Full Year Revenue $5.5 Billion; Constant
Currency Revenue Increases 4%
GAAP EPS $1.62; EPS (excluding prior charge)
Increases 5% to $1.67
Dividend Increased 3%
_________________________________________________________
The Western Union Company (NYSE: WU) today reported financial
results for the 2015 fourth quarter and full year, and its
financial outlook for 2016.
For the 2015 full year, the Company’s revenue increased 4% on a
constant currency basis compared to the prior year period, while
reported revenues declined 2% due to the impact of the stronger
U.S. dollar. The strengthening of the U.S. dollar, net of hedge
benefits, negatively impacted revenue by $323 million.
Operating margin, excluding the second quarter settlement charge
related to our Paymap subsidiary, improved to 20.9% for the year,
compared to 20.3% in 2014. The improvement was driven by cost
savings initiatives benefits and foreign currency hedge gains,
which more than offset the negative impact of currency translation
on margins. GAAP operating margin in 2015 was 20.2%.
Earnings per share excluding the charge increased 5% to $1.67,
compared to $1.59 in the prior year, while GAAP earnings per share
increased 2% to $1.62. Cash flow from operating activities was
approximately $1.1 billion, and the Company returned $817 million
to shareholders through dividends and share repurchases.
“I am pleased with our fourth quarter and 2015 results,” said
President and Chief Executive Officer Hikmet Ersek. “We
again delivered a good quarter despite global economic and
geopolitical challenges, which demonstrates the resiliency of our
consumers and business.”
Ersek added, “We are also advancing our long-term
strategy. Westernunion.com grew full year money transfer revenues
by 26% in constant currency terms and increased penetration to 34
countries, and we introduced WU® ConnectSM, which enables leading
third party digital platforms to offer our money transfer services
to their users. Our network now connects online and mobile channels
with over 500,000 agent locations and more than 100,000 ATMs and
kiosks, and provides the capability to send money to over 1 billion
accounts.”
The Company also announced that its Board of Directors declared
a quarterly cash dividend of $0.16 per common share, which
represents a 3% increase over the previous quarterly dividend. The
dividend is payable March 31, 2016 to shareholders of record at the
close of business on March 17, 2016.
Fourth Quarter 2015
Results
In the fourth quarter, revenues increased 3% on a constant
currency basis compared to the prior year period, while reported
revenues declined 2% due to the impact of the stronger U.S. dollar.
The strengthening of the U.S. dollar, net of hedge benefits,
negatively impacted revenue by $74 million.
Consumer-to-Consumer (C2C) revenues increased 2% constant
currency, and reported revenues declined 3%. C2C transactions
increased 3% in the quarter. Constant currency revenue growth was
driven by strong performance from westernunion.com and solid growth
from U.S. outbound. Westernunion.com C2C revenue increased 21%, or
25% constant currency, on transaction growth of 28%. Electronic
channels revenue, which includes westernunion.com, account based
money transfer through banks, and mobile money transfer,
represented 7% of total Company revenues in the quarter.
Consumer-to-Business (C2B) revenues grew 4% in the quarter, or
9% constant currency, driven by the Argentina walk-in and the U.S.
electronic bill payments businesses.
Western Union Business Solutions revenues increased 1%, or 8% on
a constant currency basis. Constant currency revenue growth was
driven by Europe.
Operating margin was 20.4% in the quarter, which compares to
19.6% in the fourth quarter of 2014. The operating margin
improvement primarily resulted from lower expenses related to cost
savings initiatives and benefits from foreign exchange hedges,
partially offset by increased technology spending.
The effective tax rate was 10.4%, which compares to 6.1% in the
prior year quarter.
Earnings per share of $0.42 was flat with the prior year period,
as increased operating profit and fewer diluted shares outstanding
were offset by a higher effective tax rate.
In the fourth quarter, the Company returned $147 million to
shareholders through $69 million of share repurchases and $78
million of dividends.
Executive Vice President and Chief Financial Officer Raj
Agrawal stated, “Our solid earnings performance was supported
by cost management actions, which helped us overcome the negative
impact of foreign exchange. Strong cash flow generation allowed us
to return over $800 million to our shareholders in 2015, while we
also continued to invest in our technology platforms and compliance
capabilities.”
2016 Full Year Outlook
The Company expects to continue to deliver solid constant
currency revenue growth. Reported results are expected to be
negatively impacted by the stronger U.S. dollar relative to 2015
rates, and the outlook also includes incremental investment in
technology and tight management of other expenses.
Foreign currency translation and reduced hedge benefits are
anticipated to negatively impact 2016 revenues by approximately
$250 million and operating profit by approximately $100 million,
compared to the prior year. As a result, the Company’s 2016
earnings per share outlook of $1.58 to $1.70 includes an
approximately $0.15 negative impact from currency.
Operating margins are expected to decline from 20.9% in 2015
(excluding the impact of the Paymap charge) to approximately 20% in
2016 due to the impact of foreign exchange, including reduced hedge
benefits. Excluding all currency impacts, the outlook for operating
margins in 2016 would be similar to 2015.
The tax rate is expected to increase from 11.8% in 2015
(excluding the impact of the charge) to a mid-teens level in
2016.
Ersek added, “We remain confident in our long-term
strategies to drive new areas of growth in cross-border money
movement. We believe our business will continue to generate
constant currency revenue growth and solid earnings and cash flow
in 2016, despite macro challenges.”
The Company expects the following outlook for 2016:
Revenue
- Low to mid-single digit constant
currency revenue increase
- GAAP revenue change approximately 400
basis points lower than constant currency
Operating Profit Margin
- Operating margin of approximately
20%
Earnings per Share
- EPS in a range of $1.58 to $1.70, which
includes an approximately $0.15 negative impact from changes in
foreign exchange rates and reduced hedge benefits
Cash Flow
- Cash flow from operating activities of
approximately $1 billion. The cash flow outlook excludes
approximately $100 million of anticipated final tax payments
relating to the agreement announced with the U.S. Internal Revenue
Service in December 2011. Some or all of these payments may occur
in 2016.
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, excluding Paymap
settlement agreement; 2015 diluted earnings per share, excluding
Paymap settlement agreement, net of income tax benefit; 2015
effective tax rate, excluding Paymap settlement agreement; 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 0357678.
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 February 23, 2016, at 1 (877) 344-7529
(U.S.) or +1 (412) 317-0088 (outside the U.S.). The pass code is
10078859. 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 electronic,
mobile and Internet-based services, card associations, and
card-based payment providers, and with 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; 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; cessation of or defects in various services
provided to us by third-party vendors; 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; 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; 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; changes in tax laws, or their interpretation, and
unfavorable resolution of tax contingencies; adverse rating actions
by credit rating agencies; 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; 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; 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 requirements; 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 (the
“Dodd-Frank 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 evolving industry
requirements 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; 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
December 31, 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 over one billion accounts. In 2015, The Western Union Company
completed 262 million consumer-to-consumer transactions worldwide,
moving $82 billion of principal between consumers, and 508 million
business payments. For more information, visit
www.westernunion.com.
WU-F, WU-G
THE WESTERN UNION COMPANY KEY STATISTICS
(Unaudited)
Notes* 4Q14 FY2014
1Q15 2Q15 3Q15 4Q15 FY2015
Consolidated Metrics Consolidated revenues (GAAP) -
YoY % change (1 )% 1 % (2 )% (2 )% (3 )% (2 )% (2 )% Consolidated
revenues (constant currency) - YoY % change a 4 % 4 % 4 % 4 % 3 % 3
% 4 % Consolidated operating margin (GAAP) 19.6 % 20.3 % 20.6 %
18.1 % 21.8 % 20.4 % 20.2 % Consolidated operating margin
(excluding Paymap settlement agreement) b N/A N/A N/A 20.7 % N/A
N/A 20.9 %
Consumer-to-Consumer (C2C) Segment
Revenues (GAAP) - YoY % change (2 )% 1 % (4 )% (3 )% (3 )% (3 )% (3
)% Revenues (constant currency) - YoY % change f 2 % 3 % 2 % 3 % 3
% 2 % 3 % Operating margin 23.1 % 23.4 % 23.1 % 23.3 % 25.5 % 24.0
% 24.0 % Transactions (in millions) 65.42 254.93 61.75 65.76
66.55 67.47 261.53 Transactions - YoY % change 2 % 5 % 3 % 3 % 2 %
3 % 3 % Total principal ($ - billions) $ 21.2 $ 85.4 $ 19.5
$ 20.8 $ 20.9 $ 20.4 $ 81.6 Principal per transaction ($ - dollars)
$ 323 $ 335 $ 315 $ 316 $ 315 $ 303 $ 312 Principal per transaction
- YoY % change (4 )% (1 )% (7 )% (7 )% (7 )% (6 )% (7 )% Principal
per transaction (constant currency) - YoY % change g 0 % 0 % (1 )%
(1 )% 0 % (1 )% (1 )% Cross-border principal ($ - billions)
$ 19.2 $ 77.2 $ 17.5 $ 18.8 $ 18.9 $ 18.4 $ 73.6 Cross-border
principal - YoY % change (1 )% 5 % (4 )% (5 )% (6 )% (4 )% (5 )%
Cross-border principal (constant currency) - YoY % change h 2 % 6 %
2 % 2 % 1 % 1 % 2 % Europe and CIS region revenues (GAAP) -
YoY % change v, w (5 )% 0 % (9 )% (9 )% (10 )% (8 )% (9 )% Europe
and CIS region revenues (constant currency) - YoY % change i, v, w
1 % 1 % 2 % 2 % 0 % 0 % 1 % Europe and CIS region transactions -
YoY % change v, w 6 % 9 % 4 % 1 % (3 )% 1 % 1 % North
America region revenues (GAAP) - YoY % change v, x 0 % 1 % (2 )% (2
)% (1 )% 0 % (1 )% North America region revenues (constant
currency) - YoY % change j, v, x 1 % 1 % 0 % (1 )% 1 % 2 % 0 %
North America region transactions - YoY % change v, x 2 % 3 % 3 % 3
% 4 % 5 % 4 % Middle East and Africa region revenues (GAAP)
- YoY % change v, y (3 )% 2 % (6 )% (4 )% (2 )% (5 )% (4 )% Middle
East and Africa region revenues (constant currency) - YoY % change
k, v, y 0 % 3 % (1 )% 1 % 3 % (1 )% 1 % Middle East and Africa
region transactions - YoY % change v, y (3 )% 3 % (3 )% 0 % 0 % (1
)% (1 )% APAC region revenues (GAAP) - YoY % change v, z (3
)% 0 % (6 )% (5 )% (8 )% (6 )% (6 )% APAC region revenues (constant
currency) - YoY % change l, v, z 1 % 2 % (2 )% 0 % (2 )% (1 )% (1
)% APAC region transactions - YoY % change v, z (4 )% 1 % (4 )% (3
)% (6 )% (5 )% (4 )% LACA region revenues (GAAP) - YoY %
change v, aa (3 )% (6 )% 4 % 6 % 0 % (2 )% 2 % LACA region revenues
(constant currency) - YoY % change m, v, aa 4 % 2 % 10 % 13 % 8 % 5
% 9 % LACA region transactions - YoY % change v, aa 2 % 3 % 6 % 7 %
7 % 7 % 7 % westernunion.com region revenues (GAAP) - YoY %
change v, bb 19 % 28 % 17 % 22 % 22 % 21 % 21 % westernunion.com
region revenues (constant currency) - YoY % change n, v, bb 23 % 29
% 23 % 28 % 28 % 25 % 26 % westernunion.com region transactions -
YoY % change v, bb 27 % 39 % 25 % 27 % 25 % 28 % 26 %
International revenues - YoY % change cc (4 )% 0 % (7 )% (5 )% (7
)% (7 )% (6 )% International transactions - YoY % change cc 0 % 5 %
0 % 1 % (2 )% 0 % 0 % International revenues - % of C2C segment
revenues cc 72 % 72 % 69 % 70 % 70 % 69 % 69 % United States
originated revenues - YoY % change dd 3 % 5 % 4 % 3 % 6 % 6 % 5 %
United States originated transactions - YoY % change dd 5 % 6 % 6 %
6 % 8 % 8 % 7 % United States originated revenues - % of C2C
segment revenues dd 28 % 28 % 31 % 30 % 30 % 31 % 31 %
Electronic channels revenues - YoY % change ee 17 % 24 % 17 % 19 %
16 % 16 % 17 %
Consumer-to-Business (C2B) Segment
Revenues (GAAP) - YoY % change 4 % (2 )% 7 % 8 % 6 % 4 % 6 %
Revenues (constant currency) - YoY % change o 15 % 10 % 11 % 12 %
10 % 9 % 11 % Operating margin 14.2 % 16.5 % 18.7 % (4.1 )% 16.4 %
11.9 % 10.8 % Operating margin (excluding Paymap settlement
agreement) p N/A N/A N/A 18.3 % N/A N/A 16.3 %
Business
Solutions (B2B) Segment Revenues (GAAP) - YoY % change 1 % 3 %
(1 )% (1 )% (4 )% 1 % (1 )% Revenues (constant currency) - YoY %
change q 5 % 4 % 7 % 9 % 6 % 8 % 7 % Operating margin (4.9 )% (3.0
)% 2.1 % (0.4 )% (2.7 )% 3.7 % 0.7 %
% of Total Company
Revenue Consumer-to-Consumer segment revenues 80 % 80 % 79 % 80
% 80 % 79 % 79 % Consumer-to-Business segment revenues 11 % 11 % 12
% 11 % 11 % 12 % 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 % 20 % 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 % 15 % 16 % APAC
revenues v, z 11 % 12 % 11 % 11 % 11 % 11 % 11 % LACA revenues v,
aa 9 % 8 % 8 % 9 % 9 % 9 % 8 % westernunion.com revenues v, bb 4 %
4 % 5 % 5 % 5 % 5 % 5 % Electronic channels revenues ee 6 % 6 % 7 %
7 % 7 % 7 % 7 %
* See page 13 of the press release for the
applicable Note references and the reconciliation of non-GAAP
financial measures.
THE WESTERN UNION COMPANY CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (in millions, except
per share amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 % Change 2015
2014 % Change Revenues: Transaction
fees $ 983.8 $ 1,025.9 (4 )% $ 3,915.6 $ 4,083.6 (4 )% Foreign
exchange revenues 363.8 352.1 3 % 1,436.2 1,386.3 4 % Other
revenues 32.4 31.9 2 % 131.9
137.3 (4 )% Total revenues 1,380.0 1,409.9 (2
)% 5,483.7 5,607.2 (2 )% Expenses: Cost of services 811.0 831.9 (3
)% 3,199.4 3,297.4 (3 )% Selling, general and administrative (a)
287.2 301.9 (5 )% 1,174.9
1,169.3 0 % Total expenses 1,098.2
1,133.8 (3 )% 4,374.3 4,466.7
(2 )% Operating income 281.8 276.1 2 % 1,109.4 1,140.5 (3 )%
Other income/(expense): Interest income 2.5 2.1 19 % 10.9 11.5 (5
)% Interest expense (40.8 ) (42.4 ) (4 )% (167.9 ) (176.6 ) (5 )%
Derivative gains/(losses), net (1.2 ) (0.1 ) (b) 1.2 (2.2 ) (b)
Other income/(expense), net
(5.4 ) 0.2 (b) (11.8 ) (5.0 )
(b) Total other expense, net (44.9 ) (40.2 ) 12 %
(167.6 ) (172.3 ) (3 )% Income before income taxes
236.9 235.9 0 % 941.8 968.2 (3 )% Provision for income taxes
24.6 14.4 71 % 104.0
115.8 (10 )% Net income $ 212.3 $ 221.5 (4 )%
$ 837.8 $ 852.4 (2 )% Earnings per share: Basic $
0.42 $ 0.42 0 % $ 1.63 $ 1.60 2 % Diluted $ 0.42 $ 0.42 0 % $ 1.62
$ 1.59 2 % Weighted-average shares outstanding: Basic 504.5 522.8
512.6 533.4 Diluted 508.6 526.9 516.7 536.8 Cash dividends declared
per common share $ 0.155 $ 0.125 24 % $ 0.62 $ 0.50 24 %
__________________
(a) For the twelve months ended December 31, 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 CONSOLIDATED BALANCE SHEETS
(Unaudited) (in millions, except per share amounts)
December 31, 2015 2014
Assets Cash and cash equivalents (a) $ 1,315.9 $ 1,783.2
Settlement assets 3,308.7 3,313.7 Property and equipment, net of
accumulated depreciation of $538.2 and $478.5, respectively 231.8
206.4 Goodwill 3,163.8 3,169.2 Other intangible assets, net of
accumulated amortization of $884.4 and $820.0, respectively 705.0
748.1 Other assets 733.7 669.8 Total
assets $ 9,458.9 $ 9,890.4
Liabilities and
Stockholders' Equity Liabilities: Accounts payable and accrued
liabilities $ 606.6 $ 600.4 Settlement obligations 3,308.7 3,313.7
Income taxes payable 211.5 166.3 Deferred tax liability, net 272.6
305.0 Borrowings 3,225.6 3,720.4 Other liabilities 429.0
484.2 Total liabilities 8,054.0 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; 502.4 shares and 521.5 shares issued and
outstanding as of December 31, 2015 and 2014, respectively 5.0 5.2
Capital surplus 566.5 445.4 Retained earnings 977.3 968.7
Accumulated other comprehensive loss (143.9 ) (118.9
) Total stockholders' equity 1,404.9 1,300.4
Total liabilities and stockholders' equity $ 9,458.9
$ 9,890.4
_____________
(a) Approximately $950 million was held by entities outside
of the United States as of both December 31, 2015 and 2014.
THE WESTERN UNION COMPANY CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (in
millions) Year Ended
December 31,
2015 2014
Cash Flows From
Operating Activities Net income $ 837.8 $ 852.4 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation 67.7 66.6 Amortization 202.5 205.3 Deferred income tax
benefit (39.9 ) (26.8 ) Other non-cash items, net 63.7 49.5
Increase/(decrease) in cash, excluding the effects of acquisitions,
resulting from changes in: Other assets (107.4 ) (31.1 ) Accounts
payable and accrued liabilities 14.2 (29.4 ) Income taxes payable
47.1 (39.3 ) Other liabilities (14.6 ) (1.3 ) Net
cash provided by operating activities 1,071.1 1,045.9
Cash Flows
From Investing Activities Capitalization of contract costs
(122.8 ) (73.1 ) Capitalization of purchased and developed software
(49.3 ) (38.1 ) Purchases of property and equipment (94.4 ) (67.8 )
Proceeds from sale of available-for-sale non-settlement related
investments — 100.2 Purchase of non-settlement related investments
and other (110.9 ) — Proceeds from maturity of non-settlement
related investments 100.3 — Purchase of held-to-maturity
non-settlement related investments (9.3 ) —
Acquisition of business, net
— (10.6 ) Net cash used in investing
activities (286.4 ) (89.4 )
Cash Flows From Financing
Activities Cash dividends paid (316.5 ) (265.2 ) Common stock
repurchased (511.3 ) (495.4 ) Principal payments on borrowings
(500.0 ) (500.0 ) Proceeds from exercise of options and other
75.8 14.2 Net cash used in financing
activities (1,252.0 ) (1,246.4 ) Net change in cash
and cash equivalents (467.3 ) (289.9 )
Cash and cash equivalents at beginning of
year
1,783.2 2,073.1
Cash and cash equivalents at end of
year
$ 1,315.9 $ 1,783.2
THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA (Unaudited) (in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 % Change 2015
2014 % Change Revenues:
Consumer-to-Consumer (C2C): Transaction fees $ 808.3 $ 855.1 (5 )%
$ 3,221.0 $ 3,421.8 (6 )% Foreign exchange revenues 268.0 255.0 5 %
1,057.1 998.9 6 % Other revenues 14.9 15.2
(2 )% 65.8 65.1 1 % Total
Consumer-to-Consumer 1,091.2 1,125.3 (3 )% 4,343.9 4,485.8 (3 )%
Consumer-to-Business (C2B): Transaction fees 155.6 148.6 5 % 612.7
572.7 7 % Foreign exchange and other revenues 6.3
6.7 (6 )% 25.0 26.1 (4 )%
Total Consumer-to-Business 161.9 155.3 4 % 637.7 598.8 6 % Business
Solutions (B2B): Foreign exchange revenues 91.2 90.6 1 % 357.2
363.1 (2 )% Transaction fees and other revenues 10.7
10.6 1 % 41.5 41.5 0 %
Total Business Solutions 101.9 101.2 1 % 398.7 404.6 (1 )% Other:
Total revenues 25.0 28.1 (11 )%
103.4 118.0 (12 )% Total consolidated revenues
$ 1,380.0 $ 1,409.9 (2 )% $ 5,483.7 $ 5,607.2
(2 )% Operating income/(loss): Consumer-to-Consumer $ 261.9
$ 259.8 1 % $ 1,042.0 $ 1,050.4 (1 )% Consumer-to-Business (a) 19.3
22.1 (13 )% 68.6 98.7 (30 )% Business Solutions 3.8 (5.0 ) (b) 2.8
(12.1 ) (b) Other (3.2 ) (0.8 ) (b) (4.0 )
3.5 (b) Total consolidated operating income $ 281.8
$ 276.1 2 % $ 1,109.4 $ 1,140.5 (3 )%
Operating income/(loss) margin: Consumer-to-Consumer 24.0 % 23.1 %
0.9 % 24.0 % 23.4 % 0.6 % Consumer-to-Business 11.9 % 14.2 % (2.3
)% 10.8 % 16.5 % (5.7 )% Business Solutions 3.7 % (4.9 )% 8.6 % 0.7
% (3.0 )% 3.7 % Total consolidated operating income margin 20.4 %
19.6 % 0.8 % 20.2 % 20.3 % (0.1 )% (a) For the twelve
months ended December 31, 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.
4Q14
FY2014 1Q15 2Q15 3Q15 4Q15
FY2015 Consolidated Metrics (a) Revenues, as reported
(GAAP) $ 1,409.9 $ 5,607.2 $ 1,320.9 $ 1,383.6 $ 1,399.2 $ 1,380.0
$ 5,483.7 Foreign currency translation impact (s) 63.7
157.5 78.6 84.7
85.4 73.9 322.6 Revenues,
constant currency adjusted $ 1,473.6 $ 5,764.7 $
1,399.5 $ 1,468.3 $ 1,484.6 $ 1,453.9 $
5,806.3 Prior year revenues, as reported (GAAP) $ 1,421.9 $
5,542.0 $ 1,350.8 $ 1,405.6 $ 1,440.9 $ 1,409.9 $ 5,607.2 Revenue
change, as reported (GAAP) (1 )% 1 % (2 )% (2 )% (3 )% (2 )% (2 )%
Revenue change, constant currency adjusted 4 % 4 % 4 % 4 % 3 % 3 %
4 % (b) Operating income, as reported (GAAP) $ 276.1 $
1,140.5 $ 272.3 $ 250.8 $ 304.5 $ 281.8 $ 1,109.4 Less: Paymap
settlement agreement (t) N/A N/A
N/A 35.3 N/A N/A
35.3 Operating income, excluding Paymap settlement
agreement $ 276.1 $ 1,140.5 $ 272.3 $ 286.1
$ 304.5 $ 281.8 $ 1,144.7 Operating
income margin, as reported (GAAP) 19.6 % 20.3 % 20.6 % 18.1 % 21.8
% 20.4 % 20.2 % Operating income margin, excluding Paymap
settlement agreement N/A N/A N/A 20.7 % N/A N/A 20.9 % (c)
Operating income, as reported (GAAP) $ 276.1 $ 1,140.5 $ 272.3 $
250.8 $ 304.5 $ 281.8 $ 1,109.4 Reversal of depreciation and
amortization 69.5 271.9 63.9
62.9 74.4 69.0
270.2 EBITDA (u) $ 345.6 $ 1,412.4 $
336.2 $ 313.7 $ 378.9 $ 350.8 $ 1,379.6
Less: Paymap settlement agreement (t) N/A
N/A N/A 35.3 N/A
N/A 35.3 Adjusted EBITDA,
excluding Paymap settlement agreement $ 345.6 $ 1,412.4
$ 336.2 $ 349.0 $ 378.9 $ 350.8
$ 1,414.9 Operating income margin, as reported (GAAP) 19.6 %
20.3 % 20.6 % 18.1 % 21.8 % 20.4 % 20.2 % EBITDA margin 24.5 % 25.2
% 25.5 % 22.7 % 27.1 % 25.4 % 25.2 % Adjusted EBITDA margin,
excluding Paymap settlement agreement N/A N/A N/A 25.2 % N/A N/A
25.8 % (d) Net income, as reported (GAAP) $ 221.5 $ 852.4 $
203.9 $ 189.3 $ 232.3 $ 212.3 $ 837.8 Less: Paymap settlement
agreement, net of income tax benefit (t) N/A
N/A N/A 24.2 N/A
N/A 24.2 Net income, excluding Paymap
settlement agreement $ 221.5 $ 852.4 $ 203.9 $
213.5 $ 232.3 $ 212.3 $ 862.0 Diluted
earnings per share ("EPS"), as reported (GAAP) ($ - dollars) $ 0.42
$ 1.59 $ 0.39 $ 0.36 $ 0.45 $ 0.42 $ 1.62 Impact from Paymap
settlement agreement, net of income tax benefit ($ - dollars)
N/A N/A N/A 0.05
N/A N/A 0.05
Diluted EPS, excluding Paymap settlement agreement ($ - dollars)
N/A N/A N/A $ 0.41
N/A $ 0.42 $ 1.67 Diluted
weighted-average shares outstanding 526.9 536.8 525.2 519.8 513.2
508.6 516.7 (e) Effective tax rate, as reported (GAAP) 6.1 %
12.0 % 12.3 % 8.5 % 12.5 % 10.4 % 11.0 % Impact from Paymap
settlement agreement, net of income tax benefit (t) N/A
N/A N/A 3.3 % N/A
N/A 0.8 % Effective tax rate, excluding
Paymap settlement agreement N/A N/A
N/A 11.8 % N/A N/A
11.8 %
Consumer-to-Consumer Segment (f)
Revenues, as reported (GAAP) $ 1,125.3 $ 4,485.8 $ 1,038.3 $
1,101.5 $ 1,112.9 $ 1,091.2 $ 4,343.9 Foreign currency translation
impact (s) 42.8 80.7 63.0
69.1 67.1 56.8
256.0 Revenues, constant currency adjusted $ 1,168.1
$ 4,566.5 $ 1,101.3 $ 1,170.6 $ 1,180.0
$ 1,148.0 $ 4,599.9 Prior year revenues, as reported
(GAAP) $ 1,146.5 $ 4,433.6 $ 1,077.5 $ 1,132.1 $ 1,150.9 $ 1,125.3
$ 4,485.8 Revenue change, as reported (GAAP) (2 )% 1 % (4 )% (3 )%
(3 )% (3 )% (3 )% Revenue change, constant currency adjusted 2 % 3
% 2 % 3 % 3 % 2 % 3 % (g) Principal per transaction, as
reported ($ - dollars) $ 323 $ 335 $ 315 $ 316 $ 315 $ 303 $ 312
Foreign currency translation impact (s) ($ - dollars) 12
3 19 23 23
16 20 Principal per transaction,
constant currency adjusted ($ - dollars) $ 335 $ 338
$ 334 $ 339 $ 338 $ 319 $ 332
Prior year principal per transaction, as reported ($ - dollars) $
335 $ 338 $ 338 $ 341 $ 339 $ 323 $ 335 Principal per transaction
change, as reported (4 )% (1 )% (7 )% (7 )% (7 )% (6 )% (7 )%
Principal per transaction change, constant currency adjusted 0 % 0
% (1 )% (1 )% 0 % (1 )% (1 )% (h) Cross-border principal, as
reported ($ - billions) $ 19.2 $ 77.2 $ 17.5 $ 18.8 $ 18.9 $ 18.4 $
73.6 Foreign currency translation impact (s) ($ - billions)
0.8 0.8 1.1 1.3
1.3 1.2 4.9 Cross-border
principal, constant currency adjusted ($ - billions) $ 20.0
$ 78.0 $ 18.6 $ 20.1 $ 20.2 $ 19.6
$ 78.5 Prior year cross-border principal, as reported
($ - billions) $ 19.5 $ 73.9 $ 18.3 $ 19.7 $ 20.0 $ 19.2 $ 77.2
Cross-border principal change, as reported (1 )% 5 % (4 )% (5 )% (6
)% (4 )% (5 )% Cross-border principal change, constant currency
adjusted 2 % 6 % 2 % 2 % 1 % 1 % 2 % (i) Europe and CIS
region revenue change, as reported (GAAP) (5 )% 0 % (9 )% (9 )% (10
)% (8 )% (9 )% Europe and CIS region foreign currency translation
impact (s) 6 % 1 % 11 % 11 % 10
% 8 % 10 % Europe and CIS region revenue change,
constant currency adjusted 1 % 1 % 2 %
2 % 0 % 0 % 1 % (j) North America
region revenue change, as reported (GAAP) 0 % 1 % (2 )% (2 )% (1 )%
0 % (1 )% North America region foreign currency translation impact
(s) 1 % 0 % 2 % 1 % 2 % 2
% 1 % North America region revenue change, constant currency
adjusted 1 % 1 % 0 % (1 )% 1 %
2 % 0 % (k) Middle East and Africa region
revenue change, as reported (GAAP) (3 )% 2 % (6 )% (4 )% (2 )% (5
)% (4 )% Middle East and Africa region foreign currency translation
impact (s) 3 % 1 % 5 % 5 % 5 %
4 % 5 % Middle East and Africa region revenue change,
constant currency adjusted 0 % 3 % (1 )%
1 % 3 % (1 )% 1 % (l) APAC
region revenue change, as reported (GAAP) (3 )% 0 % (6 )% (5 )% (8
)% (6 )% (6 )% APAC region foreign currency translation impact (s)
4 % 2 % 4 % 5 % 6 % 5 %
5 % APAC region revenue change, constant currency adjusted
1 % 2 % (2 )% 0 % (2 )%
(1 )% (1 )% (m ) LACA region revenue change, as
reported (GAAP) (3 )% (6 )% 4 % 6 % 0 % (2 )% 2 % LACA region
foreign currency translation impact (s) 7 % 8 %
6 % 7 % 8 % 7 % 7 % LACA region
revenue change, constant currency adjusted 4 % 2 %
10 % 13 % 8 % 5 % 9 % (n)
westernunion.com region revenue change, as reported (GAAP) 19 % 28
% 17 % 22 % 22 % 21 % 21 % westernunion.com region foreign currency
translation impact (s) 4 % 1 % 6 % 6 %
6 % 4 % 5 % westernunion.com region revenue
change, constant currency adjusted 23 % 29 %
23 % 28 % 28 % 25 % 26 %
Consumer-to-Business Segment (o) Revenues, as reported
(GAAP) $ 155.3 $ 598.8 $ 157.8 $ 157.9 $ 160.1 $ 161.9 $ 637.7
Foreign currency translation impact (s) 16.6
70.1 6.3 4.9 5.6
7.8 24.6 Revenues, constant currency
adjusted $ 171.9 $ 668.9 $ 164.1 $ 162.8
$ 165.7 $ 169.7 $ 662.3 Prior year
revenues, as reported (GAAP) $ 149.5 $ 608.5 $ 147.2 $ 145.9 $
150.4 $ 155.3 $ 598.8 Revenue change, as reported (GAAP) 4 % (2 )%
7 % 8 % 6 % 4 % 6 % Revenue change, constant currency adjusted 15 %
10 % 11 % 12 % 10 % 9 % 11 % (p ) Operating income/(loss),
as reported (GAAP) $ 22.1 $ 98.7 $ 29.5 $ (6.4 ) $ 26.2 $ 19.3 $
68.6 Less: Paymap settlement agreement (t) N/A
N/A N/A 35.3 N/A
N/A 35.3 Operating income, excluding
Paymap settlement agreement $ 22.1 $ 98.7 $ 29.5
$ 28.9 $ 26.2 $ 19.3 $ 103.9
Operating income/(loss) margin, as reported (GAAP) 14.2 % 16.5 %
18.7 % (4.1 )% 16.4 % 11.9 % 10.8 % Operating income margin,
excluding Paymap settlement agreement N/A N/A N/A 18.3 % N/A N/A
16.3 %
Business Solutions Segment (q) Revenues, as
reported (GAAP) $ 101.2 $ 404.6 $ 98.0 $ 97.6 $ 101.2 $ 101.9 $
398.7 Foreign currency translation impact (s) 3.7
4.5 8.1 9.4 10.9
7.7 36.1 Revenues, constant
currency adjusted $ 104.9 $ 409.1 $ 106.1 $
107.0 $ 112.1 $ 109.6 $ 434.8 Prior
year revenues, as reported (GAAP) $ 100.2 $ 392.9 $ 99.4 $ 98.2 $
105.8 $ 101.2 $ 404.6 Revenue change, as reported (GAAP) 1 % 3 % (1
)% (1 )% (4 )% 1 % (1 )% Revenue change, constant currency adjusted
5 % 4 % 7 % 9 % 6 % 8 % 7 % (r) Operating income/(loss), as
reported (GAAP) $ (5.0 ) $ (12.1 ) $ 2.1 $ (0.4 ) $ (2.7 ) $ 3.8 $
2.8 Reversal of depreciation and amortization 12.7
56.1 12.2 12.2
20.3 12.7 57.4 EBITDA (u) $ 7.7
$ 44.0 $ 14.3 $ 11.8 $ 17.6 $
16.5 $ 60.2 Operating income/(loss) margin, as
reported (GAAP) (4.9 )% (3.0 )% 2.1 % (0.4 )% (2.7 )% 3.7 % 0.7 %
EBITDA margin 7.6 % 10.9 % 14.6 % 12.1 % 17.4 % 16.2 % 15.1 %
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/20160209006323/en/
Western UnionMediaDan Diaz,
720-332-5564daniel.diaz@westernunion.comorInvestorsMike
Salop, 720-332-8276mike.salop@westernunion.com
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