The Western Union Company (WU) 8-K Western Union Reports First Quarter Results

Western Union

First Quarter 2011

Earnings Webcast & Conference Call

April 26, 2011

Exhibit 99.2

Mike Salop

Senior Vice President, Investor Relations

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Safe Harbor

3

This

press

release

contains

certain

statements

that

are

forward-looking

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

These

statements

are

not

guarantees

of

future

performance

and

involve

certain

risks,

uncertainties

and

assumptions

that

are

difficult

to

predict.

Actual

outcomes

and

results

may

differ

materially

from

those

expressed

in,

or

implied

by,

our

forward-looking

statements.

Words

such

as

“expects,”

“intends,”

“anticipates,”

“believes,”

“estimates,”

“guides,”

“provides

guidance,”

“provides

outlook”

and

other

similar

expressions

or

future

or

conditional

verbs

such

as

“will,”

“should,”

“would”

and

“could”

are

intended

to

identify

such

forward-looking

statements.

Readers

of

this

press

release

by

The

Western

Union

Company

(the

“Company,”

“Western

Union,”

“we,”

“our”

or

“us”)

should

not

rely

solely

on

the

forward-looking

statements

and

should

consider

all

uncertainties

and

risks

discussed

in

the

Risk

Factors

section

and

throughout

the

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2010.

The

statements

are

only

as

of

the

date

they

are

made,

and

the

Company

undertakes

no

obligation

to

update

any

forward-looking

statement.

Possible

events

or

factors

that

could

cause

results

or

performance

to

differ

materially

from

those

expressed

in

our

forward-looking

statements

include

the

following:

changes

in

immigration

laws,

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 products, services and enhancements, and gain market acceptance of

such

products;

the

failure

by

us,

our

agents

or

subagents

to

comply

with

our

business

and

technology

standards

and

contract

requirements

or

applicable

laws

and

regulations,

especially

laws

designed

to

prevent

money

laundering,

terrorist

financing

and

anti-competitive

behavior,

and/or

changing

regulatory

or

enforcement

interpretations

of

those

laws;

the

impact

on

our

business

of

the

Dodd-Frank

Wall

Street

Reform

and

Consumer

Protection

Act

and the rules promulgated there-under; changes in United States or foreign laws, rules and regulations including the Internal Revenue Code, and

governmental

or

judicial

interpretations

thereof;

changes

in

general

economic

conditions

and

economic

conditions

in

the

regions

and

industries

in

which

we

operate;

political

conditions

and

related

actions

in

the

United

States

and

abroad

which

may

adversely

affect

our

businesses

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;

our

ability

to

resolve

tax

matters

with

the

Internal

Revenue

Service

and

other

tax

authorities

consistent

with

our

reserves;

failure

to

comply

with

the

settlement

agreement

with

the

State

of

Arizona;

liabilities

and

unanticipated

developments

resulting

from

litigation

and

regulatory

investigations

and

similar

matters,

including

costs,

expenses,

settlements

and

judgments;

mergers,

acquisitions

and

integration

of

acquired

businesses

and

technologies

into

our

Company,

and

the

realization

of

anticipated

financial

benefits

from

these

acquisitions;

failure

to

maintain

sufficient

amounts

or

types

of

regulatory

capital

to

meet

the

changing

requirements

of

our

regulators

worldwide;

deterioration

in

consumers'

and

clients'

confidence

in

our

business,

or

in

money

transfer

providers

generally;

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;

any

material

breach

of

security

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;

failure

to

implement

agent

contracts

according

to

schedule;

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;

cessation

of

various

services

provided

to

us

by

third-party

vendors;

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;

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;

changes

in

industry

standards

affecting

our

business;

changes

in

accounting

standards,

rules

and

interpretations;

significantly

slower

growth

or

declines

in

the

money

transfer

market

and

other

markets

in

which

we

operate;

adverse

consequences

from

our

spin-off

from

First

Data

Corporation;

decisions

to

change

our

business

mix;

catastrophic

events;

and

management's

ability

to

identify

and

manage

these

and

other

risks.

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Hikmet Ersek

President

& Chief Executive Officer

Q1 Highlights

Total revenue increased 4%

Strong trends continue in C2C

5% revenue growth, reported and constant currency

Domestic money transfer revenue increased 8%

Bill Payments

Revenue decline moderated to -2%

Margins improved versus Q4

Business Solutions revenue grew 13%

5

Good Start to 2011

Note: See appendix for reconciliation of Non-GAAP to GAAP measures.

Electronic Channels & Prepaid Q1 Highlights

Account-based money transfer

Over 35% transaction growth

Agreements in place with over 45 banks globally

Westernunion.com

Over 40% transaction growth in international markets

Transactions increased by over 15% globally

Mobile

16 agreements in place

Over 85,000 locations enabled for cash-to-mobile in 49 countries

Prepaid

Over one million prepaid cards-in-force

Approximately $180 million principal loaded through 500,000+ loads

6

Electronic Channels 3% of Total Revenue

7

Go To Market Leadership

•

Consumer Money Transfer and Bill Payments

•

Global Sales and Network Management

•

New Products and Services

•

Business Solutions

•

Electronic Channels

•

Stored Value Programs

•

Global Marketing

•

Communications and Social Responsibility

David Yates

EVP & President

Business Development and Innovation

Stewart Stockdale

EVP & President

Global Consumer Financial Services

Diane Scott

EVP & Chief Marketing Officer

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Scott Scheirman

Executive Vice President

& Chief Financial Officer

Revenue

9

($ in millions)

$1,233

$1,283

Note: See appendix for reconciliation of Non-GAAP to GAAP measures.

Consolidated revenue up 4%,

reported and constant

currency

Transaction fees increased

3%

Foreign exchange revenue

increased 8%

$29

$29

$256

$238

$966

$988

Q1 2010

Q1 2011

Transaction Fee

Foreign Exchange

Other

C2C Remittance Trends

10

+7%

C2C Transactions

(millions)

Note: See appendix for reconciliation of Non-GAAP to GAAP measures.

C2C Revenue growth 5%,

reported and constant currency

Total Q1 Western Union cross-

border principal of $17 billion

Increased 7% on a reported basis

Increased 6% constant currency

Principal per transaction

Increased 1% on a reported and

constant currency basis

50

53

Q1 2010

Q1 2011

Consumer-to-Consumer

11

Revenue

Transactions

Q1 2011

2%

4%

Europe, Middle East, Africa, S. Asia

43% of Western Union revenue

Europe constant currency revenue trends similar to Q4

India grew revenue 8% and transactions 6%

Completed acquisition of super-agent, Angelo Costa, earlier this month

12

Revenue

Transactions

Americas

6%

8%

32% of Western Union revenue

Domestic money transfer grew revenue 8% and transactions 21%

Mexico grew revenue and transactions 1%

Signed US Bank to account based money transfer

Q1 2011

Consumer-to-Consumer

13

Revenue

Transactions

Asia Pacific

14%

11%

9% of Western Union revenue

Many markets contributing to growth

China grew revenue 12% and transactions 5%

Signed China Construction Bank

Q1 2011

Consumer-to-Consumer

C2C Transaction and Revenue Growth

14

Note: See appendix for reconciliation of Non-GAAP to GAAP measures.

+7%

+5%

+5%

Transaction

Growth

Price Reductions

Other Mix

Constant

Currency

Revenue Growth

Currency Impact

Reported

Revenue Growth

Q1 2011

Global Business Payments

15

Revenue

Transactions

Global Business Payments

0%

8%

14% of Western Union revenue

Bill payments revenue decline moderated to -2%

Business Solutions grew revenue 13%

Q1 2011

16

Operating Margin –

Q1 2011

Note: See appendix for reconciliation of Non-GAAP to GAAP measures

GAAP

Excluding

Restructuring

(1)

Q1 2011 consolidated operating margin excludes restructuring charges

Operating margin excluding

restructuring, +70 basis points

•

Revenue leverage

•

Other efficiencies, including

restructuring savings

•

Negative foreign exchange

impact

•

Increased investment spending

25.6%

24.4%

25.6%

26.3%

17

C2C Operating Margin

C2C 84% of total company

revenue

Operating Margin +120 basis

points YoY

Improvement due to the same

factors as for consolidated

margin

18

Global Business Payments

Operating Margin

GBP 14% of total company

revenue

Operating margin:

vs. Prior Year

Revenue declines and mix shifts in

U.S. bill payments

Investments in Business Solutions

vs. Prior Quarter

Lower integration expenses in

Business Solutions

Restructuring savings and other

cost structure changes in bill

payments

19

Financial Strength

Q1 2011

Cash Flow from Operations

$252 million

Capital Expenditures

$22 million

Stock Repurchases

$525 million

Dividends Paid

$45 million

Cash Balance, March 31, 2011

$2.2 billion

Debt Outstanding, March 31, 2011

$3.6 billion

2011 Outlook

20

Note: See appendix for reconciliation of Non-GAAP to GAAP measures.

Constant currency revenue in the range of 3% to 4%

GAAP revenue growth similar to constant currency

GAAP operating margin of approximately 26%

Operating margin of approximately 27%, excluding restructuring

charges

GAAP EPS of $1.41 to $1.46

EPS excluding restructuring charges of $1.47 to $1.52

GAAP cash flows from operating activities of $1.2 billion to $1.3 billion

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Questions & Answers

Appendix

First Quarter 2011 Earnings

Webcast & Conference Call

April 26, 2011

22

Non-GAAP Measures

23

Western

Union's

management

believes

the

non-GAAP

measures

presented

provide

meaningful

supplemental

information

regarding

our

operating

results

to

assist

management,

investors,

analysts,

and

others

in

understanding

our

financial

results

and

to

better

analyze

trends

in

our

underlying

business,

because

they

provide

consistency

and

comparability

to

prior

periods.

These

non-GAAP

measurements

include

revenue

change

constant

currency

adjusted,

operating

income

margin

and

earnings

per

share

excluding

restructuring

expenses,

effective

tax

rate

excluding

restructuring

expenses,

consumer-to-consumer

segment

revenue

change

constant

currency

adjusted,

consumer-to-consumer

segment

principal

per

transaction

change

constant

currency

adjusted,

consumer-to-consumer

cross-border

principal

change

constant

currency

adjusted,

consumer-to-consumer

international

revenues

constant

currency

adjusted,

2011

earnings

per

share

outlook

excluding

restructuring

expenses,

and

2011

operating

income

margin

outlook

excluding

restructuring

expenses.

A

non-GAAP

financial

measure

should

not

be

considered

in

isolation

or

as

a

substitute

for

the

most

comparable

GAAP

financial

measure.

A

non-GAAP

financial

measure

reflects

an

additional

way

of

viewing

aspects

of

our

operations

that,

when

viewed

with

our

GAAP

results

and

the

reconciliation

to

the

corresponding

GAAP

financial

measure,

provide

a

more

complete

understanding

of

our

business.

Users

of

the

financial

statements

are

encouraged

to

review

our

financial

statements

and

publicly-filed

reports

in

their

entirety

and

not

to

rely

on

any

single

financial

measure.

A

reconciliation

of

non-GAAP

measures

to

the

most

directly

comparable

GAAP

financial

measures

is

included

below.

Reconciliation of Non-GAAP Measures

24

1Q10

2Q10

3Q10

4Q10

FY2010

1Q11

Consolidated Metrics

Revenues, as reported (GAAP)

1,232.7

$      

1,273.4

$      

1,329.6

$      

1,357.0

$      

5,192.7

$      

1,283.0

$        

Foreign currency translation impact (a)

(20.0)

16.1

22.2

18.5

36.8

2.3

Revenues, constant currency adjusted

1,212.7

$      

1,289.5

$      

1,351.8

$      

1,375.5

$      

5,229.5

$      

1,285.3

$        

Prior year revenues, as reported (GAAP)

1,201.2

$      

1,254.3

$      

1,314.1

$      

1,314.0

$      

5,083.6

$      

1,232.7

$        

Revenue change, as reported (GAAP)

3

%

2

%

1

%

3

%

2

%

4

%

Revenue change, constant currency adjusted

1

%

3

%

3

%

5

%

3

%

4

%

Operating income, as reported (GAAP)

315.8

$        

311.0

$        

351.2

$        

322.1

$        

1,300.1

$      

312.9

$           

Reversal of restructuring and related expenses (b)

N/A

34.5

14.0

11.0

59.5

24.0

Operating income, excluding restructuring

315.8

$        

345.5

$        

365.2

$        

333.1

$        

1,359.6

$      

336.9

$           

Operating income margin, as reported (GAAP)

25.6

%

24.4

%

26.4

%

23.7

%

25.0

%

24.4

%

Operating income margin, excluding restructuring

N/A

27.1

%

27.5

%

24.5

%

26.2

%

26.3

%

Effective tax rate, as reported (GAAP)

24.7

%

18.8

%

22.7

%

15.9

%

20.5

%

23.5

%

Impact from restructuring expenses, net of income tax benefit (b)

N/A

1.9

%

0.5

%

0.6

%

0.7

%

0.6

%

Effective tax rate, restructuring adjusted

24.7

%

20.7

%

23.2

%

16.5

%

21.2

%

24.1

%

Net income, as reported (GAAP)

207.9

$        

221.0

$        

238.4

$        

242.6

$        

909.9

$        

210.2

$           

Foreign currency translation impact, net of income tax (a)

(0.7)

5.5

2.4

1.4

8.6

4.8

Reversal of restructuring and related expenses, including foreign currency translation impacts, net of income tax benefit (b)

N/A

22.4

9.5

6.4

38.3

16.4

Net income, constant currency and restructuring adjusted

207.2

$        

248.9

$        

250.3

$        

250.4

$        

956.8

$        

231.4

$           

Diluted earnings per share ("EPS"), as reported (GAAP) ($ - dollars)

0.30

$          

0.33

$          

0.36

$          

0.37

$          

1.36

$          

0.32

$              

Impact from restructuring and related expenses, net of income tax benefit (b) ($ - dollars)

N/A

0.03

0.01

0.01

0.06

0.03

Diluted EPS, restructuring adjusted ($ - dollars)

0.30

$          

0.36

$          

0.37

$          

0.38

$          

1.42

$          

0.35

$              

Foreign currency translation impact, net of income tax (a) ($ - dollars)

-

0.01

0.01

-

0.01

-

Diluted EPS, constant currency and restructuring adjusted ($ - dollars)

0.30

$          

0.37

$          

0.38

$          

0.38

$          

1.43

$          

0.35

$              

Diluted weighted-average shares outstanding

684.2

671.6

661.3

658.4

668.9

652.1

Reconciliation of Non-GAAP Measures

25

1Q10

2Q10

3Q10

4Q10

FY2010

1Q11

Consumer-to-Consumer Segment

Revenues, as reported (GAAP)

1,030.2

$      

1,073.1

$      

1,128.3

$      

1,151.8

$      

4,383.4

$      

1,078.1

$        

Foreign currency translation impact (a)

(21.9)

15.0

21.2

18.0

32.3

2.2

Revenues, constant currency adjusted

1,008.3

$      

1,088.1

$      

1,149.5

$      

1,169.8

$      

4,415.7

$      

1,080.3

$        

Prior year revenues, as reported (GAAP)

1,003.7

$      

1,065.5

$      

1,117.8

$      

1,113.7

$      

4,300.7

$      

1,030.2

$        

Revenue change, as reported (GAAP)

3

%

1

%

1

%

3

%

2

%

5

%

Revenue change, constant currency adjusted

0

%

2

%

3

%

5

%

3

%

5

%

Principal per transaction, as reported ($ - dollars)

357

$           

351

$           

355

$           

356

$           

355

$           

360

$               

Foreign currency translation impact (a) ($ - dollars)

(11)

2

7

5

1

(1)

Principal per transaction, constant currency adjusted  ($ - dollars)

346

$           

353

$           

362

$           

361

$           

356

$           

359

$               

Prior year principal per transaction, as reported  ($ - dollars)

358

$           

358

$           

371

$           

365

$           

363

$           

357

$               

Principal per transaction change, as reported

0

%

(2)%

(4)%

(3)%

(2)%

1

%

Principal per transaction change, constant currency adjusted

(3)%

(2)%

(3)%

(1)%

(2)%

1

%

Cross-border principal, as reported ($ - billions)

16.1

$          

16.8

$          

17.6

$          

18.1

$          

68.6

$          

17.1

$              

Foreign currency translation impact (a) ($ - billions)

(0.5)

0.1

0.4

0.3

0.3

-

Cross-border principal, constant currency adjusted ($ - billions)

15.6

$          

16.9

$          

18.0

$          

18.4

$          

68.9

$          

17.1

$              

Prior year cross-border principal, as reported ($ - billions)

15.0

$          

15.9

$          

17.0

$          

17.1

$          

65.0

$          

16.1

$              

Cross-border principal change, as reported

7

%

6

%

4

%

6

%

6

%

7

%

Cross-border principal change, constant currency adjusted

4

%

7

%

6

%

7

%

6

%

6

%

International revenues, as reported (GAAP)

862.0

$        

890.8

$        

944.0

$        

972.4

$        

3,669.2

$      

901.7

$           

Foreign currency translation impact (a)

(20.8)

15.7

21.7

18.4

35.0

2.6

International revenues, constant currency adjusted

841.2

$        

906.5

$        

965.7

$        

990.8

$        

3,704.2

$      

904.3

$           

Prior year international revenues, as reported (GAAP)

814.8

$        

875.0

$        

926.5

$        

943.4

$        

3,559.7

$      

862.0

$           

International revenue change, as reported (GAAP)

6

%

2

%

2

%

3

%

3

%

5

%

International revenue change, constant currency adjusted

3

%

4

%

4

%

5

%

4

%

5

%

Reconciliation of Non-GAAP Measures

26

2011 EPS Outlook

EPS guidance (GAAP) ($ - dollars)

1.41

$          

1.46

$          

Impact from restructuring and related expenses, net of income tax benefit (b) ($ - dollars)

0.06

0.06

EPS guidance, restructuring adjusted ($ - dollars)

1.47

$          

1.52

$          

2011 Operating Income Margin Outlook

Operating income margin (GAAP)

26.0

%

Impact from restructuring and related expenses (b)

1.0

%

Operating income margin, restructuring adjusted

27.0

%

Range

Footnote explanations

27

a)

Represents

the

impact

from

the

fluctuation

in

exchange

rates

between

all

foreign

currency

denominated

amounts

and

the

United

States

dollar.

Constant

currency

results

exclude

any

benefit

or

loss

caused

by

foreign

exchange

fluctuations

between

foreign

currencies

and

the

United

States

dollar,

net

of

foreign

currency

hedges,

which

would

not

have

occurred

if

there

had

been

a

constant

exchange

rate.

In

addition,

to

compute

constant

currency

earnings

per

share,

the

Company

assumes

the

impact

of

fluctuations

in

foreign

currency

derivatives

not

designated

as

hedges

and

the

portion

of

fair

value

that

is

excluded

from

the

measure

of

effectiveness

for

those

contracts

designated

as

hedges

was

consistent

with

the

prior

year.

b)

Restructuring

and

related

expenses

consist

of

direct

and

incremental

expenses

including

the

impact

from

fluctuations

in

exchange

rates

associated

with

restructuring

and

related

activities,

consisting

of

severance,

outplacement

and

other

related

benefits;

facility

closure

and

migration

of

the

Company's

IT

infrastructure;

and

other

expenses

related

to

the

relocation

of

various

operations

to

new

or

existing

Company

facilities

and

third-party

providers,

including

hiring,

training,

relocation,

travel,

and

professional

fees.

Also

included

in

the

facility

closure

expenses

are

non-cash

expenses

related

to

fixed

asset

and

leasehold

improvement

write-offs

and

the

acceleration

of

depreciation

and

amortization.

Restructuring

and

related

expenses

were

not

allocated

to

the

segments.