Exhibit 99.1
Contacts: Media | Investors | |
Tom Fitzgerald | Mike Salop | |
720-332-4374 | 720-332-8276 | |
tom.fitzgerald@westernunion.com | mike.salop@westernunion.com |
Western Union Reports Second Quarter Results
GAAP Revenue Increases 7%, Constant Currency Revenue Increases 5%
EPS of $0.41, or $0.42 Excluding Restructuring Expenses
2011 Revenue and EPS Outlook Increased
Englewood, Colo., July 26, 2011 – The Western Union Company (NYSE: WU) today reported financial results for the 2011 second quarter.
Financial highlights for the quarter included:
| • | Revenue of $1.4 billion, an increase of 7% compared to last year’s second quarter |
| • | Constant currency adjusted revenue increase of 5% |
| • | Operating margin of 25.7%, or 26.3% excluding restructuring expenses, compared to 24.4%, or 27.1% excluding restructuring expenses, in the prior year. Current quarter includes $6 million of costs related to the Travelex Global Business Payments acquisition |
| • | Gain of $0.03 per share in Other income related to the Company’s previous 30% ownership position in Angelo Costa S.r.l. |
| • | EPS of $0.41, or $0.42 excluding restructuring expenses, compared to $0.33 in the prior year, or $0.36 in the prior year excluding restructuring expenses |
| • | Year-to-date cash provided by operating activities of $506 million |
| • | Restructuring expenses of $9 million, or $6 million after-tax, related to organizational changes and other actions as previously disclosed by the Company |
Additional highlights for the quarter included:
| • | Consumer-to-consumer (C2C) revenue increase of 8% reported and 5% constant currency on transaction growth of 6%; C2C represented 84% of Company revenues |
| • | Europe, Middle East, Africa and South Asia (EMEASA) region revenue increase of 8% on transaction growth of 4% |
| • | Americas region revenue increase of 5% on transaction growth of 7% |
| • | Asia Pacific (APAC) region revenue increase of 16% on transaction growth of 12% |
| • | C2C operating margin of 28.6% compared to 29.1% in prior year |
| • | Global Business Payments revenue increase of 4% |
| • | Bill payments revenue increase of 2% |
| • | Western Union Business Solutions (WUBS) revenue increase of 14% |
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| • | Global Business Payments operating margin of 19.9% compared to 18.9% in the prior year |
| • | Electronic channels revenue increase of over 35%. Electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer, represents 3% of total Company revenue for the quarter |
| • | Prepaid cards in force of 1.1 million, with retail distribution available at approximately 12,000 U.S. locations |
| • | Growth in agent locations to 470,000 |
| • | Agreement to acquire Travelex Global Business Payments (TGBP), a leading specialist provider of international business payments, which enhances the Company’s position in one of its key strategic growth areas, business-to-business cross border payments |
| • | Agreement to acquire the remaining 70 percent of Finint S.r.l., a leading money transfer network agent in Europe, which provides the Company more direct access to agent locations and scale benefits on existing European infrastructure |
| • | Share repurchases of $135 million (6.6 million shares at an average price of $20.35 per share) and dividends paid of $50 million in the quarter. Quarterly dividend increased 14%, to $0.08 per share, in May |
Additional Statistics
Additional key statistics for the quarter and historical trends can be found in the supplemental table included with this press release.
Western Union President and Chief Executive Officer Hikmet Ersek commented,“We continue to see solid trends in our business, and I am pleased we are able to raise our full year outlook for both revenue and earnings per share. The consumer-to-consumer business is growing in each of our regions, and our bill payments revenue growth turned positive in the quarter for the first time since 2008. We also made further strides in electronic channels, which now represent 3% of total Company revenue.”
Ersek continued, “I am very excited about the recent announcement regarding the acquisition of Travelex Global Business Payments, which will give us immediate scale, further reach, and added capabilities in the business-to-business cross border payments market. Our existing b-to-b business, Western Union Business Solutions, is on track for good growth this year, and we are expanding distribution through our money transfer agent network in several countries. The combination of Travelex Global Business Payments and Western Union Business Solutions will give us a strong foundation for long-term growth in international business payments.”
Ersek added, “We continue to deploy the Company’s strong cash flow against our priorities of investing in the business, making strategic acquisitions to accelerate growth and diversify our sources of revenue, and returning funds to shareholders through both share repurchase and
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dividends, while maintaining a strong balance sheet. In addition to the Travelex Global Business Payments acquisition, which is expected to close late this year, we completed the purchase of one of our leading money transfer network agents in Europe, Angelo Costa, in April, and expect to complete the Finint acquisition later this year. We have also been active in the first half of the year in returning funds to shareholders. In May, we raised our dividend by 14%, and year-to-date through June we have repurchased $660 million of our shares.”
2011 Outlook
The Company has increased its full year 2011 revenue and EPS financial outlook and now expects the following full year 2011 results:
Revenue
| • | Constant currency revenue growth in the range of +4% to +5% (previously +3% to +4%) |
| • | GAAP revenue growth in the range of +5% to +6% (previously similar to constant currency) |
The updated 2011 outlook does not include any revenue impact related to the TGBP acquisition, which is expected to close in late 2011.
EPS
| • | GAAP EPS of $1.48 to $1.53 (previously $1.41 to $1.46) |
| • | EPS excluding restructuring charges of $1.53 to $1.58 (previously $1.47 to $1.52) |
The 2011 projected GAAP EPS range has increased by $0.07 compared to the April 26, 2011 outlook, and the EPS range excluding restructuring expenses has increased by $0.06. Restructuring expenses in 2011 are expected to be slightly lower than previously projected, at approximately $45 million. Excluding restructuring expenses, the primary drivers of the $0.06 increase in EPS relate to:
| • | Positive $0.02 EPS impact from the increase in constant currency revenue |
| • | Positive $0.01 EPS impact from an additional 1% increase in GAAP revenue from currency translation net of the offset from hedges |
| • | Positive $0.01 EPSfrom acquisition impacts not included in the previous outlook. This includes an anticipated second half gain on the previous 30% ownership position in Finint S.r.l. (positive $0.02) and higher than expected benefit from the Angelo Costa S.r.l. acquisition (positive $0.01 due to the strength of the Euro and integration expense timing), partially offset by an estimated $15 million of deal costs related to the planned acquisition of TGBP (negative $0.02 impact) |
| • | Positive $0.02 EPS impact from a 1% reduction in the estimated tax rate range. |
Operating Margins
The Company’s operating margin is now projected at a range of 25% to 25.5%, or a range of 26% to 26.5% excluding restructuring charges. The change in operating margin from the April
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outlook is due to the deal costs related to the TGBP acquisition and the impact of foreign exchange. On a constant currency basis, excluding restructuring charges, the Company projects a full year operating margin of 26.5% to 27%, including the negative impact of TGBP deal costs. This compares to an operating margin of 26.2% in 2010, excluding restructuring charges.
Operating Cash Flow
The Company expects GAAP cash flows from operating activities to be at the lower end of its previous range of $1.2 billion to $1.3 billion.
Non-GAAP Measures
Western Union presents a number of non-GAAP measurements because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods. These non-GAAP measurements include revenue change constant currency adjusted, operating income margin and earnings per share excluding restructuring expenses, consumer-to-consumer segment revenue change constant currency adjusted, 2011 revenue outlook constant currency adjusted, 2011 operating income margin outlook restructuring and constant currency adjusted, 2011 earnings per share outlook excluding restructuring expenses, and additional measures found in the supplemental schedule included with this press release.
Reconciliations of non-GAAP to comparable GAAP measures are available in the accompanying schedules and in the “Investor Relations” section of the Company’s web site atwww.westernunion.com.
Restructuring
Western Union incurred $9 million in restructuring expenses in the second quarter from previously announced actions. Approximately $0.5 million was included in cost of services and $8.4 million was included in selling, general, and administrative expense. The Company incurred $35 million in restructuring expenses in the second quarter of 2010.
For the 2010 full year, Western Union incurred $60 million in restructuring expenses from previously announced actions. Approximately $15 million was included in cost of services and $45 million was included in selling, general, and administrative expense.
The Company expects to record a total of approximately $45 million of restructuring charges in 2011. The restructuring charges relate primarily to organizational changes designed to simplify business processes, move decision-making closer to the marketplace, and create operating efficiencies. The Company realized pre-tax savings from the initiatives of $8 million in 2010, and expects approximately $50 million of savings in 2011, and $70 million annualized beginning in 2012. Restructuring expenses are not reflected in segment operating results.
Restructuring expenses include expenses related to severance, outplacement and other related benefits; facility closure and migration of IT infrastructure; and other expenses related to
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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.
Currency
Constant currency results assume foreign revenues and expenses are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. Constant currency results also assume any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the U.S. dollar, net of the effect of foreign currency hedges, would have been consistent with the prior year. Additionally, the measurement 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 is consistent with the prior year.
Investor and Analyst Conference Call and Slide Presentation
The Company will host a conference call and webcast, including slides, at 8:30 a.m. Eastern Time today. To listen to the conference call live via telephone, dial 800-901-5248 (U.S.) or +1-617-786-4512 (outside the U.S.) ten minutes prior to the start of the call. The pass code is 93950425.
The conference call and accompanying slides will be available via webcast athttp://ir.westernunion.com. Registration for the event is required, so please register at least five minutes prior to the scheduled start time.
A replay of the call will be available approximately two hours after the call ends through August 2, 2011, at 888-286-8010 (U.S.) or +1-617-801-6888 (outside the U.S.). The pass code is 96917112. A webcast replay will be available athttp://ir.westernunion.com for the same time period.
Please note: All statements made by Western Union officers on this call are the property of Western Union and subject to copyright protection. Other than the replay, Western Union has not authorized, and disclaims responsibility for, any recording, replay or distribution of any transcription of this call.
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Safe Harbor Compliance Statement for Forward-Looking Statements
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; mergers, acquisitions and integration of acquired businesses and technologies into our Company, and the realization of anticipated financial benefits from these acquisitions; 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; 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.
About Western Union
The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. The Western Union, Vigo and Orlandi Valuta branded services are offered through a combined network of approximately 470,000 agent locations in 200 countries and territories. In 2010, The Western Union Company completed 214 million consumer-to-consumer transactions worldwide, moving $76 billion of principal between consumers, and 405 million business payments. For more information, visitwww.westernunion.com.
WU-F, WU-G
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THE WESTERN UNION COMPANY
KEY STATISTICS
(unaudited)
| Notes* | 2Q10 | 3Q10 | 4Q10 | FY2010 | 1Q11 | 2Q11 | YTD 2Q11 | |||||||||||||||||||||||
Consolidated Metrics | ||||||||||||||||||||||||||||||
Consolidated revenue (GAAP) - YoY % change | 2 | % | 1 | % | 3 | % | 2 | % | 4 | % | 7 | % | 6 | % | ||||||||||||||||
Consolidated revenue (constant currency) - YoY % change | a | 3 | % | 3 | % | 5 | % | 3 | % | 4 | % | 5 | % | 5 | % | |||||||||||||||
Agent locations | 430,000 | 435,000 | 445,000 | 445,000 | 455,000 | 470,000 | 470,000 | |||||||||||||||||||||||
Consumer-to-Consumer Segment | ||||||||||||||||||||||||||||||
Revenue (GAAP) - YoY % change | 1 | % | 1 | % | 3 | % | 2 | % | 5 | % | 8 | % | 6 | % | ||||||||||||||||
Revenue (constant currency) - YoY % change | d | 2 | % | 3 | % | 5 | % | 3 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||
Operating margin | 29.1 | % | 29.9 | % | 27.0 | % | 28.4 | % | 28.6 | % | 28.6 | % | 28.6 | % | ||||||||||||||||
Transactions - (in millions) | 53.05 | 54.91 | 56.17 | 213.74 | 52.84 | 56.31 | 109.15 | |||||||||||||||||||||||
Transactions - YoY % change | 9 | % | 10 | % | 9 | % | 9 | % | 7 | % | 6 | % | 6 | % | ||||||||||||||||
Total Principal ($ - billions) | 18.6 | 19.5 | 20.0 | 75.8 | 19.0 | 20.6 | 39.6 | |||||||||||||||||||||||
Cross-border Principal ($ - billions) | 16.8 | 17.6 | 18.1 | 68.6 | 17.1 | 18.6 | 35.7 | |||||||||||||||||||||||
Cross-border Principal - YoY % change | 6 | % | 4 | % | 6 | % | 6 | % | 7 | % | 10 | % | 8 | % | ||||||||||||||||
Cross-border Principal (constant currency) - YoY % change | f | 7 | % | 6 | % | 7 | % | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||
Principal per transaction ($ - dollars) | 351 | 355 | 356 | 355 | 360 | 365 | 363 | |||||||||||||||||||||||
Principal per transaction - YoY % change | (2 | )% | (4 | )% | (3 | )% | (2 | )% | 1 | % | 4 | % | 3 | % | ||||||||||||||||
Principal per transaction (constant currency) - YoY % change | e | (2 | )% | (3 | )% | (1 | )% | (2 | )% | 1 | % | 0 | % | 0 | % | |||||||||||||||
International revenue (GAAP) - YoY % change | n | 2 | % | 2 | % | 3 | % | 3 | % | 5 | % | 8 | % | 6 | % | |||||||||||||||
International revenue (constant currency) - YoY % change | g, n | 4 | % | 4 | % | 5 | % | 4 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||
International transactions - YoY % change | n | 7 | % | 7 | % | 8 | % | 8 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||
International principal per transaction ($ - dollars) | n | 376 | 384 | 386 | 382 | 390 | 399 | 394 | ||||||||||||||||||||||
International principal per transaction - YoY % change | n | (1 | )% | (3 | )% | (1 | )% | (1 | )% | 2 | % | 6 | % | 4 | % | |||||||||||||||
International principal per transaction (constant currency) - YoY % change | i, n | 0 | % | (1 | )% | 1 | % | (1 | )% | 2 | % | | 1 | % | 2 | % | ||||||||||||||
International revenue excl. US origination (GAAP) - YoY % change | o | 1 | % | 1 | % | 3 | % | 3 | % | 5 | % | 10 | % | 7 | % | |||||||||||||||
International revenue excl. US origination (constant currency) - YoY % change | h, o | 3 | % | 4 | % | 5 | % | 4 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||
International transactions excl. US origination - YoY % change | o | 7 | % | 7 | % | 8 | % | 8 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||
EMEASA region revenue - YoY % change | m, u | (1 | )% | (2 | )% | (1 | )% | 0 | % | 2 | % | 8 | % | 5 | % | |||||||||||||||
EMEASA region transactions - YoY % change | m, u | 5 | % | 5 | % | 6 | % | 5 | % | 4 | % | 4 | % | 4 | % | |||||||||||||||
EMEASA region operating margin** | m, u | 28.4 | % | |||||||||||||||||||||||||||
India revenue - YoY % change | z | 4 | % | 2 | % | 8 | % | 5 | % | 8 | % | 11 | % | 10 | % | |||||||||||||||
India transactions - YoY % change | z | 3 | % | 2 | % | 6 | % | 4 | % | 6 | % | 8 | % | 7 | % | |||||||||||||||
THE WESTERN UNION COMPANY
KEY STATISTICS
(unaudited)
| Notes* | 2Q10 | 3Q10 | 4Q10 | FY2010 | 1Q11 | 2Q11 | YTD 2Q11 | |||||||||||||||||||||||
Americas region revenue - YoY % change | m, t | 1 | % | 2 | % | 7 | % | 2 | % | 6 | % | 5 | % | 6 | % | |||||||||||||||
Americas region transactions - YoY % change | m, t | 12 | % | 13 | % | 11 | % | 11 | % | 8 | % | 7 | % | 7 | % | |||||||||||||||
Americas region operating margin** | m, t | 28.2 | % | |||||||||||||||||||||||||||
Domestic revenue - YoY % change | p | (10 | )% | (6 | )% | 7 | % | (6 | )% | 8 | % | 9 | % | 8 | % | |||||||||||||||
Domestic transactions - YoY % change | p | 28 | % | 35 | % | 29 | % | 28 | % | 21 | % | 19 | % | 20 | % | |||||||||||||||
Mexico revenue - YoY % change | q | 4 | % | (1 | )% | 3 | % | 0 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||
Mexico transactions - YoY % change | q | 5 | % | 2 | % | 3 | % | 2 | % | 1 | % | (1 | )% | 0 | % | |||||||||||||||
APAC region revenue - YoY % change | m, v | 11 | % | 12 | % | 14 | % | 13 | % | 14 | % | 16 | % | 15 | % | |||||||||||||||
APAC region transactions - YoY % change | m, v | 14 | % | 15 | % | 14 | % | 14 | % | 11 | % | 12 | % | 11 | % | |||||||||||||||
APAC region operating margin** | m, v | 28.7 | % | |||||||||||||||||||||||||||
China revenue - YoY % change | aa | 11 | % | 6 | % | 6 | % | 10 | % | 12 | % | 13 | % | 13 | % | |||||||||||||||
China transactions - YoY % change | aa | 6 | % | 6 | % | 7 | % | 7 | % | 5 | % | 7 | % | 6 | % | |||||||||||||||
Electronic channels revenue - YoY % change | w | 16 | % | 10 | % | 19 | % | 14 | % | 24 | % | 39 | % | 31 | % | |||||||||||||||
Global Business Payments Segment | ||||||||||||||||||||||||||||||
Revenue - YoY % change | 9 | % | 5 | % | 0 | % | 4 | % | 0 | % | 4 | % | 2 | % | ||||||||||||||||
Operating margin | 18.9 | % | 15.1 | % | 13.3 | % | 17.0 | % | 16.5 | % | 19.9 | % | 18.2 | % | ||||||||||||||||
Transactions - in millions | 98.0 | 103.4 | 105.3 | 404.9 | 105.9 | 105.6 | 211.5 | |||||||||||||||||||||||
Transactions - YoY % change | (6 | )% | (2 | )% | 6 | % | (2 | )% | 8 | % | 8 | % | 8 | % | ||||||||||||||||
Bill Payments revenue - YoY % change | x | (8 | )% | (7 | )% | (5 | )% | (8 | )% | (2 | )% | 2 | % | 0 | % | |||||||||||||||
Business Solutions revenue - YoY % change | y | N/A | N/A | 32 | % | N/A | 13 | % | 14 | % | 13 | % | ||||||||||||||||||
% of Total Company Revenue | ||||||||||||||||||||||||||||||
Consumer-to-Consumer segment revenue | 84 | % | 85 | % | 85 | % | 84 | % | 84 | % | 84 | % | 84 | % | ||||||||||||||||
EMEASA region revenue | m, u | 44 | % | 44 | % | 44 | % | 44 | % | 43 | % | 43 | % | 43 | % | |||||||||||||||
Americas region revenue | m, t | 32 | % | 32 | % | 32 | % | 31 | % | 32 | % | 32 | % | 32 | % | |||||||||||||||
APAC region revenue | m, v | 8 | % | 9 | % | 9 | % | 9 | % | 9 | % | 9 | % | 9 | % | |||||||||||||||
Mexico revenue | q | 6 | % | 6 | % | 5 | % | 6 | % | 5 | % | 6 | % | 6 | % | |||||||||||||||
India & China revenue | r | 7 | % | 7 | % | 7 | % | 7 | % | 8 | % | 8 | % | 8 | % | |||||||||||||||
Electronic channels revenue | w | 2 | % | 2 | % | 2 | % | 2 | % | 3 | % | 3 | % | 3 | % | |||||||||||||||
Global Business Payments segment revenue | 14 | % | 13 | % | 13 | % | 14 | % | 14 | % | 14 | % | 14 | % | ||||||||||||||||
Bill Payments revenue | x | 12 | % | 11 | % | 11 | % | 12 | % | 12 | % | 12 | % | 12 | % | |||||||||||||||
Business Solutions revenue | y | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||
Prepaid revenue | bb | 0 | % | 1 | % | 0 | % | 0 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||
Marketing expense | s | 4.1 | % | 3.7 | % | 5.0 | % | 4.1 | % | 3.4 | % | 4.1 | % | 3.7 | % | |||||||||||||||
| * | See page 13 of the press release for the applicable Note references and the reconciliation of non-GAAP measures. |
| ** | Regional operating margins are provided on an annual basis only. |
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Transaction fees | $ | 1,057.0 | $ | 995.5 | 6 | % | $ | 2,055.0 | $ | 1,961.2 | 5 | % | ||||||||||||
Foreign exchange revenues | 279.2 | 249.3 | 12 | % | 535.3 | 487.4 | 10 | % | ||||||||||||||||
Other revenues | 30.1 | 28.6 | 5 | % | 59.0 | 57.5 | 3 | % | ||||||||||||||||
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Total revenues | 1,366.3 | 1,273.4 | 7 | % | 2,649.3 | 2,506.1 | 6 | % | ||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Cost of services (a) | 764.2 | 727.7 | 5 | % | 1,509.6 | 1,442.3 | 5 | % | ||||||||||||||||
Selling, general and administrative (b) | 251.4 | 234.7 | 7 | % | 476.1 | 437.0 | 9 | % | ||||||||||||||||
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Total expenses | 1,015.6 | 962.4 | 6 | % | 1,985.7 | 1,879.3 | 6 | % | ||||||||||||||||
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Operating income | 350.7 | 311.0 | 13 | % | 663.6 | 626.8 | 6 | % | ||||||||||||||||
Other income/(expense): | ||||||||||||||||||||||||
Interest income | 1.3 | 0.5 | (d | ) | 2.5 | 1.4 | (d | ) | ||||||||||||||||
Interest expense | (44.2 | ) | (41.1 | ) | 8 | % | (87.6 | ) | (79.9 | ) | 10 | % | ||||||||||||
Derivative gains/(losses), net | (1.3 | ) | 0.7 | (d | ) | 0.6 | (0.2 | ) | (d | ) | ||||||||||||||
Other income, net (c) | 26.9 | 1.2 | (d | ) | 29.0 | 0.2 | (d | ) | ||||||||||||||||
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Total other expense, net | (17.3 | ) | (38.7 | ) | (55 | )% | (55.5 | ) | (78.5 | ) | (29 | )% | ||||||||||||
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| |||||||||||||||||
Income before income taxes | 333.4 | 272.3 | 22 | % | 608.1 | 548.3 | 11 | % | ||||||||||||||||
Provision for income taxes | 70.2 | 51.3 | 37 | % | 134.7 | 119.4 | 13 | % | ||||||||||||||||
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| |||||||||||||||||
Net income | $ | 263.2 | $ | 221.0 | 19 | % | $ | 473.4 | $ | 428.9 | 10 | % | ||||||||||||
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Earnings per share: | ||||||||||||||||||||||||
Basic | $ | 0.42 | $ | 0.33 | 27 | % | $ | 0.74 | $ | 0.63 | 17 | % | ||||||||||||
Diluted | $ | 0.41 | $ | 0.33 | 24 | % | $ | 0.74 | $ | 0.63 | 17 | % | ||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||||||
Basic | 631.1 | 669.3 | 639.0 | 675.6 | ||||||||||||||||||||
Diluted | 635.8 | 671.6 | 644.0 | 677.9 | ||||||||||||||||||||
| (a) | Cost of services includes restructuring and related expenses of $0.5M and $7.4M for the three and six months ended June 30, 2011, respectively, and $9.4M for the three and six months ended June 30, 2010. |
| (b) | Selling, general and administrative expenses includes restructuring and related expenses of $8.4M and $25.5M for the three and six months ended June 30, 2011, respectively, and $25.1M for the three and six months ended June 30, 2010. |
| (c) | Other income, net includes a gain of $29.4 million for the revaluation of the Company’s 30% equity interest in Angelo Costa S.r.l. to fair value. |
| (d) | Calculation not meaningful. |
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
Assets | ||||||||
Cash and cash equivalents (a) | $ | 2,089.7 | $ | 2,157.4 | ||||
Settlement assets | 2,585.3 | 2,635.2 | ||||||
Property and equipment, net of accumulated depreciation of $412.7 and $383.6, respectively | 196.4 | 196.5 | ||||||
Goodwill | 2,329.6 | 2,151.7 | ||||||
Other intangible assets, net of accumulated amortization of $472.0 and $441.2, respectively | 483.0 | 438.0 | ||||||
Other assets | 325.5 | 350.4 | ||||||
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Total assets | $ | 8,009.5 | $ | 7,929.2 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 483.2 | $ | 520.4 | ||||
Settlement obligations | 2,585.3 | 2,635.2 | ||||||
Income taxes payable | 423.7 | 356.6 | ||||||
Deferred tax liability, net | 287.5 | 289.9 | ||||||
Borrowings | 3,585.5 | 3,289.9 | ||||||
Other liabilities | 265.2 | 254.5 | ||||||
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Total liabilities | 7,630.4 | 7,346.5 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | — | — | ||||||
Common stock, $0.01 par value; 2,000 shares authorized; 627.5 shares and 654.0 shares issued and outstanding at June 30, 2011, and December 31, 2010, respectively | 6.3 | 6.5 | ||||||
Capital surplus | 221.6 | 117.4 | ||||||
Retained earnings | 307.7 | 591.6 | ||||||
Accumulated other comprehensive loss | (156.5 | ) | (132.8 | ) | ||||
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| |||||
Total stockholders’ equity | 379.1 | 582.7 | ||||||
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|
| |||||
Total liabilities and stockholders’ equity | $ | 8,009.5 | $ | 7,929.2 | ||||
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| (a) | At June 30, 2011, approximately $1,059 million was held by entities outside of the United States. |
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
| Six Months Ended June 30, | ||||||||
| 2011 | 2010 | |||||||
Cash Flows From Operating Activities | ||||||||
Net income | $ | 473.4 | $ | 428.9 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 30.4 | 30.1 | ||||||
Amortization | 60.9 | 55.5 | ||||||
Stock compensation expense | 15.3 | 20.6 | ||||||
Gain on revaluation of equity interest | (29.4 | ) | — | |||||
Other non-cash items, net | (11.7 | ) | (4.9 | ) | ||||
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in: | ||||||||
Other assets | (3.4 | ) | 64.2 | |||||
Accounts payable and accrued liabilities | (48.4 | ) | (36.3 | ) | ||||
Income taxes payable (a) | 42.4 | (213.5 | ) | |||||
Other liabilities | (23.2 | ) | (18.5 | ) | ||||
Net cash provided by operating activities | 506.3 | 326.1 | ||||||
Cash Flows From Investing Activities | ||||||||
Capitalization of contract costs | (44.8 | ) | (13.0 | ) | ||||
Capitalization of purchased and developed software | (4.0 | ) | (9.8 | ) | ||||
Purchases of property and equipment | (26.6 | ) | (20.8 | ) | ||||
Acquisition of business | (135.7 | ) | — | |||||
Repayments of notes receivable issued to agents | — | 16.9 | ||||||
Net cash used in investing activities | (211.1 | ) | (26.7 | ) | ||||
Cash Flows From Financing Activities | ||||||||
Proceeds from exercise of options | 91.6 | 11.9 | ||||||
Cash dividends paid | (95.0 | ) | (80.1 | ) | ||||
Common stock repurchased | (658.5 | ) | (417.1 | ) | ||||
Net proceeds from issuance of borrowings | 299.0 | 247.5 | ||||||
Net cash used in financing activities | (362.9 | ) | (237.8 | ) | ||||
Net change in cash and cash equivalents | (67.7 | ) | 61.6 | |||||
Cash and cash equivalents at beginning of period | 2,157.4 | 1,685.2 | ||||||
Cash and cash equivalents at end of period | $ | 2,089.7 | $ | 1,746.8 | ||||
| (a) | The Company made a $250 million refundable tax deposit with the IRS in first quarter 2010. |
THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Consumer-to-Consumer: | ||||||||||||||||||||||||
Transaction fees | $ | 898.0 | $ | 843.0 | 7 | % | $ | 1,737.8 | $ | 1,650.0 | 5 | % | ||||||||||||
Foreign exchange revenues | 245.4 | 220.0 | 12 | % | 472.8 | 431.9 | 9 | % | ||||||||||||||||
Other revenues | 11.7 | 10.1 | 16 | % | 22.6 | 21.4 | 6 | % | ||||||||||||||||
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Total Consumer-to-Consumer: | 1,155.1 | 1,073.1 | 8 | % | 2,233.2 | 2,103.3 | 6 | % | ||||||||||||||||
Global Business Payments: | ||||||||||||||||||||||||
Transaction fees | 145.3 | 142.4 | 2 | % | 290.9 | 290.4 | — | |||||||||||||||||
Foreign exchange revenues | 33.8 | 29.3 | 15 | % | 62.5 | 55.5 | 13 | % | ||||||||||||||||
Other revenues | 7.6 | 7.6 | — | 15.4 | 15.2 | 1 | % | |||||||||||||||||
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Total Global Business Payments: | 186.7 | 179.3 | 4 | % | 368.8 | 361.1 | 2 | % | ||||||||||||||||
Total Other: | 24.5 | 21.0 | 17 | % | 47.3 | 41.7 | 13 | % | ||||||||||||||||
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Total consolidated revenues | $ | 1,366.3 | $ | 1,273.4 | 7 | % | $ | 2,649.3 | $ | 2,506.1 | 6 | % | ||||||||||||
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Operating income/(loss): | ||||||||||||||||||||||||
Consumer-to-Consumer | $ | 329.8 | $ | 312.4 | 6 | % | $ | 638.4 | $ | 595.1 | 7 | % | ||||||||||||
Global Business Payments | 37.2 | 33.8 | 10 | % | 67.3 | 71.4 | (6 | )% | ||||||||||||||||
Other (a) | (7.4 | ) | (0.7 | ) | (c) | (9.2 | ) | (5.2 | ) | 77 | % | |||||||||||||
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| |||||||||||||||||
Total segment operating income | 359.6 | 345.5 | 4 | % | 696.5 | 661.3 | 5 | % | ||||||||||||||||
Restructuring and related expenses (b) | (8.9 | ) | (34.5 | ) | (74 | )% | (32.9 | ) | (34.5 | ) | (5 | )% | ||||||||||||
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| |||||||||||||||||
Total consolidated operating income | $ | 350.7 | $ | 311.0 | 13 | % | $ | 663.6 | $ | 626.8 | 6 | % | ||||||||||||
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Operating income/(loss) margin: | ||||||||||||||||||||||||
Consumer-to-Consumer | 28.6 | % | 29.1 | % | (0.5 | )% | 28.6 | % | 28.3 | % | 0.3 | % | ||||||||||||
Global Business Payments | 19.9 | % | 18.9 | % | 1.0 | % | 18.2 | % | 19.8 | % | (1.6 | )% | ||||||||||||
Total consolidated operating income margin | 25.7 | % | 24.4 | % | 1.3 | % | 25.0 | % | 25.0 | % | — | |||||||||||||
Depreciation and amortization: | ||||||||||||||||||||||||
Consumer-to-Consumer | $ | 35.1 | $ | 32.1 | 9 | % | $ | 68.3 | $ | 63.1 | 8 | % | ||||||||||||
Global Business Payments | 9.7 | 9.3 | 4 | % | 19.3 | 17.9 | 8 | % | ||||||||||||||||
Other | 1.1 | 2.1 | (48 | )% | 2.4 | 4.5 | (47 | )% | ||||||||||||||||
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Total segment depreciation and amortization | 45.9 | 43.5 | 6 | % | 90.0 | 85.5 | 5 | % | ||||||||||||||||
Restructuring and related expenses (b) | 0.7 | 0.1 | (c) | 1.3 | 0.1 | (c) | ||||||||||||||||||
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Total consolidated depreciation and amortization | $ | 46.6 | $ | 43.6 | 7 | % | $ | 91.3 | $ | 85.6 | 7 | % | ||||||||||||
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| (a) | Total other operating loss includes $6 million of costs related to the Travelex Global Business Payments acquisition. |
| (b) | Restructuring expenses are excluded from the measurement of segment operating profit provided to the Chief Operating Decision Maker for purposes of assessing segment performance and decision making with respect to resource allocation. |
| (c) | Calculation not meaningful. |
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(in millions, unless indicated otherwise)
(unaudited)
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.
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.
All adjusted year-over-year changes were calculated using prior year reported amounts.
| 2Q10 | 3Q10 | 4Q10 | FY2010 | 1Q11 | 2Q11 | YTD 2Q11 | ||||||||||||||||||||||||
Consolidated Metrics | ||||||||||||||||||||||||||||||
(a) | Revenues, as reported (GAAP) | $ | 1,273.4 | $ | 1,329.6 | $ | 1,357.0 | $ | 5,192.7 | $ | 1,283.0 | $ | 1,366.3 | $ | 2,649.3 | |||||||||||||||
Foreign currency translation impact (j) | 16.1 | 22.2 | 18.5 | 36.8 | 2.3 | (32.5 | ) | (30.2 | ) | |||||||||||||||||||||
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Revenues, constant currency adjusted | $ | 1,289.5 | $ | 1,351.8 | $ | 1,375.5 | $ | 5,229.5 | $ | 1,285.3 | $ | 1,333.8 | $ | 2,619.1 | ||||||||||||||||
Prior year revenues, as reported (GAAP) | $ | 1,254.3 | $ | 1,314.1 | $ | 1,314.0 | $ | 5,083.6 | $ | 1,232.7 | $ | 1,273.4 | $ | 2,506.1 | ||||||||||||||||
Revenue change, as reported (GAAP) | 2 | % | 1 | % | 3 | % | 2 | % | 4 | % | 7 | % | 6 | % | ||||||||||||||||
Revenue change, constant currency adjusted | 3 | % | 3 | % | 5 | % | 3 | % | 4 | % | 5 | % | 5 | % | ||||||||||||||||
(b) | Operating income, as reported (GAAP) | $ | 311.0 | $ | 351.2 | $ | 322.1 | $ | 1,300.1 | $ | 312.9 | $ | 350.7 | $ | 663.6 | |||||||||||||||
Reversal of restructuring and related expenses (k) | 34.5 | 14.0 | 11.0 | 59.5 | 24.0 | 8.9 | 32.9 | |||||||||||||||||||||||
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Operating income, excluding restructuring | $ | 345.5 | $ | 365.2 | $ | 333.1 | $ | 1,359.6 | $ | 336.9 | $ | 359.6 | $ | 696.5 | ||||||||||||||||
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Operating income margin, as reported (GAAP) | 24.4 | % | 26.4 | % | 23.7 | % | 25.0 | % | 24.4 | % | 25.7 | % | 25.0 | % | ||||||||||||||||
Operating income margin, excluding restructuring | 27.1 | % | 27.5 | % | 24.5 | % | 26.2 | % | 26.3 | % | 26.3 | % | 26.3 | % | ||||||||||||||||
(c) | Net income, as reported (GAAP) | $ | 221.0 | $ | 238.4 | $ | 242.6 | $ | 909.9 | $ | 210.2 | $ | 263.2 | $ | 473.4 | |||||||||||||||
Reversal of restructuring and related expenses, net of income tax benefit (k) | 22.4 | 9.5 | 7.4 | 39.3 | 16.4 | 5.9 | 22.3 | |||||||||||||||||||||||
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Net income, restructuring adjusted, net of income tax | $ | 243.4 | $ | 247.9 | $ | 250.0 | $ | 949.2 | $ | 226.6 | $ | 269.1 | $ | 495.7 | ||||||||||||||||
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Diluted earnings per share (“EPS”), as reported (GAAP) ($ - dollars) | $ | 0.33 | $ | 0.36 | $ | 0.37 | $ | 1.36 | $ | 0.32 | $ | 0.41 | $ | 0.74 | ||||||||||||||||
Impact from restructuring and related expenses, net of income tax benefit (k) ($ - dollars) | 0.03 | 0.01 | 0.01 | 0.06 | 0.03 | 0.01 | 0.03 | |||||||||||||||||||||||
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Diluted EPS, restructuring adjusted ($ - dollars) | $ | 0.36 | $ | 0.37 | $ | 0.38 | $ | 1.42 | $ | 0.35 | $ | 0.42 | $ | 0.77 | ||||||||||||||||
Diluted weighted-average shares outstanding | 671.6 | 661.3 | 658.4 | 668.9 | 652.1 | 635.8 | 644.0 | |||||||||||||||||||||||
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(in millions, unless indicated otherwise)
(unaudited)
| 2Q10 | 3Q10 | 4Q10 | FY2010 | 1Q11 | 2Q11 | YTD 2Q11 | ||||||||||||||||||||||||
Consumer-to-Consumer Segment | ||||||||||||||||||||||||||||||
(d) | Revenues, as reported (GAAP) | $ | 1,073.1 | $ | 1,128.3 | $ | 1,151.8 | $ | 4,383.4 | $ | 1,078.1 | $ | 1,155.1 | $ | 2,233.2 | |||||||||||||||
Foreign currency translation impact (j) | 15.0 | 21.2 | 18.0 | 32.3 | 2.2 | (31.4 | ) | (29.2 | ) | |||||||||||||||||||||
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Revenues, constant currency adjusted | $ | 1,088.1 | $ | 1,149.5 | $ | 1,169.8 | $ | 4,415.7 | $ | 1,080.3 | $ | 1,123.7 | $ | 2,204.0 | ||||||||||||||||
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Prior year revenues, as reported (GAAP) | $ | 1,065.5 | $ | 1,117.8 | $ | 1,113.7 | $ | 4,300.7 | $ | 1,030.2 | $ | 1,073.1 | $ | 2,103.3 | ||||||||||||||||
Revenue change, as reported (GAAP) | 1 | % | 1 | % | 3 | % | 2 | % | 5 | % | 8 | % | 6 | % | ||||||||||||||||
Revenue change, constant currency adjusted | 2 | % | 3 | % | 5 | % | 3 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||||
(e) | Principal per transaction, as reported ($ - dollars) | $ | 351 | $ | 355 | $ | 356 | $ | 355 | $ | 360 | $ | 365 | $ | 363 | |||||||||||||||
Foreign currency translation impact (j) ($ - dollars) | 2 | 7 | 5 | 1 | (1 | ) | (14 | ) | (8 | ) | ||||||||||||||||||||
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Principal per transaction, constant currency adjusted ($ - dollars) | $ | 353 | $ | 362 | $ | 361 | $ | 356 | $ | 359 | $ | 351 | $ | 355 | ||||||||||||||||
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Prior year principal per transaction, as reported ($ - dollars) | $ | 358 | $ | 371 | $ | 365 | $ | 363 | $ | 357 | $ | 351 | $ | 354 | ||||||||||||||||
Principal per transaction change, as reported | (2 | )% | (4 | )% | (3 | )% | (2 | )% | 1 | % | 4 | % | 3 | % | ||||||||||||||||
Principal per transaction change, constant currency adjusted | (2 | )% | (3 | )% | (1 | )% | (2 | )% | 1 | % | 0 | % | 0 | % | ||||||||||||||||
(f) | Cross-border principal, as reported ($ - billions) | $ | 16.8 | $ | 17.6 | $ | 18.1 | $ | 68.6 | $ | 17.1 | $ | 18.6 | $ | 35.7 | |||||||||||||||
Foreign currency translation impact (j) ($ - billions) | 0.1 | 0.4 | 0.3 | 0.3 | — | (0.8 | ) | (0.8 | ) | |||||||||||||||||||||
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Cross-border principal, constant currency adjusted ($ - billions) | $ | 16.9 | $ | 18.0 | $ | 18.4 | $ | 68.9 | $ | 17.1 | $ | 17.8 | $ | 34.9 | ||||||||||||||||
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Prior year cross-border principal, as reported ($ - billions) | $ | 15.9 | $ | 17.0 | $ | 17.1 | $ | 65.0 | $ | 16.1 | $ | 16.8 | $ | 32.9 | ||||||||||||||||
Cross-border principal change, as reported | 6 | % | 4 | % | 6 | % | 6 | % | 7 | % | 10 | % | 8 | % | ||||||||||||||||
Cross-border principal change, constant currency adjusted | 7 | % | 6 | % | 7 | % | 6 | % | 6 | % | 6 | % | 6 | % | ||||||||||||||||
(g) | International revenues, as reported (GAAP) | $ | 890.8 | $ | 944.0 | $ | 972.4 | $ | 3,669.2 | $ | 901.7 | $ | 962.9 | $ | 1,864.6 | |||||||||||||||
Foreign currency translation impact (j) | 15.7 | 21.7 | 18.4 | 35.0 | 2.6 | (30.7 | ) | (28.1 | ) | |||||||||||||||||||||
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International revenues, constant currency adjusted | $ | 906.5 | $ | 965.7 | $ | 990.8 | $ | 3,704.2 | $ | 904.3 | $ | 932.2 | $ | 1,836.5 | ||||||||||||||||
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Prior year international revenues, as reported (GAAP) | $ | 875.0 | $ | 926.5 | $ | 943.4 | $ | 3,559.7 | $ | 862.0 | $ | 890.8 | $ | 1,752.8 | ||||||||||||||||
International revenue change, as reported (GAAP) | 2 | % | 2 | % | 3 | % | 3 | % | 5 | % | 8 | % | 6 | % | ||||||||||||||||
International revenue change, constant currency adjusted | 4 | % | 4 | % | 5 | % | 4 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||||
(h) | International excl. US origination revenues, as reported (GAAP) | $ | 719.2 | $ | 774.3 | $ | 797.6 | $ | 2,990.9 | $ | 732.2 | $ | 788.6 | $ | 1,520.8 | |||||||||||||||
Foreign currency translation impact (j) | 15.7 | 21.7 | 18.4 | 35.0 | 2.6 | (30.7 | ) | (28.1 | ) | |||||||||||||||||||||
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International excl. US origination revenues, constant currency adjusted | $ | 734.9 | $ | 796.0 | $ | 816.0 | $ | 3,025.9 | $ | 734.8 | $ | 757.9 | $ | 1,492.7 | ||||||||||||||||
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Prior year international excl. US origination revenues, as reported (GAAP) | $ | 712.5 | $ | 765.5 | $ | 778.0 | $ | 2,910.8 | $ | 699.8 | $ | 719.2 | $ | 1,419.0 | ||||||||||||||||
International excl. US origination revenue change, as reported (GAAP) | 1 | % | 1 | % | 3 | % | 3 | % | 5 | % | 10 | % | 7 | % | ||||||||||||||||
International excl. US origination revenue change, constant currency adjusted | 3 | % | 4 | % | 5 | % | 4 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||||
(i) | International principal per transaction, as reported ($ - dollars) | $ | 376 | $ | 384 | $ | 386 | $ | 382 | $ | 390 | $ | 399 | $ | 394 | |||||||||||||||
Foreign currency translation impact (j) ($ - dollars) | 3 | 8 | 7 | 2 | (2 | ) | (18 | ) | (9 | ) | ||||||||||||||||||||
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International principal per transaction, constant currency adjusted ($ - dollars) | $ | 379 | $ | 392 | $ | 393 | $ | 384 | $ | 388 | $ | 381 | $ | 385 | ||||||||||||||||
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Prior year international principal per transaction, as reported ($ - dollars) | $ | 380 | $ | 395 | $ | 390 | $ | 386 | $ | 381 | $ | 376 | $ | 379 | ||||||||||||||||
International principal per transaction change, as reported | (1 | )% | (3 | )% | (1 | )% | (1 | )% | 2 | % | 6 | % | 4 | % | ||||||||||||||||
International principal per transaction change, constant currency adjusted | 0 | % | (1 | )% | 1 | % | (1 | )% | 2 | % | 1 | % | 2 | % | ||||||||||||||||
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(in millions, unless indicated otherwise)
(unaudited)
| Range | ||||||||
2011 Revenue Outlook | ||||||||
Revenue change (GAAP) | 5 | % | 6 | % | ||||
Foreign currency translation impact (l) | (1 | )% | (1 | )% | ||||
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Revenue change, constant currency adjusted | 4 | % | 5 | % | ||||
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2011 Operating Income Margin Outlook | ||||||||
Operating income margin (GAAP) | 25.0 | % | 25.5 | % | ||||
Impact from restructuring and related expenses (k) | 1.0 | % | 1.0 | % | ||||
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Operating income margin, restructuring adjusted | 26.0 | % | 26.5 | % | ||||
Foreign currency translation impact (l) | 0.5 | % | 0.5 | % | ||||
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Operating income margin, restructuring and constant currency adjusted | 26.5 | % | 27.0 | % | ||||
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2011 EPS Outlook | ||||||||
EPS guidance (GAAP) ($ - dollars) | $ | 1.48 | $ | 1.53 | ||||
Impact from restructuring and related expenses, net of income tax benefit (k) ($ - dollars) | 0.05 | 0.05 | ||||||
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EPS guidance, restructuring adjusted ($ - dollars) | $ | 1.53 | $ | 1.58 | ||||
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Non-GAAP related notes:
| (j) | 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. |
| (k) | 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. |
| (l) | Represents the estimated impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any estimated 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. |
Other notes:
| (m) | Geographic split is determined based upon the region where the money transfer is initiated and the region where the money transfer is paid, with each transaction and the related revenue being split 50% between the two regions. For those money transfer transactions that are initiated and paid in the same region, 100% of the revenue is attributed to that region. |
| (n) | Represents transactions between and within foreign countries (excluding Canada and Mexico), transactions originated in the United States or Canada and paid elsewhere, and transactions originated outside the United States or Canada and paid in the United States or Canada. Excludes all transactions between or within the United States and Canada and all transactions to and from Mexico as reflected in (p) and (q) below. |
| (o) | Represents transactions between and within foreign countries (excluding Canada and Mexico). Excludes all transactions originated in the United States and all transactions to and from Mexico as reflected in (p) and (q) below. |
| (p) | Represents all transactions between and within the United States and Canada. |
| (q) | Represents all transactions to and from Mexico. |
| (r) | Represents all transactions to and from India and China. |
| (s) | Marketing expense includes advertising, events, loyalty programs and the cost of employees dedicated to marketing activities. |
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(in millions, unless indicated otherwise)
(unaudited)
| (t) | Represents the Americas region of our consumer-to-consumer segment, which includes North America, Latin America, the Caribbean and South America. |
| (u) | Represents the Europe, Middle East, Africa and South Asia region of our consumer-to-consumer segment, including India. |
| (v) | Represents the Asia Pacific region of our consumer-to-consumer segment. |
| (w) | Represents revenue generated from electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer. |
| (x) | Represents revenue from the Company’s Bill Payments services, which allow consumers to make payments to a variety of organizations including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. This revenue is included within the Global Business Payments segment. |
| (y) | Represents revenue from the Company’s Business Solutions services, which facilitate cross-border, cross-currency business-to-business payment transactions. This revenue is included within the Global Business Payments segment. |
| (z) | Represents all transactions to and from India. |
| (aa) | Represents all transactions to and from China. |
| (bb) | Represents revenue from prepaid services. This revenue is included within the Other segment. |