Investment Securities

12 Months Ended

Dec. 31, 2013

Marketable Securities [Abstract]

Investment Securities

Investment Securities

Investment securities included in "Settlement assets" in the Consolidated Balance Sheets 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 have varying maturities through 2051. 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.

During the third quarter of 2013, the Company invested in a short-term bond mutual fund which holds a diversified portfolio of fixed income securities, with a combined average maturity of less than one year. This investment can be redeemed daily. The fair value of this investment, which is included in "Other assets" in the Company's Consolidated Balance Sheets, was $100.2 million as of December 31, 2013.

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 December 31, 2013, 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. Proceeds from the sale and maturity of available-for-sale securities during the years ended December 31, 2013, 2012 and 2011 were $19.0 billion, $16.3 billion and $14.2 billion, respectively.

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. Factors that could indicate an impairment exists include, but are not limited to: earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. If potential impairment exists, the Company assesses whether it has the intent to sell the debt security, more likely than not will be required to sell the debt security before its anticipated recovery or expects that some of the contractual cash flows will not be received. The Company had no material other-than-temporary impairments during the periods presented.

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

December 31, 2013	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
Settlement assets:
State and municipal debt securities (a)	$	868.1	$	874.2	$	7.8	$	(1.7	)	$	6.1
State and municipal variable rate demand notes	865.0		865.0		—		—			—
Other debt securities	11.2		11.3		0.1		—			0.1
	$	1,744.3	$	1,750.5	$	7.9	$	(1.7	)	$	6.2
Other assets:
Short-term bond mutual fund	100.0		100.2		0.2		—			0.2
	$	1,844.3	$	1,850.7	$	8.1	$	(1.7	)	$	6.4
December 31, 2012	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Net Unrealized Gains/ (Losses)
Settlement assets:
State and municipal debt securities (a)	$	991.5	$	1,003.7	$	12.5	$	(0.3	)	$	12.2
State and municipal variable rate demand notes	463.3		463.3		—		—			—
Other debt securities	47.7		47.8		0.1		—			0.1
	$	1,502.5	$	1,514.8	$	12.6	$	(0.3	)	$	12.3

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

There were no investments with a single issuer or individual securities representing greater than 10% of total investment securities as of December 31, 2013 and 2012.

The following summarizes the contractual maturities of settlement-related debt securities as of December 31, 2013 (in millions):

	Amortized Cost		Fair Value
Due within 1 year	$	187.6	$	188.4
Due after 1 year through 5 years	425.2		429.1
Due after 5 years through 10 years	306.7		308.1
Due after 10 years	824.8		824.9
	$	1,744.3	$	1,750.5

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 $21.6 million, $21.4 million and $822.0 million are included in the "Due after 1 year through 5 years," "Due after 5 years through 10 years" and "Due after 10 years" categories, respectively, in the table above.