2
25.2
—
25.2

STOCK
OPTIONS
($000)
1,175.6
—
—
—
—

PSUs
($000)
8,835.0
2,940.8
—
1,099.2
1,000.6

RSUs
($000)
1,462.4
1,472.1
—
568.1
561.6

DEU
ACCRUAL
($000)
298.9
132.5
—
49.7
50.1

TOTAL
($000)
18,358.2
6,897.6
1,650.2
3,616.5
3,460.0

DEATH OR DISABILITY

LONG-TERM INCENTIVES(5)

SEVERANCE
($000)
—
—

WELFARE
BENEFITS
($000)
—
—

STOCK
OPTIONS
($000)
2,331.4
—

—
—
—

RETIREMENT(6)

PSUs
($000)
15,085.3
4,904.0

1,362.1
2,145.5
1,925.7

RSUs
($000)
2,314.5
2,274.2

2,622.1
995.0
1,083.6

DEU
ACCRUAL
($000)
572.1
248.9

145.3
103.8
107.3

TOTAL
($000)
20,303.3
7,427.1

4,129.5
3,244.3
3,116.6

LONG-TERM INCENTIVES(5)

SEVERANCE
($000)
—
—
—

WELFARE
BENEFITS
($000)
—
—
—

STOCK
OPTIONS
($000)
1,175.6
—
—

PSUs
($000)
8,835.0
2,940.8
1,000.6

RSUs
($000)
1,462.4
1,472.1
561.6

DEU
ACCRUAL
($000)
298.9
132.5
50.1

TOTAL
($000)
11,771.9
4,545.4
1,612.3

(1)

Under the Executive Severance Policy, following a change-in-control, an eligible executive will become entitled to severance benefits if he or
she is involuntarily terminated by the Company other than on account of death or disability or for cause, or he or she terminates employment
voluntarily for good reason within 24 months after the date of the change-in-control.

2021 Proxy Statement | 63

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EXECUTIVE COMPENSATION

(2)

(3)

(4)

(5)

In accordance with the Executive Severance Policy, amounts in this column represent severance payments equal to (i) the lesser of the NEO’s (x)
2020 target bonus and (y) 2020 bonus based on actual performance, plus (ii) 1.5 times (two times in the case of the CEO and in the case of all senior
executives who terminate for an eligible reason within 24 months following a change-in-control) the sum of the NEO’s base salary and target bonus,
with the exception of Ms. Swanback, who has been with the Company for less than two years as of December 31, 2020. Due to this fact, in accordance
with the Executive Severance Policy in effect on December 31, 2020, the amount for Ms. Swanback represents payments equal to one times the sum
of her base salary and target bonus for the current year in the case of an involuntary termination not in connection with a change in control.

Amounts in this column represent a lump sum cash payment equal to the product of (i) the difference in cost between the NEO’s actual health
premiums and COBRA health premiums (if applicable) as of December 31, 2020, and (ii) 18, the number of months of continuing COBRA coverage.

As noted above, for individuals who were senior executives on or before April 30, 2009 (only our CEO), if benefits payable after a change-
in-control exceed 110% of the maximum amount of such benefits that would not be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code, the executive would receive an additional cash payment for such taxes. If the benefits do not exceed the 110%
threshold, the change-in-control benefits will be reduced to the maximum amount not subject to the excise tax. As of December 31, 2020,
the change-in-control benefits payable with respect to Mr. Ersek would have been subject to a cut-back under the terms of the Executive
Severance Policy. The amounts reflected in this table do not reflect the application of any reduction in change-in-control benefits pursuant to
the terms of the Executive Severance Policy.

Amounts in these columns reflect the long-term incentive awards to be received upon a termination or a change-in-control calculated in accordance
with the Executive Severance Policy and the Long-Term Incentive Plan. In the case of stock grants, the equity value represents the value of the shares
determined by multiplying the closing stock price of $21.94 per share on December 31, 2020 by the number of unvested RSUs or, in the case of PSUs,
by the number of shares to be awarded based on target achievement. In the case of option awards, the equity value was determined by multiplying (i)
the spread between the exercise price and the closing stock price of $21.94 per share on December 31, 2020 and (ii) the number of unvested option
shares that would vest following a qualifying termination or termination due to death or disability. The calculation with respect to unvested long-term
incentive awards reflects the following additional assumptions under the Executive Severance Policy and the Long-Term Incentive Plan:

EVENT
Change-in-control and
qualifying termination within
subsequent 24-month
period

Change-in-control (without
termination of employment)
Involuntary termination
without cause (outside the
24-month period following a
change-in-control)*
*If the NEO would satisfy
the age and service
requirements for retirement,
then the NEO would receive
retirement vesting under
this termination scenario.

STOCK OPTIONS
Accelerate

RSUs
Accelerate

Vesting continues under
normal terms
Prorated vesting by grant
based on period served
during vesting period

Accrued dividend equivalents
would be distributed on
accelerated RSUs.

Vesting continues under normal
terms
Prorated vesting by grant
based on period served during
vesting period; if termination
occurs prior to the one-year
anniversary of the grant date,
the awards are forfeited

Accrued dividend equivalents
would be distributed on
accelerated RSUs.

Death or disability

Accelerate

Retirement

Accrued dividend equivalents
would be distributed on
accelerated RSUs.

Prorated vesting by grant
based on period served during
vesting period

Accrued dividend equivalents
would be distributed on
accelerated RSUs.

Prorated vesting by grant
based on period served
during vesting period, with
an exercise period equal to
the earlier of (i) two years
post-termination (three
years, in the case of the
CEO if termination is a
severance-eligible event)
and (ii) the expiration date

PSUs
Accelerated vesting and award is
payable to the extent earned based
on actual performance results

Accrued dividend equivalents
would be distributed on
accelerated Financial PSUs.
Vesting continues under normal
terms
Prorated vesting by grant based
on actual performance results
and period served during vesting
period; if termination occurs
prior to the one-year anniversary
of the grant date, the awards
are forfeited

Accrued dividend equivalents
would be distributed on
accelerated Financial PSUs.
Accelerated vesting and award is
payable to the extent earned based
on actual performance results

Accrued dividend equivalents
would be distributed on
accelerated Financial PSUs.
Prorated vesting by grant based
on actual performance results
and period served during
vesting period

Accrued dividend equivalents
would be distributed on
accelerated Financial PSUs.

(6) Messrs. Ersek, Agrawal and Fellahi are the only NEOs eligible for retirement as of December 31, 2020, as defined under the Long-Term Incentive Plan.

64 | The Western Union Company

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EXECUTIVE COMPENSATION

RISK MANAGEMENT AND COMPENSATION

Appropriately incentivizing behaviors which foster the
best interests of the Company and its stockholders is
an essential part of the compensation-setting process.
The Company believes that risk-taking is necessary for
continued innovation and growth, but that risks should be
encouraged within parameters that are appropriate for the
long-term health and sustainability of the business. As
part of its compensation setting process, the Company
evaluates the merits of
its compensation programs
through a comprehensive review of its compensation
policies and programs
they
encourage unnecessary or inappropriate risk-taking by
the Company’s executives and employees below the
executive level. Based on this review, the Company has
concluded that the risks arising from its compensation
programs are not reasonably likely to have a material
adverse effect on the Company.

to determine whether

Management and the Compensation Consultant review
the Company’s compensation programs, including the
broad-based employee programs and the programs
tied to the performance of individual business units.
The team maps the level of “enterprise” risk for each
business area, as established through the Company’s
enterprise risk management oversight process, with the
level of compensation risk for the associated incentive
programs.
In developing the risk assessment, the
team reviews the compensation programs within each
business area for:

• The mix of fixed versus variable pay;

• The performance metrics to which pay is tied;

• Whether the pay opportunity is capped;

• The timing of payout;

• Whether “clawback” adjustments are permitted;

• The use of equity awards; and

• Whether stock ownership guidelines apply.

to a +/-25%

Annual incentive awards and long-term incentive awards
granted to executives are tied primarily to corporate
performance goals,
including revenue and operating
margin growth, and strategic performance objectives. The
Compensation Committee believes that these metrics
encourage performance that supports the business as
a whole. The executive annual incentive awards include
a maximum payout opportunity equal to 175% of target,
subject
individual performance-based
modifier for NEOs other than Mr. Ersek. Our executives
are also expected to meet share ownership guidelines in
order to align the executives’ interests with those of our
stockholders. Further, the Company’s clawback policy
permits the Company to recover incentive compensation
paid to designated executives (including our officers who
are subject to Section 16 of the Exchange Act as well
as the Company’s CCO) in the event of an accounting
restatement or if the executive engaged in detrimental
conduct, as defined in the clawback policy. This policy
helps to discourage inappropriate risks, as executives
will be held accountable for misconduct which is harmful
to the Company’s financial and reputational health. In
addition, the Company’s clawback policy and specific
clawback provisions in its annual and long-term incentive
award agreements allow the Company to “claw back”
executive pay if the executive engages in conduct that is
determined to have contributed to material compliance
failures, subject to applicable law.

2021 Proxy Statement | 65

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CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Act, we are
providing the following disclosure about the relationship of
the annual total compensation of our employees to the annual
total compensation of Mr. Ersek, our CEO. To understand
this disclosure, we think it is important to give context to our
operations. As noted above, The Western Union Company
provides people and businesses with fast, reliable, and
convenient ways to send money and make payments around
the world. As a global organization, approximately 84% of
our employees are located outside of the United States, with
our employees located in a total of 52 countries. We strive to
create a competitive global compensation program in terms
of both the position and the geographic location in which the
employee is located. As a result, our compensation program
varies amongst each local market, in order to allow us to
provide a competitive total rewards package.

Given the leverage of our executive compensation program
towards performance-based elements, we expect that our
pay ratio disclosure will fluctuate year-to-year based on
the Company’s performance against the pre-established
performance goals.

Ratio

For 2020,

• The median of the annual total compensation of all of our

employees, other than Mr. Ersek, was $30,515.

• Mr. Ersek’s annual total compensation, as reported in the
Total column of the 2020 Summary Compensation Table,
was $10,336.4 thousands.

• Based on this information, the ratio of the annual total
compensation of Mr. Ersek to the median of the annual
total compensation of all employees is estimated to be
339 to 1.

Identification of Median Employee

We selected November 1, 2020 as the date on which to
determine our median employee. As of that date, we had
approximately 11,000 employees. For purposes of identifying
the median employee, we considered the aggregate of the
following compensation elements for each of our employees,
as compiled from the Company’s payroll records:

• Base Salary

• Target Annual Bonus

• Actual Equity Awards

• Target Commissions

We selected the above compensation elements as
they represent the Company’s principal broad-based
compensation elements.
In addition, we measured
compensation for purposes of determining the median
employee using the 12-month period ending December
31, 2020.

Using this methodology, we determined that our median
employee was a full-time, salaried employee working in
Europe. For purposes of this disclosure, we converted
such employee’s compensation from the employee’s
local currency to U.S. dollars using an exchange rate
as of December 31, 2020. In determining the annual
total compensation of the 2020 median employee, we
calculated such employee’s 2020 compensation
in
accordance with Item 402(c)(2)(x) of Regulation S-K
as required pursuant to SEC executive compensation
disclosure rules. This calculation is the same calculation
used to determine total compensation for purposes of
the 2020 Summary Compensation Table with respect to
each of the NEOs.

66 | The Western Union Company

PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

PROPOSAL 2
ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION

The Company is providing stockholders an advisory vote
to approve executive compensation as required by Section
14A of the Exchange Act. Section 14A was added to the
Exchange Act by Section 951 of the Dodd-Frank Act. The
advisory vote to approve executive compensation is a non-
binding vote on the compensation of the Company’s NEOs,
as described in the “Compensation Discussion and Analysis”
section, the tabular disclosure regarding such compensation,
and the accompanying narrative disclosure set forth in this
Proxy Statement. The advisory vote to approve executive
compensation is not a vote on the Company’s general
compensation policies or the compensation of the Company’s
Board of Directors. The Dodd-Frank Act requires the Company
to hold the advisory vote to approve executive compensation
at least once every three years. At the 2017 Annual Meeting of
Stockholders, the Company asked stockholders to indicate if
it should hold an advisory vote to approve the compensation
of named executive officers every one, two or three years,
with the Board recommending an annual advisory vote. Our
stockholders approved this recommendation. Accordingly,
the Company is again asking stockholders to approve the
compensation of NEOs as disclosed in this Proxy Statement.

At the 2020 Annual Meeting of Stockholders, the Company
provided stockholders with the opportunity to cast an
advisory vote to approve the compensation of the Company’s
NEOs as disclosed in the Proxy Statement for the 2020 Annual

Meeting of Stockholders, and the Company’s stockholders
overwhelmingly approved the proposal, with approval by
approximately 89% of the votes cast for the proposal at the
2020 Annual Meeting of Stockholders.

its compensation policies
The Company believes that
and procedures, which are outlined in the “Compensation
Discussion and Analysis” section of this Proxy Statement,
support the goals of:

- Aligning our executives’ goals with our stockholders’

interests;

- Attracting, retaining, and motivating outstanding executive

talent; and

- “Pay-for-performance” - Holding our executives accountable
and rewarding their achievement of financial, strategic and
operating goals.

The Compensation Committee of the Board continually
reviews the Company’s executive compensation and
benefits program to evaluate whether it supports these goals
and serves the interests of the Company’s stockholders. The
Company’s executive compensation practices include the
following, as discussed in more detail in the “Compensation
Discussion and Analysis” section of this Proxy Statement:

WHAT WE DO

% Pay-for-performance and at-risk compensation.
% Align compensation with stockholder interests.
% Emphasis on future pay opportunity vs. current pay.
% Mix of performance metrics.
% Stockholder engagement.
% “Clawback” policy.
% Robust stock ownership guidelines.
% Three-year performance period for PSUs.
% Outside compensation consultant retained by the Compensation Committee.
% “Double trigger” severance benefits in the event of a change-in-control.
% Maximum payout caps for annual cash incentive compensation and PSUs.
% Consider ESG metric in compensation program.

WHAT WE DON’T DO

× No repricing or buyout of
underwater stock options.
× No change-in-control tax
gross ups for individuals
promoted or hired after
April 2009.

× No dividends or dividend

equivalents paid on unvested
or unearned PSUs or RSUs.
× Prohibition against pledging
and hedging of Company
securities by senior
executives and directors.
× No service-based defined

benefit pension plan.

2021 Proxy Statement | 67

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PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

We believe that our executive compensation practices,
in combination with a competitive market review, limited
executive perquisites, and reasonable severance pay
multiples contribute to an executive compensation program
that is competitive yet strongly aligned with stockholder
interests.

The Board recommends that you vote in favor of the following
“say-on-pay” resolution:

Item 402 of Regulation S-K

RESOLVED, that the stockholders of the Company
approve, on an advisory basis, the compensation of
the Company’s named executive officers, as disclosed
pursuant to
in the
“Compensation Discussion and Analysis” section, the
tabular disclosure regarding such compensation, and
the accompanying narrative disclosure, each as set forth
in the Company’s Proxy Statement for its 2021 Annual
Meeting of Stockholders.

REQUIRED VOTE

Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee
may take into account the outcome of the vote when considering future executive compensation arrangements. Stockholders
attending the Annual Meeting via webcast are deemed to be present “in person”.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 2.

68 | The Western Union Company

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PROPOSAL 3 RATIFICATION OF SELECTION OF AUDITORS

PROPOSAL 3
RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors and the Audit Committee believe it
is in the best interest of the Company and its stockholders
to recommend to the stockholders the ratification of the
selection of Ernst & Young LLP, independent registered
public accounting firm, to audit the accounts of the
Company and its subsidiaries for 2021. Ernst & Young
LLP has served as the Company’s independent registered
public accounting firm since the Company became a
public company in 2006. Consistent with the regulations

adopted pursuant to the Sarbanes-Oxley Act of 2002, the
lead audit partner having primary responsibility for the
audit and the concurring audit partner are rotated every
five years.

A representative of Ernst & Young LLP will be present at
the Annual Meeting, will have the opportunity to make a
statement if they desire to do so, and will be available to
respond to appropriate questions.

SUMMARY OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES
FOR 2020 AND 2019

Fees for professional services provided by our independent auditors, Ernst & Young LLP, for fiscal years 2020 and 2019,
respectively, included the following (in millions):

Audit Fees(1)

Audit-Related Fees(2)

Tax Fees(3)

All Other Fees(4)

2020

$6.1

$1.0

$0.6

$—

2019

$5.9

$1.4

$0.7

$—

(1)

(2)

(3)

“Audit Fees” primarily include fees related to (i) the integrated audit of the Company’s annual consolidated financial statements and internal
controls over financial reporting; (ii) the review of its quarterly consolidated financial statements; (iii) statutory audits required domestically
and internationally; (iv) comfort letters, consents and assistance with and review of documents filed with the SEC; and (v) other accounting and
financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the PCAOB (United States).

“Audit-Related Fees” primarily include fees, not included in “Audit Fees” above, related to (i) service auditor examinations; (ii) attest services
that are not required by statute or regulation; and (iii) consultation concerning financial accounting and reporting standards that are not
classified as “Audit Fees.”

“Tax Fees,” which incorporate both tax advice and tax planning services, primarily include fees related to (i) consultations, analysis and
assistance with domestic and foreign tax matters, including value-added and goods and services taxes; (ii) local tax authority audits; and
(iii) other miscellaneous tax consultations, including tax services requested as part of the Company’s procedures for commercial agreements,
the acquisition of new entities, and other potential business transactions.

(4)

“All Other Fees” consist of fees for professional services other than the services reported above.

During 2020 and 2019, all audit and non-audit services provided by the independent registered public accounting firm were
pre-approved, consistent with the pre-approval policy of the Audit Committee. The pre-approval policy requires that all services
provided by the independent registered public accounting firm be pre-approved by the Audit Committee or one or more
members of the Audit Committee designated by the Audit Committee.

2021 Proxy Statement | 69

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PROPOSAL 3 RATIFICATION OF SELECTION OF AUDITORS

REQUIRED VOTE

The affirmative vote of the holders of a majority of shares of the
Company’s Common Stock present in person or represented
by proxy at the meeting and entitled to vote on the subject
matter is required to approve this Proposal 3. Stockholders
attending the Annual Meeting via webcast are deemed to be
present “in person”. In the event the stockholders fail to ratify
the selection of Ernst & Young LLP, the Audit Committee of

the Board of Directors will consider it a direction to select
another independent registered public accounting firm for
the subsequent year. Even if the selection is ratified, the Audit
Committee, in its discretion, may select a new independent
registered public accounting firm at any time during the year,
if it feels that such a change would be in the best interest of
the Company and its stockholders.

THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT YOU VOTE FOR PROPOSAL 3.

70 | The Western Union Company

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PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT

PROPOSAL 4
STOCKHOLDER PROPOSAL REGARDING
STOCKHOLDER RIGHT TO ACT
BY WRITTEN CONSENT

John Chevedden, 2215 Nelson Avenue, No. 205, Redondo
Beach, California 90278, owner of more than $2,000 worth
of shares of the Company’s Common Stock, has notified
the Company that he intends to present a proposal for
consideration at the Annual Meeting. As required by the

Exchange Act, the text of the stockholder proposal and
supporting statement appear as submitted to the Company
by the proponent. The Board and the Company accept
no responsibility for the contents of the proposal or the
supporting statement.

PROPOSAL 4 SHAREHOLDER RIGHT TO ACT BY WRITTEN CONSENT

Shareholders request that our board of directors take such
steps as may be necessary to permit written consent by
the shareholders entitled to cast the minimum number of
votes that would be necessary to authorize an action at a
meeting at which all shareholders entitled to vote thereon
were present and voting. This includes shareholder ability
to initiate any appropriate topic for written consent.

Taking action by written consent in place of a meeting is
a means shareholders can use to raise important matters
outside the normal annual meeting cycle like the election of
a new director. For instance Mr. Michael Miles was rejected
by 25 million votes in 2020. And Ms. Betsy Holden was
rejected by 21 million votes. Management pay was rejected
by 40 million votes.

This proposal topic won 95%-support at Dover Corporation
and 88%-support at AT&T.

The Bank of New York Mellon Corporation (BK) said
it adopted written consent in 2019 after 45%-support
for a written consent shareholder proposal. This was
significantly less that our 51% support for this same topic
in 2017. And this BK action was a year before the pandemic
put an end to in-person shareholder meetings — perhaps
forever. An end to in-person shareholder meetings makes
a right to act by written consent more valuable.

A shareholder right to act by written consent still affords
WU management strong protection for a management
holdout mentality for the status quo during the current
rapidly changing business environment. Any action taken
by written consent would still need 58% supermajority

approval from the shares that normally cast ballots at the
WU annual meeting to equal the required majority vote
from all WU shares outstanding.

transparency have

With the avalanche of bare bones online shareholder
in 2020 shareholder engagement and
meetings
management
taken a big hit.
Shareholders are so restricted in online meetings that
management will never want a return to the much more
transparent
format.
This is all the more reason to support this corporate
governance enhancement.

in-person shareholder meeting

Shareholders are restricted in making their views known
at online shareholder meetings because all constructive
questions and comments can be screened out by
management. For instance the Goodyear shareholder
meeting was spoiled by a trigger-happy management
mute button for shareholders. And AT&T would not even
allow shareholders to speak.

The sole content of an online special shareholder meeting
can be a few stilted formalities and the announcement of
the vote with an almost total absence of communication,
outreach or engagement with shareholders.

Now more than ever shareholders need to have the
option to take action outside of a shareholder meeting
and send a wake-up call to management, if need be,
since tightly controlled online shareholder meetings
are the Death Valley of shareholder engagement and
management transparency.

Please vote yes:

Shareholder Right to Act by Written Consent -- Proposal 4

2021 Proxy Statement | 71

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The affirmative vote of the holders of a majority of shares

of the Company’s Common Stock present in person or

represented by proxy at the Annual Meeting and entitled

to vote on the subject matter is required to approve

this Proposal. Stockholders should be aware that this

present “in person”.

stockholder proposal is simply a request that the Board take

the action stated in the proposal. Approval of this proposal

may not result in the requested action being taken by the

Board, and therefore, its approval would not effectuate the

actions requested by the proposal. Stockholders attending

the Annual Meeting via the live webcast are deemed to be

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4.

PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT

BOARD’S STATEMENT OPPOSING THE PROPOSAL

Required Vote; Recommendation Only

After careful consideration, and for the following reasons,
the Board believes that the proposal is not in the best
interests of the Company or its stockholders, and the Board
recommends voting “AGAINST” this proposal.

Stockholder engagement efforts suggest
limited
stockholder support for the proposal. After a proposal
to establish the right of stockholders to act by written
consent received approximately 51% approval at the
2017 annual meeting of stockholders, the Board engaged
with the Company’s top 25 stockholders to solicit input
regarding the most appropriate response to the approval
of the proposal. The stockholders in this group who agreed
to speak with the Company are believed by the Company
to have held approximately 49% of the Company’s
outstanding stock as of December 31, 2017.

- A significant majority of these stockholders (representing
approximately 31% of the Company’s outstanding stock
as of December 31, 2017) indicated that a reduction in
the ownership threshold required under the Company’s
existing special meeting right was preferable to
implementing a right for stockholders to act by written
consent.

- In response, the Board reduced the ownership threshold
for stockholders to call a special meeting from 20% to
10%, subject to stockholder approval.

- Stockholders voted on an amendment to the Company’s
Amended and Restated Certificate of Incorporation
to approve the reduced special meeting ownership
threshold at the 2018 annual meeting of stockholders.
This proposal passed with the favorable vote of 83.3%
of all outstanding shares.

The Company believes that permitting stockholder action
by written consent could lead to substantial confusion
and disruption for stockholders. The board believes that
permitting stockholder action by written consent is not
an appropriate corporate governance model for a widely-
held public company like Western Union. Consider the
following:

- Currently, any matter that Western Union or its
stockholders wish to present for a stockholder vote
must be presented at a meeting of the stockholders,
thus allowing all stockholders to consider, discuss
and vote on the pending matter.

- In contrast, the written consent proposal at issue
would permit a group of stockholders with no fiduciary
duties to other stockholders to initiate action without
prior notice, either to the other stockholders or to
the Company, and without giving all stockholders an
opportunity to participate and consider arguments,
including those of the Company, for and against the
action.

- Stockholder action by written consent would allow for
the solicitation of multiple, even conflicting, written
consents by multiple stockholder groups, potentially
creating substantial confusion and disruption for
stockholders.

The Board of Directors is already highly accountable to
stockholders. The proposal suggests that the written
consent right is necessary to keep the Board accountable
to stockholders. Our current policies, however, implement
the goal of accountability without the governance risk to
stockholders and the Company associated with action
by written consent as contemplated by the proposal. The
Company has implemented a comprehensive package of
corporate governance practices and policies that enable
stockholders to hold the Board accountable and, where
necessary, take quick action to support their interests.
Elements of this comprehensive package include:

- the Board of Directors is declassified, with majority

voting for uncontested Director elections;

- the Company was among the first U.S. companies to

adopt the “proxy access” right for its stockholders;

- a stockholder or group of stockholders holding 10%
or more of our outstanding shares may call a special
meeting;

- our Amended and Restated Certificate of Incorporation
and By-Laws have no supermajority provisions; and

- the Company regularly seeks to engage with its
stockholders to better understand their perspectives.

The Board has repeatedly responded to stockholder
concerns and the Company’s existing corporate governance
practices and policies give stockholders sufficient means
to take actions which might otherwise be taken by written
consent. There is, accordingly, no need for stockholders to be
given the right to act by written consent.

72 | The Western Union Company

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BOARD’S STATEMENT OPPOSING THE PROPOSAL

Required Vote; Recommendation Only

The affirmative vote of the holders of a majority of shares
of the Company’s Common Stock present in person or
represented by proxy at the Annual Meeting and entitled
to vote on the subject matter is required to approve
this Proposal. Stockholders should be aware that this

stockholder proposal is simply a request that the Board take
the action stated in the proposal. Approval of this proposal
may not result in the requested action being taken by the
Board, and therefore, its approval would not effectuate the
actions requested by the proposal. Stockholders attending
the Annual Meeting via the live webcast are deemed to be
present “in person”.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4.

PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT

After careful consideration, and for the following reasons,

- In contrast, the written consent proposal at issue

the Board believes that the proposal is not in the best

interests of the Company or its stockholders, and the Board

recommends voting “AGAINST” this proposal.

would permit a group of stockholders with no fiduciary

duties to other stockholders to initiate action without

prior notice, either to the other stockholders or to

the Company, and without giving all stockholders an

Stockholder engagement efforts suggest

limited

opportunity to participate and consider arguments,

stockholder support for the proposal. After a proposal

including those of the Company, for and against the

to establish the right of stockholders to act by written

action.

consent received approximately 51% approval at the

2017 annual meeting of stockholders, the Board engaged

with the Company’s top 25 stockholders to solicit input

regarding the most appropriate response to the approval

of the proposal. The stockholders in this group who agreed

to speak with the Company are believed by the Company

to have held approximately 49% of the Company’s

outstanding stock as of December 31, 2017.

- A significant majority of these stockholders (representing

approximately 31% of the Company’s outstanding stock

as of December 31, 2017) indicated that a reduction in

the ownership threshold required under the Company’s

existing special meeting right was preferable to

implementing a right for stockholders to act by written

consent.

- Stockholder action by written consent would allow for

the solicitation of multiple, even conflicting, written

consents by multiple stockholder groups, potentially

creating substantial confusion and disruption for

stockholders.

The Board of Directors is already highly accountable to

stockholders. The proposal suggests that the written

consent right is necessary to keep the Board accountable

to stockholders. Our current policies, however, implement

the goal of accountability without the governance risk to

stockholders and the Company associated with action

by written consent as contemplated by the proposal. The

Company has implemented a comprehensive package of

corporate governance practices and policies that enable

stockholders to hold the Board accountable and, where

- In response, the Board reduced the ownership threshold

necessary, take quick action to support their interests.

for stockholders to call a special meeting from 20% to

Elements of this comprehensive package include:

to approve the reduced special meeting ownership

- the Company was among the first U.S. companies to

10%, subject to stockholder approval.

- Stockholders voted on an amendment to the Company’s

Amended and Restated Certificate of Incorporation

threshold at the 2018 annual meeting of stockholders.

This proposal passed with the favorable vote of 83.3%

of all outstanding shares.

The Company believes that permitting stockholder action

by written consent could lead to substantial confusion

and disruption for stockholders. The board believes that

permitting stockholder action by written consent is not

an appropriate corporate governance model for a widely-

held public company like Western Union. Consider the

following:

- Currently, any matter that Western Union or its

stockholders wish to present for a stockholder vote

must be presented at a meeting of the stockholders,

thus allowing all stockholders to consider, discuss

and vote on the pending matter.

- the Board of Directors is declassified, with majority

voting for uncontested Director elections;

adopt the “proxy access” right for its stockholders;

- a stockholder or group of stockholders holding 10%

or more of our outstanding shares may call a special

meeting;

- our Amended and Restated Certificate of Incorporation

and By-Laws have no supermajority provisions; and

- the Company regularly seeks to engage with its

stockholders to better understand their perspectives.

The Board has repeatedly responded to stockholder

concerns and the Company’s existing corporate governance

practices and policies give stockholders sufficient means

to take actions which might otherwise be taken by written

consent. There is, accordingly, no need for stockholders to be

given the right to act by written consent.

2021 Proxy Statement | 73

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EQUITY COMPENSATION PLAN INFORMATION

The following table gives information, as of December 31, 2020, about our Common Stock that may be issued upon the exercise
of options and settlement of other equity awards under all compensation plans under which equity securities are reserved for
issuance. The Company’s 2015 Long-Term Incentive Plan, 2006 Long-Term Incentive Plan and 2006 Non-Employee Director
Equity Compensation Plan are our only equity compensation plans pursuant to which our equity securities are authorized for
issuance.

PLAN CATEGORY

NUMBER OF SECURITIES
TO
BE ISSUED UPON
EXERCISE
OF OUTSTANDING
OPTIONS,
WARRANTS AND RIGHTS

(a)

Equity compensation plans

approved by security holders

11,728,522(1)

Equity compensation plans not
approved by security holders

—

Total

Footnotes:

11,728,522(1)

WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS

NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION
PLANS (EXCLUDING
SECURITIES REFLECTED IN
COLUMN (a))

(b)

$19.11(2)

N/A

$19.11(2)

(c)

21,060,618(3)

—

21,060,618(3)

(1)

(2)

(3)

Includes 6,876,881 restricted stock units, PSUs, deferred stock units, and bonus stock units that were outstanding on December 31, 2020
under the Company’s 2015 Long-Term Incentive Plan, 2006 Long-Term Incentive Plan and 2006 Non-Employee Director Equity Compensation
Plan. Restricted stock unit awards, deferred stock unit awards and bonus stock units may be settled only for shares of Common Stock on a
one-for-one basis. The number included for PSUs reflects grant date units awarded. Assuming maximum payout for PSU grants that have not
completed the required performance period, the number of securities to be issued would increase by 1,821,350. Please see the “Compensation
Discussion and Analysis” section of this Proxy Statement for further information regarding the 2018 PSUs, including the performance metrics
applicable to such awards.

Only option awards were used in computing the weighted-average exercise price.

This amount represents shares of Common Stock available for issuance under the Company’s 2015 Long-Term Incentive Plan. Awards
available for grant under the Company’s 2015 Long-Term Incentive Plan include stock options, stock appreciation rights, restricted stock,
restricted stock units, bonus stock, bonus stock units, deferred stock units, performance grants, and any combination of the foregoing awards.

74 | The Western Union Company

STOCK BENEFICIALLY OWNED BY DIRECTORS,
EXECUTIVE OFFICERS AND OUR LARGEST
STOCKHOLDERS

The following table sets forth the beneficial ownership of Common Stock by each person or group that is known by us to be the
beneficial owner of more than 5% of our Common Stock, all directors and nominees, each of the executive officers named in
the 2020 Summary Compensation Table contained in this Proxy Statement, and all directors and executive officers as a group.
Except as otherwise noted, (i) the information is as of March 24, 2021, (ii) each person has sole voting and investment power of
the shares, and (iii) the business address of each person shown below is 7001 East Belleview Avenue, Denver, Colorado 80237.

NAME OF BENEFICIAL OWNER
5% Owners
BlackRock, Inc.

The Vanguard Group

Capital Research Global Investors

State Street Corporation

DIRECTORS AND NAMED EXECUTIVE OFFICERS(5)
Martin I. Cole
Hikmet Ersek
Richard A. Goodman
Betsy D. Holden
Jeffrey A. Joerres
Michael A. Miles, Jr.
Timothy P. Murphy
Joyce A. Phillips
Jan Siegmund
Angela A. Sun
Solomon D. Trujillo
Raj Agrawal
Jean Claude Farah
Khalid Fellahi
Michelle Swanback
All directors and executive officers as a group

(19 persons)

Less than 1%

AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP

48,871,150(1)

47,792,244(2)

PERCENTAGE
OF
OUTSTANDING
SHARES

11.9%(1)

11.62%(2)

32,979,147(3)

8%(3)

22,394,787(4)

5.45%(4)

ADDRESS

55 East 52nd Street,
New York, NY 10055
100 Vanguard Blvd.,
Malvern, PA 19355
333 South Hope Street,
55th Fl, Los Angeles,
CA 90071
State Street
Financial Center
One Lincoln Street
Boston, MA 02111

37,854
3,617,942
36,931
5,000
15,998
—
20,084
—
50,599
22,620
169,556(6)
726,970
363,870
139,471
32,870
5,461,724

*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
1.33%

2021 Proxy Statement | 75

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STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS

(1)

(2)

(3)

(4)

(5)

The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 10 to Schedule 13G filing
with the Securities and Exchange Commission filed January 27, 2021, which reports ownership as of December 31, 2020. The Schedule 13G
filing indicates that the holder had sole voting power over 44,757,576 shares, sole dispositive power over 48,871,150 shares, shared voting
power over 0 shares, and shared dispositive power over 0 shares.

The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 8 to Schedule 13G filing
with the Securities and Exchange Commission filed February 10, 2021, which reports ownership as of December 31, 2020. The Schedule 13G
filing indicates that the holder had sole voting power over 0 shares, sole dispositive power over 45,841,756 shares, shared voting power over
805,241 shares, and shared dispositive power over 1,950,488 shares.

The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 8 to Schedule 13G filing
with the Securities and Exchange Commission filed February 16, 2021, which reports ownership as of December 31, 2020. The Schedule 13G
filing indicates that the holder had sole voting and sole dispositive power over 32,979,147 shares, and shared voting power over, and shared
dispositive power over, 0 shares.

The number of shares held and percentage of outstanding shares were obtained from the holder’s Schedule 13G filing with the Securities and
Exchange Commission filed February 11, 2021, which reports ownership as of December 31, 2020. The Schedule 13G filing indicates that the
holder had shared voting power over 18,692,422 shares, shared dispositive power over 22,313,765 shares and sole voting power over, and sole
dispositive power over, 0 shares.

The number of shares reported includes shares covered by options that are exercisable within 60 days of March 24, 2021 as follows: Mr. Cole,
9,208; Mr. Ersek, 2,543,622; Mr. Goodman, 36,814; Ms. Holden, 0; Mr. Joerres, 11,448; Mr. Miles, 0; Mr. Murphy, 20,084; Ms. Phillips, 0; Ms.
Sun 22,620; Mr. Trujillo, 157,756; Mr. Siegmund 40,599; Mr. Agrawal (Chief Financial Officer), 395,559; Mr. Farah (President, Global Network),
116,503; Mr. Fellahi (President, Consumer Money Transfer), 28,012; Ms. Molnar (Chief Transformation Officer), 0; Andrew Summerill (President,
Payments), 0; Michelle Swanback (President, Product and Platform), 0; Ms. Tsai (Chief Legal Officer and Corporate Secretary), 0; Richard
Williams (Chief People Officer), 53,329; and all directors and executive officers as a group, 3,435,554.

(6) Mr. Trujillo shares with his spouse through a family trust the power to vote or direct the vote of, and the power to dispose or direct the disposition

of, 11,800 shares.

76 | The Western Union Company

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CERTAIN TRANSACTIONS AND OTHER MATTERS

The Corporate Governance, ESG, and Public Policy
Committee considers all relevant factors when determining
whether to approve or ratify a related person transaction,
including, without limitation, the following:

- the size of the transaction and the amount payable to a

related person;

- the nature of the interest of the related person in the

transaction;

- whether the transaction may involve a conflict of interest;

and

- whether the transaction involves the provision of goods
or services to the Company that are available from
unaffiliated third parties and, if so, whether the transaction
is on terms and made under circumstances that are at
least as favorable to the Company as would be available
in comparable transactions with or involving unaffiliated
third parties.

The Company’s Related Person Transactions Policy is available
through the “Investor Relations, Corporate Governance” portion
of the Company’s website, www.westernunion.com.

We or one of our subsidiaries may occasionally enter into
transactions with certain “related persons.” Related persons
include our executive officers, directors, nominees for directors,
5% or more beneficial owners of our Common Stock, and
immediate family members of these persons. We refer to
transactions involving amounts in excess of $120,000 and
in which the related person has a direct or indirect material
interest as “related person transactions.” Each related person
transaction must be approved or ratified in accordance with
the Company’s written Related Person Transactions Policy by
the Corporate Governance, ESG, and Public Policy Committee
of the Board of Directors or, if the Corporate Governance,
ESG, and Public Policy Committee of the Board of Directors
determines that the approval or ratification of such related
person transaction should be considered by all disinterested
members of the Board of Directors, by the vote of a majority of
such disinterested members.

During 2020, N.A. Zeid, the brother-in-law of Mr. Farah served
as the principal executive officer of one of the Company’s
money transfer agents in the Middle East region. In 2020,
the agent generated approximately 1% of the Company’s
overall revenue and was paid approximately $13 million in
commissions for its services as a money transfer agent.
Mr. Farah does not receive any direct benefit from the
Company’s relationship with the agent. Internal controls are
in place to preclude Mr. Farah from making decisions on
behalf of the Company with respect to the agent or otherwise
being involved in the Company’s relationship with the agent.
Pursuant to the Company’s Related Person Transactions
Policy, the relationship was ratified by the Corporate
Governance, ESG, and Public Policy Committee.

2021 Proxy Statement | 77

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* * *

This Proxy Statement is provided to you at the direction of
the Board of Directors.

Caroline Tsai,
Chief Legal Officer and Corporate
Secretary

78 | The Western Union Company

ANNEX A

RECONCILIATION OF NON-GAAP MEASURES

Western Union’s management believes the non-GAAP financial measures presented provide meaningful supplemental
information regarding our operating results to assist management, investors, analysts, and others in understanding our financial
results and to better analyze trends in our underlying business, because they provide consistency and comparability to prior
periods.

A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial
measure. A non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with
our GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding
of our business. Users of the financial statements are encouraged to review our financial statements and publicly-filed reports
in their entirety and not to rely on any single financial measure. A reconciliation of non-GAAP financial measures to the most
directly comparable GAAP financial measures is included below. All adjusted year-over-year changes were calculated using
prior year amounts.

REVENUES

Revenues, as reported (GAAP)

Foreign currency translation impact(a)

Revenues, constant currency adjusted

Revenues, as reported (GAAP)

Divestitures impact(b)

Revenues, excluding divestitures

Revenue change, as reported (GAAP)

Revenue change, constant currency adjusted and excluding divestitures

OPERATING INCOME

Operating income, as reported (GAAP)

Foreign currency translation impact(a)

Restructuring-related expenses(c)

Acquisition and divestiture costs(d)

Operating income, constant currency adjusted, excluding restructuring-related expenses and
acquisition and divestiture costs

Operating income margin, as reported

Operating margin, excluding restructuring-related expenses and acquisition and divestiture costs

Operating income, as reported (GAAP)

Restructuring-related expenses(c)

Acquisition and divestiture costs(d)

Operating income, adjusted, excluding restructuring-related expenses acquisition and divestiture costs

Operating income margin, as reported (GAAP)

Operating margin, adjusted, excluding restructuring-related expenses acquisition and divestiture costs

2020

$4,835.0

157.2

$4,992.2

2019

$5,292.1

(130.7)

$5,161.4

(9%)

(3%)

2020

$967.3

44.4

36.8

2.5

$1,051.0

20%

20.8%

2019

$934.0

115.5

16.0

$1,065.5

17.6%

20.1%

2021 Proxy Statement | A-1

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(a)

(b)

(c)

Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar.
Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United
States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate. We believe that this
measure provides management and investors with information about operating results and trends that eliminates currency volatility and
provides greater clarity regarding, and increases the comparability of, our underlying results and trends.

Represents the revenue generated by the Speedpay and Paymap businesses which were divested in 2019. We have included this information
because management believes that presenting revenues as adjusted to exclude divestitures will provide investors with a more meaningful
comparison of results within the periods presented.

Represents the impact from expenses incurred in connection with an overall restructuring plan, approved by the Board of Directors on August 1,
2019, to improve our business processes and cost structure by reducing headcount and consolidating various facilities. While these expenses
are specific to this initiative, the types of expenses related to this initiative are similar to expenses that we have previously incurred and can
reasonably be expected to incur in the future. We believe that, by excluding the effect of these charges associated with restructuring-related
activities that can impact operating trends, management and investors are provided with a measure that increases the comparability of our
underlying operating results.

(d)

Represents the impact from expenses incurred in connection with our acquisition and divestiture activity, including the Speedpay and Paymap
divestitures. We believe that, by excluding the effect of these charges that can impact operating trends, management and investors are provided
with a measure that increases the comparability of our underlying operating results.

A-2 | The Western Union Company

2020

Notice of 2021 Annual Meeting
of Stockholders, Proxy Statement
and 2020 Annual Report

2
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8419_Western_Union_2021_AR_PRINT_v12.3.indd 5

3/17/21 4:57 PM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-32903

THE WESTERN UNION COMPANY
(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

20-4531180
(I.R.S. Employer Identification No.)

THE WESTERN UNION COMPANY
7001 East Belleview Avenue
Denver, Colorado 80237
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (866) 405-5012
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.01 Par Value

Trading Symbol

Name of each exchange on which registered
The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-

T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.

Large accelerated filer ☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
As of June 30, 2020, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $8.8 billion based on the

closing sale price of $21.62 of the common stock as reported on the New York Stock Exchange.

As of February 16, 2021, 410,921,508 shares of the registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s proxy statement for the 2021 annual meeting of stockholders are incorporated into Part III of this Annual Report on Form 10-K.

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INDEX

PAGE
NUMBER

PART I

Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . .

Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 8.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . .

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . .

Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART IV

Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

138

139

145

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PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and materials we have filed or will file with the Securities and Exchange
Commission (“SEC”) (as well as information included in our other written or oral statements) contain or will contain
certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that
are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our
forward-looking statements. Words such as “expects,” “intends,” “targets,” “anticipates,” “believes,” “estimates,”
“guides,” “provides guidance,” “provides outlook,” and other similar expressions or future or conditional verbs such as
“may,” “will,” “should,” “would,” “could,” and “might” are intended to identify such forward-looking statements. Readers
of the Annual Report on Form 10-K of The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or
“us”) should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in
Part I, Item 1A, Risk Factors and throughout this Annual Report on Form 10-K. The statements are only as of the date
they are made, and the Company undertakes no obligation to update any forward-looking statement.

Possible events or factors that could cause results or performance to differ materially from those expressed in our

forward-looking statements include the following:

Events Related to Our Business and Industry

•

changes in general economic conditions and economic conditions in the regions and industries in which we
operate, including global economic downturns and trade disruptions, or significantly slower growth or declines
in the money transfer, payment service, and other markets in which we operate, including downturns or declines
related to interruptions in migration patterns or other events, such as public health emergencies, epidemics, or
pandemics, such as COVID-19, civil unrest, war, terrorism, natural disasters, or non-performance by our banks,
lenders, insurers, or other financial services providers;

failure to compete effectively in the money transfer and payment service industry, including among other things,
with respect to price, with global and niche or corridor money transfer providers, banks and other money transfer
and payment service providers, including digital, mobile and internet-based services, card associations, and card-
based payment providers, and with digital currencies and related protocols, and other innovations in technology
and business models;

political conditions and related actions, including trade restrictions and government sanctions, in the United States
and abroad, which may adversely affect our business and economic conditions as a whole, including interruptions
of United States or other government relations with countries in which we have or are implementing significant
business relationships with agents, clients, or other partners;

deterioration in customer confidence in our business, or in money transfer and payment service providers
generally;

failure to maintain our agent network and business relationships under terms consistent with or more
advantageous to us than those currently in place;

our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in
response to changing industry and consumer needs or trends;

changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the
regulation of foreign exchange spreads on money transfers and payment transactions;

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•

any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems
or those of our vendors or other third parties;

cessation of or defects in various services provided to us by third-party vendors;

• mergers, acquisitions, and the integration of acquired businesses and technologies into our Company, divestitures,
and the failure to realize anticipated financial benefits from these transactions, and events requiring us to write
down our goodwill;

•

decisions to change our business mix;

our ability to realize the anticipated benefits from restructuring-related initiatives, which may include decisions
to downsize or to transition operating activities from one location to another, and to minimize any disruptions in
our workforce that may result from those initiatives;

failure to manage credit and fraud risks presented by our agents, clients, and consumers;

changes in tax laws, or their interpretation, any subsequent regulation, and potential related state income tax
impacts, and unfavorable resolution of tax contingencies;

adverse rating actions by credit rating agencies;

our ability to protect our trademarks, patents, copyrights, and other intellectual property rights, and to defend
ourselves against potential intellectual property infringement claims;

our ability to attract and retain qualified key employees and to manage our workforce successfully;

• material changes in the market value or liquidity of securities that we hold;

•

restrictions imposed by our debt obligations;

Events Related to Our Regulatory and Litigation Environment

•

liabilities or loss of business resulting from a failure by us, our agents, or their subagents to comply with laws
and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to
protect consumers, or detect and prevent money laundering, terrorist financing, fraud, and other illicit activity;

increased costs or loss of business due to regulatory initiatives and changes in laws, regulations and industry
practices and standards, including changes in interpretations, in the United States and abroad, affecting us, our
agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide
our services, including related to anti-money laundering regulations, anti-fraud measures, our licensing
arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring
requirements, consumer protection requirements, remittances, and immigration;

liabilities, increased costs or loss of business and unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions by regulators;

liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory
enforcement actions, including costs, expenses, settlements, and judgments;

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•

failure to comply with regulations and evolving industry standards regarding consumer privacy, data use, the
transfer of personal data between jurisdictions, and information security, including with respect to the General
Data Protection Regulation (“GDPR”) in the European Union ("EU") and the California Consumer Privacy Act;

failure to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”),
as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau (“CFPB”)
and similar legislation and regulations enacted by other governmental authorities in the United States and abroad
related to consumer protection and derivative transactions;

effects of unclaimed property laws or their interpretation or the enforcement thereof;

failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working
capital to meet the changing requirements of our regulators worldwide;

changes in accounting standards, rules and interpretations, or industry standards affecting our business;

Other Events

•

catastrophic events; and

• management’s ability to identify and manage these and other risks.

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Item 1. Business

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.

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. As of December 31, 2020, our global network included over 550,000 agent locations in
more than 200 countries and territories and many Western Union branded or partner websites in a growing number of
countries and territories. Each location in our agent network is capable of facilitating a consumer’s use of one or more of
our services, with the majority offering a Western Union branded service. As of December 31, 2020, more than 65% of
our agent locations had conducted money transfer activity in the previous 12 months.

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 majority of this
business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In
addition, in certain countries, we write foreign currency forward and option contracts for customers to facilitate future
payments.

We believe that brand strength, size and reach of our global network, convenience, reliability and value for the price
paid have been important to the growth of our business. 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
payment and other financial services and to expand the ways our services can be accessed.

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.

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. In
May 2019, we sold a substantial majority of our United States based electronic bill payments services, as discussed below.
Our money order and other services, in addition to certain 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.

Year Ended December 31,
2019

2018

2020

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87 %
8 %
5 %
100 %

83 %
7 %
10 %
100 %

80 %
7 %
13 %
100 %

No individual country or territory outside the United States accounted for more than 7% of our consolidated revenue

for each of the years ended December 31, 2020, 2019, and 2018.

See Part I, Item 1A, Risk Factors, for a discussion of certain risks relating to our foreign operations.

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Consumer-to-Consumer Segment

Money transfers from one consumer to another are the core of our business, representing 87% of our total consolidated
revenues for 2020. A substantial majority of these transfers were cross-border transactions. Our money transfer service is
mainly conducted through our retail agent locations worldwide but also includes our fast-growing money transfer
transactions conducted and funded
through websites and mobile applications marketed under our brands
(“westernunion.com”) and transactions initiated on internet and mobile applications hosted by our third-party white label
or co-branded digital partners (together with westernunion.com, “Digital Money Transfer”). This segment includes five
geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships
and localized marketing activities. We include Digital Money Transfer transactions in these regions, including transactions
from our arrangements with financial institutions and other third parties to enable such entities to offer money transfer
services to their own customers under their brands, as further discussed below. By means of common processes and
systems, these regions, including Digital Money Transfer, 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. 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, the difference between the exchange rate set by us to the consumer
and the rate available in the wholesale foreign exchange market, and speed of service, as applicable.

In a typical money transfer transaction, a consumer provides information, either at one of our agent or subagent
locations or online, specifying, among other things, the name and other identifying information regarding the recipient and
the principal amount of the transfer. The consumer also provides funds for the transaction, including fees. Certain of these
processes are streamlined for consumers who participate in our loyalty programs or are registered westernunion.com
customers. This information is entered into our money transfer system and the funds are made available for pick-up by the
recipient within our system, usually within minutes, in the country or territory specified by the consumer, or paid into the
designated account of the recipient. In some jurisdictions, the principal and fees are not collected until after the presentation
of our written disclosure that generally identifies the exchange rate and all fees and charges associated with the transaction
and the consumer has agreed to the transaction, as described in the disclosure. Consumers then receive a unique identifying
number assigned by our system, which the consumer must communicate to the recipient in order to obtain the principal.
The recipient generally enters an agent location in the designated receiving country or territory, presents the unique
identifying number and identification, where applicable, and is paid the transferred amount by our agent based on the
information in our system. Recipients generally do not pay a fee. However, in limited circumstances, a tax may be imposed
by the local government on the receipt of the money transfer, or a fee may be charged by the recipient’s institution related
to the use of an account. We determine the fee paid by the sender, which generally is based on the principal amount of the
transaction, the send and receive country or territory, speed of service, and channel.

In a retail transaction, we generally pay our agents a commission based on a percentage of revenue. A commission is
usually paid to both the agent that initiated the transaction, the “send agent,” and the agent that paid the transaction, the
“receive agent.” For most agents, the costs of providing the physical infrastructure and staff are typically covered by the
agent’s primary business (e.g., postal services, banking, check cashing, travel, and retail businesses), making the
economics of being a Western Union agent attractive. Western Union’s global reach and large consumer base allow us to
attract agents we believe to be well-positioned to deliver our services. In a westernunion.com transaction, we typically pay
a credit card processor or bank a fee for collecting the principal, and we are also responsible for losses from chargebacks
and fraud, in addition to commissions owed to the receive agent.

No individual country or territory outside the United States accounted for greater than 8% of this segment’s revenue

during all periods presented.

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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. 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. 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.

Although the majority of transactions are funded with cash, consumers can fund a transaction in a variety of ways.
For example, at certain of our agent locations, consumers can fund a transaction using a debit card, and, where available,
consumers can fund a money transfer from an account and through an account using an automated teller machine (“ATM”).
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. At our retail agent locations, consumers generally receive
payments in cash. However, in certain countries, our retail agents may also issue a money order or check or provide payout
through an ATM. Funds can also be directed to a bank account in many countries, by either the sender or receiver, and in
more limited circumstances, can be directed to a mobile wallet, a stored-value card, or debit card.

Distribution and Marketing Channels

We offer our Consumer-to-Consumer services around the world primarily through our global network of third-party
agents and sub-agents in most countries and territories, with approximately 90% of our agent locations being located
outside the United States. Our agents facilitate the global distribution and convenience associated with our brands, which
in turn helps create demand for our services, and helps us to recruit and retain agents. Western Union agents include large
networks such as post offices, banks and retailers, and other established organizations as well as smaller independent retail
locations, which typically provide other consumer products and services. Many of our agents have multiple locations. Our
agents know the markets that they serve and leverage this local knowledge to develop business plans for their markets. In
some regions, our agents contribute financial resources to, or otherwise support, our efforts to market our services. Many
agents operate in locations that are open outside of traditional banking hours, for example on nights and weekends. Our
top 40 agents and partners globally have been with us for more than 20 years, on average, and in 2020, 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.

We provide our third-party 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. Our agents
provide the point-of-sale presence and facilitate the interface with Western Union required to complete the transfers.
Western Union provides central operating functions such as transaction processing, settlement, marketing support, and
consumer relationship management to our agents, as well as compliance training and related support. Some of our agents
outside the United States manage subagents. We refer to these agents as superagents. Although the subagents are under
contract with these superagents (and not with Western Union directly), the subagent locations typically have access to
similar technology and services as our other agent locations. Our international agents often customize services as
appropriate for their geographic markets. In some markets, individual agents are independently offering specific services

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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.

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 and digital advertising. Our
marketing strategy includes a loyalty program such as “My WUSM” which is available in certain countries and territories.
These programs offer consumers faster service at the point-of-sale and the opportunity to earn points on eligible products,
such as money transfers and bill payments, and channels (including westernunion.com and mobile applications) that can
be redeemed for rewards, such as reduced transaction fees. Redemption activity has been insignificant to the results of our
operations.

We cooperate with various partners around the world to offer a variety of branded, co-branded, and unbranded money
transfer services, including services offered exclusively under the partners’ brands. 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.

Industry Trends

Trends in the volume of cross-border money transfer activity correlate with migration, global economic opportunity
and related employment levels worldwide. A significant trend currently impacting the money transfer industry is increasing
regulation. Regulations in the United States and elsewhere focus, in part, on anti-money laundering, anti-terrorist
financing, consumer protection, consumer privacy, data protection, and information security. Regulations require money
transfer providers, banks and other financial institutions to develop systems to prevent, detect, monitor and report certain
transactions. Such regulations increase the costs to provide money transfer services and can make it more difficult or less
desirable for consumers and businesses to use money transfer services, either of which could have an adverse effect on
money transfer providers’ revenues and operating income. 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.
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.

We are seeing increased competition from, and increased market acceptance of, electronic, mobile, and internet-based
money transfer services as well as digital currencies. This trend accelerated during 2020, as consumers responded to the
COVID-19 pandemic by sending money increasingly through digital channels. We believe this shift in consumer
preference will continue beyond the pandemic, 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 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. Digital channels also
include digital wallets, digital currencies, and social media and other predominantly communication or
commerce-oriented platforms that offer money transfer services.

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• 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. We believe that such networks comprise a
significant share of the market.

• 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.

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.

Business Solutions Segment

In our Business Solutions segment, which represented 8% of our total consolidated revenues for 2020, we facilitate
payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size
enterprises, and other organizations and individuals.

Operations

The significant majority of our revenue in this segment is derived from foreign exchange resulting from the difference
between the exchange rate set by us to the customer and the rate available in the wholesale foreign exchange market. The
significant majority of Business Solutions revenue was generated outside the United States during all periods presented.

Services

The majority of our Business Solutions business relates to exchanges of currency at spot rates, which enable customers
to make cross-currency payments. For certain industries such as educational institutions, financial institutions, and law
firms, we provide tailored payment solutions. In addition, in certain countries, we write foreign currency forward and
option contracts for customers to facilitate future payments, which usually generate higher revenue per transaction than
spot payments. Payments are made predominantly through electronic transfers, wire transfers, or checks.

Distribution and Marketing Channels

Our Business Solutions services are offered primarily through digital channels, including through the internet and
third-party channels, and over the phone. Our internet services are marketed through our own websites as well as, from
time to time, co-branding arrangements with third-party websites.

Our customer relationships are a core component of our business payments services. No individual customer

accounted for greater than 10% of this segment’s revenue.

Industry Trends

The business-to-business payments industry has evolved rapidly with technological innovations that have created new
competitors and methods of processing payments from businesses to other businesses. The various products and services
within the business-to-business payments industry are in varying stages of development. Business-to-business payments,
especially cross-border, cross-currency transactions are also dependent on global trade trends and regulations. Increased
anti-money laundering, anti-terrorist financing, consumer protection regulations and compliance requirements, and
increased regulations and compliance requirements applicable to the offering of derivatives are impacting the business-to-

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business payments industry. We believe these increases in competition and regulatory costs are likely to continue in this
segment.

Competition

Our Business Solutions segment competes with a diverse set of service providers offering payment services and
foreign exchange risk management solutions, including financial institutions, other non-bank competitors, and electronic
payment providers. We believe the most significant competitive factors in this segment relate to recurring relationships
founded on customer service and expertise in payments and foreign exchange, customized solutions for specific industries
and clients, convenience and speed of payments network, availability of derivative products, variety of inbound and
outbound payment methods, brand recognition, and price.

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. Other revenue
is derived primarily from transaction fees paid by customers and billers and represented 5% of our total consolidated
revenues for 2020.

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 at a Company-operated location. We believe our business partners who receive payments through our services benefit
from their relationship with Western Union as it provides them with real-time or near real-time posting of their customers’
payments. In many circumstances, our relationships with business partners also provide them with an additional source of
income and reduce their expenses for handling of payments.

On February 28, 2019, we entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. to sell
our United States electronic bill payments business known as “Speedpay,” which had been included as a component of
Other in our segment reporting. We received approximately $750 million and recorded a pre-tax gain on the sale of
approximately $523 million in the all-cash transaction that closed on May 9, 2019.

Consumers use our money orders for making purchases, paying bills, and as an alternative to checks. We derive
investment income from interest generated on our money order settlement assets, which are primarily held in United States
tax exempt state and municipal debt securities.

Intellectual Property

The Western Union® and WU® 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. We also provide various payment and other financial services under many
brands and product names, including Western Union Business SolutionsSM, Pago Fácil®, Quick Collect®, Quick PaySM,
Pay@WUSM, Quick Cash®, My WUSM, and Western Union Convenience Pay®. Our operating results have allowed us to
invest significantly each year to support our brands, and in some regions, our agents have also contributed financial
resources to assist with marketing our services. Additionally, we own patents and patent applications covering various
aspects of our products and services, covering a broad range of technologies, including those related to money transfer,
compliance analytics, fraud prevention, and mobile applications. We also own a number of application programming
interfaces.

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. These include increasingly

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strict legal and regulatory requirements intended to help detect and prevent money laundering, terrorist financing, fraud,
and other illicit activity. 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 and the sale of spot, forward and option currency
contracts, unclaimed property, the regulation of competition, consumer privacy, data protection, and information security.
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. 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 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.”

We have developed and continue to enhance our global compliance programs, including our anti-money laundering
program, comprised of policies, procedures, systems, and internal controls to monitor and to address various legal and
regulatory requirements. In addition, we continue to adapt our business practices and strategies to help us comply with
current and evolving legal standards and industry practices, including heightened regulatory focus on compliance with
anti-money laundering or fraud prevention requirements. As of December 31, 2020, these programs included dedicated
compliance personnel, training and monitoring programs, suspicious activity reporting, regulatory outreach and education,
and support and guidance to our agent network on regulatory compliance. Our money transfer and payment service
networks operate through third-party agents in most countries, and, therefore, there are limitations on our legal and
practical ability to completely control those agents’ compliance activities.

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.
The BSA, among other things, requires money transfer companies and the issuers and sellers of money orders to develop
and implement risk-based anti-money laundering programs, to report large cash transactions and suspicious activity, and
in some cases, to collect and maintain information about consumers who use their services and maintain other transaction
records. In addition to United States federal laws and regulations, many other countries and states impose similar and, in
some cases, more stringent requirements. These requirements may also apply to our agents and their subagents. In addition,
the United States Department of the Treasury has interpreted the BSA to require money transfer companies to conduct due
diligence into and risk-based monitoring of their agents and subagents inside and outside the United States, and certain
states also require money transfer companies to conduct similar due diligence reviews. Compliance with anti-money
laundering laws and regulations continues to be a focus of regulatory attention, with recent settlement agreements being
reached with Western Union, other money transfer providers, and several large financial institutions. For example, in early
2017, we entered into the Joint Settlement Agreements, and in early 2018, we agreed to the NYDFS Consent Order.

Economic and trade sanctions programs administered by the United States Department of the Treasury’s Office of
Foreign Assets Control (“OFAC”) and by certain foreign jurisdictions prohibit or restrict transactions to or from (or
dealings with or involving) certain countries, regions, governments, and in certain circumstances, specified foreign
nationals, as well as with certain individuals and entities such as narcotics traffickers, terrorists, and terrorist organizations.
We provide limited money transfer and payment services to parties in 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,

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or specific or general licenses issued by, OFAC. In October 2020, OFAC amended its Cuban Assets Control Regulations,
requiring us to suspend our money transfer services to Cuba.

In the United States, almost all states license certain of our services and many exercise authority over the operations
of certain aspects of our business and, as part of this authority, regularly examine us. Many states require us to 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. The
substantial majority of our investment securities, classified within Settlement assets in the Consolidated Balance Sheets,
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.

These licensing laws also cover matters such as government approval of controlling shareholders and senior
management of our licensed entities, regulatory approval of agents and in some instances their locations, consumer
disclosures and the filing of periodic reports by the licensee, and they may require the licensee to demonstrate and maintain
certain net worth levels. Many states also require money transfer providers and their agents to comply with federal and/or
state anti-money laundering laws and regulations.

Outside the United States, our money transfer business is subject to some form of regulation in almost all of the
countries and territories in which we offer those services. These laws and regulations may include limitations on what
types of entities may offer money transfer services, agent registration requirements, limitations on the amount of principal
that can be sent into or out of a country, limitations on the number of money transfers that may be sent or received by a
consumer, and controls on the rates of exchange between currencies. They also include laws and regulations intended to
detect and prevent money laundering or terrorist financing, including obligations to collect and maintain information about
consumers, recordkeeping, reporting and due diligence, and supervision of agents and subagents similar to and in some
cases exceeding those required under the BSA. In most countries, either we or our agents are required to obtain licenses
or to register with a government authority in order to offer money transfer services, and in certain countries, we must
maintain sufficient cash or other funds to satisfy payout obligations in these countries. Where we cooperate with partners
around the world to offer other branded and unbranded money transfer services, including services offered and marketed
exclusively under the partners’ brands, the regulatory requirements applicable to us may vary.

The majority of our EU business is managed through our Irish payment institution subsidiary, which is regulated by
the Central Bank of Ireland under the Second EU Payment Services Directive EU 2015/2366 (“PSD2”) and local
implementing regulations. PSD2 imposes rules on payment service providers like Western Union. It became EU law in
January 2016 and required EU member states to transpose it into their national laws by January 2018. Its aim is to drive
increased competition, innovation, and transparency across the EU payments market, while enhancing consumer protection
and the security of internet payments and account access. To achieve this, 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.

Under our PSD2 license and local EU member states’ implementing legislation and associated regulatory supervisory
powers, we are responsible for the regulatory compliance of our agents and their subagents. We are also subject to
requirements such as capital and safeguarding rules, certain consumer protection requirements, information technology,
and operational security risk management requirements, outsourcing oversight requirements, and periodic regulatory
examinations similar to those in the United States. These rules have resulted in increased compliance and agent monitoring
costs and the increased risk of adverse regulatory action against us resulting from the actions of our agents in those areas.
In addition to increasing our compliance costs, PSD2 increases the regulatory supervision and enforcement associated with
non-compliance with it and the associated increasing body of applicable European Banking Authority guidelines and
regulatory technical standards. PSD2 may also result in increased competition arising from other service providers utilizing
the enhanced payment initiation and account information access provisions or by our failure to utilize those provisions to
innovate our own service offerings. We continue to monitor PSD2’s impact, including indicators of potential increases in
competition such as the number of new payment and electronic money license authorizations, including those by

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multinational online service and technology companies, and the number of newly-licensed payment initiation and account
information service providers.

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. Its digital money transfer business is subject to payment
services regulated under PSD2 and local implementing legislation.

The United Kingdom (“UK”) left the EU on January 31, 2020 (“Brexit”), following a referendum and a notification
to the EU, under Article 50 of the Treaty on the European Union. In advance of Brexit, the UK and the EU ratified an
agreement governing the terms of the UK’s withdrawal from the EU (the “Withdrawal Agreement”). Under the terms of
the Withdrawal Agreement, certain regulated financial service providers were permitted to continue to rely on EU
regulatory “passport” rights until December 31, 2020 to provide services between the UK and EU without needing to
obtain separate local regulatory authorizations in the relevant jurisdictions. To ensure that our operations will continue in
the UK, which represented approximately 6% of our consolidated revenues for the year ended December 31, 2020, 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 have also applied for the UK branch of our Austrian banking subsidiary to be authorized by the UK Prudential
Regulation Authority (the “PRA”) as a Third Country Branch (i.e., a UK branch of a non-UK bank) in order to continue
to conduct our UK Business Solutions and digital money transfer operations. The PRA has a period of 3 years from
December 31, 2020 to determine the application. In the period from December 31, 2020 and the date of the UK branch
being authorized, it will operate under the Temporary Permissions Regime established by the UK for this purpose. This
UK branch will be subject to certain additional UK regulatory requirements upon authorization. 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.

Regulators worldwide are exercising heightened supervision of money transfer providers and requiring increasing
efforts to ensure compliance, including as a result of PSD2 and the 4th and 5th Anti-Money Laundering Directives in the
EU. As a result, we continue to incur significant compliance costs related to customer, agent, and subagent due diligence,
verification, transaction approval, disclosure, and reporting requirements, including requirements to report transaction data
to a greater extent or frequency than previously required, along with other requirements that have had and will continue to
have a negative impact on our financial condition and results of operations.

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;

limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue
derived from foreign exchange;

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•

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.

Consumer Protection Regulations

The Dodd-Frank Act created the CFPB, which implements, examines compliance with, and enforces federal consumer
protection laws governing financial products and services, including money transfer services. 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. These include: (i) a
requirement to provide consumers sending funds internationally from the United States enhanced, written, pre-transaction
disclosures and transaction receipts, including the disclosure of fees, foreign exchange rates and taxes, (ii) an obligation
to resolve various errors, including certain errors that may be outside our control, and (iii) an obligation at a consumer’s
request to cancel transactions that have not been completed. We have modified certain of our systems, business practices,
service offerings, and procedures to comply with these regulations. We also face liability for the failure of our money
transfer agents to comply with the rules and have implemented and are continuing to enhance additional policies,
procedures, and oversight measures designed to foster compliance by our agents. The extent of our and our agents’
implementation of these policies, procedures, and measures may be considered by the CFPB in any action or proceeding
against us for noncompliance with the rules by our agents. The CFPB has also implemented a direct portal for gathering
information regarding consumer complaints, including with respect to money transfers. The CFPB uses the information
collected to help improve its supervision of companies, enforcement of federal consumer financial laws, and writing of
rules and regulations. This effort may lead to additional regulations and regulatory scrutiny of our business.

In addition, various jurisdictions in the United States and outside the United States have consumer protection laws
and regulations, and numerous governmental agencies are tasked with enforcing those laws and regulations. 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. For instance, the International Consumer Protection and
Enforcement Network (“ICPEN”) is an organization composed of consumer protection authorities from over 60 countries
that provides a forum for developing and maintaining regular contact between consumer protection agencies and focusing
on consumer protection concerns. By encouraging cooperation between agencies, ICPEN aims to enable its members to
have a greater impact with their consumer protection laws and regulations. As the scope of consumer protection laws and
regulations change, we may experience increased costs to comply and other adverse effects to our business.

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 and its technical standards, which are directly applicable
in the member states of the EU and in the UK, have subjected most of our foreign exchange hedging transactions, including
certain intercompany hedging transactions, certain of the corporate interest rate hedging transactions we may enter into in

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the future, and certain of the foreign exchange derivatives contracts we offer as part of our Business Solutions segment, to
reporting, recordkeeping, and other requirements. Additionally, certain of the corporate interest rate hedging transactions
and foreign exchange derivatives transactions we may enter into in the future may be subject to centralized clearing
requirements or may be subject to margin requirements in the United States, the EU, and the UK. Other jurisdictions
outside of the United States, the EU, and the UK are considering, have implemented, or are implementing regulations
similar to those described above. 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 as well as impact how we conduct our business within our Business
Solutions segment. Although currently unlikely due to our derivative activity levels, there is some risk that we will have
to register one or more of our subsidiaries with the CFTC as a swap dealer in the future. Swap dealers are subject to a
comprehensive regulatory framework and compliance with this framework would lead to additional costs, including costs
relating to regulatory capital and margin requirements, and could impact how we conduct our hedging activities and
derivatives business with customers. For further discussion of these risks, see Part I, Item 1A, Risk Factors - “The Dodd-
Frank Act, as well as the regulations required by that Act 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.” Our
implementation of these requirements has resulted, and will continue to result, in additional costs to our business.

Additionally, the regulatory regimes for derivatives in the United States, the EU, and the UK, such as under the Dodd-
Frank Act and the European Markets in Financial Instruments Directive known as “MiFID II,” are continuing to evolve.
Any changes to such regimes, or our designation or the implementation of new rules under these regimes, such as future
registration requirements and increased regulation of derivatives contracts, may result in additional costs to our business.
Other jurisdictions outside the United States, the EU, and the UK are considering, have implemented, or are implementing
regulations similar to those described above and these will result in greater costs to us as well. Moreover, as a result of
Brexit, 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. Furthermore, our failure to
implement these requirements correctly could result in fines and other sanctions, as well as necessitate a temporary or
permanent cessation to some or all of our derivative related activities. Any such fines, sanctions, or limitations on our
business could adversely affect our operations and financial results.

Unclaimed Property Regulations

Our Company is subject to unclaimed property laws in the United States and in certain other countries, and our agents
are subject to unclaimed property laws in some jurisdictions. These laws require us or our agents, as applicable, to turn
over to certain government authorities the property of others held by our Company that has been unclaimed for a specified
period of time, such as unpaid money transfers and money orders. We hold property subject to unclaimed property laws
and we have an ongoing program designed to help us comply with these laws. We are subject to audits with regard to our
escheatment practices. For further discussion of the risks associated with unclaimed property, see Part I, Item 1A, Risk
Factors - “We are subject to unclaimed property laws, and differences between the amounts we have accrued for
unclaimed property and amounts that are claimed by a state or foreign jurisdiction could have a significant impact on our
results of operations and cash flows.”

Privacy Regulations and Information Security Standards

We must collect, transfer, disclose, use, and store personal information in order to provide our 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 many other countries in which we provide services. These laws and requirements continue
to evolve and may become increasingly difficult to comply with.

In the United States, federal data privacy laws such as the federal Gramm-Leach-Bliley Act and various state laws,
such as 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. The United States Federal
Trade Commission (“FTC”), which has jurisdiction over companies such as Western Union, has brought numerous
enforcement actions, resulting in multi-year settlements, against companies whose privacy or data security practices

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allegedly violated the law. We are also subject to privacy and data breach laws in various states, such as the California
Consumer Privacy Act, which became effective on January 1, 2020, that imposes heightened data privacy requirements
on companies that collect information from California residents and creates a broad set of privacy rights and remedies
modeled in part on the GDPR, as discussed below. The FTC, CFPB, and some states continue to actively investigate
companies’ privacy practices including those related to online and mobile applications. Most state laws require notification
to be provided to affected individuals, state authorities, and consumer reporting agencies, in the event of a breach of certain
types of personal data contained in computer databases and in some cases physical documents. Such notification
requirements may be subject to various factors, including the level of encryption, the data elements involved in the incident,
and the potential harm to consumers. In addition, we are also subject to United States federal reporting requirements in
connection with some such incidents.

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. The trend in this area is one of increasingly more stringent regulation,
particularly with the EU’s GDPR which took effect on May 25, 2018. The GDPR imposes additional obligations and risks
upon our businesses, including the risk of substantially increased penalties for non-compliance. We have incurred and we
expect to continue to incur expenses to meet the obligations of the GDPR, which have required us to make changes to our
business operations. The GDPR, and other national and provincial laws throughout the world are frequently not uniform,
and cover one or more of the following objectives: (i) regulating the collection, transfer (including in some cases, the
transfer outside of the country or region of collection), processing, storage, use and disclosure of personal information,
(ii) requiring notice to individuals of the processing of their personal information and our privacy practices, (iii) giving
individuals certain access, correction and other rights with respect to their personal information, and (iv) restricting the
use or disclosure of personal information for secondary purposes such as marketing. Under certain circumstances, some
of these laws require us to provide notification to affected individuals, data protection authorities, and/or other regulators
in the event of a data breach.

The pending e-Privacy Regulation in the EU, which will replace the current e-Privacy Directive, will introduce a new
privacy legal framework for electronic communications including direct marketing communications and the use of cookies
and tracking technologies. The new regulation likely will contain penalty provisions that could result in significant costs
for non-compliance.

An emerging trend is the increase in data localization laws which either require that personal information be hosted
on local servers or restrict the transfer of personal information outside national borders. These laws present operational
and technology challenges that can require companies to make significant changes to the management of personal
information and can potentially increase our costs and impact our ability to process personal information. These laws may
also restrict or limit our ability to process transactions using centralized databases, including cloud computing
infrastructure and software, for example, by requiring that transactions be processed using a database maintained in a
particular country or region.

Data privacy regulations, laws, and industry standards also impose requirements for safeguarding personal
information. We seek to maintain and upgrade our systems and processes to protect the security of our computer systems,
software, networks, and other technology assets to help protect against the risks presented by hackers, nation-states and
other threat actors. 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. 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 reduce the risk
of identity theft. 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. These regulatory goals - the prevention of money laundering, terrorist financing, and

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identity theft and the protection of the individual’s right to privacy - may conflict, and the law in these areas is not
consistent or settled. The legal, political, and business environments in these areas are rapidly changing, and subsequent
legislation, regulation, litigation, court rulings, or other events could expose us to increased program costs, liability, and
reputational damage.

For further discussion of risks related to current and proposed data privacy and security laws and regulations, see Part
I, Item 1A, Risk Factors - “Current and proposed regulation addressing consumer privacy and data use and security
could increase our costs of operations, which could adversely affect our operations, results of operations and financial
condition.”

Banking Regulations

We have subsidiaries that operate under banking licenses granted by the Austrian Financial Market Authority and the
Brazilian Central Bank. We are also subject to regulation, examination, and supervision by the New York State Department
of Financial Services (“NYDFS”), which has regulatory authority over our subsidiary that holds our Austrian banking
license. Further, an Agreement of Supervision with the NYDFS imposes various regulatory requirements including
operational limitations, capital requirements, affiliate transaction limitations, and notice and reporting requirements on this
entity and its Austrian subsidiary. 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.

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”). All merchants and service providers that store, process and transmit payment card
data are required to comply with PCI DSS as a condition to accepting credit cards. We are subject to annual reviews to
ensure compliance with PCI regulations worldwide and are subject to fines if we are found to be non-compliant.

Human Capital Management

Our People

As of December 31, 2020, our businesses employed approximately 11,000 individuals, of which approximately 1,700

employees are located inside the United States. Our employees span more than 50 countries.

Attracting, Developing, and Engaging Employees

Recruitment

Our recruitment efforts focus on identifying internal and external talent with skills that are critical to our business
strategy, including those individuals with cloud, data architecture, cybersecurity, payment systems, and many other areas
of expertise. 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. 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. To position our people for success,
we provide our employees with access to a variety of learning, including self-paced digital and facilitated formats.

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Employees also gain valuable experiences through on the job learning, special assignments and projects, and coaching and
mentoring. We use a variety of assessments to help employees identify and develop areas to both improve current
performance as well as areas that prepare them for future opportunities.

Reflecting our commitment to a culture of ethics and compliance, new employees receive mandatory education related
to compliance, ethics, privacy, and information security. Existing employees receive continuing education on these same
topics every year.

Engagement

We assess employee engagement regularly, and our employee engagement system utilizes monthly surveys, artificial
intelligence, and machine learning to help leaders better understand what our employees are thinking, what they value,
and what they need. We benchmark our engagement results against global peers to better understand our strengths and
areas of opportunity. One of our ongoing goals is to foster greater communication to help ensure that our employees are
informed, believe that their concerns are heard, and feel empowered to make decisions. To that end, we have implemented
employee engagement and culture teams in certain of our offices worldwide. While each site varies somewhat in its
approach, these “Empower” teams are supported by on-site business leaders to focus on the “culture of the customer,”
diversity and inclusion, community, the environment, and other issues that are meaningful to employees in those locations.

Diversity, Equity, and Inclusion

We are committed to fostering a diverse and inclusive work environment. 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.

For example, as of December 31, 2020, over 50% of our global workforce were women, over 35% of senior
management-level and above positions were held by women, and one-third of our executive officers were women. Our
leadership team has diverse backgrounds, with wide-ranging, global experience. In addition, our Board of Directors
considers diversity in gender, ethnicity, geography, background, and cultural viewpoints when selecting nominees. As of
December 31, 2020, five of our eleven directors were diverse, including three directors who were female and three
directors who identify as Latinx, Asian, or LGBTQ+.

Compensation, Benefits, and Wellness

We seek to provide compensation that motivates, retains, and rewards our employees and attracts future talent. We
offer packages designed to inspire the delivery of exceptional performance and results to help us deliver on our business
strategy, stockholder commitments, and Company values. To guide our annual compensation assessment, we examine and
benchmark market data for countries where we operate, as available data allows.

We strive to achieve equal pay for equal work. We consistently review and update salary ranges and perform internal
pay equity reviews, with the goal of developing impartial and competitive pay practices and aligning salaries to local

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market conditions and cost-of-labor changes. We also offer employees multiple channels to raise pay equity concerns,
such as our human resources team, ethics helpline, and legal department.

Our benefit packages aim to support the health and well-being of our employees and their families, including same
and opposite sex domestic partners in most countries. Our benefit packages vary among countries based on laws, cultural
norms, and market practices. 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.

During the COVID-19 pandemic, we have introduced multiple new benefits, working arrangements, and trainings to
support the mental and physical health and financial security of our employees. These included the ability to work from
home for the majority of employees, along with work-from-home tools, resources, and support, and in certain cases,
enhanced back-up and in-home child and elder care, additional paid sick and family leave for employees affected by
COVID-19, and telehealth doctor visits and enhanced health insurance services. In addition, we have introduced an internet
subsidy and a one-time equipment support bonus for a portion of the employee population below the senior management
level. To continue support for employees in 2021, we have expanded the back-up child and elder care benefit to multiple
countries, implemented a global tutoring benefit for employees and their children to support remote learning, and supported
our employees’ mental and emotional health through the implementation of an award-winning meditation and sleep
application.

Available Information

The Western Union Company is a Delaware corporation and its principal executive offices are located at 7001 East
Belleview Avenue, Denver, CO, 80237, telephone (866) 405-5012. The Company’s Annual Report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge
through the “Investor Relations” portion of the Company’s website, www.westernunion.com, as soon as reasonably
practical after they are filed with the SEC. The SEC maintains a website, www.sec.gov, which contains reports, proxy and
information statements, and other information filed electronically with the SEC by the Company.

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Information About our Executive Officers

As of February 19, 2021, our executive officers consist of the individuals listed below:

Name
Hikmet Ersek
Raj Agrawal
Jean Claude Farah
Khalid Fellahi
Jacqueline Molnar
Michelle Swanback
Andrew Summerill
Caroline Tsai
Richard Williams

Age

Position

60 President, Chief Executive Officer, and Director
55 Chief Financial Officer
50 President, Global Network
56 President, Consumer Money Transfer
57 Chief Transformation Officer
52 President, Product and Platform
47 President, Payments
51 Chief Legal Officer and Corporate Secretary
55 Chief People Officer

Hikmet Ersek is our President and Chief Executive Officer and a member of the Company’s Board of Directors (from
2010). Also during 2010, Mr. Ersek served as the Company’s Chief Operating Officer. Prior to 2010, Mr. Ersek served as
the Company’s Executive Vice President and Managing Director, Europe, Middle East, Africa and Asia Pacific Region
from 2008. From 2006 to 2008, Mr. Ersek served as the Company’s Executive Vice President and Managing Director,
Europe/Middle East/Africa/South Asia. Prior to 2006, Mr. Ersek held various positions of increasing responsibility with
Western Union. Prior to joining Western Union in 1999, Mr. Ersek was with GE Capital specializing in European payment
systems and consumer finance.

Raj Agrawal is our Chief Financial Officer (from 2014), and previously served as Executive Vice President of Global
Operations (from 2017 to 2019), and Executive Vice President and Interim Chief Financial Officer during 2014. From
2011 to 2014, Mr. Agrawal served as President, Western Union Business Solutions. From 2010 to 2011, Mr. Agrawal
served as General Manager, Business Solutions, and as Senior Vice President of Finance for Business Units. Previously,
Mr. Agrawal served as Senior Vice President of Finance of the Company’s Europe, Middle East, and Africa and Asia
Pacific regions from 2008 to 2010, and as Senior Vice President and Treasurer of Western Union from 2006 to 2008. Prior
to joining Western Union in 2006, Mr. Agrawal served as Treasurer and Vice President of Investor Relations at Deluxe
Corporation, and worked at General Mills, Inc., Chrysler Corporation, and General Motors Corporation.

Jean Claude Farah is our President, Global Network (from 2019). From 2017 to 2019, Mr. Farah served as Executive
Vice President and President, Global Payments, from 2013 to 2017, Mr. Farah served as Executive Vice President and
President, Middle East, Africa, APAC, Eastern Europe and CIS, and from 2009 to 2013, Mr. Farah served as Senior Vice
President for the Middle East and Africa region. Mr. Farah joined Western Union in 1999 as Marketing Manager, Middle
East & North Africa. He has 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. Prior to joining Western Union, he was Area Manager for Orangina
Pernod Ricard.

Khalid Fellahi is our President, Consumer Money Transfer (from 2019). From 2011 to 2019, Mr. Fellahi served as
Senior Vice President and General Manager for Western Union Digital, and Head of our Mobile Transaction Services
group from 2009 to 2010. Prior to that, Mr. Fellahi served as Head of our Africa region from 2002 to 2009. Prior to joining
Western Union in 2002, Mr. Fellahi held roles within SIS-Groupe Compagnie Bancaire (Paribas) and Price Waterhouse
Management Consultants. In addition, he has held senior leadership positions at small and medium enterprises in the
service industry.

Jacqueline Molnar is our Chief Transformation Officer (from 2020). Ms. Molnar served as Chief Transformation
Officer and Global Head of Compliance from 2019 to 2020, Chief Compliance Officer from 2016 to 2019, Interim Chief
Compliance Officer from 2015 to 2016, and Senior Vice President and Deputy Chief Compliance Officer from 2013 to
2015. Prior to joining Western Union in 2013, Ms. Molnar served as Vice President, Associate Global Anti-Money
Laundering Officer at Toronto Dominion Bank Group, as Vice President, Assistant General Counsel at Wells Fargo &
Company, and in various roles at Gibson Dunn, Latham & Watkins LLP, and at Herbert Smith Freehills.

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Michelle Swanback is our President, Product and Platform (from 2020). From 2014 to 2020, Ms. Swanback served
as the Group Operating Officer at Accenture Digital. She previously served as the lead for Accenture Technology, North
America from 2012 to 2014. Prior to that, she served as a managing director in the North American operating unit of the
Accenture Communications, Media, and Technology operating group from 2011 to 2012.

Andrew Summerill is our President, Payments (from 2020). From 2019 to 2020, Mr. Summerill served as our Interim
President, Payments. From 2015 to 2019, Mr. Summerill served as Chief Financial Officer of Western Union Business
Solutions and as Vice-President of Finance for Asia Pacific of Western Union Business Solutions from 2010 to 2015.
Mr. Summerill joined Western Union with the 2011 acquisition of Travelex Global Business Payments, where he held
various positions.

Caroline Tsai is our Chief Legal Officer and Corporate Secretary (from 2019). From 2017 to 2019, Ms. Tsai served
as Executive Vice President, General Counsel and Secretary. Prior to joining Western Union in 2017, Ms. Tsai served as
Deputy General Counsel and Chief Regulatory Officer of BMO Financial Group, a banking and financial services provider,
from 2015 to 2017 and from 2014 to 2015, Ms. Tsai served as Chief Legal Officer, U.S. Personal and Commercial Banking
at BMO Harris Bank. Prior to joining BMO Financial Group, Ms. Tsai was Senior Vice President and Associate General
Counsel of Bank of America Corporation, a banking and financial services provider, from 2012 to 2013, and from 2005
to 2011, Ms. Tsai served as Senior Vice President and Assistant General Counsel. Ms. Tsai began her legal career as an
Associate with the law firm Jones Day, based in Washington, D.C.

Richard Williams is our Chief People Officer (from 2019). Mr. Williams previously served as Executive Vice
President, Chief Human Resources Officer from 2013 to 2019, Interim Chief Human Resources Officer during 2013 and
as Senior Vice President, Human Resources - Global Consumer Financial Services from 2011 to 2013. Mr. Williams
joined Western Union in 2009 as the Vice President of Human Resources for the Americas and Global Cards. Before
joining Western Union, Mr. Williams worked for Fullerton Financial Holdings (a wholly-owned subsidiary of Temasek
Holdings) as its Senior Vice President of Human Resources for Central and Eastern Europe, Middle East and Africa, based
in Dubai, United Arab Emirates from 2007 to 2009. Previously, Mr. Williams spent 17 years with American Express
Company.

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Item 1A. Risk Factors

The following is a summary of certain key risk factors with respect to our Company. You should read this summary

together with the more detailed descriptions of risks relating to our Company below.

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 the COVID-19 pandemic.

• 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 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.

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• Western Union is the subject of litigation, including purported class action litigation, and regulatory actions,

which could result in material settlements, judgments, fines or penalties.

There are many factors that affect our business, financial condition, results of operations, and cash flows, some of
which are beyond our control. These risks include, but are not limited to, the risks described in detail below. Such risks
are grouped according to:

• Risks Relating to Our Business and Industry; and

• Risks Relating to Our Regulatory and Litigation Environment

You should carefully consider all of these risks.

Risks Relating to Our Business and Industry

Risks Relating to our Business Model and COVID-19

Global economic downturns or slower growth or declines in the money transfer, payment service, and other markets in
which we operate, including downturns or declines related to interruptions in migration patterns, and difficult
conditions in global financial markets and financial market disruptions could adversely affect our business, financial
condition, results of operations, and cash flows.

The global economy has experienced in recent years, and may experience, downturns, volatility and disruption, such
as the COVID-19 pandemic (see risk factor “The COVID-19 pandemic is ongoing and has negatively impacted our
business, and the extent to which it will further impact our business depends on future developments, which are highly
uncertain and difficult to predict. The effects of the pandemic had an adverse effect, and could have a material adverse
effect, on our business, financial condition, results of operations, and cash flows”), and we face certain risks relating to
such events, including:

• Demand for our services could soften, including due to low consumer confidence, high unemployment, 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, or public health emergencies or epidemics.

• Our Consumer-to-Consumer money transfer business relies in large part on migration, which brings workers to
countries with greater economic opportunities than those available in their native countries. A significant portion
of money transfers are sent by international migrants. Migration is affected by (among other factors) overall
economic conditions, the availability of job opportunities, changes in immigration laws, restrictions on
immigration and travel, and political or other events (such as civil unrest, war, terrorism, natural disasters, or
public health emergencies or epidemics) that would make it more difficult for workers to migrate or work abroad.
Changes to these factors could adversely affect our remittance volume and could have an adverse effect on our
business, financial condition, results of operations, and cash flows.

• Many of our consumers work in industries that may be impacted by deteriorating economic conditions more
quickly or significantly than other industries. 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. If general market softness in the economies of countries important to migrant workers
occurs, our results of operations could be adversely impacted. Additionally, if our consumer transactions decline,
if the amount of money that consumers send per transaction declines, or if migration patterns shift due to weak
or deteriorating economic conditions or immigration laws, our financial condition, results of operations, and cash
flows may be adversely affected.

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• Our agents or clients could experience reduced sales or business as a result of a deterioration in economic
conditions. As a result, our agents could reduce their numbers of locations or hours of operation, or cease doing
business altogether. Businesses using our services may make fewer cross-currency payments or may have fewer
customers making payments to them through us, particularly businesses in those industries that may be more
affected by an economic downturn.

• Our Business Solutions business is heavily dependent on global trade. A downturn in global trade, including as a
result of increased tensions regarding trade relationships between countries, or the failure of long-term import
growth rates to return to historic levels could have an adverse effect on our business, financial condition, results
of operations, and cash flows. Additionally, as customer hedging activity in our Business Solutions business
generally varies with currency volatility, we have experienced and may experience in the future lower foreign
exchange revenues in periods of lower currency volatility.

• Our exposure to receivables from our agents, consumers and businesses could impact us. For more information
on this risk, see risk factor “We face credit, liquidity, and fraud risks from our agents, consumers, businesses,
and third-party processors that could adversely affect our business, financial condition, results of operations,
and cash flows.”

• The market value of the securities in our investment portfolio may substantially decline. The impact of that decline

in value may adversely affect our liquidity, financial condition, and results of operations.

• The third-party service providers on whom we depend may experience difficulties in their businesses, which may
impair their ability to provide services to us and have a potential impact on our own business. The impact of a
change or temporary stoppage of services may have an adverse effect on our business, financial condition, results
of operations, and cash flows.

• The counterparties to the derivative financial instruments that we use to reduce our exposure to various market
risks, including changes in interest rates and foreign exchange rates, may fail to honor their obligations, which
could expose us to risks we had sought to mitigate. This includes the exposure generated by the Business Solutions
business, where we write derivative contracts to our customers as part of our cross-currency payments business,
and we typically hedge the net exposure through offsetting contracts with established financial institution
counterparties. That failure could have an adverse effect on our financial condition, results of operations, and
cash flows.

• We may be unable to refinance our existing indebtedness, or finance our obligations to pay tax on certain of our
previously undistributed earnings pursuant to United States tax reform legislation enacted in December 2017 (the
“Tax Act”) on favorable terms, as such amounts become due, or we may have to refinance or obtain new financing
on unfavorable terms, which could require 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, share repurchases, dividends, and other purposes.

• Our revolving credit facility with a consortium of banks is one source for funding liquidity needs and also backs
our commercial paper program. If any of the banks participating in our credit facility fails to fulfill its lending
commitment to us, our short-term liquidity and ability to support borrowings under our commercial paper
program could be adversely affected.

• Banks upon which we rely to conduct our business could fail or be unable to satisfy their obligations to us. This
could lead to our inability to access funds and/or credit losses for us and could adversely impact our ability to
conduct our business.

•

Insurers we utilize to mitigate our exposures to litigation and other risks may be unable to or refuse to satisfy
their obligations to us, which could have an adverse effect on our liquidity, financial condition, results of
operations, and cash flows.

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•

If market disruption or volatility occurs, we could experience difficulty in accessing capital on favorable terms
and our business, financial condition, results of operations, and cash flows could be adversely impacted.

The COVID-19 pandemic is ongoing and has negatively impacted our business, and the extent to which it will further
impact our business depends on future developments, which are highly uncertain and difficult to predict. The effects
of the pandemic had an adverse effect, and could have a material adverse effect, on our business, financial condition,
results of operations, and cash flows.

The global spread of COVID-19 has created significant macroeconomic uncertainty, volatility, and disruption. In
response, many governments implemented policies intended to stop or slow the further spread of the disease, such as
lockdowns, shelter-in-place orders, or restricted movement guidelines, and these measures may remain in place for a
significant period of time or be reinstated again in the future. These policies have resulted in lower consumer and
commercial activity across many markets and the closure of Western Union locations and agent locations in certain areas.
As a result, customers have experienced and may continue to experience reduced access to retail agent locations due to
localized response policies. Additionally, as money transfer services offered through our retail agent locations contribute
a majority of our Consumer-to-Consumer revenue, our business has been and may continue to be negatively impacted by
these temporary closures to a greater extent than others in our industry who are not as reliant on retail locations. We
experienced declines in our Consumer-to-Consumer transactions from retail locations in each quarter of 2020, compared
to the corresponding quarters in the prior year, which we believe is mainly due to economic uncertainty and increased
unemployment resulting from the pandemic. Further, a continued global economic downturn, including continued high
unemployment, may continue to result from lower consumer and commercial activity and may continue to negatively
impact our transaction volumes. While the duration and severity of this pandemic and related impacts are uncertain, we
expect that our results of operations in future periods may also be negatively impacted by COVID-19.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work
locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions
as may be recommended or required by government authorities or that we determine are in the best interests of our
employees, customers, clients and business partners. There is no certainty that such measures will be sufficient to mitigate
the risks posed by the virus or otherwise be satisfactory to government authorities.

The extent to which the COVID-19 pandemic continues to impact our business, financial condition, results of
operations or cash flows will depend on future developments, which are highly uncertain and are difficult to predict,
including, but not limited to, the duration and geographic spread of the pandemic, its severity, the occurrence of additional
waves, variants, or periods of increased spread of COVID-19 in key markets in which we operate, the availability and
effectiveness of a vaccine, the actions to contain the virus or treat its impact, including new or additional restrictions
imposed by governments, its effects on consumer behavior and demand, its effects on migrants and immigration patterns
and regulations, how quickly and to what extent normal economic and operating conditions can resume and be sustained,
and our ability to adapt to changing conditions. Even after the COVID-19 pandemic has subsided, we may continue to
experience materially adverse impacts to our business as a result of its global economic impact, including any recession,
economic downturn, changes in customer behavior or demand, or increased unemployment that has occurred or may occur
in the future.

There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19, and,
as a result, the ultimate impact of the pandemic or a similar health epidemic is highly uncertain and subject to change. We
do not yet know the full extent of the impacts on our business, our operations, or the global economy as a whole. However,
the effects have had an adverse effect on our business, financial condition, results of operations, and cash flows and could
have a material adverse effect in the future.

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We face competition from global and niche or corridor money transfer providers, United States and international banks,
card associations, card-based payments providers and a number of other types of service providers, including electronic,
mobile and internet-based services, and from digital currencies and related protocols, and other innovations in
technology and business models. Our future growth depends on our ability to compete effectively in the industry.

Money transfer and business payments are highly competitive industries which include service providers from a
variety of financial and non-financial business groups. 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, 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. These services are differentiated by features and functionalities such as brand recognition, customer
service, trust and reliability, distribution network and channel options, convenience, price, speed, variety of payment
methods, service offerings and innovation. Our business, distribution network and channel options, such as our digital
channels, have been and may continue to be impacted by increased competition, including from new competitors and the
consolidation of competitors and the expansion of their services, which could adversely affect our financial condition,
results of operations, and cash flows. For example, we have experienced increased competition in money transfers sent
and received within the United States from competitors that do not charge a fee to send or receive money through bank
accounts. The potential international expansion of these competitors could represent significant competition to us.

Our future growth depends on our ability to compete effectively in money transfer and business payments. For
example, if we fail to price our services appropriately, consumers may not use our services, which could adversely affect
our business and financial results. 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. Further, failure to compete on service differentiation and service quality
could significantly affect our future growth potential and results of operations.

As noted below under risk factor “Risks associated with operations outside the United States and foreign currencies
could adversely affect our business, financial condition, results of operations, and cash flows,” many of our agents outside
the United States are national post offices. These entities are usually governmental organizations that may enjoy special
privileges or protections that could allow them to simultaneously develop their own money transfer businesses.
International postal organizations could agree to establish a money transfer network among themselves. Due to the size of
these organizations and the number of locations they have, any such network could represent significant competition to
us.

If customer confidence in our business or in consumer money transfer and payment service providers generally
deteriorates, our business, financial condition, results of operations, and cash flows could be adversely affected.

Our business is built on customer confidence in our brands and our ability to provide fast, reliable money transfer and
payment services. Erosion in customer confidence in our business, or in consumer money transfer and payment service
providers as a means to transfer money, could adversely impact transaction volumes which would in turn adversely impact
our business, financial condition, results of operations, and cash flows.

A number of factors could adversely affect customer confidence in our business, or in consumer money transfer and
payment service providers generally, many of which are beyond our control, and could have an adverse impact on our
results of operations. These factors include:

•

changes or proposed changes in laws or regulations or regulator or judicial interpretation thereof that have the
effect of making it more difficult or less desirable to transfer money using consumer money transfer and payment
service providers, including additional consumer due diligence, identification, reporting, and recordkeeping
requirements;

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•

the quality of our services and our customer experience, and our ability to meet evolving customer needs and
preferences, including consumer preferences related to our westernunion.com and other Digital Money Transfer
services;

failure of our agents or their subagents to deliver services in accordance with our requirements;

reputational concerns resulting from actual or perceived events, including those related to fraud, consumer
protection, data breaches, or other matters;

actions by federal, state or foreign regulators that interfere with our ability to transfer consumers’ money reliably,
for example, attempts to seize money transfer funds, or limit our ability to or prohibit us from transferring money
in certain corridors;

federal, state or foreign legal requirements, including those that require us to provide consumer or transaction
data either pursuant to requirements under the Joint Settlement Agreements or other requirements or to a greater
extent than is currently required;

any significant interruption in our systems, including by unauthorized entry and computer viruses, fire, natural
disaster, power loss, telecommunications failure, terrorism, vendor failure, or disruptions in our workforce; and

any breach of our computer systems or other data storage facilities, or of certain of our third-party providers,
resulting in a compromise of personal or other data.

Many of our money transfer consumers are migrants. Consumer advocacy groups or governmental agencies could
consider migrants to be disadvantaged and entitled to protection, enhanced consumer disclosure, or other different
treatment. 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 we are unable to maintain our agent, subagent or global business relationships under terms acceptable to us or
consistent with those currently in place, including due to increased costs or loss of business as a result of increased
compliance requirements or difficulty for us, our agents or their subagents in establishing or maintaining relationships
with banks needed to conduct our services, or if our agents or their subagents fail to comply with our business and
technology standards and contract requirements, our business, financial condition, results of operations, and cash
flows would be adversely affected.

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. If, due to competition or other reasons, agents or their
subagents decide to leave our network, or if we are unable to sign new agents or maintain our agent network under terms
acceptable to us or consistent with those currently in place, or if our agents are unable to maintain relationships with or
sign new subagents, our revenue and profits may be adversely affected. Agent attrition might occur for a number of reasons,
including a competitor engaging an agent, an agent’s dissatisfaction with its relationship with us or the revenue derived
from that relationship, an agent’s or its subagents’ unwillingness or inability to comply with our standards or legal
requirements, including those related to compliance with anti-money laundering regulations, anti-fraud measures, or agent
registration and monitoring requirements or increased costs or loss of business as a result of difficulty for us, our agents
or their subagents in establishing or maintaining relationships with banks needed to conduct our services. 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. Further, certain agents decided to leave our
network due to reputational concerns related to the Joint Settlement Agreements and the NYDFS Consent Order. In
addition, agents may generate fewer transactions or less revenue for various reasons, including increased competition,
political unrest, changes in the economy, or factors impacting our agents’ ability to settle with us, and the cost of
maintaining agent or subagent locations has increased and may continue to increase because of enhanced compliance
efforts or changes to compliance requirements. Because an agent is a third-party that engages in a variety of activities in

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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.

Changes in laws regulating competition or in the interpretation of those laws could undermine our ability to enter into
or maintain our exclusive arrangements with our current and prospective agents. See risk factor “Regulatory initiatives
and changes in laws, regulations and industry practices and standards 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” below. In addition, certain of our agents and subagents have refused to enter into exclusive
arrangements recently, including a significant agent in the United States. The inability to enter into exclusive arrangements
or to maintain our exclusive rights in agent contracts in certain situations could adversely affect our business, financial
condition, results of operations, and cash flows by, for example, allowing competitors to benefit from the goodwill
associated with the Western Union brand at our agent locations.

In Business Solutions, we facilitate payment and foreign exchange solutions, primarily cross-border, cross-currency
transactions, for small and medium size enterprises and other organizations and individuals. In our various bill payments
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. Our relationships with these businesses and other organizations are a core component of our payments services,
and we derive a substantial portion of our revenue from payment services through these relationships. Increased regulation
and compliance requirements are impacting these businesses by making it more costly for us to provide our services or by
making it more cumbersome for businesses or consumers to do business with us. We have also had difficulty establishing
or maintaining banking relationships needed to conduct our services due to banks’ policies. If we are unable to maintain
our current business or banking relationships or establish new relationships under terms acceptable to us or consistent with
those currently in place, our ability to continue to offer our services may be adversely impacted, which could have an
adverse effect on our business, financial condition, results of operations, and cash flows.

As a result of offering our services, our agents may be subject to various taxes, as governments outside the United
States have viewed and may continue to view our agents’ services as subject to income, withholding, and other taxes. Any
such taxes that are levied on our agents could make it less desirable for agents to offer our services, which could result in
increased agent attrition, agents ceasing to offer some of our services, or increased costs to maintain our agent network,
any of which could have an adverse effect on our business, results of operations, and cash flows.

Our ability to adopt new technology and develop and gain market acceptance of new and enhanced products and
services in response to changing industry and regulatory standards and evolving customer needs poses a challenge to
our business.

Our industry is subject to rapid and significant technological changes, with the constant introduction of new and
enhanced products and services and evolving industry and regulatory standards and consumer needs and preferences. Our
ability to enhance our current products and services and introduce new products and services that address these changes
has a significant impact on our ability to be successful. We actively seek to respond in a timely manner to changes in
customer (both consumer and business) needs and preferences, technology advances and new and enhanced products and
services such as technology-based money transfer and Business Solutions payments services, including internet, phone-
based and other mobile money transfer services. Failure to respond timely and well to these challenges could adversely
impact our business, financial condition, results of operations, and cash flows. 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.

Risks associated with operations outside the United States and foreign currencies could adversely affect our business,
financial condition, results of operations, and cash flows.

A substantial portion of our revenue is generated in currencies other than the United States dollar. As a result, we are
subject to risks associated with changes in the value of our revenues and net monetary assets denominated in foreign

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currencies. For example, a considerable portion of our revenue is generated in the euro. In an environment of a rising
United States dollar relative to the euro, the value of our euro-denominated revenue, operating income and net monetary
assets would be reduced when translated into United States dollars for inclusion in our financial statements. Some of these
adverse financial effects may be partially mitigated by foreign currency hedging activities. In an environment of a declining
United States dollar relative to the euro, some of the translation benefits on our reported financial results could be limited
by the impact of foreign currency hedging activities. We are also subject to changes in the value of other foreign currencies.

We operate in almost all developing markets throughout the world. 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, euros, or Mexican pesos 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. Our
exposure to foreign currency fluctuations in those markets is increased as these fluctuations impact our revenues and
operating income.

We have additional foreign exchange risk and associated foreign exchange risk management requirements due to the
nature of our Business Solutions business. The majority of this business’ revenue is from exchanges of currency at spot
rates, which enable customers to make cross-currency payments. In certain countries, this business also writes foreign
currency forward and option contracts for our customers. The significant majority of these derivative contracts have a
duration at inception of less than one year. The credit risk associated with our derivative contracts increases when foreign
currency exchange rates move against our customers, possibly impacting their ability to honor their obligations to deliver
currency to us or to maintain appropriate collateral with us. Business Solutions aggregates its foreign exchange exposures
arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency
risks by entering into offsetting contracts with established financial institution counterparties. However, these contracts do
not eliminate all of the risks related to fluctuating foreign currency rates. If we are unable to obtain offsetting positions,
our business, financial condition, results of operations, and cash flows could be adversely affected.

A substantial portion of our revenue is generated outside the United States. We utilize a variety of planning and
financial strategies to help ensure that our worldwide cash is available where needed, including decisions related to the
amounts, timing, and manner by which cash is repatriated or otherwise made available from our international subsidiaries.
Changes in the amounts, timing, and manner by which cash is repatriated (or deemed repatriated) or otherwise made
available from our international subsidiaries, including changes arising from new legal or tax rules, disagreements with
legal or tax authorities concerning existing rules that are ultimately resolved in their favor, or changes in our operations or
business, could result in material adverse effects on our financial condition, results of operations, and cash flows including
our ability to pay future dividends or make share repurchases. For further discussion regarding the risk that our future
effective tax rates could be adversely impacted by changes in tax laws, both domestically and internationally, see risk
factor “Changes in tax laws, or their interpretation, and unfavorable resolution of tax contingencies could adversely affect
our tax expense” below.

Money transfers and payments to, from, within, or between countries may be limited or prohibited by law. At times
in the past, we have been required to cease operations in particular countries due to political uncertainties or government
restrictions imposed by foreign governments or the United States. Occasionally agents or their subagents have been
required by their regulators to cease offering our services; see risk factor “Regulatory initiatives and changes in laws,
regulations and industry practices and standards 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”
below. Additionally, economic or political instability or natural disasters may make money transfers to, from, within, or
between particular countries difficult or impossible, such as when banks are closed, when currency devaluation makes
exchange rates difficult to manage or when natural disasters or civil unrest makes access to agent locations unsafe. These
risks could negatively impact our ability to offer our services, to make payments to or receive payments from international
agents or our subsidiaries or to recoup funds that have been advanced to international agents or are held by our subsidiaries,
and as a result could adversely affect our business, financial condition, results of operations, and cash flows. In addition,
the general state of telecommunications and infrastructure in some lesser developed countries, including countries where
we have a large number of transactions, creates operational risks for us and our agents that generally are not present in our
operations in the United States and other more developed countries.

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Many of our agents outside the United States are post offices, which are usually 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. For example, governments may decide to separate financial service operations from postal
operations, or mandate the creation or privatization of a “post bank,” which could result in the loss of agent locations, or
they may require multiple service providers in their network. These changes could have an adverse effect on our ability to
distribute or offer our services in countries that are material to our business.

We face credit, liquidity and fraud risks from our agents, consumers, businesses, and third-party processors that could
adversely affect our business, financial condition, results of operations, and cash flows.

The majority of our Consumer-to-Consumer money transfer activity and our walk-in bill payment and money order
activity is conducted through third-party 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.
As a result, we have credit exposure to our agents. In some countries, our agent networks include superagents that establish
subagent relationships; these agents must collect funds from their subagents in order to pay us. We are generally not
insured against credit losses, except in certain circumstances related to agent theft or fraud. 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.

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. If our agents or other partners fail to settle with us
in a timely manner, our liquidity could be affected.

From time to time, we have made, and may in the future make, advances to our agents. We generally owe settlement
funds payable to these agents that offset these advances. However, the failure of these borrowing agents to repay these
advances constitutes a credit risk to us.

We are exposed to credit risk in our Business Solutions business relating to: (i) derivatives written by us to our
customers and (ii) the extension of trade credit when transactions are paid to recipients prior to our receiving cleared funds
from the sending customers. The credit risk associated with our derivative contracts increases when foreign currency
exchange rates move against our customers, possibly impacting their ability to honor their obligations to deliver currency
to us or to maintain appropriate collateral with us. If a customer becomes insolvent, files for bankruptcy, commits fraud
or otherwise fails to pay us, we may be exposed to the value of an offsetting position with a financial institution
counterparty for the derivatives or may bear financial risk for those receivables where we have extended trade credit.

We offer consumers in select countries the ability to transfer money utilizing their bank account or credit or debit card
via websites and mobile devices. These transactions have experienced and continue to experience a greater risk of fraud
and higher fraud losses than transactions initiated at agent locations. Additionally, money transfers funded by ACH, or
similar methods, are not preauthorized by the sender’s bank and carry the risk that the account may not exist or have
sufficient funds to cover the transaction. We apply verification and other tools to help authenticate transactions and protect
against fraud. However, these tools are not always successful in protecting us against fraud. 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. We may be subject to additional fees or
penalties if the amount of chargebacks exceeds a certain percentage of our transaction volume. Such fees and penalties
increase over time if we do not take effective action to reduce chargebacks below the threshold, and if chargeback levels
are not ultimately reduced to acceptable levels, our merchant accounts could be suspended or revoked, which would
adversely affect our results of operations.

To help ensure availability of our worldwide cash where needed, we utilize a variety of planning and financial
strategies, including decisions related to the amounts, timing and manner by which cash is repatriated or otherwise made
available from our international subsidiaries. These decisions can influence our overall tax rate and impact our total
liquidity. Our overall liquidity may also be impacted by regulations or their interpretations that, if fully enacted or

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implemented, could require us to register as a swap dealer and post collateral in connection with our derivative financial
instruments used to hedge our exposures arising in connection with changes to foreign currency exchange rates.

Risks Relating to Cybersecurity and Third-Party Vendors

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.

We collect, transfer and retain confidential and personal information about consumers, business customer
representatives, employees, applicants, agents and other individuals as part of our business. With our services being offered
in more than 200 countries and territories, these activities are subject to laws and regulations in the United States and many
other jurisdictions; see risk factor “Current and proposed regulation addressing consumer privacy and data use and
security could increase our costs of operations, which could adversely affect our operations, results of operations and
financial condition” below. The requirements imposed by these laws and regulations, which often differ materially among
the many jurisdictions in which we operate and can have impacts on our business operations, are designed to protect the
privacy of personal information and prevent that information from being inappropriately accessed, used or disclosed and
protect financial services providers and other regulated entities and their customers, as well as information technology
systems, from cyber attacks. We believe we have developed and maintain administrative, technical and physical safeguards
designed to comply with applicable legal requirements. It is possible that hackers, employees acting contrary to our policies
or others could circumvent these safeguards to improperly access our systems or documents, or the systems or documents
of our business partners, agents, or service providers, and improperly access, obtain, misuse or disclose sensitive business
information or personal information about our consumers, business customer representatives, employees, applicants,
agents or others, or that a third-party service provider could experience a cybersecurity incident or intentionally or
inadvertently use, disclose or make available sensitive business information or personal information to unauthorized parties
or in violation of law. In addition, a significant and increasing amount of our data is collected and stored by third parties,
including providers of cloud-based software services. Security incidents have the potential to impose material costs on the
Company and there can be no assurance that security incidents will not occur in the future. 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 detect for long 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.
Any security incident resulting in a compromise of sensitive business information or the personal information of
consumers, business customer representatives, employees, applicants, agents or other individuals, could result in material
costs to us and require us to notify impacted individuals, and in some cases regulators, of a possible or actual incident,
expose us to regulatory enforcement actions, including substantial fines, limit our ability to provide services, subject us to
litigation, damage our reputation, and adversely affect our business, financial condition, results of operations, and cash
flows.

Interruptions in our systems, including as a result of cyber attacks, or disruptions in our workforce may have a
significant adverse effect on our business.

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. Any significant interruptions could harm our business and
reputation and result in a loss of business. These systems and operations could be exposed to damage or interruption from
unauthorized entry and computer viruses, fire, natural disaster, power loss, telecommunications failure, terrorism, vendor
failure, or other causes, many of which may be beyond our control or that of our service providers. Additionally, any
significant damage or interruptions in the computer information systems of our agents or other partners could result in a
disruption in providing our services to consumers at their locations. Further, we have been and continue to be the subject
of cyber attacks, including distributed denial of service attacks. These attackers and attacks, which may even be initiated
by nation-states, have continued to become more sophisticated and are primarily aimed at interrupting our business,
exposing us to financial losses, or exploiting information security vulnerabilities. Historically, none of these attacks or
breaches has individually or in the aggregate resulted in any material liability to us or any material damage to our
reputation, and disruptions related to cybersecurity have not caused any material disruption to the Company’s business.
The safeguards we have designed to help prevent future security incidents and systems disruptions and comply with
applicable legal requirements may not be successful, and we may experience material security incidents, disruptions or

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other problems in the future. We also may experience software defects, development delays, installation difficulties and
other systems problems, which could harm our business and reputation and expose us to potential liability which may not
be fully covered by our business interruption insurance. In addition, hardware, software, or applications we develop or
procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly
compromise information security. These applications may not be sufficient to address technological advances, regulatory
requirements, changing market conditions or other developments. 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. Cessation of or defects in various services provided to us by third-party vendors could
cause temporary disruption to our business.

Some services relating to our business, such as cloud-based software service providers, software application support,
the development, hosting and maintenance of our operating systems, merchant acquiring services, call center services,
check clearing, processing of returned checks, and other operating activities are outsourced to third-party vendors, which
would be difficult to replace quickly. If our third-party vendors were unwilling or unable to provide us with these services
in the future, 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.

We have acquired and may acquire businesses both inside and outside the United States. As of December 31, 2020,
we had $2,566.6 million of goodwill comprising approximately 27% of our total assets, including $1,980.7 million of
goodwill in our Consumer-to-Consumer reporting unit and $532.0 million of goodwill in our Business Solutions reporting
unit. 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.

For example, for the year ended December 31, 2017, we recognized a non-cash goodwill impairment charge related
to our Business Solutions reporting unit. The fair value of the Business Solutions reporting unit continues to be sensitive
to changes in projections for revenue growth rates and Earnings before Interest, Taxes, Depreciation, and Amortization
(“EBITDA”) margins. Any reduction in anticipated future operating cash flows or the occurrence of further negative
factors impacting the fair value of the Business Solutions reporting unit could result in another write down of goodwill,
which could have a significant adverse impact on our financial condition and results of operations. See the "Critical
Accounting Policies and Estimates" discussion in Part II, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, for more detail.

In addition to the risk of goodwill impairment, the acquisition and integration of businesses involve a number of other
risks. The core risks involve valuation (negotiating a fair price for the business based on inherently limited due diligence)
and integration (managing the complex process of integrating the acquired company’s people, products and services,
technology and other assets in an effort to realize the projected value of the acquired company and the projected synergies
of the acquisition). Another risk is the need in some cases to improve regulatory compliance; see “Risks Relating to Our
Regulatory and Litigation Environment” below. 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;

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•

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.

Integrating operations could cause an interruption of, or divert resources from, one or more of our businesses and
could result in the loss of key personnel. The diversion of management’s attention and any delays or difficulties
encountered in connection with an acquisition and the integration of the acquired company’s operations could have an
adverse effect on our business, financial condition, results of operations, and cash flows.

Divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results.

We continually evaluate the performance and strategic fit of all of our businesses and may sell businesses or product
lines. For example, in May 2019, we sold a substantial majority of our United States based electronic bill payments
services, as previously discussed. Divestitures involve risks, including difficulties in the separation of operations, services,
products and personnel, the diversion of management's attention from other business concerns, the disruption of our
business, the potential loss of key employees and the retention of uncertain contingent liabilities related to the divested
business. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit
strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may
also dispose of a business at a price or on terms that are less desirable than we had anticipated, which could result in
significant asset impairment charges, including those related to goodwill and other intangible assets, that could have a
material adverse effect on our financial condition and results of operations. 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. We cannot assure you that we will be successful in managing these or any other
significant risks that we encounter in divesting a business or product line, and any divestiture we undertake could materially
and adversely affect our business, financial condition, results of operations and cash flows.

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We may not realize all of the anticipated benefits from restructuring and other related initiatives, which may include
decisions to downsize or to transition operating activities from one location to another, and we may experience
disruptions in our workforce as a result of those initiatives.

Over the past few years, we have been engaged in restructuring actions and activities associated with business
transformation, productivity improvement initiatives, and expense reduction measures. See Part II, Item 8, Financial
Statements and Supplementary Data, Note 4, Restructuring-Related Expenses for further discussion regarding our
restructuring plan initiated in 2019 designed to change our operating model and improve our business processes and cost
structure by reorganizing our senior management, reducing our headcount, and consolidating various facilities. We may
implement additional initiatives in future periods. While these initiatives are designed to increase operational effectiveness
and productivity and result in improved profitability, there can be no assurance that the anticipated benefits will be realized,
and the costs to implement such initiatives may be greater than expected. In addition, these initiatives have resulted and
will likely result in the loss of personnel, some of whom may support significant systems or operations, and may make it
more difficult to attract and retain key personnel, any of which could negatively impact our results of operations.
Consequently, these initiatives could result in a disruption to our workforce. If we do not realize the anticipated benefits
from these or similar initiatives, the costs to implement future initiatives are greater than expected, or if the actions result
in a disruption to our workforce greater than anticipated, our business, financial condition, results of operations, and cash
flows could be adversely affected.

General Risks

Changes in tax laws, or their interpretation, and unfavorable resolution of tax contingencies could adversely affect our
tax expense.

Our future effective tax rates could be adversely affected by changes in tax laws or their interpretation, both
domestically and internationally. For example, in December 2017, the Tax Act was enacted into United States law. Among
other things, the Tax Act imposes a tax on certain previously undistributed foreign earnings, establishes minimum taxes
related to certain payments deemed to erode the United States tax base, and retains and expands United States taxation on
a broad range of foreign earnings (whether or not the earnings have been repatriated) while effectively exempting certain
types of foreign earnings from United States tax. In addition, the Tax Act is broad and complex, and any changes or
clarifications in the interpretation of the Tax Act or other legislative proposals or amendments could have an adverse effect
on our financial condition, results of operations, and cash flows. Furthermore, the effect of certain aspects of the Tax Act
on state income tax frameworks could change as states update their laws for these aspects, and potential changes to state
income tax laws or their interpretation could further increase our income tax expense. During his 2020 presidential
campaign, the president of the United States proposed several changes in current United States tax laws to increase taxes
on corporations. If any or all of these (or similar) proposals are ultimately enacted into law, in whole or in part, such
increases could negatively impact our effective tax rate.

Additionally, the Organization for Economic Co-Operation and Development (“OECD”) has asked countries around
the globe to act to prevent what it refers to as base erosion and profit shifting (“BEPS”). The OECD considers BEPS to
refer to tax planning strategies that shift, perhaps artificially, profits across borders to take advantage of differing tax laws
and rates among countries. Tax reforms recommended in the BEPS action plan include changes that would impact, among
other things, global tax reporting, intercompany transfer pricing arrangements, the definition of taxable permanent
establishments, and other legal or financial arrangements that are viewed as causing BEPS. Significant components of the
BEPS action plan were published by the OECD in October 2015 and a number of governments have enacted or proposed
rules to implement changes specifically suggested in the recommendations or other changes, such as specific “economic
substance” rules, inspired by BEPS-style considerations. Furthermore, the OECD is seeking to gain consensus around
further changes in traditional international tax principles to address, among other things, perceived challenges presented
by global digital commerce, under a so-called “BEPS 2.0” initiative. Any material change in tax laws or policies, or their
interpretation, resulting from BEPS, BEPS 2.0, or other legislative proposals or inquiries could result in a higher effective
tax rate on our earnings and have an adverse effect on our financial condition, results of operations, and cash flows.

Our tax returns and positions (including positions regarding jurisdictional authority of foreign governments to impose
tax) are subject to review and audit by federal, state, local and foreign taxing authorities. An unfavorable outcome to a tax

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audit could result in higher tax expense, thereby negatively impacting our results of operations. We have established
contingency reserves for a variety of material, known tax exposures. As of December 31, 2020, the total amount of
unrecognized tax benefits was a liability of $310.5 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. 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, and such
resolution could have a material effect on our effective tax rate, financial condition, results of operations and cash flows
in the current period and/or future periods. 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. Such resolution could increase or decrease income tax
expense in our consolidated financial statements in future periods and could impact our operating cash flows.

Our business, financial condition, results of operations, and cash flows could be harmed by adverse rating actions by
credit rating agencies.

Downgrades in our credit ratings, or their review or revision to a negative outlook, could adversely affect our business,
financial condition, results of operations, and cash flows, and could damage perceptions of our financial strength, which
could adversely affect our relationships with our agents, particularly those agents that are financial institutions or post
offices, and our banking and other business relationships. In addition, adverse ratings actions could result in regulators
imposing additional capital and other requirements on us, including imposing restrictions on the ability of our regulated
subsidiaries to pay dividends. Also, a downgrade below investment grade will increase our interest expense under certain
of our notes, our revolving credit facility, and our term loan facility, and any significant downgrade could increase our
costs of borrowing money more generally or adversely impact or eliminate our access to the commercial paper market,
each of which could adversely affect our business, financial condition, results of operations, and cash flows.

There can be no guarantee that we will continue to make dividend payments or repurchase stock.

For risks associated with our ability to continue to make dividend payments or repurchase shares, please see Part II,
Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

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.

The Western Union and WU brands, which are protected by trademark registrations in many countries, are material
to our Company. The loss of the Western Union or WU trademarks or a diminution in the perceived quality of products or
services associated with the names would harm our business. Similar to the Western Union and WU trademarks, the
Orlandi Valuta, Vigo, Western Union Business Solutions, Pago Fácil, Quick Collect, Quick Pay, Pay@WU, Quick Cash,
My WU, 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.

Our intellectual property rights are an important element in the value of our business. Our failure to take appropriate
actions against those who infringe upon our intellectual property could adversely affect our business, financial condition,
results of operations, and cash flows.

The laws of certain foreign countries in which we do business do not always protect intellectual property rights to the
same extent as do the laws of the United States. Adverse determinations in judicial or administrative proceedings in the
United States or in foreign countries could impair our ability to sell our products or services or license or protect our
intellectual property, which could adversely affect our business, financial condition, results of operations, and cash flows.

We own patents and patent applications covering various aspects of our processes and services. We have been, are
and in the future may be, subject to claims alleging that our platform, mobile application, or other products and services
infringe third-party intellectual property or other proprietary rights, both inside and outside the United States. Unfavorable

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resolution of these claims could require us to change how we deliver or promote a service, result in significant financial
consequences, or both, which could adversely affect our business, financial condition, results of operations, and cash flows.

Material changes in the market value or liquidity of the securities we hold may adversely affect our results of operations
and financial condition.

As of December 31, 2020, we held $2.0 billion in investment securities, the significant majority of which are state
and municipal debt securities. The majority of this money represents the principal of money orders issued by us to
consumers primarily in the United States and money transfers sent by consumers. We regularly monitor our credit risk and
attempt to mitigate our exposure by investing in highly-rated securities and by diversifying our investments. Despite those
measures, it is possible that the value of our portfolio may decline in the future due to any number of factors, including
general market conditions, credit issues, the viability of the issuer of the security, failure by a fund manager to manage the
investment portfolio consistently with the fund prospectus or increases in interest rates. Any such decline in value may
adversely affect our results of operations and financial condition.

The trust holding the assets of our pension plan has assets totaling $280.6 million as of December 31, 2020. The fair
value of these assets held in the trust are compared to the plan’s projected benefit obligation of $240.7 million to determine
the prepaid pension costs of $39.9 million recorded within Other assets in our Consolidated Balance Sheets as of
December 31, 2020. We attempt to mitigate risk through diversification, and we regularly monitor investment risk in our
portfolio through quarterly investment portfolio reviews and periodic asset and liability studies. Despite these measures,
it is possible that the value of our portfolio may decline in the future due to any number of factors, including general market
conditions and credit issues. Such declines could have an impact on the funded status of our pension plan and future
funding requirements.

We have substantial debt and other obligations that could restrict our operations.

As of December 31, 2020, we had approximately $3.1 billion in consolidated indebtedness, and we may also incur
additional indebtedness in the future. Furthermore, the Tax Act imposes a tax on certain of our previously undistributed
foreign earnings, which we have elected to pay in periodic installments through 2025.

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.

In July 2017, the Financial Conduct Authority in the United Kingdom (“UK”), which regulates LIBOR, publicly
announced that it will no longer compel or persuade banks to make LIBOR submissions after 2021. This announcement
is expected to effectively end LIBOR rates beginning in 2022, and while other alternatives, such as the Secured Overnight
Financing Rate, have been proposed, it is unclear which, if any, alternative to LIBOR will be available and widely accepted
in major financial markets. We currently have borrowings that are subject to LIBOR-based interest rates, including
borrowings under our term loan facility. The governing agreements for these borrowings contain provisions to amend the
rate and payment terms in order to conform to an appropriate LIBOR alternative, and we intend to exercise and negotiate

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these options in accordance with market standards. Historically, we have utilized LIBOR-based interest rate swaps to vary
the percentage of fixed to floating rate debt, subject to market conditions, and we may continue to use similar instruments
in the future. If an alternative to LIBOR is not available and widely accepted after 2021, our ability to borrow at floating
interest rates may be adversely impacted, as the costs associated with any potential future borrowings or interest rate swaps
requiring us to pay floating interest rates may increase.

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. Laws and regulations to which we are subject include those related to: financial services,
anti-money laundering, countering the financing of terrorism, sanctions and anti-fraud, 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,
unclaimed property, the regulation of competition, consumer privacy, data protection and information security,
cybersecurity, operational security, outsourcing, risk management, and other governance requirements applicable to
regulated financial service providers. Further, where we cooperate with partners around the world to offer other branded
and unbranded money transfer services, including services offered and marketed exclusively under the partners’ brands,
the regulatory requirements applicable to us may vary. The failure by us, our agents, their subagents, or our partners to
comply with any such laws or regulations could have an adverse effect on our business, financial condition, results of
operations, and cash flows and could seriously damage our reputation and brands, and result in diminished revenue and
profit and increased operating costs.

Risks Relating to Significant Regulatory Requirements

Our business is subject to a wide range and increasing number of laws and regulations. Liabilities or loss of business
resulting from a failure by us, our agents or their subagents to comply with laws and regulations and regulatory or
judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent
money laundering, terrorist financing, fraud and other illicit activity, and increased costs or loss of business associated
with compliance with those laws and regulations has had and we expect will continue to have an adverse effect on our
business, financial condition, results of operations, and cash flows.

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 interpretation of those
requirements by judges, regulatory bodies and enforcement agencies may change quickly and with little notice.
Additionally, these requirements or their interpretations in one jurisdiction may conflict with those of another jurisdiction.
As United States federal and state as well as foreign legislative and regulatory scrutiny and enforcement action in these
areas increase, we expect that our costs of complying with these requirements could continue to increase, perhaps
substantially, and may make it more difficult or less desirable for consumers and others to use our services or for us to
contract with certain intermediaries, either of which would have an adverse effect on our revenue and operating income.
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. Further,
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.

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. Some of these laws, such as the Bribery Act, also prohibit improper payments between commercial enterprises.

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Because our services are offered in virtually every country of the world, we face significant risks associated with our
obligations under the FCPA, the Bribery Act, and other national anti-corruption laws. Any determination that we have
violated these laws could have an adverse effect on our business, financial condition, results of operations, and cash flows.

Our United States business is subject to reporting, recordkeeping and anti-money laundering provisions of the BSA
and to regulatory oversight and enforcement by FinCEN. 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. Under the Payment Services
Directive (“PSD”), as amended by a revised Payment Services Directive known as PSD2, and the 4th and 5th 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, agent oversight and monitoring requirements,
as well as broader supervision by EU member states. Additionally, the financial penalties associated with the failure to
comply with anti-money laundering laws have increased in recent regulation, including the 4th Anti-Money Laundering
Directive in the EU. These laws have increased and will continue to increase our costs and could also increase competition
in some or all of our areas of service. 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. For
example, in early 2017, we entered into the Joint Settlement Agreements with the United States Department of Justice
(“DOJ”), certain United States Attorney’s Offices, the FTC, FinCEN, and various state attorneys general to resolve the
respective investigations of those agencies, and in early 2018, we agreed to the NYDFS Consent Order. The ingenuity of
criminal fraudsters, combined with the potential susceptibility to fraud by consumers, make the prevention of consumer
fraud a significant and challenging problem. Our failure to continue to help prevent such frauds and increased costs related
to the implementation of enhanced anti-fraud measures, or a change in fraud prevention laws or their interpretation or the
manner in which they are enforced has had, and could in the future have an adverse effect on our business, financial
condition, results of operations, and cash flows.

Further, any determination that our agents or their subagents have violated laws and regulations could seriously
damage our reputation and brands, resulting in diminished revenue and profit and increased operating costs. In some cases,
we could be liable for the failure of our agents or their subagents to comply with laws which also could have an adverse
effect on our business, financial condition, results of operations, and cash flows. 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. 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 our Irish payment institution subsidiary,
which is regulated by the Central Bank of Ireland. The majority of our EU consumer money transfer activity is managed
through our Irish payment institution. 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.

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. Additional countries may adopt similar legislation.

In view of the UK’s departure from the EU on January 31, 2020, 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 applied for
the UK branch of our Austrian banking subsidiary to be authorized by the UK PRA as a Third Country Branch (i.e., a UK
branch of a non-UK bank) in order to continue to conduct our UK Business Solutions and Digital Money Transfer
operations. In the period from December 31, 2020 until the date of the UK branch being authorized, it will operate under
the Temporary Permissions Regime introduced in the UK. This UK branch will be subject to certain additional UK
regulatory requirements upon authorization. Further, as a result of Brexit, including under the terms of any new regulatory

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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.

Our fees, profit margins and/or foreign exchange spreads may be reduced or limited because of regulatory initiatives
and changes in laws and regulations or their interpretation and industry practices and standards that are either industry
wide or specifically targeted at our Company.

The evolving regulatory environment, including increased fees or taxes, regulatory initiatives, and changes in laws
and regulations or their interpretation, industry practices and standards imposed by state, federal or foreign governments
and expectations regarding our compliance efforts, is impacting the manner in which we operate our business, may change
the competitive landscape and is expected to continue to adversely affect our financial results. 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,
as well as the regulations required by that Act 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. If governments implement new laws or regulations that limit our
right to set fees and/or foreign exchange spreads, then our business, financial condition, results of operations, and cash
flows could be adversely affected. In addition, changes in regulatory expectations, interpretations or practices could
increase the risk of regulatory enforcement actions, fines and penalties. For example, in early 2017, we entered into the
Joint Settlement Agreements, and in early 2018, we agreed to the NYDFS Consent Order.

In addition, U.S. policy makers have sought and may continue to seek heightened customer due diligence requirements
on, or restrict, remittances from the United States to Mexico or other jurisdictions. For example, in October 2020, OFAC
amended its Cuban Assets Control Regulations, requiring us to suspend our money transfer services to Cuba. Policy makers
have also discussed potential legislation to add taxes to remittances from the United States to Mexico and/or other
countries. Further, one state has passed a law imposing a fee on certain money transfer transactions, and certain other states
have proposed similar legislation. Several foreign countries have enacted or proposed rules imposing taxes or fees on
certain money transfer transactions, as well. The approach of policy makers, the ongoing budget shortfalls in many
jurisdictions, combined with future federal action or inaction on immigration reform, may lead other states or localities to
impose similar taxes or fees, or other requirements or restrictions. Foreign countries in similar circumstances have invoked
and could continue to invoke the imposition of sales, service or similar taxes, or other requirements or restrictions, on
money transfer services. A tax, fee, or other requirement or restriction exclusively on money transfer services like Western
Union could put us at a competitive disadvantage to other means of remittance which are not subject to the same taxes,
fees, requirements or restrictions. Other examples of changes to our financial environment include the possibility of
regulatory initiatives that focus on lowering international remittance costs. Such initiatives may have a material adverse
impact on our business, financial condition, results of operations, and cash flows.

Regulators around the world look at each other’s approaches to the regulation of the payments and other industries.
Consequently, a development in any one country, state or region may influence regulatory approaches in other countries,
states or regions. Similarly, new laws and regulations in a country, state or region involving one service may cause
lawmakers there to extend the regulations to another service. As a result, the risks created by any one new law or regulation
are magnified by the potential they may be replicated, affecting our business in another place or involving another service.
Conversely, if widely varying regulations come into existence worldwide, we may have difficulty adjusting our services,
fees, foreign exchange spreads and other important aspects of our business, with the same effect. 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.
Any of these eventualities could materially and adversely affect our business, financial condition, results of operations,
and cash flows.

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Regulatory initiatives and changes in laws, regulations and industry practices and standards 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.

Our agents and their subagents are subject to a variety of regulatory requirements, which differ from jurisdiction to
jurisdiction and are subject to change. Material changes in the regulatory requirements for offering money transfer services,
including with respect to anti-money laundering requirements, fraud prevention, licensing requirements, consumer
protection, customer due diligence, agent registration, or increased requirements to monitor our agents or their subagents
in a jurisdiction important to our business have meant and could continue to mean increased costs and/or operational
demands on our agents and their subagents, which have resulted and could continue to result in their attrition, a decrease
in the number of locations at which money transfer services are offered, an increase in the commissions paid to agents and
their subagents to compensate for their increased costs, and other negative consequences.

We rely on our agents’ technology systems and/or processes to obtain transaction data. If an agent or its subagent
experiences a breach of its systems, if there is a significant disruption to the technology systems of an agent or its subagent,
if an agent or its subagent does not maintain the appropriate controls over their systems, or if we are unable to demonstrate
adequate oversight of an agent’s or subagent’s handling of those matters, we may experience reputational and other harm
which could result in losses to the Company.

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. We and our agents
and their subagents are considered Money Service Businesses (“MSBs”) under the BSA, including our Business Solutions
operations. Many banks view MSBs as a class of higher risk customers for purposes of their anti-money laundering
programs. We and some of our agents and their subagents have had, and in the future may have, difficulty establishing or
maintaining banking relationships due to the banks’ policies. If we or a significant number of our agents or their subagents
are unable to maintain existing or establish new banking relationships, or if we or these agents face higher fees to maintain
or establish new bank accounts, our ability and the ability of our agents and their subagents to continue to offer our services
may be adversely impacted, which would have an adverse effect on our business, financial condition, results of operations,
and cash flows.

The types of enterprises that are legally authorized to act as our agents and their subagents vary significantly from one
country to another. Changes in the laws affecting the kinds of entities that are permitted to act as money transfer agents or
their subagents (such as changes in requirements for capitalization or ownership) could adversely affect our ability to
distribute our services and the cost of providing such services, both by us and our agents and their subagents. For example,
a requirement that a money transfer provider be a bank or other highly regulated financial entity could increase significantly
the cost of providing our services in many countries where that requirement does not exist today or could prevent us from
offering our services in an affected country. Further, any changes in law that would require us to provide money transfer
services directly to consumers as opposed to through an agent network (which would effectively change our business
model) or that would prohibit or impede the use of subagents could significantly adversely impact our ability to provide
our services, and/or the cost of our services, in the relevant jurisdiction. 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.

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. While we expect to
continue signing certain agents under exclusive arrangements and believe that these agreements are valid and enforceable,
changes in laws regulating competition or in the interpretation of those laws could undermine our ability to enforce them
in the future. Various jurisdictions continue to increase their focus on the potential impact of agent agreements on
competition. In addition, over the past several years, several countries in Eastern Europe, the Commonwealth of
Independent States, Africa, and Asia have promulgated laws or regulations, or authorities in these countries have issued
orders, which effectively prohibit payment service providers, such as money transfer companies, from agreeing to
exclusive arrangements with agents in those countries. Certain institutions, non-governmental organizations and others are

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actively advocating against exclusive arrangements in money transfer agent agreements. Advocates for laws prohibiting
or limiting exclusive agreements continue to push for enactment of similar laws in other jurisdictions. In addition to legal
challenges, certain of our agents and their subagents have refused to enter into exclusive arrangements. See risk factor “If
we are unable to maintain our agent, subagent or global business relationships under terms acceptable to us or consistent
with those currently in place, including due to increased costs or loss of business as a result of increased compliance
requirements or difficulty for us, our agents or their subagents in establishing or maintaining relationships with banks
needed to conduct our services, or if our agents or their subagents fail to comply with our business and technology
standards and contract requirements, our business, financial condition, results of operations, and cash flows would be
adversely affected” above. The inability to enter into exclusive arrangements or to maintain our exclusive rights in agent
contracts in certain situations could adversely affect our business, financial condition, results of operations, and cash flows
by, for example, allowing competitors to benefit from the goodwill associated with the Western Union brand at our agent
locations.

In addition to legal or regulatory restrictions discussed in the Capital Resources and Liquidity section in Part II, Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations, some jurisdictions use tangible
net worth and other financial strength guidelines to evaluate financial position. If our regulated subsidiaries do not abide
by these guidelines, they may be subject to heightened review by these jurisdictions, and the jurisdictions may be more
likely to impose new formal financial strength requirements. 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.

The Dodd-Frank Act, as well as the regulations required by that Act 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.

Rules and regulations implemented under the Dodd-Frank Act have made and continue to make significant structural
reforms and new substantive regulation across the financial services industry. In addition, the Dodd-Frank Act created the
CFPB, which implements, examines compliance with and enforces federal consumer protection laws governing financial
products and services, including money transfer services. 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 CFPB’s regulations implementing the remittance provisions of
the Dodd-Frank Act have affected our business in a variety of areas. These include: (i) a requirement to provide consumers
sending funds internationally from the United States enhanced, written, pre-transaction disclosures and transaction
receipts, including the disclosure of fees, foreign exchange rates and taxes, (ii) an obligation to resolve various errors,
including certain errors that may be outside our control, and (iii) an obligation at a consumer’s request to cancel
transactions that have not been completed. These requirements have changed the way we operate our business and along
with other potential changes under CFPB regulations could adversely affect our operations and financial results. In
addition, the Dodd-Frank Act and interpretations and actions by the CFPB have had, and could continue to have a
significant impact on us by, for example, requiring us to limit or change our business practices, limiting our ability to
pursue business opportunities, requiring us to invest valuable management time and resources in compliance efforts,
imposing additional costs on us, delaying our ability to respond to marketplace changes, requiring us to alter our products
and services in a manner that would make them less attractive to consumers and impair our ability to offer them profitably,
or requiring us to make other changes that could adversely affect our business. In addition, these regulations impose
responsibility on us for any related compliance failures of our agents.

The CFPB has broad authority to enforce consumer protection laws. The CFPB has a large staff and budget, which is
not subject to Congressional appropriation, and has broad authority with respect to our money transfer service and related
business. It is authorized to collect fines and provide consumer restitution in the event of violations, engage in consumer
financial education, track and solicit consumer complaints, request data and promote the availability of financial services
to underserved consumers and communities. In addition, the CFPB may adopt other regulations governing consumer
financial services, including regulations defining UDAAP, and new model disclosures. The CFPB’s authority to change
regulations adopted in the past by other regulators, or to rescind or ignore past regulatory guidance, could increase our

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compliance costs and litigation exposure. In addition, attorneys general of the various states of the United States also have
authority to enforce the consumer protection provisions of the Dodd-Frank Act in their respective jurisdictions.

We have been and continue to be subject to examination by the CFPB, which defines “larger participants of a market
for other consumer financial products or services” as including companies, such as Western Union, that make at least one
million aggregate annual international money transfers. The CFPB has the authority to examine and supervise us and our
larger competitors, which will involve providing reports to the CFPB. The CFPB has used information gained in
examinations as the basis for enforcement actions resulting in settlements involving monetary penalties and other remedies.

The effect of the Dodd-Frank Act and the CFPB on our business and operations has been and will continue to be
significant and the application of the Dodd-Frank Act’s implementing regulations to our business may differ from the
application to certain of our competitors, including banks. Further, and in addition to our own compliance costs,
implementation of requirements under Dodd-Frank could impact our business relationships with financial institution
customers who outsource processing of consumer transactions to our Business Solutions segment. These financial
institutions may determine that the compliance costs associated with providing consumer services are too burdensome and
consequently may limit or discontinue offering such services.

Various jurisdictions in the United States and outside the United States have consumer protection laws and regulations,
and numerous governmental agencies are tasked with enforcing those laws and regulations. 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. For instance, ICPEN is an organization composed of consumer
protection authorities from over 60 countries that provides a forum for developing and maintaining regular contact between
consumer protection agencies and focusing on consumer protection concerns. By encouraging cooperation between
agencies, ICPEN aims to enable its members to have a greater impact with their consumer protection laws and regulations.
As the scope of consumer protection laws and regulations change, we may experience increased costs to comply and other
adverse effects to our business.

Rules adopted under the Dodd-Frank Act by the CFTC, as well as the provisions of the European Market Infrastructure
Regulation and its technical standards, which are directly applicable in the member states of the EU and in the UK, have
subjected most of our foreign exchange hedging transactions, including certain intercompany hedging transactions, certain
of the corporate interest rate hedging transactions we may enter into in the future, and certain of the foreign exchange
derivatives contracts we offer as part of our Business Solutions segment, to reporting, recordkeeping, and other
requirements. Additionally, certain of the corporate interest rate hedging transactions and foreign exchange derivatives
transactions we may enter into in the future may be subject to centralized clearing requirements or may be subject to
margin requirements in the United States, the EU, and the UK. Other jurisdictions outside of the United States, the EU,
and the UK are considering, have implemented, or are implementing regulations similar to those described above.
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 as well as impact how we conduct our business within our Business Solutions segment. Although
currently unlikely due to our derivative activity levels, there is some risk that we will have to register one or more of our
subsidiaries with the CFTC as a swap dealer in the future. Swap dealers are subject to a comprehensive regulatory
framework and compliance with this framework would lead to additional costs, including costs relating to regulatory
capital and margin requirements, and could impact how we conduct our hedging activities and derivatives business with
customers. Additionally, the regulatory regimes for derivatives in the United States, the EU, and the UK, such as under
the Dodd-Frank Act and MiFID II, are continuing to evolve and changes to such regimes, our designation under such
regimes, or the implementation of new rules under such regimes, such as future registration requirements and increased
regulation of derivatives contracts, may result in additional costs to our business. Other jurisdictions outside the United
States, the EU, and the UK are considering, have implemented, or are implementing regulations similar to those described
above and these will result in greater costs to us as well. Our implementation of these requirements has resulted, and will
continue to result, in additional costs to our business. Moreover, as a result of Brexit, 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. Furthermore, our failure to implement these requirements correctly could result
in fines and other sanctions, as well as necessitate a temporary or permanent cessation to some or all of our derivative

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related activities. Any such fines, sanctions or limitations on our business could adversely affect our operations and
financial results.

Current and proposed regulation addressing consumer privacy and data use and security could increase our costs of
operations, which could adversely affect our operations, results of operations and financial condition.

We are subject to extensive requirements relating to data privacy and security under federal, state and foreign laws.
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 multi-year agreements governing the settling companies’ privacy practices. Furthermore, certain industry
groups require us to adhere to privacy requirements in addition to federal, state and foreign laws, and certain of our business
relationships depend upon our compliance with these requirements. As the number of countries enacting privacy and
related laws increases and the scope of these laws and enforcement efforts expand, we will increasingly become subject
to new and varying requirements. For example, in 2018 the EU implemented the EU General Data Protection Regulation
(“GDPR”), and other countries have enacted similar legislation, such as Brazil’s General Data Protection Law (“LGPD”),
which became effective on September 18, 2020. Both the GDPR and the LGPD impose additional obligations and risks
upon our businesses, including the risk of substantially increased penalties for non-compliance. Such penalties could have
a material adverse effect on our financial condition, results of operations, and cash flows. In addition, on July 16, 2020,
the Court of Justice of the European Union (“CJEU”) invalidated the EU-U.S. Privacy Shield framework, which provided
a mechanism for companies transferring personal data from the EU to the U.S., and imposed additional obligations on
companies such as Western Union when transferring personal data from the EU to the U.S. and other jurisdictions. This
may result in increased costs of compliance and limitations on us. Further, this CJEU decision or other regulatory changes
relating to cross-border data transfers may serve as a basis for challenges to our personal data handling practices, which
could also adversely impact our business, financial condition and operating results. We have incurred and we expect to
continue to incur expenses to meet the obligations of the GDPR and other similar legislation, and new interpretations of
their requirements. We are also subject to data privacy and security laws in various states, such as the California Consumer
Privacy Act, which became effective on January 1, 2020, that imposes heightened data privacy requirements on companies
that collect information from California residents and creates a broad set of privacy rights and remedies modeled in part
on the GDPR. 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.

Pursuant to the EU-UK Trade and Cooperation Agreement, which is a free trade agreement signed on December 30,
2020 between the European Union and the United Kingdom, all transfers of personal data between entities subject to
GDPR and UK entities will not be considered transfers to a third country subject to the data transfer provisions of the
GDPR through June 30, 2021. The European Commission has until June 30, 2021 to issue an adequacy decision as to the
data protection regime of the UK as per Article 45 GDPR. If the European Commission does not issue an adequacy
decision, transfers of personal data between UK entities and entities subject to the GDPR could be challenged, which could
adversely impact our business, financial condition and operating results.

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 recent years, Western Union has
experienced an increasing number of data sharing requests by these agencies, particularly in connection with efforts to
prevent terrorist financing or reduce the risk of identity theft. 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. These regulatory goals - the prevention of money
laundering, terrorist financing and identity theft and the protection of the individual’s right to privacy - may conflict, and
the law in these areas is not consistent or settled. The legal, political and business environments in these areas are rapidly
changing, and subsequent legislation, regulation, litigation, court rulings or other events could expose Western Union to
increased program costs, liability, and reputational damage.

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We are subject to unclaimed property laws, and differences between the amounts we have accrued for unclaimed
property and amounts that are claimed by a state or foreign jurisdiction could have a significant impact on our results
of operations and cash flows.

We are subject to unclaimed property laws in the United States and abroad and some of our agents are subject to
unclaimed property laws in their respective jurisdictions which require us, or our agents, to turn over to certain government
authorities the property of others held by us that has been unclaimed for a specified period of time, such as unpaid money
transfers and money orders. 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. 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.
Any difference between the amounts we have accrued for unclaimed property and amounts that are claimed by a state,
foreign jurisdiction, or representative thereof could have a significant impact on our results of operations and cash flows.

Our consolidated balance sheets may not contain sufficient amounts or types of regulatory capital to meet the changing
requirements of our various regulators worldwide, which could adversely affect our business, financial condition,
results of operations, and cash flows.

Our regulators expect us to possess sufficient financial soundness and strength to adequately support our regulated
subsidiaries. We have substantial indebtedness and other obligations, including those related to the tax imposed on certain
of our previously undistributed foreign earnings pursuant to the Tax Act, which could make it more difficult to meet these
requirements or any additional requirements. 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 payments 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 issue securities that would qualify as Tier 1 regulatory capital under the
Basel Committee accords or retain earnings over a period of time. Also, 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. Any change or increase in these regulatory requirements could
have a material adverse effect on our business, financial condition and results of operations.

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.
Under the Joint Settlement Agreements, the Company was required, among other things, to pay an aggregate amount of
$586 million to the DOJ to be used to reimburse consumers who were the victims of third-party fraud conducted through
the Company’s money transfer services, and retain an independent compliance auditor for three years to review and assess
actions taken by the Company to further enhance its oversight of agents and protection of consumers, both of which were
performed by the Company during 2017. The Joint Settlement Agreements also required the Company to adopt certain
new or enhanced practices with respect to its compliance program, relating to, among other things, consumer
reimbursement, agent due diligence, agent training, monitoring, reporting, and record-keeping by the Company and its
agents, consumer fraud disclosures, and agent suspensions and terminations. Western Union has continuing obligations
under the FTC Consent Order, which is a permanent injunction, as well as the requirement to submit annual reports to the
FTC through January 2028. The ongoing obligations under the Joint Settlement Agreements could have adverse effects on
the Company’s business, including additional costs and potential loss of business. The Company has also faced actions
from other regulators as a result of the Joint Settlement Agreements. 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. In January 2018, the Company agreed to the
NYDFS Consent Order with the NYDFS which required the Company to pay a civil monetary penalty of $60 million to

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the NYDFS and resolved its investigation into these matters. The term of the DPA expired in January 2020 and it was
dismissed in March 2020, and the term of the Independent Compliance Auditor under the FTC Consent Order ended in
May 2020. 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.

Our business is the subject of litigation, including purported class action litigation, and regulatory actions, which could
result in material settlements, judgments, fines or penalties.

As a company that provides global financial services primarily to consumers, we are 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. We also are subject to claims asserted by consumers
based on individual transactions. There can be no guarantee that we will be successful in defending ourselves in these
matters, and such failure may result in substantial fines, damages and expenses, revocation of required licenses or other
limitations on our ability to conduct business. Any of these outcomes could adversely affect our business, financial
condition, results of operations, and cash flows. 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. 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.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Properties and Facilities

As of December 31, 2020, we occupied facilities in nearly 50 countries. Substantially all these facilities were leased.
Our office in Denver, Colorado serves as our corporate headquarters. Our offices in Dublin, Ireland and in Barbados (which
we began expanding in 2020) represent key operational and leadership locations. We also operate shared service centers
in Lithuania, Costa Rica, India, and the Philippines. Our facilities are primarily used for operational, sales, and
administrative purposes in support of our Consumer-to-Consumer and Business Solutions segments, and other services.
The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work
locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions
as may be recommended or required by government authorities or that we determine are in the best interests of our
employees, customers, clients, and business partners.

We believe that our facilities are suitable and adequate for our current business; however, we periodically review our
facility requirements, and may consolidate and dispose of, or sublet facilities, which are no longer required, or acquire
new facilities and update existing facilities to meet the needs of our business.

Item 3. Legal Proceedings

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.

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PART II

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 3,099 stockholders
of record as of February 16, 2021. This figure does not include an estimate of the indeterminate number of beneficial
holders whose shares may be held of record by brokerage firms and clearing agencies.

The following table sets forth stock repurchases for each of the three months of the quarter ended December 31, 2020:

Total Number of Average Price

Approximate Dollar
Total Number of Shares Value of Shares that
Purchased as Part of May Yet Be Purchased
Publicly Announced

Under the Plans or

Period
October 1 - 31 . . . . . . . . . . . . . . . . . . . . . . .
November 1 - 30 . . . . . . . . . . . . . . . . . . . . .
December 1 - 31 . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares Purchased (a) Paid per Share Plans or Programs (b) Programs (in millions)
782.6
782.6
782.6

37,676 $
31,005 $
9,780 $
78,461 $

21.90
20.59
21.71
21.36

— $
— $
— $
—

(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. For the three
months ended December 31, 2020, there were no share repurchases under a publicly announced authorization.

(b) On February 28, 2019, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2021, of which $782.6
million remained available as of December 31, 2020. In certain instances, management has historically and may continue to establish prearranged
written plans pursuant to Rule 10b5-1. A Rule 10b5-1 plan permits us to repurchase shares at times when we may otherwise be unable to do so,
provided the plan is adopted when we are not aware of material non-public information.

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.

Dividend Policy and Share Repurchases

During 2020, the Board of Directors declared quarterly cash dividends of $0.225 per common share payable on
December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020. During 2019, the Board of Directors
declared quarterly cash dividends of $0.20 per common share payable on December 31, 2019, September 30, 2019,
June 28, 2019, and March 29, 2019. The declaration or authorization and amount of future dividends or share repurchases
will be determined by the Board of Directors and will depend on our financial condition, earnings, liquidity, the amount
and timing of payments under our debt and other obligations, capital requirements, regulatory constraints, cash generated
or made available in the United States, industry practice, and any other factors that the Board of Directors believes are
relevant. As a holding company with no material assets other than the capital stock of our subsidiaries, our ability to pay
dividends or repurchase shares in future periods will be dependent primarily on our ability to use cash generated by our
operating subsidiaries. Several of our operating subsidiaries are subject to financial services regulations and their ability
to pay dividends and distribute cash may be restricted. In addition, the Tax Act imposes a tax on certain of our previously
undistributed foreign earnings, which we have elected to pay in periodic installments through 2025, as discussed in the
Capital Resources and Liquidity section in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition
and Results of Operations. These payments will adversely affect our cash flow and liquidity and may adversely affect
future share repurchases.

During the first quarter of 2020, we temporarily paused and did not resume share repurchases under a publicly

announced authorization through December 31, 2020.

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On February 10, 2021, the Board of Directors declared a quarterly cash dividend of $0.235 per common share payable

on March 31, 2021.

Item 6. Selected Financial Data

None. Discussion was omitted pursuant to SEC Release 33-10890.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and the notes to
those statements included elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains
certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995.
Certain statements contained in the Management’s Discussion and Analysis of Financial Condition and Results of
Operations are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not
historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry,
business and future financial results. Our actual results could differ materially from the results contemplated by these
forward-looking statements due to a number of factors, including those discussed in other sections of this Annual Report
on Form 10-K. 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
sent from our retail agent locations worldwide or through websites and mobile devices, including our fast-growing
money transfer transactions conducted and funded through websites and mobile applications marketed under our
brands (“westernunion.com”) and transactions initiated on the internet and mobile applications hosted by our
third-party white label or co-branded digital partners (together with westernunion.com, “Digital Money
Transfer”). Our money transfer service is provided through one interconnected global network. 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. The majority of the segment’s business relates to exchanges of currency at spot
rates, which enable customers to make cross-currency payments. In addition, in certain countries, we write foreign
currency forward and option contracts for customers to facilitate future payments.

All businesses and other services that have not been classified in the above 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 other services, in addition to certain 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. Additional information on our segments is further described in the Segment Discussion below.

Results of Operations

The following discussion of our consolidated results of operations and segment results refers to the year ended
December 31, 2020 compared to the same period in 2019. For discussion of our consolidated results of operations and
segment results for the year ended December 31, 2019 compared to the same period in 2018, 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, 2019, filed with the SEC on February 20, 2020.

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 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. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the
rounded amounts provided.

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travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of COVID-19. These actions
negatively impacted our ability to offer our services, at least temporarily, through a portion of our locations and our retail
agent locations during the year ended December 31, 2020. Beginning in March 2020 and continuing throughout the
remainder of the year, we experienced a decrease in transaction volumes from retail locations and a decrease in foreign
exchange and payment services activity, which also negatively impacted revenues during this period, partially offset by
revenue growth from westernunion.com and other digital transactions, as further described below. We believe this decrease
is mainly due to economic decline and uncertainty resulting from the pandemic.

Our revenues and operating income for the year ended December 31, 2020 were negatively impacted by fluctuations
in the United States dollar compared to foreign currencies. Fluctuations in the United States dollar compared to foreign
currencies, net of the impact of foreign currency hedges, resulted in a reduction to revenues of $157.2 million for the year
ended December 31, 2020 relative to the prior year. Included within this amount are impacts related to the strengthening
of the dollar against the Argentine peso, which resulted in a reduction to revenues of $138.8 million for the year ended
December 31, 2020 relative to the prior year. Fluctuations in the United States dollar compared to foreign currencies
negatively impacted operating income by $44.4 million for the year ended December 31, 2020 relative to the prior year.
Included within this amount are impacts related to the strengthening of the dollar against the Argentine peso, which resulted
in a reduction to operating income of $24.5 million for the year ended December 31, 2020 relative to the prior year.

On February 28, 2019, we entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. to sell
our United States based electronic bill payments business known as “Speedpay”, which had been included as a component
of Other in our segment reporting. We received approximately $750 million and recorded a pre-tax gain on the sale of
approximately $523 million in the all-cash transaction that closed on May 9, 2019. Speedpay revenues and direct operating
expenses included in our results were $125.4 million and $98.2 million, respectively, for the year ended December 31,
2019.

The following table sets forth our consolidated results of operations for the years ended December 31, 2020 and 2019:

Year Ended December 31,
2019

% Change

(in millions, except per share amounts)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,835.0 $ 5,292.1
Expenses:

2020

Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income/(expense):

2,826.5
1,041.2
3,867.7
967.3

3,086.5
1,271.6
4,358.1
934.0

Gain on divestitures of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income/(expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Earnings per share:

524.6
—
6.3
3.2
(152.0)
(118.5)
8.5
3.1
387.4
(112.2)
1,321.4
855.1
110.8
263.1
744.3 $ 1,058.3

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1.81 $
1.79 $

2.47
2.46

Weighted-average shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

412.3
415.2

427.6
430.9

(a) Calculation not meaningful.

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(9)%

(8)%
(18)%
(11)%
4 %

(a)
(48)%
(22)%
(64)%
(a)
(35)%
(58)%
(30)%

(27)%
(27)%

Revenues Overview

Revenues are primarily derived from consideration paid by customers to transfer money. 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, the difference between the exchange rate we set to the customer
and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. We also offer several
other services, including foreign exchange and payment services and other bill payment services, for which revenue is
impacted by similar factors.

Due to the significance of the effect that foreign exchange fluctuations against the United States dollar can have on
our reported revenues, constant currency results have been provided in the table below for consolidated revenues. We have
also disclosed the impact of divestitures on our revenues in the table below. 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. Constant currency results assume foreign revenues are translated from foreign currencies
to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.
Constant currency measures and measures that exclude the impact of divestitures are non-GAAP financial measures and
are provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates and
divestitures of our businesses, which is consistent with how management evaluates our revenue results and trends. We
believe that these measures provide management and investors with information about revenue results and trends that
eliminates currency volatility and divestitures, thereby providing greater clarity regarding, and increasing the
comparability of, our underlying results and trends. 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, 2020 compared to the prior year.
Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this
measure for comparative purposes.

The following table sets forth our consolidated revenue results for the years ended December 31, 2020 and 2019:

(dollars in millions)
Revenues, as reported - (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,835.0 $ 5,292.1
Foreign currency impact (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestitures impact (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue change, constant currency adjusted and excluding divestitures - (Non-

2020

GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)%
3 %
3 %

(3)%

Year Ended December 31,
2019

% Change

(a) Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in a reduction to
revenues of $157.2 million for the year ended December 31, 2020 when compared to foreign currency rates in the prior year. Included within this
amount are impacts related to the strengthening of the dollar against the Argentine peso, which resulted in a reduction to revenues of $138.8 million
for the year ended December 31, 2020 when compared to foreign currency rates in the prior year.
In May 2019, we sold a substantial majority of our United States based electronic bill payments services. Speedpay revenues included in our results
were $125.4 million for the year ended December 31, 2019. Paymap Inc. (“Paymap”), which we sold in May 2019, provides electronic mortgage
bill payment services, and related revenues included in our results were $5.3 million for the year ended December 31, 2019.

(b)

For the year ended December 31, 2020, GAAP revenues decreased when compared to the prior year, including as a
result of the impacts from the worldwide actions related to COVID-19. For the year ended December 31, 2020, we
experienced a decrease in transaction volumes from retail locations in our Consumer-to-Consumer segment, which was
offset by growth in digital transactions, including from white label partnerships. For the year ended December 31, 2020,
GAAP revenues also decreased when compared to the prior year due to fluctuations between the United States dollar and
other currencies and the divestitures of the Speedpay and Paymap businesses during the second quarter of 2019. The
decrease in revenues constant currency adjusted and excluding divestitures (Non-GAAP) was primarily the result of the
impacts from the worldwide actions related to COVID-19, as discussed above.

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Operating Expenses Overview

Enhanced Regulatory Compliance

The financial services industry, including money services businesses, continues to be subject to increasingly strict
legal and regulatory requirements, and we continue to focus on and regularly review our compliance programs. In
connection with these reviews, and in light of growing and rapidly evolving regulatory complexity and heightened attention
of, and increased dialogue with, governmental and regulatory authorities related to our compliance activities, we have
made, and continue to make, enhancements to our processes and systems designed to detect and prevent money laundering,
terrorist financing, and fraud and other illicit activity, and enhancements designed to improve consumer protection. Some
of these changes have had, and we believe will continue to have, an adverse effect on our business, financial condition,
and results of operations.

Restructuring-Related Expenses

On August 1, 2019, our Board of Directors approved a plan to change our operating model and improve our business
processes and cost structure by reorganizing our senior management, including those managers reporting to our chief
executive officer, reducing our headcount, and consolidating various facilities. For the year ended December 31, 2020, we
incurred $36.8 million related to this plan. Of this amount, $4.5 million and $32.3 million are included within Cost of
services and Selling, general, and administrative, respectively, in the Consolidated Statements of Income. For the year
ended December 31, 2019, we incurred $115.5 million of expenses related to this plan, of which $39.8 million and $75.7
million are included within Cost of services and Selling, general, and administrative, respectively, in the Consolidated
Statements of Income. Refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 4, Restructuring-
Related Expenses for further discussion. As of December 31, 2020, all expenses associated with this plan have been
incurred and substantially all have been and will continue to be paid in cash. The plan generated expense savings of more
than $50 million in 2020 and we expect to generate approximately $100 million of expense savings in 2021, which is our
estimate and subject to change.

These expenses are specific to this initiative; however, the types of expenses related to this initiative are similar to

expenses that we have previously incurred and can reasonably be expected to incur in the future.

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, 2020. Cost of services decreased for the year ended December 31, 2020
compared to the prior year due to a decrease in agent commissions in our Consumer-to-Consumer money transfer business,
which generally vary with revenues, including due to fluctuations between the United States dollar and foreign currencies,
the Speedpay divestiture during the second quarter of 2019, a decrease in employee-related expenses, including as a result
of reduced hiring, and a decrease in restructuring-related expenses, partially offset by an increase in credit losses.

Selling, General, and Administrative

Selling, general, and administrative expenses decreased for the year ended December 31, 2020 compared to the
prior year due to a decrease in employee-related expenses, including incentive compensation and as a result of savings
from our restructuring plan, and a decrease in restructuring-related expenses. Certain of these reductions in employee-
related expenses are a result of delayed hiring and a reduction in travel, which are partially due to COVID-19 and not
expected to reoccur. In addition, Selling, general, and administrative expenses decreased due to a decrease in marketing
costs and costs related to strategic initiatives, including for the review and closing of mergers, acquisitions, and
divestitures. These decreases were partially offset by the strengthening of the United States dollar against certain foreign
currencies.

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Total Other Income/(Expense), Net

Total other income/(expense), net during the year ended December 31, 2019 was impacted by the non-recurring gain
on the sale of our United States based electronic bill payments business known as Speedpay. In addition, total other
income/(expense), net benefitted from a reduction in interest expense driven by a lower weighted-average interest rate on
our outstanding debt during the year ended December 31, 2020 compared to the prior year.

Income Taxes

Our effective tax rates on pre-tax income were 12.9% and 19.9% for the years ended December 31, 2020 and 2019,
respectively. The decrease in our effective tax rate for the year ended December 31, 2020 compared to the prior year was
primarily due to higher prior period domestic pre-tax income associated with the sales of the Speedpay and Paymap
businesses, prior period settlements in certain geographies, and discrete tax benefits in the current period.

We have established contingency reserves for a variety of material, known tax exposures. As of December 31, 2020,
the total amount of tax contingency reserves was $310.5 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. 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. 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. 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, 2020 and 2019, 100%
and 67%, respectively, of our pre-tax income was derived from foreign sources. While the income tax imposed by any one
foreign country is not material to us, our overall effective tax rate could be adversely affected by changes in foreign tax
laws.

Earnings Per Share

During the years ended December 31, 2020 and 2019, basic earnings per share were $1.81 and $2.47, respectively,
and diluted earnings per share were $1.79 and $2.46, respectively. Outstanding options to purchase Western Union stock
and unvested shares of restricted stock are excluded from basic shares outstanding. 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. As of December 31, 2020 and 2019, there were 1.6 million and 1.9 million, respectively, of shares
excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding
restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the restricted
stock and options per unit were above our weighted-average share price during the periods and their effect was anti-
dilutive.

Earnings per share for the year ended December 31, 2020 compared to the prior year was 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, 2019 was impacted by the gain on the sale of Speedpay in the second quarter of 2019. The lower number
of shares outstanding for the year ended December 31, 2020 compared to the prior year is due to stock repurchases
exceeding stock issuances related to our stock compensation programs.

Segment Discussion

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 consumer groups, distribution networks, and services offered. Our
segments are Consumer-to-Consumer and Business Solutions.

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The business segment measurements provided to, and evaluated by, our Chief Operating Decision Maker (“CODM”)

are computed in accordance with the following principles:

• The accounting policies of the segments are the same as those described in the summary of significant accounting

policies.

• Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily

based on a percentage of the segments’ revenue compared to total revenue.

• As described in Part II, Item 8, Financial Statements and Supplementary Data, Note 4, Restructuring-Related
Expenses on August 1, 2019, our Board of Directors approved an overall plan to change our operating model and
improve our business processes and cost structure by reducing our headcount and consolidating various facilities.
For the years ended December 31, 2020 and 2019, we incurred $36.8 million and $115.5 million, respectively,
related to this plan. While certain of these expenses may be identifiable to our segments, primarily our Consumer-
to-Consumer segment, the expenses are not included in the measurement of segment operating income provided
to the CODM for purposes of assessing segment performance and decision making with respect to resource
allocation.

• All items not included in operating income are excluded from the segments.

The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the

years ended December 31, 2020 and 2019:

Year Ended December 31,

2020

2019

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87 %
8 %
5 %
100 %

83 %
7 %
10 %
100 %

In the first quarter of 2020, we changed our expense allocation method so that our corporate data center and network
engineering information technology expenses are allocated based on a percentage of relative revenue. In 2019, these costs
had been allocated based in part on a percentage of relative transactions. We believe that an allocation method based fully
on relative revenue presents a more representative view of segment profitability, as certain of our services, particularly
some of our bill payment services and our money order services, have much lower revenues per transaction than our other
services. Further, these technology expenses are becoming increasingly based on data storage utilized and less based on
the number of transactions processed. For the year ended December 31, 2019, this change would have decreased
Consumer-to-Consumer operating income and increased Other operating income by $49.6 million. Business Solutions was
not materially impacted by the change in the allocation method.

Consumer-to-Consumer Segment

The following table sets forth our Consumer-to-Consumer segment results of operations for the years ended

December 31, 2020 and 2019:

(dollars and transactions in millions)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,220.0
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 924.7
Operating income margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Key indicator:
Consumer-to-Consumer transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

290.5

2020

22 %

Year Ended December 31,
2019
$ 4,407.8
$ 975.4

% Change

(4)%
(5)%

22 %

289.4

0 %

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Our Consumer-to-Consumer money transfer service facilitates money transfers sent from our retail agent locations
worldwide and our Digital Money Transfer services. The segment includes five geographic regions whose functions are
primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. We
include Digital Money Transfer transactions in our regions, including transactions from our arrangements with financial
institutions and other third parties, to enable such entities to offer money transfer services to their own customers under
their brands. By means of common processes and systems, these regions, including Digital Money Transfer transactions,
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. 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, including Digital Money
Transfer transactions, is determined based upon the region where the money transfer is initiated. Included in each region’s
transaction and revenue percentages in the tables below are Digital Money Transfer transactions for the years ended
December 31, 2020 and 2019. Where reported separately in the discussion below, Digital Money Transfer, and its subset
westernunion.com, consist of 100% of the transactions conducted and funded through those respective channels.

The table below sets forth revenue and transaction changes by geographic region compared to the prior year.
Consumer-to-Consumer segment constant currency revenue growth/(decline) is a non-GAAP financial measure, as further
discussed in Revenues Overview above.

Year Ended December 31, 2020

Revenue
Growth/
(Decline), as
Reported -
(GAAP)

Foreign
Exchange
Translation
Impact

Constant
Currency
Revenue
Growth/
(Decline) (a) -
(Non-GAAP)

Transaction
Growth/
(Decline)

Consumer-to-Consumer regional growth/(decline):

North America (United States & Canada) ("NA") . . . . . . . . .
Europe and Russia/CIS ("EU & CIS") . . . . . . . . . . . . . . . . . .
Middle East, Africa, and South Asia ("MEASA") . . . . . . . . .
Latin America and the Caribbean ("LACA") (b) . . . . . . . . . . .
East Asia and Oceania ("APAC") . . . . . . . . . . . . . . . . . . . . .
Total Consumer-to-Consumer growth/(decline): . . . . . . . . . . . .

Digital Money Transfer (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
westernunion.com (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)%
(2)%
(2)%
(22)%
(3)%
(4)%

38 %
27 %

0 %
1 %
0 %
(11)%
0 %
(1)%

0 %
0 %

(3)%
(3)%
(2)%
(11)%
(3)%
(3)%

38 %
27 %

(3)%
13 %
7 %
(20)%
(10)%
0 %

81 %
44 %

(a) Constant currency revenue growth 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.

(b) Our LACA region results were impacted by the strengthening of the United States dollar against the Argentine peso, in addition to an increase in

local currency revenue per transaction, primarily due to inflation.

(c) Digital Money Transfer revenues have been included in the regions above. As noted above, westernunion.com is a subset of Digital Money Transfer

and is included in the regions and Digital Money Transfer revenues.

The table below sets forth regional revenues as a percentage of our Consumer-to-Consumer revenue for the years

ended December 31, 2020 and 2019:

Consumer-to-Consumer revenue as a percentage of segment revenue:

NA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EU & CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MEASA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LACA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38 %
33 %
15 %
8 %
6 %

38 %
32 %
15 %
9 %
6 %

Year Ended December 31,

2020

2019

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Digital Money Transfer, which is included in the regional percentages above, represented approximately 20% and

14% of our Consumer-to-Consumer revenues for the years ended December 31, 2020 and 2019, respectively.

Our consumers transferred $96.1 billion and $87.7 billion in Consumer-to-Consumer principal for the years ended
December 31, 2020 and 2019, of which $90.6 billion and $80.7 billion, respectively, related to cross-border principal. The
increase in principal and cross-border principal transferred during the year ended December 31, 2020 compared to the
prior year is attributable to growth in Digital Money Transfer. Consumer-to-Consumer principal is the amount of consumer
funds transferred to the designated recipient. 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-to-Consumer principal and cross-border principal are metrics 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.

Revenues

Consumer-to-Consumer money transfer revenue decreased 4% and transactions were flat for the year ended
December 31, 2020 compared to the prior year, including as a result of the impacts from the worldwide actions related to
COVID-19. Revenues were impacted by a decrease in transaction volumes from retail locations, which were offset by
growth in digital transactions, including from white label partnerships. The spread between transaction volumes and
revenue decline was primarily attributable to growth in our digital white label partnerships, which have a lower revenue
per transaction than Western Union branded transactions. 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, 2020 compared to the prior year. Constant currency revenue decreased 3% for the year ended
December 31, 2020.

Revenues compared to the prior year were negatively impacted by COVID-19, which caused governments around the
world to institute various protective measures in an effort to slow the spread of the virus. These measures, which include
lockdowns, stay-at-home orders, travel restrictions, and closures of non-essential businesses, negatively impacted our
ability to offer services, at least temporarily, through some of our retail agent locations across all of our regions. The
COVID-19 pandemic and associated public health measures also resulted in a decline in economic activity that negatively
impacted our revenues for the year ended December 31, 2020. This decline was caused by decreases in transactions from
our retail business and was partially offset by growth in Digital Money Transfer transactions, including transactions
initiated through westernunion.com. We believe that our growth in Digital Money Transfer transactions was due, in part,
to shifts in consumer behavior to send money through digital channels, including as a result of COVID-19. The significant
majority of agent locations that had been closed as a result of COVID-19 have resumed offering our services as of
December 31, 2020, although certain of our retail locations remain closed.

Revenues for all Consumer-to-Consumer regions compared to the prior year were negatively impacted by the
COVID-19 pandemic. The decrease in NA revenue for the year ended December 31, 2020 compared to the prior year was
primarily the result of declines in money transfers sent and received in the United States. The decrease in EU & CIS and
MEASA revenues for the year ended December 31, 2020 compared to the prior year was driven by transaction declines in
retail money transfers, partially offset by transaction growth from digital white label partnerships. For the year ended
December 31, 2020, the decrease in LACA revenue, which generates a higher proportion of revenues from retail locations
compared to our other regions, was primarily due to transaction declines caused by continued COVID-19-related
government protective measures, including agent location closures in the region. For the year ended December 31, 2020,
westernunion.com revenues, which have been included in the regions as described above, were negatively impacted by
net price reductions.

Consumer-to-Consumer revenues in 2021 could be negatively impacted by the effects of COVID-19. The duration
and severity of the pandemic as well as the responses of government authorities to the pandemic, the macro economic
consequences, and the impacts on consumer behavior are uncertain. We expect that our results will continue to be adversely
impacted as long as such factors persist.

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We have historically implemented price reductions or price increases throughout many of our global corridors. We
will likely continue to implement price changes 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. Price increases may adversely affect
transaction volumes, as consumers may not use our services if we fail to price them appropriately.

Operating Income

Consumer-to-Consumer operating income decreased 5% during the year ended December 31, 2020 compared to the
prior year. Results for the year ended December 31, 2020 were negatively impacted by the decrease in revenues, increased
allocations of certain information technology expenses, as previously discussed, an increase in credit losses, and the
strengthening of the United States dollar against certain foreign currencies, partially offset by decreases in employee-
related expenses, as described above, including incentive compensation and as a result of reduced hiring and savings from
our restructuring plan, as well as decreases in marketing costs. Certain of these reductions in employee-related expenses
are a result of delayed hiring and a reduction in travel, which are partially due to COVID-19 and not expected to reoccur.

Business Solutions

The following table sets forth our Business Solutions segment results of operations for the years ended

December 31, 2020 and 2019:

(dollars in millions)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 356.1
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
24.4
Operating income margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2020

% Change

Year Ended December 31,
2019
$ 388.8
$
46.8
7 %

12 %

(8)%
(48)%

Revenues

Business Solutions revenue decreased 8% for the year ended December 31, 2020 compared to the prior year, primarily
due to a decline in payment services activity, generally across all geographic regions. We believe this decrease was due to
a downturn in economic conditions and trade, which primarily resulted from the effects of COVID-19. We expect that to
the extent the COVID-19 pandemic or the related macro-economic consequences continue, we could continue to
experience declines in cross-currency payments and reductions to segment revenues in future periods.

Operating Income

For the year ended December 31, 2020, Business Solutions operating income and operating income margin decreased
when compared to the prior year due to the impact of revenue declines, as discussed above, and costs associated with the
termination of a property lease in the United States, partially offset by a reduction in employee-related expenses.

Other

Other primarily consists of our cash-based bill payments businesses in Argentina and the United States, in addition to
our money order services. As previously described, we entered into an agreement on February 28, 2019 to sell Speedpay
and closed the transaction on May 9, 2019. Speedpay revenues and direct operating expenses included in our results were
$125.4 million and $98.2 million, respectively, for the year ended December 31, 2019.

On May 6, 2019, we completed the sale of Paymap for contingent consideration and immaterial cash proceeds
received at closing. Paymap revenues and direct operating expenses included in our results were $5.3 million and $2.2
million, respectively, for the year ended December 31, 2019.

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The following table sets forth Other results for the years ended December 31, 2020 and 2019:

(dollars in millions)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 258.9
55.0
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating income margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2020

% Change

Year Ended December 31,
2019
$ 495.5
27.3
$
21 %

6 %

(48)%
(a)

(a) Calculation not meaningful.

Revenues

Other revenue decreased 48% for the year ended December 31, 2020 compared to the prior year, primarily due to the
impact of the sale of Speedpay in the second quarter of 2019 and declines in revenues from our cash-based bill payments
services offered at retail locations, including as a result of the strengthening of the United States dollar against the
Argentine peso, partially offset by an increase in local currency revenue per transaction, primarily due to inflation.

We believe that Other revenues could continue to be negatively impacted by the effects of COVID-19 to the extent
the pandemic or the related macro-economic consequences continue, as we may continue to experience decreases in our
cash-based bill payments services.

Operating Income

Other operating income increased for the year ended December 31, 2020 compared to the prior year due to the change
in allocated information technology expenses, as previously discussed, and a decrease in costs related to strategic
initiatives, including for the review and closing of mergers, acquisitions, and divestitures, partially offset by a decrease in
revenues, net of a reduction in direct expenses from the Speedpay and Paymap divestitures, and a decrease in revenues
from our cash-based bill payments services.

Capital Resources and Liquidity

Our primary source of liquidity has been cash generated from our operating activities, primarily from net income and
fluctuations in working capital. Our working capital is affected by the timing of payments for employee and agent
incentives, interest payments on our outstanding borrowings and timing of income tax payments, among other items. Many
of our annual employee incentive compensation and agent incentive payments are made in the first quarter following the
year they were incurred. The majority of our interest payments are due in the second and fourth quarters which results in
a decrease in the amount of cash provided by operating activities in those quarters and a corresponding increase to the first
and third quarters. The annual payments resulting from the United States tax reform legislation enacted in 2017 (the “Tax
Act”) include amounts related to the United States taxation of certain previously undistributed earnings of foreign
subsidiaries. These payments are typically due in the second quarter of each year through 2025.

Our future cash flows could be impacted by a variety of factors, some of which are out of our control. These factors
include, but are not limited to, changes in economic conditions, especially those impacting migrant populations and
including as a result of COVID-19 related impacts, changes in income tax laws or the status of income tax audits, including
the resolution of outstanding tax matters, and the settlement or resolution of legal contingencies. The duration and severity
of COVID-19 and related impacts are uncertain, but we believe we are taking appropriate measures to attempt to address
liquidity-related considerations by evaluating, monitoring, and assessing the creditworthiness and credit risk ratings of our
agents and customers.

Substantially all of our cash flows from operating activities have been generated from subsidiaries. Most of these cash
flows are generated from our regulated subsidiaries. Our regulated subsidiaries may transfer all excess cash to the parent
company for general corporate use, except for assets subject to legal or regulatory restrictions, including: (i) requirements
to maintain cash and other qualifying investment balances, free of any liens or other encumbrances, related to the payment
of certain of our money transfer and other payment obligations, (ii) other legal or regulatory restrictions, including statutory

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or formalized minimum net worth requirements, and (iii) restrictions on transferring assets outside of the countries where
these assets are located. See also Part II, Item 8, Financial Statements and Supplementary Data, Note 1, Business and
Basis of Presentation.

Assuming that our operations are not significantly affected by the COVID-19 pandemic for a protracted period, 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. 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.
As of December 31, 2020, we had no outstanding borrowings on our Revolving Credit Facility and $80.0 million of
outstanding borrowings on the commercial paper program.

To help ensure availability of our worldwide cash where needed, we utilize a variety of planning and financial
strategies, including decisions related to the amounts, timing, and manner by which cash is made available from our
international subsidiaries. These decisions can influence our overall tax rate and impact our total liquidity. We regularly
evaluate, taking tax consequences and other factors into consideration, our United States cash requirements and also the
potential uses of cash internationally to determine the appropriate level of dividend repatriations of our foreign source
income.

Cash and Investment Securities

As of December 31, 2020 and 2019, we had cash and cash equivalents of $1,428.2 million and $1,450.5 million,
respectively. In many cases, we receive funds from money transfers and certain other payment services before we settle
the payment of those transactions. These funds, referred to as Settlement assets on our Consolidated Balance Sheets, are
not used to support our operations. However, we earn income from investing these funds. 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.

Investment securities, classified within Settlement assets, were $1,990.6 million and $1,698.4 million as of
December 31, 2020 and 2019, respectively, and consist primarily of highly-rated state and municipal debt securities,
including fixed-rate term notes and variable-rate demand notes. The substantial majority of our 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.

Investment securities are exposed to market risk due to changes in interest rates and credit risk. We regularly monitor
credit risk and attempt to mitigate our exposure by investing in highly-rated securities and diversifying our investment
portfolio. Our investment securities are also actively managed with respect to concentration. As of December 31, 2020, all
investments with a single issuer and each individual security represented less than 10% of our investment securities
portfolio.

Cash Flows from Operating Activities

During the years ended December 31, 2020 and 2019, cash provided by operating activities was $877.5 million and
$914.6 million, respectively. Cash provided by operating activities can be impacted by changes to our consolidated net
income, in addition to fluctuations in our working capital balances, among other factors.

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Financing Resources

As of December 31, 2020, we had the following outstanding borrowings (in millions):

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Notes:

3.600% notes due 2022 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.250% notes due 2023 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.850% notes due 2025 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.200% notes due 2036 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.200% notes due 2040 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan facility borrowing (effective rate of 1.4%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total borrowings at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs and unamortized discount, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total borrowings at carrying value (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

80.0

500.0
300.0
500.0
500.0
250.0
950.0
3,080.0
(12.8)
3,067.2

(a) The difference between the stated interest rate and the effective interest rate is not significant.
(b) As of December 31, 2020, our weighted-average effective rate on total borrowings was approximately 3.5%.

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. 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, 2020 and 2019, we had $80.0 million
and $245.0 million in commercial paper borrowings outstanding, respectively. Our commercial paper borrowings as of
December 31, 2020 had a weighted-average annual interest rate of approximately 0.3% and a weighted-average term of
approximately 5 days. During the years ended December 31, 2020 and 2019, the average commercial paper balance
outstanding was $181.6 million and $193.6 million, respectively, and the maximum balance outstanding was $690.0
million and $630.0 million, respectively. 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. On December 18, 2019, we extended the
final maturity date of the Revolving Credit Facility to January 8, 2025.

Interest due under the Revolving Credit Facility is fixed for the term of each borrowing and is payable according to
the terms of that borrowing. Generally, interest is calculated using a selected LIBOR rate plus an interest rate margin of
110 basis points. A facility fee of 15 basis points is also payable quarterly on the total facility, regardless of usage. Both
the interest rate margin and facility fee percentage are based on certain of our credit ratings.

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%. As of December 31, 2020 and 2019, 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.

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Term Loan Facility

On December 18, 2018, we extended the Term Loan Facility providing for an unsecured delayed draw term loan
facility in an aggregate amount of $950.0 million. In October 2016, we borrowed $575.0 million under our prior term loan
facility. In December 2018, we borrowed the remaining amount available under the Term Loan Facility.

Generally, interest under the Term Loan Facility is calculated using a selected LIBOR rate plus an interest rate margin
of 125 basis points. The interest rate margin percentage is based on certain of our credit ratings and will increase or
decrease in the event of certain upgrades or downgrades in our credit ratings.

In addition to the payment of interest, we are required to make certain periodic amortization payments with respect to
the outstanding principal of the term loan, beginning in 2021. The final maturity date of the Term Loan Facility is
January 8, 2024.

Notes

On November 25, 2019, we issued $500.0 million of aggregate principal amount of unsecured notes due January 10,
2025 (“2025 Notes”). We used the net proceeds from the sale of the 2025 Notes to redeem our 2020 Notes, as defined
below, and for general corporate purposes. Interest with respect to the 2025 Notes is payable semi-annually in arrears on
January 10 and July 10 of each year, beginning on July 10, 2020, based on the per annum rate of 2.850%. The interest rate
payable on the 2025 Notes will be increased if the debt rating assigned to these notes is downgraded by an applicable
credit rating agency, beginning at a downgrade below investment grade. However, in no event will the interest rate on the
2025 Notes exceed 4.850% per annum. The interest rate payable on the 2025 Notes may also be adjusted downward for
debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 2.850% per annum. We
may redeem the 2025 Notes, in whole or in part, at any time prior to December 10, 2024 at the greater of par or a price
based on the applicable treasury rate plus 20 basis points. We may redeem the 2025 Notes at any time after December 10,
2024 at a price equal to par, plus accrued interest.

On June 11, 2018, we issued $300.0 million of aggregate principal amount of unsecured notes due June 9, 2023 (“2023
Notes”). Interest with respect to the 2023 Notes is payable semi-annually in arrears on June 9 and December 9 of each year,
beginning on December 9, 2018, based on the per annum rate of 4.250%. The interest rate payable on the 2023 Notes will
be increased if the debt rating assigned to these notes is downgraded by an applicable credit rating agency, beginning at a
downgrade below investment grade. However, in no event will the interest rate on the 2023 Notes exceed 6.250% per
annum. The interest rate payable on the 2023 Notes may also be adjusted downward for debt rating upgrades subsequent
to any debt rating downgrades but may not be adjusted below 4.250% per annum. We may redeem the 2023 Notes, in
whole or in part, at any time prior to May 9, 2023 at the greater of par or a price based on the applicable treasury rate plus
25 basis points. We may redeem the 2023 Notes at any time after May 9, 2023 at a price equal to par, plus accrued interest.

On August 22, 2017, we issued $250.0 million of aggregate principal amount of unsecured floating rate notes due
May 22, 2019 (“Floating Rate Notes”). The Floating Rate Notes were repaid in May 2019 using proceeds from the
Speedpay divestiture, commercial paper, and cash, including cash generated from operations.

On March 15, 2017, we issued $400.0 million of aggregate principal amount of unsecured notes due March 15, 2022.
On August 22, 2017, we issued an additional $100.0 million of aggregate principal amount of unsecured notes due
March 15, 2022, for an aggregate principal total of $500.0 million of 3.600% unsecured notes (“2022 Notes”). The notes
issued on August 22, 2017 are part of the same series and, accordingly, have the same terms and conditions as the notes
issued on March 15, 2017; however, the notes issued on August 22, 2017 were issued at a premium of 101.783% and we
received $1.57 million of accrued interest upon issuance. Interest with respect to the 2022 Notes is payable semi-annually
in arrears on March 15 and September 15 of each year, beginning on September 15, 2017, based on the per annum rate of
3.600%. The interest rate payable on the 2022 Notes will be increased if the debt rating assigned to the note is downgraded
by an applicable credit rating agency, beginning at a downgrade below investment grade. However, in no event will the
interest rate on the 2022 Notes exceed 5.600% per annum. The interest rate payable on the 2022 Notes may also be adjusted
downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 3.600% per
annum. We may redeem the 2022 Notes at any time prior to February 15, 2022 at the greater of par or a price based on the

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applicable treasury rate plus 25 basis points. We may redeem the 2022 Notes at any time after February 15, 2022 at a price
equal to par, plus accrued interest.

On November 22, 2013, we issued $250.0 million of aggregate principal amount of unsecured notes due May 22,
2019 (“2019 Notes”). The 2019 Notes were repaid in May 2019 using proceeds from the Speedpay divestiture, commercial
paper, and cash, including cash generated from operations.

On June 21, 2010, we issued $250.0 million of aggregate principal amount of unsecured notes due June 21, 2040
(“2040 Notes”). Interest with respect to the 2040 Notes is payable semi-annually on June 21 and December 21 each year
based on the fixed per annum rate of 6.200%. We may redeem the 2040 Notes at any time prior to maturity at the greater
of par or a price based on the applicable treasury rate plus 30 basis points.

On March 30, 2010, we exchanged $303.7 million of aggregate principal amount of unsecured notes due
November 17, 2011 for unsecured notes due April 1, 2020 (“2020 Notes”). Interest with respect to the 2020 Notes was
payable semi-annually on April 1 and October 1 each year based on the fixed per annum rate of 5.253%. In connection
with the exchange, note holders were given a 7% premium ($21.2 million), which approximated market value at the
exchange date, as additional principal. As this transaction was accounted for as a debt modification, this premium was not
charged to expense. Rather, the premium, along with the offsetting hedge accounting adjustments, was accreted into
Interest expense over the life of the notes. On November 18, 2019, we announced a cash tender offer on our outstanding
2020 Notes. On November 25, 2019, we purchased the principal amount of $56.1 million, plus accrued interest, pursuant
to the tender offer. On December 27, 2019, we redeemed the remaining principal amount of $268.8 million, plus accrued
interest. The total premium paid to redeem the 2020 Notes was $3.1 million.

On November 17, 2006, we issued $500.0 million of aggregate principal amount of unsecured notes due
November 17, 2036 (“2036 Notes”). Interest with respect to the 2036 Notes is payable semi-annually on May 17 and
November 17 each year based on the fixed per annum rate of 6.200%. We may redeem the 2036 Notes at any time prior
to maturity at the greater of par or a price based on the applicable treasury rate plus 25 basis points.

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. Factors that we believe are important in assessing our credit
ratings include earnings, cash flow generation, leverage, available liquidity, and the overall business.

Our Revolving Credit Facility and our Term Loan Facility contain interest rate margins which are determined based
on certain of our credit ratings, and our Revolving Credit Facility also contains a facility fee that is based on our credit
ratings. In addition, the interest rates payable on our 2022 Notes, 2023 Notes, and 2025 Notes can be impacted by our
credit ratings. 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. We do not have any other terms within our debt agreements that are tied to
changes in our credit ratings.

The Revolving Credit Facility and Term Loan Facility contain covenants, subject to certain exceptions, that, among
other things, limit or restrict our ability to sell or transfer assets or merge or consolidate with another company, grant
certain types of security interests, incur certain types of liens, impose restrictions on subsidiary dividends, enter into sale
and leaseback transactions, incur certain subsidiary level indebtedness, or use proceeds in violation of anti-corruption or
anti-money laundering laws. Our notes are subject to similar covenants except that only the 2036 Notes contain covenants
limiting or restricting subsidiary indebtedness and none of our notes are subject to a covenant that limits our ability to
impose restrictions on subsidiary dividends. Our Revolving Credit Facility and Term Loan Facility require us to maintain
a consolidated adjusted 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

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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 consolidated interest coverage ratio was 11:1 for the year ended December 31, 2020.

For the year ended December 31, 2020, 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.

Certain of our notes (including the 2022 Notes, 2023 Notes, 2025 Notes, and 2040 Notes) include a change of control
triggering event provision, as defined in the terms of the notes. If a change of control triggering event occurs, holders of
the notes may require us to repurchase some or all of their notes at a price equal to 101% of the principal amount of their
notes, plus any accrued and unpaid interest. A change of control triggering event will occur when there is a change of
control involving us and among other things, within a specified period in relation to the change of control, the notes are
downgraded from an investment grade rating to below an investment grade rating by certain major credit rating agencies.

Cash Priorities

Liquidity

Our objective is to maintain strong liquidity and a capital structure consistent with investment-grade credit ratings.
We have existing cash balances, cash flows from operating activities, access to the commercial paper markets, and our
Revolving Credit Facility available to support the needs of our business.

Our ability to grow the business, make investments in our business, make acquisitions, return capital to shareholders,
including through dividends and share repurchases, and service our debt and tax obligations will depend on our ability to
continue to generate excess operating cash through our operating subsidiaries and to continue to receive dividends from
those operating subsidiaries, our ability to obtain adequate financing and our ability to identify acquisitions that align with
our long-term strategy. 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.

Investment in Saudi Digital Payments Company

On November 21, 2020, we entered into an agreement to acquire an ownership interest in Saudi Digital Payments
Company (“stc pay”), a subsidiary of Saudi Telecom Company and one of our Consumer-to-Consumer digital white label
partners. Under the terms of the agreement, the transaction is intended to occur in two tranches. In the first tranche, we
agreed to invest approximately $133 million for a 10% investment in stc pay, and, in the second tranche, we agreed to
invest an additional approximately $67 million for an additional 5% investment in stc pay. The first tranche is expected to
close in the first quarter of 2021 and the closing of the second tranche is contingent upon stc pay satisfying certain
conditions.

Capital Expenditures

The total aggregate amount paid for contract costs, purchases of property and equipment, and purchased and developed
software was $156.8 million and $127.7 million in 2020 and 2019, respectively. Amounts paid for new and renewed agent
contracts vary depending on the terms of existing contracts as well as the timing of new and renewed contract signings.
Other capital expenditures during these periods included investments in our information technology infrastructure and
purchased and developed software.

Share Repurchases and Dividends

During the years ended December 31, 2020 and 2019, 8.5 million and 26.9 million shares, respectively, have been
repurchased for $217.4 million and $540.0 million, respectively, excluding commissions, at an average cost of $25.45 and
$20.07, respectively. During the first quarter of 2020, we temporarily paused and did not resume share repurchases under

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a publicly announced authorization through December 31, 2020. However, we have resumed share repurchases in the first
quarter of 2021. As of December 31, 2020, $782.6 million remains available under the share repurchase authorization
approved by our Board of Directors through December 31, 2021.

Our Board of Directors declared quarterly cash dividends of $0.225 per common share in all four quarters of 2020,
representing $369.9 million in total dividends. Our Board of Directors declared quarterly cash dividends of $0.20 per
common share in all four quarters of 2019, representing $340.8 million in total dividends. These amounts were paid to
shareholders of record in the respective quarter the dividend was declared.

On February 10, 2021, the Board of Directors declared a quarterly cash dividend of $0.235 per common share payable

on March 31, 2021.

Material Cash Requirements

Debt Service Requirements

Our 2021 and future debt service requirements will include payments on all outstanding indebtedness, including any
borrowings under our commercial paper program. Refer to Part II, Item 8, Financial and Supplemental Data, Note 16,
Borrowings for details on our outstanding borrowings, including future principal payments on our notes, term loan, and
commercial paper. As of December 31, 2020, the total projected interest payments on our borrowings were $960.9 million,
of which $104.5 million is expected to be paid in the next 12 months. We have estimated our future interest payments
based on the assumption that no debt issuances or renewals will occur upon the maturity dates of our notes. However, we
may refinance all or a portion of our borrowings in future periods. Estimated interest payments on floating-rate debt are
calculated by utilizing the effective rate and forward rates as of December 31, 2020 for our current and future interest
rates, respectively.

2017 United States Federal Tax Liability

The Tax Act imposed a tax on certain of our previously undistributed foreign earnings. 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 $604 million remained as of December 31, 2020. We have elected
to pay this liability in periodic installments through 2025. Under the terms of the law, we owe 8% of the original liability
in both 2021 and 2022, with 15%, 20%, and 25% of the tax owed in 2023, 2024, and 2025, respectively. During each of
the years ended December 31, 2020 and 2019, we made installment payments of $64.0 million. These payments have
affected and will continue to adversely affect our cash flows and liquidity and may adversely affect future share
repurchases.

Operating Leases

We lease real properties for use as administrative and sales offices, in addition to transportation, office, and other
equipment. Refer to Part II, Item 8, Financial Statements and Supplemental Data, Note 13, Leases for details on our
leasing arrangements, including future maturities of our operating lease liabilities.

Foreign Currency Derivative Contracts

We use derivatives to minimize our exposures related to changes in foreign currency exchange rates, which fluctuate
based on market conditions. Refer to Part II, Item 8, Financial Statements and Supplemental Data, Note 15, Derivatives.
The substantial majority of these derivative contracts relate to our Business Solutions segment, which facilitates cross-
currency payments by writing derivatives to customers, and a significant majority of these Business Solutions derivative
contracts have a duration at inception of less than one year.

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Purchase Obligations

A purchase obligation is an agreement to purchase goods or services that is enforceable, legally binding, and specifies
all significant terms. As of December 31, 2020, we had approximately $170 million of outstanding purchase obligations,
of which approximately $120 million is expected to be paid in the next 12 months. Many of our contracts contain clauses
that allow us to terminate the contract with notice and with a termination penalty. Termination penalties are generally an
amount less than the original obligation. Obligations under certain contracts are usage-based and are, therefore, estimated
in the above amounts. 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.

Pension Plan

We have a frozen defined benefit pension plan (the “Plan”), for which the funded status is measured as the difference
between the fair value of the plan assets and the projected benefit obligation. As of December 31, 2020, the fair value of
the plan assets was $280.6 million, which exceeded the projected benefit obligation of $240.7 million and resulted in
prepaid pension costs of $39.9 million. As of December 31, 2019, the projected benefit obligation exceeded the fair value
of the plan assets, which resulted in an unfunded pension obligation of $11.4 million. We were not required to and did not
make a contribution to the Plan in 2020 and 2019, and we are not required to make any contributions to the Plan in 2021.

Our most recent measurement date for our pension plan was December 31, 2020. The calculation of the funded status
and net periodic benefit cost is dependent upon three primary assumptions: (i) expected long-term return on plan assets,
(ii) discount rate, and (iii) life expectancy trends.

Given the overfunded status of the Plan, we are in the process of moving towards a full allocation of fixed income
investments to more closely match the Plan’s assets to its liabilities. The expected long-term return on plan assets is 2.00%
for 2021. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews,
annual liability measurements, and periodic asset and liability studies.

The discount rate assumption is based on the rate at which pension benefits could be effectively settled and is
determined by matching the timing and balance of anticipated payouts under the Plan to the rates from an AA spot rate
yield curve, which is derived from AA bonds of varying maturities. The discount rate assumption for our benefit obligation
was 1.66% and 2.66% for the years ended December 31, 2020 and 2019, respectively. A 100 basis point change to both
the discount rate and long-term rate of return on plan assets would not have a material impact to our annual pension
expense.

The assumptions related to life expectancy are used to estimate the expected period over which pension benefits will
be required to be paid. Projections used for life expectancy are based on mortality tables and mortality improvement tables,
which are statistical tables of expected annual mortality rates and expected future mortality improvements, respectively.
We utilize a mortality table that we believe best aligns with the underlying demographics and census data of the Plan
participants.

Other Commercial Commitments

We had approximately $390 million in outstanding letters of credit and bank guarantees as of December 31, 2020
primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent agreements. The
significant majority of our letters of credit and bank guarantees have a one-year renewal option, and we expect to renew
prior to expiration in most circumstances.

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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 generally accepted accounting principles in the United
States of America. The preparation of these consolidated financial statements requires that management make estimates
and assumptions that affect the amounts reported for revenues, expenses, assets, liabilities and other related disclosures.
Actual results may or may not differ from these estimates. Our significant accounting policies are discussed in Part II,
Item 8, Financial Statements and Supplementary Data, Note 2, Summary of Significant Accounting Policies.

Our critical accounting policies and estimates, described below, are very important to the portrayal of our financial
condition and our results of operations and applying them requires our management to make difficult, subjective, and
complex judgments. We believe that the understanding of these key accounting policies and estimates is essential in
achieving more insight into our operating results and financial condition.

Income Taxes

Income taxes, as reported in our consolidated financial statements, represent the net amount of income taxes we expect
to pay to various taxing jurisdictions in connection with our operations. We provide for income taxes based on amounts
that we believe we will ultimately owe after applying the required analyses and judgments.

The determination of our worldwide provision for income taxes requires significant judgment. We routinely receive,
and may in the future receive, questions from taxing authorities on various tax-related assertions. In many of these
instances, the ultimate tax determination is uncertain, given the complexities in interpreting tax laws and applying our
facts and circumstances to these laws in many jurisdictions throughout the world.

Income Tax Contingencies

We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical
merits of the position, that the tax position will be sustained upon examination, including the resolution of any related
appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured
as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

We have established contingency reserves for a variety of material, known tax exposures. Our tax reserves reflect our
judgment as to the resolution of the issues involved if subject to judicial review or other settlement. 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. 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 consolidated financial statements and the final resolution of a tax issue during the period.

Our tax contingency reserves for our uncertain tax positions as of December 31, 2020 were $310.5 million, including
accrued interest and penalties, net of related items. While we believe that our reserves are adequate to cover reasonably
expected tax risks, in the event that the ultimate resolution of our uncertain tax positions differs from our estimates, we
may be exposed to material increases in income tax expense, which could materially impact our financial condition, results
of operations, and cash flows. Furthermore, the timing of related cash payments for these tax liabilities is inherently
uncertain and is affected by variable factors outside our control.

Derivative Financial Instruments

We use derivatives to: (i) minimize our exposures related to changes in foreign currency exchange rates and,
periodically, interest rates and (ii) facilitate cross-currency Business Solutions payments by writing derivatives to
customers. We recognize all derivatives in Other assets and Other liabilities in our Consolidated Balance Sheets at their
fair value. Certain of our derivative arrangements are designated as either cash flow hedges or fair value hedges at the time
of inception, and others are not designated as accounting hedges.

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• Cash flow hedges - Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as
hedges of the forecasted issuance of fixed-rate debt. Derivative fair value changes that are captured in
Accumulated other comprehensive loss (“AOCL”) are reclassified to earnings in the same period the hedged item
affects earnings when the instrument is effective in offsetting the change in cash flows attributable to the risk
being hedged.

• Fair value hedges - Fair value hedges consist of hedges of fixed-rate debt, through interest rate swaps. The
changes in fair value of these hedges, along with offsetting changes in fair value of the related debt instrument
attributable to changes in the benchmark interest rate, are recorded in Interest expense.

The accounting guidance related to derivative accounting is complex and contains strict documentation requirements.
The details of each designated hedging relationship must be formally documented at the inception of the arrangement,
including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative
instrument, and how effectiveness is being assessed. The derivative must be highly effective in offsetting the changes in
cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective
basis. If the hedge is no longer deemed effective, we discontinue applying hedge accounting to that relationship on a
prospective basis.

We have foreign currency and interest rate derivative instruments that qualify for hedge accounting and are designated
as cash flow hedges. If these hedges no longer qualify under hedge accounting, the change in the fair value of these
derivatives would be reflected into earnings, which could have a significant impact on our reported results. As of
December 31, 2020, the cumulative pre-tax unrealized loss currently classified within AOCL that would be reflected in
earnings if these hedges were disqualified from hedge accounting was $22.9 million.

Goodwill

Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired
less liabilities assumed, arising from business combinations. An impairment assessment of goodwill is conducted annually
during our fourth quarter at the reporting unit level. This assessment of goodwill is performed more frequently if events
or changes in circumstances indicate that the carrying value of the goodwill may not be recoverable. Reporting units are
determined by the level at which management reviews segment operating results. In some cases, that level is the operating
segment and in others it is one level below the operating segment.

Our impairment assessment typically begins with a qualitative assessment to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying value. The initial qualitative assessment includes
comparing the overall financial performance of the reporting units 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. Periodically, we perform a quantitative
assessment, as described below, for each of our reporting units, regardless of the results of prior qualitative assessments.

If we determine in the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less
than its carrying value, then we estimate the fair value of the reporting unit using discounted cash flows and compare the
estimated fair value to its carrying value. If the carrying value exceeds the fair value of the reporting unit, then an
impairment is recognized for the difference. Refer to Part II, Item 8, Financial Statements and Supplementary Data,
Note 2, Summary of Significant Accounting Policies, for further discussion regarding our accounting policies for goodwill
and any related impairments.

The determination of the reporting units and which reporting units to include in the qualitative assessment requires
significant judgment. Also, all of the assumptions used in the qualitative assessment require judgment. Additionally, for
the quantitative goodwill impairment test, we calculate the fair value of reporting units through discounted cash flow
analyses which require us to make estimates and assumptions including, among other items, revenue growth rates,
operating margins, and capital expenditures based on our budgets and business plans. Development of such estimates and
assumptions and the resultant fair value takes into consideration expected regulatory, marketplace, and other economic
factors as well as relevant discount rates and terminal values.

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We could be required to evaluate the recoverability of goodwill if we experience disruptions to the business,
unexpected significant declines in operating results, a divestiture of a significant component of our business, or other
triggering events. In addition, as our business or the way we manage our business changes, our reporting units may also
change. 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, 2020 was $2,566.6 million which represented approximately 27%
of our consolidated assets. As of December 31, 2020, goodwill of $1,980.7 million and $532.0 million resides in our
Consumer-to-Consumer and Business Solutions reporting units, respectively, while the remaining $53.9 million resides in
Other. For the years ended December 31, 2020 and 2019, we did not record any goodwill impairments. For the reporting
units that comprise Consumer-to-Consumer and Other, the fair values of the businesses significantly exceed their carrying
amounts.

The fair value of the Business Solutions reporting unit continues to be sensitive to changes in projections for revenue
growth rates and EBITDA margins. Our current expectation is for Business Solutions to average low to mid-single digit
annual revenue growth over the 10-year forecast period, with EBITDA margins dependent on revenue growth. Our ability
to achieve the projected revenue growth and EBITDA margins may be affected by, amongst other factors: (i) pricing and
product competition from direct competitors, banks and new market entrants; (ii) our success and speed to market in
developing new products; (iii) the foreign exchange impact from revenues generated in currencies other than the United
States dollar; (iv) increased regulatory compliance requirements; (v) our ability to enter relationships with partners that
can accelerate our time to market; (vi) failure of long-term import growth rates returning to historic levels, including as a
result of COVID-19; (vii) our ability to continue to maintain our payment network and bank account infrastructure;
(viii) foreign currency volatility impacts on customer activity; and (ix) continued opportunities for cost reduction. Based
on assumptions used within the Business Solutions reporting unit valuation, we believe an approximate 100 basis point
decrease in the ten-year compound annual growth rate of revenue (also reflecting the assumed impact such a reduction
would have on EBITDA margins) would result in a reduction in the fair value of the Business Solutions reporting unit of
approximately $175 million. Such a reduction would result in the fair value approximating the carrying value of the
reporting unit.

Other Intangible Assets

We capitalize acquired intangible assets as well as certain initial payments for new and renewed agent contracts and
software. We evaluate such intangible assets for impairment on an annual basis or whenever events or changes in
circumstances indicate the carrying amount of such assets may not be recoverable. In such reviews, estimated undiscounted
cash flows associated with these assets or operations are compared with their carrying amounts to determine if a write-
down to fair value (normally measured by the present value technique) is required.

The capitalization of initial payments for new and renewed agent contracts is subject to strict accounting policy criteria
and requires management judgment as to the amount to capitalize and the related period of benefit. Our accounting policy
is to limit the amount of capitalized costs for a given agent contract to the lesser of the estimated future cash flows from
the contract or the termination fees we would receive in the event of early termination of the contract. Additionally, the
estimated undiscounted cash flows associated with each asset requires us to make estimates and assumptions, including,
among other things, revenue growth rates and operating margins based on our budgets and business plans.

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. The net carrying value of our other
intangible assets as of December 31, 2020 was $505.0 million. During the years ended December 31, 2020 and 2019, we
recorded immaterial impairments related to other intangible assets.

Legal Contingencies

We are subject to certain claims and litigation that could result in losses, including damages, fines, and/or civil
penalties, which could be significant, and in some cases, criminal charges. We regularly evaluate the status of legal matters

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to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. If the
potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we
accrue a liability for the estimated loss. When a potential loss is considered probable and the reasonable estimate is a range,
we accrue on the low end of the range when no amount is a better estimate than any other amount.

Significant judgment is required in determining whether a loss is probable and whether the loss can be reasonably
estimated, including determining a loss value within a range. Our judgments are subjective and are based on considerations
such as the status of the legal or regulatory proceedings, the merits of our defenses, and consultations with in-house and
outside legal counsel. As the outcome of claims and litigation is uncertain, accruals are based on the best information
available at the time the judgment is made. As additional information becomes available, which may include information
we learn through the discovery process, settlement discussions, or rulings by courts, arbitrators or others, we reassess the
potential liability related to pending claims and litigation and may revise our estimates.

In determining whether disclosure is appropriate, we evaluate each legal matter to assess if there is at least a reasonable
possibility that a material loss or additional material losses may have been incurred beyond those amounts which we have
already accrued. If such a reasonable possibility exists, we include an estimate of possible loss or range of loss in our
disclosure of reasonably possible potential litigation losses or we state if such an estimate of possible loss or range of loss
cannot be made.

Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in which we operate,

and to the varied range of potential outcomes, the actual outcomes may differ materially from our judgments.

Recent Accounting Pronouncements

Refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 2, Summary of Significant Accounting

Policies for further discussion.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks arising from changes in market rates and prices, including changes in foreign currency
exchange rates and interest rates and credit risk related to our agents and customers. A risk management program is in
place to manage these risks.

Foreign Currency Exchange Rates

We provide our services primarily through a network of agent locations in more than 200 countries and territories.
We manage foreign exchange risk through the structure of the business and an active risk management process. We
currently settle with the substantial majority of our agents in United States dollars, euros, or Mexican pesos requiring those
agents to obtain local currency to pay recipients, and we generally do not rely on international currency markets to obtain
and pay illiquid currencies. However, in certain circumstances, we settle in 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. To mitigate this risk further, we enter into short duration
foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange
rate fluctuations between transaction initiation and settlement. We also have exposure to certain foreign currency
denominated cash and other asset and liability positions and may utilize foreign currency forward contracts, typically with
maturities of less than one year at inception, to offset foreign exchange rate fluctuations on these positions. In certain
consumer money transfer, bill payment, and Business Solutions 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 the rate available in the wholesale foreign exchange market, helping to provide protection against currency
fluctuations. We attempt to promptly buy and sell foreign currencies as necessary to cover our net payables and receivables
which are denominated in foreign currencies.

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 contracts with maturities of up to 36 months at inception to mitigate some
of the impact that changes in foreign currency exchange rates could have on forecasted revenues, with a targeted weighted-
average maturity of approximately one year. We believe the use of longer-term foreign currency forward contracts
provides predictability of future cash flows from our international operations.

We have bill payment, money transfer, and other operations in Argentina, which together represented less than 3% of
our total consolidated revenues for the year ended December 31, 2020. The strengthening of the United States dollar
against the Argentine peso has had adverse impacts on our historical results of operations and cash flows, as our Argentine
peso-denominated revenue and operating income have been reduced when translated into United States dollars for
inclusion in our financial statements. During the third quarter of 2019, the Argentine government imposed restrictions that
limit the transfer of cash outside of the country. While we manage our working capital balances to have minimal net
monetary assets denominated in the Argentine peso, further policy restrictions could cause our cash and cash equivalents
held in the Argentine peso to increase in future periods, including as a result of cash flows generated by our operations.
Therefore, the continued devaluation of the Argentine peso could adversely affect our results of operations, and limits on
repatriating excess cash balances could adversely affect future distributions of excess cash from Argentina or increase the
costs of these repatriations.

As of December 31, 2020, 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

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pre-tax annual income of approximately $65 million, based on our forecast of unhedged exposure to foreign currency at
that date. There are inherent limitations in this sensitivity analysis, primarily due to the following assumptions: (i) foreign
exchange rate movements are linear and instantaneous, (ii) fixed exchange rates between certain currency pairs are
retained, (iii) the unhedged exposure is static, and (iv) we would not hedge any additional exposure. 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, 2020 of approximately
$3.3 billion. Approximately $2.0 billion of these assets bear interest at floating rates. These assets primarily include cash
in banks, money market instruments, and state and municipal variable-rate securities and are included in our Consolidated
Balance Sheets within Cash and cash equivalents and Settlement assets. To the extent these assets are held in connection
with money transfers and other related payment services awaiting redemption, they are classified as Settlement assets.
Earnings on these investments will increase and decrease with changes in the underlying short-term interest rates.

The remainder of our interest-bearing assets primarily consists of highly-rated state and municipal debt securities,
which are fixed-rate term notes. These investments may include investments made from cash received from our money
order services, money transfer business, and other related payment services awaiting redemption and are classified within
Settlement assets in the Consolidated Balance Sheets. 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
securities. 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/(deficit) in our
Consolidated Balance Sheets.

As of December 31, 2020, we had a total of approximately $1.0 billion of borrowings subject to floating interest rates.
Interest on $950.0 million borrowed under our Term Loan Facility is calculated using a selected LIBOR rate plus an
interest rate margin of 125 basis points. Borrowings of $80.0 million under our commercial paper program mature in such
a short period that the financing is also effectively floating rate.

We review our overall exposure to floating and fixed rates by evaluating our net asset or liability position and the
duration of each individual position. We manage this mix of fixed versus floating exposure in an attempt to minimize risk,
reduce costs, and improve returns. Our exposure to interest rates can be modified by changing the mix of our interest-
bearing assets as well as adjusting the mix of fixed versus floating rate debt. The latter is accomplished primarily through
the use of interest rate swaps and the decision regarding terms of any new debt issuances (i.e., fixed versus floating). 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. As of December 31, 2020, our weighted-average effective rate on total borrowings was
approximately 3.5%. For further detail on our variable rate borrowings, see risk factor “We have substantial debt and other
obligations that could restrict our operations” in Part I, Item 1A, Risk Factors.

A hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to annual pre-tax
income of approximately $10 million based on borrowings that are sensitive to interest rate fluctuations, net of the impact
of hedges, on December 31, 2020. The same 100 basis point increase/decrease in interest rates, if applied to our cash and
investment balances on December 31, 2020 that bear interest at floating rates, would result in an offsetting
increase/decrease to annual pre-tax income of approximately $20 million. There are inherent limitations in the sensitivity
analysis presented, primarily due to the assumptions that interest rate changes would be instantaneous and consistent across
all geographies in which our interest-bearing assets are held and our liabilities are payable. As a result, the analysis is
unable to reflect the potential effects of more complex market changes, including changes in credit risk regarding our
investments, which may positively or negatively affect income. In addition, the mix of fixed versus floating rate debt and
investments and the level of assets and liabilities will change over time, including the impact from commercial paper
borrowings that may be outstanding in future periods.

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Credit Risk

To manage our exposures to credit risk with respect to investment securities, money market fund investments,
derivatives, and other credit risk exposures resulting from our relationships with banks and financial institutions, we
regularly review investment concentrations, trading levels, credit spreads, and credit ratings, and we attempt to diversify
our investments among global financial institutions.

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. While we have experienced some delays in our
collections from agents in connection with COVID-19 agent location closures and other impacts, we believe we are taking
appropriate measures to attempt to address liquidity-related considerations by evaluating, monitoring, and assessing the
creditworthiness and credit risk ratings of our agents. These delays have been largely temporary as certain agents were not
able to remit settlement funds to us during lockdowns or other stay-at-home orders. 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.

We are exposed to credit risk in our Business Solutions business relating to: (i) derivatives written by us, primarily to
our customers, and (ii) the extension of trade credit when transactions are paid to recipients prior to our receiving cleared
funds from the sending customers. For the derivatives, the duration of these contracts at inception is generally less than
one year. The credit risk associated with our derivative contracts increases when foreign currency exchange rates move
against our customers, possibly impacting their ability to honor their obligations to deliver currency to us or to maintain
appropriate collateral with us. For those receivables where we have extended trade credit, collection ordinarily occurs
within a few days. To mitigate the risk associated with potential customer defaults, we perform credit reviews of the
customer on an ongoing basis, and, for our derivatives, we may require certain customers to post or increase collateral.

Our losses have been approximately 2% or less of our consolidated revenues in all periods presented.

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ITEM 8. Financial Statements and Supplementary Data

THE WESTERN UNION COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income for each of the three years in the period ended December 31, 2020 . . . . . . . . . .

Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31,
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets as of December 31, 2020 and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2020 . . . . . .

Consolidated Statements of Stockholders’ Equity/(Deficit) for each of the three years in the period ended
December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule I - Condensed Financial Information of the Registrant (Parent Company Only) . . . . . . . . . . . . . . . . . . . . . . 131

All other financial statement schedules for The Western Union Company have been omitted since the required
information is not present or not present in amounts sufficient to require submission of the schedule, or because the
information required is included in the respective consolidated financial statements or notes thereto.

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Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Western Union Company’s (“Western Union”
or the “Company”) internal control over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial statements for external purposes in
accordance with generally accepted accounting principles. Western Union’s internal control over financial reporting
includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures are being made only in accordance with authorizations of our management
and Board of Directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Management assessed the effectiveness of Western Union’s internal control over financial reporting as of
December 31, 2020, utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control—Integrated Framework (2013 framework). Based on the results of its evaluation,
the Company’s management concluded that as of December 31, 2020, the Company’s internal control over financial
reporting is effective. Western Union’s internal control over financial reporting as of December 31, 2020 has been audited
by Ernst & Young LLP, Western Union’s independent registered public accounting firm, as stated in their attestation report
included in this Annual Report on Form 10-K.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of The Western Union Company

Opinion on Internal Control Over Financial Reporting

We have audited The Western Union Company’s internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Western Union
Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, and the related
consolidated statements of income, comprehensive income, cash flows and stockholders' equity/(deficit) for each of the
three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the
Index at Item 15(a) and our report dated February 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Denver, Colorado
February 19, 2021

/s/ Ernst & Young LLP

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of The Western Union Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Western Union Company (the Company) as
of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, cash flows
and stockholders’ equity/(deficit) for each of the three years in the period ended December 31, 2020 and the related notes
and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 19, 2021 expressed an unqualified opinion
thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts
or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or
complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income taxes - Uncertain tax positions

Description of
the matter

As described in Note 11 to the consolidated financial statements, the Company operates in a
multinational tax environment and is subject to taxation in various jurisdictions. The Company
recognizes tax benefits from uncertain tax positions only when it is more likely than not, based
on the technical merits that the tax position will be sustained upon examination, including the
resolution of any related appeals or litigation. The tax benefits recognized in the consolidated
financial statements from such a position are measured as the largest benefit that has a greater
than fifty percent likelihood of being realized upon ultimate resolution. As of December 31,
2020, the Company has accrued liabilities of $310.5 million for uncertain tax positions.

Auditing management’s estimate of the amount of tax benefits that qualify for recognition
required significant judgment given the complexity and varying interpretations of international
tax laws, regulations and legal rulings.

How we
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over the Company’s accounting process for uncertain tax positions. For example, this
included controls over the Company’s assessment of the technical merits of tax positions,
including controls relating to management’s process to measure the benefit of those tax
positions.

In testing the recognition and measurement of uncertain tax positions, we made inquiries of
management and involved our income tax professionals to assess the technical merits of the
Company’s tax positions. This included assessing the Company’s correspondence with the
relevant tax authorities and evaluating income tax opinions or other third-party advice obtained
by the Company. We evaluated the appropriateness of the Company’s accounting for its tax
positions taking into consideration our knowledge of and experience with the application of
international and local income tax laws by the relevant income tax authorities. We analyzed the
Company’s assumptions and data used to determine the amount of tax benefits to recognize and
tested the accuracy of the calculations. We have also evaluated the adequacy of the Company’s
financial statement disclosures related to tax matters.

Goodwill impairment of the Business Solutions reporting unit

Description of
the matter

As described in Note 5 to the consolidated financial statements, the Company’s goodwill is tested
for impairment at least annually at the reporting unit level. As of October 1, 2020, the Company
performed a quantitative assessment of the $532.0 million in goodwill of the Business Solutions
reporting unit.

Auditing management’s goodwill impairment assessment for the Business Solutions reporting
unit was complex due to the subjective nature of the assumptions used in the model to determine
the fair value of the Business Solutions reporting unit. In particular, the estimated fair value of
the Business Solutions reporting unit was sensitive to significant assumptions such as projected
revenue growth rates, EBITDA margins, and the effects of market and economic conditions and
how such conditions may impact subsequent periods’ operations.

How we
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over the Company’s goodwill impairment review process. For example, we evaluated
the design and tested controls over the Company’s budgetary process and management’s review
of the significant assumptions described above.

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To test the estimated fair value of the Business Solutions reporting unit, we performed audit
procedures that included, among others, assessing methodologies and testing the significant
assumptions discussed above and underlying data used by the Company in its analysis. We
compared the significant assumptions used by management to current industry and economic
trends, recent historical performance, and other relevant factors. We assessed the historical
accuracy of management’s estimates and performed sensitivity analyses of significant
assumptions to evaluate the change in the fair value of the reporting unit resulting from
changes in assumptions.

We have served as the Company’s auditor since 2006.

Denver, Colorado
February 19, 2021

/s/ Ernst & Young LLP

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THE WESTERN UNION COMPANY

CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)

Year Ended December 31,
2019

2020

2018

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,835.0 $ 5,292.1 $ 5,589.9
Expenses:

Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income/(expense):

2,826.5
1,041.2
3,867.7
967.3

3,086.5
1,271.6
4,358.1
934.0

3,300.8
1,167.0
4,467.8
1,122.1

Gain on divestitures of businesses (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income/(expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Earnings per share:

—
3.2
(118.5)
3.1
(112.2)
855.1
110.8
744.3 $ 1,058.3 $

524.6
6.3
(152.0)
8.5
387.4
1,321.4
263.1

—
4.8
(149.6)
14.1
(130.7)
991.4
139.5
851.9

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1.81 $
1.79 $

2.47 $
2.46 $

1.89
1.87

Weighted-average shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

412.3
415.2

427.6
430.9

451.8
454.4

(a) As further described in Note 7, total expenses include amounts incurred with related parties of $54.6 million, $57.1 million, and $57.6 million for

the years ended December 31, 2020, 2019, and 2018, respectively.

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)

Year Ended December 31,
2019

2020

2018

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 744.3 $ 1,058.3 $ 851.9
Other comprehensive income, net of reclassifications and tax (Note 14):

(4.3)
Unrealized gains/(losses) on investment securities . . . . . . . . . . . . . . . . . . . . . . . . . .
50.3
Unrealized gains/(losses) on hedging activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19.5)
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.8
Defined benefit pension plan adjustments (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.3
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 793.8 $ 1,080.3 $ 880.2

33.6
(26.9)
—
42.8
49.5

25.8
(11.0)
—
7.2
22.0

See Notes to Consolidated Financial Statements.

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THE WESTERN UNION COMPANY

CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)

Assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Settlement assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net of accumulated depreciation of $659.9 and $616.5,

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net of accumulated amortization of $1,044.6 and $961.5,

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Liabilities and stockholders' equity/(deficit)
Liabilities:

Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Settlement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liability, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commitments and contingencies (Note 6)

Stockholders' equity/(deficit):

December 31,

2020

2019

1,428.2 $
3,821.4

1,450.5
3,296.7

150.4
2,566.6

505.0
1,024.7
9,496.3 $

186.9
2,566.6

494.9
762.9
8,758.5

500.9 $

3,821.4
928.9
188.9
3,067.2
802.4
9,309.7

601.9
3,296.7
1,019.7
152.1
3,229.3
498.3
8,798.0

Preferred stock, $1.00 par value; 10 shares authorized; no shares issued . . . . . . . . . .
Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and

418.0 shares issued and outstanding as of December 31, 2020 and December 31,
2019, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders' equity/(deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders' equity/(deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

—

4.1
885.1
(543.1)
(159.5)
186.6
9,496.3 $

4.2
841.2
(675.9)
(209.0)
(39.5)
8,758.5

See Notes to Consolidated Financial Statements.

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THE WESTERN UNION COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

Year Ended December 31,
2019

2020

2018

Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 744.3 $ 1,058.3 $ 851.9

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on divestitures of businesses, excluding transaction costs (Note 5) . . . . . . .
Deferred income tax provision/(benefit) (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash items, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase/(decrease) in cash, excluding the effects of divestitures, resulting from

changes in:
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities

Payments for capitalized contract costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for internal use software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the sale of former corporate headquarters and other property

(Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from divestitures of businesses, net of cash divested (Note 5) . . . . . . . . .
Purchases of non-settlement related investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturity of non-settlement related investments . . . . . . . . . . . . . . . . .
Purchases of held-to-maturity non-settlement related investments . . . . . . . . . . . . . .
Proceeds from held-to-maturity non-settlement related investments . . . . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in)/provided by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities

61.3
164.3
—
13.9
145.8

(44.4)
(96.6)
(94.4)
(16.7)
877.5

(69.1)
(51.2)
(36.5)

49.4
—
(4.9)
0.9
—
—
(2.0)
(113.4)

79.6
178.1
(532.1)
(24.5)
118.4

76.9
187.8
—
(15.1)
66.2

7.5
94.3
(36.8)
(28.2)
914.6

(31.0)
(126.5)
(193.1)
4.2
821.3

(46.6)
(33.0)
(48.1)

(150.3)
(52.0)
(136.7)

—
711.7
(6.8)
23.4
(1.3)
33.0
—
632.3

—
—
(24.2)
13.7
(2.8)
23.5
—
(328.8)

(341.7)
Cash dividends and dividend equivalents paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(412.4)
Common stock repurchased (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
125.0
Net (repayments of)/proceeds from commercial paper . . . . . . . . . . . . . . . . . . . . . . .
685.4
Net proceeds from issuance of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(414.4)
Principal payments on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1
Proceeds from exercise of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9.2)
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(357.2)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
135.3
Net change in cash, cash equivalents, and restricted cash . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents, and restricted cash at beginning of period . . . . . . . . . . . . . . .
844.4
Cash, cash equivalents, and restricted cash at end of period . . . . . . . . . . . . . . . . . . . . $ 1,447.4 $ 1,456.8 $ 979.7
Supplemental cash flow information:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109.6 $
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 187.3 $
65.9 $
Cash paid for lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
38.6 $
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 13) . . . . . $
19.2 $
Restricted cash at end of period (included in Other assets) . . . . . . . . . . . . . . . . . . . . . $

(340.8)
(552.6)
120.0
495.9
(824.9)
36.7
(4.1)
(1,069.8)
477.1
979.7

(370.3)
(239.7)
(165.0)
—
—
2.2
(0.7)
(773.5)
(9.4)
1,456.8

151.3 $ 142.5
318.9 $ 339.4
—
—
6.3

53.8 $
269.1 $
6.3 $

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)
(in millions)

Balance, December 31, 2017 . . . . . . . . . . . . . . . . . . . .
Adoption of new accounting pronouncements (Note 2) . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Common stock dividends declared ($0.76 per share) . . .
Repurchase and retirement of common shares . . . . . . . .
Shares issued under stock-based compensation plans . . .
Other comprehensive income (Note 14) . . . . . . . . . . . . .
Balance, December 31, 2018 . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Common stock dividends and dividend equivalents
declared ($0.80 per share) . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and retirement of common shares . . . . . . . .
Shares issued under stock-based compensation plans . . .
Other comprehensive income (Note 14) . . . . . . . . . . . . .
Balance, December 31, 2019 . . . . . . . . . . . . . . . . . . . .
Adoption of new accounting pronouncement (Note 2) . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .
Common stock dividends and dividend equivalents
declared ($0.90 per share) . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and retirement of common shares . . . . . . . .
Shares issued under stock-based compensation plans . . .
Other comprehensive income (Note 14) . . . . . . . . . . . . .
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . .

Common Stock
Shares Amount Surplus Deficit

Capital

Total

(227.9) $

Accumulated
Other
Accumulated Comprehensive Stockholders'
Equity/(Deficit)
Loss
(491.4)
(0.7)
851.9
47.7
(341.7)
(414.0)
10.1
28.3
(309.8)
1,058.3
48.9

(965.9) $
30.7
851.9
—
(341.7)
(413.8)
—
—
(838.8)
1,058.3
—

(31.4)
—
—
—
—
—
28.3
(231.0)
—
—

697.8 $
—
—
47.7
—
—
10.1
—
755.6
—
48.9

459.0 $
—
—
—
—
(20.9)
3.1
—
441.2
—
—

4.6 $
—
—
—
—
(0.2)
—
—
4.4
—
—

—
(27.6)
4.4
—
418.0
—
—
—

—
(0.2)
—
—
4.2
—
—
—

—
—
36.7
—
841.2
—
—
41.7

(342.6)
(552.8)
—
—
(675.9)
(0.6)
744.3
—

—
—
—
22.0
(209.0)
—
—
—

—
(9.4)
2.6
—
411.2 $

—
(0.1)
—
—
4.1 $

—
—
2.2
—
885.1 $

(373.2)
(237.7)
—
—
(543.1) $

—
—
—
49.5
(159.5) $

(342.6)
(553.0)
36.7
22.0
(39.5)
(0.6)
744.3
41.7

(373.2)
(237.8)
2.2
49.5
186.6

See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

Business

The Western Union Company (“Western Union” or the “Company”) 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. The Western Union® brand is globally recognized. The Company’s services are primarily
available through a network of agent locations in more than 200 countries and territories and through money transfer
transactions conducted and funded through websites and mobile applications marketed under the Company’s brands
(“westernunion.com”) and transactions initiated on internet and mobile applications hosted by the Company’s third-party
white label or co-branded digital partners (together with westernunion.com, “Digital Money Transfer”). Each location in
the Company’s agent network is capable of providing one or more of the Company’s services.

The Western Union business consists of the following segments:

• Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers, which are
sent from retail agent locations worldwide or through websites and mobile devices, including Digital Money
Transfer services. The Company’s money transfer service is provided through one interconnected global network.
This service is available for international cross-border transfers and, in certain countries, intra-country transfers.

• Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange
solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other
organizations and individuals. The majority of the segment’s business relates to exchanges of currency at spot
rates, which enable customers to make cross-currency payments. In addition, in certain countries, the Company
writes foreign currency forward and option contracts for customers to facilitate future payments.

All businesses and other services that have not been classified in the above segments are reported as Other, which
primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other
organizations and the Company’s money order services. In May 2019, the Company sold a substantial majority of its
United States based electronic bill payments services, as discussed in Note 5. The Company’s other services, in addition
to certain 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. See Note 18 for further information regarding the Company’s
segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where
these assets are located. However, there are generally no limitations on the use of these assets within those countries.
Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating
licenses. As of December 31, 2020, the amount of these net asset limitations totaled approximately $680 million.

Various aspects of the Company’s services and businesses are subject to United States federal, state, and local
regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.

Basis of Presentation

The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the
accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts
have been eliminated.

Consistent with industry practice, the accompanying Consolidated Balance Sheets are unclassified due to the short-
term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting
settlement in long-term investment securities.

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2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United
States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ from these estimates.

In March 2020, the World Health Organization declared the outbreak associated with a novel coronavirus a pandemic
(“COVID-19”), and governments throughout the world instituted various actions such as lockdowns, stay-at-home orders,
travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of COVID-19. These actions
negatively impacted the Company’s ability to offer its services, at least temporarily, through a portion of its locations and
its retail agent locations, during the year ended December 31, 2020. Beginning in March 2020 and continuing throughout
the remainder of the year, the Company experienced a decrease in transaction volumes from retail locations, and a decrease
in foreign exchange and payment services activity, which also negatively impacted revenues in these periods, partially
offset by revenue and transaction growth from Digital Money Transfer services. The Company believes this decrease is
mainly due to economic decline and uncertainty resulting from the pandemic. The extent to which the COVID-19
pandemic continues to impact the Company’s business, financial condition, results of operations, or cash flows will depend
on future developments, which are highly uncertain and are difficult to predict. To the extent the pandemic or the related
macro-economic consequences continue, the Company could potentially experience changes in estimates, including
increased credit losses or intangible asset impairments in future periods.

Principles of Consolidation

The Company consolidates financial results when it has a controlling financial interest in a subsidiary via voting rights
or when it has both the power to direct the activities of an entity that most significantly impact the entity’s economic
performance and the ability to absorb losses or the right to receive benefits of the entity that could potentially be significant
to the entity. The Company utilizes the equity method of accounting when it is able to exercise significant influence over
an entity’s operations, which generally occurs when the Company has an ownership interest between 20% and 50%.

Earnings Per Share

The calculation of basic earnings per share is computed by dividing net income available to common stockholders by
the weighted-average number of shares of common stock outstanding for the period. Outstanding options to purchase
Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. 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, using the treasury stock method. The treasury stock method assumes proceeds
from the exercise price of stock options and the unamortized compensation expense of options and restricted stock are
available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.

Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to
outstanding restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the
restricted stock and options per unit were above the Company’s average share price during the periods and their effect was
anti-dilutive, were 1.6 million, 1.9 million, and 2.6 million, respectively, of shares for the years ended December 31, 2020,
2019, and 2018.

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The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

Basic weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted-average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair Value Measurements

Year Ended December 31,
2019
427.6
3.3
430.9

2020
412.3
2.9
415.2

2018
451.8
2.6
454.4

The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in
accordance with the hierarchy described below. The fair values of the assets and liabilities held in the Company’s defined
benefit plan trust (“Trust”) are recognized or disclosed utilizing the same hierarchy. The following three levels of inputs
may be used to measure fair value:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted
prices in markets that are not active, or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities. For most of these assets, the Company utilizes
pricing services that use multiple prices as inputs to determine daily market values.

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value
requires significant management judgment or estimation. The Company holds assets classified as Level 3 that are
recognized and disclosed at fair value on a non-recurring basis related to the Company’s business combinations,
where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three
recognized approaches: the market approach, the income approach, or the cost approach.

In addition, the Trust has other investments that are valued at net asset value, which are not quoted on an active market;

however, the unit price is based on underlying investments which are traded on an active market.

Carrying amounts for many of the Company’s financial instruments, including cash and cash equivalents, settlement
cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short
maturities. Available-for-sale investment securities, as further discussed in Notes 8 and 9, and derivative financial
instruments, as further discussed in Notes 9 and 15, are carried at fair value. Fixed-rate notes are carried at their original
issuance values and adjusted over time to accrete that value to par, except for portions of notes that were hedged by interest
rate swap agreements in prior years, as disclosed in Note 15. The fair values of fixed-rate notes are disclosed in Note 9
and are based on market quotations.

The fair values of non-financial assets and liabilities related to the Company’s business combinations are disclosed in
Note 5. The fair value of the assets in the Trust, which holds the assets for the Company’s defined benefit pension plan, is
disclosed in Note 12.

Business Combinations

The Company accounts for all business combinations where control over another entity is obtained using the
acquisition method of accounting, which requires that most assets (both tangible and intangible), liabilities (including
contingent consideration), and remaining noncontrolling interests be recognized at fair value at the date of acquisition. The
excess of the purchase price over the fair value of assets less liabilities and noncontrolling interests is recognized as

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goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made
subsequent to the acquisition date, but within the measurement period, which is one year or less, are recorded as
adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded within Net income. Any
cost or equity method interest that the Company holds in the acquired company prior to the acquisition is remeasured to
fair value at acquisition with a resulting gain or loss recognized within Other income, net for the difference between fair
value and existing book value. Results of operations of the acquired company are included in the Company’s results from
the date of the acquisition forward and include amortization expense arising from acquired intangible assets. The Company
expenses all costs as incurred related to or involved with an acquisition in Selling, general, and administrative expenses.

Cash and Cash Equivalents

Highly liquid investments (other than those included in settlement assets) with maturities of three months or less at
the date of purchase (that are readily convertible to cash) are considered cash equivalents and are stated at cost, which
approximates fair value.

The Company maintains cash and cash equivalent balances, including a portion in money market funds, with a group
of globally diversified banks and financial institutions. The Company limits the concentration of its cash and cash
equivalents with any one institution and regularly reviews investment concentrations and credit worthiness of these
institutions.

Allowance for Credit Losses

For the Company’s accounting policies with respect to the allowance for credit losses, refer to Note 8.

Settlement Assets and Obligations

Settlement assets represent funds received or to be received from agents and others for unsettled money transfers,
money orders, and consumer payments. The Company records corresponding settlement obligations relating to amounts
payable under money transfers, money orders, and consumer payment service arrangements. Settlement assets and
obligations also include amounts receivable from, and payable to, customers for the value of their cross-currency payment
transactions related to the Business Solutions segment.

Settlement assets consist of cash and cash equivalents, receivables from agents, Business Solutions customers, and
others, and investment securities. Cash received by Western Union agents generally becomes available to the Company
within one week after initial receipt by the agent. Cash equivalents consist of short-term time deposits, commercial paper,
and other highly liquid investments. Receivables from agents represent funds collected by such agents, but in transit to the
Company. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any
one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business
Solutions segment. Receivables occur when funds have been paid out to a beneficiary but not yet received from the
customer. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential
Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis.

Settlement obligations consist of money transfer, money order and payment service payables, and payables to agents.
Money transfer payables represent amounts to be paid to transferees when they request their funds. Most agents typically
settle with transferees first and then obtain reimbursement from the Company. Money order payables represent amounts
not yet presented for payment. Payment service payables represent amounts to be paid to utility companies, auto finance
companies, mortgage servicers, financial service providers, government agencies, and others. Due to the agent funding

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and settlement process, payables to agents represent amounts due to agents for money transfers that have been settled with
transferees.

Refer to Note 8 for additional details on the Company’s settlement assets and obligations.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the lesser of
the estimated life of the related assets (generally three to ten years for equipment and furniture and fixtures, and 30 years
for buildings) or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are
charged to expense as incurred.

Property and equipment consisted of the following (in millions):

Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projects in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total property and equipment, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property and equipment, net (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

December 31,

2020
608.9 $
153.3
45.4
0.4
2.3
810.3
(659.9)
150.4 $

2019
591.4
159.2
49.4
0.4
3.0
803.4
(616.5)
186.9

(a) As of December 31, 2019, Property and equipment, net excluded assets held for sale of $49.3 million, which primarily consisted of the Company’s
former headquarters and land. These assets were sold in 2020 and were included in Other assets in the Company’s Consolidated Balance Sheets as
of December 31, 2019.

Amounts charged to expense for depreciation of property and equipment were $61.3 million, $79.6 million, and $76.9

million during the years ended December 31, 2020, 2019, and 2018, respectively.

Goodwill

Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired
less liabilities assumed, arising from business combinations. In the event a reporting unit’s carrying amount exceeds its
fair value, the Company recognizes an impairment charge for the amount by which the carrying amount of the reporting
unit exceeds its fair value. The Company’s annual impairment assessment did not identify any goodwill impairment during
the years ended December 31, 2020, 2019, and 2018.

Other Intangible Assets

Other intangible assets primarily consist of contract costs (primarily amounts paid to agents in connection with
establishing and renewing long-term contracts), acquired contracts, and software. Other intangible assets are generally
amortized on a straight-line basis over the length of the contract or benefit periods. Included in the Consolidated Statements
of Income is amortization expense of $164.3 million, $178.1 million, and $187.8 million for the years ended December 31,
2020, 2019, and 2018, respectively.

The Company capitalizes initial payments for new and renewed agent contracts to the extent recoverable through
future operations or penalties in the case of early termination. The Company’s accounting policy is to limit the amount of

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capitalized costs for a given contract to the lesser of the estimated future cash flows from the contract or the termination
fees the Company would receive in the event of early termination of the contract.

Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in

connection with the Company’s acquisitions.

The Company purchases and develops software that is used in providing services and in performing administrative
functions. Internal and external software development costs incurred that are directly related to the chosen design,
development, and testing phases of the software are capitalized once the Company has completed all planning and analysis
activities. Any other software development related costs are expensed as incurred. Capitalization of costs ceases when the
product is available for general use. Software development costs and purchased software are generally amortized over a
term of three to seven years.

The following table provides the components of other intangible assets (in millions):

December 31, 2020

December 31, 2019

Capitalized contract costs . . . . . . . . . . . . . . . . . . . . .
Acquired contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internal use software . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired trademarks . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projects in process . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other intangible assets . . . . . . . . . . . . . . . . . .

574.4 $
561.7
310.3
30.1
19.4
53.7

308.0
75.8
55.5
12.0
—
53.7
505.0

8.0

$ 1,549.6 $

Net of
Accumulated
Amortization Initial Cost

Initial Cost

Net of
Accumulated
Amortization
271.7
124.1
54.7
13.2
—
31.2
494.9

510.3 $
584.2
281.2
30.1
19.4
31.2
$ 1,456.4 $

Weighted-
Average
Amortization
Period
(in years)
6.1
11.6
3.7
25.4
4.3
(a)

(a) Not applicable as the assets have not been placed in service.

The estimated future aggregate amortization expense for existing other intangible assets as of December 31, 2020 is
expected to be $148.5 million in 2021, $106.8 million in 2022, $78.8 million in 2023, $61.4 million in 2024, $35.1 million
in 2025, and $20.7 million thereafter.

Other intangible assets are reviewed for impairment on an annual basis or whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. In such reviews, estimated undiscounted cash
flows associated with these assets or operations are compared with their carrying values to determine if a write-down to
fair value (normally measured by the present value technique) is required. The Company recorded immaterial impairments
related to other intangible assets during the years ended December 31, 2020, 2019, and 2018.

Revenue Recognition

For the Company’s accounting policies with respect to revenue recognition, refer to Note 3.

Cost of Services

Cost of services primarily consists of agent commissions and expenses for call centers, settlement operations, and
related information technology costs. Expenses within these functions include personnel, software, equipment,
telecommunications, bank fees, credit losses, depreciation, amortization, and other expenses incurred in connection with
providing money transfer and other payment services.

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Advertising Costs

Advertising costs are charged to operating expenses as incurred. Advertising costs for the years ended

December 31, 2020, 2019, and 2018 were $177.0 million, $209.1 million, and $180.9 million, respectively.

Income Taxes

The Company accounts for income taxes under the liability method, which requires that deferred tax assets and
liabilities be determined based on the expected future income tax consequences of events that have been recognized in the
consolidated financial statements. Deferred tax assets and liabilities are recognized based on temporary differences
between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in
the years in which the temporary differences are expected to reverse. The Company assesses the realizability of its deferred
tax assets. A valuation allowance must be established when, based upon available evidence, it is more likely than not that
all or a portion of the deferred tax assets will not be realized.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on
the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any
related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are
measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

The Company accounts for the effects of global intangible low-taxed income taxed in the United States as a component

of income tax expense in the period the tax arises.

Foreign Currency Translation

The United States dollar is the functional currency for substantially all of the Company’s businesses. Revenues and
expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated assets and
liabilities for those businesses for which the local currency is the functional currency are translated into United States
dollars based on exchange rates at the end of the year. The effects of foreign exchange gains and losses arising from the
translation of assets and liabilities of these businesses are included as a component of Accumulated other comprehensive
loss (“AOCL”) in the accompanying Consolidated Balance Sheets. Foreign currency denominated monetary assets and
liabilities of businesses for which the United States dollar is the functional currency are remeasured based on exchange
rates at the end of the period, and the resulting remeasurement gains and losses are recognized in Net income. Non-
monetary assets and liabilities of these operations are remeasured at historical rates in effect when the asset was recognized
or the liability was incurred.

Derivatives

The Company has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange
rates and, periodically, interest rates and (ii) facilitate cross-currency Business Solutions payments by writing derivatives
to customers. The Company recognizes all derivatives in the Other assets and Other liabilities captions in the
accompanying Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in
Cash flows from operating activities in the Consolidated Statements of Cash Flows. Certain of the Company’s derivative
arrangements are designated as either cash flow hedges or fair value hedges at the time of inception, and others are not
designated as accounting hedges.

• Cash flow hedges – Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as
hedges of the forecasted issuance of fixed-rate debt. Derivative fair value changes that are captured in AOCL are
reclassified to earnings in the same period the hedged item affects earnings when the instrument is effective in
offsetting the change in cash flows attributable to the risk being hedged. On January 1, 2018, the Company early

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adopted an accounting pronouncement related to hedging activities. As a result of the new accounting
pronouncement, for foreign currency cash flow hedges entered into on or after January 1, 2018, the Company
excludes time value from the assessment of effectiveness, and the initial value of the excluded components is
amortized into Revenues within the Consolidated Statements of Income. For foreign currency cash flow hedges
entered into before January 1, 2018, all changes in the fair value of the excluded components were recognized
immediately in Revenues during the years ended December 31, 2019 and 2018.

• Fair value hedges - Fair value hedges consist of hedges of fixed-rate debt, through interest rate swaps. Changes
in the fair value of derivatives that are designated as fair value hedges of fixed-rate debt are recorded in Interest
expense. The offsetting change in value of the related debt instrument attributable to changes in the benchmark
interest rate is also recorded in Interest expense. There were no fair value hedges outstanding as of December 31,
2020 and 2019.

• Undesignated - Derivative contracts entered into to reduce the foreign exchange variability related to: (i) money
transfer settlement assets and obligations, generally with maturities from a few days up to one month, and
(ii) certain foreign currency denominated cash and other asset and liability positions, typically with maturities of
less than one year at inception, are not designated as hedges for accounting purposes and changes in their fair
value are included in Selling, general, and administrative. The Company is also exposed to risk from derivative
contracts written to its customers arising from its cross-currency Business Solutions payments operations. The
significant majority of these derivative contracts have a duration at inception of less than one year. The Company
aggregates its Business Solutions payments foreign currency exposures arising from customer contracts,
including the derivative contracts described above, and hedges the resulting net currency risks by entering into
offsetting contracts with established financial institution counterparties (economic hedge contracts) as part of a
broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and
options. The changes in fair value related to these contracts are recorded in Revenues.

The fair value of the Company’s derivatives is derived from standardized models that use market-based inputs (e.g.,

forward prices for foreign currency).

The details of each designated hedging relationship are formally documented at the inception of the arrangement,
including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative
instrument, and how effectiveness is being assessed. The derivative must be highly effective in offsetting the changes in
cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective
basis.

Legal Contingencies

The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. The Company
records an accrual for these contingencies to the extent that a loss is both probable and reasonably estimable. If some
amount within a range of loss appears to be a better estimate than other amounts within the range, that amount is accrued.
When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the
range is accrued.

Stock-Based Compensation

The Company has a stock-based compensation plan that provides for grants of Western Union stock options, restricted

stock awards, and restricted and unrestricted stock units to employees and non-employee directors of the Company.

All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite
service period. The Company generally recognizes compensation expense on awards on a straight-line basis over the

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requisite service period for the entire award, with an estimate for forfeitures. Refer to Note 17 for additional discussion
regarding details of the Company’s stock-based compensation plans.

Severance and Other Related Expenses

The Company records severance-related expenses once they are both probable and estimable in accordance with the
provisions of the applicable accounting guidance for severance provided under an ongoing benefit arrangement. One-time
involuntary benefit arrangements and other costs are generally recognized when the liability is incurred. The Company
also evaluates impairment issues associated with restructuring and other activities when the carrying amount of the related
assets may not be fully recoverable, in accordance with the appropriate accounting guidance.

Recently Adopted Accounting Pronouncements

On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit
losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on
historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard
requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an
allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an
adjustment to the January 1, 2020 balance of Accumulated deficit in the Consolidated Balance Sheets, and the adoption of
the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. In
accordance with the modified retrospective approach, the comparative information has not been restated and continues to
be reported under accounting standards in effect for those periods. Refer to Note 8 for additional information and the
related disclosures.

On January 1, 2019, the Company adopted a new accounting standard, as amended, that requires the Company to
record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about
its leasing arrangements. The Company elected the effective date method, utilized the modified retrospective approach
upon adoption, and elected the package of practical expedients available under the new standard, including the expedients
to not reassess whether an existing contract is a lease or contains a lease and whether the lease is an operating or finance
lease. This new standard establishes a right-of-use (“ROU”) model that requires the Company to recognize ROU assets
and lease liabilities on the balance sheet for all leases with a term longer than 12 months at commencement of the lease.
Refer to Note 13 for additional information and the related disclosures.

On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts
with customers using the modified retrospective approach. This standard provides guidance on recognizing revenue,
including a five-step model to determine when revenue recognition is appropriate. The adoption of this standard did not
have a material impact on the Company’s financial position and results of operations. Refer to Note 3 for the related
additional disclosures.

In the first quarter of 2018, the Company adopted a new accounting pronouncement that provides entities the option
to reclassify tax effects included within AOCL as a result of the United States tax reform legislation enacted in
December 2017 (the “Tax Act”) to retained earnings. The adoption of this standard resulted in an increase to AOCL and
a decrease to Accumulated deficit in the Consolidated Balance Sheets of $31.4 million, which represents the tax effects of
the lower federal tax rate on unrealized gains/(losses) on investment securities, hedging activities, and adjustments related
to the Company’s defined benefit pension plan, in addition to the release of deferred taxes accrued on undistributed
earnings of one of the Company’s subsidiaries that are no longer owed under the Tax Act. The Company will continue to
release tax effects remaining in AOCL into income as the individual units of account are sold or otherwise extinguished.
Refer to Note 14 for additional information.

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3. Revenue

On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts
with customers using the modified retrospective approach, which was applied to all contracts with customers. The standard
requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The
Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening
balance of Accumulated deficit in the Consolidated Balance Sheet, and the adoption of the new accounting standard did
not have a material impact on the Company’s January 1, 2018 accumulated deficit.

The Company’s revenues are primarily derived from consideration paid by customers to transfer money. 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, the difference between the exchange rate set
by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as
applicable. The Company also offers several other services, including foreign exchange and payment services and other
bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s
revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls
the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has
the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial
institutions and other third parties to enable such entities to offer money transfer services to their own customers under
their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial
institution or other third party that, among other things, establish pricing paid by the consumer for the service. The
Company recognizes revenue on a net basis under these arrangements. Revenue is recognized net of any taxes collected
from customers, which are subsequently remitted to governmental authorities.

The Company recognized $4,625.1 million, $5,033.2 million, and $5,382.6 million in revenues from contracts with
customers for the years ended December 31, 2020, 2019, and 2018, respectively. There were no material upfront costs
incurred to obtain contracts with customers during these same periods. Under the Company’s loyalty programs, which are
primarily offered in its money transfer services, the Company must fulfill loyalty program rewards earned by customers.
The loyalty program redemption activity has been and continues to be insignificant to the Company’s results of operations
for the years ended December 31, 2020, 2019, and 2018, and the Company has immaterial contract liability balances as of
December 31, 2020 and 2019, which primarily relate to its customer loyalty programs and other services. Contract asset
balances related to customers were also immaterial as of December 31, 2020 and 2019, as the Company typically receives
payment of consideration from its customers prior to satisfying performance obligations under the customer contracts. In
addition to revenue generated from contracts with customers, the Company recognizes revenue from other sources,
including the sale of derivative financial instruments and investment income generated on settlement assets primarily
related to money transfer and money order services.

The Company analyzes its different services individually to determine the appropriate basis for revenue recognition,
as further described below. Revenues from consumer money transfers are included in the Company’s Consumer-to-
Consumer segment, revenues from foreign exchange and payment services are included in the Company’s Business
Solutions segment, and revenues from consumer bill payments and other services are not included in the Company’s
segments and are reported as Other. See Note 18 for further information on the Company’s segments.

Consumer Money Transfers

For the Company’s money transfer services, customers agree to the Company’s terms and conditions at the time of
initiating a transaction. In a money transfer, the Company has one performance obligation as the customer engages the
Company to perform one integrated service which typically occurs within minutes — collect the customer’s money and
make funds available for payment to a designated person in the currency requested. Therefore, the Company recognizes

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revenue upon completion of the following: (i) the customer’s acknowledgment of the Company’s terms and conditions
and payment information has been received by the Company, (ii) the Company has agreed to process the money transfer,
(iii) the Company has provided the customer a unique transaction identification number, and (iv) funds are available to be
picked up by the customer’s designated receiving party. The transaction price is comprised of a transaction fee and the
difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign
exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated.

Foreign Exchange and Payment Services

For the Company’s foreign exchange and payment services, customers agree to terms and conditions for all
transactions, either at the time of initiating a transaction or signing a contract with the Company to provide payment
services on the customer’s behalf. In the majority of the Company’s foreign exchange and payment services, the Company
makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, the Company
recognizes revenue on foreign exchange and payment services when this performance obligation has been fulfilled.
Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange
rate set by the Company to the customer and the rate available in the wholesale foreign exchange market.

Consumer Bill Payments

The Company offers several different bill payment services that vary by considerations such as: (i) who pays the fee
to the Company (consumer or biller), (ii) whether the service is offered to all potential consumers, or only to those for
which the Company has a relationship with the biller, and (iii) whether the service utilizes a physical agent network offered
for consumers’ convenience, among other factors. The determination of which party is the Company’s customer for
revenue recognition purposes is based on these considerations for each of the Company’s bill payment services. For all
transactions, the Company’s customers agree to the Company’s terms and conditions, either at the time of initiating a
transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a
contract with the Company to provide services on the biller’s behalf (where the biller is determined to be the customer for
revenue recognition purposes). As with consumer money transfers, customers engage the Company to perform one
integrated service — collect money from the consumer and process the bill payment transaction, thereby providing the
billers real-time or near real-time information regarding their customers’ payments and simplifying the billers’ collection
efforts. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services,
as discussed in Note 5.

Management has determined that the significant majority of the Company’s revenue is recognized at a point in time.
The following tables represent the disaggregation of revenue earned from contracts with customers by product type and
region for the years ended December 31, 2020, 2019, and 2018 (in millions). The regional split of revenue shown in the
tables below is based upon where transactions are initiated.

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Year Ended December 31, 2020

Foreign

Consumer
Money
Transfers

Exchange
and Payment

Services

Consumer

Other
Bill Payments Services

Total

Regions:

North America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,605.5 $
Europe and Russia/CIS . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East, Africa, and South Asia . . . . . . . . . . . . . . .
Latin America and the Caribbean . . . . . . . . . . . . . . . . .
East Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . .

1,330.0
630.0
310.1
257.4

Revenues from contracts with customers . . . . . . . . . . . . $ 4,133.0 $

Other revenues (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87.0

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,220.0 $

83.6 $

121.1
1.5
2.4
60.5
269.1 $
87.0
356.1 $

75.1 $ 57.0 $ 1,821.2
1,456.5
1.8
3.6
631.9
—
0.4
7.9
75.8
396.2
319.3
—
1.4
156.3 $ 66.7 $ 4,625.1
209.9
170.3 $ 88.6 $ 4,835.0

21.9

14.0

Year Ended December 31, 2019

Foreign

Consumer
Money
Transfers

Exchange
and Payment

Services

Consumer

Other
Bill Payments (b) Services

Total

Regions:

North America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,653.5 $
Europe and Russia/CIS . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East, Africa, and South Asia . . . . . . . . . . . . . . .
Latin America and the Caribbean . . . . . . . . . . . . . . . . .
East Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . .

1,350.1
642.0
395.2
263.5

Revenues from contracts with customers . . . . . . . . . . . . $ 4,304.3 $

Other revenues (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103.5

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,407.8 $

95.4 $

127.1
1.8
3.4
68.4
296.1 $
92.7
388.8 $

3.2
0.4
129.4
1.5

223.0 $ 55.9 $ 2,027.8
1,484.5
4.1
644.2
—
543.3
15.3
333.4
—
357.5 $ 75.3 $ 5,033.2
258.9
25.4
394.8 $ 100.7 $ 5,292.1

37.3

Year Ended December 31, 2018

Foreign

Consumer
Money
Transfers

Exchange
and Payment

Services

Consumer

Other
Bill Payments (b) Services

Total

Regions:

North America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,632.3 $
Europe and Russia/CIS . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East, Africa, and South Asia . . . . . . . . . . . . . . .
Latin America and the Caribbean . . . . . . . . . . . . . . . . .
East Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . .

1,399.5
654.4
393.2
304.6

Revenues from contracts with customers . . . . . . . . . . . . $ 4,384.0 $

Other revenues (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69.6

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,453.6 $

97.6 $

130.0
1.5
3.1
69.9
302.1 $
84.7
386.8 $

3.1
0.3
152.7
1.5

463.9 $ 57.4 $ 2,251.2
1,536.5
3.9
656.2
—
562.7
13.7
376.0
—
621.5 $ 75.0 $ 5,382.6
207.3
652.3 $ 97.2 $ 5,589.9

22.2

30.8

(a)

Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money
transfer and money order services, and other sources.

(b) On February 28, 2019, the Company entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. to sell its United States
electronic bill payments business known as “Speedpay,” and closed the transaction on May 9, 2019. Included within North America revenues are
Speedpay revenues of $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively.

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4. Restructuring-Related Expenses

On August 1, 2019, the Company’s Board of Directors approved a plan to change the Company’s operating model
and improve its business processes and cost structure by reorganizing the Company’s senior management, including those
managers reporting to the Chief Executive Officer (“CEO”), reducing its headcount, and consolidating various facilities.
While certain of the expenses may be identifiable to the Company’s segments, primarily to the Company’s Consumer-to-
Consumer segment, the expenses are not included in the measurement of segment operating income provided to the Chief
Operating Decision Maker (“CODM”) for purposes of performance assessment and resource allocation. These expenses
are therefore excluded from the Company’s segment operating income results. These expenses are specific to this initiative;
however, the types of expenses related to this initiative are similar to expenses that the Company has previously incurred
and can reasonably be expected to incur in the future. As of December 31, 2020, all expenses associated with this plan
have been incurred and substantially all have been and will continue to be paid in cash.

The following table summarizes the activity for the years ended December 31, 2020 and 2019 for expenses related to
the restructuring accruals, which are included in Accounts payable and accrued liabilities in the Company’s Consolidated
Balance Sheets as of December 31, 2020 and 2019, and the total expenses incurred since the inception of the restructuring
plan (in millions):

Severance and Facility Relocations

Related
Employee
Benefits

and Closures,
Consulting,
and Other

Balance, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Expenses (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash benefits/(charges) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Expenses (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash benefits/(charges) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

98.0
(28.6)
1.8
71.2 $
11.8
(58.7)
0.6
24.9 $

— $

17.5
(9.6)
(5.8)
2.1 $
25.0
(24.0)
(1.8)
1.3 $

Total

—
115.5
(38.2)
(4.0)
73.3
36.8
(82.7)
(1.2)
26.2

Total expenses incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

109.8 $

42.5 $

152.3

(a) Non-cash benefits/(charges) include non-cash write-offs and accelerated depreciation of ROU assets and leasehold improvements and a non-cash
benefit for adjustments to stock compensation for awards forfeited by employees. These amounts have been removed from the liability balance in
the table above as they do not impact the restructuring accruals.

The following table presents restructuring-related expenses as reflected in the Consolidated Statements of Income (in

millions):

Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses, pre-tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$
$

4.5
32.3
36.8
31.5

$
$

39.8
75.7
115.5
90.0

Year Ended December 31,
2019

2020

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5. Divestitures, Acquisitions, and Goodwill

Divestitures of Businesses

On February 28, 2019, the Company entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc.
(together, “ACI”) to sell its United States electronic bill payments business known as Speedpay, which had been included
as a component of Other in the Company’s segment reporting. The Company received approximately $750 million and
recorded a pre-tax gain on the sale of approximately $523 million, which is included in Gain on divestitures of businesses
in the accompanying Consolidated Statements of Income, in the all-cash transaction that closed on May 9, 2019. Speedpay
revenues included in the Company’s results were $125.4 million and $352.0 million for the years ended December 31,
2019 and 2018, respectively. Speedpay direct operating expenses were $98.2 million and $251.2 million for the years
ended December 31, 2019 and 2018, respectively.

On May 6, 2019, the Company completed the sale of Paymap Inc. (“Paymap”), which provides electronic mortgage
bill payment services, for contingent consideration and immaterial cash proceeds received at closing. The Company
recorded an immaterial pre-tax gain related to this sale during 2019.

In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial pre-tax
net gain on the sales. The proceeds from these sales have been included in Cash flows from investing activities within the
Company’s Consolidated Statements of Cash Flows for the year ended December 31, 2020.

Investment in Saudi Digital Payments Company

On November 21, 2020, the Company entered into an agreement to acquire an ownership interest in Saudi Digital
Payments Company (“stc pay”), a subsidiary of Saudi Telecom Company and one of the Company’s Consumer-to-
Consumer digital white label partners. Under the terms of the agreement, the transaction is intended to occur in two
tranches. In the first tranche, the Company agreed to invest approximately $133 million for a 10% investment in stc pay,
and, in the second tranche, the Company agreed to invest an additional approximately $67 million for an additional 5%
investment in stc pay. The first tranche is expected to close in the first quarter of 2021 and the closing of the second tranche
is contingent upon stc pay satisfying certain conditions. In conjunction with the transaction, the Company and stc pay have
also agreed to extend and expand the terms of their commercial agreement.

The Company expects to measure this investment at cost, less any impairment, adjusted for any changes resulting

from observable price changes in orderly transactions for identical or similar investments in stc pay.

Goodwill

The following table presents changes to goodwill for the years ended December 31, 2020 and 2019 (in millions):

Consumer-to-

Consumer

Business
Solutions

January 1, 2019 goodwill, net . . . . . . . . . . . . . . . . . . . . . . . $
Divestitures (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2019 goodwill, net . . . . . . . . . . . . . . . . . . . $

Additions . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2020 goodwill, net . . . . . . . . . . . . . . . . . . . $

1,980.7 $
—
1,980.7 $
—
1,980.7 $

532.0 $
—
532.0 $
—
532.0 $

Other

Total

212.3 $ 2,725.0
(158.4)
(158.4)
53.9 $ 2,566.6
—
53.9 $ 2,566.6

—

(a) Related to the Speedpay and Paymap divestitures, as described above.

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The following table presents accumulated impairment losses as of December 31, 2020, 2019, and 2018 (in millions):

As of December 31,
2019

2018

2020

Goodwill, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,030.6 $ 3,030.6 $ 3,189.0
(464.0)
Accumulated impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,566.6 $ 2,566.6 $ 2,725.0

(464.0)

The Company did not record any goodwill impairments during the years ended December 31, 2020, 2019, and 2018.

6. Commitments and Contingencies

Letters of Credit and Bank Guarantees

The Company had approximately $390 million in outstanding letters of credit and bank guarantees as of
December 31, 2020 primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent
agreements. The significant majority of the Company’s letters of credit and bank guarantees have a one-year renewal
option, and the Company expects to renew prior to expiration in most circumstances.

Litigation and Related Contingencies

The Company is subject to certain claims and litigation that could result in losses, including damages, fines and/or
civil penalties, which could be significant, and in some cases, criminal charges. The Company regularly evaluates the
status of legal matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is
appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each legal matter to
assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an
estimate of possible loss or range of loss can be made. Unless otherwise specified below, the Company believes that there
is at least a reasonable possibility that a loss or additional loss may have been incurred for each of the matters described
below.

For those matters that the Company believes there is at least a reasonable possibility that a loss or additional loss may
have been incurred and can reasonably estimate the loss or potential loss, the reasonably possible potential litigation losses
in excess of the Company’s recorded liability for probable and estimable losses was approximately $30 million as of
December 31, 2020. For the remaining matters, management is unable to provide a meaningful estimate of the possible
loss or range of loss because, among other reasons: (i) the proceedings are in preliminary stages; (ii) specific damages
have not been sought; (iii) damage claims are unsupported and/or unreasonable; (iv) there is uncertainty as to the outcome
of pending appeals or motions; (v) there are significant factual issues to be resolved; or (vi) novel legal issues or unsettled
legal theories are being asserted.

The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult
to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss
and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly,
actual losses may be in excess of the established liability or the range of reasonably possible loss.

Shareholder Derivative Action

On January 16, 2020, Stanley Lieblein filed a shareholder derivative complaint in the Court of Chancery of the State
of Delaware naming the Company’s President and Chief Executive Officer, certain current and former directors, and a
former executive officer as individual defendants and the Company as a nominal defendant (the “Delaware Complaint”).
Mr. Lieblein had previously filed a shareholder derivative action asserting related claims in the United States District Court

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for the District of Colorado, which was subsequently consolidated with multiple pending related derivative actions.
Following the filing of multiple amended complaints, the United States Court of Appeals for the Tenth Circuit affirmed
dismissal of the consolidated derivative action on April 16, 2019 on the ground that the plaintiffs did not have standing to
proceed on behalf of the Company without making a demand on the Company’s Board of Directors. The consolidated
derivative action is described in further detail in the Company’s prior disclosures.

On August 1, 2019, Mr. Lieblein made a written demand on the Company’s Board of Directors to investigate and
address alleged misconduct related to the Company’s anti-fraud and anti-money laundering (“AML”) compliance
programs, including certain alleged misconduct at issue in the consolidated derivative action. The Company’s Board of
Directors formed a special committee to evaluate Mr. Lieblein’s demand together with a related shareholder demand (the
“Demand Letters”), and the special committee’s investigation was still ongoing at the time Mr. Lieblein filed the Delaware
Complaint. Mr. Lieblein alleges that he filed the Delaware Complaint prior to the completion of the special committee’s
investigation because of concerns regarding the statute of limitations on some of the claims asserted. Mr. Lieblein agreed
to stay the action until December 31, 2020, pending completion of the special committee’s investigation. Within 60 days
after December 31, 2020, Mr. Lieblein is required either to specify whether the Delaware Complaint will serve as the
operative complaint in the action or file an amended complaint.

The Delaware Complaint filed by Mr. Lieblein on January 16, 2020 includes allegations that the director and officer
defendants declined to implement effective anti-fraud and AML compliance systems after receiving numerous red flags
indicating prolonged willful illegality, condoned executive officers’ obstruction of efforts by various regulators to impose
an effective compliance system on the Company, approved executive compensation packages for management that were
not aligned with development of effective anti-fraud and AML compliance programs, allowed management to fail to timely
report known or likely impropriety by Company employees or agents to regulatory authorities, failed to require
management to adopt a risk assessment for all very high risk areas, refused to remedy the board’s oversight of executive
officers, and, in effect, refused Mr. Lieblein’s shareholder demand and related request for tolling agreements.

It also includes allegations that the officer defendants declined to ensure that the Company implemented effective
anti-fraud and AML compliance programs after receiving red flags that those programs were inadequate, allowed
Company agents to willfully ignore anti-fraud and AML recording and reporting requirements for a prolonged period,
opposed efforts by various regulators to implement effective anti-fraud and AML complaint programs, caused the
Company to fail to comply with its obligations under settlements with regulators, and knowingly exposed the Company to
criminal and civil sanctions.

The special committee completed its investigation in early December 2020 and, on the basis of its findings,
recommended that the Company’s Board of Directors reject the Demand Letters and direct the Company to oppose any
effort to assert claims based on or related to the Demand Letters on behalf of the Company, that no action on behalf of the
Company should be brought or pursued against any of the current or former officers or directors of the Company based on
the Demand Letters, and that none of the corporate governance reforms raised in the Demand Letters is necessary or
appropriate. On December 16, 2020, the Board of Directors resolved to adopt the recommendations of the special
committee. The Board of Directors further resolved, among other things, that none of the asserted claims has factual or
legal merit. The Company thereafter informed Mr. Lieblein and the other shareholders who sent the Demand Letters that
their demands have been rejected. On February 12, 2021, one of the shareholders who sent a Demand Letter sent the
Company a request to inspect books and records related to the consideration of the Demand Letters pursuant to Section
220 of the Delaware General Corporation Law.

The Company intends to oppose any effort by Mr. Lieblein to continue his action. The Company believes the action
is without merit. The Company will likewise oppose any future action by the other shareholders who sent the Demand
Letters.

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Other Matters

In October 2015, Consumidores Financieros Asociación Civil para su Defensa, an Argentinian consumer association,
filed a purported class action lawsuit in Argentina’s National Commercial Court No. 19 against the Company’s subsidiary
Western Union Financial Services Argentina S.R.L. (“WUFSA”). The lawsuit alleges, among other things, that WUFSA’s
fees for money transfers sent from Argentina are excessive and that WUFSA does not provide consumers with adequate
information about foreign exchange rates. The plaintiff is seeking, among other things, an order requiring WUFSA to
reimburse consumers for the fees they paid and the foreign exchange revenue associated with money transfers sent from
Argentina, plus punitive damages. The complaint does not specify a monetary value of the claim or a time period. In
November 2015, the Court declared the complaint formally admissible as a class action. The notice of claim was served
on WUFSA in May 2016, and in June 2016 WUFSA filed a response to the claim and moved to dismiss it on statute of
limitations and standing grounds. In April 2017, the Court deferred ruling on the motion until later in the proceedings. The
process for notifying potential class members has been completed and the case is currently in the evidentiary stage. The
case will be stayed until: (i) the Attorney-General instructs the Prosecutor to continue to litigate the claims on behalf of
the plaintiff (during the time the registration of Consumidores Financieros before the Secretary of Commerce remains
suspended); or (ii) the parties report to the Court that the plaintiff recovered its legal capacity. Due to the stage of this
matter, the Company is unable to predict the outcome or the possible loss or range of loss, if any, associated with this
matter. WUFSA intends to defend itself vigorously.

In addition to the principal matters described above, the Company is a party to a variety of other legal matters that
arise in the normal course of the Company’s business. While the results of these other legal matters cannot be predicted
with certainty, management believes that the final outcome of these matters will not have a material adverse effect either
individually or in the aggregate on the Company’s financial condition, results of operations, or cash flows.

7. Related Party Transactions

The Company has ownership interests in certain of its agents accounted for under the equity method of accounting.
The Company pays these agents commissions for money transfer and other services provided on the Company’s behalf.
Commission expense recognized for these agents for the years ended December 31, 2020, 2019, and 2018 totaled $54.6
million, $57.1 million, and $57.6 million, respectively.

8. Settlement Assets and Obligations

2
0
2
0
F
O
R
M
1
0
-
K

100

THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Settlement assets and obligations consisted of the following (in millions):

December 31, 2020

Settlement assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables from agents, Business Solutions customers, and others . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables from agents, Business Solutions customers, and others, net . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total settlement assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement obligations:

Money transfer, money order, and payment service payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables to agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total settlement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

695.7
1,188.3
(53.2)
1,135.1
1,990.6
3,821.4

2,902.9
918.5
3,821.4

Settlement assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables from agents, Business Solutions customers, and others . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total settlement assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement obligations:

368.2
1,230.1
1,698.4
3,296.7

2,571.5
725.2
3,296.7

December 31, 2019

Allowance for Credit Losses

On January 1, 2020, the Company adopted a new accounting standard related to the estimation of the allowance for
credit losses, as discussed in Note 2. However, due to the short-term nature of the Company’s receivables and the
Company’s historical and expected collections practice, the adoption did not have a material impact on the Company’s
financial position or results of operations.

Receivables from agents and others primarily represent funds collected by such agents, but in transit to the Company,
and were $1,081.2 million as of December 31, 2020. Cash received by Western Union agents generally becomes available
to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base,
thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations
of its agents’ financial condition and credit worthiness.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business
Solutions segment. Business Solutions receivables totaled $53.9 million as of December 31, 2020. Receivables occur when
funds have been paid out to a beneficiary but not yet received from the customer. Collection of these receivables ordinarily
occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company
performs credit reviews on an ongoing basis.

101

2
0
2
0
F
O
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1
0
-
K

THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company establishes and monitors an allowance for credit losses related to receivables from agents and others,
and Business Solutions customers. The Company estimates the allowance based on its historical collections experience,
adjusted for current conditions and forecasts of future economic conditions, including those related to COVID-19. Given
the short-term nature of these receivables, the Company does not expect the impact of forecasted economic conditions on
its allowance for credit losses to be significant. The Company has estimated credit losses based on information known as
of December 31, 2020.

The following table summarizes activity in the allowance for credit losses on receivables from agents and others, and

Business Solutions customers (in millions):

Agents and
Others

Business Solutions

Customers

Allowance for credit losses as of January 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . $
Current period provision for expected credit losses (a) . . . . . . . . . . . . . . . . . . . . . . .
Write-offs charged against the allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries of amounts previously written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impacts of foreign currency exchange rates and other . . . . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses as of December 31, 2020 . . . . . .. . . . . . . . . . . . . . . . . $

20.4
39.9
(11.9)
2.3
(1.4)
49.3

4.5
2.0
(3.1)
—
0.5
3.9

(a) Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these
losses are not credit-related. For the year ended December 31, 2020, the Company recognized $41.3 million of losses that were not credit-related.

Prior to the adoption of the new accounting standard discussed above, the Company recorded an allowance for
doubtful accounts when it was probable that the related receivable balance would not be collected based on its history of
collection experience, known collection issues, such as agent suspensions and bankruptcies, consumer chargebacks and
insufficient funds, and other matters the Company identified in its routine collection monitoring. The allowance for
doubtful accounts was $42.2 million as of December 31, 2019 and is recorded in the same balance sheet captions as the
related receivable. During the years ended December 31, 2019 and 2018, the provision for doubtful accounts (bad debt
expense) reflected in the Consolidated Statements of Income was $47.1 million and $43.9 million, respectively.

In addition, from time to time, the Company has made advances to its agents. The Company generally owes settlement
funds payable to these agents that offset these advances. These amounts advanced to agents are included within Other
assets in the accompanying Consolidated Balance Sheets. As of December 31, 2020, amounts advanced to agents were
$135.9 million, and the related allowance for credit losses was immaterial.

Investment Securities

Investment securities included in Settlement assets in the Company’s Consolidated Balance Sheets consist primarily
of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes.
Variable-rate demand note securities can be put (sold at par), typically on a daily basis with settlement periods ranging
from the same day to one week but have varying maturities through 2057. These securities may be used by the Company
for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to
changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and
such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory
requirements.

The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union
regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through
investment diversification.

102

2
0
2
0
F
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0
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THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of
accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below
the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related
factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative
earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment
of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of
accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired
security or it is more likely than not that the Company will be required to sell the security before recovering its amortized
cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the
Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and
the amortized cost basis. As of and for the year ended December 31, 2020, the Company’s allowance for credit losses and
provision for credit losses on its available-for-sale securities were immaterial. Proceeds from the sale and maturity of
available-for-sale securities during the years ended December 31, 2020, 2019, and 2018 were $6.2 billion, $5.4 billion,
and $7.7 billion.

The components of investment securities are as follows (in millions):

December 31, 2020
Settlement assets:

Cash and cash equivalents:

Amortized
Cost

Fair
Value

Gross

Gross
Unrealized Unrealized Unrealized
Losses

Gains/(Losses)

Gains

Net

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

13.1 $

— $

—

Available-for-sale securities:

State and municipal debt securities (a) . . . . . . . . . . . . . . .
State and municipal variable-rate demand notes . . . . . .
Corporate and other debt securities . . . . . . . . . . . . . . . . .
United States government agency mortgage-backed
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total available-for-sale securities . . . . . . . . . . . . . . . . . . . .
Total investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,931.2 $ 2,003.7 $

1,234.1
562.1
71.6

1,303.9
562.1
72.8

50.3
1,918.1

51.8
1,990.6

69.8
—
1.2

—
—
—

1.5
72.5
72.5 $

—
—
— $

69.8
—
1.2

1.5
72.5
72.5

December 31, 2019
Settlement assets:

Cash and cash equivalents:

Amortized
Cost

Fair
Value

Gross

Gross
Unrealized Unrealized Unrealized
Losses

Gains/(Losses)

Gains

Net

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

24.6 $

— $

—

Available-for-sale securities:

1,227.4
276.1

State and municipal debt securities (a) . . . . . . . . . . . . . . .
State and municipal variable-rate demand notes . . . . . .
United States government agency mortgage-backed
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . .
Other United States government agency debt
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States Treasury securities . . . . . . . . . . . . . . . . . .
Total available-for-sale securities . . . . . . . . . . . . . . . . . . . .
Total investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,691.4 $ 1,723.0 $

34.9
9.8
1,666.8

34.9
10.0
1,698.4

1,257.8
276.1

67.2
52.4

66.3
52.3

(a) The majority of these securities are fixed-rate instruments.

103

31.0
—

0.9
0.1

(0.6)
—

—
—

—
0.2
32.2
32.2 $

—
—
(0.6)
(0.6) $

30.4
—

0.9
0.1

—
0.2
31.6
31.6

2
0
2
0
F
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0
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K

THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There were no investments with a single issuer or individual securities representing greater than 10% of total

investment securities as of December 31, 2020 and 2019.

The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of

December 31, 2020 (in millions):

Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 1 year through 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years through 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair Value

176.3
684.4
452.5
677.4
1,990.6

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the
obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable-rate
demand notes. Variable-rate demand notes, having a fair value of $15.0 million, $0.9 million, and $546.2 million are
included in the “Due after 1 year through 5 years,” “Due after 5 years through 10 years,” and “Due after 10 years”
categories, respectively, in the table above.

9. Fair Value Measurements

Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for
an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date. Refer to Note 2 for additional information
on how the Company measures fair value.

The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring

basis, by balance sheet line item (in millions):

December 31, 2020
Assets:

Settlement assets:

Fair Value Measurement Using

Total

Level 1

Level 2

Fair Value

Measured at fair value through net income:

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.1

—

13.1

Measured at fair value through other comprehensive income (net of
expected credit losses recorded through net income):

State and municipal debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and municipal variable-rate demand notes . . . . . . . . . . . . . . . . .
Corporate and other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States government agency mortgage-backed securities . . . . .

Other assets:

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:

Other liabilities:

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$
$

—
—
—
—

1,303.9
562.1
72.8
51.8

—
13.1

453.3
$ 2,443.9

—
—

$
$

430.3
430.3

1,303.9
562.1
72.8
51.8

453.3
2,457.0

430.3
430.3

$
$

104

2
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2
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K

THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value Measurement Using

Total

Level 1

Level 2

Fair Value

December 31, 2019
Assets:

Settlement assets:

Measured at fair value through net income:

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.6

—

24.6

Measured at fair value through other comprehensive income:

State and municipal debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and municipal variable-rate demand notes . . . . . . . . . . . . . . . . .
United States government agency mortgage-backed securities . . . . .
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other United States government agency debt securities . . . . . . . . . . .
United States Treasury securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets:

Other liabilities:

$
$

—
—
—
—
—
10.0

—
34.6

—
—

1,257.8
276.1
67.2
52.4
34.9
—

204.5
1,892.9

159.5
159.5

1,257.8
276.1
67.2
52.4
34.9
10.0

204.5
1,927.5

159.5
159.5

$
$

There were no material, non-recurring fair value adjustments or transfers between Level 1 and Level 2 measurements

during the years ended December 31, 2020 and 2019.

Other Fair Value Measurements

The carrying amounts for many of the Company’s financial instruments, including certain cash and cash equivalents,
settlement cash and cash equivalents, and settlement receivables and obligations approximate fair value due to their short
maturities. The Company’s borrowings are classified as Level 2 within the valuation hierarchy, and the aggregate fair
value of these borrowings was based on quotes from multiple banks. Fixed-rate notes are carried in the Company’s
Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par. As of
December 31, 2020, the carrying value and fair value of the Company’s borrowings were $3,067.2 million and $3,348.0
million, respectively (see Note 16). As of December 31, 2019, the carrying value and fair value of the Company’s
borrowings were $3,229.3 million and $3,372.2 million, respectively.

105

2
0
2
0
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THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Other Assets and Other Liabilities

The following table summarizes the components of Other assets and Other liabilities (in millions):

December 31,

2020

2019

Other assets:

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
ROU assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts advanced to agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension costs (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

453.3 $
189.1
135.9
81.0
39.9
34.5
91.0

Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,024.7 $
Other liabilities:

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued agent contract costs (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension obligations (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

430.3 $
234.9
77.1
—
60.1

802.4 $

204.5
199.7
96.4
102.4
—
33.0
126.9
762.9

159.5
242.3
16.0
11.4
69.1
498.3

(a) Property, equipment, and land of $49.3 million, primarily related to the Company’s former headquarters, was included in Other as of December 31,
2019 and classified as held for sale. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial
gain on the sales.

(b) Represents accrued and unpaid contract costs for new and renewed agent contracts. The majority of the balance as of December 31, 2020 was paid

in January 2021.

11. Income Taxes

The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions):

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total pre-tax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2020

Year Ended December 31,
2019
434.7 $
886.7

855.1
855.1 $ 1,321.4 $

2018
(11.4)
1,002.8
991.4

— $

For the years ended December 31, 2020, 2019, and 2018, 100%, 67% and 101% of the Company’s pre-tax income
was derived from foreign sources, respectively. For the year ended December 31, 2019, the Company’s domestic pre-tax
income increased due to the net gain on the sales of the Speedpay and Paymap businesses, as discussed in Note 5.

2
0
2
0
F
O
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1
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K

106

THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The provision for income taxes was as follows (in millions):

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2020

Year Ended December 31,
2019
153.7 $
22.9
86.5
263.1 $

50.1 $
1.1
59.6
110.8 $

2018

62.9
0.6
76.0
139.5

In 2020, the Company’s federal, state, and foreign tax provisions decreased due to lower pre-tax income and discrete
tax benefits in the current period. In 2019, the Company’s federal and state and local tax provisions increased due to the
net gain on the sales of the Speedpay and Paymap businesses.

The Company’s effective tax rates differed from statutory rates as follows:

Federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal income tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign rate differential, net of United States tax paid on foreign earnings (5.6%,
2.3%, and 4.9%, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Act impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Base erosion anti-abuse tax (BEAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,
2019
21.0 %
1.4 %

2020
21.0 %
0.5 %

2018
21.0 %
0.4 %

(8.3)%
— %
— %
— %
(0.7)%
0.2 %
0.2 %
12.9 %

(5.5) %
2.4 %
— %
— %
(0.5) %
0.1 %
1.0 %
19.9 %

(8.2)%
— %
2.3 %
3.0 %
(2.2)%
— %
(2.2)%
14.1 %

The decrease in the Company’s effective tax rate for the year ended December 31, 2020 compared to the prior year is
primarily due to a reduction in domestic pre-tax income, prior period settlements in certain geographies, and discrete tax
benefits in the current period. The increase in the Company’s effective tax rate for the year ended December 31, 2019
compared to the prior year is primarily due to an increase in 2019 domestic pre-tax income due to the net gain on the sales
of the Speedpay and Paymap businesses and certain discrete items recognized in the prior year, partially offset by
adjustments to the Company's accounting for the implementation of the Tax Act, as finalized in the fourth quarter of 2018.

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The Company’s provision for income taxes consisted of the following components (in millions):

Year Ended December 31,
2019

2018

2020

Current:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35.7 $
1.9
59.3
96.9

169.4 $
18.1
100.1
287.6

69.2
—
85.4
154.6

14.4
(0.8)
0.3
13.9
110.8 $

(15.7)
4.8
(13.6)
(24.5)
263.1 $

(6.3)
0.6
(9.4)
(15.1)
139.5

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between
the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal components of
deferred tax items (in millions):

December 31,

2020

2019

Deferred tax assets related to:

Reserves, accrued expenses and employee-related items . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax attribute carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities related to:

Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liability (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

22.9 $
23.8
30.2
—
15.1
8.6
(18.6)
82.0

218.0
15.8
7.8
14.2
255.8
173.8 $

38.3
28.1
31.7
4.0
13.6
5.3
(19.1)
101.9

214.8
18.7
—
6.9
240.4
138.5

(a) As of December 31, 2020 and 2019, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax jurisdictions of

$15.1 million and $13.6 million, respectively, are reflected in Other assets in the Consolidated Balance Sheets.

The valuation allowances are primarily the result of uncertainties regarding the Company’s ability to recognize tax
benefits associated with certain United States foreign tax credit carryforwards and certain foreign and state net operating
losses. Such uncertainties include generating sufficient United States foreign tax credit limitation related to passive income
and generating sufficient income. Changes in circumstances, or the identification and implementation of relevant tax
planning strategies, could make it foreseeable that the Company will recover these deferred tax assets in the future, which
could lead to a reversal of these valuation allowances and a reduction in income tax expense.

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Outside tax basis differences of approximately $550 million as of December 31, 2020 primarily relate to remaining
undistributed foreign earnings not subject to the tax on certain previously undistributed earnings of foreign subsidiaries
pursuant to the Tax Act, discussed further below, and additional outside basis difference inherent in certain entities. To
the extent such outside basis differences are attributable to undistributed earnings not already subject to United States tax,
such undistributed earnings continue to be indefinitely reinvested in foreign operations. Upon the future realization of the
Company’s basis difference, the Company could be subject to United States income taxes, state income taxes and possible
withholding taxes payable to various foreign countries. However, determination of this amount of unrecognized deferred
tax liability is not practicable because of complexities associated with its hypothetical calculation.

In 2017, the Tax Act was enacted into United States law, and a domestic one-time tax was imposed under the Tax Act
on the Company’s previously undistributed earnings of foreign subsidiaries, with certain exceptions. This tax charge,
combined with the Company’s 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 $604 million remained as of December 31,
2020. The Company has elected to pay this liability in periodic installments through 2025. For each of the years ended
December 31, 2020, 2019, and 2018, the Company made installment payments of $64.0 million.

Uncertain Tax Positions

The Company has established contingency reserves for a variety of material, known tax exposures. As of
December 31, 2020, the total amount of tax contingency reserves was $310.5 million, including accrued interest and
penalties, net of related items. The Company’s tax reserves reflect management’s judgment as to the resolution of the
issues involved if subject to judicial review or other settlement. While the Company believes its 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 its related reserve. With respect to these reserves, the Company’s
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. Such resolution
could materially increase or decrease income tax expense in the Company’s consolidated financial statements in future
periods and could impact operating cash flows.

Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the
amounts otherwise recognized in the Company’s consolidated financial statements and are reflected in Income taxes
payable in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax
benefits, excluding interest and penalties and before offset of related items, is as follows (in millions):

Balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Increase related to current period tax positions (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase related to prior period tax positions(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease related to prior period tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease due to lapse of applicable statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease due to effects of foreign currency exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2020
293.9 $
2.8
49.7
(1.9)
(3.2)
(0.6)
340.7 $

2019
295.0
5.2
0.8
(1.6)
(5.3)
(0.2)
293.9

(a)
(b)

Includes recurring accruals for issues which initially arose in previous periods.
Includes gross accrual for tax positions associated with current audits.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $329.2

million and $283.4 million as of December 31, 2020 and 2019, respectively, excluding interest and penalties.

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The Company recognizes interest and penalties with respect to unrecognized tax benefits in Provision for income
taxes in its Consolidated Statements of Income and records the associated liability in Income taxes payable in its
Consolidated Balance Sheets. The Company recognized $1.9 million, $6.0 million, and $(0.7) million in interest and
penalties during the years ended December 31, 2020, 2019, and 2018, respectively. The Company has accrued $28.6
million and $27.1 million for the payment of interest and penalties as of December 31, 2020 and 2019, respectively.

The unrecognized tax benefits accrual as of December 31, 2020 consists of federal, state and foreign tax matters. It is
reasonably possible that the Company’s total unrecognized tax benefits will decrease by approximately $3 million during
the next 12 months in connection with various matters which may be resolved.

The Company and its subsidiaries file tax returns for the United States, for multiple states and localities, and for
various non-United States jurisdictions, and the Company has identified the United States as its major tax jurisdiction, as
the income tax imposed by any one foreign country is not material to the Company. The Company’s United States federal
income tax returns since 2017 are eligible to be examined. The Internal Revenue Service (“IRS”) commenced an
examination of the Company’s U.S. consolidated income tax returns for 2017 and 2018 in the current year. The IRS
anticipates completion of the examination phase in 2022.

The United States Internal Revenue Service (“IRS”) completed its examination of the 2003 and 2004 United States
federal consolidated income tax returns of First Data Corporation, from which the Company was spun out in
September 2006, and issued a Notice of Deficiency in December 2008. In December 2011, the Company reached an
agreement with the IRS resolving substantially all of the issues related to the Company’s restructuring of its international
operations in 2003 (“IRS Agreement”). The Company has made payments related to the IRS Agreement in years prior to
2018, with a substantial majority of these payments in the year ended December 31, 2012. During the year ended
December 31, 2018, the Company made cash payments under the IRS Agreement of approximately $120 million,
including accrued interest and net of related tax benefits.

12. Employee Benefit Plans

Defined Contribution Plans

The Company administers several defined contribution plans in various countries globally, including The Western
Union Company Incentive Savings Plan (the “401(k)”), which covers eligible employees on the United States payroll.
Such plans have vesting and employer contribution provisions that vary by country. In addition, the Company sponsors a
non-qualified deferred compensation plan for a select group of highly compensated United States employees. The plan
provides tax-deferred contributions and the restoration of Company matching contributions otherwise limited under the
401(k). The aggregate amount charged to expense in connection with all of the above plans was $18.4 million for the year
ended December 31, 2020 and $20.0 million for both the years ended December 31, 2019 and 2018.

Defined Benefit Plan

The Company has a frozen defined benefit pension plan (the “Plan”), for which the funded status is reported in the
Consolidated Balance Sheets and measured as the difference between the fair value of the plan assets and the projected
benefit obligation. Plan assets, which are managed in a third-party trust, primarily consist of fixed income and equity
investments, and had a total fair value of $280.6 million and $237.1 million as of December 31, 2020 and 2019,
respectively. Given the overfunded status of the Plan, the Company is in the process of moving towards a full allocation
of fixed income investments to more closely match the Plan’s assets to its liabilities. The substantial majority of plan assets
are classified as either Level 1 or Level 2 within the valuation hierarchy or are valued at net asset value, which is not
quoted on an active market; however, the unit price is based on underlying investments which are traded on an active
market. The benefit obligation associated with the Plan will vary over time only as a result of changes in market interest
rates, the life expectancy of the plan participants, and benefit payments, since the accrual of benefits was suspended when

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the Plan was frozen in 1988. The benefit obligation was $240.7 million and $248.5 million, and the discount rate
assumption used in the measurement of this obligation was 1.66% and 2.66% for the years ended December 31, 2020 and
2019, respectively. As of December 31, 2020, the fair value of the plan assets exceeded the projected benefit obligation,
which resulted in prepaid pension costs of $39.9 million reported in Other assets. The Plan’s overfunded status as of
December 31, 2020 is primarily due to favorable investment returns relative to the expected return on plan assets during
the year then ended. As of December 31, 2019, the projected benefit obligation exceeded the fair value of the plan assets,
which resulted in an unfunded pension obligation of $11.4 million reported in Other liabilities.

The net periodic benefit cost associated with the Plan was $4.4 million, $4.1 million, and $3.3 million for the years
ended December 31, 2020, 2019 and 2018, respectively. The expected long-term return on plan assets assumption is 2.00%
for 2021. The Company made no contributions to the Plan for both the years ended December 31, 2020 and 2019. No
funding to the Plan will be required for 2021. The estimated undiscounted future benefit payments are expected to be $25.9
million in 2021, $24.2 million in 2022, $22.5 million in 2023, $20.9 million in 2024, $19.3 million in 2025, and $73.9
million in 2026 through 2030.

13. Leases

The Company leases real properties for use as administrative and sales offices, in addition to transportation, office,
and other equipment. The Company determines if a contract contains a lease arrangement at the inception of the contract.
For leases in which the Company is the lessee, leases are classified as either finance or operating, with classification
affecting the pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of
lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate
cannot be readily determined, an incremental borrowing rate is used to determine the future lease payments. Lease and
variable non-lease components within the Company’s lease agreements are accounted for separately. The Company has
no material leases in which the Company is the lessor.

The Company’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-
line basis. As of December 31, 2020 and 2019, total ROU assets were $189.1 million and $199.7 million, respectively,
and operating lease liabilities were $234.9 million and $242.3 million, respectively. The ROU assets and operating lease
liabilities are included in Other assets and Other liabilities, respectively, in the Company’s Consolidated Balance Sheets.
Cash paid for operating lease liabilities is included in Cash flows from operating activities in the Company’s Consolidated
Statements of Cash Flows. Operating lease costs, which are included in Total expenses in the Company’s Consolidated
Statements of Income, were $59.8 million and $56.7 million for the years ended December 31, 2020 and 2019,
respectively. Short-term and variable lease costs were not material for the years ended December 31, 2020 and 2019.

The Company’s leases have remaining terms from less than 1 year to 10 years. Certain of these leases contain
escalation provisions and/or renewal options, giving the Company the right to extend the lease by up to 10 years. However,
a significant majority of these options are not reflected in the calculation of the ROU asset and operating lease liability
due to uncertainty surrounding the likelihood of renewal.

The following table summarizes the weighted-average lease terms and discount rates for operating lease liabilities:

Weighted-average remaining lease term (in years) . . . . . . . . . . . . .
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.2
5.6 %

7.6
6.5 %

December 31, 2020

December 31, 2019

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The following table represents maturities of operating lease liabilities as of December 31, 2020 (in millions):

Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 1 year through 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 2 years through 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 3 years through 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 4 years through 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51.9
44.5
37.0
32.6
27.7
90.3
284.0
(49.1)
234.9

For the year ended December 31, 2018, total rent expense, net of sublease income, was $59.5 million as recorded

under accounting standards in effect in that period.

14. Stockholders’ Equity/(Deficit)

Accumulated Other Comprehensive Loss

AOCL includes all changes in equity during a period that have not yet been recognized in income, except those
resulting from transactions with shareholders. The components include unrealized gains and losses on investment
securities, unrealized gains and losses from cash flow hedging activities, foreign currency translation adjustments, and
defined benefit pension plan adjustments.

Unrealized gains and losses on investment securities that are available for sale, primarily state and municipal debt
securities, are included in AOCL until the investment is either sold or experiences a credit loss. See Note 8 for further
discussion.

The effective portion of the change in fair value of derivatives that qualifies as a cash flow hedge is recorded in AOCL.
Generally, amounts are recognized in income when the related forecasted transaction affects earnings. See Note 15 for
further discussion.

While the United States dollar is the functional currency for substantially all of the Company’s businesses, the assets
and liabilities of foreign subsidiaries whose functional currency is not the United States dollar are translated using the
appropriate exchange rate as of the end of the year. Foreign currency translation adjustments represent unrealized gains
and losses on assets and liabilities arising from the difference in these foreign currencies compared to the United States
dollar. These gains and losses are accumulated in other comprehensive income/(loss). When a foreign subsidiary is
substantially liquidated or sold, the cumulative translation gain or loss is removed from AOCL and recognized as a
component of the gain or loss on the liquidation or sale.

The defined benefit pension plan adjustment is recognized for the difference between estimated assumptions (e.g.,
asset returns, discount rates, mortality) and actual results. The amount in AOCL is amortized to income over the remaining
life expectancy of the plan participants. Details of the pension plan’s assets and obligations are explained further in
Note 12.

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The following table details reclassifications out of AOCL and into Net income. All amounts reclassified from AOCL
affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the
Consolidated Statements of Income.

Amounts Reclassified from AOCL to Net Income

Income for the period (in millions)
Accumulated other comprehensive loss
components:

Gains/(losses) on investment securities:

Income Statement
Location

Year Ended December 31,
2019

2020

2018

Available-for-sale securities . . . . . . . . . . . . .
Income tax benefit/(expense) . . . . . . . . . . . . .

Revenues
Provision for income taxes

0.6 $
(0.1)

(0.4)
0.1

Total reclassification adjustments related to
investment securities, net of tax . . . . . . . . . . . .
Gains/(losses) on cash flow hedges:

0.5

(0.3)

Foreign currency contracts . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . .
Income tax benefit/(expense) . . . . . . . . . . . . .

Revenues
Interest expense
Provision for income taxes

1.2
(0.6)
0.1

14.2
—
(0.1)

(14.9)
(2.1)
0.7

Total reclassification adjustments related to
cash flow hedges, net of tax . . . . . . . . . . . . . . .
Amortization of components of defined
benefit plans:

0.7

14.1

(16.3)

Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit . . . . . . . . . . . . . . . . . . . . .

Other income, net
Provision for income taxes

(12.1)
2.7

(10.8)
2.4

(11.7)
2.6

Total reclassification adjustments related to
defined benefit plans, net of tax . . . . . . . . . . . .
Total reclassifications, net of tax . . . . . . . . . . . .

(9.4)
(8.2) $

(8.4)
6.2 $

(9.1)
(25.7)

The following tables summarize the components of AOCL, net of tax in the accompanying Consolidated Balance

Sheets (in millions):

Investment
Securities Activities

Hedging

Foreign Currency Defined Benefit
Pension Plan

Translation

Total

As of December 31, 2019 . . . . . . . . . . . . . . . . . . . $
Unrealized gains/(losses) . . . . . . . . . . . . . . . . . .
Tax benefit/(expense) . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from AOCL into
earnings, net of tax . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2020 . . . . . . . . . . . . . . . . . . . $

24.7 $
41.5
(7.4)

(3.6) $
(26.4)
0.2

(101.2) $
—
—

(128.9) $ (209.0)
58.6
(17.3)

43.5
(10.1)

(0.5)
58.3 $

(0.7)
(30.5) $

—
(101.2) $

9.4

8.2
(86.1) $ (159.5)

Investment
Securities Activities

Hedging

Foreign Currency Defined Benefit
Pension Plan

Translation

Total

As of December 31, 2018 . . . . . . . . . . . . . . . . . . . $
Unrealized gains/(losses) . . . . . . . . . . . . . . . . . .
Tax benefit/(expense) . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from AOCL into
earnings, net of tax . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2019 . . . . . . . . . . . . . . . . . . . $

(1.1) $
33.6
(7.3)

7.4 $
2.0
1.1

(101.2) $
—
—

(136.1) $ (231.0)
33.6
(5.4)

(2.0)
0.8

(0.5)
24.7 $

(14.1)
(3.6) $

—
(101.2) $

8.4

(6.2)
(128.9) $ (209.0)

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As of December 31, 2017 . . . . . . . . . . . . . . . . . . . $
Unrealized gains/(losses) . . . . . . . . . . . . . . . . . .
Tax benefit/(expense) . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from AOCL into
earnings, net of tax . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments (a) . . .
Reclassification of Tax Act effects into
Accumulated deficit (b) . . . . . . . . . . . . . . . . . . . .
As of December 31, 2018 . . . . . . . . . . . . . . . . . . . $

Hedging

Investment
Securities Activities
2.7 $
(5.9)
1.3

(40.6) $
35.6
(1.6)

Foreign Currency Defined Benefit
Pension Plan

Translation

Total

(76.9) $
—
—

(113.1) $ (227.9)
20.4
1.7

(9.3)
2.0

0.3
—

16.3
—

—
(19.5)

9.1
—

25.7
(19.5)

0.5
(1.1) $

(2.3)
7.4 $

(4.8)
(101.2) $

(24.8)

(31.4)
(136.1) $ (231.0)

(a) Beginning in the third quarter of 2018, all changes in the value of the Argentine peso on the Company’s monetary assets and liabilities are reflected
in net income, given Argentina’s status as a highly inflationary economy. Prior to the third quarter of 2018, changes in the Argentine peso exchange
rate were reflected in net income for the Company’s money transfer operations, whereas these effects were reflected in other comprehensive income
for the Company’s bill payment operations. This designation did not have a material impact on the Company’s financial position and results of
operations for the years ended December 31, 2020, 2019 and 2018.

(b) As discussed in Note 2, in the first quarter of 2018, the Company adopted an accounting pronouncement as a result of the Tax Act and reclassified

tax effects included within AOCL to Accumulated deficit in the Consolidated Balance Sheets.

Cash Dividends Paid

Cash dividends paid for the years ended December 31, 2020, 2019, and 2018 were $369.9 million, $340.8 million,
and $341.7 million, respectively. Dividends per share declared quarterly by the Company’s Board of Directors during
the years ended 2020, 2019, and 2018 were as follows:

Year
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.225 $ 0.225 $ 0.225 $ 0.225
0.20
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.19
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.20 $
0.19 $

On February 10, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.235 per common

share payable on March 31, 2021.

Share Repurchases

During the years ended December 31, 2020, 2019, and 2018, 8.5 million, 26.9 million, and 20.2 million shares,
respectively, have been repurchased for $217.4 million, $540.0 million, and $399.2 million, respectively, excluding
commissions, at an average cost of $25.45, $20.07, and $19.81, respectively. These amounts represent shares authorized
by the Board of Directors for repurchase under the publicly announced authorizations. During the first quarter 2020, the
Company temporarily paused and did not resume share repurchases under a publicly announced authorization through
December 31, 2020. However, the Company has resumed share repurchases in the first quarter of 2021. As of
December 31, 2020, $782.6 million remained available under the share repurchase authorization approved by the
Company’s Board of Directors through December 31, 2021. The amounts included in the Common stock repurchased line
in the Company’s Consolidated Statements of Cash Flows represent both shares authorized by the Board of Directors for
repurchase under publicly announced authorizations and shares withheld from employees to cover tax withholding
obligations on restricted stock units that have vested.

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15. Derivatives

The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily
the euro, and, to a lesser degree, the British pound, the Canadian dollar, and other currencies, related to forecasted revenues
and settlement assets and obligations, as well as on certain foreign currency denominated cash and other asset and liability
positions. The Company is also exposed to risk from derivative contracts, primarily from customer derivatives, arising
from its cross-currency Business Solutions payment operations. Additionally, the Company is exposed to interest rate risk
related to changes in market rates both prior to and subsequent to the issuance of debt. The Company has used derivatives
to: (i) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (ii) facilitate
cross-currency Business Solutions payments by writing derivatives to customers.

The Company executes derivatives with established financial institutions; the substantial majority of these financial
institutions have a credit rating of "A-" or higher from a major credit rating agency. Customer derivatives written by the
Company’s Business Solutions operations primarily involve small and medium size enterprises. The primary credit risk
inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a
counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception
of the contract and on an ongoing basis, while also monitoring the concentration of its contracts with any individual
counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the
agreements, but takes action when doubt arises about the counterparties’ ability to perform. These actions may include
requiring Business Solutions customers to post or increase collateral, and for all counterparties, the possible termination
of the related contracts. The Company’s hedged foreign currency exposures are in liquid currencies; consequently, there
is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.

Foreign Currency Derivatives

The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to
36 months at inception and a targeted weighted-average maturity of approximately one year, to help mitigate some of the
risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted
revenues denominated in other currencies related to its business. As of December 31, 2020, these foreign currency forward
contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These
contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the
spot rate of the affected currencies during the period of designation and thus time value is excluded from the assessment
of effectiveness.

As described in Note 2, foreign currency cash flow hedges entered into on or after January 1, 2018 exclude time value
from the assessment of effectiveness, and the initial value of the excluded components is amortized into Revenues within
the Company’s Consolidated Statements of Income. For foreign currency cash flow hedges entered into before January 1,
2018, all changes in the fair value of the excluded components were recognized immediately in Revenues.

The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a
few days to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation
and settlement. In addition, forward contracts, typically with maturities of less than one year at inception, are utilized to
offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability
positions. None of these contracts are designated as accounting hedges.

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The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of

December 31, 2020 and 2019 were as follows (in millions):

Contracts designated as hedges:

Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
British pound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swiss franc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contracts not designated as hedges:

Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
British pound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexican peso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indian rupee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Philippine peso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Russian ruble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indonesian rupiah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swedish krona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2020

428.9
131.9
71.9
58.3
41.1
36.6
29.5

533.0
153.9
105.0
81.0
71.5
68.1
39.6
35.2
31.2
29.1
26.0
151.5

Contracts designated as hedges:

Contracts not designated as hedges:

Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Canadian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
British pound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indian rupee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexican peso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australian dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazilian real . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million.

December 31, 2019

391.9
99.0
57.2
36.1
28.9
50.9

289.0
110.3
78.1
61.0
52.3
37.7
35.2
32.5
145.6

116

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Business Solutions Operations

The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small
and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations.
The Company aggregates its Business Solutions foreign currency exposures arising from customer contracts, including
the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts
with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the
broader portfolio of foreign currency positions arising from the Company’s cross-currency payments operations, which
primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the
total portfolio of positions were $311.9 million, $343.1 million, and $342.3 million for the years ended December 31,
2020, 2019, and 2018, respectively, and were included in Revenues in the Company’s Consolidated Statements of Income.
None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the
significant majority of these derivative contracts have a duration at inception of less than one year.

The aggregate equivalent United States dollar notional amount of derivative customer contracts held by the Company
in its Business Solutions operations for December 31, 2020 and 2019 was approximately $8.0 billion and $7.5 billion,
respectively. The significant majority of customer contracts are written in the following currencies: the United States
dollar, euro, and the Canadian dollar.

Interest Rate Hedging

Periodically, the Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of
its notes from fixed-rate payments to short-term, variable-rate payments in order to manage its overall exposure to interest
rate fluctuations. The Company designates these derivatives as fair value hedges. The change in fair value of the interest
rate swaps is offset by a change in the carrying value of the debt being hedged within Borrowings in the Consolidated
Balance Sheets. Interest expense in the Consolidated Statements of Income has been adjusted to include the effects of
interest accrued on the swaps.

On November 15, 2019, the Company terminated its interest rate swaps designated as fair value hedges in connection
with the repayment of $324.9 million of aggregate principal amount unsecured notes in the fourth quarter of 2019 and
received cash of $0.9 million. Therefore, as of December 31, 2020 and 2019, the Company did not have any interest rate
swaps designated as fair value hedges.

During the fourth quarter of 2020, the Company entered into two treasury locks to partially fix the treasury yield
component associated with the refinance of unsecured senior notes set to expire in 2022. The notional amounts of these
treasury locks were $100.0 million and $150.0 million and were designated as cash flow hedges at the time the agreements
were executed.

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Balance Sheet

The following table summarizes the fair value of derivatives reported in the Company’s Consolidated Balance Sheets

as of December 31, 2020 and 2019 (in millions):

Derivative Assets

Fair Value

Derivative Liabilities

Fair Value

Balance Sheet December 31, December 31, Balance Sheet December 31, December 31,

Location

2020

2019

Location

2020

2019

Derivatives designated as hedges:

Foreign currency cash flow hedges . . . . . . . Other assets $
Interest rate cash flow hedges . . . . . . . . . . . Other assets

Total derivatives designated as hedges . . .

9.1 $
—
9.1 $

21.0 Other liabilities $
— Other liabilities

21.0

24.9 $
0.1

25.0 $

Derivatives not designated as hedges:

Business Solutions operations - foreign
currency (a) . . . . . . . . . . . . . . . . . . . . . . . . . Other assets $
Foreign currency . . . . . . . . . . . . . . . . . . . . Other assets

441.4 $
2.8

182.0 Other liabilities $
1.5 Other liabilities

402.5 $
2.8

Total derivatives not designated as
hedges . . . . . . . . . . . . . . . . . . . . . . . . . .
Total derivatives . . . . . . . . . . . . . . . . . . . . . .

$
$

444.2 $
453.3 $

183.5
204.5

$
$

405.3 $
430.3 $

4.8
—
4.8

151.0
3.7

154.7
159.5

(a)

In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity.
However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate
this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts.
This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the
underlying derivatives business.

The fair values of derivative assets and liabilities associated with contracts that include netting language that the
Company believes to be enforceable have been netted in the following tables to present the Company’s net exposure with
these counterparties. The Company’s rights under these agreements generally allow for transactions to be settled on a net
basis, including upon early termination, which could occur upon the counterparty’s default, a change in control, or other
conditions.

In addition, certain of the Company’s other agreements include netting provisions, the enforceability of which may
vary from jurisdiction to jurisdiction and depending on the circumstances. Due to the uncertainty related to the
enforceability of these provisions, the derivative balances associated with these agreements are included within
"Derivatives that are not or may not be subject to master netting arrangement or similar agreement" in the following tables.
In certain circumstances, the Company may require its Business Solutions customers to maintain collateral balances which
may mitigate the risk associated with potential customer defaults.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of December 31,

2020 and 2019 (in millions):

Offsetting of Derivative Assets

December 31, 2020

Gross

Amounts of
Recognized

Assets

Gross
Amounts Offset
in the
Consolidated
Balance Sheets

Net Amounts Derivatives
Not Offset
in the

Presented
in the

Consolidated
Balance Sheets

Net Amounts

Derivatives subject to a master netting
arrangement or similar agreement . . . . $
Derivatives that are not or may not be
subject to master netting arrangement
or similar agreement . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . $

December 31, 2019

Total . . . . . . . . . . . . . . . . . . . . . . . . . . $

Offsetting of Derivative Liabilities

165.1 $

— $

165.1 $

(155.1) $

10.0

288.2
453.3

95.3 $

— $

95.3 $

(74.7) $

20.6

109.2
204.5

December 31, 2020

Gross

Amounts of
Recognized
Liabilities

Gross
Amounts Offset
in the

Net Amounts Derivatives
Not Offset
in the

Presented
in the

Consolidated
Balance Sheets

Net Amounts

Total . . . . . . . . . . . . . . . . . . . . . . . . . . $

December 31, 2019

Total . . . . . . . . . . . . . . . . . . . . . . . . . . $

356.2 $

— $

356.2 $

(155.1) $

201.1

74.1
430.3

121.8 $

— $

121.8 $

(74.7) $

47.1

37.7
159.5

119

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Income Statement

Cash Flow and Fair Value Hedges

The effective portion of the change in fair value of derivatives that qualify as cash flow hedges is recorded in AOCL
in the Company’s Consolidated Balance Sheets. Generally, amounts are recognized in income when the related forecasted
transaction affects earnings.

The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive

income from cash flow hedges for the years ended December 31, 2020, 2019, and 2018 (in millions):

Foreign currency derivatives (a) . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate derivatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(26.3)
(0.1)

2.0
—

2020

Year Ended December 31,
2019

2018

35.6
—

(a) For the years ended December 31, 2020, 2019, and 2018, gains/(losses) of $0.3 million, $1.5 million, and $0.1 million, respectively, represent
amounts excluded from the assessment of effectiveness that were recognized in other comprehensive income, for which an amortization approach
is applied.

The following table presents the location and amount of pre-tax net gains/(losses) from fair value and cash flow
hedging relationships recognized in the Consolidated Statements of Income for the years ended December 31, 2020, 2019,
and 2018 (in millions):

2020

Interest

2019

2018

Interest
Expense

Revenues

Interest
Expense

Revenues

Expense Revenues

Total amounts presented in the Consolidated Statements of Income in
which the effects of fair value or cash flow hedges are recorded. . . . . . . . . . . . $
The effects of fair value and cash flow hedging:

Gain/(loss) on fair value hedges:

Interest rate derivatives:

Hedged items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives designated as hedging instruments . . . . . . . . . . . . . . . . . . .

Gain/(loss) on cash flow hedges:
Foreign currency derivatives:

Gains/(losses) reclassified from AOCL into earnings . . . . . . . . . . . . . . .
Amount excluded from effectiveness testing recognized in
earnings based on an amortization approach . . . . . . . . . . . . . . . . . . . . .
Amount excluded from effectiveness testing recognized in
earnings based on changes in fair value . . . . . . . . . . . . . . . . . . . . . . . .

Interest rate derivatives:

Losses reclassified from AOCL into earnings . . . . . . . . . . . . . . . . . . . .

4,835.0

(118.5)

5,292.1

(152.0)

5,589.9

(149.6)

—
—

1.2

10.4

—

—
—

—

(0.6)

—
—

(0.1)
1.0

—
—

14.2

11.5

2.9

—

(14.9)

4.3

7.5

—

0.6
(1.6)

—

(2.1)

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Undesignated Hedges

The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the
Consolidated Statements of Income on derivatives for the years ended December 31, 2020, 2019, and 2018 (in millions):

Derivatives (a)
Foreign currency derivatives (b) . . . . . . . . . . . . Selling, general, and administrative $
Foreign currency derivatives . . . . . . . . . . . . . . Revenues
Foreign currency derivatives (c) . . . . . . . . . . . . Other income, net

Location

Total gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2020
15.9 $
—
—
15.9 $

December 31,
2019
23.9 $
0.3
—
24.2 $

2018
58.6
3.0
(1.8)
59.8

(a) The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts
are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains
and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(b) The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations, as well as
certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other
assets and liabilities, not including amounts related to derivative activity as displayed above, and included in Selling, general, and administrative
in the Consolidated Statements of Income, were $(37.0) million, $(33.1) million, and $(52.3) million for the years ended December 31, 2020, 2019,
and 2018, respectively.

(c) All derivative contracts executed in the Company’s revenue hedging program prior to January 1, 2018 are not designated as hedges in the
final month of the contract. The change in fair value in this final month was recorded to Revenues for the year ended December 31, 2018. The
amount recorded to Other income, net for the year ended December 31, 2018 relates to losses on certain undesignated foreign currency derivative
contracts that were recognized after the Company determined that certain forecasted transactions were no longer probable of occurring.

All cash flows associated with derivatives are included in Cash flows from operating activities in the Consolidated

Statements of Cash Flows.

Based on December 31, 2020 foreign exchange rates, an accumulated other comprehensive pre-tax loss of $18.9
million related to the foreign currency forward contracts is expected to be reclassified into Revenues within the next
12 months.

16. Borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes:

3.600% notes due 2022 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.250% notes due 2023 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.850% notes due 2025 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.200% notes due 2036 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.200% notes due 2040 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan facility borrowing (effective rate of 1.4%) . . . . . . . . . . . . . . . . . . . .
Total borrowings at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs and unamortized discount, net . . . . . . . . . . . . . . . . . . . . .
Total borrowings at carrying value (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2020
80.0

December 31, 2019
245.0

500.0
300.0
500.0
500.0
250.0
950.0
3,080.0
(12.8)
3,067.2

500.0
300.0
500.0
500.0
250.0
950.0
3,245.0
(15.7)
3,229.3

(a) The difference between the stated interest rate and the effective interest rate is not significant.
(b) As of December 31, 2020, the Company’s weighted-average effective rate on total borrowings was approximately 3.5%.

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The following summarizes the Company’s maturities of notes and term loan at par value as of December 31, 2020 (in

millions):

Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Due after 1 year through 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 2 years through 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 3 years through 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 4 years through 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47.5
547.5
395.0
760.0
500.0
750.0

The Company’s obligations with respect to its outstanding borrowings, as described below, rank equally.

Commercial Paper Program

Pursuant to the Company’s commercial paper program, the Company 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 the
Company’s Revolving Credit Facility as defined below. The commercial paper notes may have maturities of up to 397 days
from date of issuance. The Company’s commercial paper borrowings as of December 31, 2020 had a weighted-average
annual interest rate of approximately 0.3% and a weighted-average term of approximately 5 days. As of
December 31, 2020 and 2019, the Company had $80.0 million and $245.0 million in commercial paper borrowings
outstanding, respectively.

Revolving Credit Facility

On December 18, 2018, the Company 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 (“Revolving Credit Facility”).
On December 18, 2019, the Company extended the final maturity date of the Revolving Credit Facility to January 8, 2025.
Consistent with the prior facility, and the Term Loan Facility, as described below, the Company is required to maintain
compliance with a consolidated adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”)
interest coverage ratio covenant of greater than 3:1 for each period of four consecutive fiscal quarters. The Revolving
Credit Facility supports borrowings under the Company’s commercial paper program.

As of December 31, 2020 and 2019, the Company had no outstanding borrowings under its Revolving Credit Facility.

Term Loan Facility

On December 18, 2018, the Company extended the Term Loan Facility providing for an unsecured delayed draw term
loan facility in an aggregate amount of $950.0 million. In October 2016, the Company borrowed $575.0 million under the
prior term loan facility. In December 2018, the Company borrowed the remaining amount available under the Term Loan
Facility.

The Term Loan Facility requires the Company to maintain a consolidated adjusted EBITDA interest coverage ratio
of greater than 3:1 for each period of four consecutive fiscal quarters. The Term Loan Facility also contains customary
representations, warranties and events of default.

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Generally, interest under the Term Loan Facility is calculated using a selected LIBOR rate plus an interest rate margin
of 125 basis points. The interest rate margin percentage is based on certain of the Company’s credit ratings and will
increase or decrease in the event of certain upgrades or downgrades in the Company’s credit ratings.

In addition to the payment of interest, the Company is required to make certain periodic amortization payments with
respect to the outstanding principal of the term loan, beginning in 2021. The final maturity date of the Term Loan Facility
is January 8, 2024.

Under the terms of the prior term loan facility, the Company was required to make certain amortization payments with
respect to the outstanding principal of the prior term loan facility. For the year ended December 31, 2018, the Company
made amortization payments of $14.4 million prior to the extension of the term loan agreement.

Notes

On November 25, 2019, the Company issued $500.0 million of aggregate principal amount of unsecured notes due
January 10, 2025 (“2025 Notes”). The Company used the net proceeds from the sale of the 2025 Notes to redeem the
Company’s unsecured notes that were due on April 1, 2020 and for general corporate purposes. Interest with respect to the
2025 Notes is payable semi-annually in arrears on January 10 and July 10 of each year, beginning on July 10, 2020, based
on the per annum rate of 2.850%. The interest rate payable on the 2025 Notes will be increased if the debt rating assigned
to these notes is downgraded by an applicable credit rating agency, beginning at a downgrade below investment grade.
However, in no event will the interest rate on the 2025 Notes exceed 4.850% per annum. The interest rate payable on the
2025 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may
not be adjusted below 2.850% per annum. The Company may redeem the 2025 Notes, in whole or in part, at any time prior
to December 10, 2024 at the greater of par or a price based on the applicable treasury rate plus 20 basis points. The
Company may redeem the 2025 Notes at any time after December 10, 2024 at a price equal to par, plus accrued interest.

On June 11, 2018, the Company issued $300.0 million of aggregate principal amount of unsecured notes due June 9,
2023 (“2023 Notes”). Interest with respect to the 2023 Notes is payable semi-annually in arrears on June 9 and December 9
of each year, beginning on December 9, 2018, based on the per annum rate of 4.250%. The interest rate payable on the
2023 Notes will be increased if the debt rating assigned to these notes is downgraded by an applicable credit rating agency,
beginning at a downgrade below investment grade. However, in no event will the interest rate on the 2023 Notes exceed
6.250% per annum. The interest rate payable on the 2023 Notes may also be adjusted downward for debt rating upgrades
subsequent to any debt rating downgrades but may not be adjusted below 4.250% per annum. The Company may redeem
the 2023 Notes, in whole or in part, at any time prior to May 9, 2023 at the greater of par or a price based on the applicable
treasury rate plus 25 basis points. The Company may redeem the 2023 Notes at any time after May 9, 2023 at a price equal
to par, plus accrued interest.

On August 22, 2017, the Company issued $250.0 million of aggregate principal amount of unsecured floating rate
notes due May 22, 2019 (“Floating Rate Notes”). The Floating Rate Notes were repaid in May 2019 using proceeds from
the Speedpay divestiture (see Note 5), commercial paper, and cash, including cash generated from operations.

On March 15, 2017, the Company issued $400.0 million of aggregate principal amount of unsecured notes due
March 15, 2022. On August 22, 2017, the Company issued an additional $100.0 million of aggregate principal amount of
unsecured notes due March 15, 2022 for an aggregate principal total of $500.0 million of 3.600% unsecured notes (“2022
Notes”). The notes issued on August 22, 2017 are part of the same series and, accordingly, have the same terms and
conditions as the notes issued on March 15, 2017; however, the notes issued on August 22, 2017 were issued at a premium
of 101.783% and the Company received $1.57 million of accrued interest upon issuance. Interest with respect to the 2022
Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2017,
based on the per annum rate of 3.600%. The interest rate payable on the 2022 Notes will be increased if the debt rating
assigned to the note is downgraded by an applicable credit rating agency, beginning at a downgrade below investment

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grade. However, in no event will the interest rate on the 2022 Notes exceed 5.60% per annum. The interest rate payable
on the 2022 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but
may not be adjusted below 3.600% per annum. The Company may redeem the 2022 Notes at any time prior to February 15,
2022 at the greater of par or a price based on the applicable treasury rate plus 25 basis points. The Company may redeem
the 2022 Notes at any time after February 15, 2022 at a price equal to par, plus accrued interest.

On November 22, 2013, the Company issued $250.0 million of aggregate principal amount of unsecured notes due
May 22, 2019 (“2019 Notes”). The 2019 Notes were repaid in May 2019 using proceeds from the Speedpay divestiture
(see Note 5), commercial paper, and cash, including cash generated from operations.

On August 22, 2011, the Company issued $400.0 million of aggregate principal amount of unsecured notes due

August 22, 2018 (“2018 Notes”). In August 2018, the 2018 Notes matured and were repaid.

On June 21, 2010, the Company issued $250.0 million of aggregate principal amount of unsecured notes due June 21,
2040 (“2040 Notes”). Interest with respect to the 2040 Notes is payable semi-annually on June 21 and December 21
each year based on the fixed per annum rate of 6.200%. The Company may redeem the 2040 Notes at any time prior to
maturity at the greater of par or a price based on the applicable treasury rate plus 30 basis points.

On March 30, 2010, the Company exchanged $303.7 million of aggregate principal amount of unsecured notes due
November 17, 2011 for unsecured notes due April 1, 2020 (“2020 Notes”). Interest with respect to the 2020 Notes was
payable semi-annually on April 1 and October 1 each year based on the fixed per annum rate of 5.253%. In connection
with the exchange, note holders were given a 7% premium ($21.2 million), which approximated market value at the
exchange date, as additional principal. As this transaction was accounted for as a debt modification, this premium was not
charged to expense. Rather, the premium, along with the offsetting hedge accounting adjustments, was accreted into
Interest expense over the life of the notes. On November 18, 2019, the Company announced a cash tender offer on the
Company’s outstanding 2020 Notes. On November 25, 2019, the Company purchased the principal amount of $56.1
million, plus accrued interest, pursuant to the tender offer. On December 27, 2019, the Company redeemed the remaining
principal amount of $268.8 million, plus accrued interest. The total premium paid to redeem the 2020 Notes was $3.1
million.

On November 17, 2006, the Company issued $500.0 million of aggregate principal amount of unsecured notes due
November 17, 2036 (“2036 Notes”). Interest with respect to the 2036 Notes is payable semi-annually on May 17 and
November 17 each year based on the fixed per annum rate of 6.200%. The Company may redeem the 2036 Notes at any
time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 25 basis points.

The Revolving Credit Facility and Term Loan Facility contain covenants, subject to certain exceptions, that, among
other things, limit or restrict the Company’s ability to sell or transfer assets or merge or consolidate with another company,
grant certain types of security interests, incur certain types of liens, impose restrictions on subsidiary dividends, enter into
sale and leaseback transactions, incur certain subsidiary level indebtedness, or use proceeds in violation of anti-corruption
or anti-money laundering laws. The Company’s notes are subject to similar covenants except that only the 2036
Notes contain covenants limiting or restricting subsidiary indebtedness and none of the Company’s notes are subject to a
covenant that limits the Company’s ability to impose restrictions on subsidiary dividends.

Certain of the Company’s notes (including the 2022 Notes, 2023 Notes, 2025 Notes, and 2040 Notes) include a change
of control triggering event provision, as defined in the terms of the notes. If a change of control triggering event occurs,
holders of the notes may require the Company to repurchase some or all of their notes at a price equal to 101% of the
principal amount of their notes, plus any accrued and unpaid interest. A change of control triggering event will occur when
there is a change of control involving the Company and among other things, within a specified period in relation to the
change of control, the notes are downgraded from an investment grade rating to below an investment grade rating by
certain major credit rating agencies.

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17. Stock-Based Compensation Plans

The Western Union Company 2006 Long-Term Incentive Plan and 2015 Long-Term Incentive Plan

The Western Union Company 2015 Long-Term Incentive Plan (“2015 LTIP”), approved on May 15, 2015, provides
for the granting of stock options, restricted stock awards and units, unrestricted stock awards and units, and other equity-
based awards to employees and non-employee directors of the Company. Prior to this, equity-based awards were granted
out of the 2006 Long-Term Incentive Plan (“2006 LTIP”). Shares available for grant under the 2015 LTIP were 21.1
million as of December 31, 2020.

Options granted under the 2015 LTIP and the 2006 LTIP are issued with exercise prices equal to the fair market value
of Western Union common stock on the grant date, have 10-year terms, and typically vest over four equal annual
increments beginning 12 months after the date of grant, with the exception of options granted to retirement eligible
employees, which generally will vest on a prorated basis, upon termination, and options granted to non-employee directors,
which vest at grant. Compensation expense related to stock options is recognized over the requisite service period, which
is the same as the vesting period.

Restricted stock unit grants typically vest over four equal annual increments beginning 12 months after the date of
grant. Restricted stock units granted to retirement eligible employees generally vest on a prorated basis upon termination.
The fair value of the awards granted is measured based on the fair value of the shares on the date of grant. The majority of
stock unit awards granted prior to 2019 do not provide for the payment of dividend equivalents. For those grants, the value
of the grant is reduced by the net present value of the foregone dividend equivalent payments. Beginning with awards
granted in February 2019, restricted stock units accrue dividend equivalents, with dividend equivalents paid in cash to the
extent that the underlying shares vest. Restricted stock units that accrue dividend equivalents are valued using the
Company’s stock price on the date of grant. Compensation expense related to restricted stock units is recognized over the
requisite service period, which is the same as the vesting period.

The compensation committee of the Company’s Board of Directors has granted the Company’s executives and certain
other key employees, excluding the CEO, long-term incentive awards under the 2015 LTIP, which consisted of 50%
Financial PSUs (as defined below), 30% restricted stock unit awards, and 20% TSR PSUs (as defined below) in 2020 and
2019. The CEO received long-term incentive awards under the 2015 LTIP consisting of 50% Financial PSUs, 20% TSR
PSUs, 20% stock option awards, and 10% restricted stock unit awards in 2020 and 2019. The compensation committee
granted Senior Vice Presidents of the Company awards under the 2015 LTIP, which consisted of 50% Financial PSUs and
50% restricted stock unit awards in 2020 and 2019. The compensation committee granted certain other non-executive
employees of the Company participating in the 2015 LTIP annual equity grants consisting of restricted stock unit awards
in 2020 and 2019 as well as Financial PSUs in 2020.

The performance-based restricted stock units granted to the Company’s executives in 2020 are restricted stock units
and consist of two separate awards. The first award consists of performance-based restricted stock units, which require the
Company to meet certain financial objectives over a three-year cumulative performance period (2020 through 2022)
(“Financial PSUs”). Beginning with awards granted in February 2019, Financial PSUs accrue dividend equivalents, with
dividend equivalents paid in cash to the extent that the underlying shares vest. The second award consists of performance-
based restricted stock units with a market condition tied to the Company’s total shareholder return in relation to the S&P
500 Index as calculated over a three-year performance period (2020 through 2022) (“TSR PSUs”). Both of these awards
will vest 100% on the third anniversary of the grant date, contingent upon threshold market and financial performance
metrics being met. The actual number of performance-based restricted stock units that the recipients will receive for awards
in 2020 and 2019 range from 0% up to 200% of the target number of stock units granted, contingent upon actual financial
and total shareholder return performance results. The grant date fair value of all performance-based restricted stock units
is fixed and the amount of restricted stock units that will ultimately vest depends upon the level of achievement of the
performance and market conditions over the performance period. The fair value of the Financial PSUs is measured with a

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methodology similar to that used to value the restricted stock units discussed above, while the fair value of the TSR PSUs
is determined using the Monte-Carlo simulation model. Unlike the Financial PSUs, compensation costs related to the TSR
PSUs are recognized regardless of whether the market condition is satisfied, provided that the requisite service period has
been completed.

The Company has also granted deferred stock units out of the 2015 LTIP to the non-employee directors of the
Company. Since deferred stock units vest immediately, compensation expense is recognized on the date of grant based on
the fair value of the awards when granted. These awards may be settled immediately unless the participant elects to defer
the receipt of common shares under the applicable plan rules.

Stock Option Activity

A summary of stock option activity for the year ended December 31, 2020 was as follows (options and aggregate

intrinsic value in millions):

Aggregate
Weighted-Average Contractual Term Intrinsic

Weighted-Average
Remaining

Options Exercise Price

(Years)

Value

Outstanding as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancelled/forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options exercisable as of December 31 . . . . . . . . . . . . . . . . . . . . . .

4.5 $
0.5 $
(0.1) $
— $
4.9 $
3.7 $

18.31
26.20
18.76
—
19.11
18.38

5.4 $ 15.9
4.6 $ 13.6

The Company received $2.2 million, $36.7 million, and $10.1 million in cash proceeds related to the exercise of stock
options during the years ended December 31, 2020, 2019, and 2018, respectively. Upon the exercise of stock options,
shares of common stock are issued from authorized common shares.

The Company realized total tax benefits during the years ended December 31, 2020, 2019, and 2018 from stock option

exercises of $0.2 million, $2.4 million, and $0.6 million, respectively.

The total intrinsic value of stock options exercised during the years ended December 31, 2020, 2019, and 2018 was

$0.8 million, $11.6 million, and $3.1 million, respectively.

Restricted Stock Activity

A summary of activity for restricted stock units and performance-based restricted stock units for the year ended

December 31, 2020 was as follows (units in millions):

Units

Weighted-Average
Grant-Date Fair Value
17.92
25.35
17.86
18.83
20.88

7.1 $
2.8 $
(2.4) $
(0.6) $
6.9 $

Non-vested as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-vested as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Stock-Based Compensation Expense

The following table sets forth the total impact on earnings for stock-based compensation expense recognized in the
Consolidated Statements of Income resulting from stock options, restricted stock units, performance-based restricted stock
units and deferred stock units for the years ended December 31, 2020, 2019, and 2018 (in millions, except per share data):

Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income tax benefit from stock-based compensation expense . . . . . . . . . . . . . . . .
Net income impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Earnings per share impact:

2020
(41.7) $
6.9
(34.8) $

2019
(48.9) $
8.5
(40.4) $

2018
(47.7)
8.3
(39.4)

Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(0.08) $

(0.09) $

(0.09)

As of December 31, 2020, there was $1.4 million of total unrecognized compensation cost, net of assumed forfeitures,
related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.7 years, and
there was $62.0 million of total unrecognized compensation cost, net of assumed forfeitures, related to non-vested
restricted stock units and performance-based restricted stock units, which is expected to be recognized over a weighted-
average period of 2.0 years.

Fair Value Assumptions

The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of

Western Union options granted for the years ended December 31, 2020, 2019, and 2018:

Stock options granted:
Weighted-average risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average grant date fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1.5 %
4.0 %
25.2 %
7.12
3.96

2.5 %
4.2 %
22.8 %
7.05
2.56

2.8 %
3.9 %
26.3 %
6.05
3.66

2020

2019

2018

Risk-free interest rate - The risk-free rate for stock options granted during all periods presented was determined by

using a United States Treasury rate for the period that coincided with the expected terms listed above.

Expected dividend yield - The Company’s expected annual dividend yield for all periods presented was the calculation
of the annualized Western Union dividend divided by an average Western Union stock price on each respective grant date.

Expected volatility - For the Company’s CEO and non-employee directors, the Company used a blend of implied and
historical volatility, which was calculated using the market price of traded options on Western Union’s common stock and
the historical volatility of Western Union stock data. There were no options granted to non-executive employees in 2020,
2019, or 2018.

Expected term - For both 2020 and 2019, the expected term for the CEO and non-employee director grants was
approximately seven years and eight years, respectively. For 2018, the expected term for the CEO and non-employee
director grants was approximately six years and seven years, respectively. The Company’s expected term for options was
based upon, among other things, historical exercises, the vesting term of the Company’s options, and the options’
contractual term of 10 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect
market conditions and the Company’s historical experience and future expectations. The calculated fair value is recognized
as compensation cost in the Company’s consolidated financial statements over the requisite service period of the entire
award. Compensation cost is recognized only for those options expected to vest, with forfeitures estimated at the date of
grant and evaluated and adjusted periodically to reflect the Company’s historical experience and future expectations. Any
change in the forfeiture assumption is accounted for as a change in estimate, with the cumulative effect of the change on
periods previously reported being reflected in the consolidated financial statements of the period in which the change is
made.

18. Segments

As further described in Note 1, the Company classifies its business into two segments: Consumer-to-Consumer and
Business Solutions. Operating segments are defined as components of an enterprise that engage in business activities,
about which separate financial information is available that is evaluated regularly by the Company’s CODM in allocating
resources and assessing performance.

The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The segment
includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent
relationships and localized marketing activities. The Company includes Digital Money Transfer transactions in its regions,
including transactions from the Company’s arrangements with financial institutions and other third parties to enable such
entities to offer money transfer services to their own customers under their brands. By means of common processes and
systems, these regions, including Digital Money Transfer transactions, create one interconnected global network for
consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating
segment.

The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border,

cross-currency transactions, for small and medium size enterprises, and other organizations and individuals.

The Company’s segments are reviewed separately below because each segment represents a strategic business unit
that offers different products and serves different markets. The business segment measurements provided to, and evaluated
by, the Company’s CODM are computed in accordance with the following principles:

• The accounting policies of the segments are the same as those described in the summary of significant accounting

policies.

• Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily

based on a percentage of the segments’ revenue compared to total revenue.

• As described in Note 4, on August 1, 2019, the Company’s Board of Directors approved an overall plan to change
the Company’s operating model and improve its business processes and cost structure by reducing its headcount
and consolidating various facilities. For the years ended December 31, 2020 and 2019, the Company incurred
$36.8 million and $115.5 million, respectively, related to this plan. While certain of these expenses may be
identifiable to the Company’s segments, primarily the Company’s Consumer-to-Consumer segment, the expenses
are not included in the measurement of segment operating income provided to the CODM for purposes of
assessing segment performance and decision making with respect to resource allocation.

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THE WESTERN UNION COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• The CODM does not review total assets by segment for purposes of assessing segment performance and allocating

resources. As such, the disclosure of total assets by segment has not been included below.

• All items not included in operating income are excluded from the segments.

The following tables present the Company’s segment results for the years ended December 31, 2020, 2019, and 2018

(in millions):

Revenues:

Year Ended December 31,
2019

2020

2018

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,220.0 $ 4,407.8 $ 4,453.6
386.8
Business Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
749.5
Total consolidated revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,835.0 $ 5,292.1 $ 5,589.9
Operating income:

388.8
495.5

356.1
258.9

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Business Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total segment operating income (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring-related expenses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total consolidated operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

924.7 $
24.4
55.0
1,004.1
(36.8)
967.3 $

975.4 $ 1,048.2
23.4
46.8
50.5
27.3
1,122.1
1,049.5
(115.5)
—
934.0 $ 1,122.1

(b)

(a) Other primarily consists of the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations.
In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. Speedpay
revenues included in the Company’s results were $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively.
Speedpay direct operating expenses were $98.2 million and $251.2 million for the years ended December 31, 2019 and 2018, respectively. Paymap
revenues included in the Company’s results were $5.3 million and $16.2 million for the years ended December 31, 2019 and 2018, respectively.
Paymap direct operating expenses were $2.2 million and $6.7 million for the years ended December 31, 2019 and 2018, respectively.
In the first quarter of 2020, the Company changed its expense allocation method so that its corporate data center and network engineering
information technology expenses are allocated based on a percentage of relative revenue. In 2019, these costs had been allocated based in part on
a percentage of relative transactions. The Company believes that an allocation method based fully on relative revenue presents a more representative
view of segment profitability, as certain of the Company’s services, particularly some of its bill payment services and its money order services,
have much lower revenues per transaction than the Company’s other services. Further, these technology expenses are becoming increasingly based
on data storage utilized and less based on the number of transactions processed. For the year ended December 31, 2019, this change would have
decreased Consumer-to-Consumer operating income and increased Other operating income by $49.6 million. Business Solutions was not materially
impacted by the change in the allocation method.

Year Ended December 31,

2020

2019

2018

Depreciation and amortization:

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Business Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total consolidated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . $

178.5 $
36.1
11.0
225.6 $

194.5 $
39.6
23.6
257.7 $

189.9
41.9
32.9
264.7

Capital expenditures:

Consumer-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Business Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

133.5 $
10.3
13.0
156.8 $

97.0 $
7.7
23.0
127.7 $

273.8
11.9
53.3
339.0

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The geographic split of revenue below for the Consumer-to-Consumer and Business Solutions segments and Other is
based upon the country where the transaction is initiated with 100% of the revenue allocated to that country. Long-lived
assets, consisting of property and equipment, net, are presented based upon the location of the assets.

Based on the method used to attribute revenue between countries described in the paragraph above, each individual
country outside the United States accounted for less than 10% of consolidated revenue for the years ended December 31,
2020, 2019, and 2018, respectively. In addition, each individual agent or Business Solutions customer accounted for less
than 10% of consolidated revenue during these periods.

Information concerning principal geographic areas was as follows (in millions):

Year Ended December 31,
2019

2020

2018

Revenue:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,678.4 $ 1,896.1 $ 2,126.2
3,463.7
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,835.0 $ 5,292.1 $ 5,589.9
Long-lived assets:

3,156.6

3,396.0

United States (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

100.4 $
50.0
150.4 $

173.7 $
62.5
236.2 $

207.4
63.0
270.4

(a) Assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters, were included in Other assets as of
December 31, 2019 in the Company’s Consolidated Balance Sheets. In 2020, the Company sold its former corporate headquarters and other
property and recorded an immaterial gain on the sales.

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SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

The following lists the condensed financial information for the parent company as of December 31, 2020 and 2019
and Condensed Statements of Income and Comprehensive Income and Condensed Statements of Cash Flows for each of
the three years in the period ended December 31, 2020.

THE WESTERN UNION COMPANY

CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in millions, except per share amounts)

Assets

December 31,

2020

2019

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Property and equipment, net of accumulated depreciation of $37.0 and $24.8, respectively . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.0
68.5
147.3
5,886.9
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,813.6 $ 6,106.7

54.0
96.2
5,661.3

2.1 $

Liabilities and stockholders’ equity/(deficit)
Liabilities:

Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payable to subsidiaries, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

551.5
1,852.6
3,067.2
102.7
5,627.0

58.0
680.4
2,070.1
3,229.3
108.4
6,146.2

53.0 $

Stockholders’ equity/(deficit):

Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and 418.0 shares
issued and outstanding as of December 31, 2020 and 2019, respectively . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity/(deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.2
841.2
(675.9)
(209.0)
(39.5)
Total liabilities and stockholders’ equity/(deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,813.6 $ 6,106.7

4.1
885.1
(543.1)
(159.5)
186.6

—

See Notes to Condensed Financial Statements.

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CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(PARENT COMPANY ONLY)
(in millions)

For the Years Ended December 31,
2018
2019
2020

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on divestitures of businesses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income/(expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income/(loss) before equity in earnings of affiliates and income taxes . . . . . . . .
Equity in earnings of affiliates, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax (expense)/benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income of affiliates, net of tax . . . . . . . . . . . . . . . . . . . . . . . .

— $
—
—
—
—
(158.5)
3.6
(154.9)
861.7
37.5
744.3
0.4
49.1

— $
—
—
524.6
—
(181.5)
2.7
345.8
827.3
(114.8)
1,058.3
0.2
21.8

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

793.8 $ 1,080.3 $

—
—
—
—
—
(197.6)
(1.0)
(198.6)
997.2
53.3
851.9
1.6
26.7
880.2

See Notes to Condensed Financial Statements.

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CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
(in millions)

Cash flows from operating activities

Net cash provided by/(used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . $

(79.0) $

103.1 $

539.1

Year Ended December 31,
2019

2020

2018

Cash flows from investing activities

Purchases of property and equipment and other . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the sale of former corporate headquarters (Note 4) . . . . . . . . . . . .
Proceeds from divestitures of businesses, net of cash divested (Note 4) . . . . . . .
Distributions received from/(capital contributed to) subsidiaries, net . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by/(used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities

(1.0)
43.6
—
(329.4)
(2.1)
(288.9)

(9.9)
—
711.7
74.0
—
775.8

Advances from subsidiaries, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (repayments of)/proceeds from commercial paper . . . . . . . . . . . . . . . . . . . . .
Net proceeds from issuance of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal payments on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercise of options and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends and dividend equivalents paid . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by/(used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Supplemental cash flow information:
Non-cash financing activity, distribution of note from subsidiary (Note 3) . . . . . . $ 1,364.4 $
20.7 $
Cash paid for lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.5 $
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) . . . . $

1,139.5
(165.0)
—
—
2.2
(370.3)
(239.7)
(0.7)
366.0
(1.9)
4.0
2.1 $

See Notes to Condensed Financial Statements.

133

(78.9)
—
—
(456.3)
—
(535.2)

345.5
125.0
685.4
(414.4)
7.9
(341.7)
(412.4)
—
(4.7)
(0.8)
1.0
0.2

194.0
120.0
495.9
(824.9)
33.3
(340.8)
(552.6)
—
(875.1)
3.8
0.2
4.0 $

— $ 2,256.1
—
—

17.0 $
124.8 $

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CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

THE WESTERN UNION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Basis of Presentation

The Western Union Company (the “Parent”) is a holding company that conducts substantially all of its business
operations through its subsidiaries. Under a parent company only presentation, the Parent’s investments in its consolidated
subsidiaries are presented under the equity method of accounting, and the condensed financial statements do not present
the financial statements of the Parent and its subsidiaries on a consolidated basis. These financial statements should be
read in conjunction with The Western Union Company’s consolidated financial statements.

2. Restricted Net Assets

Certain assets of the Parent’s subsidiaries totaling approximately $680 million as of December 31, 2020 constitute
restricted net assets, as there are legal or regulatory limitations on transferring such assets outside of the countries where
the respective assets are located. Additionally, certain of the Parent’s subsidiaries must meet minimum capital requirements
in some countries in order to maintain operating licenses.

3. Related Party Transactions

The Parent enters into contracts with third-party vendors on behalf of its subsidiaries. Because the Parent is a holding
company, as noted above, these corporate costs are incurred by the Parent, and the expenses are then allocated to its
subsidiaries based primarily on the subsidiaries’ percentage of revenues compared to total revenues.

All transactions described below are with subsidiaries of the Parent. The Parent has issued multiple promissory notes
payable to its 100% owned subsidiary, First Financial Management Corporation, in exchange for funds distributed to the
Parent. All notes pay interest at a fixed rate, may be repaid at any time without penalty, and are included within Payable
to subsidiaries, net in the Condensed Balance Sheets. These promissory notes are as follows:

Date Issued
April 1, 2018 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
June 1, 2018 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
October 1, 2019 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
December 1, 2019 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
December 1, 2020 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

273.0 December 31, 2020
229.6 February 28, 2021
162.8 June 30, 2022

67.4 August 31, 2022
93.3 August 31, 2023

Amount
(in millions)

Due Date

Interest Rate
(per annum)
2.12 %
2.34 %
1.69 %
1.61 %
0.15 %

(a) On January 1, 2021, this note was refinanced for a note payable in the amount of $289.0 million that is due September 30, 2023 and bears interest

at a rate of 0.14% per annum.

(b) This note refinanced a note originally issued on a prior date.

On November 8, 2015, the Parent entered into a Revolving Credit Facility agreement (the “Revolver”) with its 100%
owned subsidiary, RII Holdings, Inc., which expires on November 8, 2035, providing for unsecured financing facilities in
an aggregate amount of $3.0 billion. As of December 31, 2020 and 2019, borrowings outstanding under the Revolver were
$620.3 million and $993.6 million, respectively. The interest rate applicable for outstanding borrowings under the Revolver
is the six-month LIBOR rate set on the first day of the calendar year, which was 0.26% and 1.91% as of December 31,
2020 and 2019, respectively. Outstanding borrowings under the Revolver are included within Payable to subsidiaries, net
in the Condensed Balance Sheets as of December 31, 2020 and 2019. During the years ended December 31, 2020 and
2018, a portion of the outstanding balances were repaid by means of non-cash distributions by the Parent’s subsidiaries.

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CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

THE WESTERN UNION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

The Parent files its United States federal consolidated income tax return on its and certain of its affiliates’ behalf.
Accordingly, the Parent has recorded income taxes payable on behalf of its subsidiaries, and these income taxes payable
were significant due to the enactment of the Tax Act into United States law.

Excess cash generated from operations of the Parent’s subsidiaries that is not required to meet certain regulatory
requirements may be periodically distributed to the Parent in the form of a distribution, although the amounts of such
distributions may vary from year to year.

The Parent files a consolidated United States federal income tax return and also a number of consolidated state income
tax returns on behalf of its subsidiaries. In these circumstances, the Parent is responsible for remitting income tax payments
on behalf of the consolidated group. The Parent’s provision for income taxes has been computed as if it were a separate
tax-paying entity.

4. Divestitures of Businesses

On February 28, 2019, the Parent entered into an agreement with ACI to sell its United States electronic bill payments
business known as Speedpay. The Parent received approximately $750 million and recorded a pre-tax gain on the sale of
approximately $523 million, which is included in Gain on divestitures of businesses in the Condensed Statements of
Income and Comprehensive Income, in the all-cash transaction that closed on May 9, 2019.

On May 6, 2019, the Parent completed the sale of Paymap, which provides electronic mortgage bill payment services,
for contingent consideration and immaterial cash proceeds received at closing. The Parent recorded an immaterial pre-tax
gain related to this sale during 2019.

In 2020, the Parent sold its former corporate headquarters and recorded an immaterial pre-tax gain on the sale. The
proceeds from this sale have been included in Cash flows from investing activities within the Parent’s Condensed
Statements of Cash Flows for the year ended December 31, 2020.

5. Commitments and Contingencies

The Parent had approximately $180 million in outstanding letters of credit and bank guarantees as of
December 31, 2020 primarily held in connection with certain agent agreements. The significant majority of the Parent’s
letters of credit and bank guarantees have a one-year renewal option, which the Parent expects to renew prior to expiration
in most circumstances.

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CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

THE WESTERN UNION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

6. Leases

The Parent leases real properties primarily for use as administrative and sales offices, in addition to transportation and
other equipment. The Parent determines if a contract contains a lease arrangement at the inception of the contract. For
leases in which the Parent is the lessee, leases are classified as either finance or operating, with classification affecting the
pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of lease payments
over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate cannot be readily
determined, an incremental borrowing rate is used to determine the future lease payments. Lease and variable non-lease
components within the Parent’s lease agreements are accounted for separately. The Parent has no material leases in which
the Parent is the lessor.

The Parent’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-
line basis. As of December 31, 2020 and 2019, the total ROU assets were $63.1 million and $66.5 million, respectively,
and lease liabilities were $100.1 million and $105.7 million, respectively. The ROU assets and operating lease liabilities
were included in Other assets and Other liabilities, respectively, in the Parent’s Condensed Balance Sheets. Cash paid for
operating lease liabilities is recorded as Cash flows from operating activities in the Parent’s Condensed Statements of Cash
Flows. Short-term and variable lease costs were not material for the years ended December 31, 2020 and 2019.

The Parent’s leases have remaining terms from 3 years to 10 years. Certain of these leases contain escalation
provisions and/or renewal options, giving the Parent the right to extend the lease by up to 10 years. However, these options
are not reflected in the calculation of the ROU asset and lease liability due to uncertainty surrounding the likelihood of
renewal.

The following table summarizes the weighted-average lease term and discount rate for operating lease liabilities as of

December 31, 2020 and 2019:

Weighted-average remaining lease term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.5
5.5 %

10.5

5.7 %

December 31, 2020

December 31, 2019

The following table represents maturities of operating lease liabilities as of December 31, 2020 (in millions):

Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Due after 1 year through 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 2 years through 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 3 years through 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 4 years through 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

14.6
14.8
14.1
13.0
12.7
61.0
130.2
(30.1)
100.1

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of the Principal Executive Officer and Principal
Financial Officer, has evaluated the effectiveness of our controls and procedures related to our reporting and disclosure
obligations (as defined by Rules 13a-15(e) and 15d-15(e) within the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) as of December 31, 2020, which is the end of the period covered by this Annual Report on Form 10-K.
Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of
December 31, 2020, the disclosure controls and procedures were effective to ensure that information required to be
disclosed by us, including our consolidated subsidiaries, in the reports we file or submit under the Exchange Act, is
recorded, processed, summarized and reported, as applicable, within the time periods specified in the rules and forms of
the Securities and Exchange Commission, and are designed to ensure that information required to be disclosed by us in
the reports that we file or submit is accumulated and communicated to our management, including our Principal Executive
Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Management’s report on Western Union’s internal control over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934), and the related Report of Independent
Registered Public Accounting Firm, are set forth under Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

On August 1, 2019, our Board of Directors approved a restructuring plan to change our operating model and improve
our cost structure by reducing our headcount and transitioning certain technology functions to existing Company facilities
and third-party providers. Accordingly, we have experienced and may continue to experience significant turnover in these
functions during the duration of these transition activities. Management believes it is taking the necessary steps to monitor
and maintain appropriate internal control over financial reporting during this period of change.

There were no other changes that occurred during our most recently completed fiscal quarter covered by this Annual
Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

Item 9B. Other Information

None.

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Item 10. Directors, Executive Officers, and Corporate Governance

PART III

Except for the information required by this item with respect to our executive officers included in Item 1 of Part I of
this Annual Report on Form 10-K and our Code of Ethics, the information required by this Item 10 is incorporated herein
by reference to the discussion in “Proposal 1—Election of Directors,” “Board of Directors Information,” and “Corporate
Governance—Committees of the Board of Directors” of our definitive proxy statement for the 2021 annual meeting of
stockholders.

Code of Ethics

The Company’s Directors’ Code of Conduct, Code of Ethics for Senior Financial Officers, Reporting Procedure for
Accounting and Auditing Concerns, Attorneys’ Professional Conduct Policy, and the Code of Conduct are available
without charge through the “Corporate Governance” portion of the Company’s website, www.westernunion.com, or by
writing to the attention of: Investor Relations, The Western Union Company, 7001 East Belleview Avenue, Denver,
Colorado 80237. In the event of an amendment to, or a waiver from, the Company’s Code of Ethics for Senior Financial
Officers, the Company intends to post such information on its website, www.westernunion.com.

Item 11. Executive Compensation

The information required by this Item 11 is incorporated herein by reference to the discussion in “Compensation
Discussion and Analysis,” “Executive Compensation,” “Compensation of Directors,” and “Compensation and Benefits
Committee Report” of our definitive proxy statement for the 2021 annual meeting of stockholders, provided that the
Compensation and Benefits Committee Report shall not be deemed filed in this Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is incorporated herein by reference to the discussion in “Stock Beneficially
Owned by Directors, Executive Officers and Our Largest Stockholders,” and “Equity Compensation Plan Information” of
our definitive proxy statement for the 2021 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated herein by reference to the discussion of “Corporate
Governance—Independence of Directors” and “Certain Transactions and Other Matters” of our definitive proxy statement
for the 2021 annual meeting of stockholders.

Item 14. Principal Accounting Fees and Services

The information required by this Item 14 is incorporated herein by reference to the discussion in “Proposal 3—

Ratification of Selection of Auditors” of our definitive proxy statement for the 2021 annual meeting of stockholders.

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Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

PART IV

1. Financial Statements (See Index to Consolidated Financial Statements in Item 8, Financial Statements and

Supplementary Data, of this Annual Report on Form 10-K);

2. Financial Statement Schedule (See Index to Consolidated Financial Statements in Item 8, Financial Statements

and Supplementary Data, of this Annual Report on Form 10-K);

3. The exhibits listed in the “Exhibit Index” attached to this Annual Report on Form 10-K.

Exhibit
Number

2.1

2.2

3.1

3.2

4.1

4.2

4.3

4.4

EXHIBIT INDEX

Description

Separation and Distribution Agreement, dated as of September 29, 2006, between First Data Corporation and
The Western Union Company (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on
October 3, 2006 and incorporated herein by reference thereto).

Stock Purchase Agreement, dated as of February 28, 2019, among The Western Union Company, ACI
Worldwide Corp. and ACI Worldwide, Inc. (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K
filed on May 9, 2019 and incorporated herein by reference thereto).**

Amended and Restated Certificate of Incorporation of The Western Union Company, as amended on May 18,
2018 (filed as Exhibit 3.1 to the Company’s Current Report on form 8-K filed on May 22, 2018 and
incorporated herein by reference thereto).

By-Laws of The Western Union Company, as amended on December 11, 2020 (filed as Exhibit 3.2 to the
Company’s Current Report on Form 8-K filed on December 11, 2020 and incorporated herein by reference
thereto).

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities and Exchange
Act of 1934 (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed on February 20, 2020
and incorporated herein by reference thereto).

Indenture, dated as of November 17, 2006, between The Western Union Company and Wells Fargo Bank,
National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on
November 20, 2006 and incorporated herein by reference thereto).

Supplemental Indenture, dated as of September 6, 2007, among The Western Union Company and Wells Fargo
Bank, National Association, as trustee (filed as Exhibit 4.13 to the Company’s Annual Report on Form 10-K
filed on February 26, 2008 and incorporated herein by reference thereto).

Second Supplemental Indenture, dated as of May 3, 2019, between The Western Union Company and Wells
Fargo Bank, National Association, as trustee (filed as Exhibit 4.1 to the Company’s Quarterly Report on
Form 10-Q filed on May 7, 2019 and incorporated herein by reference thereto).

4.5

Form of 6.200% Note due 2036 (filed as Exhibit 4.14 to the Company’s Registration Statement on Form S-4

filed on December 22, 2006 and incorporated herein by reference thereto).

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4.6

Form of 6.200% Note due 2040 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on

June 21, 2010 and incorporated herein by reference thereto).

4.7

Form of 3.600% Note due 2022 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on

March 15, 2017 and incorporated herein by reference thereto).

4.8

Form of 3.600% Note due 2022 (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on

August 22, 2017 and incorporated herein by reference thereto).

4.9

Form of 4.250% Note due 2023 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on

June 11, 2018 and incorporated herein by reference thereto).

4.10

Form of 2.850% Note due 2025 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on

November 25, 2019 and incorporated herein by reference thereto).

10.1

10.2

10.3

10.4

10.5

10.6

10.7

Amended and Restated Credit Agreement, dated as of December 18, 2018, among The Western Union
Company, the banks named therein, as lenders, Citibank, N.A., Bank of America, N.A. and Wells Fargo Bank,
National Association, in their respective capacities as Issuing Lenders, Bank of America, N.A. and Wells Fargo
Bank, National Association, as Syndication Agents, Barclays Bank PLC, JPMorgan Chase Bank, N.A. and
U.S. Bank National Association, as Documentation Agents, and Citibank, N.A., as Administrative Agent for
the banks thereunder (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
December 20, 2018 and incorporated herein by reference thereto).

Letter Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of May 11, 2020, among
The Western Union Company, the banks, financial institutions and other institutional lenders party thereto as
Banks, and Citibank, N.A., as administrative agent for the Banks (filed as Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q filed on August 4, 2020 and incorporated herein by reference thereto).

Amended and Restated Term Loan Agreement, dated as of December 18, 2018, among The Western Union
Company, the banks named therein, as lenders, Citibank, N.A., Mizuho Bank (USA), U.S. Bank National
Association and Wells Fargo Bank, National Association, as Syndication Agents, Banco Bilbao Vizcaya
Argentaria, S.A., New York Branch, Barclays Bank PLC, Fifth Third Bank, KeyBank National Association,
PNC Bank, National Association and The Bank of Nova Scotia, as Documentation Agents, and Bank of
America, N.A., as Administrative Agent for the banks thereunder (filed as Exhibit 10.2 to the Company’s
Current Report on Form 8-K filed on December 20, 2018 and incorporated herein by reference thereto).

Letter Amendment No. 1 to the Amended and Restated Term Loan Agreement, dated as of May 11, 2020,
among The Western Union Company, the banks, financial institutions and other institutional lenders party
thereto as Banks, and Bank of America, N.A., as administrative agent for the Banks (filed as Exhibit 10.1 to
the Company’s Quarterly Report on Form 10-Q filed on August 4, 2020 and incorporated herein by reference
thereto).

Form of Director Indemnification Agreement (filed as Exhibit 10.10 to Amendment No. 2 to the Company’s
Registration Statement on Form 10 (file no. 001-32903) filed on August 28, 2006 and incorporated herein by
reference thereto).*

The Western Union Company Severance/Change in Control Policy (Executive Committee Level), as Amended
and Restated Effective July 28, 2015 (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K
filed on February 19, 2016 and incorporated herein by reference thereto).*

The Western Union Company 2006 Long-Term Incentive Plan, as amended and restated on January 31, 2014
(filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on February 24, 2014 and
incorporated herein by reference thereto).*

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10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, as Amended and
Restated Effective January 31, 2014 (filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K
filed on February 24, 2014 and incorporated herein by reference thereto).*

The Western Union Company Non-Employee Director Deferred Compensation Plan, as Amended and Restated
Effective December 31, 2008 (filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on
February 19, 2009 and incorporated herein by reference thereto).*

The Western Union Company Senior Executive Performance Incentive Plan, Established February 20, 2019
(filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed on February 21, 2019 and
incorporated herein by reference thereto).*

The Western Union Company Grandfathered Supplemental Incentive Savings Plan, as Amended and Restated
Effective January 1, 2010 (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed on
February 26, 2010 and incorporated herein by reference thereto).*

Form of Unrestricted Stock Unit Award Agreement Under The Western Union Company 2006 Non-Employee
Director Equity Compensation Plan, as Amended and Restated Effective February 17, 2009 (filed as Exhibit
10.15 to the Company’s Annual Report on Form 10-K filed on February 26, 2010 and incorporated herein by
reference thereto).*

Form of Unrestricted Stock Unit Award Agreement for Non-Employee Directors Residing in the United States
Under The Western Union Company 2006 Non-Employee Director Equity Compensation Plan (filed as Exhibit
10.4 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2010 and incorporated herein by
reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Non-Employee Directors Residing in the United
States Under The Western Union Company 2006 Non-Employee Director Equity Compensation Plan (filed as
Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2010 and incorporated herein
by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (U.S.) Under The Western
Union Company 2006 Long-Term Incentive Plan (filed as Exhibit 10.29 to the Company’s Annual Report on
Form 10-K filed on February 25, 2011 and incorporated herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (Non - U.S.) Under The Western
Union Company 2006 Long-Term Incentive Plan (filed as Exhibit 10.30 to the Company’s Annual Report on
Form 10-K filed on February 25, 2011 and incorporated herein by reference thereto).*

Employment Contract, dated as of November 9, 2009, between Western Union Financial Services GmbH and
Hikmet Ersek (filed as Exhibit 10.35 to the Company’s Annual Report on Form 10-K filed on February 26,
2010 and incorporated herein by reference thereto).*

First Amendment to Employment Contract and Expatriate Letter Agreement, dated as of October 7, 2010,
between Western Union Financial Services GmbH, The Western Union Company and Hikmet Ersek (filed as
Exhibit 10 to the Company’s Quarterly Report on Form 10-Q filed on November 5, 2010 and incorporated
herein by reference thereto).*

10.19

Form of Bonus Stock Unit Award Agreement for Non-Employee Directors Residing in the United States
Under The Western Union Company 2006 Long-Term Incentive Plan (filed as Exhibit 10.3 to the Company’s
Quarterly Report on Form 10-Q filed on May 1, 2012 and incorporated herein by reference thereto).*

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10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

Form of Nonqualified Stock Option Award Agreement for Non-Employee Directors Residing in the United
States Under The Western Union Company 2006 Long-Term Incentive Plan (filed as Exhibit 10.47 to the
Company’s Annual Report on Form 10-K filed on February 24, 2014 and incorporated herein by reference
thereto).*

Form of Award Agreement Under The Western Union Company Senior Executive Performance Incentive
Plan (filed as Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed on February 21, 2019 and
incorporated herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (Non - U.S.) Under The
Western Union Company 2006 Long-Term Incentive Plan For Awards Granted in 2014 and Thereafter (filed
as Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on May 1, 2014 and incorporated
herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (U.S.) Under The Western
Union Company 2006 Long-Term Incentive Plan For Awards Granted in 2014 and Thereafter (filed as Exhibit
10.11 to the Company’s Quarterly Report on Form 10-Q filed on May 1, 2014 and incorporated herein by
reference thereto).*

The Western Union Company 2015 Long-Term Incentive Plan, as amended and restated on February 21, 2018
(filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K filed on February 22, 2018 and
incorporated herein by reference thereto).*

Form of Deferred Stock Unit Award Agreement for U.S. Non-Employee Directors Under The Western Union
Company 2015 Long-Term Incentive Plan, Effective May 15, 2015 (filed as Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q filed on July 30, 2015 and incorporated herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for U.S. Non-Employee Directors Under The Western
Union Company 2015 Long-Term Incentive Plan, Effective May 15, 2015 (filed as Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q filed on July 30, 2015 and incorporated herein by reference
thereto).*

The Western Union Company Supplemental Incentive Savings Plan, as Amended and Restated Effective
April 1, 2018 (filed as Exhibit 10.48 to the Company’s Annual Report on Form 10-K filed on February 21,
2019 and incorporated herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (Non - U.S.) Under The Western
Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.8 to the Company’s Quarterly Report on
Form 10-Q filed on May 3, 2016 and incorporated herein by reference thereto).*

Form of Performance-Based Restricted Stock Unit Award Notice and Agreement for Section 16 Officers (U.S.)
under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q filed on May 2, 2017 and incorporated herein by reference thereto).*

Form of Performance-Based Restricted Stock Unit Award Notice and Agreement for Section 16 Officers
(Austria) under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q filed on May 2, 2017 and incorporated herein by reference
thereto).*

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10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

Form of Performance-Based Restricted Stock Unit Award Notice and Agreement for Section 16 Officers
(United Arab Emirates) under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit
10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 2, 2017 and incorporated herein by
reference thereto).*

Form of Restricted Stock Unit Award Agreement for Section 16 Officers (U.S.) under The Western Union
Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.4 to the Company’s Quarterly Report on
Form 10-Q filed on May 2, 2017 and incorporated herein by reference thereto).*

Form of Restricted Stock Unit Award Agreement for Section 16 Officers (Non - U.S.) under The Western
Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.5 to the Company’s Quarterly Report on
Form 10-Q filed on May 2, 2017 and incorporated herein by reference thereto).*

Form of Nonqualified Stock Option Award Agreement for Section 16 Officers (Non - U.S.) Under The Western
Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.6 to the Company’s Quarterly Report on
Form 10-Q filed on May 2, 2017 and incorporated herein by reference thereto).*

Deferred Prosecution Agreement dated January 19, 2017 by and between The Western Union Company, the
United States Department of Justice, and the United States Attorney’s Offices for the Eastern and Middle
Districts of Pennsylvania, the Central District of California, and the Southern District of Florida (filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 20, 2017 and incorporated herein
by reference thereto).

Stipulated Order for Permanent Injunction and Final Judgment dated January 19, 2017 by and between The
Western Union Company and the United States Federal Trade Commission (filed as Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed on January 20, 2017 and incorporated herein by reference
thereto).

Consent to the Assessment of Civil Money Penalty dated January 19, 2017 by and between Western Union
Financial Services, Inc. and the Financial Crimes Enforcement Network of the United States Department of
Treasury (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on January 20, 2017 and
incorporated herein by reference thereto).

Form of Nonqualified Stock Option Grant Award Agreement for Non-U.S. Section 16 Officer under The
Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.65 to the Company’s Annual
Report on Form 10-K filed on February 21, 2019 and incorporated herein by reference thereto).*

Form of Restricted Stock Unit Award Agreement for U.S. Section 16 Officers under The Western Union
Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.66 to the Company’s Annual Report on
Form 10-K filed on February 21, 2019 and incorporated herein by reference thereto).*

Form of Financial Performance-Based Restricted Stock Unit Award Agreement for U.S. Section 16 Officers
under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.67 to the Company’s
Annual Report on Form 10-K filed on February 21, 2019 and incorporated herein by reference thereto).*

Form of Total Shareholder Return Performance-Based Restricted Stock Unit Award Agreement for U.S.
Section 16 Officers under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit
10.68 to the Company’s Annual Report on Form 10-K filed on February 21, 2019 and incorporated herein by
reference thereto).*

10.42

Form of Restricted Stock Unit Award Agreement for Non-U.S. Section 16 Officers under The Western Union
Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.69 to the Company’s Annual Report on
Form 10-K filed on February 21, 2019 and incorporated herein by reference thereto).*

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10.43

10.44

10.45

10.46

10.47

10.48

Form of Financial Performance-Based Restricted Stock Unit Award Agreement for Non-U.S. Section 16
Officers under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.70 to the
Company’s Annual Report on Form 10-K filed on February 21, 2019 and incorporated herein by reference
thereto).*

Form of Total Shareholder Return Performance-Based Restricted Stock Unit Award Agreement for Non-U.S.
Section 16 Officers under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit
10.71 to the Company’s Annual Report on Form 10-K filed on February 21, 2019 and incorporated herein by
reference thereto).*

Form of Restricted Stock Unit Award Agreement for U.S. Section 16 Officers under The Western Union
Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on August 1, 2019 and incorporated herein by reference thereto).*

Form of Financial Performance-Based Restricted Stock Unit Award Agreement for U.S. Section 16 Officers
under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.4 to the Company’s
Quarterly Report on Form 10-Q filed on August 1, 2019 and incorporated herein by reference thereto).*

Form of Restricted Stock Unit Award Agreement for Non-U.S. Section 16 Officers under The Western Union
Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q filed on August 1, 2019 and incorporated herein by reference thereto).*

Form of Financial Performance-Based Restricted Stock Unit Award Agreement for Non-U.S. Section 16
Officers under The Western Union Company 2015 Long-Term Incentive Plan (filed as Exhibit 10.5 to the
Company’s Quarterly Report on Form 10-Q filed on August 1, 2019 and incorporated herein by reference
thereto).*

Subsidiaries of The Western Union Company***

Consent of Independent Registered Public Accounting Firm***

31.1

Certification of Chief Executive Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the

Securities Exchange Act of 1934***

31.2

Certification of Chief Financial Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the

Securities Exchange Act of 1934***

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code****

101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because

its XBRL tags are embedded within the Inline XBRL document)***

101.SCH Inline XBRL Taxonomy Extension Schema Document***

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document***

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document***

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document***

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document***

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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* Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item
15(b) of this report.

** Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Corporation agrees
to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon request.

*** Filed herewith.

**** Furnished herewith.

Item 16. Form 10-K Summary

None.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Signatures

February 19, 2021

The Western Union Company (Registrant)

By:

/S/ HIKMET ERSEK
Hikmet Ersek
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

/s/ Hikmet Ersek
Hikmet Ersek

President, Chief Executive Officer, and Director (Principal
Executive Officer)

Date

February 19, 2021

/s/ Raj Agrawal
Raj Agrawal

Chief Financial Officer (Principal Financial Officer)

February 19, 2021

/s/ Mark Hinsey
Mark Hinsey

Chief Accounting Officer and Controller

(Principal Accounting Officer)

February 19, 2021

/s/ Jeffrey A. Joerres
Jeffrey A. Joerres

Non-Executive Chairman of the Board of Directors

February 19, 2021

/s/ Martin I. Cole
Martin I. Cole

Director

/s/ Richard A. Goodman
Richard A. Goodman

Director

/s/ Betsy D. Holden
Betsy D. Holden

Director

/s/ Michael A. Miles, Jr.
Michael A. Miles, Jr.

Director

/s/ Timothy P. Murphy
Timothy P. Murphy

Director

/s/ Joyce A. Phillips
Joyce A. Phillips

Director

/s/ Jan Siegmund
Jan Siegmund

/s/ Angela A. Sun
Angela A. Sun

Director

/s/ Solomon D. Trujillo
Solomon D. Trujillo

Director

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BOARD OF DIRECTORS

Jeffrey A. Joerres
Non-Executive Chairman of the Board of
Directors, Chair of the Corporate Governance,
ESG, and Public Policy Committee
Former Executive Chairman and CEO of
ManpowerGroup, Inc.

Martin I. Cole
Director, member of the Compensation
and Benefits Committee
and the Compliance Committee
Chairman of the Board of Directors,
Magnitude Software Inc

Hikmet Ersek
Director
President and Chief Executive Officer,
The Western Union Company

Richard A. Goodman
Director, member of the Audit Committee and
the Compensation and Benefits Committee
Former CFO and Executive Vice President,
Global Operations of PepsiCo, Inc.

Betsy D. Holden
Director, member of the Compensation and
Benefits Committee and the Audit Committee
Former Senior Advisor to McKinsey & Company
and Former Co-CEO, Kraft Foods Inc.

Timothy P. Murphy
Director, Chair of the Compliance Committee
and member of the Audit Committee
President and Chief Executive Officer of
Consortium Networks

Michael A. Miles, Jr.
Director, Chair of the Compensation and
Benefits Committee and member of the
Corporate Governance, ESG, and Public
Policy Committee Advisory Director, Berkshire
Partners and Former President and Chief
Operating Officer, Staples, Inc.

Joyce A. Phillips
Director, member of the Compensation and
Benefits Committee and the Corporate
Governance, ESG, and Public Policy
Committee
Founder and Chief Executive Officer of
EqualFuture Corp.

Jan Siegmund
Director, Chair of the Audit Committee and
member of the Compliance Committee Chief
Financial Officer of Cognizant Technology
Solutions Corporation

Angela A. Sun
Director, member of the Audit Committee and
the Compliance Committee Chief Operating
Officer & Partner, Alpha Edison

Solomon D. Trujillo
Director, member of the Audit Committee
and the Compliance Committee Founder and
Chairman, Trujillo Group, LLC

EXECUTIVE OFFICERS AND SENIOR LEADERSHIP

EXECUTIVE OFFICERS

Hikmet Ersek
President, Chief Executive Officer
and Director

Raj Agrawal
Chief Financial Officer

Jean Claude Farah
President, Global Network

SENIOR LEADERSHIP

Khalid Fellahi
President, Consumer Money Transfer

Andrew Summerill
President, Payments

Jacqueline Molnar
Chief Transformation Officer

Caroline Tsai
Chief Legal Officer and Corporate Secretary

Michelle Swanback
President, Product and Platform

Richard L. Williams
Chief People Officer

Nicole Vogrin
Chief Corporate Affairs and Communications Officer

Tyler Hand
Chief Compliance Officer

Forward-Looking Statements
This Annual Report contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995.
Certain statements contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of The
Western Union Company’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2020 (“Form 10-K”) are forward-looking
statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations,
estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the
results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of the Form 10-K.
See “Risk Factors” and “Forward-looking Statements” sections and other statements throughout the Form 10-K. The statements are only as of the
date they are made, and the Company undertakes no obligation to update any forward-looking statement.

2020 Highlights

A banner year for digital,

transcending borders and

currencies

Western Union continued towards our vision to

be the leader in cross-border, cross-currency

money movement and payments with a year of

unprecedented digital growth. Even amid difficult

global economic conditions, we made strides

opening our platform to leading e-commerce,

telecom and financial services partners. We continue

to execute on our strategy to become a more

diversified payments company, adding incremental

customers and expanding our addressable market.

We believe that our business outperformed the

market with cross border principal growth of 12%,

in contrast to the World Bank’s 2020 market forecast

for a 7% decline.

Digital Performance*

Digital presence in more than

75 countries and territories

2020

2019

Transaction growth

26%

81%

Revenues

Up 38%

>$850M >$600M

29% of transactions,

20% of revenue

WU.com

WU.com customers up 29% to 8.6 million

80%+ of new WU.com users are new to

the company*

12% increase in transactions and 25% increase

in principal per customer

80% access WU.com via mobile devices

WU.com app downloaded 3x more than any

peer money transfer company’s in 2020**

Global Financial Network

200 countries and territories

Payout in 130+ currencies

Account payout into billions of bank accounts,

millions of digital wallets, and cards in

120 countries

Real-time account payout in 100 countries

550,000 retail locations in urban, rural, and

remote areas

Financial Performance

$4.8 billion in revenue

$878 million operating cash flow

$587 million returned to shareholders through

dividends and share repurchases

For C2C (up from 16% and 14%, respectively, in 2019)

All figures as of December 31, 2020

*C2C

*Have not transacted with Western Union in the prior 12 months

**Data provided by mobile app marketing firm Sensor Tower

Corporate Information

Corporate Headquarters
7001 East Belleview Avenue, Denver, CO 80237
+1-720-332-1000
+1-866-405-5012

Transfer Agent and Registrar
Stockholders with questions concerning their stock holdings or
dividends or with address changes should contact:

EQ Shareowner Services
PO Box 64874
St Paul MN 55164-0874
www.shareowneronline.com

Overnight Mail:
Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100

Shareowner Relations Phone Numbers:
+1-651-450-4064
+1-800-468-9716

Independent Registered Public Accounting Firm
Ernst & Young LLP
370 17th Street, Suite 3300
Denver, CO 80202

Financial Information and Reports
The Company routinely issues press releases and quarterly and annual
financial reports. To receive this information please write the Company
at: Western Union, Investor Relations, 7001 East Belleview Avenue
HQ-14, Denver, CO 80237, call +1-866-405-5012 or visit the “Investor
Relations” section of our website at www.westernunion.com.
A copy of The Western Union Company 2020 Annual Report on Form
10-K filed with the U.S. Securities and Exchange Commission will be
furnished to stockholders without charge (except charges for providing
exhibits) upon request to the Company. Analysts and investors seeking
additional information about the Company can contact the Investor
Relations Department at +1-866-405-5012. For more information about
The Western Union Company, please visit the Company’s website at
www.westernunion.com.

Trademarks, Service Marks and Trade Names
The Western Union and WU names, logos and related trademarks
and service marks, owned by Western Union Holdings, Inc., are
registered and/or used in the U.S. and many foreign countries. All other
trademarks, service marks, logos and trade names referenced in this
material are the property of their respective owners.

Company Stock Performance
The following graph shows the five-year comparison of cumulative
total shareholder return, calculated on a dividend reinvested basis,
for (i) our common stock, (ii) the Standard & Poor’s Composite – 500
Stock Index (the “S&P 500 Index”), and (iii) the Standard & Poor’s
Composite – 500 Financials Index (the “S&P 500 Financials Index”),
an independently prepared index that includes companies in the
financial services industry. Pursuant to rules of the U.S. Securities and
Exchange Commission, the comparison assumes $100 was invested
on December 31, 2015 in our common stock and in each of the indices.
Data points on the graph are annual. Historic stock price performance is
not necessarily indicative of future stock price performance.

The Western Union Company
S&P 500 Index
S&P 500 Financials Index

$250

$200

$150

$100

$50

2015

2016

2017

2018

2019

2020

Corporate Governance
To review the Company’s corporate governance guidelines, Board
committee charters and codes of business conduct and ethics, please
visit the “Corporate Governance” section on the “Investor Relations”
page of our website at www.westernunion.com.

Shareholders of Record
There were

3,082

stockholders of record as of March 24, 2021.

Annual Meeting
The annual meeting of stockholders of The Western Union Company
(“Annual Meeting”) will be held on Friday, May 14, 2020 at 8:00 a.m.
Mountain Time. Due to the continued public health impact of the
coronavirus (COVID-19) pandemic and to support the health and well-
being of our stockholders, the Annual Meeting will be a completely
virtual meeting of stockholders, which will be conducted online via
live webcast. You will be able to attend the Annual Meeting by pre-
registering prior to the meeting at www.proxydocs.com/WU (for
Registered Holders) and www.proxydocs.com/brokers/WU (for
Beneficial Owners).

2020

Notice of 2021 Annual Meeting

of Stockholders, Proxy Statement

and 2020 Annual Report

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