Revenue $1.4 Billion, Earnings per Share
$0.45$204 Million Returned to Shareholders through Dividends
and Repurchases2015 Full Year Outlook Affirmed
_________________________________________________________
The Western Union Company (NYSE: WU) today reported financial
results for the 2015 third quarter and affirmed its full year
financial outlook, which was previously provided on July 30,
2015.
On a constant currency basis, third quarter revenues increased
3% compared to the prior year period. Reported revenues declined
3%, primarily due to the impact of the stronger U.S. dollar.
Earnings per share increased 2% to $0.45 in the quarter.
“We delivered another good quarter and are on track with our
expectations, as the business remained resilient despite
geopolitical and global economic challenges,” said President and
Chief Executive Officer Hikmet Ersek. “U.S. outbound money
transfer provided solid results and our westernunion.com online
transaction sites, which are now activated in 33 countries, once
again produced strong growth.”
Ersek added, “We are also continuing to execute key
strategic actions, such as launching the WU Connect platform and
expanding our capabilities to transfer funds into accounts. Within
our omni-channel strategy we currently have the ability to access
hundreds of millions of accounts globally, adding to our
distribution network of over 500,000 agent locations and 100,000
ATMs and kiosks.”
Executive Vice President and Chief Financial Officer Raj
Agrawal said, “In the quarter we achieved constant currency
revenue growth in each of our segments and generated strong
operating margins and cash flow, which we continued to deploy for
our shareholders. We are pleased to affirm the full year financial
outlook, including the adjusted earnings per share outlook that was
raised in July.”
In the third quarter, Consumer-to-Consumer (C2C) constant
currency revenues increased 3%, while reported revenues declined
3%. C2C transactions increased 2% in the quarter. C2C constant
currency revenue growth was driven by westernunion.com and the U.S.
outbound business. Westernunion.com C2C revenue increased 22%, or
28% constant currency, on transaction growth of 25%. Electronic
channels revenue, which includes westernunion.com, account based
money transfer through banks, and mobile money transfer,
represented 7% of total Company revenues.
Consumer-to-Business (C2B) revenues grew 6% in the quarter, or
10% constant currency, driven by the Argentina walk-in and the U.S.
electronic bill payments businesses.
Western Union Business Solutions revenues decreased 4%, or
increased 6% on a constant currency basis. Constant currency growth
was driven by Europe and Australia, and aided by strong sales of
hedging products.
Operating margin was 21.8% for the quarter, which is consistent
with the third quarter of 2014.
Earnings per share were $0.45 compared to $0.44 in the prior
year period.
The Company returned $204 million to shareholders in the third
quarter, consisting of $125 million of share repurchases and $79
million of dividends. Year-to-date, cash flow from operating
activities totaled $804 million, with $670 million returned to
shareholders through share repurchases and dividends.
2015 Full Year Outlook
The Company affirmed its full year outlook for 2015 provided on
July 30, 2015:
Revenue
- Low to mid-single digit constant
currency revenue increase
- Low to mid-single digit GAAP revenue
decrease
Operating Profit Margin
- Adjusted operating margin of
approximately 21%
- GAAP operating margin of approximately
20%
Earnings per Share
- Adjusted EPS in a range of
approximately $1.60 to $1.67
- GAAP EPS in a range of approximately
$1.55 to $1.62
Cash Flow
- Cash flow from operating activities of
approximately $1 billion. The Company now expects that the $100
million of anticipated final tax payments relating to the agreement
announced with the U.S. Internal Revenue Service in December 2011
will be paid in years subsequent to 2015.
Adjusted operating margin and EPS metrics exclude the impact of
the previously announced Paymap settlement charge of $35.3 million
pre-tax, or $24.2 million after tax, which occurred in the second
quarter.
Additional Statistics
Additional key statistics for the quarter and historical trends
can be found in the supplemental tables included with this press
release.
Non-GAAP Measures
Western Union presents a number of non-GAAP financial measures
because management believes that these metrics provide meaningful
supplemental information in addition to the GAAP metrics and
provide comparability and consistency to prior periods. Constant
currency results assume foreign revenues 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.
These non-GAAP financial measures include revenue change
constant currency adjusted; Consumer-to-Consumer segment revenue
change constant currency adjusted; Consumer-to-Consumer segment
westernunion.com region revenue change constant currency adjusted;
Consumer-to-Business segment revenue change constant currency
adjusted; Business Solutions segment revenue change constant
currency adjusted; 2015 operating income margin outlook, excluding
Paymap settlement agreement; 2015 earnings per share outlook,
excluding Paymap settlement agreement, net of income tax benefit;
and additional measures found in the supplemental tables 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 website at
http://ir.westernunion.com.
Investor and Analyst Conference Call
and Slide Presentation
The Company will host a conference call and webcast, including
slides, at 4:30 p.m. Eastern Time today. To listen to the
conference call via telephone, dial 1 (888) 317-6003 (U.S.) or +1
(412) 317-6061 (outside the U.S.) ten minutes prior to the start of
the call. The pass code is 1130822.
The conference call and accompanying slides will be available
via webcast at http://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 one hour
after the call ends through November 12, 2015, at 1 (877) 344-7529
(U.S.) or +1 (412) 317-0088 (outside the U.S.). The pass code is
10073424. A webcast replay will be available at
http://ir.westernunion.com.
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.
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 "may," "will,"
"should," "would," "could," and "might" are intended to identify
such forward-looking statements. Readers of this press release of
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, 2014.
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: (i) events
related to our business and industry, such as: changes in general
economic conditions and economic conditions in the regions and
industries in which we operate, including global economic and trade
downturns, or significantly 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, or non-performance by our banks, lenders,
insurers, or other financial services providers; failure to compete
effectively in the money transfer and payment service industry,
including among other things, with respect to price, with global
and niche or corridor money transfer providers, banks and other
money transfer and payment service providers, including card
associations, card-based payment providers, electronic, mobile and
Internet-based services, digital currencies and related protocols,
and other innovations in technology and business models;
deterioration in customer confidence in our business, or in money
transfer and payment service providers generally; our ability to
adopt new technology and develop and gain market acceptance of new
and enhanced services in response to changing industry and consumer
needs or trends; 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; political conditions and related actions in
the United States and abroad which may adversely affect our
business and economic conditions as a whole, including
interruptions of United States or other government relations with
countries in which we have or are implementing significant business
relationships with agents or clients; any material breach of
security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or
other third parties; mergers, acquisitions and integration of
acquired businesses and technologies into our Company, and the
failure to realize anticipated financial benefits from these
acquisitions, and events requiring us to write down our goodwill;
failure to manage credit and fraud risks presented by our agents,
clients and consumers; failure to maintain our agent network and
business relationships under terms consistent with or more
advantageous to us than 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; decisions to change our business
mix; adverse rating actions by credit rating
agencies; cessation of or defects in various services provided
to us by third-party vendors; our ability to realize the
anticipated benefits from productivity and cost-savings and other
related initiatives, which may include decisions to downsize or to
transition operating activities from one location to another, and
to minimize any disruptions in our workforce that may result from
those initiatives; our ability to protect our brands and our other
intellectual property rights and to defend ourselves against
potential intellectual property infringement claims; changes in tax
laws and unfavorable resolution of tax contingencies; our ability
to attract and retain qualified key employees and to manage our
workforce successfully; material changes in the market value or
liquidity of securities that we hold; and restrictions imposed by
our debt obligations; (ii) events related to our regulatory and
litigation environment, such as: liabilities or loss of business
resulting from a failure by us, our agents or their subagents to
comply with laws and regulations and regulatory or judicial
interpretations thereof, including laws and regulations designed to
protect consumers, or detect and prevent money laundering,
terrorist financing, fraud and other illicit activity; increased
costs or loss of business due to regulatory initiatives and changes
in laws, regulations and industry practices and standards,
including changes in interpretations in the United States and
globally, affecting us, our agents or their subagents, or the banks
with which we or our agents maintain bank accounts needed to
provide our services, including related to anti-money laundering
regulations, anti-fraud measures, customer due diligence, agent and
subagent due diligence, registration, and monitoring requirements,
and consumer protection; liabilities or loss of business and
unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions
by regulators, including those associated with compliance with or
failure to comply with the settlement agreement with the State of
Arizona, as amended; the potential impact on our business from the
Dodd-Frank Wall Street Reform and Consumer Protection Act, as well
as regulations issued pursuant to it and the actions of the
Consumer Financial Protection Bureau and similar legislation and
regulations enacted by other governmental authorities related to
consumer protection; liabilities resulting from litigation,
including class-action lawsuits and similar matters, including
costs, expenses, settlements and judgments; failure to comply with
regulations and changes in expectations regarding consumer privacy
and data use and security; effects of unclaimed property laws;
failure to maintain sufficient amounts or types of regulatory
capital or other restrictions on the use of our working capital to
meet the changing requirements of our regulators worldwide; and
changes in accounting standards, rules and interpretations or
industry standards affecting our business; and (iii) other events,
such as: adverse tax consequences from our spin-off from First Data
Corporation; 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. As of
September 30, 2015, the Western Union, Vigo and Orlandi Valuta
branded services were offered through a combined network of over
500,000 agent locations in 200 countries and territories and over
100,000 ATMs and kiosks, and included the capability to send money
to hundreds of millions of accounts. In 2014, The Western Union
Company completed 255 million consumer-to-consumer transactions
worldwide, moving $85 billion of principal between consumers, and
484 million business payments. For more information, visit
www.westernunion.com.
WU-F, WU-G
THE WESTERN UNION COMPANYKEY
STATISTICS(Unaudited)
Notes* 3Q14 4Q14
FY2014 1Q15 2Q15 3Q15 YTD 3Q15
Consolidated Metrics Consolidated revenues (GAAP) -
YoY % change 2 % (1 )% 1 % (2 )% (2 )% (3 )% (2 )% Consolidated
revenues (constant currency) - YoY % change a 5 % 4 % 4 % 4 % 4 % 3
% 4 % Consolidated operating margin (GAAP) 21.8 % 19.6 % 20.3 %
20.6 % 18.1 % 21.8 % 20.2 % Consolidated operating margin
(excluding Paymap settlement agreement) b N/A N/A N/A N/A 20.7 %
N/A 21.0 %
Consumer-to-Consumer (C2C) Segment
Revenues (GAAP) - YoY % change 2 % (2 )% 1 % (4 )% (3 )% (3 )% (3
)% Revenues (constant currency) - YoY % change f 4 % 2 % 3 % 2 % 3
% 3 % 3 % Operating margin 24.9 % 23.1 % 23.4 % 23.1 % 23.3 % 25.5
% 24.0 % Transactions (in millions) 65.31 65.42 254.93 61.75
65.76 66.55 194.06 Transactions - YoY % change 5 % 2 % 5 % 3 % 3 %
2 % 2 % Total principal ($ - billions) $ 22.1 $ 21.2 $ 85.4
$ 19.5 $ 20.8 $ 20.9 $ 61.2 Principal per transaction ($ - dollars)
$ 339 $ 323 $ 335 $ 315 $ 316 $ 315 $ 315 Principal per transaction
- YoY % change 0 % (4 )% (1 )% (7 )% (7 )% (7 )% (7 )% Principal
per transaction (constant currency) - YoY % change g 0 % 0 % 0 % (1
)% (1 )% 0 % (1 )% Cross-border principal ($ - billions) $
20.0 $ 19.2 $ 77.2 $ 17.5 $ 18.8 $ 18.9 $ 55.2 Cross-border
principal - YoY % change 5 % (1 )% 5 % (4 )% (5 )% (6 )% (5 )%
Cross-border principal (constant currency) - YoY % change h 5 % 2 %
6 % 2 % 2 % 1 % 2 % Europe and CIS region revenues (GAAP) -
YoY % change v, w 1 % (5 )% 0 % (9 )% (9 )% (10 )% (9 )% Europe and
CIS region revenues (constant currency) - YoY % change i, v, w 3 %
1 % 1 % 2 % 2 % 0 % 1 % Europe and CIS region transactions - YoY %
change v, w 10 % 6 % 9 % 4 % 1 % (3 )% 1 % North America
region revenues (GAAP) - YoY % change v, x 2 % 0 % 1 % (2 )% (2 )%
(1 )% (2 )% North America region revenues (constant currency) - YoY
% change j, v, x 2 % 1 % 1 % 0 % (1 )% 1 % 0 % North America region
transactions - YoY % change v, x 3 % 2 % 3 % 3 % 3 % 4 % 3 %
Middle East and Africa region revenues (GAAP) - YoY % change v, y 3
% (3 )% 2 % (6 )% (4 )% (2 )% (4 )% Middle East and Africa region
revenues (constant currency) - YoY % change k, v, y 4 % 0 % 3 % (1
)% 1 % 3 % 1 % Middle East and Africa region transactions - YoY %
change v, y 1 % (3 )% 3 % (3 )% 0 % 0 % (1 )% APAC region
revenues (GAAP) - YoY % change v, z 1 % (3 )% 0 % (6 )% (5 )% (8 )%
(6 )% APAC region revenues (constant currency) - YoY % change l, v,
z 2 % 1 % 2 % (2 )% 0 % (2 )% (1 )% APAC region transactions - YoY
% change v, z 0 % (4 )% 1 % (4 )% (3 )% (6 )% (4 )% LACA
region revenues (GAAP) - YoY % change v, aa (3 )% (3 )% (6 )% 4 % 6
% 0 % 3 % LACA region revenues (constant currency) - YoY % change
m, v, aa 4 % 4 % 2 % 10 % 13 % 8 % 10 % LACA region transactions -
YoY % change v, aa 2 % 2 % 3 % 6 % 7 % 7 % 7 %
westernunion.com region revenues (GAAP) - YoY % change v, bb 21 %
19 % 28 % 17 % 22 % 22 % 20 % westernunion.com region revenues
(constant currency) - YoY % change n, v, bb 20 % 23 % 29 % 23 % 28
% 28 % 26 % westernunion.com region transactions - YoY % change v,
bb 34 % 27 % 39 % 25 % 27 % 25 % 25 % International revenues
- YoY % change cc 1 % (4 )% 0 % (7 )% (5 )% (7 )% (6 )%
International transactions - YoY % change cc 4 % 0 % 5 % 0 % 1 % (2
)% 0 % International revenues - % of C2C segment revenues cc 72 %
72 % 72 % 69 % 70 % 70 % 70 % United States originated
revenues - YoY % change dd 4 % 3 % 5 % 4 % 3 % 6 % 4 % United
States originated transactions - YoY % change dd 6 % 5 % 6 % 6 % 6
% 8 % 7 % United States originated revenues - % of C2C segment
revenues dd 28 % 28 % 28 % 31 % 30 % 30 % 30 % Electronic
channels revenues - YoY % change ee 21 % 17 % 24 % 17 % 19 % 16 %
17 %
Consumer-to-Business (C2B) Segment Revenues
(GAAP) - YoY % change (1 )% 4 % (2 )% 7 % 8 % 6 % 7 % Revenues
(constant currency) - YoY % change o 11 % 15 % 10 % 11 % 12 % 10 %
11 % Operating margin 15.4 % 14.2 % 16.5 % 18.7 % (4.1 )% 16.4 %
10.4 % Operating margin (excluding Paymap settlement agreement) p
N/A N/A N/A N/A 18.3 % N/A 17.8 %
Business Solutions
(B2B) Segment Revenues (GAAP) - YoY % change 4 % 1 % 3 % (1 )%
(1 )% (4 )% (2 )% Revenues (constant currency) - YoY % change q 3 %
5 % 4 % 7 % 9 % 6 % 7 % Operating margin (0.2 )% (4.9 )% (3.0 )%
2.1 % (0.4 )% (2.7 )% (0.3 )%
% of Total Company
Revenue Consumer-to-Consumer segment revenues 80 % 80 % 80 % 79
% 80 % 80 % 79 % Consumer-to-Business segment revenues 11 % 11 % 11
% 12 % 11 % 11 % 12 % Business Solutions segment revenues 7 % 7 % 7
% 7 % 7 % 7 % 7 % Consumer-to-Consumer region revenues: Europe and
CIS revenues v, w 21 % 21 % 21 % 20 % 20 % 20 % 20 % North America
revenues v, x 19 % 19 % 19 % 19 % 19 % 19 % 19 % Middle East and
Africa revenues v, y 16 % 16 % 16 % 16 % 16 % 16 % 16 % APAC
revenues v, z 12 % 11 % 12 % 11 % 11 % 11 % 11 % LACA revenues v,
aa 8 % 9 % 8 % 8 % 9 % 9 % 8 % westernunion.com revenues v, bb 4 %
4 % 4 % 5 % 5 % 5 % 5 % Electronic channels revenues ee 6 % 6 % 6 %
7 % 7 % 7 % 7 %
* See page 12 of the press release for the
applicable Note references and the reconciliation of non-GAAP
financial measures.
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (in millions, except per share amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 % Change 2015 2014 % Change Revenues: Transaction fees $
994.9 $ 1,040.8 (4 )% $ 2,931.8 $ 3,057.7 (4 )% Foreign exchange
revenues 372.3 360.6 3
%
1,072.4 1,034.2 4
%
Other revenues 32.0 39.5 (19 )%
99.5 105.4 (6 )% Total revenues 1,399.2
1,440.9 (3 )% 4,103.7 4,197.3 (2 )% Expenses: Cost of services
817.2 840.5 (3 )% 2,388.4 2,465.5 (3 )% Selling, general and
administrative (a) 277.5 286.3 (3 )%
887.7 867.4 2
%
Total expenses 1,094.7 1,126.8 (3 )%
3,276.1 3,332.9 (2 )% Operating income
304.5 314.1 (3 )% 827.6 864.4 (4 )% Other income/(expense):
Interest income 3.0 1.8 67
%
8.4 9.4 (11 )% Interest expense (42.2 ) (43.2 ) (2 )% (127.1 )
(134.2 ) (5 )% Derivative gains/(losses), net 1.4 0.5
(b
)
2.4 (2.1 )
(b
)
Other expense, net (1.3 ) (0.4 )
(b
)
(6.4 ) (5.2 ) 23
%
Total other expense, net (39.1 ) (41.3 ) (5 )%
(122.7 ) (132.1 ) (7 )% Income before income taxes 265.4
272.8 (3 )% 704.9 732.3 (4 )% Provision for income taxes
33.1 38.7 (14 )% 79.4
101.4 (22 )% Net income $ 232.3 $ 234.1 (1 )%
$ 625.5 $ 630.9 (1 )% Earnings per share: Basic $
0.46 $ 0.44 5
%
$ 1.21 $ 1.17 3
%
Diluted $ 0.45 $ 0.44 2
%
$ 1.20 $ 1.17 3
%
Weighted-average shares outstanding: Basic 509.6 527.8 515.3 537.0
Diluted 513.2 531.2 519.4 540.1 Cash dividends declared per common
share $ 0.155 $ 0.125 24
%
$ 0.465 $ 0.375 24
%
________________
(a) For the nine months ended September 30, 2015, selling,
general and administrative expenses included $35.3 million of
expenses related to a settlement agreement reached with the
Consumer Financial Protection Bureau regarding the Equity
Accelerator service of Paymap, Inc., a subsidiary of the Company.
(b)
Calculation not meaningful.
THE WESTERN UNION COMPANY CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions,
except per share amounts)
September 30, December 31, 2015 2014
Assets Cash and cash
equivalents (a) $ 1,414.4 $ 1,783.2 Settlement assets 3,369.9
3,313.7 Property and equipment, net of accumulated depreciation of
$525.2 and $478.5, respectively 224.8 206.4 Goodwill 3,168.0
3,169.2 Other intangible assets, net of accumulated amortization of
$869.5 and $820.0, respectively 738.1 748.1 Other assets
900.7 669.8 Total assets $ 9,815.9 $
9,890.4
Liabilities and Stockholders' Equity
Liabilities: Accounts payable and accrued liabilities $ 648.0 $
600.4 Settlement obligations 3,369.9 3,313.7 Income taxes payable
199.1 166.3 Deferred tax liability, net 314.3 305.0 Borrowings
3,483.8 3,720.4 Other liabilities 453.6 484.2
Total liabilities 8,468.7 8,590.0 Stockholders'
equity: Preferred stock, $1.00 par value; 10 shares authorized; no
shares issued — — Common stock, $0.01 par value; 2,000 shares
authorized; 506.0 shares and 521.5 shares issued and outstanding as
of September 30, 2015 and December 31, 2014, respectively 5.1 5.2
Capital surplus 556.1 445.4 Retained earnings 912.3 968.7
Accumulated other comprehensive loss (126.3 ) (118.9
) Total stockholders' equity 1,347.2 1,300.4
Total liabilities and stockholders' equity $ 9,815.9
$ 9,890.4
______________
(a) Approximately $1.2 billion and $950 million was held by
entities outside of the United States as of September 30, 2015 and
December 31, 2014, respectively.
THE
WESTERN UNION COMPANY CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) (in millions)
Nine Months Ended
September 30,
2015 2014
Cash Flows From Operating Activities Net
income $ 625.5 $ 630.9 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation 49.6 49.5
Amortization 151.6 152.9 Other non-cash items, net 32.8 7.5
Increase/(decrease) in cash, excluding the effects of acquisitions,
resulting from changes in: Other assets (118.2 ) (16.0 ) Accounts
payable and accrued liabilities 41.1 (47.1 ) Income taxes payable
33.5 (6.2 ) Other liabilities (11.7 ) 3.8 Net
cash provided by operating activities 804.2 775.3
Cash Flows
From Investing Activities Capitalization of contract costs
(110.5 ) (49.0 ) Capitalization of purchased and developed software
(30.5 ) (29.4 ) Purchases of property and equipment (65.7 ) (50.9 )
Acquisition of business — (10.6 ) Purchase of non-settlement
related investments and other (111.2 ) — Proceeds from sale of
non-settlement related investments — 100.2
Net cash used in investing activities (317.9 ) (39.7 )
Cash Flows From Financing Activities Cash dividends paid
(238.5 ) (199.9 ) Common stock repurchased (441.9 ) (450.0 )
Principal payments on borrowings (250.0 ) (500.0 ) Proceeds from
exercise of options and other 75.3 8.6
Net cash used in financing activities (855.1 )
(1,141.3 ) Net change in cash and cash equivalents (368.8 ) (405.7
) Cash and cash equivalents at beginning of period 1,783.2
2,073.1 Cash and cash equivalents at end of
period $ 1,414.4 $ 1,667.4
THE WESTERN UNION COMPANY SUMMARY SEGMENT DATA
(Unaudited) (in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015 2014 % Change 2015 2014 % Change Revenues:
Consumer-to-Consumer (C2C): Transaction fees $ 820.4 $ 874.0 (6 )%
$ 2,412.7 $ 2,566.7 (6 )% Foreign exchange revenues 276.1 258.3 7
%
789.1 743.9 6
%
Other revenues 16.4 18.6 (12 )%
50.9 49.9 2
%
Total Consumer-to-Consumer 1,112.9 1,150.9 (3 )% 3,252.7 3,360.5 (3
)% Consumer-to-Business (C2B): Transaction fees 154.1 144.0 7
%
457.1 424.1 8
%
Foreign exchange and other revenues 6.0 6.4
(6 )% 18.7 19.4 (4 )% Total
Consumer-to-Business 160.1 150.4 6
%
475.8 443.5 7
%
Business Solutions (B2B): Foreign exchange revenues 90.6 94.4 (4 )%
266.0 272.5 (2 )% Transaction fees and other revenues 10.6
11.4 (7 )% 30.8 30.9
0
%
Total Business Solutions 101.2 105.8 (4 )% 296.8 303.4 (2 )% Other:
Total revenues 25.0 33.8 (26 )%
78.4 89.9 (13 )% Total consolidated revenues $
1,399.2 $ 1,440.9 (3 )% $ 4,103.7 $ 4,197.3
(2 )% Operating income/(loss): Consumer-to-Consumer $ 283.3
$ 286.1 (1 )% $ 780.1 $ 790.6 (1 )% Consumer-to-Business (a) 26.2
23.2 13
%
49.3 76.6 (36
)%
Business Solutions (2.7 ) (0.2 )
(b
)
(1.0 ) (7.1 )
(b
)
Other (2.3 ) 5.0
(b
)
(0.8 ) 4.3
(b
)
Total consolidated operating income $ 304.5 $ 314.1
(3 )% $ 827.6 $ 864.4 (4 )% Operating income/(loss)
margin: Consumer-to-Consumer 25.5
%
24.9
%
0.6
%
24.0
%
23.5
%
0.5
%
Consumer-to-Business 16.4
%
15.4
%
1.0
%
10.4
%
17.3
%
(6.9 )% Business Solutions (2.7 )% (0.2 )% (2.5 )% (0.3 )% (2.3 )%
2.0
%
Total consolidated operating income margin 21.8
%
21.8
%
0.0
%
20.2
%
20.6
%
(0.4 )%
______________
(a) For the nine months ended September 30, 2015,
Consumer-to-Business operating income/(loss) included $35.3 million
of expenses related to a settlement agreement reached with the
Consumer Financial Protection Bureau regarding the Equity
Accelerator service of Paymap, Inc., a subsidiary of the Company.
(b) 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 financial 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
financial 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.
3Q14
4Q14 FY2014 1Q15 2Q15 3Q15
YTD 3Q15 Consolidated Metrics (a) Revenues, as
reported (GAAP) $ 1,440.9 $ 1,409.9 $ 5,607.2 $ 1,320.9 $ 1,383.6 $
1,399.2 $ 4,103.7 Foreign currency translation impact (s)
35.0 63.7 157.5 78.6
84.7 85.4 248.7
Revenues, constant currency adjusted $ 1,475.9 $ 1,473.6
$ 5,764.7 $ 1,399.5 $ 1,468.3 $ 1,484.6
$ 4,352.4 Prior year revenues, as reported (GAAP) $
1,408.8 $ 1,421.9 $ 5,542.0 $ 1,350.8 $ 1,405.6 $ 1,440.9 $ 4,197.3
Revenue change, as reported (GAAP) 2 % (1 )% 1 % (2 )% (2 )% (3 )%
(2 )% Revenue change, constant currency adjusted 5 % 4 % 4 % 4 % 4
% 3 % 4 % (b) Operating income, as reported (GAAP) $ 314.1 $
276.1 $ 1,140.5 $ 272.3 $ 250.8 $ 304.5 $ 827.6 Less: Paymap
settlement agreement (t) N/A N/A
N/A N/A 35.3 N/A
35.3 Operating income, excluding Paymap settlement
agreement $ 314.1 $ 276.1 $ 1,140.5 $ 272.3
$ 286.1 $ 304.5 $ 862.9 Operating
income margin, as reported (GAAP) 21.8 % 19.6 % 20.3 % 20.6 % 18.1
% 21.8 % 20.2 % Operating income margin, excluding Paymap
settlement agreement N/A N/A N/A N/A 20.7 % N/A 21.0 % (c)
Operating income, as reported (GAAP) $ 314.1 $ 276.1 $ 1,140.5 $
272.3 $ 250.8 $ 304.5 $ 827.6 Reversal of depreciation and
amortization 66.8 69.5 271.9
63.9 62.9 74.4
201.2 EBITDA (u) $ 380.9 $ 345.6 $
1,412.4 $ 336.2 $ 313.7 $ 378.9 $
1,028.8 Less: Paymap settlement agreement (t) N/A
N/A N/A N/A
35.3 N/A 35.3 Adjusted EBITDA,
excluding Paymap settlement agreement $ 380.9 $ 345.6
$ 1,412.4 $ 336.2 $ 349.0 $ 378.9 $
1,064.1 Operating income margin, as reported (GAAP) 21.8 %
19.6 % 20.3 % 20.6 % 18.1 % 21.8 % 20.2 % EBITDA margin 26.4 % 24.5
% 25.2 % 25.5 % 22.7 % 27.1 % 25.1 % Adjusted EBITDA margin,
excluding Paymap settlement agreement N/A N/A N/A N/A 25.2 % N/A
25.9 % (d) Net income, as reported (GAAP) $ 234.1 $ 221.5 $
852.4 $ 203.9 $ 189.3 $ 232.3 $ 625.5 Less: Paymap settlement
agreement, net of income tax benefit (t) N/A
N/A N/A N/A 24.2
N/A 24.2 Net income, excluding Paymap
settlement agreement $ 234.1 $ 221.5 $ 852.4 $
203.9 $ 213.5 $ 232.3 $ 649.7 Diluted
earnings per share ("EPS"), as reported (GAAP) ($ - dollars) $ 0.44
$ 0.42 $ 1.59 $ 0.39 $ 0.36 $ 0.45 $ 1.20 Impact from Paymap
settlement agreement, net of income tax benefit ($ - dollars)
N/A N/A N/A N/A
0.05 N/A 0.05
Diluted EPS, excluding Paymap settlement agreement ($ - dollars)
N/A N/A N/A N/A
$ 0.41 N/A $ 1.25 Diluted
weighted-average shares outstanding 531.2 526.9 536.8 525.2 519.8
513.2 519.4 (e) Effective tax rate, as reported (GAAP) 14.2
% 6.1 % 12.0 % 12.3 % 8.5 % 12.5 % 11.3 % Impact from Paymap
settlement agreement, net of income tax benefit (t) N/A
N/A N/A N/A
3.3 % N/A 0.9 % Effective tax rate, excluding
Paymap settlement agreement N/A N/A
N/A N/A 11.8 % N/A
12.2 %
Consumer-to-Consumer Segment (f)
Revenues, as reported (GAAP) $ 1,150.9 $ 1,125.3 $ 4,485.8 $
1,038.3 $ 1,101.5 $ 1,112.9 $ 3,252.7 Foreign currency translation
impact (s) 17.9 42.8 80.7
63.0 69.1 67.1
199.2 Revenues, constant currency adjusted $ 1,168.8
$ 1,168.1 $ 4,566.5 $ 1,101.3 $ 1,170.6
$ 1,180.0 $ 3,451.9 Prior year revenues, as reported
(GAAP) $ 1,128.1 $ 1,146.5 $ 4,433.6 $ 1,077.5 $ 1,132.1 $ 1,150.9
$ 3,360.5 Revenue change, as reported (GAAP) 2 % (2 )% 1 % (4 )% (3
)% (3 )% (3 )% Revenue change, constant currency adjusted 4 % 2 % 3
% 2 % 3 % 3 % 3 % (g) Principal per transaction, as reported
($ - dollars) $ 339 $ 323 $ 335 $ 315 $ 316 $ 315 $ 315 Foreign
currency translation impact (s) ($ - dollars) —
12 3 19 23
23 22 Principal per transaction,
constant currency adjusted ($ - dollars) $ 339 $ 335
$ 338 $ 334 $ 339 $ 338 $ 337
Prior year principal per transaction, as reported ($ - dollars) $
339 $ 335 $ 338 $ 338 $ 341 $ 339 $ 339 Principal per transaction
change, as reported 0 % (4 )% (1 )% (7 )% (7 )% (7 )% (7 )%
Principal per transaction change, constant currency adjusted 0 % 0
% 0 % (1 )% (1 )% 0 % (1 )% (h) Cross-border principal, as
reported ($ - billions) $ 20.0 $ 19.2 $ 77.2 $ 17.5 $ 18.8 $ 18.9 $
55.2 Foreign currency translation impact (s) ($ - billions)
— 0.8 0.8 1.1
1.3 1.3 3.7 Cross-border
principal, constant currency adjusted ($ - billions) $ 20.0
$ 20.0 $ 78.0 $ 18.6 $ 20.1 $ 20.2
$ 58.9 Prior year cross-border principal, as reported
($ - billions) $ 19.0 $ 19.5 $ 73.9 $ 18.3 $ 19.7 $ 20.0 $ 58.0
Cross-border principal change, as reported 5 % (1 )% 5 % (4 )% (5
)% (6 )% (5 )% Cross-border principal change, constant currency
adjusted 5 % 2 % 6 % 2 % 2 % 1 % 2 % (i) Europe and CIS
region revenue change, as reported (GAAP) 1 % (5 )% 0 % (9 )% (9 )%
(10 )% (9 )% Europe and CIS region foreign currency translation
impact (s) 2 % 6 % 1 % 11 % 11 %
10 % 10 % Europe and CIS region revenue change,
constant currency adjusted 3 % 1 % 1 %
2 % 2 % 0 % 1 % (j) North America
region revenue change, as reported (GAAP) 2 % 0 % 1 % (2 )% (2 )%
(1 )% (2 )% North America region foreign currency translation
impact (s) 0 % 1 % 0 % 2 % 1 %
2 % 2 % North America region revenue change, constant
currency adjusted 2 % 1 % 1 % 0 %
(1 )% 1 % 0 % (k) Middle East and
Africa region revenue change, as reported (GAAP) 3 % (3 )% 2 % (6
)% (4 )% (2 )% (4 )% Middle East and Africa region foreign currency
translation impact (s) 1 % 3 % 1 % 5 %
5 % 5 % 5 % Middle East and Africa region
revenue change, constant currency adjusted 4 % 0 %
3 % (1 )% 1 % 3 % 1 % (l)
APAC region revenue change, as reported (GAAP) 1 % (3 )% 0 % (6 )%
(5 )% (8 )% (6 )% APAC region foreign currency translation impact
(s) 1 % 4 % 2 % 4 % 5 % 6
% 5 % APAC region revenue change, constant currency adjusted
2 % 1 % 2 % (2 )% 0 % (2
)% (1 )% (m ) LACA region revenue change, as reported
(GAAP) (3 )% (3 )% (6 )% 4 % 6 % 0 % 3 % LACA region foreign
currency translation impact (s) 7 % 7 % 8 %
6 % 7 % 8 % 7 % LACA region revenue
change, constant currency adjusted 4 % 4 % 2 %
10 % 13 % 8 % 10 % (n)
westernunion.com region revenue change, as reported (GAAP) 21 % 19
% 28 % 17 % 22 % 22 % 20 % westernunion.com region foreign currency
translation impact (s) (1 )% 4 % 1 % 6
% 6 % 6 % 6 % westernunion.com region revenue
change, constant currency adjusted 20 % 23 %
29 % 23 % 28 % 28 % 26 %
Consumer-to-Business Segment (o) Revenues, as reported
(GAAP) $ 150.4 $ 155.3 $ 598.8 $ 157.8 $ 157.9 $ 160.1 $ 475.8
Foreign currency translation impact (s) 18.1
16.6 70.1 6.3 4.9
5.6 16.8 Revenues, constant currency
adjusted $ 168.5 $ 171.9 $ 668.9 $ 164.1
$ 162.8 $ 165.7 $ 492.6 Prior year
revenues, as reported (GAAP) $ 152.3 $ 149.5 $ 608.5 $ 147.2 $
145.9 $ 150.4 $ 443.5 Revenue change, as reported (GAAP) (1 )% 4 %
(2 )% 7 % 8 % 6 % 7 % Revenue change, constant currency adjusted 11
% 15 % 10 % 11 % 12 % 10 % 11 % (p ) Operating
income/(loss), as reported (GAAP) $ 23.2 $ 22.1 $ 98.7 $ 29.5 $
(6.4
)
$ 26.2 $ 49.3 Less: Paymap settlement agreement (t) N/A
N/A N/A N/A
35.3 N/A 35.3 Operating income,
excluding Paymap settlement agreement $ 23.2 $ 22.1 $
98.7 $ 29.5 $ 28.9 $ 26.2 $ 84.6
Operating income/(loss) margin, as reported (GAAP) 15.4 % 14.2 %
16.5 % 18.7 % (4.1 )% 16.4 % 10.4 % Operating income margin,
excluding Paymap settlement agreement N/A N/A N/A N/A 18.3 % N/A
17.8 %
Business Solutions Segment (q) Revenues, as
reported (GAAP) $ 105.8 $ 101.2 $ 404.6 $ 98.0 $ 97.6 $ 101.2 $
296.8 Foreign currency translation impact (s) (1.6 )
3.7 4.5 8.1 9.4
10.9 28.4 Revenues, constant currency
adjusted $ 104.2 $ 104.9 $ 409.1 $ 106.1
$ 107.0 $ 112.1 $ 325.2 Prior year
revenues, as reported (GAAP) $ 101.6 $ 100.2 $ 392.9 $ 99.4 $ 98.2
$ 105.8 $ 303.4 Revenue change, as reported (GAAP) 4 % 1 % 3 % (1
)% (1 )% (4 )% (2 )% Revenue change, constant currency adjusted 3 %
5 % 4 % 7 % 9 % 6 % 7 % (r) Operating income/(loss), as
reported (GAAP) $ (0.2 ) $ (5.0 ) $ (12.1 ) $ 2.1 $ (0.4 ) $ (2.7 )
$ (1.0 ) Reversal of depreciation and amortization 13.7
12.7 56.1 12.2
12.2 20.3 44.7 EBITDA (u)
$ 13.5 $ 7.7 $ 44.0 $ 14.3 $ 11.8
$ 17.6 $ 43.7 Operating income/(loss) margin,
as reported (GAAP) (0.2 )% (4.9 )% (3.0 )% 2.1 % (0.4 )% (2.7 )%
(0.3 )% EBITDA margin 12.8 % 7.6 % 10.9 % 14.6 % 12.1 % 17.4 % 14.7
%
2015 Operating Income Margin Outlook Operating
income margin (GAAP) 20 % Impact for Paymap settlement agreement
(t) 1 % Operating income margin, excluding Paymap settlement
agreement 21 %
2015 EPS Outlook Range
EPS guidance (GAAP) ($ - dollars) $ 1.55 $ 1.62 Impact from Paymap
settlement agreement, net of income tax benefit (t) ($ - dollars)
0.05 0.05 EPS guidance, excluding
Paymap settlement agreement, net of income tax benefit ($ -
dollars) $ 1.60 $ 1.67
Non-GAAP related
notes:
(s) 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. (t) Represents the impact from a settlement
agreement reached with the Consumer Financial Protection Bureau
regarding the Equity Accelerator service of Paymap, Inc., a
subsidiary of the Company. (u) Earnings before Interest,
Taxes, Depreciation and Amortization ("EBITDA") results from taking
operating income and adjusting for depreciation and amortization
expenses. EBITDA results provide an additional performance
measurement calculation which helps neutralize the operating income
effect of assets acquired in prior periods.
Other
notes:
(v) Geographic split is determined based upon the region where the
money transfer is initiated and the region where the money transfer
is paid. For transactions originated and paid in different regions,
the Company splits the transaction count and revenue between the
two regions, with each region receiving 50%. For money transfers
initiated and paid in the same region, 100% of the revenue and
transactions are attributed to that region. For money transfers
initiated through the Company’s websites (“westernunion.com”), 100%
of the revenue and transactions are attributed to westernunion.com.
(w) Represents the Europe and the Commonwealth of
Independent States ("CIS") region of our Consumer-to-Consumer
segment. (x) Represents the North America region of our
Consumer-to-Consumer segment, including the United States, Mexico,
and Canada. (y) Represents the Middle East and Africa region
of our Consumer-to-Consumer segment. (z) Represents the Asia
Pacific ("APAC") region of our Consumer-to-Consumer segment,
including India, China, and South Asia.
(aa)
Represents the Latin America and the Caribbean ("LACA") region of
our Consumer-to-Consumer segment. (bb) Represents
transactions initiated on westernunion.com which are primarily paid
out at Western Union agent locations in the respective regions.
(cc) Represents transactions between and within foreign
countries (including Canada and Mexico). Excludes all transactions
originated in the United States. (dd) Represents
transactions originated in the United States, including
intra-country transactions. (ee) Represents revenue
generated from electronic channels, which include westernunion.com,
account based money transfer and mobile money transfer (included in
the various segments).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151029005328/en/
Western UnionMediaDan Diaz,
720-332-5564daniel.diaz@westernunion.comorInvestorsMike
Salop, 720-332-8276mike.salop@westernunion.com
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