1365135--2/27/2007--Western_Union

related topics

{financial, litigation, operation}

{product, market, service}

{system, service, information}

{tax, income, asset}

{control, financial, internal}

{regulation, change, law}

{acquisition, growth, future}

{capital, credit, financial}

{debt, indebtedness, cash}

{operation, natural, condition}

{investment, property, distribution}

{property, intellectual, protect}

{operation, international, foreign}

{cost, contract, operation}

{cost, operation, labor}

Risks Relating to Our Business and Industry If we are unable to maintain our agent network, our business, financial position and results of operations would be adversely affected. Our business is subject to a wide variety of laws and regulations, especially laws designed to prevent money laundering and terrorist financing. Failure by us, our agents or subagents to comply with those laws and regulations could have an adverse effect on our business, financial position and results of operations. 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. Our continued growth depends on our ability to compete effectively in the industry. Risks associated with operations outside the United States could adversely affect our business, financial position and results of operations. Interruptions in international migration patterns could adversely affect our business, financial position and results of operations. If consumers confidence in our business, or in traditional money transfer providers generally deteriorates, our business, revenue and results of operations could be adversely affected. Unfavorable resolution of tax contingencies could adversely affect our tax expense. Acquisitions and integrating new businesses create risks and may affect operating results. Our ability to adopt technology in response to changing industry and consumer needs or trends poses a challenge to our business. Western Union has been the subject of class-action litigation, and remains the subject of other litigation as well as consent agreements with or enforcement actions by regulators. Our ability to remain competitive depends in part on our ability to protect our brands and our other intellectual property rights and to defend ourselves against potential patent infringement claims. Interruptions in our systems may have a significant effect on our business. Breaches of our information security policies or safeguards could adversely affect our ability to operate and could damage our reputation, business, financial position and results of operations. We face credit and fraud risks from our agents and from consumers that could adversely affect our business, financial position and results of operations. We have substantial debt obligations that could restrict our operations. In addition, our business, financial position and results of operations could be harmed by adverse rating actions by credit rating agencies. Our consolidated balance sheet 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 position and results of operations. We previously identified a material weakness in the design and operation of our internal control related to compliance with SFAS No. 133. Risks Relating to the Spin-Off We may not realize the potential benefits from the spin-off. Our historical consolidated financial information is not necessarily indicative of our future financial position, future results of operations or future cash flows nor does it reflect what our financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented. We are incurring significant expenses to create the infrastructure necessary to operate as a stand-alone company, and we will experience increased on-going costs in connection with being a stand-alone company. If the spin-off does not qualify as a tax-free transaction, First Data and its stockholders could be subject to material amounts of taxes and, in certain circumstances, our company could be required to indemnify First Data for material taxes pursuant to indemnification obligations under the tax allocation agreement. Our separation from First Data could have negative consequences on our effective tax rate. Under some circumstances, we could be prevented from engaging in strategic or capital raising transactions, and we could be liable to First Data for any resulting adverse tax consequences. Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we are now subject. If we are unable to achieve and maintain effective internal controls, our business, financial position and results of operations could be adversely affected.

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1365135--2/27/2007--Western_Union_CO