10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _______________________________

Form 10-Q

_______________________________

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2012

or

¨	TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THESECURITIES 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	20-4531180
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
12500 EAST BELFORD AVENUE	80112
ENGLEWOOD, CO (Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (866) 405-5012

_______________________________ 

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   þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   þ    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of April 27, 2012, 612,951,394 shares of our common stock were outstanding.

THE WESTERN UNION COMPANY

INDEX

		PAGE NUMBER
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):	3
	Condensed Consolidated Statements of Income for the three months ended March 31, 2012 and 2011	3
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011	4
	Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
	Report of Independent Registered Public Accounting Firm	43
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46

2

PART I

FINANCIAL INFORMATION

Item1.  Financial Statements

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

	Three Months Ended March 31,
	2012			2011
Revenues:
Transaction fees	$	1,040.9		$	998.0
Foreign exchange revenues	322.6			256.1
Other revenues	29.9			28.9
Total revenues	1,393.4			1,283.0
Expenses:
Cost of services	783.0			745.4
Selling, general and administrative	277.9			224.7
Total expenses	1,060.9			970.1
Operating income	332.5			312.9
Other income/(expense):
Interest income	1.5			1.2
Interest expense	(44.4		)	(43.4		)
Derivative gains, net	1.6			1.9
Other income/(expense), net	(1.1		)	2.1
Total other expense, net	(42.4		)	(38.2		)
Income before income taxes	290.1			274.7
Provision for income taxes	42.8			64.5
Net income	$	247.3		$	210.2
Earnings per share:
Basic	$	0.40		$	0.32
Diluted	$	0.40		$	0.32
Weighted-average shares outstanding:
Basic	619.1			646.9
Diluted	621.9			652.1

See Notes to Condensed Consolidated Financial Statements.

3

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in millions)

	Three Months Ended March 31,
	2012			2011
Net income	$	247.3		$	210.2
Other comprehensive income/(loss):
Unrealized gains on investment securities:
Unrealized gains	5.9			0.4
Tax expense	(2.2		)	(0.1		)
Reclassification of gains into earnings	(1.4		)	(0.2		)
Tax expense	0.5			0.1
Net unrealized gains on investment securities	2.8			0.2
Unrealized losses on hedging activities:
Unrealized losses	(23.0		)	(35.6		)
Tax benefit	3.4			5.2
Reclassification of (gains)/losses into earnings	(1.6		)	6.2
Tax benefit	—			(1.4		)
Net unrealized losses on hedging activities	(21.2		)	(25.6		)
Foreign currency translation adjustments:
Foreign currency translation adjustments	3.3			4.5
Tax expense	(0.5		)	(1.0		)
Net foreign currency translation adjustments	2.8			3.5
Defined benefit pension plan:
Reclassification of losses into earnings	2.6			2.0
Tax benefit	(1.0		)	(0.7		)
Net defined benefit pension plan adjustments	1.6			1.3
Total other comprehensive loss	(14.0		)	(20.6		)
Comprehensive income	$	233.3		$	189.6

See Notes to Condensed Consolidated Financial Statements.

4

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions, except per share amounts)

	March 31, 2012			December 31, 2011
Assets
Cash and cash equivalents	$	1,395.9		$	1,370.9
Settlement assets	3,185.1			3,091.2
Property and equipment, net of accumulated depreciation of $445.2 and $429.7, respectively	196.3			198.1
Goodwill	3,166.3			3,198.9
Other intangible assets, net of accumulated amortization of $433.6 and $462.5, respectively	878.3			847.4
Other assets	375.9			363.4
Total assets	$	9,197.8		$	9,069.9
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable and accrued liabilities	$	498.3		$	535.0
Settlement obligations	3,185.1			3,091.2
Income taxes payable	259.6			302.4
Deferred tax liability, net	392.0			389.7
Borrowings	3,633.7			3,583.2
Other liabilities	261.7			273.6
Total liabilities	8,230.4			8,175.1
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued	—			—
Common stock, $0.01 par value; 2,000 shares authorized; 613.9 shares and 619.4 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively	6.1			6.2
Capital surplus	298.9			247.1
Retained earnings	794.9			760.0
Accumulated other comprehensive loss	(132.5		)	(118.5		)
Total stockholders’ equity	967.4			894.8
Total liabilities and stockholders’ equity	$	9,197.8		$	9,069.9

See Notes to Condensed Consolidated Financial Statements.

5

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

	Three Months Ended March 31,
	2012			2011
Cash flows from operating activities
Net income	$	247.3		$	210.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	15.3			15.0
Amortization	48.6			29.7
Other non-cash items, net	1.6			(7.2		)
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
Other assets	(10.1		)	(11.5		)
Accounts payable and accrued liabilities	(35.7		)	(20.2		)
Income taxes payable (Note 12)	(40.1		)	41.0
Other liabilities	(11.9		)	(5.4		)
Net cash provided by operating activities	215.0			251.6
Cash flows from investing activities
Capitalization of contract costs	(55.8		)	(7.1		)
Capitalization of purchased and developed software	(5.8		)	(2.5		)
Purchases of property and equipment	(14.2		)	(12.3		)
Net cash used in investing activities	(75.8		)	(21.9		)
Cash flows from financing activities
Proceeds from exercise of options	41.2			72.3
Cash dividends paid	(61.6		)	(44.7		)
Common stock repurchased	(146.8		)	(498.4		)
Net proceeds from commercial paper	53.0			—
Net proceeds from issuance of borrowings	—			299.5
Net cash used in financing activities	(114.2		)	(171.3		)
Net change in cash and cash equivalents	25.0			58.4
Cash and cash equivalents at beginning of period	1,370.9			2,157.4
Cash and cash equivalents at end of period	$	1,395.9		$	2,215.8
Supplemental cash flow information:
Interest paid	$	23.1		$	23.6
Income taxes paid (Note 12)	$	89.5		$	24.6
Unsettled repurchases of common stock	$	—		$	26.8

See Notes to Condensed Consolidated Financial Statements.

6

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 available through a network of agent locations in more than 200 countries and territories. 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 between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through the Company's websites and account based money transfers.

• Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. This segment primarily consists of U.S. bill payments, Pago Fácil (bill payments in Argentina), and international bill payments. The significant majority of the segment's revenue was generated in the United States during all periods presented.

• Business Solutions - The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations. The majority of the segment's business relates to exchanges of currency at the spot rate which enables 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. Travelex Global Business Payments (“TGBP”), which was acquired in November 2011 (see Note 3), is also included in this segment.

All businesses that have not been classified in the above segments are reported as “Other” and include the Company's money order, prepaid services, mobile money transfer, and other businesses and services, in addition to costs for the investigation and closing of acquisitions.

The Company's previously reported segments were Consumer-to-Consumer, Global Business Payments, and Other. The changes in the Company's segment structure primarily relate to the separation of the Global Business Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. All prior segment information has been reclassified to reflect these new segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located, or which constitute undistributed earnings of affiliates of the Company accounted for under the equity method of accounting. 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 March 31, 2012, the amount of net assets subject to these limitations totaled approximately $265 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.

7

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position and cash flows as of March 31, 2012 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Consistent with industry practice, the accompanying Condensed 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.

Use of Estimates

The preparation of financial statements in conformity with 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.

2.  Earnings Per Share and Dividends

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. 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, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.

For the three months ended March 31, 2012 and 2011, there were 20.5 million and 7.8 million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation, as their effect was anti-dilutive.

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

	Three Months Ended March 31,
	2012	2011
Basic weighted-average shares outstanding	619.1	646.9
Common stock equivalents	2.8	5.2
Diluted weighted-average shares outstanding	621.9	652.1

8

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Cash Dividends Paid

During the first quarter of 2012 and 2011, the Company's Board of Directors declared quarterly cash dividends of $0.10 and $0.07 per common share, respectively, representing $61.6 million and $44.7 million, respectively, in total dividends, which were paid on March 30, 2012 and March 31, 2011, respectively.

3.  Acquisitions

2011 Acquisitions

On November 7, 2011, the Company acquired the business-to-business payment business known as Travelex Global Business Payments from Travelex Holdings Limited for cash consideration of £603 million ($967.8 million). The acquisition of the French assets of TGBP for cash consideration of £3 million (approximately $5.2 million based on currency exchange rates at March 31, 2012) has not been finalized as of March 31, 2012. This acquisition is expected to close in 2012, subject to satisfaction of closing conditions. The final consideration and the final purchase price allocation for TGBP are subject to a working capital adjustment, further analysis of tax balances, final valuation of identifiable intangible assets, and other items. With the acquisition of TGBP and the Company's existing Business Solutions business, the Company has the ability to leverage TGBP's business-to-business payments market expertise, distribution, product and capabilities with Western Union's brand, existing Business Solutions operations, global infrastructure and relationships, and financial strength. The results of operations for TGBP have been included in the Company's consolidated financial statements from the date of acquisition.

On October 31, 2011 and April 20, 2011, the Company acquired the remaining 70% interests in European-based Finint S.r.l. (“Finint”) and Angelo Costa S.r.l. (“Costa”), respectively, two of the Company's largest agents providing services in a number of European countries. The Company previously held a 30% equity interest in each of these agents. The Company expects these acquisitions will help accelerate the introduction of additional Western Union products and services and will leverage its existing European infrastructure to build new opportunities across the European Union. The acquisitions do not impact the Company's money transfer revenue, because the Company was already recording all of the revenue arising from money transfers originating at Finint's and Costa's subagents. As of the acquisition dates, the Company no longer incurs commission costs for transactions related to Finint and Costa; rather the Company now pays commissions to Finint and Costa subagents, resulting in lower overall commission expense. The Company's operating expenses include costs attributable to Finint's and Costa's operations subsequent to the acquisition dates.

The Company acquired the remaining 70% interest in Finint for cash consideration of €99.6 million ($139.4 million). The Company revalued its previous 30% equity interest to fair value of approximately $47.7 million on the acquisition date, resulting in total value of $187.1 million.

The Company acquired the remaining 70% interest in Costa for cash consideration of €95 million ($135.7 million). The final consideration is subject to the resolution of a working capital adjustment. The Company revalued its previous 30% equity interest to fair value of approximately $46.2 million on the acquisition date, resulting in total value of $181.9 million.

9

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

All assets and liabilities have been recorded at fair value, excluding deferred tax liabilities. The following table summarizes the final allocations of purchase price for Finint and Costa and the preliminary allocation of purchase price for TGBP (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Assets:
Cash and cash equivalents	$	25.3	$	—	$	—
Settlement assets	171.6		52.2		46.3
Property and equipment	4.9		0.5		3.0
Goodwill	688.3		153.6		174.2
Other intangible assets	321.3		64.8		51.4
Other assets	66.5		2.0		1.5
Total assets	$	1,277.9	$	273.1	$	276.4
Liabilities:
Accounts payable and accrued liabilities	$	39.6	$	6.1	$	10.8
Settlement obligations	171.6		57.5		55.7
Income taxes payable	1.1		3.1		10.3
Deferred tax liability, net	76.0		15.8		15.5
Other liabilities	21.8		3.5		2.2
Total liabilities	310.1		86.0		94.5
Total purchase price (a)	$	967.8	$	187.1	$	181.9

____________________

(a) Total purchase price includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date.

The preliminary valuation of assets acquired for TGBP and the final valuation of assets acquired for Finint and Costa were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in identifiable intangible assets as follows (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Customer and other contractual relationships	$	270.3	$	—	$	—
Network of subagents	—		53.9		44.6
Other	51.0		10.9		6.8
Total identifiable intangible assets	$	321.3	$	64.8	$	51.4

Customer and other contractual relationships and network of subagents identifiable intangible assets were valued using an income approach and are being amortized over 9 to 15 years, subject to valuation completion for TGBP. Other intangibles were valued using both income and cost approaches and are being amortized over one to five years. For the remaining assets and liabilities excluding goodwill and deferred tax liabilities, fair value approximated carrying value.

The goodwill recognized for TGBP of $688.3 million is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce and relates entirely to the Business Solutions segment. The goodwill recognized for Finint and Costa of $153.6 million and $174.2 million, respectively, is attributable to growth opportunities that will arise from the Company directly managing its agent relationships, expected synergies, projected long-term business growth and an assembled workforce and relates entirely to the Consumer-to-Consumer segment. Based on the preliminary allocation of purchase price, goodwill expected to be deductible for income tax purposes for TGBP, Finint and Costa is approximately $440.0 million, $97.0 million and $104.9 million, respectively.

10

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4.  Restructuring and Related Expenses

On May 25, 2010 and as subsequently revised, the Company's Board of Directors approved a restructuring plan (the “Restructuring Plan”) designed to reduce the Company's overall headcount and migrate positions from various facilities, primarily within North America and Europe, to regional operating centers. As of September 30, 2011, the Company had incurred all of the expenses related to the Restructuring Plan.

The following table summarizes the activity for the restructuring accruals as of March 31, 2012 (in millions):

	Severance, Outplacement and Related Benefits			Other(a)			Total
Balance, December 31, 2011	$	13.7		$	0.2		$	13.9
Cash payments	(4.9		)	(0.2		)	(5.1		)
Balance, March 31, 2012	$	8.8		$	—		$	8.8

____________________ 

(a) Other expenses related to the relocation of various operations to new and existing Company facilities including expenses for hiring, training, relocation, travel and professional fees. All such expenses were recorded when incurred.

Restructuring and related expenses are reflected in the Condensed Consolidated Statements of Income as follows (in millions):

	Three Months Ended March 31,
	2011
Cost of services	$	6.9
Selling, general and administrative	17.1
Total restructuring and related expenses, pre-tax	$	24.0
Total restructuring and related expenses, net of tax	$	16.4

There were no restructuring and related expenses incurred during the three months ended March 31, 2012. During the three months ended March 31, 2011, $19.1 million and $3.5 million of the expenses incurred were attributable to the Consumer-to-Consumer and Consumer-to-Business segments, respectively, and $1.4 million was attributable to Other, for a total of $24.0 million. There were no restructuring and related expenses incurred during the three months ended March 31, 2011 that were attributable to the Business Solutions segment.

5.  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. For additional information on how the Company measures fair value, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

11

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):

	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
March 31, 2012	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	931.1	$	—	$	931.1
State and municipal variable rate demand notes	—		553.6		—		553.6
Corporate debt and other	0.1		88.0		—		88.1
Derivatives	—		110.9		—		110.9
Total assets	$	0.1	$	1,683.6	$	—	$	1,683.7
Liabilities:
Commercial paper	$	—	$	350.0	$	—	$	350.0
Notes and other borrowings	—		3,579.4		—		3,579.4
Total borrowings	—		3,929.4		—		3,929.4
Derivatives	—		90.6		—		90.6
Total liabilities	$	—	$	4,020.0	$	—	$	4,020.0
	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
December 31, 2011	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	866.5	$	—	$	866.5
State and municipal variable rate demand notes	—		376.9		—		376.9
Corporate debt and other	0.1		88.5		—		88.6
Derivatives	—		124.8		—		124.8
Total assets	$	0.1	$	1,456.7	$	—	$	1,456.8
Liabilities:
Commercial paper	$	—	$	297.0	$	—	$	297.0
Notes and other borrowings	—		3,563.5		—		3,563.5
Total borrowings	—		3,860.5		—		3,860.5
Derivatives	—		86.6		—		86.6
Total liabilities	$	—	$	3,947.1	$	—	$	3,947.1

No non-recurring fair value adjustments were recorded during the three months ended March 31, 2012, except those associated with acquisitions, as disclosed in Note 3. No non-recurring fair value adjustments were recorded during the three months ended March 31, 2011.

Other Fair Value Measurements

The carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, settlement receivables and settlement obligations, and commercial paper approximate fair value due to their short maturities. The aggregate fair value of the Company's borrowings, excluding commercial paper, was based on quotes from multiple banks and excluded the impact of related interest rate swaps. All the assets and liabilities in the above tables were carried at fair value in the Company's Condensed Consolidated Balance Sheets, with the exception of borrowings, which had a carrying value of $3,633.7 million and $3,583.2 million as of March 31, 2012 and December 31, 2011, respectively (see Note 11).

12

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6.  Commitments and Contingencies

Letters of Credit and Bank Guarantees

The Company had approximately $95 million in outstanding letters of credit and bank guarantees as of March 31, 2012 with expiration dates through 2015, the majority of which contain a one-year renewal option. The letters of credit and bank guarantees are primarily held in connection with lease arrangements and certain agent agreements. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances.

Litigation and Related Contingencies

In the second quarter of 2009, the Antitrust Division of the United States Department of Justice (“DOJ”) served one of the Company's subsidiaries with a grand jury subpoena requesting documents in connection with an investigation into money transfers, including related foreign exchange rates, from the United States to the Dominican Republic from 2004 through the date of subpoena. The Company is cooperating fully with the DOJ investigation. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company and one of its subsidiaries are defendants in two purported class action lawsuits: James P. Tennille v. The Western Union Company and Robert P. Smet v. The Western Union Company, both of which are pending in the United States District Court for the District of Colorado. The original complaints asserted claims for violation of various consumer protection laws, unjust enrichment, conversion and declaratory relief, based on allegations that the Company waits too long to inform consumers if their money transfers are not redeemed by the recipients and that the Company uses the unredeemed funds to generate income until the funds are escheated to state governments. The Tennille complaint was served on the Company on April 27, 2009. The Smet complaint was served on the Company on April 6, 2010. On September 21, 2009, the Court granted the Company's motion to dismiss the Tennille complaint and gave the plaintiff leave to file an amended complaint. On October 21, 2009, Tennille filed an amended complaint. The Company moved to dismiss the Tennille amended complaint and the Smet complaint. On November 8, 2010, the Court denied the motion to dismiss as to the plaintiffs' unjust enrichment and conversion claims. On February 4, 2011, the Court dismissed plaintiffs' consumer protection claims. On March 11, 2011, the plaintiffs filed an amended complaint that adds a claim for breach of fiduciary duty, various elements to its declaratory relief claim and Western Union Financial Services, Inc. as a defendant. On April 25, 2011, the Company and Western Union Financial Services, Inc. filed a motion to dismiss the breach of fiduciary duty and declaratory relief claims. Western Union Financial Services, Inc. also moved to compel arbitration of the plaintiffs' claims and to stay the action pending arbitration. On November 21, 2011, the Court denied the motion to compel arbitration and the stay request. Both companies appealed the decision. On January 24, 2012, the United States Court of Appeals for the Tenth Circuit granted the companies' request to stay the District Court proceedings pending their appeal. The plaintiffs have not sought and the Court has not granted class certification. The Company and Western Union Financial Services, Inc. intend to vigorously defend themselves against both lawsuits. However, due to the preliminary stages of these lawsuits, the fact the plaintiffs have not quantified their damage demands, and the uncertainty as to whether they will ever be certified as class actions, the potential outcome cannot be determined.

On February 11, 2010, the Company signed an agreement and settlement, which resolved all outstanding legal issues and claims with the State of Arizona and required the Company to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which California, Texas and New Mexico are participating with Arizona. The accrual included amounts for reimbursement to the State of Arizona for its costs associated with this matter. In addition, as part of the agreement and settlement, the Company has made and expects to make certain investments in its compliance programs along the United States and Mexico border and a monitor has been engaged for those programs. The costs of the investments in the Company's programs and for the monitor are expected to reach up to $23.0 million over the period from signing to 2013.

In the normal course of business, the Company is subject to claims and litigation. Management of the Company believes such matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the Company's financial condition, results of operations and cash flows. The Company accrues for loss contingencies as they become probable and estimable.

13

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

On January 26, 2006, the First Data Corporation (“First Data”) Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments business and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the “Spin-off”). The Spin-off resulted in the formation of the Company and these assets and businesses no longer being part of First Data. Pursuant to the separation and distribution agreement with First Data in connection with the Spin-off, First Data and the Company are each liable for, and agreed to perform, all liabilities with respect to their respective businesses. In addition, the separation and distribution agreement also provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Company's business with the Company and financial responsibility for the obligations and liabilities of First Data's retained businesses with First Data. The Company also entered into a tax allocation agreement that sets forth the rights and obligations of First Data and the Company with respect to taxes imposed on their respective businesses both prior to and after the Spin-off as well as potential tax obligations for which the Company may be liable in conjunction with the Spin-off (see Note 12).

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, as it does its other agents, commissions for money transfer and other services provided on the Company’s behalf. Commission expense recognized for these agents for the three months ended March 31, 2012 and 2011 totaled $16.1 million and $44.0 million, respectively. Commission expense recognized for Finint prior to October 31, 2011 and Costa prior to April 20, 2011, the date of the acquisitions (see Note 3), was considered a related party transaction.

The Company has a director who is also a director for a company holding significant investments in two of the Company's existing agents. These agents had been agents of the Company prior to the director being appointed to the board. The Company recognized commission expense of $14.0 million and $13.4 million for the three months ended March 31, 2012 and 2011, respectively, related to these agents.

8.  Settlement Assets and Obligations

Settlement assets represent funds received or to be received from agents 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 businesses for the value of customer cross-currency payment transactions related to the Business Solutions segment.

Settlement assets and obligations consisted of the following (in millions):

	March 31, 2012		December 31, 2011
Settlement assets:
Cash and cash equivalents	$	483.2	$	712.5
Receivables from selling agents and Business Solutions customers	1,129.1		1,046.7
Investment securities	1,572.8		1,332.0
	$	3,185.1	$	3,091.2
Settlement obligations:
Money transfer, money order and payment service payables	$	2,283.6	$	2,242.3
Payables to agents	901.5		848.9
	$	3,185.1	$	3,091.2

14

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Investment securities consist primarily of highly-rated state and municipal debt securities, including 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 that have varying maturities through 2050. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold specific highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. The substantial majority of the Company's investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. As of March 31, 2012, the majority of the Company's investment securities had credit ratings of “AA-” or better from a major credit rating agency.

Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Proceeds from the sale and maturity of available-for-sale securities during the three months ended March 31, 2012 and 2011 were $3.0 billion and $3.3 billion, respectively.

The components of investment securities are as follows (in millions):

March 31, 2012	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	919.1	$	931.1	$	13.3	$	(1.3	)	$	12.0
State and municipal variable rate demand notes	553.6		553.6		—		—			—
Corporate debt and other	87.7		88.1		0.8		(0.4		)	0.4
	$	1,560.4	$	1,572.8	$	14.1	$	(1.7	)	$	12.4

December 31, 2011	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	858.5	$	866.5	$	10.4	$	(2.4	)	$	8.0
State and municipal variable rate demand notes	376.9		376.9		—		—			—
Corporate debt and other	88.7		88.6		0.6		(0.7		)	(0.1		)
	$	1,324.1	$	1,332.0	$	11.0	$	(3.1	)	$	7.9

____________________ 

(a) The majority of these securities are fixed-rate instruments.

The following summarizes the contractual maturities of investment securities as of March 31, 2012 (in millions):

	Fair Value
Due within 1 year	$	210.9
Due after 1 year through 5 years	750.8
Due after 5 years through 10 years	124.1
Due after 10 years	487.0
	$	1,572.8

15

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 $1.2 million, $64.6 million, $22.7 million and $465.1 million, are included in the “Due within 1 year,” “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. Employee Benefit Plan

The Company has a frozen defined benefit pension plan (the “Plan”) for which it had a recorded unfunded pension obligation of $102.2 million and $112.7 million as of March 31, 2012 and December 31, 2011, respectively, included in “Other liabilities” in the Condensed Consolidated Balance Sheets. The Company is required to fund $20 million to the Plan in 2012. Through March 2012, the Company has made contributions of $9 million to the Plan, including a discretionary contribution of approximately $5 million.

The following table provides the components of net periodic benefit cost for the Plan (in millions):

	Three Months Ended March 31,
	2012			2011
Interest cost	$	3.7		$	4.5
Expected return on plan assets	(5.2		)	(5.3		)
Amortization of actuarial loss	2.6			2.0
Net periodic benefit cost	$	1.1		$	1.2

10.  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, Canadian dollar and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency business-to-business payments 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 uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency business-to-business payments by writing derivatives to customers.

The Company executes derivatives with established financial institutions, with the substantial majority of these financial institutions having credit ratings of “A-” or better from a major credit rating agency. The Company also writes Business Solutions derivatives mostly with 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. The Company also monitors 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 (including termination of contracts) when doubt arises about the counterparties' ability to perform. 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.

16

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Foreign Currency — Consumer-to-Consumer

The Company’s policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to 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 March 31, 2012, the Company’s longer-term 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. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net” within the Company’s Condensed Consolidated Statements of Income.

The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up 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, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2012 were as follows (in millions):

Contracts not designated as hedges:
Euro	$	149.7
Australian dollar	48.1
Canadian dollar	43.6
British pound	42.5
Other	67.6
Contracts designated as hedges:
Euro	$	503.2
Canadian dollar	117.4
British pound	104.1
Australian dollar	48.2
Other	78.5

Foreign Currency — Business Solutions

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-to-business 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). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency business-to-business 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 $80.1 million and $27.7 million for the three months ended March 31, 2012 and 2011, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts is generally nine months or less.

The aggregate equivalent United States dollar notional amounts of foreign currency derivative customer contracts held by the Company in its Business Solutions operations as of March 31, 2012 were approximately $3.5 billion. The significant majority of customer contracts are written in major currencies such as the Canadian dollar, euro, Australian dollar, and British pound.

17

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Interest Rate Hedging — Corporate

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 LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The Company designates these derivatives as fair value hedges utilizing the short-cut method, which permits an assumption of no ineffectiveness if certain criteria are met. 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 the Company's “Borrowings” in the Condensed Consolidated Balance Sheets and “Interest expense” in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets.

The Company held interest rate swaps in an aggregate notional amount of $500.0 million, related to notes due in 2014, as of both March 31, 2012 and December 31, 2011.

Balance Sheet

The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (in millions):

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
	Balance Sheet Location	March 31, 2012		December 31, 2011		Balance Sheet Location	March 31, 2012		December 31, 2011
Derivatives — hedges:
Interest rate fair value hedges — Corporate	Other assets	$	3.9	$	4.4	Other liabilities	$	—	$	—
Foreign currency cash flow hedges — Consumer-to-Consumer	Other assets	18.3		37.0		Other liabilities	13.4		6.6
Total		$	22.2	$	41.4		$	13.4	$	6.6
Derivatives — undesignated:
Foreign currency — Business Solutions	Other assets	$	87.2	$	79.8	Other liabilities	$	69.4	$	67.6
Foreign currency —Consumer-to-Consumer	Other assets	1.5		3.6		Other liabilities	7.8		12.4
Total		$	88.7	$	83.4		$	77.2	$	80.0
Total derivatives		$	110.9	$	124.8		$	90.6	$	86.6

18

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Income Statement

The following tables summarize the location and amount of gains and losses of derivatives in the Condensed Consolidated Statements of Income segregated by designated, qualifying hedging instruments and those that are not, for the three months ended March 31, 2012 and 2011 (in millions):

Fair Value Hedges

The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives							Gain/(Loss) Recognized in Income on Related Hedged Item (a)
	Income Statement Location	Amount						Income Statement Location	Amount
Derivatives		March 31, 2012		March 31, 2011			Hedged Items		March 31, 2012		March 31, 2011
Interest rate contracts	Interest expense	$	1.7	$	(0.2	)	Fixed-rate debt	Interest expense	$	0.2	$	7.3
Total gain/(loss)		$	1.7	$	(0.2	)			$	0.2	$	7.3

Cash Flow Hedges

The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)						Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)							Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
							Income Statement	Amount						Income Statement	Amount
	March 31,			March 31,				March 31,			March 31,				March 31,		March 31,
Derivatives	2012			2011			Location	2012			2011			Location	2012		2011
Foreign currency contracts	$	(23.0	)	$	(35.6	)	Revenue	$	2.5		$	(5.8	)	Derivative gains, net	$	1.4	$	2.3
Interest rate contracts (c)	—			—			Interest expense	(0.9		)	(0.4		)	Interest expense	—		—
Total gain/(loss)	$	(23.0	)	$	(35.6	)		$	1.6		$	(6.2	)		$	1.4	$	2.3

Undesignated Hedges

The following table presents the location and amount of net losses from undesignated hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives (d)
	Income Statement Location	Amount
		Three Months Ended March 31,
Derivatives		2012			2011
Foreign currency contracts (e)	Selling, general and administrative	$	(14.8	)	$	(22.7	)
Foreign currency contracts (f)	Derivative gains, net	0.2			(2.0		)
Total loss		$	(14.6	)	$	(24.7	)

 ____________________

(a) The gain of $0.2 million and $7.3 million in the three months ended March 31, 2012 and 2011, respectively, was comprised of a (loss)/gain in value on the debt of $(1.7) million and $0.2 million, respectively, and amortization of hedge accounting adjustments of $1.9 million and $7.1 million, respectively.

19

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

(b) The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.

(c) The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.

(d) The Company uses foreign currency forward and option contracts as part of its business-to-business payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(e) The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gain on settlement assets and obligations and cash balances for the three months ended March 31, 2012 and 2011, were $16.1 million and $20.2 million, respectively.

(f) The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract.

An accumulated other comprehensive pre-tax loss of $1.4 million related to the foreign currency forward contracts is expected to be reclassified into revenue within the next 12 months as of March 31, 2012. Approximately $3.6 million of net losses on the forecasted debt issuance hedges are expected to be recognized in "Interest expense" in the Condensed Consolidated Statements of Income within the next 12 months as of March 31, 2012. No amounts have been reclassified into earnings as a result of the underlying transaction being considered probable of not occurring within the specified time period.

20

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

11.  Borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

	March 31, 2012			December 31, 2011
Due in less than one year:
Commercial paper	$	350.0		$	297.0
Floating rate notes (effective rate of 1.1%) due 2013	300.0			300.0
Due in greater than one year (a):
6.500% notes (effective rate of 5.6%) due 2014	500.0			500.0
5.930% notes due 2016 (b)	1,000.0			1,000.0
3.650% notes (effective rate of 4.4%) due 2018	400.0			400.0
5.253% notes due 2020 (b)	324.9			324.9
6.200% notes due 2036 (b)	500.0			500.0
6.200% notes due 2040 (b)	250.0			250.0
Other borrowings	5.8			8.8
Total borrowings at par value	3,630.7			3,580.7
Fair value hedge accounting adjustments, net (a)	23.8			23.9
Unamortized discount, net	(20.8		)	(21.4		)
Total borrowings at carrying value (c)	$	3,633.7		$	3,583.2

____________________ 

(a) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.

(b) The difference between the stated interest rate and the effective interest rate is not significant.

(c) As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

The Company's maturities of borrowings at par value as of March 31, 2012 are $350.0 million in 2012, $300.0 million in 2013, $500.0 million in 2014, $1.0 billion in 2016 and approximately $1.5 billion thereafter.

The Company's obligations with respect to its outstanding borrowings, as described above, 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. The Commercial Paper Notes may have maturities of up to 397 days from date of issuance. The Company's commercial paper borrowings as of March 31, 2012 had a weighted-average annual interest rate of approximately 0.5% and a weighted-average term of 5 days. During the three months ended March 31, 2012, the average commercial paper balance outstanding was $141.7 million and the maximum balance outstanding was $350.0 million. Proceeds from the Company's commercial paper borrowings were used for general corporate purposes. The Company had $350.0 million and $297.0 million of commercial paper outstanding as of March 31, 2012 and December 31, 2011, respectively.

21

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12.  Income Taxes

The Company's effective tax rates on pre-tax income for the three months ended March 31, 2012 and 2011 were 14.8% and 23.5%, respectively. The significant decrease in the Company's effective tax rate for the three months ended March 31, 2012 is primarily due to an agreement with the United States Internal Revenue Service (“IRS Agreement”) resolving substantially all of the issues related to the Company's restructuring of its international operations in 2003, as described below. The Company also continues to benefit from an increasing proportion of its profits being foreign-derived, and therefore taxed at lower rates than its combined federal and state tax rates in the United States. For the three months ended March 31, 2012, 85.0% of the Company's pre-tax income was from foreign sources. However, certain portions of the Company's foreign source income are subject to U.S. federal and state income tax as earned due to the nature of the income, and dividend repatriations of the Company's foreign source income are generally subject to U.S. federal and state income tax.

Uncertain Tax Positions

The Company has established contingency reserves for a variety of material, known tax exposures. 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 financial statements, and are reflected in “Income taxes payable” in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March 31, 2012 and December 31, 2011 was $120.2 million and $123.7 million, respectively, excluding interest and penalties. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $113.9 million and $115.6 million as of March 31, 2012 and December 31, 2011, respectively, excluding interest and penalties.

The Company recognizes interest and penalties with respect to unrecognized tax benefits in “Provision for income taxes” in its Condensed Consolidated Statements of Income, and records the associated liability in “Income taxes payable” in its Condensed Consolidated Balance Sheets. The Company recognized $(1.5) million and $3.0 million in interest and penalties during the three months ended March 31, 2012 and 2011, respectively. The Company has accrued $19.3 million and $20.7 million for the payment of interest and penalties as of March 31, 2012 and December 31, 2011, respectively.

The unrecognized tax benefits accrual at March 31, 2012 consists of federal, state and foreign tax matters. It is reasonably possible that the Company's total unrecognized tax benefits will decrease by approximately $50 million during the next 12 months in connection with various matters which may be resolved.

22

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 United States federal income tax returns of First Data, which include the Company, are eligible to be examined for 2005 and 2006. The Company's United States federal income tax returns since the Spin-off are also eligible to be examined. The United States Internal Revenue Service (“IRS”) completed its examination of the United States federal consolidated income tax returns of First Data for 2003 and 2004, which included the Company, 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. As a result of the IRS Agreement, the Company expects to make cash payments of approximately $190 million, of which approximately $65 million were made in the three months ended March 31, 2012. An examination of the United States federal consolidated income tax returns of First Data that cover the Company's 2005 and pre-Spin-off 2006 taxable periods is ongoing, as is an examination of the Company's United States federal consolidated income tax returns for the 2006 post-Spin-off period through 2009.

As of March 31, 2012, no provision had been made for United States federal and state income taxes on certain of the Company's outside tax basis differences, which primarily relate to accumulated foreign earnings of approximately $3.8 billion, which are expected to be reinvested outside the United States indefinitely. Upon distribution of those earnings to the United States in the form of actual or constructive dividends, the Company would be subject to United States income taxes (subject to an adjustment for foreign tax credits), state income taxes and possible withholding taxes payable to various foreign countries. Such taxes could be significant. Determination of this amount of unrecognized deferred United States tax liability is not practicable because of the complexities associated with its hypothetical calculation.

Tax Allocation Agreement with First Data

The Company and First Data each are liable for taxes imposed on their respective businesses both prior to and after the Spin-off. If such taxes have not been appropriately apportioned between First Data and the Company, subsequent adjustments may occur that may impact the Company's financial condition or results of operations.

Also under the tax allocation agreement, with respect to taxes and other liabilities that result from a final determination that is inconsistent with the anticipated tax consequences of the Spin-off (as set forth in the private letter ruling and relevant tax opinion) (“Spin-off Related Taxes”), the Company will be liable to First Data for any such Spin-off Related Taxes attributable solely to actions taken by or with respect to the Company. In addition, the Company will also be liable for half of any Spin-off Related Taxes (i) that would not have been imposed but for the existence of both an action by the Company and an action by First Data or (ii) where the Company and First Data each take actions that, standing alone, would have resulted in the imposition of such Spin-off Related Taxes. The Company may be similarly liable if it breaches certain representations or covenants set forth in the tax allocation agreement. If the Company is required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it likely would have a material adverse effect on the Company's business, financial condition and results of operations. First Data generally will be liable for all Spin-off Related Taxes, other than those described above.

13.  Stock Compensation Plans

For the three months ended March 31, 2012 and 2011, the Company recognized stock-based compensation expense of $10.5 million and $7.5 million, respectively, resulting from stock options, restricted stock awards, restricted stock units, performance-based restricted stock units, deferred stock units and bonus stock units in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2012, the Company granted 2.5 million options at a weighted-average exercise price of $17.86, 1.7 million restricted stock units at a weighted-average grant date fair value of $16.76 and 0.5 million performance-based restricted stock units at a weighted-average grant date fair value of $16.70. The performance-based restricted stock units granted in 2012 are restricted stock awards, primarily granted to the Company's executives, which require certain financial and strategic performance objectives to be met over the next two years plus an additional one year vesting period. Achievement is also limited if certain total shareholder return metrics are not met over the three year vesting period.

As of March 31, 2012, the Company had 29.6 million outstanding options at a weighted-average exercise price of $18.45, and had 24.0 million options exercisable at a weighted-average exercise price of $18.71. Approximately 26% of the outstanding options as of March 31, 2012 were held by employees of First Data. The Company had 5.3 million non-vested restricted stock awards and units at a weighted-average grant date fair value of $17.42 as of March 31, 2012.

23

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March 31, 2012:

Stock options granted:
Weighted-average risk-free interest rate	1.2		%
Weighted-average dividend yield	1.7		%
Volatility	33.3		%
Expected term (in years)	6.09
Weighted-average grant date fair value	$	4.94

All assumptions used to calculate the fair value of Western Union’s stock options granted during the three months ended March 31, 2012 were determined on a consistent basis with those assumptions disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

14.  Segments

As previously described in Note 1, the Company classifies its businesses into three segments: Consumer-to-Consumer, Consumer-to-Business 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 deciding where to allocate resources and in assessing performance.

The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The Company's money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world, including related transactions that can be initiated through the Company's websites and account based money transfers. The segment includes six regions whose functions are limited to generating, managing and maintaining agent relationships and localized marketing activities. These regions interact on transactions with consumers and share common processes, systems and licenses, thereby constituting one global Consumer-to-Consumer money transfer business and one operating segment.

The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses.

The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations.

All businesses that have not been classified in the above segments are reported as “Other” and include the Company's money order, prepaid services, mobile money transfer, and other businesses and services.

There were no restructuring and related expenses incurred during the three months ended March 31, 2012, but the Company incurred expenses of $24.0 million for the three months ended March 31, 2011. These expenses were not allocated to the Company's segments. While these items were identifiable to the Company's segments, they were not included in the measurement of segment operating profit provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. For additional information on restructuring and related activities, refer to Note 4.

24

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

In the first quarter of 2012, the Company began assessing performance and allocating resources based on the segment structure described above. Segment results for the three months ended March 31, 2011 have been reclassified to reflect this structure. The following table presents the Company's reportable segment results for the three months ended March 31, 2012 and 2011 (in millions):

	Three Months Ended March 31,
	2012			2011
Revenues:
Consumer-to-Consumer:
Transaction fees	$	872.0		$	839.8
Foreign exchange revenues	239.4			227.4
Other revenues	13.2			10.9
	1,124.6			1,078.1
Consumer-to-Business:
Transaction fees	147.7			144.7
Foreign exchange revenues	0.8			0.9
Other revenues	6.6			7.6
	155.1			153.2
Business Solutions:
Transaction fees	6.5			0.9
Foreign exchange revenues	80.1			26.8
Other revenues	0.3			0.2
	86.9			27.9
Other:
Total revenues	26.8			23.8
	26.8			23.8
Total consolidated revenues	$	1,393.4		$	1,283.0
Operating income/(loss):
Consumer-to-Consumer	$	311.3		$	308.6
Consumer-to-Business	41.1			34.6
Business Solutions	(14.8		)	(4.3		)
Other	(5.1		)	(2.0		)
Total segment operating income	332.5			336.9
Restructuring and related expenses (Note 4)	—			(24.0		)
Total consolidated operating income	$	332.5		$	312.9

25

THE WESTERN UNION COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Item 2.

This report on Form 10-Q contains certain statements that areforward-looking within the meaning of the Private Securities Litigation Reform Act of1995. These statements are not guarantees of future performance and involve certainrisks, uncertainties and assumptions that are difficult to predict. Actual outcomesand results may differ materially from those expressed in, or implied by, ourforward-looking statements. Words such as “expects,” “intends,” “anticipates,”“believes,” “estimates,” “guides,” “provides guidance,” “provides outlook” and othersimilar expressions or future or conditional verbs such as “will,” “should,” “would”and “could” are intended to identify such forward-looking statements. Readers of theForm 10-Q of The Western Union Company (the “Company,” “Western Union,”“we,” “our” or “us”) should not rely solely on the forward-looking statements andshould consider all uncertainties and risks discussed in the “Risk Factors” sectionand throughout the Annual Report on Form 10-K for the year endedDecember 31, 2011. The statements are only as of the date they are made, and theCompany undertakes no obligation to update any forward-looking statement.

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Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events related to our business and industry, such as: deterioration in consumers' and clients' confidence in our business, or in money transfer and payment service providers generally; changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic downturns and financial market disruptions; political conditions and related actions in the United States and abroad which may adversely affect our business and economic conditions as a whole; interruptions of United States government relations with countries in which we have or are implementing material agent contracts; 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; changes in immigration laws, interruptions in immigration patterns and other factors related to migrants; our ability to adapt technology in response to changing industry and consumer needs or trends; our failure to develop and introduce new services and enhancements, and gain market acceptance of such services; mergers, acquisitions and integration of acquired businesses and technologies into our Company, and the realization of anticipated financial benefits from these acquisitions; decisions to downsize, sell or close units, or to transition operating activities from one location to another or to third parties, particularly transitions from the United States to other countries; decisions to change our business mix; failure to manage credit and fraud risks presented by our agents, clients and consumers or non-performance by our banks, lenders, other financial services providers or insurers; adverse movements and volatility in capital markets and other events which affect our liquidity, the liquidity of our agents or clients, or the value of, or our ability to recover our investments or amounts payable to us; any material breach of security or safeguards of or interruptions in any of our systems; our ability to attract and retain qualified key employees and to manage our workforce successfully; our ability to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place; adverse rating actions by credit rating agencies; failure to compete effectively in the money transfer industry with respect to global and niche or corridor money transfer providers, banks and other money transfer services providers, including telecommunications providers, card associations, card-based payment providers and electronic and Internet providers; our ability to protect our brands and our other intellectual property rights; our failure to manage the potential both for patent protection and patent liability in the context of a rapidly developing legal framework for intellectual property protection; changes in tax laws and unfavorable resolution of tax contingencies; cessation of various services provided to us by third-party vendors; material changes in the market value or liquidity of securities that we hold; restrictions imposed by our debt obligations; significantly slower growth or declines in the money transfer market and other markets in which we operate; and changes in industry standards affecting our business;(ii) events related to our regulatory and litigation environment, such as: the failure by us, our agents or their subagents to comply with laws and regulations designed to detect and prevent money laundering, terrorist financing, fraud and other illicit activity; changes in United States or foreign laws, rules and regulations including the Internal Revenue Code, governmental or judicial interpretations thereof and industry practices and standards; liabilities resulting from a failure of our agents or subagents to comply with laws and regulations; increased costs due to regulatory initiatives and changes in laws, regulations and industry practices and standards affecting our agents; liabilities and unanticipated developments resulting from governmental investigations and consent agreements with, or enforcement actions by, regulators, including those associated with compliance with, or a failure to comply with, the settlement agreement with the State of Arizona; the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules promulgated there-under and the creation of the Consumer Financial Protection Bureau; liabilities resulting from litigation, including class-action lawsuits and similar matters, including costs, expenses, settlements and judgments; failure to comply with regulations regarding consumer privacy and data use and security; effects of unclaimed property laws; failure to maintain sufficient amounts or types of regulatory capital to meet the changing requirements of our regulators worldwide; and changes in accounting standards, rules and interpretations; and (iii) other events, such as: adverse consequences from our spin-off from First Data Corporation; catastrophic events; and management's ability to identify and manage these and other risks.

Overview

We are a leading provider of money movement services, operating in three business segments:

• Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. Our multi-currency, real-time money transfer service is viewed by us as one interconnected global network where a money transfer can be sent from one location to another, around the world. Our money transfer services are available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through our websites and account based money transfers.

• Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. This segment primarily consists of U.S. bill payments, Pago Fácil (bill payments in Argentina), and international bill payments. The significant majority of the segment's revenue was generated in the United States during all periods presented.

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• Business Solutions - The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations. The majority of the segment's business relates to exchanges of currency at the spot rate which enables 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. Travelex Global Business Payments (“TGBP”), which was acquired in November 2011, is also included in this segment.

All businesses that have not been classified in the above segments are reported as “Other” and include our money order, prepaid services, mobile money transfer, and other businesses and services, in addition to costs for the investigation and closing of acquisitions.

Our previously reported segments were Consumer-to-Consumer, Global Business Payments, and Other. The changes in our segment structure primarily relate to the separation of the Global Business Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. All prior segment information has been reclassified to reflect these new segments.

Significant Financial and Other Highlights

Significant financial and other highlights for the three months ended March 31, 2012 included:

• We generated $1,393.4 million in total consolidated revenues compared to $1,283.0 million for the comparable period in the prior year, representing an increase of 9%. The acquisition of TGBP contributed approximately 5% of consolidated revenue growth for the three months ended March 31, 2012.

• We generated $332.5 million in consolidated operating income compared to $312.9 million for the comparable period in the prior year, representing an increase of 6%. The current year results include $6.4 million of integration expenses resulting from the acquisition of TGBP. The prior year results include restructuring and related expenses of $24.0 million, as described within “Operating expenses overview.”

• Our operating income margin was 24% for both of the three month periods ended March 31, 2012 and 2011.

• Our effective tax rate was 14.8% compared to 23.5% for the comparable period in the prior year, primarily due to an agreement with the United States Internal Revenue Service (“IRS Agreement”) resolving substantially all of the issues related to our restructuring of our international operations in 2003. We also continue to benefit from an increasing proportion of our profits being foreign-derived, and therefore taxed at lower rates than our combined federal and state tax rates in the United States. For the three months ended March 31, 2012, 85.0% of our pre-tax income was 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 tax laws, both foreign and domestic. Certain portions of our foreign source income are subject to U.S. federal and state income tax as earned due to the nature of the income, and dividend repatriations of our foreign source income are generally subject to U.S. federal and state income tax.

• Consolidated net income was $247.3 million, representing an increase of 18% over the comparable period in the prior year. The current year results include $4.3 million of TGBP integration expenses, net of tax. The prior year results include $16.4 million in restructuring and related expenses, net of tax.

• Our consumers transferred $19.5 billion in Consumer-to-Consumer principal, of which $17.5 billion related to cross-border principal, which represented increases of 2% in both Consumer-to-Consumer principal and cross-border principal over the comparable period in the prior year.

• Consolidated cash flows provided by operating activities for the three months ended March 31, 2012 and 2011 were $215.0 million and $251.6 million, respectively. Cash flows provided by operating activities for the three months ended March 31, 2012 were impacted by tax payments of approximately $65 million made as a result of the IRS Agreement.

Results of Operations

The following discussion of our consolidated results of operations and segment results refers to the three months ended March 31, 2012 compared to the same period in 2011. 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 Condensed Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated.

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There were no restructuring and related expenses incurred during the three months ended March 31, 2012, but we incurred expenses of $24.0 million for the three months ended March 31, 2011, which were not allocated to the segments. While these items were identifiable to our segments, they were not included in the measurement of segment operating profit provided to the Chief Operating Decision Maker (“CODM”) for purposes of assessing segment performance and decision making with respect to resource allocation. For additional information on restructuring and related activities refer to “Operating Expenses Overview.”

Overview

The following table sets forth our results of operations for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(in millions, except per share amounts)	2012			2011			% Change
Revenues:
Transaction fees	$	1,040.9		$	998.0		4	%
Foreign exchange revenues	322.6			256.1			26	%
Other revenues	29.9			28.9			3	%
Total revenues	1,393.4			1,283.0			9	%
Expenses:
Cost of services	783.0			745.4			5	%
Selling, general and administrative	277.9			224.7			24	%
Total expenses	1,060.9			970.1			9	%
Operating income	332.5			312.9			6	%
Other income/(expense):
Interest income	1.5			1.2			25	%
Interest expense	(44.4		)	(43.4		)	2	%
Derivative gains, net	1.6			1.9			(16	)%
Other income/(expense), net	(1.1		)	2.1			*
Total other expense, net	(42.4		)	(38.2		)	11	%
Income before income taxes	290.1			274.7			6	%
Provision for income taxes	42.8			64.5			(34	)%
Net income	$	247.3		$	210.2		18	%
Earnings per share:
Basic	$	0.40		$	0.32		25	%
Diluted	$	0.40		$	0.32		25	%
Weighted-average shares outstanding:
Basic	619.1			646.9
Diluted	621.9			652.1

 ____________________

* Calculation not meaningful

Revenues Overview

The majority of transaction fees and foreign exchange revenues were contributed by our Consumer-to-Consumer segment, which is discussed in greater detail in “Segment Discussion.”

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, consolidated revenue increased 9% due to Consumer-to-Consumer transaction growth, and the acquisition of TGBP, which contributed approximately 5% to consolidated revenue growth.

29

The majority of the revenues in our Consumer-to-Consumer segment are recognized in the Europe and the Commonwealth of Independent States (“CIS”) and North America regions. These two regions represented 22% and 21%, respectively, of our total consolidated revenue for the three months ended March 31, 2012. For the three months ended March 31, 2012 compared to the same period in 2011, revenue remained flat in the Europe and CIS region on transaction growth of 1%. The region continues to be impacted by softness in Southern Europe and Russia. For the three months ended March 31, 2012, the North America region experienced revenue growth of 5% due to transaction growth of 6%, primarily due to solid growth in our domestic business (transactions between and within the United States and Canada), offset by geographic and product mix. Additionally, our United States outbound and Canada outbound businesses experienced transaction and revenue growth in the three months ended March 31, 2012, with slight improvement in growth rates for Mexico.

Foreign exchange revenues increased for the three months ended March 31, 2012 over the corresponding previous period due to the acquisition of TGBP and increasing foreign exchange revenues in our Consumer-to-Consumer segment, driven primarily by the increased amount of revenue from the international business outside the United States.

Fluctuations in the exchange rate between the United States dollar and currencies other than the United States dollar have resulted in a reduction to transaction fees and foreign exchange revenues for the three months ended March 31, 2012 of $8.1 million over the same period in the previous year, net of foreign currency hedges, that would not have occurred had there been constant currency rates.

Operating Expenses Overview

TGBP integration expenses

During the three months ended March 31, 2012, we incurred $6.4 million of integration expenses related to the acquisition of TGBP. TGBP was acquired on November 7, 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition. We expect to incur integration expenses resulting from the acquisition of TGBP throughout the remainder of 2012 and in 2013.

Restructuring and related activities

On May 25, 2010 and as subsequently revised, our Board of Directors approved a restructuring plan (the “Restructuring Plan”) designed to reduce our overall headcount and migrate positions from various facilities, primarily within North America and Europe, to regional operating centers. As of September 30, 2011, we had incurred all of the expenses related to this Restructuring Plan. Total expense incurred under the Restructuring Plan from the period from May 25, 2010 through September 30, 2011 was $106 million, of which $24 million was recognized in the three months ended March 31, 2011. Total cost savings of approximately $70 million are expected to be generated in 2012 and annually thereafter. We recognized $55 million of cost savings related to the Restructuring Plan in 2011.

There were no restructuring and related expenses incurred during the three months ended March 31, 2012, but for the three months ended March 31, 2011, expenses of $6.9 million are classified within “Cost of services” and $17.1 million are classified within “Selling, general and administrative” in the Condensed Consolidated Statements of Income.

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Cost of services

Cost of services primarily consists of agent commissions, which represent approximately 70% of total cost of services for the three months ended March 31, 2012. Also included in cost of services are expenses for call centers, settlement operations and related information technology costs. Expenses within these functions include personnel, software, equipment, telecommunications, bank fees, depreciation, amortization and other expenses incurred in connection with providing money transfer and other payment services. Cost of services increased for the three months ended March 31, 2012 compared to the corresponding period in the prior year primarily due to incremental costs associated with the TGBP acquisition, including intangible amortization, and agent commissions, which increase in relation to revenue increases. Cost of services also increased due to investments in our strategic initiatives and compliance program costs, partially offset by net commission savings resulting from the acquisitions of Finint and Costa, the strengthening of the United States dollar compared to most other foreign currencies, which resulted in a positive impact on the translation of our expenses, and restructuring costs incurred in 2011, which did not recur in 2012. Cost of services as a percentage of revenue was 56% and 58% for the three months ended March 31, 2012 and 2011, respectively. The decrease in cost of services as a percentage of revenue compared to the same period in 2011 was primarily due to net commission savings resulting from the acquisitions of Finint and Costa, decreased debit card bank fees due to the Durbin legislation, which was effective beginning in the fourth quarter of 2011, and restructuring costs incurred in 2011, which did not recur in 2012, partially offset by investments in our strategic initiatives and increased compliance program costs.

Selling, general and administrative

Selling, general and administrative expenses (“SG&A”) increased for the three months ended March 31, 2012 compared to the same period in the prior year primarily due to increased expenses resulting from the acquisitions of TGBP, Finint and Costa, including integration costs, higher employee compensation expenses and investments in strategic initiatives, including marketing-related expenditures, partially offset by the restructuring costs incurred in 2011, which did not recur in 2012, and the strengthening of the United States dollar compared to most other foreign currencies, which resulted in a positive impact on the translation of our expenses.

During the three months ended March 31, 2012 and 2011, marketing-related expenditures, principally classified within SG&A, were 3.8% and 3.4% of revenue, respectively. Marketing-related expenditures include advertising, events, costs related to administering our loyalty programs, and the cost of employees dedicated to marketing activities. When making decisions with respect to marketing investments, we review opportunities for advertising and other marketing-related expenditures together with opportunities for fee adjustments, as discussed in “Segment Discussion,” for Consumer-to-Consumer revenues and other initiatives in order to best maximize the return on these investments.

Total other expense, net

Total other expense, net was relatively flat during the three months ended March 31, 2012 compared to the corresponding period in 2011.

Income taxes

Our effective tax rates on pre-tax income for the three months ended March 31, 2012 and 2011 were 14.8% and 23.5%, respectively. The significant decrease in our effective tax rate for the three months ended March 31, 2012 is primarily due to an agreement with the United States Internal Revenue Service resolving substantially all of the issues related to the restructuring of our international operations in 2003, as described below, and the resolution of other tax matters.

We continue to benefit from an increasing proportion of profits being foreign-derived, and therefore taxed at lower rates than our combined federal and state tax rates in the United States. For the three months ended March 31, 2012, 85.0% of our pre-tax income was from foreign sources. Our foreign pre-tax income is subject to tax in multiple foreign jurisdictions, virtually all of which have statutory income tax rates lower than the United States. 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 tax laws, both foreign and domestic. Certain portions of our foreign source income are subject to U.S. federal and state income tax as earned due to the nature of the income, and dividend repatriations of our foreign source income are generally subject to U.S. federal and state income tax.

31

We have established contingency reserves for a variety of material, known tax exposures. As of March 31, 2012, the total amount of tax contingency reserves was $131.9 million, including accrued interest and penalties, net of related benefits. 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 during the period in facts and circumstances (i.e., new information) surrounding a tax issue 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.

The United States Internal Revenue Service (“IRS”) completed its examination of the United States federal consolidated income tax returns of First Data for 2003 and 2004, of which we are a part, and issued a Notice of Deficiency in December 2008. In December 2011, we reached an agreement with the IRS resolving substantially all of the issues related to the restructuring of our international operations in 2003.

Earnings per share

During the three months ended March 31, 2012 and 2011, basic and diluted earnings per share were $0.40 and $0.32, respectively. 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. For the three months ended March 31, 2012 and 2011, there were 20.5 million and 7.8 million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation under the treasury stock method as their effect was anti-dilutive.

Earnings per share increased for the three months ended March 31, 2012 compared to the same period in the prior year as a result of the previously described factors impacting net income and lower weighted-average shares outstanding. The lower number of shares outstanding was due to stock repurchases exceeding stock option exercises.

Segment Discussion

We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our three segments addresses a different combination of consumer groups, distribution networks and services offered. Our segments are Consumer-to-Consumer, Consumer-to-Business and Business Solutions. Businesses not considered part of these segments are categorized as “Other.”

There were no restructuring and related expenses incurred during the three months ended March 31, 2012, but we incurred expenses of $24.0 million for the three months ended March 31, 2011, which were not allocated to segments. While these items were identifiable to our segments, they were not included in the measurement of segment operating profit provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. For additional information on restructuring and related activities refer to “Operating expenses overview.”

Consumer-to-Consumer Segment

The following table sets forth our Consumer-to-Consumer segment results of operations for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(dollars and transactions in millions)	2012			2011			% Change
Revenues:
Transaction fees	$	872.0		$	839.8		4	%
Foreign exchange revenues	239.4			227.4			5	%
Other revenues	13.2			10.9			21	%
Total revenues	$	1,124.6		$	1,078.1		4	%
Operating income	$	311.3		$	308.6		1	%
Operating income margin	28		%	29		%
Key indicator:
Consumer-to-Consumer transactions	56.4			52.8			7	%

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The table below sets forth supplemental transaction and revenue growth rate information by region for the three months ended March 31, 2012.

	Three Months Ended March 31, 2012
Consumer-to-Consumer transaction growth (a)
Europe and CIS	1	%
North America	6	%
Middle East and Africa	9	%
APAC	6	%
LACA	8	%
westernunion.com	41	%
Consumer-to-Consumer revenue growth (a)
Europe and CIS	0	%
North America	5	%
Middle East and Africa	6	%
APAC	7	%
LACA	2	%
westernunion.com	39	%

 ____________________

(a) Significant allocations are made in determining the revenue and transaction growth rates under the regional view in the above table. The geographic split for transactions and revenue is determined based upon the region where the money transfer is initiated and the region where the money transfer is paid. For transactions originated and paid in different regions, we split the transaction count and revenue between the two regions, with each region receiving 50%. For money transfers initiated and paid in the same region, 100% of the revenue and transactions are attributed to that region. For money transfers initiated through our websites (“westernunion.com”), 100% of the revenue and transactions are attributed to westernunion.com.

No individual country, other than the United States, represented more than approximately 6% of our consolidated revenues during both of the three month periods ended March 31, 2012 and 2011.

Transaction fees and foreign exchange revenues

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, Consumer-to-Consumer money transfer revenue, which represented 81% of our total consolidated revenue, grew 4%, on transaction growth of 7%. The transaction growth was partially offset by geographic and product mix, the strengthening of the United States dollar compared to most other foreign currencies, which negatively impacted revenue, and slight price reductions. The strengthening of the United States dollar compared to most other foreign currencies negatively impacted our revenue growth by approximately 1% for the three months ended March 31, 2012.

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, revenue in our Europe and CIS region, which represented 22% of our total consolidated revenue, was flat on transaction growth of 1%. The region continues to be impacted by softness in Southern Europe and Russia.

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, revenue in our North America region, which represented 21% of our total consolidated revenue, increased due to transaction growth, offset by geographic and product mix. For the three months ended March 31, 2012, we experienced transaction and revenue growth in our domestic business due to transaction growth, primarily in lower principal bands. Additionally, our United States outbound and Canada outbound businesses experienced both transaction and revenue growth in the three months ended March 31, 2012, with slight improvement in growth rates for Mexico. However, we are still determining and implementing changes to our compliance related practices for Mexico which may cause our Mexico business to decline in the remainder of 2012.

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Revenue in our Middle East and Africa, APAC, and LACA regions, which represented 15%, 12%, and 9% of our total consolidated revenue for the three months ended March 31, 2012, respectively, increased compared to the corresponding period in the prior year due to transaction growth. The Gulf States, Africa, the Philippines, and India all displayed revenue growth, but China revenue declined, primarily due to our decision to restrict transfers from Argentina to avoid currency risk on our cash balances in that country resulting from currency control restrictions. Additionally, the strengthening of the United States dollar compared to most other foreign currencies negatively impacted revenues in the LACA region for the three months ended March 31, 2012. Revenue generated from transactions initiated at westernunion.com, which represented 2% of our total consolidated revenue, increased for the three months ended March 31, 2012, compared to the same period in 2011 due to strong transaction growth.

Foreign exchange revenues for the three months ended March 31, 2012 grew compared to the same period in 2011, driven by the increased amount of revenue from the international business outside of the United States.

Fluctuations in the exchange rate between the United States dollar and currencies other than the United States dollar have resulted in a reduction to transaction fees and foreign exchange revenues for the three months ended March 31, 2012 of approximately $5.2 million over the same period in the previous year, net of foreign currency hedges, that would not have occurred had there been constant currency rates.

We have historically implemented and will likely implement future strategic fee reductions and actions to adjust foreign exchange spreads, where appropriate, taking into account a variety of factors. Fee and foreign exchange reductions generally reduce revenues in the near term, but are done in anticipation that they will result in increased transaction volumes and increased revenues over time. In certain corridors, we may also implement fee or foreign exchange spread increases. We anticipate that fee decreases and foreign exchange actions will be approximately 1% to 2% of total Western Union revenue for the full year 2012.

The majority of transaction growth is derived from more mature agent locations; new agent locations typically contribute only marginally to growth in the first few years of their operation. Increased productivity, measured by transactions per location, is often experienced as locations mature. We believe that new agent locations will help our growth by increasing the number of locations available to send and receive money. We generally refer to locations with more than 50% of transactions being initiated (versus paid) as “send locations” and to the balance of locations as “receive locations.” Send locations are the engine that drives Consumer-to-Consumer revenue. They contribute more transactions per location than receive locations. However, a wide network of receive locations is necessary to build each corridor and to help ensure global distribution and convenience for consumers. The number of send and receive transactions at an agent location can vary significantly due to such factors as customer demographics around the location, migration patterns, the location's class of trade, hours of operation, length of time the location has been offering our services, regulatory limitations and competition. Each of the more than 495,000 agent locations in our agent network is capable of providing one or more of our services; however, not every location completes a transaction in a given period. For example, as of March 31, 2012, more than 85% of agent locations in the United States, Canada and Western Europe (representing at least one of our three money transfer brands: Western Union^®, Orlandi Valuta^(SM) and Vigo^®) experienced money transfer activity in the previous 12 months. In the developing regions of Asia and other areas where there are primarily receive locations, approximately 65% of locations experienced money transfer activity in the previous 12 months. We periodically review locations to determine whether they remain enabled to perform money transfer transactions.

Operating income

Consumer-to-Consumer operating income increased 1% during the three months ended March 31, 2012 compared to the same period in 2011 due to revenue growth, the effect of foreign currency hedges, and restructuring savings, partially offset by spending on strategic initiatives, including marketing-related and westernunion.com expenditures, incremental costs associated with the Finint and Costa acquisitions, and increased costs associated with our compliance programs. The decline in operating income margin for the three months ended March 31, 2012 compared to the same period in the prior year was primarily due to investments in strategic initiatives, including marketing-related and westernunion.com expenditures, incremental costs associated with the Finint and Costa acquisitions, and increased costs associated with our compliance programs. These costs were partially offset by revenue leverage, currency, and restructuring savings.

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Consumer-to-Business Segment

The following table sets forth our Consumer-to-Business segment results of operations for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(dollars and transactions in millions)	2012			2011			% Change
Revenues:
Transaction fees	$	147.7		$	144.7		2	%
Foreign exchange revenues	0.8			0.9			(11	)%
Other revenues	6.6			7.6			(13	)%
Total revenues	$	155.1		$	153.2		1	%
Operating income	$	41.1		$	34.6		19	%
Operating income margin	26		%	23		%

Revenues

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, Consumer-to-Business revenue, which represented 11% of our total consolidated revenue, increased 1% due to growth in our international bill payments, primarily in South America. The strengthening of the United States dollar compared to most other foreign currencies negatively impacted our revenue growth by approximately 2% for the three months ended March 31, 2012.

Operating income

For the three months ended March 31, 2012, operating income increased compared to the same period in the prior year primarily due to a net decrease in debit card bank fees, due to the Durbin legislation.

The changes in operating income margins in the segment are due to the same factors mentioned above.

Business Solutions Segment

The following table sets forth our Business Solutions segment results of operations for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(dollars in millions; principal in billions)	2012			2011			% Change
Revenues:
Transaction fees	$	6.5		$	0.9		*
Foreign exchange revenues	80.1			26.8			*
Other revenues	0.3			0.2			*
Total revenues	$	86.9		$	27.9		*
Operating loss	$	(14.8	)	$	(4.3	)	*
Operating loss margin	(17		)%	(15		)%

____________________

* Calculation not meaningful

Revenues

For the three months ended March 31, 2012 compared to the corresponding period in the prior year, Business Solutions revenue, which represented 6% of our total consolidated revenue, grew primarily due to our acquisition of TGBP, and revenue growth in our existing business.

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Operating income

For the three months ended March 31, 2012, operating loss increased compared to the same period in the prior year primarily due to increased expenses resulting from the acquisition of TGBP, including amortization and integration expenses. We expect to incur integration expenses resulting from the acquisition of TGBP throughout the remainder of 2012 and in 2013.

The changes in operating income margins in the segment are due to the same factors mentioned above.

Other

The following table sets forth Other results for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
(dollars in millions)	2012			2011			% Change
Revenues	$	26.8		$	23.8		13	%
Operating loss	$	(5.1	)	$	(2.0	)	*

Revenues

Other results revenue, which represented 2% of our total consolidated revenue, grew for the three months ended March 31, 2012 compared to the same period in the prior year primarily due to an increase in our money order and prepaid businesses.

Operating loss

During the three months ended March 31, 2012, operating loss increased due to investments in our prepaid business.

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 interest payments on our outstanding borrowings, timing of income tax payments, and collections on receivables, among other items. 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.

Our future cash flows could be impacted by a variety of factors, some of which are out of our control, including changes in economic conditions, especially those impacting the migrant population and changes in income tax laws or the status of income tax audits, including the resolution of outstanding tax matters.

A significant portion of our cash flows from operating activities has been generated from subsidiaries, some of which are regulated entities. These subsidiaries may transfer all excess cash to the parent company for general corporate use except for assets subject to legal or regulatory restrictions. Assets subject to legal or regulatory restrictions, totaling approximately $265 million as of March 31, 2012, include assets outside of the United States subject to restrictions from being transferred outside of the countries where they are located. We are also required to maintain cash and investment balances in our regulated subsidiaries related to certain of our money transfer and other payment obligations. Significant changes in the regulatory environment for money transmitters could impact our primary source of liquidity.

We believe we have adequate liquidity to meet our business needs through our existing cash balances and our ability to generate cash flows through operations. These business needs include approximately $125 million of remaining tax payments we expect to make as a result of the IRS Agreement, in addition to dividends and share repurchases. In addition, we have capacity to borrow up to $1.65 billion in the aggregate under our revolving credit facility (“Revolving Credit Facility”), which supports borrowings under our $1.5 billion commercial paper program. As of March 31, 2012, we had no outstanding borrowings under our Revolving Credit Facility and had $350.0 million of commercial paper borrowings outstanding, which left $1,300.0 million remaining that was available to borrow on the Revolving Credit Facility.

Cash and Investment Securities

As of March 31, 2012, we had cash and cash equivalents of $1.4 billion, of which approximately $723 million was held by our foreign entities. Our ongoing cash management strategies to fund our business needs could cause United States and foreign cash balances to fluctuate.

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Repatriating foreign funds to the United States would, in many cases, result in significant tax obligations because most of these funds have been taxed at relatively low foreign tax rates compared to our combined federal and state tax rate in the United States. We expect to use foreign funds to expand and fund our international operations and to acquire businesses internationally.

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 Condensed 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 $1.6 billion as of March 31, 2012. Substantially all of these investments are highly-rated state and municipal debt securities. Most state regulators in the United States require us to maintain specific highly-rated, investment grade securities and such investments are intended to secure relevant outstanding settlement obligations in accordance with applicable regulations.

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. As of March 31, 2012, the majority of our investment securities had credit ratings of “AA-” or better from a major credit rating agency. Our investment securities are also actively managed with respect to concentration. As of March 31, 2012, all investments with a single issuer and each individual security was less than 10% of our investment securities portfolio.

Cash Flows from Operating Activities

Cash provided by operating activities decreased to $215.0 million during the three months ended March 31, 2012, from $251.6 million in the comparable period in the prior year, primarily due to tax payments of approximately $65 million made as a result of the IRS Agreement.

Financing Resources

As of March 31, 2012, we have outstanding borrowings at par value of $3,630.7 million. The substantial majority of these outstanding borrowings consists of unsecured fixed-rate notes and associated swaps with maturities ranging from 2014 to 2040, and our borrowings also include our 2013 Notes issued for general corporate purposes. Our Revolving Credit Facility expires in January 2017 and provides for unsecured financing facilities in an aggregate amount of $1.65 billion, including a $250.0 million letter of credit sub-facility and a $150.0 million swing line sub-facility. The purpose of our Revolving Credit Facility, which is diversified through a group of 17 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 $1.65 billion is approximately 12%. As of and during the three months ended March 31, 2012, we had no outstanding borrowings under our $1.65 billion revolving credit facility. As of March 31, 2012, we had $350.0 million of commercial paper borrowings outstanding, which left $1,300.0 million remaining that was available to borrow on the 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.

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. Our commercial paper borrowings as of March 31, 2012 had a weighted-average annual interest rate of approximately 0.5% and a weighted-average term of 5 days. During the three months ended March 31, 2012, the average commercial paper balance outstanding was $141.7 million and the maximum balance outstanding was $350.0 million. Proceeds from our commercial paper borrowings were used for general corporate purposes. We had $350.0 million of commercial paper borrowings outstanding as of March 31, 2012.

Cash Priorities

Liquidity

Our objective is to maintain strong liquidity and a capital structure consistent with our current 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.

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Capital Expenditures

The total aggregate amount paid for contract costs, purchases of property and equipment, and purchased and developed software was $75.8 million and $21.9 million for the three months ended March 31, 2012 and 2011, 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.

Acquisition of Businesses

On November 7, 2011, we acquired TGBP from Travelex Holdings Limited for cash consideration of £603 million ($967.8 million), which included acquired cash of $25.3 million. The final consideration is subject to a working capital adjustment.

On October 31, 2011, we acquired the remaining 70% interest in Finint, one of our largest money transfer agents in Europe, for cash consideration of €99.6 million ($139.4 million). We previously held a 30% equity interest in Finint.

On April 20, 2011, we acquired the remaining 70% interest in Costa, one of our largest money transfer agents in Europe, for cash consideration of €95 million ($135.7 million). The final consideration is subject to the resolution of a working capital adjustment. We previously held a 30% equity interest in Costa.

Share Repurchases and Dividends

During the three months ended March 31, 2012 and 2011, 8.3 million and 25.1 million, respectively, of shares were repurchased for $146.7 million and $525.0 million, respectively, excluding commissions, at an average cost of $17.69 and $20.95 per share, respectively. As of March 31, 2012, $468.8 million remains available under share repurchase authorizations approved by our Board of Directors through December 31, 2012.

During the three months ended March 31, 2012, our Board of Directors declared quarterly cash dividends of $0.10 per common share representing $61.6 million in total dividends. This amount was paid on March 30, 2012 to shareholders of record on March 16, 2012.

Debt Service Requirements

Our 2012 debt service requirements will include payments on existing and any future borrowings under our commercial paper program and interest payments on all outstanding indebtedness. In March 2013, our floating rate notes of $300.0 million will mature. We intend to refinance all or a portion of the 2013 Notes with new financing sources, as market conditions allow. We have the ability to use existing financing sources, including our Revolving Credit Facility or commercial paper program, and cash generated from operations to meet our debt obligations as they come due.

Our ability to continue to grow the business, make acquisitions, return capital to shareholders, including share repurchases and dividends, and service our debt 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.

Off-Balance Sheet Arrangements

Other than facility and equipment leasing arrangements, 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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Pension Plan

We have a frozen defined benefit pension plan for which we have a recorded unfunded pension obligation of $102.2 million as of March 31, 2012. We are required to fund $20 million to the plan in 2012. Through March 2012, we have made contributions of $9 million to the plan, including a discretionary contribution of $5 million.

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Other Commercial Commitments

We had approximately $95 million in outstanding letters of credit and bank guarantees as of March 31, 2012, with expiration dates through 2015, the majority of which contain a one-year renewal option. The letters of credit and bank guarantees are primarily held in connection with lease arrangements and certain agent agreements. We expect to renew the letters of credit and bank guarantees prior to expiration in most circumstances.

As of March 31, 2012, our total amount of unrecognized income tax benefits was $139.5 million, including associated interest and penalties. The timing of related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which are variable and outside our control.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts and disclosures in the financial statements and accompanying notes. Actual results could differ from those estimates. Our Critical Accounting Policies and Estimates disclosed in “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in our 2011 Annual Report on Form 10-K, for which there were no material changes, included:

• Income taxes

• Derivative financial instruments

• Other intangible assets

• Goodwill impairment testing

• Acquisitions — purchase price allocation

• Restructuring and related expenses

Risk Management

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 Consumer-to-Consumer money transfer services 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 settle with the vast majority of our agents in United States dollars or euros. However, in certain circumstances, we settle in other currencies. We typically require the agent to obtain local currency to pay recipients; thus, we generally are not reliant on international currency markets to obtain and pay illiquid currencies. The foreign currency exposure that does exist is limited by the fact that the majority of transactions are paid within 24 hours after they are initiated. To mitigate this risk further, we enter into short-term 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 utilize foreign currency forward contracts, typically with terms of less than one year at inception, to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions and intercompany loans. In certain consumer money transfer 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 customer and the rate at which we or our agents are able to acquire currency, helping to provide protection against currency fluctuations. We 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 mitigate risks associated with changes in foreign currency exchange rates on Consumer-to-Consumer revenues denominated primarily in the euro, and to a lesser degree the Canadian dollar, British pound, 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 Consumer-to-Consumer operations.

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We have additional foreign exchange risk and associated foreign exchange risk management due to the nature of our Business Solutions business. The majority of this business' revenue is from exchanges of currency at the spot rate enabling customers to make cross-currency payments. This business also writes foreign currency forward and option contracts for our customers to facilitate future payments. In certain countries, this business also writes foreign currency forward and option contracts for our customers to facilitate future payments. The duration of these derivatives contracts is generally nine months or less. 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. The foreign exchange risk is actively managed.

As of December 31, 2011, a hypothetical uniform 10% strengthening or weakening in the value of the United States dollar relative to all other currencies in which our profits are generated would have resulted in a decrease/increase to pre-tax annual income of approximately $33 million based on our 2012 forecast of Consumer-to-Consumer unhedged exposure to foreign currency. The exposure as of March 31, 2012 is not materially different based on our forecast of unhedged exposure to foreign currency through March 31, 2012. There are inherent limitations in this sensitivity analysis, primarily due to the assumption that foreign exchange rate movements are linear and instantaneous, that the unhedged exposure is static, and that 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 March 31, 2012 of $2.9 billion. Approximately $2.0 billion of these assets bear interest at floating rates and are therefore sensitive to changes in interest rates. These assets primarily include money market funds and state and municipal variable rate securities and are included in our Condensed 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.

Substantially all of the remainder of our interest bearing assets consist of highly-rated state and municipal debt securities, the majority of which are fixed-rate instruments. These investments may include investments made from cash received from our money transfer business and other related payment services awaiting redemption classified within “Settlement assets” in the Condensed 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 Condensed 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” on our Condensed Consolidated Balance Sheets.

As of March 31, 2012, we had $300.0 million of floating notes, which had an effective interest rate of 1.1% or 58 basis points above three-month LIBOR. Additionally, $500.0 million of our fixed-rate borrowings at par value are effectively floating rate debt through interest rate swap agreements, changing this fixed-rate debt to LIBOR-based floating rate debt, with weighted-average spreads of approximately 600 basis points above LIBOR. Borrowings under our commercial paper program mature in such a short period that the financing is effectively floating rate. Commercial paper borrowings of $350.0 million were outstanding as of the three months ended March 31, 2012. Our commercial paper borrowings as of March 31, 2012 had a weighted-average annual interest rate of approximately 0.5% and a weighted-average term of 5 days. During the three months ended March 31, 2012, the average commercial paper balance outstanding was $141.7 million and the maximum balance outstanding was $350.0 million.

We review our overall exposure to floating and fixed-rates by evaluating our net asset or liability position in each, also considering the duration of the individual positions. 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). We use interest rate swaps designated as hedges to increase the percentage of floating rate debt, subject to market conditions. As of March 31, 2012, our weighted-average effective rate was approximately 4.8%.

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A hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to pre-tax income of approximately $12 million annually based on borrowings on March 31, 2012 that are sensitive to interest rate fluctuations. The same 100 basis point increase/decrease in interest rates, if applied to our cash and investment balances on March 31, 2012 that are sensitive to interest rate fluctuations, would result in an offsetting benefit/reduction to pre-tax income of approximately $20 million annually. There are inherent limitations in the sensitivity analysis presented, primarily due to the assumption that interest rate changes would be instantaneous. 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 current mix of fixed versus floating rate debt and investments and the level of assets and liabilities will change over time. We will also be further impacted by changes to future interest rates as we refinance our debt or by reinvesting proceeds from the sale or maturity of our investments.

Credit Risk

Our interest earning assets include investment securities, substantially all of which are highly-rated state and municipal debt securities, which are classified in “Settlement assets” and accounted for as available-for-sale securities, and money market fund investments, which are classified in “Cash and cash equivalents.” The majority of our investment securities had credit ratings of “AA-” or better from a major credit rating agency.

To manage our exposures to credit risk with respect to investment securities, money market 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 also limit our investment level in any individual money market fund to no more than $100 million.

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. In addition, we are exposed to credit risk directly from consumer transactions particularly through our Internet services and electronic channels, where transactions are originated through means other than cash, and therefore are subject to “chargebacks,” insufficient funds or other collection impediments, such as fraud. We perform a credit review before each agent signing and conduct periodic analyses.

We are exposed to credit risk in our Business Solutions business relating to: (a) derivatives written by us to our customers and (b) receivables from certain customers for which beneficiaries are paid prior to receiving cleared funds from the customer (known as “early release”). For the derivatives, the duration of these contracts is generally nine months or less. 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 early release customers, collection ordinarily occurs within a few days. To mitigate risk, we perform credit reviews of the customer on an ongoing basis, and, for our derivatives, we may require certain customers to post collateral or increase collateral based on the fair value of the customer's contract and their risk profile.

Our losses associated with bad debts have been less than 1% of our revenues in all periods presented.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information under the caption “Risk Management” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report is incorporated herein by reference.

Item 4. 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, have evaluated the effectiveness of our controls and procedures related to our reporting and disclosure obligations as of March 31, 2012, which is the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of March 31, 2012, 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 are accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of The Western Union Company

We have reviewed the condensed consolidated balance sheet of The Western Union Company (the Company) as of March 31, 2012, and the related condensed consolidated statements of income, comprehensive income and cash flows for the three-month periods ended March 31, 2012 and 2011. These financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of The Western Union Company as of December 31, 2011, and the related consolidated statements of income, cash flows, and stockholders' equity/(deficiency) for the year then ended (not presented herein) and in our report dated February 24, 2012, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2011, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Denver, Colorado

May 1, 2012

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

On March 20, 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney's Office for the Central District of California seeking documents relating to Shen Zhou International (US Shen Zhou), a former Western Union agent located in Monterey Park, California. The principal of US Shen Zhou was indicted in 2010 and is currently awaiting trial in U.S. v. Zhi He Wang (SA CR 10-196, C.D. Cal.). Concurrent with the government's service of the subpoena, the government notified the Company that it is a target of an ongoing investigation into structuring and money laundering. The Company has cooperated fully with the government's investigation into US Shen Zhou. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.

In the fourth quarter of 2011, Western Union received Civil Investigative Demands from certain state attorneys general who have initiated an investigation into whether the Company took adequate steps to help prevent consumer fraud from 2010 to 2011. The Civil Investigative Demands seek information and documents relating to consumer fraud complaints that the Company has received and the Company's procedures to help identify and prevent fraudulent transfers. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with any possible civil claims that might be brought by one or more of the states. Should such claims be brought, we could face significant fines, damage awards, or regulatory consequences, or compulsory changes in our business practices, that could have a material adverse effect on our business, financial condition, and results of operations.

On July 26, 2010, U.F.C.W. Local 1776 & Participating Employers Pension Fund filed a Verified Shareholder Double Derivative Complaint and Jury Demand in United States District Court for the District of Colorado, alleging that the Company's Board of Directors failed to appropriately oversee the Company's compliance program, particularly in regard to the alleged deficiencies which resulted in the Company's agreement and settlement with the State of Arizona and other states in early 2010. In addition to naming the Company's Board members as individual defendants, the complaint names the Company and its subsidiary Western Union Financial Services, Inc. as nominal defendants. The complaint seeks damages from the individual defendants for breach of fiduciary duty and waste of corporate assets and an order requiring various corrective measures. On September 10, 2010, the United States District Court for the District of Colorado dismissed the complaint for lack of subject matter jurisdiction. On September 23, 2010, the plaintiff re-filed the complaint in Maricopa County Superior Court in Arizona. The complaint was removed to the United States District Court for the District of Arizona. On September 29, 2011, the Court denied Defendants' motion to dismiss on jurisdictional grounds. On December 15, 2011, the Company and Western Union Financial Services, Inc. filed a Notice of Settlement. The terms of the settlement are set forth in a Memorandum of Understanding attached to the Notice of Settlement and include corporate governance changes that the Company and Western Union Financial Services, Inc. have agreed to make relating to anti-money laundering monitoring. The Memorandum of Understanding also indicates that the individual defendants deny any wrongdoing or liability with respect to the plaintiff's claims and that the settlement does not constitute an admission of liability of wrongdoing by any party. None of the defendants will be required to pay monetary damages. The plaintiff's counsel is seeking attorney's fees and expenses from the Company not to exceed $850,000. Defendants have agreed not to oppose the amount of a requested fee and expense award up to that amount. The settlement and the attorney's fee and expense award are subject to the approval of the United States District Court for the District of Arizona.

In the second quarter of 2009, the Antitrust Division of the United States Department of Justice (“DOJ”) served one of the Company's subsidiaries with a grand jury subpoena requesting documents in connection with an investigation into money transfers, including related foreign exchange rates, from the United States to the Dominican Republic from 2004 through the date of subpoena. The Company is cooperating fully with the DOJ investigation. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company is a party to a variety of legal proceedings that arise in the normal course of our business. While the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on the Company's results of operations or financial condition.

44

Item 1A. Risk Factors

There have been no material changes to the risk factors described in our 2011 Annual Report on Form 10-K, except as described below.

Western Union is the subject of governmental investigations and consent agreements with or enforcement actions by regulators.

In the second quarter of 2009, the Antitrust Division of the United States Department of Justice (“DOJ”) served one of our subsidiaries with a grand jury subpoena requesting documents in connection with an investigation into money transfers, including related foreign exchange rates, from the United States to the Dominican Republic from 2004 through the date of subpoena. The Company is cooperating fully with the DOJ investigation. Due to the stage of the investigation, we are unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against us. Should such charges or claims be brought, we could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on our business, financial condition and results of operations.

On February 11, 2010, we signed an agreement and settlement, which resolved all outstanding legal issues and claims with the State of Arizona and required us to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which California, Texas and New Mexico are participating with Arizona. The agreement also required us to make payments to the State of Arizona for its costs associated with this matter. In addition, as part of the agreement and settlement, we have made and expect to make certain investments in and changes to our compliance programs along the United States and Mexico border and a monitor has been engaged for those programs. The costs of the investments in our programs and for the monitor are expected to reach up to $23 million over the period from signing to 2013. The monitor has made a number of recommendations related to our compliance programs.

We are in the process of making certain changes to our compliance program for transactions from the United States to Mexico, including:

• revisions to agent agreements to increase our ability to oversee the compliance of our agents and subagents;

• reduced thresholds at which our consumers are required to provide identification for transactions from certain states along the United States southwest border; and

• enhancement of our information systems including migrating customer information for our Western Union, Orlandi Valuta and Vigo brands onto a common database and migrating to a standard point of sale system.

Such changes will likely have an adverse effect on our United States to Mexico business. Any additional changes that we elect or are required to make in the United States to Mexico corridor, or similar changes that we may elect or be required to make in other corridors, could have a material adverse effect on our business, financial condition or results of operations.

Over the past several years, we have entered into consent agreements with federal and state authorities, including FinCEN, the New York Department of Financial Services, the California Department of Financial Institutions and the Arizona Department of Financial Institutions, relating to the BSA and anti-money laundering requirements and related consumer identification matters. These agreements required us to pay civil penalties and to take certain measures to enhance our compliance with recordkeeping, reporting, training and agent oversight requirements under applicable state and federal law. The consent agreements with the New York Department of Financial Services and the California Department of Financial Institutions were lifted during 2008. However, the financial services industry and businesses like ours continue to be under significant federal and state regulatory scrutiny with respect to the BSA and anti-money laundering compliance matters. It is possible that as a result of periodic examinations or otherwise, we could be subject to deficiency findings, fines, criminal penalties, asset seizures or enforcement actions that could adversely affect our business, financial condition and results of operations.

45

In the fourth quarter of 2011, Western Union received Civil Investigative Demands from certain state attorneys general who have initiated an investigation into whether the Company took adequate steps to help prevent consumer fraud from 2010 to 2011. The Civil Investigative Demands seek information and documents relating to consumer fraud complaints that the Company has received and the Company's procedures to help identify and prevent fraudulent transfers. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with any possible civil claims that might be brought by one or more of the states. Should such claims be brought, we could face significant fines, damage awards, or regulatory consequences, or compulsory changes in our business practices that could have a material adverse effect on our business, financial condition, and results of operations.

On March 20, 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney's Office for the Central District of California seeking documents relating to Shen Zhou International (US Shen Zhou), a former Western Union agent located in Monterey Park, California. The principal of US Shen Zhou was indicted in 2010 and is currently awaiting trial in U.S. v. Zhi He Wang (SA CR 10-196, C.D. Cal.). Concurrent with the government's service of the subpoena, the government notified the Company that it is a target of an ongoing investigation into structuring and money laundering.  The Company has cooperated fully with the government's investigation into US Shen Zhou. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about the Company's repurchases of shares of the Company's common stock during the first quarter of 2012:

	Total Number of Shares  Repurchased*	Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs**	Remaining Dollar Value of Shares that May Yet Be Repurchased Under the Plans or Programs (in millions)
January 1 - 31	222	$	18.26	—	$	615.5
February 1 - 29	2,703,206	$	17.79	2,477,800	$	571.5
March 1 - 31	5,813,100	$	17.66	5,813,100	$	468.8
Total	8,516,528	$	17.70	8,290,900

 ____________________

* These amounts represent both shares authorized by the Board of Directors for repurchase under a publicly announced plan, as described below, as well as shares withheld from employees to cover tax withholding obligations on restricted stock awards and units that have vested.

** On February 1, 2011, the Board of Directors authorized $1 billion of common stock repurchases through December 31, 2012, of which $468.8 million remains available as of March 31, 2012. Management has historically and may continue to establish prearranged written plans pursuant to Rule 10b5-1. A Rule 10b5-1 plan permits the Company to repurchase shares at times when the Company may otherwise be prevented from doing so, provided the plan is adopted when the Company is not aware of material non-public information.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

See “Exhibit Index” for documents filed herewith and incorporated herein by reference.

46

SIGNATURES

Pursuant to the requirements 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.

		The Western Union Company (Registrant)
Date:	May 1, 2012	By:	/S/    HIKMET ERSEK
			Hikmet Ersek
			President and Chief Executive Officer (Principal Executive Officer)
Date:	May 1, 2012	By:	/S/    SCOTT T. SCHEIRMAN
			Scott T. Scheirman
			Executive Vice President, Chief Financial Officer and Global Operations (Principal Financial Officer)
Date:	May 1, 2012	By:	/S/    AMINTORE T.X. SCHENKEL
			Amintore T.X. Schenkel
			Senior Vice President, Chief Accounting Officer, and Controller (Principal Accounting Officer)

47

EXHIBIT INDEX

Exhibit Number	Description
10.1	The Western Union Company Senior Executive Annual Incentive Plan, as Amended and Restated Effective February 23, 2012*
10.2	Form of Performance-Based Restricted Stock Unit Award Notice for Executive Committee Members Under The Western Union Company 2006 Long-Term Incentive Plan*
10.3	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*
10.4	Form of Bonus Stock Unit Award Agreement for Non-Employee Directors Residing Outside of the United States Under The Western Union Company 2006 Long-Term Incentive Plan*
12	Computation of Ratio of Earnings to Fixed Charges
15	Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information
31.1	Certification of Principal Executive Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2	Certification of Principal Financial Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 6 of this report.

48

EX-10.1

Exhibit 10.1

THE WESTERN UNION COMPANY

SENIOR EXECUTIVE ANNUAL INCENTIVE PLAN

(As Amended and Restated Effective February 23, 2012)

1. PURPOSE OF THE PLAN. The Western Union Company Senior Executive Annual Incentive Plan (the “Plan”), originally established effective January 1, 2007, is hereby amended and restated effective February 23, 2012 by the Compensation and Benefits Committee of the Board of Directors of The Western Union Company (the “Company”). The Plan is designed to encourage teamwork and individual performance by providing annual incentive compensation based on the Company's Operating Income, to advance the interests of the Company by attracting and retaining key executives, and to reward contributions made by the Company's Chief Executive Officer and other senior executive officers in optimizing long-term value to the Company's shareholders by connecting a portion of each such executive's total potential cash compensation to the attainment of objective Company financial goals. The Incentive Awards payable under the Plan are intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and shall be interpreted in a manner consistent with such intent.

2. DEFINITIONS. For purposes of this Plan, the following terms shall have the meanings set forth below:

2.1 “Committee” means the Compensation and Benefits Committee of the Company's Board of Directors, or any successor thereto or delegate thereof with the authority to act on behalf of the Committee with respect to this Plan.

2.2 “Corporate Performance Measures” means specified levels of earnings per share, the attainment of a specified price of the Company's common stock, specified levels of earnings before interest expense and taxes, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), growth in EBITDA, operating income, return to stockholders (including dividends), total shareholder return, return on equity, earnings, revenues, growth in revenues, pretax return on total capital, cash flow, cost reduction goals, economic value added, or any combination of the foregoing, or any other financial or strategic measure of company performance as selected by the Committee for a specified performance or measurement period for purposes of this Plan, and as such measures may be adjusted for major nonrecurring and non-operating expense and income items, as determined by the Company and as acceptable to the Committee in its sole discretion, based on the facts and circumstances involved, as determined pursuant to generally accepted accounting principles, and as consistently applied by the Committee.

2.3 “Division or Business Unit Performance Measures” mean specified levels of revenue, operating income, pretax return on total capital, cost reduction goals, economic value added, or any combination of the foregoing, or any other financial or strategic measure of business unit and/or division performance as selected by the Committee for a specified performance or measurement period for purposes of this Plan, and as such measures may be adjusted for major nonrecurring and non-operating expense and income items, as determined by the Company and as acceptable to the Committee in its sole discretion, based on the facts and circumstances involved, as determined pursuant to generally accepted accounting principles, and as consistently applied by the Committee.

2.4 “Incentive Award” means an incentive compensation award paid to a Participant pursuant to the Plan.

2.5 “Incentive Pool” means the aggregate dollar value of the maximum Incentive Awards payable under the Plan in any Plan Year, as specified in Section 3.1.

2.6 “Operating Income” for purposes of Section 3.1 means the Company's consolidated operating income as determined by the Committee from the Company's annual audited financial statements.

2.7 “Participant” means the Company's Chief Executive Officer and any executive officer of the Company who is identified as eligible to participate in this Plan for a given Plan Year by the Committee.

2.8 “Plan Year” means a period of one year, commencing each January 1 and ending on the following December 31, or such other twelve consecutive month period as may be established from time to time by the Company.

3. ESTABLISHMENT OF INCENTIVE POOL, PERFORMANCE MEASURES AND DETERMINATION OF INCENTIVE AWARDS.

3.1 The Incentive Pool for each Plan Year shall equal 3% of Operating Income for such year.

3.2 No later than 90 days after the beginning of each Plan Year, the Committee shall establish for each Participant the maximum Incentive Award that may be payable to such Participant for such Plan Year, expressed as a percentage of the Incentive Pool for the Plan Year (a “Maximum Percentage”), provided that the Maximum Percentage for any Participant under this Plan for any Plan Year shall not be greater than 33 1/3% of such Incentive Pool.

3.3 As soon as practicable following the end of each Plan Year, the Committee shall determine the amount of the Incentive Pool for such Plan Year and shall certify such amount in a written statement and shall authorize the payment of Incentive Awards in accordance with the terms of the Plan.

3.4 The Committee shall have the sole and absolute discretion to reduce (but not increase) the amount of any Incentive Award otherwise payable under the Plan for each Plan Year or to determine that no Incentive Award shall be payable to a Participant under the Plan (so long as the exercise of such negative discretion does not result in an increase in the Incentive Award payable to any other Participant). The exercise of such discretion may be determined by (i) the extent to which selected Corporate Performance Measures and, if appropriate in the Committee's discretion, selected Division or Business Unit Performance Measures established for each Participant for each Plan Year have been attained, and (ii) the Committee's evaluation of a Participant's individual performance. Under no circumstances shall any Incentive Award be deemed earned by or payable to a Participant under this Plan with respect to any Plan Year unless and until the Committee both certifies the amount of the Incentive Pool for such Plan Year and exercises its discretion to determine whether an Incentive Award shall be paid to each such individual Participant with respect to such Plan Year.

4. PAYMENT OF INCENTIVE AWARDS. Payment of Incentive Awards, less withholding taxes and other applicable withholdings, shall be made to Participants not later than March 15 (March 31, in the case of a Participant who is not a United States taxpayer) following the applicable Plan Year, provided the Committee has certified that the applicable Performance Measures have been satisfied and has determined the amount and approved the payment of the Incentive Award to the Participants. Funding of Incentive Awards under this Plan shall be out of the general assets of the Company or of its wholly-owned subsidiaries. Unless otherwise determined by the Committee in its discretion, Incentive Awards shall be paid in cash.

5. ADMINISTRATION. The Plan shall be administered by the Committee, which shall have full power and authority to interpret, construe and administer the Plan in accordance with the provisions set forth herein. The Committee's interpretation and construction of the Plan, and actions hereunder, or the amount or recipient of the payments to be made from the Plan, shall be binding and conclusive on all persons for all purposes. In this connection, the Committee may delegate to any corporation, committee or individual, regardless of whether the individual is an employee of the Company, the duty to act for the Committee hereunder. No officer or employee of the Company shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to his or her own willful misconduct or lack of good faith. The expenses of administering the Plan shall be paid by the Company or by a wholly-owned subsidiary of the Company and shall not be charged against the Plan.

6. PARTICIPATION IN THE PLAN. Eligible executive officers of the Company may become Participants in accordance with the terms of the Plan at any time during the Plan Year. If an executive officer becomes a Participant at any time other than as of the commencement of a Plan Year, the Corporate Performance Measures, the Division or Business Unit Performance Measures (if established by the Committee), and the Maximum Percentage for the Participant shall be established by the Committee no later than the time prescribed by the Treasury Regulations under Section 162(m) of the Internal Revenue Code of 1986, as amended.

7. TERMINATION OF EMPLOYMENT. Unless otherwise determined by the Committee, a Participant whose employment in his current position with the Company terminates for any reason prior to the end of a Plan Year shall not be entitled to receive an Incentive Award for such Plan Year.

8. DEFERRAL OF INCENTIVE AWARDS. A Participant may elect to defer receipt of all or any portion of any Incentive Award made under this Plan to a future date as provided in and subject to the terms and conditions of any deferred compensation plan of the Company.

9. MISCELLANEOUS.

9.1 NONTRANSFERABILITY. No Incentive Award payable hereunder, nor any right to receive any future Incentive Award hereunder, may be assigned, alienated, sold, transferred, anticipated, pledged, encumbered, or subjected to any charge or legal process, and if any such attempt is made, or a person eligible for any Incentive Award hereunder becomes bankrupt, the Incentive Award under the Plan which would otherwise be payable with respect to such person may be terminated by the Committee which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such award that it deems appropriate.

9.2 CLAIM TO INCENTIVE AWARDS AND EMPLOYMENT RIGHTS. Nothing in this Plan shall require the Company to segregate or set aside any funds or other property for purposes of paying all or any portion of an Incentive Award hereunder. No Participant shall have any right, title or interest in or to any Incentive Award hereunder prior to the actual payment thereof, nor to any property of the Company. Neither the adoption of the Plan nor the continued operation thereof shall confer upon any employee any right to continue in the employ of the Company or shall in any way affect the right and power of the Company to dismiss or otherwise terminate the employment of either Participant at any time for any reason, with or without cause.

9.3 INCOME TAX WITHHOLDING/RIGHTS OF OFFSET. The Company shall have the right to deduct and withhold from all Incentive Awards all federal, state and local taxes as may be required by law. In addition to the foregoing, the Company shall have the right to set off against the amount of any Incentive Award which would otherwise be payable hereunder, the amount of any debt, judgment, claim, expense or other obligation owed at such time by the Participant to the Company or any subsidiary.

9.4 GOVERNING LAW. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of Delaware.

10. AMENDMENT AND TERMINATION. The Plan may be amended or terminated at any time and for any reason by the Committee. The Committee may, in its sole discretion, reduce or eliminate an Incentive Award to any Participant at any time and for any reason. The Plan is specifically designed to guide the Company in granting Incentive Awards and shall not create any contractual right of any employee to any Incentive Award prior to the payment of such award.

11. EFFECTIVE DATE. The Plan shall be effective for the Plan Year beginning January 1, 2007 and each subsequent Plan Year.

EX-10.2

Exhibit 10.2

THE WESTERN UNION COMPANY

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD NOTICE

Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), ________________ (“Executive”) has been granted the Performance-Based Restricted Stock Unit Award described below (the “Award”). Certain terms and conditions of the Award are set forth immediately below in this Award Notice. Other terms and conditions are set forth in the Performance-Based Restricted Stock Unit Award Agreement which is appended to this Award Notice. The Award Notice and the Performance-Based Restricted Stock Unit Award Agreement are together the “Agreement” which is made and entered into between The Western Union Company, a Delaware corporation (the “Company”), and Executive as of the Grant Date. Capitalized terms not otherwise defined in this Award Notice are defined in the Plan or the Performance-Based Restricted Stock Unit Award Agreement.

Grant Date:	_______________________
Target Award: Maximum Award:	___ shares of Common Stock ___ shares of Common Stock
Performance Period:	________________________
Performance Measure:	________________________
Vesting Date:	Third anniversary of Grant Date

THE WESTERN UNION COMPANY,

a Delaware corporation

By: _______________________________

Name: _________________________

Title: _________________________

EX-10.3

Exhibit 10.3

THE WESTERN UNION COMPANY

2006 LONG-TERM INCENTIVE PLAN

BONUS STOCK UNIT AWARD AGREEMENT -- TERMS AND CONDITIONS

1. Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to the non-employee director of the Company identified in the attached Stock Unit Award Notice (which forms part of this Agreement) (“Director”) as of the grant date specified in the Stock Unit Award Notice (the “Grant Date”), the number of Bonus Stock Units (the “Units”) relating to shares of the Company's common stock specified in the Stock Unit Award Notice, subject to the conditions and restrictions set forth in this Agreement and the Plan. Each Unit shall provide for the issuance and transfer to Director of one share of the Company's common stock on the distribution date specified in the most recent Election Agreement (which may be an Election Agreement under The Western Union Company Non-Employee Director Deferred Compensation Plan) between the Company and Director on file with the Company. Upon issuance and transfer of the shares of common stock subject to the Units, Director shall have all rights incident to ownership, including but not limited to voting rights and the right to receive dividends.

2. The terms of the Plan are hereby incorporated in this instrument by reference and made a part hereof. Any capitalized terms used in this Agreement that are not defined herein shall have the meaning set forth in the Plan.

3. The Company, in its sole discretion, may require, prior to the issuance or delivery of any shares of common stock pursuant to the Units, payment by Director of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with the Award.

4. Regardless of any action the Company takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to Director's participation in the Plan and legally applicable to him or her (“Tax-Related Items”), Director acknowledges that the ultimate liability for all Tax-Related Items is and remains Director's responsibility and may exceed the amount actually withheld by the Company. Director further acknowledges that the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant of the Units, the vesting of the Units, the conversion of the Units into Shares or the receipt of an equivalent cash payment, the subsequent sale of any Shares acquired and the receipt of any dividends or dividend equivalents; and (ii) does not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate Director's liability for the Tax-Related Items or achieve any particular tax result. Further, if Director has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event (“Tax Date”), as applicable, Director acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to the Tax Date, Director will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, Director authorizes the Company or its agent, at its discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (A) accept a cash payment in U.S. dollars in the amount of the Tax-Related Items, (B) withhold whole Shares which would otherwise be delivered to Director having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash from any cash compensation which would otherwise be payable to Director by the Company or from any equivalent cash payment received upon vesting of the Units, equal to the amount necessary to satisfy the Tax-Related Items, or (C) withhold from proceeds of the sale of Shares acquired upon settlement of the Units either through a voluntary sale or through a mandatory sale arranged by the Company (on Director's behalf pursuant to this authorization).

To avoid any negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Director is deemed to have been issued the full number of Shares due to him or her at settlement, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of Director's participation in the Plan.

Finally, Director shall pay to the Company any amount of Tax-Related Items that the Company may be required to withhold or account for as a result of Director's participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares to Director, if Director fails to comply with his or her obligations in connection with the Tax-Related Items.

5. Prior to the settlement of the Units, Director will be paid amounts equal to the regular cash dividends that would have been payable to Director if Director had received and held the shares of common stock underlying the Units, which payment shall be made as soon as practicable after the payment of dividends with respect to the Company's common stock but in no event later than March 15 of the calendar year immediately following the calendar year in which such dividends are paid with respect to the Company's common stock. No amounts will be paid with respect to record dates for dividends occurring prior the Grant Date. Prior to the issuance and transfer of the shares of common stock underlying the Units, Director shall not be a shareholder of record with respect to such shares and shall have no voting rights with respect to such shares.

6. The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, or otherwise as provided by the Plan. If Director or anyone claiming under or through Director attempts to make any such sale, transfer, assignment, pledge or other disposition of the Units in violation of this Paragraph 6, such attempted violation shall be null, void, and without effect.

7. Notwithstanding anything in this Agreement to the contrary, all Units subject to this Agreement shall be immediately forfeited in the event that Director's service on the Company's Board of Directors is terminated on account of gross misconduct.

8. The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Director under this Agreement without Director's written consent. The Committee may, in its sole discretion, permit Director to surrender the Units in order to exercise or realize the rights under other Awards under the Plan, or in exchange for the grant of new Awards under the Plan, or require Director to surrender the Units as a condition precedent of new Awards under the Plan.

9. Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Director and all persons claiming under or through Director. By accepting this grant of Units or other benefit under the Plan, Director and each person claiming under or through Director shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates.

10. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Director's participation in the Plan, or Director's acquisition or sale of the Shares underlying the Units. Director is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

11. This Award is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to Director in future years.

12. The validity, construction, interpretation, administration and effect of the Plan and this Agreement and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware in the United States of America, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado in the United States of America, and agree that such litigation shall be conducted only in the courts of Arapahoe County in the State of Colorado in the United States of America, or the federal courts for the United States of America for the District of Colorado, and no other courts, where this grant is made and/or to be performed.

13. If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan.

14. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. Director hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

15. The Company reserves the right to impose other requirements on Director's participation in the Plan, on the Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan, and to require Director to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.    

EX-10.4

Exhibit 10.4

THE WESTERN UNION COMPANY

2006 LONG-TERM INCENTIVE PLAN

BONUS STOCK UNIT AWARD AGREEMENT -- TERMS AND CONDITIONS

1. Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to the non-employee director of the Company identified in the attached Stock Unit Award Notice (which forms part of this Agreement) (“Director”) as of the grant date specified in the Stock Unit Award Notice (the “Grant Date”), the number of Bonus Stock Units (the “Units”) relating to shares of the Company's common stock specified in the Stock Unit Award Notice, subject to the conditions and restrictions set forth in this Agreement and the Plan. Each Unit shall provide for the issuance and transfer to Director of one share of the Company's common stock on the first business day of January in the calendar year immediately following the calendar year in which the Director separates from service on the Company's Board of Directors. Upon issuance and transfer of the shares of common stock subject to the Units, Director shall have all rights incident to ownership, including but not limited to voting rights and the right to receive dividends.

2. The terms of the Plan are hereby incorporated in this instrument by reference and made a part hereof. Any capitalized terms used in this Agreement that are not defined herein shall have the meaning set forth in the Plan.

3. The Company, in its sole discretion, may require, prior to the issuance or delivery of any shares of common stock pursuant to the Units, payment by Director of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with the Award.

4. Regardless of any action the Company takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to Director's participation in the Plan and legally applicable to him or her (“Tax-Related Items”), Director acknowledges that the ultimate liability for all Tax-Related Items is and remains Director's responsibility and may exceed the amount actually withheld by the Company. Director further acknowledges that the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant of the Units, the vesting of the Units, the conversion of the Units into Shares or the receipt of an equivalent cash payment, the subsequent sale of any Shares acquired and the receipt of any dividends or dividend equivalents; and (ii) does not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate Director's liability for the Tax-Related Items or achieve any particular tax result. Further, if Director has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event (“Tax Date”), as applicable, Director acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to the Tax Date, Director will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, Director authorizes the Company or its agent, at its discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (A) accept a cash payment in U.S. dollars in the amount of the Tax-Related Items, (B) withhold whole Shares which would otherwise be delivered to Director having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash from any cash compensation which would otherwise be payable to Director by the Company or from any equivalent cash payment received upon vesting of the Units, equal to the amount necessary to satisfy the Tax-Related Items, or (C) withhold from proceeds of the sale of Shares acquired upon settlement of the Units either through a voluntary sale or through a mandatory sale arranged by the Company (on Director's behalf pursuant to this authorization).

To avoid any negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Director is deemed to have been issued the full number of Shares due to him or her at settlement, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of Director's participation in the Plan.

Finally, Director shall pay to the Company any amount of Tax-Related Items that the Company may be required to withhold or account for as a result of Director's participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares to Director, if Director fails to comply with his or her obligations in connection with the Tax-Related Items.

5. Prior to the settlement of the Units, Director will be paid amounts equal to the regular cash dividends that would have been payable to Director if Director had received and held the shares of common stock underlying the Units, which payment shall be made as soon as practicable after the payment of dividends with respect to the Company's common stock but in no event later than March 15 of the calendar year immediately following the calendar year in which such dividends are paid with respect to the Company's common stock. No amounts will be paid with respect to record dates for dividends occurring prior the Grant Date. Prior to the issuance and transfer of the shares of common stock underlying the Units, Director shall not be a shareholder of record with respect to such shares and shall have no voting rights with respect to such shares.

6. The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, or otherwise as provided by the Plan. If Director or anyone claiming under or through Director attempts to make any such sale, transfer, assignment, pledge or other disposition of the Units in violation of this Paragraph 6, such attempted violation shall be null, void, and without effect.

7. Notwithstanding anything in this Agreement to the contrary, all Units subject to this Agreement shall be immediately forfeited in the event that Director's service on the Company's Board of Directors is terminated on account of gross misconduct.

8. The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Director under this Agreement without Director's written consent. The Committee may, in its sole discretion, permit Director to surrender the Units in order to exercise or realize the rights under other Awards under the Plan, or in exchange for the grant of new Awards under the Plan, or require Director to surrender the Units as a condition precedent of new Awards under the Plan.

9. Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Director and all persons claiming under or through Director. By accepting this grant of Units or other benefit under the Plan, Director and each person claiming under or through Director shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates.

10. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Director's participation in the Plan, or Director's acquisition or sale of the Shares underlying the Units. Director is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

11. Director hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Director's personal data as described in this Agreement and any other grant materials by and among, as applicable, the Company and its Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Director's participation in the Plan.

Director understands that the Company and its Subsidiaries and Affiliates may hold certain personal information about Director, including, but not limited to, Director's name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock units or other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Director's favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).

Director understands that Data will be transferred to Morgan Stanley Smith Barney or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Director understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient's country (e.g., the United States) may have different data privacy laws and protections than Director's country. Director understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the Company. Director authorizes the Company, Morgan Stanley Smith Barney and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Director's participation in the Plan. Director understands that Data will be held only as long as is necessary to implement, administer and manage Director's participation in the Plan. Director understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein, in any case without cost, by contacting the Company in writing. Director understands, however, that refusing or withdrawing consent may affect his or her ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, Director understands that he or she may contact the Company.

12. This Award is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to Director in future years.

13. The validity, construction, interpretation, administration and effect of the Plan and this Agreement and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware in the United States of America, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado in the United States of America, and agree that such litigation shall be conducted only in the courts of Arapahoe County in the State of Colorado in the United States of America, or the federal courts for the United States of America for the District of Colorado, and no other courts, where this grant is made and/or to be performed.

14. If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan.

15. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. Director hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

16. The Company reserves the right to impose other requirements on Director's participation in the Plan, on the Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan, and to require Director to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

NOTICE REGARDING EXCHANGE CONTROLS: If you are resident in Germany, you will have certain exchange control obligations related to your participation in the Plan. Specifically, as of March 2010, cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. If you use a German bank to transfer a cross-border payment in excess of €12,500 in connection with the sale of shares of Common Stock acquired under the Plan, the bank will make the report for you. In addition, you must report any receivables, payables, or debts in foreign currency exceeding an amount of €5,000,000 on a monthly basis. It is your responsibility to comply with these exchange controls and they may change from time to time.

EX-12

Exhibit 12

THE WESTERN UNION COMPANY

COMPUTATION OF

RATIO OF EARNINGS TO FIXED CHARGES

(in millions)

	Three Months Ended March 31,
	2012			2011
Earnings:
Income before income taxes	$	290.1		$	274.7
Fixed charges	45.5			46.5
Other adjustments	(4.1		)	(4.0		)
Total earnings (a)	$	331.5		$	317.2
Fixed charges:
Interest expense	$	40.0		$	43.4
Other adjustments	5.5			3.1
Total fixed charges (b)	$	45.5		$	46.5
Ratio of earnings to fixed charges (a/b)	7.3			6.8

For purposes of calculating the ratio of earnings to fixed charges, earnings have been calculated by adding income before income taxes, fixed charges included in the determination of income before income taxes and distributions from equity method investments, and then subtracting income from equity method investments. Fixed charges consist of interest expense, and an estimated interest portion of rental expenses and income tax contingencies, which are included as a component of income tax expense.

EX-15

Exhibit 15

Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information

The Board of Directors and Stockholders of The Western Union Company

We are aware of the incorporation by reference in the following Registration Statements:

(1) Registration Statements (Form S-3 Nos. 333-170967 and 333-170410) of The Western Union Company, and

(2) Registration Statement (Form S-8 No. 333-137665) pertaining to The Western Union Company 2006 Long-Term Incentive Plan, The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, and The Western Union Company Supplemental Incentive Savings Plan;

of our report dated May 1, 2012 relating to the unaudited condensed consolidated interim financial statements of The Western Union Company that are included in its Form 10-Q for the quarter ended March 31, 2012.

/s/ Ernst & Young LLP

Denver, Colorado

May 1, 2012

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Hikmet Ersek, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Western Union Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 1, 2012	/S/    HIKMET ERSEK
		Hikmet Ersek
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Scott T. Scheirman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Western Union Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 1, 2012	/S/    SCOTT T. SCHEIRMAN
		Scott T. Scheirman
		Executive Vice President, Chief Financial Officer and Global Operations

EX-32

Exhibit 32

CERTIFICATIONS

The certification set forth below is being submitted in connection with the Quarterly Report of The Western Union Company on Form 10-Q for the period ended March 31, 2012 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Hikmet Ersek and Scott T. Scheirman certify that, to the best of each of their knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Western Union Company.

Date:	May 1, 2012	/S/    HIKMET ERSEK
		Hikmet Ersek
		President and Chief Executive Officer

Date:	May 1, 2012	/S/    SCOTT T. SCHEIRMAN
		Scott T. Scheirman
		Executive Vice President, Chief Financial Officer and Global Operations

XML

Restructuring and Related Expenses (Details Numeric) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2011
Restructuring and Related Expenses (Numeric) [Abstract]
Restructuring and related expenses	$ 24.0
Consumer-to-Consumer [Member]
Restructuring and Related Expenses (Numeric) [Abstract]
Expenses	19.1
Consumer-to-Business [Member]
Restructuring and Related Expenses (Numeric) [Abstract]
Expenses	3.5
Other Segment [Member]
Restructuring and Related Expenses (Numeric) [Abstract]
Expenses	$ 1.4

XML

Stock Compensation Plans (Details) (USD $)	3 Months Ended
	Mar. 31, 2012 years
Stock options granted:
Weighted-average risk-free interest rate	1.20%
Weighted-average dividend yield	1.70%
Volatility	33.30%
Expected term (in years)	6.09
Weighted-average grant date fair value (in dollars per share)	$ 4.94

XML

Derivatives (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Euro [Member]
Notional amounts of foreign currency forward contracts [Abstract]
Contracts not designated as hedges	$ 149.7
Contracts designated as hedges	503.2
Australian Dollar [Member]
Notional amounts of foreign currency forward contracts [Abstract]
Contracts not designated as hedges	48.1
Contracts designated as hedges	48.2
Canadian Dollar [Member]
Notional amounts of foreign currency forward contracts [Abstract]
Contracts not designated as hedges	43.6
Contracts designated as hedges	117.4
British Pound [Member]
Notional amounts of foreign currency forward contracts [Abstract]
Contracts not designated as hedges	42.5
Contracts designated as hedges	104.1
Other Currencies [Member]
Notional amounts of foreign currency forward contracts [Abstract]
Contracts not designated as hedges	67.6
Contracts designated as hedges	$ 78.5

XML

Stock Compensation Plans (Details Numeric) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Stock Compensation Plans (Numeric) [Abstract]
Stock-based compensation expense	$ 10.5	$ 7.5
Options Granted (in shares)	2.5
Options Granted, Weighted Average Exercise Price, per share (in dollars per share)	$ 17.86
Stock Options Outstanding (in shares)	29.6
Options Outstanding, Weighted Average Exercise Price, per share (in dollars per share)	$ 18.45
Options Exercisable (in shares)	24.0
Options Exercisable, Weighted Average Exercise Price, Per Share (in dollars per share)	$ 18.71
Percentage of total options outstanding	26.00%
Restricted Stock Awards/Units [Member]
Stock Compensation Plans (Numeric) [Abstract]
Granted awards/units (in shares)	1.7
Granted awards/units, Weighted Average Grant Date Fair Value, per award/unit (in dollars per share)	$ 16.76
Non-vested awards/units (in shares)	5.3
Non-vested awards/units, Weighted Average Grant Date Fair Value, per award/unit (in dollars per share)	$ 17.42
Performance Stock Units [Member]
Stock Compensation Plans (Numeric) [Abstract]
Granted awards/units (in shares)	0.5
Granted awards/units, Weighted Average Grant Date Fair Value, per award/unit (in dollars per share)	$ 16.70

XML

Settlement Assets and Obligations (Details Numeric) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Settlement Assets And Obligations (Numeric) [Abstract]
Variable rate demand notes, maximum maturity year	2050
Proceeds from sale and maturity of available-for-sale securities	$ 3,000,000,000	$ 3,300,000,000
Due within 1 year	210,900,000
Due after 1 year through 5 years	750,800,000
Due after 5 years through 10 years	124,100,000
Due after 10 years	487,000,000
Variable Rate Demand Obligation [Member]
Settlement Assets And Obligations (Numeric) [Abstract]
Due within 1 year	1,200,000
Due after 1 year through 5 years	64,600,000
Due after 5 years through 10 years	22,700,000
Due after 10 years	$ 465,100,000
Maximum [Member]
Settlement Assets And Obligations (Numeric) [Abstract]
Variable rate demand notes, period of time held	30 days

XML

Earnings Per Share and Dividends (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Earnings Per Share, Diluted [Abstract]
Basic weighted-average shares outstanding (in shares)	619.1	646.9
Common stock equivalents (in shares)	2.8	5.2
Diluted weighted-average shares outstanding (in shares)	621.9	652.1
Earnings per share:
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	20.5	7.8
Cash dividend declared, per share (in dollars per share)	$ 0.10	$ 0.07
Cash dividends declared	$ 61.6	$ 44.7
Cash dividends paid	$ 61.6	$ 44.7

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements of Assets and Liabilities

The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):

	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
March 31, 2012	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	931.1	$	—	$	931.1
State and municipal variable rate demand notes	—		553.6		—		553.6
Corporate debt and other	0.1		88.0		—		88.1
Derivatives	—		110.9		—		110.9
Total assets	$	0.1	$	1,683.6	$	—	$	1,683.7
Liabilities:
Commercial paper	$	—	$	350.0	$	—	$	350.0
Notes and other borrowings	—		3,579.4		—		3,579.4
Total borrowings	—		3,929.4		—		3,929.4
Derivatives	—		90.6		—		90.6
Total liabilities	$	—	$	4,020.0	$	—	$	4,020.0
	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
December 31, 2011	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	866.5	$	—	$	866.5
State and municipal variable rate demand notes	—		376.9		—		376.9
Corporate debt and other	0.1		88.5		—		88.6
Derivatives	—		124.8		—		124.8
Total assets	$	0.1	$	1,456.7	$	—	$	1,456.8
Liabilities:
Commercial paper	$	—	$	297.0	$	—	$	297.0
Notes and other borrowings	—		3,563.5		—		3,563.5
Total borrowings	—		3,860.5		—		3,860.5
Derivatives	—		86.6		—		86.6
Total liabilities	$	—	$	3,947.1	$	—	$	3,947.1

XML

Derivatives (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	$ 1.6		$ 1.9
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives	(14.6)	[1]	(24.7)	[1]
Fair Value Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives	1.7		(0.2)
Derivative Instruments, Gain (Loss) Recognized in Income on Related Hedged Item	0.2	[2]	7.3	[2]
Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	(23.0)		(35.6)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	1.6		(6.2)
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	1.4	[3]	2.3	[3]
Gain (Loss) on Derivatives [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives	0.2	[1],[4]	(2.0)	[1],[4]
Selling, General and Administrative [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives	(14.8)	[1],[5]	(22.7)	[1],[5]
Foreign Currency Contracts [Member] | Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	(23.0)		(35.6)
Foreign Currency Contracts [Member] | Revenue [Member] | Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	2.5		(5.8)
Foreign Currency Contracts [Member] | Gain (Loss) on Derivatives [Member] | Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	1.4	[3]	2.3	[3]
Interest Rate Contracts [Member] | Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	0	[6]	0	[6]
Interest Rate Contracts [Member] | Interest Expense [Member] | Fair Value Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives	1.7		(0.2)
Interest Rate Contracts [Member] | Interest Expense [Member] | Cash Flow Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(0.9)		(0.4)
Derivative Instruments, Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	0	[3]	0	[3]
Fixed Rate Debt Hedge [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Related Hedged Item	0.2	[2]	7.3	[2]
Fixed Rate Debt Hedge [Member] | Interest Expense [Member] | Fair Value Hedging [Member]
Hedges [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income on Related Hedged Item	$ 0.2	[2]	$ 7.3	[2]

[1] The Company uses foreign currency forward and option contracts as part of its business-to-business 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.

[2] The gain of $0.2 million and $7.3 million in the three months ended March 31, 2012 and 2011, respectively, was comprised of a (loss)/gain in value on the debt of $(1.7) million and $0.2 million, respectively, and amortization of hedge accounting adjustments of $1.9 million and $7.1 million, respectively.

[3] The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.

[4] The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract.

[5] 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 gain on settlement assets and obligations and cash balances for the three months ended March 31, 2012 and 2011, were $16.1 million and $20.2 million, respectively.

[6] The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Equity Method Investee [Member]
Related Party Transactions (Numeric) [Abstract]
Related party transaction, amounts of transaction	$ 16.1	$ 44.0
Director [Member]
Related Party Transactions (Numeric) [Abstract]
Related party transaction, amounts of transaction	$ 14.0	$ 13.4

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Restructuring and Related Expenses (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
Restructuring and Related Expenses [Abstract]
Restructuring Reserve, beginning Balance	$ 13.9
Cash payments	(5.1)
Restructuring Reserve, ending Balance	8.8
Severance, Outplacement and Related Benefits [Member]
Restructuring and Related Expenses [Abstract]
Restructuring Reserve, beginning Balance	13.7
Cash payments	(4.9)
Restructuring Reserve, ending Balance	8.8
Other Restructuring Costs [Member]
Restructuring and Related Expenses [Abstract]
Restructuring Reserve, beginning Balance	0.2	[1]
Cash payments	(0.2)	[1]
Restructuring Reserve, ending Balance	$ 0	[1]

[1] Other expenses related to the relocation of various operations to new and existing Company facilities including expenses for hiring, training, relocation, travel and professional fees. All such expenses were recorded when incurred.

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Borrowings (Details) (USD $)	3 Months Ended
	Mar. 31, 2012 days		Dec. 31, 2011
Borrowings [Abstract]
Total borrowings at par value	$ 3,630,700,000	[1]	$ 3,580,700,000	[1]
Fair value hedge accounting adjustments, net	23,800,000	[1]	23,900,000	[1]
Unamortized discount, net	(20,800,000)		(21,400,000)
Total borrowings at carrying value	3,633,700,000	[2]	3,583,200,000	[2]
Borrowings (Numeric) [Abstract]
Weighted average effective rate on total borrowings	4.80%
Long-term Debt, Maturities, Repayments of Principal in Remainder of Fiscal Year	350,000,000
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	300,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Two	500,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Five	1,000,000,000
Long-term Debt, Maturities, Repayments of Principal after Year Five	1,500,000,000
Commercial paper program, Maximum Amount of Issuance	1,500,000,000
Commercial paper program maximum days to maturity (in days)	397
Commercial paper program weighted average term (in days)	5
Commercial paper program, Average paper balance outstanding	141,700,000
Commercial paper program, Maximum paper balance outstanding	350,000,000
Commercial paper borrowings outstanding	350,000,000		297,000,000
Commercial Paper [Member]
Borrowings [Abstract]
Total borrowings at par value	350,000,000		297,000,000
Borrowings (Numeric) [Abstract]
Weighted average effective rate on total borrowings	0.50%
Floating Rate Notes Payable, 2013 [Member]
Borrowings [Abstract]
Total borrowings at par value	300,000,000		300,000,000
Borrowings (Numeric) [Abstract]
Effective rate of notes due	1.10%
Notes Payable, 2014 [Member]
Borrowings [Abstract]
Total borrowings at par value	500,000,000	[1]	500,000,000	[1]
Borrowings (Numeric) [Abstract]
Effective rate of notes due	5.60%
Debt Instrument, Interest Rate, Stated Percentage	6.50%
Notes Payable, 2016 [Member]
Borrowings [Abstract]
Total borrowings at par value	1,000,000,000	[1],[3]	1,000,000,000	[1],[3]
Borrowings (Numeric) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	5.93%
Notes Payable, 2018 [Member]
Borrowings [Abstract]
Total borrowings at par value	400,000,000	[3]	400,000,000	[3]
Borrowings (Numeric) [Abstract]
Effective rate of notes due	4.40%
Debt Instrument, Interest Rate, Stated Percentage	3.65%
Notes Payable, 2020 [Member]
Borrowings [Abstract]
Total borrowings at par value	324,900,000	[1],[3]	324,900,000	[1],[3]
Borrowings (Numeric) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	5.253%
Notes Payable, 2036 [Member]
Borrowings [Abstract]
Total borrowings at par value	500,000,000	[1],[3]	500,000,000	[1],[3]
Borrowings (Numeric) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	6.20%
Notes Payable, 2040 [Member]
Borrowings [Abstract]
Total borrowings at par value	250,000,000	[1],[3]	250,000,000	[1],[3]
Borrowings (Numeric) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	6.20%
Other Borrowings [Member]
Borrowings [Abstract]
Total borrowings at par value	$ 5,800,000	[1]	$ 8,800,000	[1]

[1] The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.

[2] As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

[3] The difference between the stated interest rate and the effective interest rate is not significant.

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Employee Benefit Plan (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Employee Benefit Plan [Abstract]
Interest cost	$ 3.7	$ 4.5
Expected return on plan assets	(5.2)	(5.3)
Amortization of actuarial loss	2.6	2.0
Net periodic benefit cost	1.1	1.2
Employee Benefit Plan (Numeric) [Abstract]
Defined benefit plan, amounts recognized in Balance Sheet	102.2		112.7
Defined benefit plan, estimated employer contributions in current fiscal year	20
Defined benefit plan, contributions by employer	9
Defined benefit plan, discretionary contribution by employer	$ 5

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Acquisitions

3 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Acquisitions

Acquisitions

2011 Acquisitions

On November 7, 2011, the Company acquired the business-to-business payment business known as Travelex Global Business Payments from Travelex Holdings Limited for cash consideration of £603 million ($967.8 million). The acquisition of the French assets of TGBP for cash consideration of £3 million (approximately $5.2 million based on currency exchange rates at March 31, 2012) has not been finalized as of March 31, 2012. This acquisition is expected to close in 2012, subject to satisfaction of closing conditions. The final consideration and the final purchase price allocation for TGBP are subject to a working capital adjustment, further analysis of tax balances, final valuation of identifiable intangible assets, and other items. With the acquisition of TGBP and the Company's existing Business Solutions business, the Company has the ability to leverage TGBP's business-to-business payments market expertise, distribution, product and capabilities with Western Union's brand, existing Business Solutions operations, global infrastructure and relationships, and financial strength. The results of operations for TGBP have been included in the Company's consolidated financial statements from the date of acquisition.

On October 31, 2011 and April 20, 2011, the Company acquired the remaining 70% interests in European-based Finint S.r.l. (“Finint”) and Angelo Costa S.r.l. (“Costa”), respectively, two of the Company's largest agents providing services in a number of European countries. The Company previously held a 30% equity interest in each of these agents. The Company expects these acquisitions will help accelerate the introduction of additional Western Union products and services and will leverage its existing European infrastructure to build new opportunities across the European Union. The acquisitions do not impact the Company's money transfer revenue, because the Company was already recording all of the revenue arising from money transfers originating at Finint's and Costa's subagents. As of the acquisition dates, the Company no longer incurs commission costs for transactions related to Finint and Costa; rather the Company now pays commissions to Finint and Costa subagents, resulting in lower overall commission expense. The Company's operating expenses include costs attributable to Finint's and Costa's operations subsequent to the acquisition dates.

The Company acquired the remaining 70% interest in Finint for cash consideration of €99.6 million ($139.4 million). The Company revalued its previous 30% equity interest to fair value of approximately $47.7 million on the acquisition date, resulting in total value of $187.1 million.

The Company acquired the remaining 70% interest in Costa for cash consideration of €95 million ($135.7 million). The final consideration is subject to the resolution of a working capital adjustment. The Company revalued its previous 30% equity interest to fair value of approximately $46.2 million on the acquisition date, resulting in total value of $181.9 million.

All assets and liabilities have been recorded at fair value, excluding deferred tax liabilities. The following table summarizes the final allocations of purchase price for Finint and Costa and the preliminary allocation of purchase price for TGBP (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Assets:
Cash and cash equivalents	$	25.3	$	—	$	—
Settlement assets	171.6		52.2		46.3
Property and equipment	4.9		0.5		3.0
Goodwill	688.3		153.6		174.2
Other intangible assets	321.3		64.8		51.4
Other assets	66.5		2.0		1.5
Total assets	$	1,277.9	$	273.1	$	276.4
Liabilities:
Accounts payable and accrued liabilities	$	39.6	$	6.1	$	10.8
Settlement obligations	171.6		57.5		55.7
Income taxes payable	1.1		3.1		10.3
Deferred tax liability, net	76.0		15.8		15.5
Other liabilities	21.8		3.5		2.2
Total liabilities	310.1		86.0		94.5
Total purchase price (a)	$	967.8	$	187.1	$	181.9

____________________

(a) Total purchase price includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date.

The preliminary valuation of assets acquired for TGBP and the final valuation of assets acquired for Finint and Costa were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in identifiable intangible assets as follows (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Customer and other contractual relationships	$	270.3	$	—	$	—
Network of subagents	—		53.9		44.6
Other	51.0		10.9		6.8
Total identifiable intangible assets	$	321.3	$	64.8	$	51.4

Customer and other contractual relationships and network of subagents identifiable intangible assets were valued using an income approach and are being amortized over 9 to 15 years, subject to valuation completion for TGBP. Other intangibles were valued using both income and cost approaches and are being amortized over one to five years. For the remaining assets and liabilities excluding goodwill and deferred tax liabilities, fair value approximated carrying value.

The goodwill recognized for TGBP of $688.3 million is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce and relates entirely to the Business Solutions segment. The goodwill recognized for Finint and Costa of $153.6 million and $174.2 million, respectively, is attributable to growth opportunities that will arise from the Company directly managing its agent relationships, expected synergies, projected long-term business growth and an assembled workforce and relates entirely to the Consumer-to-Consumer segment. Based on the preliminary allocation of purchase price, goodwill expected to be deductible for income tax purposes for TGBP, Finint and Costa is approximately $440.0 million, $97.0 million and $104.9 million, respectively.

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Settlement Assets and Obligations (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Settlement assets:
Cash and cash equivalents	$ 483.2	$ 712.5
Receivables from selling agents and Business Solutions customers	1,129.1	1,046.7
Investment securities	1,572.8	1,332.0
Total settlement assets	3,185.1	3,091.2
Settlement obligations:
Money transfer, money order and payment service payables	2,283.6	2,242.3
Payables to agents	901.5	848.9
Total settlement obligations	$ 3,185.1	$ 3,091.2

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

Borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

	March 31, 2012			December 31, 2011
Due in less than one year:
Commercial paper	$	350.0		$	297.0
Floating rate notes (effective rate of 1.1%) due 2013	300.0			300.0
Due in greater than one year (a):
6.500% notes (effective rate of 5.6%) due 2014	500.0			500.0
5.930% notes due 2016 (b)	1,000.0			1,000.0
3.650% notes (effective rate of 4.4%) due 2018	400.0			400.0
5.253% notes due 2020 (b)	324.9			324.9
6.200% notes due 2036 (b)	500.0			500.0
6.200% notes due 2040 (b)	250.0			250.0
Other borrowings	5.8			8.8
Total borrowings at par value	3,630.7			3,580.7
Fair value hedge accounting adjustments, net (a)	23.8			23.9
Unamortized discount, net	(20.8		)	(21.4		)
Total borrowings at carrying value (c)	$	3,633.7		$	3,583.2

____________________ 

(a) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.

(b) The difference between the stated interest rate and the effective interest rate is not significant.

(c) As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign Currency Hedging

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2012 were as follows (in millions):

Contracts not designated as hedges:
Euro	$	149.7
Australian dollar	48.1
Canadian dollar	43.6
British pound	42.5
Other	67.6
Contracts designated as hedges:
Euro	$	503.2
Canadian dollar	117.4
British pound	104.1
Australian dollar	48.2
Other	78.5

Fair Value of Derivatives

The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (in millions):

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
	Balance Sheet Location	March 31, 2012		December 31, 2011		Balance Sheet Location	March 31, 2012		December 31, 2011
Derivatives — hedges:
Interest rate fair value hedges — Corporate	Other assets	$	3.9	$	4.4	Other liabilities	$	—	$	—
Foreign currency cash flow hedges — Consumer-to-Consumer	Other assets	18.3		37.0		Other liabilities	13.4		6.6
Total		$	22.2	$	41.4		$	13.4	$	6.6
Derivatives — undesignated:
Foreign currency — Business Solutions	Other assets	$	87.2	$	79.8	Other liabilities	$	69.4	$	67.6
Foreign currency —Consumer-to-Consumer	Other assets	1.5		3.6		Other liabilities	7.8		12.4
Total		$	88.7	$	83.4		$	77.2	$	80.0
Total derivatives		$	110.9	$	124.8		$	90.6	$	86.6

Fair Value Hedges

The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives							Gain/(Loss) Recognized in Income on Related Hedged Item (a)
	Income Statement Location	Amount						Income Statement Location	Amount
Derivatives		March 31, 2012		March 31, 2011			Hedged Items		March 31, 2012		March 31, 2011
Interest rate contracts	Interest expense	$	1.7	$	(0.2	)	Fixed-rate debt	Interest expense	$	0.2	$	7.3
Total gain/(loss)		$	1.7	$	(0.2	)			$	0.2	$	7.3

Cash Flow Hedges

The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)						Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)							Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
							Income Statement	Amount						Income Statement	Amount
	March 31,			March 31,				March 31,			March 31,				March 31,		March 31,
Derivatives	2012			2011			Location	2012			2011			Location	2012		2011
Foreign currency contracts	$	(23.0	)	$	(35.6	)	Revenue	$	2.5		$	(5.8	)	Derivative gains, net	$	1.4	$	2.3
Interest rate contracts (c)	—			—			Interest expense	(0.9		)	(0.4		)	Interest expense	—		—
Total gain/(loss)	$	(23.0	)	$	(35.6	)		$	1.6		$	(6.2	)		$	1.4	$	2.3

Undesignated Hedges

The following table presents the location and amount of net losses from undesignated hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives (d)
	Income Statement Location	Amount
		Three Months Ended March 31,
Derivatives		2012			2011
Foreign currency contracts (e)	Selling, general and administrative	$	(14.8	)	$	(22.7	)
Foreign currency contracts (f)	Derivative gains, net	0.2			(2.0		)
Total loss		$	(14.6	)	$	(24.7	)

 ____________________

(a) The gain of $0.2 million and $7.3 million in the three months ended March 31, 2012 and 2011, respectively, was comprised of a (loss)/gain in value on the debt of $(1.7) million and $0.2 million, respectively, and amortization of hedge accounting adjustments of $1.9 million and $7.1 million, respectively.

(b) The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.

(c) The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.

(d) The Company uses foreign currency forward and option contracts as part of its business-to-business payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(e) The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gain on settlement assets and obligations and cash balances for the three months ended March 31, 2012 and 2011, were $16.1 million and $20.2 million, respectively.

(f) The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract.

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Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Transaction fees	$ 1,040.9	$ 998.0
Foreign exchange revenues	322.6	256.1
Other revenues	29.9	28.9
Total consolidated revenues	1,393.4	1,283.0
Operating income/(loss):
Restructuring and related expenses (Note 4)		(24.0)
Total consolidated operating income/(loss)	332.5	312.9
Consumer-to-Consumer [Member]
Revenues:
Transaction fees	872.0	839.8
Foreign exchange revenues	239.4	227.4
Other revenues	13.2	10.9
Total consolidated revenues	1,124.6	1,078.1
Operating income/(loss):
Total consolidated operating income/(loss)	311.3	308.6
Consumer-to-Business [Member]
Revenues:
Transaction fees	147.7	144.7
Foreign exchange revenues	0.8	0.9
Other revenues	6.6	7.6
Total consolidated revenues	155.1	153.2
Operating income/(loss):
Total consolidated operating income/(loss)	41.1	34.6
Business Solutions [Member]
Revenues:
Transaction fees	6.5	0.9
Foreign exchange revenues	80.1	26.8
Other revenues	0.3	0.2
Total consolidated revenues	86.9	27.9
Operating income/(loss):
Total consolidated operating income/(loss)	(14.8)	(4.3)
Other Segment [Member]
Revenues:
Total consolidated revenues	26.8	23.8
Operating income/(loss):
Total consolidated operating income/(loss)	(5.1)	(2.0)
Total segment operating income [Member]
Operating income/(loss):
Total consolidated operating income/(loss)	332.5	336.9
Unallocated Amount to Segment [Member]
Operating income/(loss):
Restructuring and related expenses (Note 4)	$ 0	$ (24.0)

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Settlement Assets and Obligations (Details 1) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012		Dec. 31, 2011
Available-for-sale investment securities [Abstract]
Amortized Cost	$ 1,560.4		$ 1,324.1
Fair Value	1,572.8		1,332.0
Gross Unrealized Gains	14.1		11.0
Gross Unrealized Losses	(1.7)		(3.1)
Net Unrealized Gains/(Losses)	12.4		7.9
State and municipal debt securities [Member]
Available-for-sale investment securities [Abstract]
Amortized Cost	919.1	[1]	858.5	[1]
Fair Value	931.1	[1]	866.5	[1]
Gross Unrealized Gains	13.3	[1]	10.4	[1]
Gross Unrealized Losses	(1.3)	[1]	(2.4)	[1]
Net Unrealized Gains/(Losses)	12.0	[1]	8.0	[1]
State and municipal variable rate demand notes [Member]
Available-for-sale investment securities [Abstract]
Amortized Cost	553.6		376.9
Fair Value	553.6		376.9
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Net Unrealized Gains/(Losses)	0		0
Corporate debt and other [Member]
Available-for-sale investment securities [Abstract]
Amortized Cost	87.7		88.7
Fair Value	88.1		88.6
Gross Unrealized Gains	0.8		0.6
Gross Unrealized Losses	(0.4)		(0.7)
Net Unrealized Gains/(Losses)	$ 0.4		$ (0.1)

[1] The majority of these securities are fixed-rate instruments.

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Stock Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Fair Value Assumptions, Stock Options Granted [Table]

The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March 31, 2012:

Stock options granted:
Weighted-average risk-free interest rate	1.2		%
Weighted-average dividend yield	1.7		%
Volatility	33.3		%
Expected term (in years)	6.09
Weighted-average grant date fair value	$	4.94

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Segments (Tables)

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Segment Results

The following table presents the Company's reportable segment results for the three months ended March 31, 2012 and 2011 (in millions):

	Three Months Ended March 31,
	2012			2011
Revenues:
Consumer-to-Consumer:
Transaction fees	$	872.0		$	839.8
Foreign exchange revenues	239.4			227.4
Other revenues	13.2			10.9
	1,124.6			1,078.1
Consumer-to-Business:
Transaction fees	147.7			144.7
Foreign exchange revenues	0.8			0.9
Other revenues	6.6			7.6
	155.1			153.2
Business Solutions:
Transaction fees	6.5			0.9
Foreign exchange revenues	80.1			26.8
Other revenues	0.3			0.2
	86.9			27.9
Other:
Total revenues	26.8			23.8
	26.8			23.8
Total consolidated revenues	$	1,393.4		$	1,283.0
Operating income/(loss):
Consumer-to-Consumer	$	311.3		$	308.6
Consumer-to-Business	41.1			34.6
Business Solutions	(14.8		)	(4.3		)
Other	(5.1		)	(2.0		)
Total segment operating income	332.5			336.9
Restructuring and related expenses (Note 4)	—			(24.0		)
Total consolidated operating income	$	332.5		$	312.9

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Earnings Per Share and Dividends

3 Months Ended

Mar. 31, 2012

Earnings Per Share and Dividends [Abstract]

Earnings Per Share and Dividends

Earnings Per Share and Dividends

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. 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, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.

For the three months ended March 31, 2012 and 2011, there were 20.5 million and 7.8 million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation, as their effect was anti-dilutive.

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

	Three Months Ended March 31,
	2012	2011
Basic weighted-average shares outstanding	619.1	646.9
Common stock equivalents	2.8	5.2
Diluted weighted-average shares outstanding	621.9	652.1

Cash Dividends Paid

During the first quarter of 2012 and 2011, the Company's Board of Directors declared quarterly cash dividends of $0.10 and $0.07 per common share, respectively, representing $61.6 million and $44.7 million, respectively, in total dividends, which were paid on March 30, 2012 and March 31, 2011, respectively.

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Business and Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012 CountryAndTerritory
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Minimum number of countries and territories where services are available through network of agent locations (in countries and territories)	200
Net Assets Subject to Limitations	$ 265

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Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012		Dec. 31, 2011
Assets:
Derivatives	$ 110.9		$ 124.8
Liabilities:
Derivatives	90.6		86.6
Fair Value Measurements (Numeric) [Abstract]
Borrowings, Carrying Value	3,633.7	[1]	3,583.2	[1]
Recurring [Member]
Assets:
State and municipal debt securities	931.1		866.5
State and municipal variable rate demand notes	553.6		376.9
Corporate debt and other	88.1		88.6
Derivatives	110.9		124.8
Total assets	1,683.7		1,456.8
Liabilities:
Commercial paper	350.0		297.0
Notes and other borrowings	3,579.4		3,563.5
Total borrowings	3,929.4		3,860.5
Derivatives	90.6		86.6
Total liabilities	4,020.0		3,947.1
Recurring [Member] | Level 1 [Member]
Assets:
State and municipal debt securities	0		0
State and municipal variable rate demand notes	0		0
Corporate debt and other	0.1		0.1
Derivatives	0		0
Total assets	0.1		0.1
Liabilities:
Commercial paper	0		0
Notes and other borrowings	0		0
Total borrowings	0		0
Derivatives	0		0
Total liabilities	0		0
Recurring [Member] | Level 2 [Member]
Assets:
State and municipal debt securities	931.1		866.5
State and municipal variable rate demand notes	553.6		376.9
Corporate debt and other	88.0		88.5
Derivatives	110.9		124.8
Total assets	1,683.6		1,456.7
Liabilities:
Commercial paper	350.0		297.0
Notes and other borrowings	3,579.4		3,563.5
Total borrowings	3,929.4		3,860.5
Derivatives	90.6		86.6
Total liabilities	4,020.0		3,947.1
Recurring [Member] | Level 3 [Member]
Assets:
State and municipal debt securities	0		0
State and municipal variable rate demand notes	0		0
Corporate debt and other	0		0
Derivatives	0		0
Total assets	0		0
Liabilities:
Commercial paper	0		0
Notes and other borrowings	0		0
Total borrowings	0		0
Derivatives	0		0
Total liabilities	$ 0		$ 0

[1] As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

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Income Taxes (Details Numeric) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Income Taxes (Numeric) [Abstract]
Effective tax rate	14.80%	23.50%
Unrecognized Tax benefits Excluding Interest and Penalties	$ 120,200,000		$ 123,700,000
Unrecognized Tax Benefits That Would Impact the Effective Tax Rate	113,900,000		115,600,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	(1,500,000)	3,000,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	19,300,000		20,700,000
Unrecognized Tax Benefits, Significant Change in Unrecognized Tax Benefits Reasonably Possible During Next 12 Months	50,000,000
Cash payments expected to be made related to IRS agreement	190,000,000
Cash payments made as a result of the IRS Agreement	65,000,000
Foreign Earnings	$ 3,800,000,000
Pre-tax Income [Member] | Geographic Concentration Risk [Member] | Foreign Country [Member]
Income Taxes (Numeric) [Abstract]
Percent of pre-tax income	85.00%

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Transaction fees	$ 1,040.9	$ 998.0
Foreign exchange revenues	322.6	256.1
Other revenues	29.9	28.9
Total revenues	1,393.4	1,283.0
Expenses:
Cost of services	783.0	745.4
Selling, general and administrative	277.9	224.7
Total expenses	1,060.9	970.1
Operating income	332.5	312.9
Other income/(expense):
Interest income	1.5	1.2
Interest expense	(44.4)	(43.4)
Derivative gains, net	1.6	1.9
Other income/(expense), net	(1.1)	2.1
Total other expense, net	(42.4)	(38.2)
Income before income taxes	290.1	274.7
Provision for income taxes	42.8	64.5
Net income	$ 247.3	$ 210.2
Earnings per share:
Basic (in dollars per share)	$ 0.40	$ 0.32
Diluted (in dollars per share)	$ 0.40	$ 0.32
Weighted-average shares outstanding:
Basic (in shares)	619.1	646.9
Diluted (in shares)	621.9	652.1

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Settlement Assets and Obligations (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Contractual maturities of investment securities [Abstract]
Due within 1 year	$ 210.9
Due after 1 year through 5 years	750.8
Due after 5 years through 10 years	124.1
Due after 10 years	487.0
Total investment securities - Fair Value	$ 1,572.8

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities
Net income	$ 247.3	$ 210.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	15.3	15.0
Amortization	48.6	29.7
Other non-cash items, net	1.6	(7.2)
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
Other assets	(10.1)	(11.5)
Accounts payable and accrued liabilities	(35.7)	(20.2)
Income taxes payable (Note 12)	(40.1)	41.0
Other liabilities	(11.9)	(5.4)
Net cash provided by operating activities	215.0	251.6
Cash flows from investing activities
Capitalization of contract costs	(55.8)	(7.1)
Capitalization of purchased and developed software	(5.8)	(2.5)
Purchases of property and equipment	(14.2)	(12.3)
Net cash used in investing activities	(75.8)	(21.9)
Cash flows from financing activities
Proceeds from exercise of options	41.2	72.3
Cash dividends paid	(61.6)	(44.7)
Common stock repurchased	(146.8)	(498.4)
Net proceeds from commercial paper	53.0	0
Net proceeds from issuance of borrowings	0	299.5
Net cash used in financing activities	(114.2)	(171.3)
Net change in cash and cash equivalents	25.0	58.4
Cash and cash equivalents at beginning of period	1,370.9	2,157.4
Cash and cash equivalents at end of period	1,395.9	2,215.8
Supplemental cash flow information:
Interest paid	23.1	23.6
Income taxes paid (Note 12)	89.5	24.6
Unsettled repurchases of common stock	$ 0	$ 26.8

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Acquisitions (Details 1) (USD $) In Millions, unless otherwise specified	Nov. 07, 2011 Business Acquisition, Travelex Global Business Payments [Member]	Oct. 31, 2011 Business Acquisition, Finint S.r.l [Member]	Apr. 20, 2011 Business Acquisition, Angelo Costa S.r.l [Member]	Nov. 07, 2011 Customer and Other Contractual Relationships [Member] Business Acquisition, Travelex Global Business Payments [Member]	Oct. 31, 2011 Customer and Other Contractual Relationships [Member] Business Acquisition, Finint S.r.l [Member]	Apr. 20, 2011 Customer and Other Contractual Relationships [Member] Business Acquisition, Angelo Costa S.r.l [Member]	Nov. 07, 2011 Network of Subagents [Member] Business Acquisition, Travelex Global Business Payments [Member]	Oct. 31, 2011 Network of Subagents [Member] Business Acquisition, Finint S.r.l [Member]	Apr. 20, 2011 Network of Subagents [Member] Business Acquisition, Angelo Costa S.r.l [Member]	Nov. 07, 2011 Other Intangible Assets [Member] Business Acquisition, Travelex Global Business Payments [Member]	Oct. 31, 2011 Other Intangible Assets [Member] Business Acquisition, Finint S.r.l [Member]	Apr. 20, 2011 Other Intangible Assets [Member] Business Acquisition, Angelo Costa S.r.l [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	$ 321.3	$ 64.8	$ 51.4	$ 270.3	$ 0	$ 0	$ 0	$ 53.9	$ 44.6	$ 51.0	$ 10.9	$ 6.8

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Earnings Per Share and Dividends (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Share and Dividends [Abstract]

Calculation of diluted weighted-average shares outstanding

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

	Three Months Ended March 31,
	2012	2011
Basic weighted-average shares outstanding	619.1	646.9
Common stock equivalents	2.8	5.2
Diluted weighted-average shares outstanding	621.9	652.1

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Acquisitions (Details Numeric) In Millions, unless otherwise specified												3 Months Ended
	Nov. 07, 2011 Business Acquisition, Travelex Global Business Payments [Member] USD ($)		Nov. 07, 2011 Business Acquisition, Travelex Global Business Payments [Member] GBP (£)	Mar. 31, 2012 Travelex Global Business Payments French Acquisition [Member] USD ($)	Mar. 31, 2012 Travelex Global Business Payments French Acquisition [Member] GBP (£)	Oct. 31, 2011 Business Acquisition Finint Srl [Member] USD ($)		Oct. 31, 2011 Business Acquisition Finint Srl [Member] EUR (€)	Apr. 20, 2011 Business Acquisition, Angelo Costa S.r.l [Member] USD ($)		Apr. 20, 2011 Business Acquisition, Angelo Costa S.r.l [Member] EUR (€)	Mar. 31, 2012 Network Of Subagents And Customer And Other Contractual Relationships [Member] years	Mar. 31, 2012 Other Intangible Assets [Member] years
Acquisitions (Numeric) [Abstract]
Business Acquisition, aggregate consideration paid	$ 967.8		£ 603.0	$ 5.2	£ 3.0	$ 139.4		€ 99.6	$ 135.7		€ 95.0
Business Acquisition, voting interest acquired (percentage)						70.00%		70.00%	70.00%		70.00%
Interest in Acquired Company, prior to acquisition (percentage)						30.00%		30.00%	30.00%		30.00%
Fair value of existing equity interest						47.7			46.2
Total value	967.8	[1]				187.1	[1]		181.9	[1]
Amortization period of intangibles acquired, minimum (in years)												9	1
Amortization period of intangibles acquired, maximum (in years)												15	5
Goodwill	688.3					153.6			174.2
Goodwill expected to be deductible for income tax purposes	$ 440.0					$ 97.0			$ 104.9

[1] Total purchase price includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date

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Restructuring and Related Expenses (Tables)

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes the activity for the restructuring accruals as of March 31, 2012 (in millions):

	Severance, Outplacement and Related Benefits			Other(a)			Total
Balance, December 31, 2011	$	13.7		$	0.2		$	13.9
Cash payments	(4.9		)	(0.2		)	(5.1		)
Balance, March 31, 2012	$	8.8		$	—		$	8.8

____________________ 

(a) Other expenses related to the relocation of various operations to new and existing Company facilities including expenses for hiring, training, relocation, travel and professional fees. All such expenses were recorded when incurred.

Schedule of Restructuring and Related Expenses in Condensed Consolidated Statements of Income

Restructuring and related expenses are reflected in the Condensed Consolidated Statements of Income as follows (in millions):

	Three Months Ended March 31,
	2011
Cost of services	$	6.9
Selling, general and administrative	17.1
Total restructuring and related expenses, pre-tax	$	24.0
Total restructuring and related expenses, net of tax	$	16.4

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Business and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

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 available through a network of agent locations in more than 200 countries and territories. 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 between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through the Company's websites and account based money transfers.

• Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. This segment primarily consists of U.S. bill payments, Pago Fácil (bill payments in Argentina), and international bill payments. The significant majority of the segment's revenue was generated in the United States during all periods presented.

• Business Solutions - The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations. The majority of the segment's business relates to exchanges of currency at the spot rate which enables 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. Travelex Global Business Payments (“TGBP”), which was acquired in November 2011 (see Note 3), is also included in this segment.

All businesses that have not been classified in the above segments are reported as “Other” and include the Company's money order, prepaid services, mobile money transfer, and other businesses and services, in addition to costs for the investigation and closing of acquisitions.

The Company's previously reported segments were Consumer-to-Consumer, Global Business Payments, and Other. The changes in the Company's segment structure primarily relate to the separation of the Global Business Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. All prior segment information has been reclassified to reflect these new segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located, or which constitute undistributed earnings of affiliates of the Company accounted for under the equity method of accounting. 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 March 31, 2012, the amount of net assets subject to these limitations totaled approximately $265 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 accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position and cash flows as of March 31, 2012 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Consistent with industry practice, the accompanying Condensed 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.

Use of Estimates

The preparation of financial statements in conformity with 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.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Net income	$ 247.3	$ 210.2
Other comprehensive income/(loss):
Unrealized gains	5.9	0.4
Tax expense	(2.2)	(0.1)
Reclassification of gains into earnings	(1.4)	(0.2)
Tax expense	0.5	0.1
Net unrealized gains on investment securities	2.8	0.2
Unrealized losses on hedging activities:
Unrealized losses	(23.0)	(35.6)
Tax benefit	3.4	5.2
Reclassification of (gains)/losses into earnings	(1.6)	6.2
Tax benefit	0	(1.4)
Net unrealized losses on hedging activities	(21.2)	(25.6)
Foreign currency translation adjustments:
Foreign currency translation adjustments	3.3	4.5
Tax expense	(0.5)	(1.0)
Net foreign currency translation adjustments	2.8	3.5
Defined benefit pension plan:
Reclassification of losses into earnings	2.6	2.0
Tax benefit	(1.0)	(0.7)
Net defined benefit pension plan adjustments	1.6	1.3
Total other comprehensive loss	(14.0)	(20.6)
Comprehensive income	$ 233.3	$ 189.6

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Borrowings

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

Borrowings

Borrowings

The Company’s outstanding borrowings consisted of the following (in millions):

	March 31, 2012			December 31, 2011
Due in less than one year:
Commercial paper	$	350.0		$	297.0
Floating rate notes (effective rate of 1.1%) due 2013	300.0			300.0
Due in greater than one year (a):
6.500% notes (effective rate of 5.6%) due 2014	500.0			500.0
5.930% notes due 2016 (b)	1,000.0			1,000.0
3.650% notes (effective rate of 4.4%) due 2018	400.0			400.0
5.253% notes due 2020 (b)	324.9			324.9
6.200% notes due 2036 (b)	500.0			500.0
6.200% notes due 2040 (b)	250.0			250.0
Other borrowings	5.8			8.8
Total borrowings at par value	3,630.7			3,580.7
Fair value hedge accounting adjustments, net (a)	23.8			23.9
Unamortized discount, net	(20.8		)	(21.4		)
Total borrowings at carrying value (c)	$	3,633.7		$	3,583.2

____________________ 

(a) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.

(b) The difference between the stated interest rate and the effective interest rate is not significant.

(c) As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

The Company's maturities of borrowings at par value as of March 31, 2012 are $350.0 million in 2012, $300.0 million in 2013, $500.0 million in 2014, $1.0 billion in 2016 and approximately $1.5 billion thereafter.

The Company's obligations with respect to its outstanding borrowings, as described above, 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. The Commercial Paper Notes may have maturities of up to 397 days from date of issuance. The Company's commercial paper borrowings as of March 31, 2012 had a weighted-average annual interest rate of approximately 0.5% and a weighted-average term of 5 days. During the three months ended March 31, 2012, the average commercial paper balance outstanding was $141.7 million and the maximum balance outstanding was $350.0 million. Proceeds from the Company's commercial paper borrowings were used for general corporate purposes. The Company had $350.0 million and $297.0 million of commercial paper outstanding as of March 31, 2012 and December 31, 2011, respectively.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	Apr. 27, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Western Union CO
Entity Central Index Key (CIK)	0001365135
Company Fiscal Year End Date	--12-31
Accelerated Filing Status	Large Accelerated Filer
Form Type	10-Q
Report Period	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Amendment Flag	false
Company Well-known Seasoned Issuer (WKSI)	Yes
Entity Voluntary Filers	No
Current with Filings	Yes
Entity Common Stock, Shares Outstanding		612,951,394

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rates on pre-tax income for the three months ended March 31, 2012 and 2011 were 14.8% and 23.5%, respectively. The significant decrease in the Company's effective tax rate for the three months ended March 31, 2012 is primarily due to an agreement with the United States Internal Revenue Service (“IRS Agreement”) resolving substantially all of the issues related to the Company's restructuring of its international operations in 2003, as described below. The Company also continues to benefit from an increasing proportion of its profits being foreign-derived, and therefore taxed at lower rates than its combined federal and state tax rates in the United States. For the three months ended March 31, 2012, 85.0% of the Company's pre-tax income was from foreign sources. However, certain portions of the Company's foreign source income are subject to U.S. federal and state income tax as earned due to the nature of the income, and dividend repatriations of the Company's foreign source income are generally subject to U.S. federal and state income tax.

Uncertain Tax Positions

The Company has established contingency reserves for a variety of material, known tax exposures. 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 financial statements, and are reflected in “Income taxes payable” in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March 31, 2012 and December 31, 2011 was $120.2 million and $123.7 million, respectively, excluding interest and penalties. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $113.9 million and $115.6 million as of March 31, 2012 and December 31, 2011, respectively, excluding interest and penalties.

The Company recognizes interest and penalties with respect to unrecognized tax benefits in “Provision for income taxes” in its Condensed Consolidated Statements of Income, and records the associated liability in “Income taxes payable” in its Condensed Consolidated Balance Sheets. The Company recognized $(1.5) million and $3.0 million in interest and penalties during the three months ended March 31, 2012 and 2011, respectively. The Company has accrued $19.3 million and $20.7 million for the payment of interest and penalties as of March 31, 2012 and December 31, 2011, respectively.

The unrecognized tax benefits accrual at March 31, 2012 consists of federal, state and foreign tax matters. It is reasonably possible that the Company's total unrecognized tax benefits will decrease by approximately $50 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 United States federal income tax returns of First Data, which include the Company, are eligible to be examined for 2005 and 2006. The Company's United States federal income tax returns since the Spin-off are also eligible to be examined. The United States Internal Revenue Service (“IRS”) completed its examination of the United States federal consolidated income tax returns of First Data for 2003 and 2004, which included the Company, 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. As a result of the IRS Agreement, the Company expects to make cash payments of approximately $190 million, of which approximately $65 million were made in the three months ended March 31, 2012. An examination of the United States federal consolidated income tax returns of First Data that cover the Company's 2005 and pre-Spin-off 2006 taxable periods is ongoing, as is an examination of the Company's United States federal consolidated income tax returns for the 2006 post-Spin-off period through 2009.

As of March 31, 2012, no provision had been made for United States federal and state income taxes on certain of the Company's outside tax basis differences, which primarily relate to accumulated foreign earnings of approximately $3.8 billion, which are expected to be reinvested outside the United States indefinitely. Upon distribution of those earnings to the United States in the form of actual or constructive dividends, the Company would be subject to United States income taxes (subject to an adjustment for foreign tax credits), state income taxes and possible withholding taxes payable to various foreign countries. Such taxes could be significant. Determination of this amount of unrecognized deferred United States tax liability is not practicable because of the complexities associated with its hypothetical calculation.

Tax Allocation Agreement with First Data

The Company and First Data each are liable for taxes imposed on their respective businesses both prior to and after the Spin-off. If such taxes have not been appropriately apportioned between First Data and the Company, subsequent adjustments may occur that may impact the Company's financial condition or results of operations.

Also under the tax allocation agreement, with respect to taxes and other liabilities that result from a final determination that is inconsistent with the anticipated tax consequences of the Spin-off (as set forth in the private letter ruling and relevant tax opinion) (“Spin-off Related Taxes”), the Company will be liable to First Data for any such Spin-off Related Taxes attributable solely to actions taken by or with respect to the Company. In addition, the Company will also be liable for half of any Spin-off Related Taxes (i) that would not have been imposed but for the existence of both an action by the Company and an action by First Data or (ii) where the Company and First Data each take actions that, standing alone, would have resulted in the imposition of such Spin-off Related Taxes. The Company may be similarly liable if it breaches certain representations or covenants set forth in the tax allocation agreement. If the Company is required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it likely would have a material adverse effect on the Company's business, financial condition and results of operations. First Data generally will be liable for all Spin-off Related Taxes, other than those described above.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012		Dec. 31, 2011
Assets
Cash and cash equivalents	$ 1,395.9		$ 1,370.9
Settlement assets	3,185.1		3,091.2
Property and equipment, net of accumulated depreciation of $445.2 and $429.7, respectively	196.3		198.1
Goodwill	3,166.3		3,198.9
Other intangible assets, net of accumulated amortization of $433.6 and $462.5, respectively	878.3		847.4
Other assets	375.9		363.4
Total assets	9,197.8		9,069.9
Liabilities:
Accounts payable and accrued liabilities	498.3		535.0
Settlement obligations	3,185.1		3,091.2
Income taxes payable	259.6		302.4
Deferred tax liability, net	392.0		389.7
Borrowings	3,633.7	[1]	3,583.2	[1]
Other liabilities	261.7		273.6
Total liabilities	8,230.4		8,175.1
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued	0		0
Common stock, $0.01 par value; 2,000 shares authorized; 613.9 shares and 619.4 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively	6.1		6.2
Capital surplus	298.9		247.1
Retained earnings	794.9		760.0
Accumulated other comprehensive loss	(132.5)		(118.5)
Total stockholders' equity	967.4		894.8
Total liabilities and stockholders' equity	$ 9,197.8		$ 9,069.9

[1] As of March 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Letters of Credit and Bank Guarantees

The Company had approximately $95 million in outstanding letters of credit and bank guarantees as of March 31, 2012 with expiration dates through 2015, the majority of which contain a one-year renewal option. The letters of credit and bank guarantees are primarily held in connection with lease arrangements and certain agent agreements. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances.

Litigation and Related Contingencies

In the second quarter of 2009, the Antitrust Division of the United States Department of Justice (“DOJ”) served one of the Company's subsidiaries with a grand jury subpoena requesting documents in connection with an investigation into money transfers, including related foreign exchange rates, from the United States to the Dominican Republic from 2004 through the date of subpoena. The Company is cooperating fully with the DOJ investigation. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company and one of its subsidiaries are defendants in two purported class action lawsuits: James P. Tennille v. The Western Union Company and Robert P. Smet v. The Western Union Company, both of which are pending in the United States District Court for the District of Colorado. The original complaints asserted claims for violation of various consumer protection laws, unjust enrichment, conversion and declaratory relief, based on allegations that the Company waits too long to inform consumers if their money transfers are not redeemed by the recipients and that the Company uses the unredeemed funds to generate income until the funds are escheated to state governments. The Tennille complaint was served on the Company on April 27, 2009. The Smet complaint was served on the Company on April 6, 2010. On September 21, 2009, the Court granted the Company's motion to dismiss the Tennille complaint and gave the plaintiff leave to file an amended complaint. On October 21, 2009, Tennille filed an amended complaint. The Company moved to dismiss the Tennille amended complaint and the Smet complaint. On November 8, 2010, the Court denied the motion to dismiss as to the plaintiffs' unjust enrichment and conversion claims. On February 4, 2011, the Court dismissed plaintiffs' consumer protection claims. On March 11, 2011, the plaintiffs filed an amended complaint that adds a claim for breach of fiduciary duty, various elements to its declaratory relief claim and Western Union Financial Services, Inc. as a defendant. On April 25, 2011, the Company and Western Union Financial Services, Inc. filed a motion to dismiss the breach of fiduciary duty and declaratory relief claims. Western Union Financial Services, Inc. also moved to compel arbitration of the plaintiffs' claims and to stay the action pending arbitration. On November 21, 2011, the Court denied the motion to compel arbitration and the stay request. Both companies appealed the decision. On January 24, 2012, the United States Court of Appeals for the Tenth Circuit granted the companies' request to stay the District Court proceedings pending their appeal. The plaintiffs have not sought and the Court has not granted class certification. The Company and Western Union Financial Services, Inc. intend to vigorously defend themselves against both lawsuits. However, due to the preliminary stages of these lawsuits, the fact the plaintiffs have not quantified their damage demands, and the uncertainty as to whether they will ever be certified as class actions, the potential outcome cannot be determined.

On February 11, 2010, the Company signed an agreement and settlement, which resolved all outstanding legal issues and claims with the State of Arizona and required the Company to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which California, Texas and New Mexico are participating with Arizona. The accrual included amounts for reimbursement to the State of Arizona for its costs associated with this matter. In addition, as part of the agreement and settlement, the Company has made and expects to make certain investments in its compliance programs along the United States and Mexico border and a monitor has been engaged for those programs. The costs of the investments in the Company's programs and for the monitor are expected to reach up to $23.0 million over the period from signing to 2013.

In the normal course of business, the Company is subject to claims and litigation. Management of the Company believes such matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the Company's financial condition, results of operations and cash flows. The Company accrues for loss contingencies as they become probable and estimable.

On January 26, 2006, the First Data Corporation (“First Data”) Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments business and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the “Spin-off”). The Spin-off resulted in the formation of the Company and these assets and businesses no longer being part of First Data. Pursuant to the separation and distribution agreement with First Data in connection with the Spin-off, First Data and the Company are each liable for, and agreed to perform, all liabilities with respect to their respective businesses. In addition, the separation and distribution agreement also provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Company's business with the Company and financial responsibility for the obligations and liabilities of First Data's retained businesses with First Data. The Company also entered into a tax allocation agreement that sets forth the rights and obligations of First Data and the Company with respect to taxes imposed on their respective businesses both prior to and after the Spin-off as well as potential tax obligations for which the Company may be liable in conjunction with the Spin-off (see Note 12).

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Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

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. For additional information on how the Company measures fair value, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):

	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
March 31, 2012	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	931.1	$	—	$	931.1
State and municipal variable rate demand notes	—		553.6		—		553.6
Corporate debt and other	0.1		88.0		—		88.1
Derivatives	—		110.9		—		110.9
Total assets	$	0.1	$	1,683.6	$	—	$	1,683.7
Liabilities:
Commercial paper	$	—	$	350.0	$	—	$	350.0
Notes and other borrowings	—		3,579.4		—		3,579.4
Total borrowings	—		3,929.4		—		3,929.4
Derivatives	—		90.6		—		90.6
Total liabilities	$	—	$	4,020.0	$	—	$	4,020.0
	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
December 31, 2011	Level 1		Level 2		Level 3
Assets:
State and municipal debt securities	$	—	$	866.5	$	—	$	866.5
State and municipal variable rate demand notes	—		376.9		—		376.9
Corporate debt and other	0.1		88.5		—		88.6
Derivatives	—		124.8		—		124.8
Total assets	$	0.1	$	1,456.7	$	—	$	1,456.8
Liabilities:
Commercial paper	$	—	$	297.0	$	—	$	297.0
Notes and other borrowings	—		3,563.5		—		3,563.5
Total borrowings	—		3,860.5		—		3,860.5
Derivatives	—		86.6		—		86.6
Total liabilities	$	—	$	3,947.1	$	—	$	3,947.1

No non-recurring fair value adjustments were recorded during the three months ended March 31, 2012, except those associated with acquisitions, as disclosed in Note 3. No non-recurring fair value adjustments were recorded during the three months ended March 31, 2011.

Other Fair Value Measurements

The carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, settlement receivables and settlement obligations, and commercial paper approximate fair value due to their short maturities. The aggregate fair value of the Company's borrowings, excluding commercial paper, was based on quotes from multiple banks and excluded the impact of related interest rate swaps. All the assets and liabilities in the above tables were carried at fair value in the Company's Condensed Consolidated Balance Sheets, with the exception of borrowings, which had a carrying value of $3,633.7 million and $3,583.2 million as of March 31, 2012 and December 31, 2011, respectively (see Note 11).

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Business Acquisition: Schedule of Allocation of Purchase Price

The following table summarizes the final allocations of purchase price for Finint and Costa and the preliminary allocation of purchase price for TGBP (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Assets:
Cash and cash equivalents	$	25.3	$	—	$	—
Settlement assets	171.6		52.2		46.3
Property and equipment	4.9		0.5		3.0
Goodwill	688.3		153.6		174.2
Other intangible assets	321.3		64.8		51.4
Other assets	66.5		2.0		1.5
Total assets	$	1,277.9	$	273.1	$	276.4
Liabilities:
Accounts payable and accrued liabilities	$	39.6	$	6.1	$	10.8
Settlement obligations	171.6		57.5		55.7
Income taxes payable	1.1		3.1		10.3
Deferred tax liability, net	76.0		15.8		15.5
Other liabilities	21.8		3.5		2.2
Total liabilities	310.1		86.0		94.5
Total purchase price (a)	$	967.8	$	187.1	$	181.9

____________________

(a) Total purchase price includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date.

Business Acquisition: Schedule of Identifiable Intangible Assets

The preliminary valuation of assets acquired for TGBP and the final valuation of assets acquired for Finint and Costa were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in identifiable intangible assets as follows (in millions):

	Travelex Global Business Payments		Finint S.r.l		Angelo Costa S.r.l
Customer and other contractual relationships	$	270.3	$	—	$	—
Network of subagents	—		53.9		44.6
Other	51.0		10.9		6.8
Total identifiable intangible assets	$	321.3	$	64.8	$	51.4

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Stock Compensation Plans

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation Plans

Stock Compensation Plans

For the three months ended March 31, 2012 and 2011, the Company recognized stock-based compensation expense of $10.5 million and $7.5 million, respectively, resulting from stock options, restricted stock awards, restricted stock units, performance-based restricted stock units, deferred stock units and bonus stock units in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2012, the Company granted 2.5 million options at a weighted-average exercise price of $17.86, 1.7 million restricted stock units at a weighted-average grant date fair value of $16.76 and 0.5 million performance-based restricted stock units at a weighted-average grant date fair value of $16.70. The performance-based restricted stock units granted in 2012 are restricted stock awards, primarily granted to the Company's executives, which require certain financial and strategic performance objectives to be met over the next two years plus an additional one year vesting period. Achievement is also limited if certain total shareholder return metrics are not met over the three year vesting period.

As of March 31, 2012, the Company had 29.6 million outstanding options at a weighted-average exercise price of $18.45, and had 24.0 million options exercisable at a weighted-average exercise price of $18.71. Approximately 26% of the outstanding options as of March 31, 2012 were held by employees of First Data. The Company had 5.3 million non-vested restricted stock awards and units at a weighted-average grant date fair value of $17.42 as of March 31, 2012.

The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March 31, 2012:

Stock options granted:
Weighted-average risk-free interest rate	1.2		%
Weighted-average dividend yield	1.7		%
Volatility	33.3		%
Expected term (in years)	6.09
Weighted-average grant date fair value	$	4.94

All assumptions used to calculate the fair value of Western Union’s stock options granted during the three months ended March 31, 2012 were determined on a consistent basis with those assumptions disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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Employee Benefit Plan

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plan

Employee Benefit Plan

The Company has a frozen defined benefit pension plan (the “Plan”) for which it had a recorded unfunded pension obligation of $102.2 million and $112.7 million as of March 31, 2012 and December 31, 2011, respectively, included in “Other liabilities” in the Condensed Consolidated Balance Sheets. The Company is required to fund $20 million to the Plan in 2012. Through March 2012, the Company has made contributions of $9 million to the Plan, including a discretionary contribution of approximately $5 million.

The following table provides the components of net periodic benefit cost for the Plan (in millions):

	Three Months Ended March 31,
	2012			2011
Interest cost	$	3.7		$	4.5
Expected return on plan assets	(5.2		)	(5.3		)
Amortization of actuarial loss	2.6			2.0
Net periodic benefit cost	$	1.1		$	1.2

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Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

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, as it does its other agents, commissions for money transfer and other services provided on the Company’s behalf. Commission expense recognized for these agents for the three months ended March 31, 2012 and 2011 totaled $16.1 million and $44.0 million, respectively. Commission expense recognized for Finint prior to October 31, 2011 and Costa prior to April 20, 2011, the date of the acquisitions (see Note 3), was considered a related party transaction.

The Company has a director who is also a director for a company holding significant investments in two of the Company's existing agents. These agents had been agents of the Company prior to the director being appointed to the board. The Company recognized commission expense of $14.0 million and $13.4 million for the three months ended March 31, 2012 and 2011, respectively, related to these agents.

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Settlement Assets and Obligations

3 Months Ended

Mar. 31, 2012

Settlement Assets and Obligations [Abstract]

Settlement Assets and Obligations

Settlement Assets and Obligations

Settlement assets represent funds received or to be received from agents 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 businesses for the value of customer cross-currency payment transactions related to the Business Solutions segment.

Settlement assets and obligations consisted of the following (in millions):

	March 31, 2012		December 31, 2011
Settlement assets:
Cash and cash equivalents	$	483.2	$	712.5
Receivables from selling agents and Business Solutions customers	1,129.1		1,046.7
Investment securities	1,572.8		1,332.0
	$	3,185.1	$	3,091.2
Settlement obligations:
Money transfer, money order and payment service payables	$	2,283.6	$	2,242.3
Payables to agents	901.5		848.9
	$	3,185.1	$	3,091.2

Investment securities consist primarily of highly-rated state and municipal debt securities, including 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 that have varying maturities through 2050. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold specific highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. The substantial majority of the Company's investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. As of March 31, 2012, the majority of the Company's investment securities had credit ratings of “AA-” or better from a major credit rating agency.

Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Proceeds from the sale and maturity of available-for-sale securities during the three months ended March 31, 2012 and 2011 were $3.0 billion and $3.3 billion, respectively.

The components of investment securities are as follows (in millions):

March 31, 2012	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	919.1	$	931.1	$	13.3	$	(1.3	)	$	12.0
State and municipal variable rate demand notes	553.6		553.6		—		—			—
Corporate debt and other	87.7		88.1		0.8		(0.4		)	0.4
	$	1,560.4	$	1,572.8	$	14.1	$	(1.7	)	$	12.4

December 31, 2011	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	858.5	$	866.5	$	10.4	$	(2.4	)	$	8.0
State and municipal variable rate demand notes	376.9		376.9		—		—			—
Corporate debt and other	88.7		88.6		0.6		(0.7		)	(0.1		)
	$	1,324.1	$	1,332.0	$	11.0	$	(3.1	)	$	7.9

____________________ 

(a) The majority of these securities are fixed-rate instruments.

The following summarizes the contractual maturities of investment securities as of March 31, 2012 (in millions):

	Fair Value
Due within 1 year	$	210.9
Due after 1 year through 5 years	750.8
Due after 5 years through 10 years	124.1
Due after 10 years	487.0
	$	1,572.8

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 $1.2 million, $64.6 million, $22.7 million and $465.1 million, are included in the “Due within 1 year,” “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.

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Derivatives

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

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, Canadian dollar and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency business-to-business payments 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 uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency business-to-business payments by writing derivatives to customers.

The Company executes derivatives with established financial institutions, with the substantial majority of these financial institutions having credit ratings of “A-” or better from a major credit rating agency. The Company also writes Business Solutions derivatives mostly with 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. The Company also monitors 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 (including termination of contracts) when doubt arises about the counterparties' ability to perform. 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 — Consumer-to-Consumer

The Company’s policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to 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 March 31, 2012, the Company’s longer-term 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. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net” within the Company’s Condensed Consolidated Statements of Income.

The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up 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, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2012 were as follows (in millions):

Contracts not designated as hedges:
Euro	$	149.7
Australian dollar	48.1
Canadian dollar	43.6
British pound	42.5
Other	67.6
Contracts designated as hedges:
Euro	$	503.2
Canadian dollar	117.4
British pound	104.1
Australian dollar	48.2
Other	78.5

Foreign Currency — Business Solutions

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-to-business 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). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency business-to-business 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 $80.1 million and $27.7 million for the three months ended March 31, 2012 and 2011, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts is generally nine months or less.

The aggregate equivalent United States dollar notional amounts of foreign currency derivative customer contracts held by the Company in its Business Solutions operations as of March 31, 2012 were approximately $3.5 billion. The significant majority of customer contracts are written in major currencies such as the Canadian dollar, euro, Australian dollar, and British pound.

Interest Rate Hedging — Corporate

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 LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The Company designates these derivatives as fair value hedges utilizing the short-cut method, which permits an assumption of no ineffectiveness if certain criteria are met. 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 the Company's “Borrowings” in the Condensed Consolidated Balance Sheets and “Interest expense” in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets.

The Company held interest rate swaps in an aggregate notional amount of $500.0 million, related to notes due in 2014, as of both March 31, 2012 and December 31, 2011.

Balance Sheet

The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (in millions):

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
	Balance Sheet Location	March 31, 2012		December 31, 2011		Balance Sheet Location	March 31, 2012		December 31, 2011
Derivatives — hedges:
Interest rate fair value hedges — Corporate	Other assets	$	3.9	$	4.4	Other liabilities	$	—	$	—
Foreign currency cash flow hedges — Consumer-to-Consumer	Other assets	18.3		37.0		Other liabilities	13.4		6.6
Total		$	22.2	$	41.4		$	13.4	$	6.6
Derivatives — undesignated:
Foreign currency — Business Solutions	Other assets	$	87.2	$	79.8	Other liabilities	$	69.4	$	67.6
Foreign currency —Consumer-to-Consumer	Other assets	1.5		3.6		Other liabilities	7.8		12.4
Total		$	88.7	$	83.4		$	77.2	$	80.0
Total derivatives		$	110.9	$	124.8		$	90.6	$	86.6

Income Statement

The following tables summarize the location and amount of gains and losses of derivatives in the Condensed Consolidated Statements of Income segregated by designated, qualifying hedging instruments and those that are not, for the three months ended March 31, 2012 and 2011 (in millions):

Fair Value Hedges

The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives							Gain/(Loss) Recognized in Income on Related Hedged Item (a)
	Income Statement Location	Amount						Income Statement Location	Amount
Derivatives		March 31, 2012		March 31, 2011			Hedged Items		March 31, 2012		March 31, 2011
Interest rate contracts	Interest expense	$	1.7	$	(0.2	)	Fixed-rate debt	Interest expense	$	0.2	$	7.3
Total gain/(loss)		$	1.7	$	(0.2	)			$	0.2	$	7.3

Cash Flow Hedges

The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)						Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)							Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
							Income Statement	Amount						Income Statement	Amount
	March 31,			March 31,				March 31,			March 31,				March 31,		March 31,
Derivatives	2012			2011			Location	2012			2011			Location	2012		2011
Foreign currency contracts	$	(23.0	)	$	(35.6	)	Revenue	$	2.5		$	(5.8	)	Derivative gains, net	$	1.4	$	2.3
Interest rate contracts (c)	—			—			Interest expense	(0.9		)	(0.4		)	Interest expense	—		—
Total gain/(loss)	$	(23.0	)	$	(35.6	)		$	1.6		$	(6.2	)		$	1.4	$	2.3

Undesignated Hedges

The following table presents the location and amount of net losses from undesignated hedges for the three months ended March 31, 2012 and 2011 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives (d)
	Income Statement Location	Amount
		Three Months Ended March 31,
Derivatives		2012			2011
Foreign currency contracts (e)	Selling, general and administrative	$	(14.8	)	$	(22.7	)
Foreign currency contracts (f)	Derivative gains, net	0.2			(2.0		)
Total loss		$	(14.6	)	$	(24.7	)

 ____________________

(a) The gain of $0.2 million and $7.3 million in the three months ended March 31, 2012 and 2011, respectively, was comprised of a (loss)/gain in value on the debt of $(1.7) million and $0.2 million, respectively, and amortization of hedge accounting adjustments of $1.9 million and $7.1 million, respectively.

(b) The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.

(c) The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.

(d) The Company uses foreign currency forward and option contracts as part of its business-to-business payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(e) The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gain on settlement assets and obligations and cash balances for the three months ended March 31, 2012 and 2011, were $16.1 million and $20.2 million, respectively.

(f) The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract.

An accumulated other comprehensive pre-tax loss of $1.4 million related to the foreign currency forward contracts is expected to be reclassified into revenue within the next 12 months as of March 31, 2012. Approximately $3.6 million of net losses on the forecasted debt issuance hedges are expected to be recognized in "Interest expense" in the Condensed Consolidated Statements of Income within the next 12 months as of March 31, 2012. No amounts have been reclassified into earnings as a result of the underlying transaction being considered probable of not occurring within the specified time period.

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	Nov. 07, 2011 Business Acquisition, Travelex Global Business Payments [Member]		Oct. 31, 2011 Business Acquisition, Finint S.r.l [Member]		Apr. 20, 2011 Business Acquisition, Angelo Costa S.r.l [Member]
Assets:
Cash and cash equivalents	$ 25.3		$ 0		$ 0
Settlement assets	171.6		52.2		46.3
Property and equipment	4.9		0.5		3.0
Goodwill	688.3		153.6		174.2
Other intangible assets	321.3		64.8		51.4
Other assets	66.5		2.0		1.5
Total assets	1,277.9		273.1		276.4
Liabilities:
Accounts payable and accrued liabilities	39.6		6.1		10.8
Settlement obligations	171.6		57.5		55.7
Income taxes payable	1.1		3.1		10.3
Deferred tax liability, net	76.0		15.8		15.5
Other liabilities	21.8		3.5		2.2
Total liabilities	310.1		86.0		94.5
Total purchase price	$ 967.8	[1]	$ 187.1	[1]	$ 181.9	[1]

[1] Total purchase price includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date

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Derivatives (Details Numeric) (USD $) In Millions, unless otherwise specified	3 Months Ended							3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011		Mar. 31, 2012 Notes Payable, 2014 [Member]	Dec. 31, 2011 Notes Payable, 2014 [Member]	Mar. 31, 2012 Business Solutions [Member]	Mar. 31, 2012 Consumer-to-Consumer [Member]	Mar. 31, 2012 Foreign Currency Contracts [Member] Business Solutions [Member] Foreign Exchange Revenues [Member]	Mar. 31, 2011 Foreign Currency Contracts [Member] Business Solutions [Member] Foreign Exchange Revenues [Member]	Mar. 31, 2012 Fixed Rate Debt Hedge [Member]		Mar. 31, 2011 Fixed Rate Debt Hedge [Member]
Foreign Currency Derivatives (Numeric) [Abstract]
Derivative Contract Maturity Period Maximum (in months)								36 months
Maximum Remaining Maturity of Foreign Currency Derivatives (in months)								24 months
Derivative Weighted Average Maturity (in years)							nine months or less	approximately one year
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ (14.6)	[1]	$ (24.7)	[1]					$ 80.1	$ 27.7
Notional Amount of Foreign Currency Derivative Instruments Not Designated as Accounting Hedges, Business Solutions							3,500.0
Debt Derivatives (Numeric) [Abstract]
Notional Amount of Interest Rate Derivatives					500.0	500.0
Derivatives (Numeric) [Abstract]
Gain (Loss) Recognized in Income on Related Hedged Item											0.2	[2]	7.3	[2]
Gain/(Loss) in value of debt	(1.7)		0.2
Amortization of hedge accounting adjustments	1.9		7.1
Foreign exchange gain/(loss) on settlement assets and obligations and cash balances	16.1		20.2
Accumulated other comprehensive pre-tax loss	1.4
Losses forecasted on debt issuance hedges	$ 3.6

[1] The Company uses foreign currency forward and option contracts as part of its business-to-business 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.

[2] The gain of $0.2 million and $7.3 million in the three months ended March 31, 2012 and 2011, respectively, was comprised of a (loss)/gain in value on the debt of $(1.7) million and $0.2 million, respectively, and amortization of hedge accounting adjustments of $1.9 million and $7.1 million, respectively.

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Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2012

Accounting Policies [Abstract]

Business

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 available through a network of agent locations in more than 200 countries and territories. 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 between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through the Company's websites and account based money transfers.

• Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. This segment primarily consists of U.S. bill payments, Pago Fácil (bill payments in Argentina), and international bill payments. The significant majority of the segment's revenue was generated in the United States during all periods presented.

• Business Solutions - The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations. The majority of the segment's business relates to exchanges of currency at the spot rate which enables 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. Travelex Global Business Payments (“TGBP”), which was acquired in November 2011 (see Note 3), is also included in this segment.

All businesses that have not been classified in the above segments are reported as “Other” and include the Company's money order, prepaid services, mobile money transfer, and other businesses and services, in addition to costs for the investigation and closing of acquisitions.

The Company's previously reported segments were Consumer-to-Consumer, Global Business Payments, and Other. The changes in the Company's segment structure primarily relate to the separation of the Global Business Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. All prior segment information has been reclassified to reflect these new segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located, or which constitute undistributed earnings of affiliates of the Company accounted for under the equity method of accounting. 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 March 31, 2012, the amount of net assets subject to these limitations totaled approximately $265 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

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position and cash flows as of March 31, 2012 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Consistent with industry practice, the accompanying Condensed 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.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with 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.

Earnings Per Share Policy

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. 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, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.

Investment Policy

Investment securities consist primarily of highly-rated state and municipal debt securities, including 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 that have varying maturities through 2050. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold specific highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. The substantial majority of the Company's investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. As of March 31, 2012, the majority of the Company's investment securities had credit ratings of “AA-” or better from a major credit rating agency.

Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Proceeds from the sale and maturity of available-for-sale securities during the three months ended March 31, 2012 and 2011 were $3.0 billion and $3.3 billion, respectively.

Derivatives Policy, General

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, Canadian dollar and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency business-to-business payments 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 uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency business-to-business payments by writing derivatives to customers.

The Company executes derivatives with established financial institutions, with the substantial majority of these financial institutions having credit ratings of “A-” or better from a major credit rating agency. The Company also writes Business Solutions derivatives mostly with 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. The Company also monitors 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 (including termination of contracts) when doubt arises about the counterparties' ability to perform. 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 Consumer-to-Consumer Derivatives Policy

Foreign Currency — Consumer-to-Consumer

The Company’s policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to 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 March 31, 2012, the Company’s longer-term 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. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net” within the Company’s Condensed Consolidated Statements of Income.

The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up 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, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.

Foreign Currency Business Solutions Derivatives Policy

Foreign Currency — Business Solutions

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-to-business 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). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency business-to-business 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 $80.1 million and $27.7 million for the three months ended March 31, 2012 and 2011, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts is generally nine months or less.

Interest Rate Hedging Policy

Interest Rate Hedging — Corporate

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 LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The Company designates these derivatives as fair value hedges utilizing the short-cut method, which permits an assumption of no ineffectiveness if certain criteria are met. 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 the Company's “Borrowings” in the Condensed Consolidated Balance Sheets and “Interest expense” in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

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Settlement Assets and Obligations (Tables)

3 Months Ended

Mar. 31, 2012

Settlement Assets and Obligations [Abstract]

Settlement Assets and Obligations

Settlement assets and obligations consisted of the following (in millions):

	March 31, 2012		December 31, 2011
Settlement assets:
Cash and cash equivalents	$	483.2	$	712.5
Receivables from selling agents and Business Solutions customers	1,129.1		1,046.7
Investment securities	1,572.8		1,332.0
	$	3,185.1	$	3,091.2
Settlement obligations:
Money transfer, money order and payment service payables	$	2,283.6	$	2,242.3
Payables to agents	901.5		848.9
	$	3,185.1	$	3,091.2

Available-for-sale investment securities

The components of investment securities are as follows (in millions):

March 31, 2012	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	919.1	$	931.1	$	13.3	$	(1.3	)	$	12.0
State and municipal variable rate demand notes	553.6		553.6		—		—			—
Corporate debt and other	87.7		88.1		0.8		(0.4		)	0.4
	$	1,560.4	$	1,572.8	$	14.1	$	(1.7	)	$	12.4

December 31, 2011	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
State and municipal debt securities (a)	$	858.5	$	866.5	$	10.4	$	(2.4	)	$	8.0
State and municipal variable rate demand notes	376.9		376.9		—		—			—
Corporate debt and other	88.7		88.6		0.6		(0.7		)	(0.1		)
	$	1,324.1	$	1,332.0	$	11.0	$	(3.1	)	$	7.9

____________________ 

(a) The majority of these securities are fixed-rate instruments.

Contractual maturities of investment securities

The following summarizes the contractual maturities of investment securities as of March 31, 2012 (in millions):

	Fair Value
Due within 1 year	$	210.9
Due after 1 year through 5 years	750.8
Due after 5 years through 10 years	124.1
Due after 10 years	487.0
	$	1,572.8

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Derivatives (Details 1) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	$ 110.9	$ 124.8
Derivative Liability, Fair Value	90.6	86.6
Designated as a Hedging Instrument [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	22.2	41.4
Derivative Liability, Fair Value	13.4	6.6
Undesignated [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	88.7	83.4
Derivative Liability, Fair Value	77.2	80.0
Interest rate fair value hedges - Corporate [Member] | Other Assets [Member] | Designated as a Hedging Instrument [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	3.9	4.4
Interest rate fair value hedges - Corporate [Member] | Other Liabilities [Member] | Designated as a Hedging Instrument [Member]
Fair Value Of Derivatives [Abstract]
Derivative Liability, Fair Value	0	0
Foreign Currency Contracts [Member] | Business Solutions [Member] | Other Assets [Member] | Undesignated [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	87.2	79.8
Foreign Currency Contracts [Member] | Business Solutions [Member] | Other Liabilities [Member] | Undesignated [Member]
Fair Value Of Derivatives [Abstract]
Derivative Liability, Fair Value	69.4	67.6
Foreign Currency Contracts [Member] | Consumer-to-Consumer [Member] | Other Assets [Member] | Designated as a Hedging Instrument [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	18.3	37.0
Foreign Currency Contracts [Member] | Consumer-to-Consumer [Member] | Other Assets [Member] | Undesignated [Member]
Fair Value Of Derivatives [Abstract]
Derivative Asset, Fair Value	1.5	3.6
Foreign Currency Contracts [Member] | Consumer-to-Consumer [Member] | Other Liabilities [Member] | Designated as a Hedging Instrument [Member]
Fair Value Of Derivatives [Abstract]
Derivative Liability, Fair Value	13.4	6.6
Foreign Currency Contracts [Member] | Consumer-to-Consumer [Member] | Other Liabilities [Member] | Undesignated [Member]
Fair Value Of Derivatives [Abstract]
Derivative Liability, Fair Value	$ 7.8	$ 12.4

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Commitments and Contingencies (Numeric) [Abstract]
Outstanding letters of credit and bank guarantees	$ 95
Settlement agreement to invest in compliance	$ 23.0

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Condensed Consolidated Balance Sheet (Unaudited) (Parentheticals) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Assets
Accumulated depreciation	$ 445.2	$ 429.7
Accumulated amortization	$ 433.6	$ 462.5
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	2,000,000,000	2,000,000,000
Common stock, shares issued (in shares)	613,900,000	619,400,000
Common stock, shares outstanding (in shares)	613,900,000	619,400,000

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Restructuring and Related Expenses

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

Restructuring and Related Expenses

Restructuring and Related Expenses

On May 25, 2010 and as subsequently revised, the Company's Board of Directors approved a restructuring plan (the “Restructuring Plan”) designed to reduce the Company's overall headcount and migrate positions from various facilities, primarily within North America and Europe, to regional operating centers. As of September 30, 2011, the Company had incurred all of the expenses related to the Restructuring Plan.

The following table summarizes the activity for the restructuring accruals as of March 31, 2012 (in millions):

	Severance, Outplacement and Related Benefits			Other(a)			Total
Balance, December 31, 2011	$	13.7		$	0.2		$	13.9
Cash payments	(4.9		)	(0.2		)	(5.1		)
Balance, March 31, 2012	$	8.8		$	—		$	8.8

____________________ 

(a) Other expenses related to the relocation of various operations to new and existing Company facilities including expenses for hiring, training, relocation, travel and professional fees. All such expenses were recorded when incurred.

Restructuring and related expenses are reflected in the Condensed Consolidated Statements of Income as follows (in millions):

	Three Months Ended March 31,
	2011
Cost of services	$	6.9
Selling, general and administrative	17.1
Total restructuring and related expenses, pre-tax	$	24.0
Total restructuring and related expenses, net of tax	$	16.4

There were no restructuring and related expenses incurred during the three months ended March 31, 2012. During the three months ended March 31, 2011, $19.1 million and $3.5 million of the expenses incurred were attributable to the Consumer-to-Consumer and Consumer-to-Business segments, respectively, and $1.4 million was attributable to Other, for a total of $24.0 million. There were no restructuring and related expenses incurred during the three months ended March 31, 2011 that were attributable to the Business Solutions segment.

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Net Periodic Benefit Cost for the Defined Benefit Pension Plan

The following table provides the components of net periodic benefit cost for the Plan (in millions):

	Three Months Ended March 31,
	2012			2011
Interest cost	$	3.7		$	4.5
Expected return on plan assets	(5.2		)	(5.3		)
Amortization of actuarial loss	2.6			2.0
Net periodic benefit cost	$	1.1		$	1.2

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Restructuring and Related Expenses (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2011
Schedule of Restructuring and Related Expenses in Consolidated Statements of Income [Abstract]
Cost of services	$ 6.9
Selling, general and administrative	17.1
Total restructuring and related expenses, pre-tax	24.0
Total restructuring and related expenses, net of tax	$ 16.4

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Segments

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Segments

Segments

As previously described in Note 1, the Company classifies its businesses into three segments: Consumer-to-Consumer, Consumer-to-Business 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 deciding where to allocate resources and in assessing performance.

The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The Company's money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world, including related transactions that can be initiated through the Company's websites and account based money transfers. The segment includes six regions whose functions are limited to generating, managing and maintaining agent relationships and localized marketing activities. These regions interact on transactions with consumers and share common processes, systems and licenses, thereby constituting one global Consumer-to-Consumer money transfer business and one operating segment.

The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses.

The Business Solutions operating segment facilitates business-to-business payment solutions, primarily cross-border, cross-currency transactions, mainly for small and medium size enterprises, and other organizations.

All businesses that have not been classified in the above segments are reported as “Other” and include the Company's money order, prepaid services, mobile money transfer, and other businesses and services.

There were no restructuring and related expenses incurred during the three months ended March 31, 2012, but the Company incurred expenses of $24.0 million for the three months ended March 31, 2011. These expenses were not allocated to the Company's segments. While these items were identifiable to the Company's segments, they were not included in the measurement of segment operating profit provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. For additional information on restructuring and related activities, refer to Note 4.

In the first quarter of 2012, the Company began assessing performance and allocating resources based on the segment structure described above. Segment results for the three months ended March 31, 2011 have been reclassified to reflect this structure. The following table presents the Company's reportable segment results for the three months ended March 31, 2012 and 2011 (in millions):

	Three Months Ended March 31,
	2012			2011
Revenues:
Consumer-to-Consumer:
Transaction fees	$	872.0		$	839.8
Foreign exchange revenues	239.4			227.4
Other revenues	13.2			10.9
	1,124.6			1,078.1
Consumer-to-Business:
Transaction fees	147.7			144.7
Foreign exchange revenues	0.8			0.9
Other revenues	6.6			7.6
	155.1			153.2
Business Solutions:
Transaction fees	6.5			0.9
Foreign exchange revenues	80.1			26.8
Other revenues	0.3			0.2
	86.9			27.9
Other:
Total revenues	26.8			23.8
	26.8			23.8
Total consolidated revenues	$	1,393.4		$	1,283.0
Operating income/(loss):
Consumer-to-Consumer	$	311.3		$	308.6
Consumer-to-Business	41.1			34.6
Business Solutions	(14.8		)	(4.3		)
Other	(5.1		)	(2.0		)
Total segment operating income	332.5			336.9
Restructuring and related expenses (Note 4)	—			(24.0		)
Total consolidated operating income	$	332.5		$	312.9