Western Union CO

The Parent had approximately $120 million in outstanding letters of credit and bank guarantees as of December 31, 2025 primarily held in connection with regulatory requirements, certain agent agreements, and the Parent’s guarantees of its subsidiaries’ performance under these letters of credit and bank guarantees. The Parent has provided guarantee to an underwriter of surety bonds, payable in the event the Parent’s subsidiaries default on their obligations, in the amount of $295 million.

6. Leases

The Parent leases real properties primarily for use as administrative and sales offices, in addition to transportation and other equipment. The Parent determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Parent is the lessee, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease and variable non-lease components within the Parent’s lease agreements are accounted for separately. The Parent has no material leases in which the Parent is the lessor.

The Parent’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-line basis. As of December 31, 2025 and 2024, the total ROU assets were $40.2 million and $45.8 million, respectively, and lease liabilities were $62.8 million and $73.4 million, respectively. The ROU assets and operating lease liabilities were included in Other assets and Other liabilities, respectively, in the Parent’s Condensed Balance Sheets. Cash paid for operating lease liabilities is recorded as Cash flows from operating activities in the Parent’s Condensed Statements of Cash Flows. Short-term and variable lease costs were not material for the years ended December 31, 2025, 2024, and 2023.

The Parent’s leases have remaining terms from 1 year to nearly 6 years. Certain of these leases contain escalation provisions and/or renewal options, giving the Parent theright to extend the lease by up to 10 years. However, these options are not reflected in the calculation of the ROU asset and lease liability due to uncertainty surrounding the likelihood of renewal.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

The following table summarizes the weighted-average lease term and discount rate for operating lease liabilities as of December 31, 2025 and 2024:

The following table represents maturities of operating lease liabilities as of December 31, 2025 (in millions):