What changed in this filing

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Item 1A. Risk Factors

2021-02-19 compared with 2020-02-20 · 213 added, 165 removed, 346 unchanged (52% of the section changed)

The following is a summary of certain key risk factors with respect to our Company.

You should read this summary together with the more detailed descriptions of risks relating to our Company below.

Risks Relating to Our Business and Industry

● Demand for our services is dependent on a number of factors that could be materially impacted by adverse changes in the global economy, including related to the COVID-19 pandemic.

● We operate in highly competitive and rapidly evolving industries and face competition from a wide variety of service providers.

● Our business depends on consumer confidence, which could be adversely affected by a number of factors, many of which are outside of our control.

● Our Consumer-to-Consumer business is highly dependent on our ability to maintain our agent network under terms consistent with or more advantageous than those currently in place.

● Our industry is subject to rapid and significant technological changes.

● We are a global company and accordingly are subject to a number of risks related to our international operations.

● As a company that transfers and retains large amounts of confidential and personal information, we are exposed to risks relating to ensuring such information is not improperly used or disclosed.

● Our ability to provide reliable service largely depends on the efficient and uninterrupted operation of our computer information systems and those of our service providers.

● We may not realize all of the anticipated benefits from restructuring and related initiatives.

● We face credit, liquidity, and fraud risks from our agents, consumers, businesses, and third-party processors.

● Changes in tax laws, or their interpretation, or unfavorable resolution of tax contingencies could adversely affect our tax expense.

● Our ability to remain competitive depends in part on our ability to protect our trademarks, patents, copyrights, and other intellectual property rights and to defend ourselves against potential intellectual property infringement claims.

Risks Relating to Our Regulatory and Litigation Environment

● Our services are subject to increasingly strict legal and regulatory requirements, including those intended to help detect and prevent money laundering, terrorist financing, fraud, and other illicit activity.

● The laws and regulations governing our business are frequently changing and evolving and could require changes in our business model and increase our costs of operations.

● The changes in our compliance program required by the consent orders and settlement agreements to which we are party have had, and may continue to have, adverse effects on our business.

● Western Union is the subject of litigation, including purported class action litigation, and regulatory actions, which could result in material settlements, judgments, fines or penalties.

There are many factors that affect our business, financial condition, results of operations, and cash flows, some of which are beyond our control.

These risks include, but are not limited to, the risks described below.

These risks include, but are not limited to, the risks described in detail below.

Such risks are grouped according to:

● Risks Relating to Our Business and Industry;

● Risks Related to Our Regulatory and Litigation Environment

● Risks Relating to Our Regulatory and Litigation Environment

You should carefully consider all of these risks.

Risks Relating to Our Business and Industry

Risks Relating to our Business Model and COVID-19

Global economic downturns or slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns, and difficult conditions in global financial markets and financial market disruptions could adversely affect our business, financial condition, results of operations, and cash flows.

The global economy has experienced in recent years, and may experience, downturns, volatility and disruption, and we face certain risks relating to such events, including:

● Demand for our services could soften, including due to low consumer confidence, high unemployment, changes in foreign exchange rates, reduced global trade, including from trade disruptions or trade restrictions, or other events, such as civil unrest, war, terrorism, natural disasters, or public health emergencies or epidemics (including, but not limited to, the coronavirus outbreak).

The global economy has experienced in recent years, and may experience, downturns, volatility and disruption, such as the COVID-19 pandemic (see risk factor “ The COVID-19 pandemic is ongoing and has negatively impacted our business, and the extent to which it will further impact our business depends on future developments, which are highly uncertain and difficult to predict.

The effects of the pandemic had an adverse effect, and could have a material adverse effect, on our business, financial condition, results of operations, and cash flows” ), and we face certain risks relating to such events, including:

● Our Consumer-to-Consumer money transfer business relies in large part on migration, which brings workers to countries with greater economic opportunities than those available in their native countries.

A significant portion of money transfers are sent by international migrants.

Migration is affected by (among other factors) overall economic conditions, the availability of job opportunities, changes in immigration laws, restrictions on immigration, and political or other events (such as civil unrest, war, terrorism, natural disasters, or public health emergencies or epidemics) that would make it more difficult for workers to migrate or work abroad.

Migration is affected by (among other factors) overall economic conditions, the availability of job opportunities, changes in immigration laws, restrictions on immigration and travel, and political or other events (such as civil unrest, war, terrorism, natural disasters, or public health emergencies or epidemics) that would make it more difficult for workers to migrate or work abroad.

Changes to these factors could adversely affect our remittance volume and could have an adverse effect on our business, financial condition, results of operations, and cash flows.

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● If market disruption or volatility occurs, we could experience difficulty in accessing capital on favorable terms and our business, financial condition, results of operations, and cash flows could be adversely impacted.

The COVID-19 pandemic is ongoing and has negatively impacted our business, and the extent to which it will further impact our business depends on future developments, which are highly uncertain and difficult to predict.

The effects of the pandemic had an adverse effect, and could have a material adverse effect, on our business, financial condition, results of operations, and cash flows.

The global spread of COVID-19 has created significant macroeconomic uncertainty, volatility, and disruption.

In response, many governments implemented policies intended to stop or slow the further spread of the disease, such as lockdowns, shelter-in-place orders, or restricted movement guidelines, and these measures may remain in place for a significant period of time or be reinstated again in the future.

These policies have resulted in lower consumer and commercial activity across many markets and the closure of Western Union locations and agent locations in certain areas.

As a result, customers have experienced and may continue to experience reduced access to retail agent locations due to localized response policies.

Additionally, as money transfer services offered through our retail agent locations contribute a majority of our Consumer-to-Consumer revenue, our business has been and may continue to be negatively impacted by these temporary closures to a greater extent than others in our industry who are not as reliant on retail locations.

We experienced declines in our Consumer-to-Consumer transactions from retail locations in each quarter of 2020, compared to the corresponding quarters in the prior year, which we believe is mainly due to economic uncertainty and increased unemployment resulting from the pandemic.

Further, a continued global economic downturn, including continued high unemployment, may continue to result from lower consumer and commercial activity and may continue to negatively impact our transaction volumes.

While the duration and severity of this pandemic and related impacts are uncertain, we expect that our results of operations in future periods may also be negatively impacted by COVID-19.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions as may be recommended or required by government authorities or that we determine are in the best interests of our employees, customers, clients and business partners.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

The extent to which the COVID-19 pandemic continues to impact our business, financial condition, results of operations or cash flows will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and geographic spread of the pandemic, its severity, the occurrence of additional waves, variants, or periods of increased spread of COVID-19 in key markets in which we operate, the availability and effectiveness of a vaccine, the actions to contain the virus or treat its impact, including new or additional restrictions imposed by governments, its effects on consumer behavior and demand, its effects on migrants and immigration patterns and regulations, how quickly and to what extent normal economic and operating conditions can resume and be sustained, and our ability to adapt to changing conditions.

Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession, economic downturn, changes in customer behavior or demand, or increased unemployment that has occurred or may occur in the future.

There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19, and, as a result, the ultimate impact of the pandemic or a similar health epidemic is highly uncertain and subject to change.

We do not yet know the full extent of the impacts on our business, our operations, or the global economy as a whole.

However, the effects have had an adverse effect on our business, financial condition, results of operations, and cash flows and could have a material adverse effect in the future.

We face competition from global and niche or corridor money transfer providers, United States and international banks, card associations, card-based payments providers and a number of other types of service providers, including electronic, mobile and internet-based services, and from digital currencies and related protocols, and other innovations in technology and business models.

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These services are differentiated by features and functionalities such as brand recognition, customer service, trust and reliability, distribution network and channel options, convenience, price, speed, variety of payment methods, service offerings and innovation.

Our business, distribution network and channel options, such as our electronic channels, have been and may continue to be impacted by increased competition, including from new competitors and the consolidation of competitors and the expansion of their services, which could adversely affect our financial condition, results of operations, and cash flows.

Our business, distribution network and channel options, such as our digital channels, have been and may continue to be impacted by increased competition, including from new competitors and the consolidation of competitors and the expansion of their services, which could adversely affect our financial condition, results of operations, and cash flows.

For example, we have experienced increased competition in money transfers sent and received within the United States from competitors that do not charge a fee to send or receive money through bank accounts.

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● changes or proposed changes in laws or regulations or regulator or judicial interpretation thereof that have the effect of making it more difficult or less desirable to transfer money using consumer money transfer and payment service providers, including additional consumer due diligence, identification, reporting, and recordkeeping requirements;

● the quality of our services and our customer experience, and our ability to meet evolving customer needs and preferences, including consumer preferences related to our westernunion.com and mobile money transfer services;

● failure of our agents or their subagents to deliver services in accordance with our requirements;

● reputational concerns resulting from actual or perceived events, including those related to fraud or consumer protection in connection with the Joint Settlement Agreements, the NYDFS Consent Order, or other matters;

● reputational concerns resulting from actual or perceived events, including those related to fraud, consumer protection, data breaches, or other matters;

● actions by federal, state or foreign regulators that interfere with our ability to transfer consumers’ money reliably, for example, attempts to seize money transfer funds, or limit our ability to or prohibit us from transferring money in certain corridors;

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If consumer advocacy groups are able to generate widespread support for actions that are detrimental to our business, then our business, financial condition, results of operations, and cash flows could be adversely affected.

If we are unable to maintain our agent, subagent or global business relationships under terms acceptable to us or consistent with those currently in place, including due to increased costs or loss of business as a result of increased compliance requirements or difficulty for us, our agents or their subagents in establishing or maintaining relationships with banks needed to conduct our services, or if our agents or their subagents fail to comply with our business and technology standards and contract requirements, our business, financial condition, results of operations, and cash flows would be adversely affected.

Most of our Consumer-to-Consumer revenue is derived through our agent network.

Some of our international agents have subagent relationships in which we are not directly involved.

If, due to competition or other reasons, agents or their subagents decide to leave our network, or if we are unable to sign new agents or maintain our agent network under terms acceptable to us or consistent with those currently in place, or if our agents are unable to maintain relationships with or sign new subagents, our revenue and profits may be adversely affected.

Agent attrition might occur for a number of reasons, including a competitor engaging an agent, an agent’s dissatisfaction with its relationship with us or the revenue derived from that relationship, an agent’s or its subagents’ unwillingness or inability to comply with our standards or legal requirements, including those related to compliance with anti-money laundering regulations, anti-fraud measures, or agent registration and monitoring requirements or increased costs or loss of business as a result of difficulty for us, our agents or their subagents in establishing or maintaining relationships with banks needed to conduct our services.

For example, the Joint Settlement Agreements and the NYDFS Consent Order subjected us to heightened requirements relating to agent oversight, which resulted in and may continue to result in agent attrition.

Further, certain agents decided to leave our network due to reputational concerns related to the Joint Settlement Agreements and the NYDFS Consent Order.

In addition, agents may generate fewer transactions or less revenue for various reasons, including increased competition, political unrest, changes in the economy, or factors impacting our agents’ ability to settle with us, and the cost of maintaining agent or subagent locations has increased and may continue to increase because of enhanced compliance efforts or changes to compliance requirements.

Because an agent is a third-party that engages in a variety of activities in

addition to providing our services, it may encounter business difficulties unrelated to its provision of our services, which could cause the agent to reduce its number of locations, hours of operation, or cease doing business altogether.

Changes in laws regulating competition or in the interpretation of those laws could undermine our ability to enter into or maintain our exclusive arrangements with our current and prospective agents.

See risk factor “Regulatory initiatives and changes in laws, regulations and industry practices and standards affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services could require changes in our business model and increase our costs of operations, which could adversely affect our financial condition, results of operations, and liquidity” below.

In addition, certain of our agents and subagents have refused to enter into exclusive arrangements recently, including a significant agent in the United States.

The inability to enter into exclusive arrangements or to maintain our exclusive rights in agent contracts in certain situations could adversely affect our business, financial condition, results of operations, and cash flows by, for example, allowing competitors to benefit from the goodwill associated with the Western Union brand at our agent locations.

In Business Solutions, we facilitate payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.

In our various bill payments services, we provide services for making one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies.

Our relationships with these businesses and other organizations are a core component of our payments services, and we derive a substantial portion of our revenue from payment services through these relationships.

Increased regulation and compliance requirements are impacting these businesses by making it more costly for us to provide our services or by making it more cumbersome for businesses or consumers to do business with us.

We have also had difficulty establishing or maintaining banking relationships needed to conduct our services due to banks’ policies.

If we are unable to maintain our current business or banking relationships or establish new relationships under terms acceptable to us or consistent with those currently in place, our ability to continue to offer our services may be adversely impacted, which could have an adverse effect on our business, financial condition, results of operations, and cash flows.

As a result of offering our services, our agents may be subject to various taxes, as governments outside the United States have viewed and may continue to view our agents’ services as subject to income, withholding, and other taxes.

Any such taxes that are levied on our agents could make it less desirable for agents to offer our services, which could result in increased agent attrition, agents ceasing to offer some of our services, or increased costs to maintain our agent network, any of which could have an adverse effect on our business, results of operations, and cash flows.

Our ability to adopt new technology and develop and gain market acceptance of new and enhanced products and services in response to changing industry and regulatory standards and evolving customer needs poses a challenge to our business.

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A substantial portion of our revenue is generated in currencies other than the United States dollar.

As a result, we are subject to risks associated with changes in the value of our revenues and net monetary assets denominated in foreign currencies.

As a result, we are subject to risks associated with changes in the value of our revenues and net monetary assets denominated in foreign

For example, a considerable portion of our revenue is generated in the euro.

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Some of these adverse financial effects may be partially mitigated by foreign currency hedging activities.

In an environment of a declining

United States dollar relative to the euro, some of the translation benefits on our reported financial results could be limited by the impact of foreign currency hedging activities.

We are also subject to changes in the value of other foreign currencies, including the British pound, which may experience volatility due to the United Kingdom’s exit from the EU.

In an environment of a declining United States dollar relative to the euro, some of the translation benefits on our reported financial results could be limited by the impact of foreign currency hedging activities.

We are also subject to changes in the value of other foreign currencies.

We operate in almost all developing markets throughout the world.

In many of these markets, our foreign currency exposure is limited because most transactions are receive transactions and we currently reimburse most of our agents in either United States dollars or euros for the payment of these transactions.

In many of these markets, our foreign currency exposure is limited because most transactions are receive transactions and we currently reimburse the substantial majority of our agents in United States dollars, euros, or Mexican pesos for the payment of these transactions.

However, in certain of these developing markets we settle transactions in local currencies and generate revenue from send transactions.

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In certain countries, this business also writes foreign currency forward and option contracts for our customers.

The duration of these derivative contracts at inception is generally less than one year.

The significant majority of these derivative contracts have a duration at inception of less than one year .

The credit risk associated with our derivative contracts increases when foreign currency exchange rates move against our customers, possibly impacting their ability to honor their obligations to deliver currency to us or to maintain appropriate collateral with us.

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These governments may decide to change the terms under which they allow post offices to offer remittances and other financial services.

For example, governments may decide to separate financial service operations from postal

operations, or mandate the creation or privatization of a “post bank,” which could result in the loss of agent locations, or they may require multiple service providers in their network.

For example, governments may decide to separate financial service operations from postal operations, or mandate the creation or privatization of a “post bank,” which could result in the loss of agent locations, or they may require multiple service providers in their network.

These changes could have an adverse effect on our ability to distribute or offer our services in countries that are material to our business.

We face credit, liquidity and fraud risks from our agents, consumers, businesses, and third-party processors that could adversely affect our business, financial condition, results of operations, and cash flows.

The majority of our Consumer-to-Consumer money transfer activity and our walk-in bill payment and money order activity is conducted through third-party agents that provide our services to consumers at their retail locations.

These agents sell our services, collect funds from consumers and are required to pay the proceeds from these transactions to us.

As a result, we have credit exposure to our agents.

In some countries, our agent networks include superagents that establish subagent relationships;

these agents must collect funds from their subagents in order to pay us.

We are generally not insured against credit losses, except in certain circumstances related to agent theft or fraud.

If an agent becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to pay money order, money transfer or payment services proceeds to us, we must nonetheless pay the money order or complete the money transfer or payment services on behalf of the consumer.

The liquidity of our agents and other parties we transact with directly, including merchant acquirers, is necessary for our business to remain strong and to continue to provide our services.

If our agents or other partners fail to settle with us in a timely manner, our liquidity could be affected.

From time to time, we have made, and may in the future make, advances to our agents.

We generally owe settlement funds payable to these agents that offset these advances.

However, the failure of these borrowing agents to repay these advances constitutes a credit risk to us.

We are exposed to credit risk in our Business Solutions business relating to:

(i) derivatives written by us to our customers and (ii) the extension of trade credit when transactions are paid to recipients prior to our receiving cleared funds from the sending customers.

If a customer becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to pay us, we may be exposed to the value of an offsetting position with a financial institution counterparty for the derivatives or may bear financial risk for those receivables where we have extended trade credit.

We offer consumers in select countries the ability to transfer money utilizing their bank account or credit or debit card via websites and mobile devices.

These transactions have experienced and continue to experience a greater risk of fraud and higher fraud losses than transactions initiated at agent locations.

Additionally, money transfers funded by ACH, or similar methods, are not preauthorized by the sender’s bank and carry the risk that the account may not exist or have sufficient funds to cover the transaction.

We apply verification and other tools to help authenticate transactions and protect against fraud.

However, these tools are not always successful in protecting us against fraud.

As the merchant of these transactions, we may bear the financial risk of the full amount sent in some of the fraudulent transactions.

Issuers of credit and debit cards may also incur losses due to fraudulent transactions through our distribution channels and may elect to block transactions by their cardholders in these channels with or without notice.

We may be subject to additional fees or penalties if the amount of chargebacks exceeds a certain percentage of our transaction volume.

Such fees and penalties increase over time if we do not take effective action to reduce chargebacks below the threshold, and if chargeback levels are not ultimately reduced to acceptable levels, our merchant accounts could be suspended or revoked, which would adversely affect our results of operations.

To help ensure availability of our worldwide cash where needed, we utilize a variety of planning and financial strategies, including decisions related to the amounts, timing and manner by which cash is repatriated or otherwise made available from our international subsidiaries.

These decisions can influence our overall tax rate and impact our total liquidity.

Our overall liquidity may also be impacted by regulations or their interpretations that, if fully enacted or

implemented, could require us to register as a swap dealer and post collateral in connection with our derivative financial instruments used to hedge our exposures arising in connection with changes to foreign currency exchange rates.

Risks Relating to Cybersecurity and Third-Party Vendors

Breaches of our information security safeguards could adversely affect our ability to operate and could damage our reputation and adversely affect our business, financial condition, results of operations, and cash flows.

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It is possible that hackers, employees acting contrary to our policies or others could circumvent these safeguards to improperly access our systems or documents, or the systems or documents of our business partners, agents, or service providers, and improperly access, obtain, misuse or disclose sensitive business information or personal information about our consumers, business customer representatives, employees, applicants, agents or others, or that a third-party service provider could experience a cybersecurity incident or intentionally or inadvertently use, disclose or make available sensitive business information or personal information to unauthorized parties or in violation of law.

For example, a significant and increasing amount of our data is collected and stored by third parties, including providers of cloud-based software services.

In 2016, we determined hackers had accessed the system of one of our third-party providers and improperly obtained copies of confidential data hosted on the system of one of our third-party providers.

Western Union systems and money transfer operations were not impacted.

Security incidents such as these have the potential to impose material costs on the Company and there can be no assurance that additional security incidents will not occur in the future.

In addition, a significant and increasing amount of our data is collected and stored by third parties, including providers of cloud-based software services.

Security incidents have the potential to impose material costs on the Company and there can be no assurance that security incidents will not occur in the future.

The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time.

Additionally, transactions undertaken through our websites or other electronic channels may create risks of fraud, hacking, unauthorized access or acquisition, and other deceptive practices.

Additionally, transactions undertaken through our websites or other digital channels may create risks of fraud, hacking, unauthorized access or acquisition, and other deceptive practices.

Any security incident resulting in a compromise of sensitive business information or the personal information of consumers, business customer representatives, employees, applicants, agents or other individuals, could result in material costs to us and require us to notify impacted individuals, and in some cases regulators, of a possible or actual incident, expose us to regulatory enforcement actions, including substantial fines, limit our ability to provide services, subject us to litigation, damage our reputation, and adversely affect our business, financial condition, results of operations, and cash flows.

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Historically, none of these attacks or breaches has individually or in the aggregate resulted in any material liability to us or any material damage to our reputation, and disruptions related to cybersecurity have not caused any material disruption to the Company’s business.

The safeguards we have designed to help prevent future security incidents and systems disruptions, and comply with

applicable legal requirements may not be successful and we may experience material security incidents, disruptions or other problems in the future.

The safeguards we have designed to help prevent future security incidents and systems disruptions and comply with applicable legal requirements may not be successful, and we may experience material security incidents, disruptions or

other problems in the future.

We also may experience software defects, development delays, installation difficulties and other systems problems, which could harm our business and reputation and expose us to potential liability which may not be fully covered by our business interruption insurance.

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If our third-party vendors were unwilling or unable to provide us with these services in the future, our business and operations could be adversely affected.

Risks Relating to Acquisitions, Divestitures, and Restructuring Activities

Acquisitions and integration of new businesses create risks and may affect operating results.

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If we or our reporting units do not generate operating cash flows at levels consistent with our expectations, we may be required to write down the goodwill on our balance sheet, which could have a significant adverse impact on our financial condition and results of operations in future periods.

For example, for the year ended December 31, 2017, we recognized a non-cash goodwill impairment charge of $464.0 million related to our Business Solutions reporting unit, as further described in Part II, Item 8, Financial Statements and Supplementary Data , Note 5, Divestitures, Business Combinations, and Goodwill.

For example, for the year ended December 31, 2017, we recognized a non-cash goodwill impairment charge related to our Business Solutions reporting unit.

The fair value of the Business Solutions reporting unit continues to be sensitive to changes in projections for revenue growth rates and Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) margins.

Any reduction in anticipated future operating cash flows or the occurrence of further negative factors impacting the fair value of the Business Solutions reporting unit could result in another write down of goodwill, which could have a significant adverse impact on our financial condition and results of operations.

See the "Critical Accounting Policies and Estimates"

discussion in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations , for more detail.

In addition to the risk of goodwill impairment, the acquisition and integration of businesses involve a number of other risks.

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Another risk is the need in some cases to improve regulatory compliance;

see “Risks Related to Our Regulatory and Litigation Environment” below.

see “Risks Relating to Our Regulatory and Litigation Environment” below.

Acquisitions often involve additional or increased risks including, for example:

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● complying with regulatory requirements, including those particular to the industry and jurisdiction of the acquired business;

● enforcing intellectual property rights in some foreign countries;

● obtaining and enforcing intellectual property rights in some foreign countries;

● entering new markets with the services of the acquired businesses;

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We may not realize all of the anticipated benefits from restructuring and other related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and we may experience disruptions in our workforce as a result of those initiatives.

We are currently engaged in restructuring actions and activities associated with business transformation, productivity improvement initiatives, and expense reduction measures.

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding our restructuring plan initiated in 2019 designed to change our operating model and improve our business processes and cost structure by reorganizing our senior management, reducing our headcount, and consolidating various facilities.

Over the past few years, we have been engaged in restructuring actions and activities associated with business transformation, productivity improvement initiatives, and expense reduction measures.

See Part II, Item 8, Financial Statements and Supplementary Data , Note 4, Restructuring-Related Expenses for further discussion regarding our restructuring plan initiated in 2019 designed to change our operating model and improve our business processes and cost structure by reorganizing our senior management, reducing our headcount, and consolidating various facilities.

We may implement additional initiatives in future periods.

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Consequently, these initiatives could result in a disruption to our workforce.

If we do not realize the anticipated benefits from these or similar initiatives, or the costs to implement future initiatives are greater than expected, or if the actions result in a disruption to our workforce greater than anticipated, our business, financial condition, results of operations, and cash flows could be adversely affected.

The significant majority of our Consumer-to-Consumer money transfer activity and our walk-in bill payment and money order activity is conducted through third-party agents that provide our services to consumers at their retail locations.

These agents sell our services, collect funds from consumers and are required to pay the proceeds from these transactions to us.

As a result, we have credit exposure to our agents.

In some countries, our agent networks include superagents that establish subagent relationships;

these agents must collect funds from their subagents in order to pay us.

We are not insured against credit losses, except in certain circumstances related to agent theft or fraud.