Revenue of $1.3 Billion; Earnings Per Share
$0.32 GAAP, $0.49 Adjusted Affirms Full-year Financial
Outlook and Three-year Targets Continues Implementation of
New Global Strategy to Drive Long-Term Growth
The Western Union Company (NYSE: WU), a global leader in
cross-border, cross-currency money movement, today reported third
quarter financial results and affirmed its financial outlook for
the full year.
In the third quarter, the Company generated revenue of $1.3
billion, a decline of 6% on a reported basis or an increase of 4%
in adjusted constant currency terms compared to the prior year
period. The strengthening of the dollar against the Argentine peso
negatively impacted reported revenue by 2% in the quarter, while
the effects of inflation on the Company’s Argentina-based
businesses are estimated to have positively impacted revenue by
approximately 2%.
GAAP earnings per share in the third quarter was $0.32 compared
to $0.46 in the prior year period. The decrease in earnings per
share was primarily due to restructuring expenses of $92 million in
the quarter related to cost savings initiatives included in the
Company’s previously announced new Global Strategy.
Adjusted earnings per share in the third quarter was $0.49
compared to $0.53 in the prior year. The decline in adjusted
earnings per share was primarily due to divestitures completed in
the second quarter of 2019 and a higher adjusted effective tax rate
in the current quarter, partially offset by lower shares
outstanding.
President and CEO Hikmet Ersek said: “Third quarter results were
solid, as we produced strong adjusted margins and improved consumer
money transfer revenue growth, while completing major actions to
advance our new strategy and the restructuring program. We are
focused on executing our long-term strategy, opening our unique
cross-border platform for incremental growth opportunities and
optimizing our existing businesses, while also generating
significant efficiencies and margin expansion.”
On September 24, 2019, the Company announced its new Global
Strategy designed to capitalize on its unique cross-border
strengths to meet increasing demand from global consumers and
businesses for fast and reliable cross-border money transfer and
payment solutions. The strategy also included a corporate
restructuring to drive cost savings, as well as other efficiency
initiatives. As a result of the strategic plans, Western Union
established three-year financial targets, including an
approximately 23% operating margin in 2022 and low double-digit
earnings per share CAGR through 2022, compared to the Company’s
2019 adjusted EPS outlook.
CFO Raj Agrawal said, “We are pleased with the third quarter
business results and the progress we have made with our
restructuring activities, which places us solidly on track to
deliver our three-year financial targets. We also continue to
generate and distribute strong cash flow, with over $730 million
returned to shareholders year-to-date through dividends and share
repurchases.”
Q3 Business Unit
Highlights
- Consumer-to-Consumer (C2C) revenues, which represented 85% of
total Company revenue in the quarter, increased 1% on a reported
basis, or 2% constant currency, while transactions grew 2%.
Geographically, growth was driven by cross-border sends originated
in the U.S. and Latin America, as well as improvement in the Middle
East, partially offset by declines in Asia Pacific and U.S.
domestic money transfer. Digital money transfer revenues increased
more than 20% in the quarter, including westernunion.com and
third-party white label digital services. Westernunion.com C2C
revenues increased 16% on a reported basis, or 17% constant
currency. Westernunion.com transactions, including U.S. domestic
money transfer, increased 16%, while cross-border transactions
increased more than 25%. Westernunion.com revenues represented 14%
of total C2C revenue in the quarter and the service is available in
75 countries, plus additional territories.
- Western Union Business Solutions revenue was flat on a reported
basis, or increased 3% constant currency, with constant currency
growth driven by strong performance generated from customers in
Europe. Business Solutions represented 8% of total Company revenue
in the quarter.
- Other revenues, which primarily consist of retail bill payments
businesses in the U.S. and Argentina, declined 48%. The reduction
was due to the divestitures of the Speedpay and Paymap businesses
in May and the impact of the depreciation of the Argentine peso.
Other revenues represented 7% of total Company revenue in the
quarter.
Additional Q3 Financial
Highlights
- GAAP operating margin in the quarter was 15.1% compared to
21.8% in the prior year period. The decline in operating margin was
primarily due to the impact of the restructuring expense in the
current quarter.
- Adjusted operating margin in the quarter was 22.3% compared to
22.0% in the prior year period. The improvement in adjusted
operating margin was due to increased operating efficiencies,
partially offset by the impact of the divestiture of the Speedpay
business.
- The GAAP effective tax rate in the quarter was 16.8% compared
to 21.7% in the prior year period, while the adjusted tax rate was
18.0% compared to 11.8% in the prior year period. The decrease in
the GAAP rate was primarily due to a prior year period adjustment
related to changes in estimates for the provisional accounting for
United States tax reform legislation enacted in December 2017. The
increase in the adjusted rate was primarily due to non-recurring
benefits in the prior year.
- Year-to-date cash flow from operating activities totaled $665
million. The Company returned $224 million to shareholders in the
third quarter, consisting of $140 million in share repurchases and
$84 million of dividends.
2019 Outlook
The Company affirmed its full-year financial outlook, which was
previously reported on August 1, 2019. The Company continues to
expect the following outlook for 2019:
Revenue
- GAAP: mid-single digit decrease
- Adjusted constant currency: low single-digit increase,
excluding any benefit related to Argentina inflation
Operating Profit Margin
- GAAP operating margin of approximately 18% and adjusted
operating margin of approximately 20%
Tax Rate
- GAAP effective tax rate of approximately 18% to 19% and
adjusted tax rate of approximately 19%
Earnings per Share
- GAAP EPS in a range of $2.47 to $2.57
- Adjusted EPS in a range of $1.70 to $1.80
Cash Flow
- GAAP cash flow from operating activities of approximately $800
million
- Adjusted cash flow from operating activities of approximately
$950 million
Three-year Financial
Targets
The Company affirmed the three-year financial targets announced
September 24, 2019:
- Approximately 23% operating margin in 2022
- Low double-digit EPS CAGR 2020-2022
Targets assume 2% to 3% revenue CAGR 2020-2022, no material
change in major foreign currency rates, and no material mergers or
acquisitions. The EPS CAGR is compared to 2019 adjusted EPS and
assumes a mid-teens tax rate and $2.5 billion to $3 billion in
anticipated share buyback and dividends over 2020-2022.
Adjustment Items
Adjusted constant currency revenue metrics for 2019 exclude
revenues for the Speedpay and Paymap businesses, which were each
divested in May. Adjusted operating profit metrics for 2019 periods
exclude restructuring expenses and acquisition and divestiture
costs. Adjusted tax rate and earnings per share metrics for 2019
periods exclude the impact of the net gain on the Speedpay and
Paymap divestitures, restructuring expenses, and acquisition and
divestiture costs. Adjusted cash flow from operating activities for
2019 periods excludes the impact of payments for restructuring
expenses, acquisition and divestiture costs, and taxes on the net
gain on the Speedpay and Paymap divestitures, including the tax
benefits related to BEAT. Restructuring expenses are not included
in operating segment results.
Although the Company has previously incurred and can reasonably
be expected to incur restructuring costs in the future, these
expenses are specific to the implementation of the new Global
Strategy initiative and the Company has therefore provided adjusted
financial results that exclude these expenses.
Adjusted constant currency revenue metrics for 2018 periods
exclude revenues for the Speedpay and Paymap businesses, each of
which was divested in May of 2019. Adjusted operating profit
metrics exclude acquisition and divestiture costs. Adjusted tax
rates and earnings per share for 2018 periods exclude the impacts
of the acquisition and divestiture costs and tax expense related to
changes in estimates for the provisional accounting for the Tax
Act. These items have been excluded to provide comparability with
2019 adjusted metrics.
Additional Statistics
Additional key statistics for the quarter and historical trends
can be found in the supplemental tables included with this press
release.
All amounts included in the supplemental tables to this press
release are rounded to the nearest tenth of a million, except as
otherwise noted. As a result, the percentage changes and margins
disclosed herein may not recalculate precisely using the rounded
amounts provided.
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 the following: (1)
consolidated revenue change constant currency adjusted and
excluding Speedpay and Paymap, (2) Consumer-to-Consumer segment
revenue change constant currency adjusted, (3) Consumer-to-Consumer
segment westernunion.com revenue change constant currency adjusted,
(4) Business Solutions segment revenue change constant currency
adjusted, (5) operating margin, excluding, as applicable,
restructuring-related expenses and acquisition and divestiture
costs, (6) diluted earnings per share, excluding, as applicable,
restructuring-related expenses, acquisition and divestiture costs,
gain on sales of Speedpay and Paymap, and Tax Act, (7) effective
tax rate, excluding, as applicable, restructuring-related expenses,
acquisition and divestiture costs, gain on sales of Speedpay and
Paymap, and Tax Act, (8) operating cash flow outlook, excluding
payments related to restructuring-related expenses and acquisition
and divestiture costs and tax payments related to net gain on
Speedpay and Paymap divestitures, net of lower BEAT payments, (9)
operating margin outlook, excluding restructuring-related expenses
and acquisition and divestiture costs, (10) effective tax rate
outlook, excluding restructuring-related expenses, acquisition and
divestiture costs, and gain on sales of Speedpay and Paymap, (11)
earnings per share outlook, excluding restructuring-related
expenses, acquisition and divestiture costs, and gain on sales of
Speedpay and Paymap, and (12) 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 8614811.
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 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," "targets," "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, 2018. 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 downturns
and trade disruptions, 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; political conditions and related
actions, including trade restrictions and government sanctions, 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; 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
the integration of acquired businesses and technologies into our
Company, divestitures, and the failure to realize anticipated
financial benefits from these transactions, and events requiring us
to write down our goodwill; decisions to change our business mix;
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; changes in tax laws, or their
interpretation, including with respect to United States tax reform
legislation enacted in December 2017 (the "Tax Act"), any
subsequent regulation, and potential related state income tax
impacts, and unfavorable resolution of tax contingencies; adverse
rating actions by credit rating agencies; our ability to realize
the anticipated benefits from business transformation, 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 abroad, 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, our licensing arrangements,
customer due diligence, agent and subagent due diligence,
registration and monitoring requirements, consumer protection
requirements, remittances, and immigration; liabilities, increased
costs or loss of business and unanticipated developments resulting
from governmental investigations and consent agreements with or
enforcement actions by regulators, including those associated with
the settlement agreements with the United States Department of
Justice, certain United States Attorney's Offices, the United
States Federal Trade Commission, the Financial Crimes Enforcement
Network of the United States Department of Treasury, and various
state attorneys general, and those associated with the January 4,
2018 consent order which resolved a matter with the New York State
Department of Financial Services; liabilities resulting from
litigation, including class-action lawsuits and similar matters,
and regulatory enforcement actions, including costs, expenses,
settlements and judgments; failure to comply with regulations and
evolving industry standards regarding consumer privacy and data use
and security, including with respect to the General Data Protection
Regulation approved by the European Union; failure to comply with
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 in the United
States and abroad related to consumer protection and derivative
transactions; effects of unclaimed property laws or their
interpretation or the enforcement thereof; 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:
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 global leader in
cross-border, cross-currency money movement. Our omnichannel
platform connects the digital and physical worlds and makes it
possible for consumers and businesses to send and receive money and
make payments with speed, ease, and reliability. As of September
30, 2019, our network included over 550,000 retail agent locations
offering our branded services in more than 200 countries and
territories, with the capability to send money to billions of
accounts. Additionally, westernunion.com, our fastest growing
channel in 2018, is available in 75 countries, plus additional
territories, to move money around the world. With our global reach,
Western Union moves money for better, connecting family, friends
and businesses to enable financial inclusion and support economic
growth. For more information, visit www.westernunion.com.
WU-G
THE WESTERN UNION COMPANY KEY STATISTICS
(Unaudited)
Notes*
3Q18
4Q18
FY 2018
1Q19
2Q19
3Q19
YTD 3Q19
Consolidated Metrics Consolidated revenues (GAAP) - YoY %
change
(1
)
%
(3
)
%
1
%
(4
)
%
(5
)
%
(6
)
%
(5
)
%
Consolidated revenues (constant currency adjusted) - YoY % change
(a)
3
%
2
%
3
%
2
%
0
%
(3
)
%
0
%
Consolidated revenues (constant currency adjusted and excluding
Speedpay and Paymap) - YoY % change (a), (s)
3
%
3
%
4
%
2
%
4
%
4
%
4
%
Consolidated operating margin (GAAP) (b)
21.8
%
19.3
%
20.1
%
18.8
%
19.3
%
15.1
%
17.8
%
Consolidated operating margin, excluding restructuring-related
expenses and acquisition and divestiture costs (c), (v), (w)
22.0
%
19.9
%
20.3
%
19.3
%
20.3
%
22.3
%
20.6
%
Consumer-to-Consumer (C2C) Segment Revenues (GAAP) -
YoY % change
0
%
(1
)
%
2
%
(3
)
%
(1
)
%
1
%
(1
)
%
Revenues (constant currency adjusted) - YoY % change (g)
2
%
1
%
2
%
0
%
1
%
2
%
1
%
Operating margin**
25.1
%
23.3
%
23.5
%
22.1
%
22.5
%
23.7
%
22.8
%
Transactions (in millions)
71.8
74.3
287.0
69.1
73.5
73.0
215.6
Transactions - YoY % change
4
%
4
%
4
%
2
%
1
%
2
%
1
%
Total principal ($- billions)
$
22.1
$
22.4
$
87.7
$
20.9
$
22.2
$
22.4
$
65.5
Principal per transaction ($- dollars)
$
308
$
301
$
305
$
302
$
303
$
307
$
304
Principal per transaction - YoY % change
2
%
0
%
3
%
(2
)
%
(1
)
%
0
%
(1
)
%
Principal per transaction (constant currency adjusted) - YoY %
change (h)
4
%
3
%
3
%
2
%
1
%
2
%
2
%
Cross-border principal ($- billions)
$
20.1
$
20.5
$
79.9
$
19.1
$
20.5
$
20.6
$
60.2
Cross-border principal - YoY % change
6
%
5
%
7
%
1
%
0
%
3
%
1
%
Cross-border principal (constant currency adjusted) - YoY % change
(i)
7
%
8
%
7
%
5
%
3
%
4
%
4
%
NA region revenues (GAAP) - YoY % change (aa), (bb)
2
%
0
%
2
%
1
%
2
%
2
%
2
%
NA region revenues (constant currency adjusted) - YoY % change (j),
(aa), (bb)
2
%
0
%
2
%
1
%
2
%
2
%
2
%
NA region transactions - YoY % change (aa), (bb)
1
%
2
%
2
%
0
%
(1
)
%
(1
)
%
(1
)
%
EU & CIS region revenues (GAAP) - YoY % change (aa),
(cc)
3
%
1
%
7
%
(3
)
%
(3
)
%
(1
)
%
(3
)
%
EU & CIS region revenues (constant currency adjusted) - YoY %
change (k), (aa), (cc)
4
%
2
%
4
%
1
%
1
%
1
%
1
%
EU & CIS region transactions - YoY % change (aa), (cc)
8
%
8
%
8
%
5
%
4
%
6
%
5
%
MEASA region revenues (GAAP) - YoY % change (aa), (dd)
(7
)
%
(7
)
%
(5
)
%
(7
)
%
(3
)
%
4
%
(2
)
%
MEASA region revenues (constant currency adjusted) - YoY % change
(l), (aa), (dd)
(6
)
%
(6
)
%
(4
)
%
(6
)
%
(1
)
%
5
%
(1
)
%
MEASA region transactions - YoY % change (aa), (dd)
2
%
3
%
1
%
1
%
(3
)
%
1
%
0
%
LACA region revenues (GAAP) - YoY % change (aa), (ee)
2
%
0
%
8
%
(2
)
%
4
%
4
%
2
%
LACA region revenues (constant currency adjusted) - YoY % change
(m), (aa), (ee)
16
%
16
%
19
%
12
%
16
%
12
%
13
%
LACA region transactions - YoY % change (aa), (ee)
11
%
11
%
14
%
9
%
11
%
10
%
10
%
APAC region revenues (GAAP) - YoY % change (aa), (ff)
(10
)
%
(9
)
%
(6
)
%
(13
)
%
(14
)
%
(13
)
%
(13
)
%
APAC region revenues (constant currency adjusted) - YoY % change
(n), (aa), (ff)
(9
)
%
(8
)
%
(6
)
%
(11
)
%
(12
)
%
(13
)
%
(12
)
%
APAC region transactions - YoY % change (aa), (ff)
(2
)
%
(4
)
%
(1
)
%
(6
)
%
(9
)
%
(6
)
%
(7
)
%
International revenues - YoY % change (gg)
(1
)
%
(2
)
%
3
%
(5
)
%
(3
)
%
0
%
(3
)
%
International transactions - YoY % change (gg)
6
%
6
%
6
%
3
%
2
%
4
%
3
%
International revenues - % of C2C segment revenues (gg)
67
%
67
%
67
%
66
%
65
%
66
%
66
%
United States originated revenues - YoY % change (hh)
1
%
(1
)
%
2
%
0
%
2
%
2
%
2
%
United States originated transactions - YoY % change (hh)
1
%
2
%
1
%
0
%
(1
)
%
(1
)
%
(1
)
%
United States originated revenues - % of C2C segment revenues (hh)
33
%
33
%
33
%
34
%
35
%
34
%
34
%
westernunion.com revenues (GAAP) - YoY % change (ii)
19
%
21
%
21
%
17
%
18
%
16
%
17
%
westernunion.com revenues (constant currency adjusted) - YoY %
change (o), (ii)
20
%
22
%
21
%
19
%
20
%
17
%
19
%
westernunion.com transactions - YoY % change (ii)
23
%
25
%
25
%
19
%
15
%
16
%
17
%
% of Consumer-to-Consumer Revenue Regional Revenues:
NA region revenues (aa), (bb)
37
%
37
%
37
%
38
%
38
%
38
%
38
%
EU & CIS region revenues (aa), (cc)
32
%
32
%
32
%
32
%
32
%
32
%
32
%
MEASA region revenues (aa), (dd)
15
%
15
%
15
%
15
%
15
%
15
%
15
%
LACA region revenues (aa), (ee)
9
%
9
%
9
%
9
%
9
%
9
%
9
%
APAC region revenues (aa), (ff)
7
%
7
%
7
%
6
%
6
%
6
%
6
%
westernunion.com revenues (ii)
12
%
12
%
12
%
13
%
13
%
14
%
13
%
Business Solutions Segment Revenues (GAAP) - YoY %
change
1
%
3
%
1
%
(1
)
%
3
%
0
%
1
%
Revenues (constant currency adjusted) - YoY % change (p)
3
%
5
%
0
%
4
%
7
%
3
%
4
%
Operating margin**
14.2
%
5.4
%
6.1
%
9.0
%
10.9
%
16.7
%
12.3
%
Other (primarily bill payments businesses in United
States and Argentina) Revenues (GAAP) - YoY % change
(9
)
%
(11
)
%
(5
)
%
(9
)
%
(31
)
%
(48
)
%
(28
)
%
Operating margin**
5.9
%
1.8
%
6.7
%
5.0
%
4.3
%
9.0
%
5.7
%
% of Total Company Revenue (GAAP)
Consumer-to-Consumer segment revenues
80
%
80
%
80
%
79
%
83
%
85
%
83
%
Business Solutions segment revenues
7
%
7
%
7
%
7
%
7
%
8
%
7
%
Other revenues
13
%
13
%
13
%
14
%
10
%
7
%
10
%
* See the “Notes to Key Statistics” section of the press
release for the applicable Note references and the reconciliation
of non-GAAP financial measures. ** Corporate costs,
including stock-based compensation and other overhead, continue to
be consistently allocated to the segments based on historical
practice. For the three and nine months ended September 30, 2019,
approximately $19.0 million and $31.0 million, respectively, of
corporate expenses were allocated to the Consumer-to-Consumer
segment that would have been previously included in Other prior to
the sale of Speedpay on May 9, 2019.
THE WESTERN UNION
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share
amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
% Change
2019
2018
% Change
Revenues
$
1,306.9
$
1,387.8
(6
)
%
$
3,984.4
$
4,188.3
(5
)
%
Expenses:
Cost of services
768.6
812.4
(5
)
%
2,330.0
2,467.0
(6
)
%
Selling, general and administrative
340.9
272.8
25
%
946.9
870.2
9
%
Total expenses (a)
1,109.5
1,085.2
2
%
3,276.9
3,337.2
(2
)
%
Operating income
197.4
302.6
(35
)
%
707.5
851.1
(17
)
%
Other income/(expense):
Gain on divestitures of businesses (b)
—
—
(c
)
524.6
—
(c
)
Interest income
1.1
1.6
(32
)
%
4.2
3.6
16
%
Interest expense
(36.2
)
(38.4
)
(6
)
%
(114.5
)
(111.4
)
3
%
Other income/(expense), net
(0.1
)
0.6
(c
)
2.1
13.1
(84
)
%
Total other income/(expense), net
(35.2
)
(36.2
)
(3
)
%
416.4
(94.7
)
(c
)
Income before income taxes
162.2
266.4
(39
)
%
1,123.9
756.4
49
%
Provision for income taxes
27.2
57.8
(53
)
%
201.0
116.6
73
%
Net income
$
135.0
$
208.6
(35
)
%
$
922.9
$
639.8
44
%
Earnings per share:
Basic
$
0.32
$
0.47
(32
)
%
$
2.14
$
1.41
52
%
Diluted
$
0.32
$
0.46
(30
)
%
$
2.13
$
1.40
52
%
Weighted-average shares outstanding: Basic
423.3
446.8
430.3
454.8
Diluted
426.8
449.0
433.0
457.4
____________________
(a)
For the three and nine months
ended September 30, 2019, we incurred $91.5 million and $98.9
million, respectively, related to our restructuring plan, with a
significant majority of these expenses related to severance and
employee benefits. For the three and nine months ended September
30, 2019, $33.9 million is included within Cost of services. For
the three and nine months ended September 30, 2019, $57.6 million
and $65.0 million, respectively, is included within Selling,
general, and administrative.
(b)
On May 9, 2019, the Company
completed the sale of its United States electronic bill payments
business known as Speedpay to ACI Worldwide Corp. and ACW
Worldwide, Inc. for approximately $750 million in cash, resulting
in a gain of approximately $523 million on the sale for the nine
months ended September 30, 2019.
(c)
Calculation not meaningful.
THE WESTERN UNION
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in millions, except per share
amounts)
September 30,
December 31,
2019
2018
Assets Cash and cash equivalents
$
1,390.9
$
973.4
Settlement assets
3,297.3
3,813.8
Property and equipment, net of accumulated depreciation of $648.7
and $702.4, respectively
212.2
270.4
Goodwill
2,566.6
2,725.0
Other intangible assets, net of accumulated amortization of
$1,013.8 and $1,047.6, respectively
514.5
598.2
Other assets
822.2
616.0
Total assets
$
8,803.7
$
8,996.8
Liabilities and stockholders' deficit Liabilities:
Accounts payable and accrued liabilities
$
574.7
$
564.9
Settlement obligations
3,297.3
3,813.8
Income taxes payable
1,008.3
1,054.0
Deferred tax liability, net
161.3
161.1
Borrowings
3,248.0
3,433.7
Other liabilities
533.8
279.1
Total liabilities
8,823.4
9,306.6
Stockholders' deficit: Preferred stock, $1.00
par value; 10 shares authorized; no shares issued — — Common
stock, $0.01 par value; 2,000 shares authorized; 419.9 shares and
441.2 shares issued and outstanding as of September 30, 2019 and
December 31, 2018, respectively
4.2
4.4
Capital surplus
818.6
755.6
Accumulated deficit
(659.4
)
(838.8
)
Accumulated other comprehensive loss
(183.1
)
(231.0
)
Total stockholders' deficit
(19.7
)
(309.8
)
Total liabilities and stockholders' deficit
$
8,803.7
$
8,996.8
THE WESTERN UNION
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
Nine Months Ended
September 30,
2019
2018
Cash flows from operating activities Net income
$
922.9
$
639.8
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
56.5
57.0
Amortization
134.2
139.0
Gain on divestitures of businesses, excluding transaction costs
(532.1
)
— Other non-cash items, net
63.5
23.5
Increase/(decrease) in cash, excluding the effects of divestitures,
resulting from changes in: Other assets
19.7
(55.6
)
Accounts payable and accrued liabilities
67.9
(109.7
)
Income taxes payable
(46.3
)
(172.8
)
Other liabilities
(21.0
)
(2.7
)
Net cash provided by operating activities
665.3
518.5
Cash flows from investing activities Capitalization
of contract costs
(27.2
)
(109.5
)
Capitalization of purchased and developed software
(27.4
)
(37.4
)
Purchases of property and equipment
(38.9
)
(101.2
)
Proceeds from divestitures of businesses, net of cash divested
711.7
— Purchases of non-settlement related investments and other
(7.2
)
(6.9
)
Proceeds from maturity of non-settlement related investments
19.8
12.5
Purchases of held-to-maturity non-settlement related investments
(1.3
)
(2.8
)
Proceeds from held-to-maturity non-settlement related investments
27.5
15.5
Net cash provided by/(used in) investing activities
657.0
(229.8
)
Cash flows from financing activities Cash dividends
paid
(257.1
)
(257.8
)
Common stock repurchased
(483.8
)
(360.6
)
Net proceeds from commercial paper
310.0
369.0
Net proceeds from issuance of borrowings —
297.5
Principal payments on borrowings
(500.0
)
(407.2
)
Proceeds from exercise of options
28.0
9.3
Other financing activities
(0.9
)
(6.6
)
Net cash used in financing activities
(903.8
)
(356.4
)
Net change in cash, cash equivalents and restricted cash
418.5
(67.7
)
Cash, cash equivalents and restricted cash at beginning of period
979.7
844.4
Cash, cash equivalents and restricted cash at end of period (a)
$
1,398.2
$
776.7
_________________________
(a)
As of September 30, 2019 and
September 30, 2018, the Company had $7.3 million and $9.1 million,
respectively, of restricted cash.
THE WESTERN UNION
COMPANY
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
% Change
2019
2018
% Change
Revenues: Consumer-to-Consumer
$
1,113.0
$
1,107.4
1
%
$
3,282.8
$
3,325.9
(1
)
%
Business Solutions
100.6
100.2
0
%
291.8
290.0
1
%
Other (a) (b)
93.3
180.2
(48
)
%
409.8
572.4
(28
)
%
Total consolidated revenues
$
1,306.9
$
1,387.8
(6
)
%
$
3,984.4
$
4,188.3
(5
)
%
Segment operating income: Consumer-to-Consumer
$
263.8
$
277.8
(5
)
%
$
747.3
$
785.7
(5
)
%
Business Solutions
16.7
14.3
18
%
35.8
18.2
97
%
Other (a) (b)
8.4
10.5
(21
)
%
23.3
47.2
(51
)
%
Total segment operating income
288.9
302.6
(5
)
%
806.4
851.1
(5
)
%
Restructuring-related expenses (c)
(91.5
)
—
(e
)
(98.9
)
—
(e
) Total consolidated operating income
$
197.4
$
302.6
(35
)
%
$
707.5
$
851.1
(17
)
%
Segment operating income margin Consumer-to-Consumer (d)
23.7
%
25.1
%
(1.4
)
%
22.8
%
23.6
%
(0.8
)
%
Business Solutions
16.7
%
14.2
%
2.5
%
12.3
%
6.3
%
6.0
%
Other (a)
9.0
%
5.9
%
3.1
%
5.7
%
8.3
%
(2.6
)
%
_____________________________________
(a)
Consists primarily of the Company's bill payments businesses in the
United States and Argentina.
(b)
On May 9, 2019, the Company completed the sale of its United States
electronic bill payments business known as Speedpay to ACI
Worldwide Corp. and ACW Worldwide, Inc. for approximately $750
million in cash. In addition, on May 6, 2019, the Company completed
the sale of Paymap Inc. ("Paymap"), which provides electronic
mortgage bill payment services, for contingent consideration and
immaterial cash proceeds received at closing. Both Speedpay and
Paymap were included as a component of Other in the Company’s
segment reporting. Revenues attributed to Speedpay and Paymap
included in the Company's results were $89.2 million for the three
months ended September 30, 2018, and $130.7 million and $279.9
million for the nine months ended September 30, 2019 and 2018,
respectively. Operating income attributed to Speedpay and Paymap,
excluding corporate allocations, was $25.7 million for the three
months ended September 30, 2018, and $30.3 million and $85.5
million for the nine months ended September 30, 2019 and 2018,
respectively.
(c)
Restructuring-related expenses have been excluded from the
measurement of segment operating income provided to the chief
operating decision maker for purposes of assessing segment
performance and decision making with respect to resource
allocation.
(d)
Corporate costs, including stock-based compensation and other
overhead, continue to be consistently allocated to the segments
based on historical practice. For the three and nine months ended
September 30, 2019, approximately $19.0 million and $31.0 million,
respectively, of corporate expenses were allocated to the
Consumer-to-Consumer segment that would have been previously
included in Other prior to the sale of Speedpay on May 9, 2019.
(e)
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. We have also included non-GAAP
revenues that remove the impact of Speedpay and Paymap in order to
provide a more meaningful comparison of results from continuing
operations. 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 amounts.
Notes*
3Q18
4Q18
FY2018
1Q19
2Q19
3Q19
YTD 3Q19
Consolidated Metrics (a) Revenues, as reported (GAAP)
$
1,387.8
$
1,401.6
$
5,589.9
$
1,337.0
$
1,340.5
$
1,306.9
$
3,984.4
Foreign currency translation impact (r)
52.8
68.9
111.9
77.2
74.2
45.8
197.2
Revenues, constant currency adjusted
1,440.6
1,470.5
5,701.8
1,414.2
1,414.7
1,352.7
4,181.6
Less revenues from Speedpay and Paymap (s)
(89.2
)
(88.2
)
(368.2
)
(91.9
)
(38.8
)
N/A
(130.7
)
Revenues, constant currency adjusted and excluding Speedpay and
Paymap
$
1,351.4
$
1,382.3
$
5,333.6
$
1,322.3
$
1,375.9
$
1,352.7
$
4,050.9
Prior year revenues, as reported (GAAP)
$
1,404.7
$
1,438.3
$
5,524.3
$
1,389.4
$
1,411.1
$
1,387.8
$
4,188.3
Less prior year revenues from Speedpay and Paymap (s)
(96.6
)
(97.2
)
(387.3
)
(99.1
)
(91.6
)
(89.2
)
(279.9
)
Prior year revenues, adjusted, excluding Speedpay and Paymap
$
1,308.1
$
1,341.1
$
5,137.0
$
1,290.3
$
1,319.5
$
1,298.6
$
3,908.4
Revenue change, as reported (GAAP)
(1
)
%
(3
)
%
1
%
(4
)
%
(5
)
%
(6
)
%
(5
)
%
Revenue change, constant currency adjusted
3
%
2
%
3
%
2
%
0
%
(3
)
%
0
%
Revenue change, constant currency adjusted and excluding Speedpay
and Paymap
3
%
3
%
4
%
2
%
4
%
4
%
4
%
(b) Operating income, as reported (GAAP)
$
302.6
$
271.0
$
1,122.1
$
251.2
$
258.9
$
197.4
$
707.5
Operating margin, as reported (GAAP)
21.8
%
19.3
%
20.1
%
18.8
%
19.3
%
15.1
%
17.8
%
Speedpay and Paymap contribution to operating income (s)
$
25.7
$
24.8
$
110.3
$
22.6
$
7.7
N/A
$
30.3
Speedpay and Paymap contribution to operating margin (s)
0.5
%
0.6
%
0.7
%
0.4
%
0.0
%
N/A
0.2
%
(c) Operating income, as reported (GAAP)
$
302.6
$
271.0
$
1,122.1
$
251.2
$
258.9
$
197.4
$
707.5
Restructuring-related expenses (v)
N/A
N/A
N/A
N/A
7.4
91.5
98.9
Acquisition and divestiture costs (w)
2.6
8.4
14.9
6.9
5.7
2.5
15.1
Operating income, adjusted, excluding restructuring-related
expenses and acquisition and divestiture costs
$
305.2
$
279.4
$
1,137.0
$
258.1
$
272.0
$
291.4
$
821.5
Operating margin, as reported (GAAP)
21.8
%
19.3
%
20.1
%
18.8
%
19.3
%
15.1
%
17.8
%
Operating margin, adjusted, excluding restructuring-related
expenses and acquisition and divestiture costs
22.0
%
19.9
%
20.3
%
19.3
%
20.3
%
22.3
%
20.6
%
(d) Operating income, as reported (GAAP)
$
302.6
$
271.0
$
1,122.1
$
251.2
$
258.9
$
197.4
$
707.5
Depreciation and amortization
63.6
68.7
264.7
64.8
64.8
61.1
190.7
EBITDA (u)
$
366.2
$
339.7
$
1,386.8
$
316.0
$
323.7
$
258.5
$
898.2
Operating margin, as reported (GAAP)
21.8
%
19.3
%
20.1
%
18.8
%
19.3
%
15.1
%
17.8
%
EBITDA margin
26.4
%
24.2
%
24.8
%
23.6
%
24.1
%
19.8
%
22.5
%
(e) Net income, as reported (GAAP)
$
208.6
$
212.1
$
851.9
$
173.1
$
614.8
$
135.0
$
922.9
Restructuring-related expenses (v)
N/A
N/A
N/A
N/A
7.4
91.5
98.9
Acquisition and divestiture costs (w)
2.6
8.4
14.9
6.9
5.7
2.5
15.1
Gain on sales of Speedpay and Paymap (s)
N/A
N/A
N/A
N/A
(524.6
)
—
(524.6
)
Income tax benefit from restructuring-related expenses (v)
N/A
N/A
N/A
N/A
(1.4
)
(18.2
)
(19.6
)
Income tax benefit from acquisition and divestiture costs (w)
(0.6
)
(1.9
)
(3.3
)
(1.6
)
(1.2
)
(0.6
)
(3.4
)
Income tax expense from net gain on sales of Speedpay and Paymap
(includes elimination of previously forecasted annual base-erosion
anti-abuse taxes) (s)
N/A
N/A
N/A
N/A
94.1
—
94.1
Income tax expense/(benefit) from Tax Act (t)
26.6
8.1
22.5
N/A
N/A
N/A
N/A
Net income, adjusted, excluding restructuring-related expenses,
acquisition and divestiture costs, gain on sales of Speedpay and
Paymap, and Tax Act
$
237.2
$
226.7
$
886.0
$
178.4
$
194.8
$
210.2
$
583.4
Diluted earnings per share ("EPS"), as reported (GAAP) ($- dollars)
$
0.46
$
0.48
$
1.87
$
0.39
$
1.42
$
0.32
$
2.13
EPS impact of restructuring-related expenses ($- dollars) (v)
N/A
N/A
N/A
N/A
$
0.02
$
0.22
$
0.23
EPS impact of acquisition and divestiture costs ($- dollars) (w)
$
0.01
$
0.02
$
0.03
$
0.02
$
0.01
—
$
0.03
EPS impact as a result of gain on sales of Speedpay and Paymap ($-
dollars) (s)
N/A
N/A
N/A
N/A
$
(1.22
)
—
$
(1.21
)
EPS impact from income tax benefit from restructuring-related
expenses ($- dollars) (v)
N/A
N/A
N/A
N/A
—
$
(0.05
)
$
(0.05
)
EPS impact from income tax benefit from acquisition and divestiture
costs ($- dollars) (w) — — — — — — — EPS impact as a result of tax
expense on gain on sales of Speedpay and Paymap (includes
elimination of previously forecasted annual base-erosion anti-abuse
taxes) ($- dollars) (s)
N/A
N/A
N/A
N/A
$
0.22
—
$
0.22
EPS impact as a result of Tax Act ($- dollars) (t)
$
0.06
$
0.01
$
0.05
N/A
N/A
N/A
N/A
EPS impact as a result of restructuring-related expenses,
acquisition and divestiture costs, and gain on sales of Speedpay
and Paymap, net of income tax expense/(benefit) and Tax Act ($-
dollars)
$
0.07
$
0.03
$
0.08
$
0.02
$
(0.97
)
$
0.17
$
(0.78
)
Diluted earnings per share, adjusted, excluding
restructuring-related expenses, acquisition and divestiture costs,
gain on sales of Speedpay and Paymap, and Tax Act ($- dollars)
$
0.53
$
0.51
$
1.95
$
0.41
$
0.45
$
0.49
$
1.35
Diluted weighted-average shares outstanding
449.0
445.4
454.4
439.9
432.3
426.8
433.0
(f) Effective tax rate, as reported (GAAP)
22
%
10
%
14
%
20
%
18
%
17
%
18
%
Impact from restructuring-related expenses (v)
N/A
N/A
N/A
N/A
0
%
1
%
0
%
Impact from acquisition and divestiture costs (w)
0
%
1
%
0
%
0
%
0
%
0
%
0
%
Impact from gain on sales of Speedpay and Paymap (s)
N/A
N/A
N/A
N/A
(1
)
%
0
%
0
%
Impact from Tax Act (t)
(10
)
%
(4
)
%
(2
)
%
N/A
N/A
N/A
N/A
Effective tax rate, adjusted,
excluding restructuring-related expenses, acquisition and
divestiture costs, gain on sales of Speedpay and Paymap, and impact
of Tax Act
12
%
7
%
12
%
20
%
17
%
18
%
18
%
Consumer-to-Consumer Segment (g) Revenues, as
reported (GAAP)
$
1,107.4
$
1,127.7
$
4,453.6
$
1,056.9
$
1,112.9
$
1,113.0
$
3,282.8
Foreign currency translation impact (r)
18.7
23.9
6.6
33.0
31.4
17.9
82.3
Revenues, constant currency adjusted
$
1,126.1
$
1,151.6
$
4,460.2
$
1,089.9
$
1,144.3
$
1,130.9
$
3,365.1
Prior year revenues, as reported (GAAP)
$
1,107.7
$
1,144.5
$
4,354.5
$
1,091.0
$
1,127.5
$
1,107.4
$
3,325.9
Revenue change, as reported (GAAP)
0
%
(1
)
%
2
%
(3
)
%
(1
)
%
1
%
(1
)
%
Revenue change, constant currency adjusted
2
%
1
%
2
%
0
%
1
%
2
%
1
%
(h) Principal per transaction, as reported ($- dollars)
$
308
$
301
$
305
$
302
$
303
$
307
$
304
Foreign currency translation impact ($- dollars) (r)
5
7
—
11
8
5
8
Principal per transaction, constant currency adjusted ($- dollars)
$
313
$
308
$
305
$
313
$
311
$
312
$
312
Prior year principal per transaction, as reported ($- dollars)
$
302
$
300
$
297
$
307
$
306
$
308
$
307
Principal per transaction change, as reported
2
%
0
%
3
%
(2
)
%
(1
)
%
0
%
(1
)
%
Principal per transaction change, constant currency adjusted
4
%
3
%
3
%
2
%
1
%
2
%
2
%
(i) Cross-border principal, as reported ($- billions)
$
20.1
$
20.5
$
79.9
$
19.1
$
20.5
$
20.6
$
60.2
Foreign currency translation impact ($- billions) (r)
0.3
0.4
(0.2
)
0.7
0.5
0.4
1.6
Cross-border principal, constant currency adjusted ($- billions)
$
20.4
$
20.9
$
79.7
$
19.8
$
21.0
$
21.0
$
61.8
Prior year cross-border principal, as reported ($- billions)
$
19.0
$
19.5
$
74.5
$
18.9
$
20.4
$
20.1
$
59.4
Cross-border principal change, as reported
6
%
5
%
7
%
1
%
0
%
3
%
1
%
Cross-border principal change, constant currency adjusted
7
%
8
%
7
%
5
%
3
%
4
%
4
%
(j) NA region revenue change, as reported (GAAP)
2
%
0
%
2
%
1
%
2
%
2
%
2
%
NA region foreign currency translation impact (r)
0
%
0
%
0
%
0
%
0
%
0
%
0
%
NA region revenue change, constant currency adjusted
2
%
0
%
2
%
1
%
2
%
2
%
2
%
(k) EU & CIS region revenue change, as reported (GAAP)
3
%
1
%
7
%
(3
)
%
(3
)
%
(1
)
%
(3
)
%
EU & CIS region foreign currency translation impact (r)
1
%
1
%
(3
)
%
4
%
4
%
2
%
4
%
EU & CIS region revenue change, constant currency adjusted
4
%
2
%
4
%
1
%
1
%
1
%
1
%
(l) MEASA region revenue change, as reported (GAAP)
(7
)
%
(7
)
%
(5
)
%
(7
)
%
(3
)
%
4
%
(2
)
%
MEASA region foreign currency translation impact (r)
1
%
1
%
1
%
1
%
2
%
1
%
1
%
MEASA region revenue change, constant currency adjusted
(6
)
%
(6
)
%
(4
)
%
(6
)
%
(1
)
%
5
%
(1
)
%
(m) LACA region revenue change, as reported (GAAP)
2
%
0
%
8
%
(2
)
%
4
%
4
%
2
%
LACA region foreign currency translation impact (r)
14
%
16
%
11
%
14
%
12
%
8
%
11
%
LACA region revenue change, constant currency adjusted
16
%
16
%
19
%
12
%
16
%
12
%
13
%
(n) APAC region revenue change, as reported (GAAP)
(10
)
%
(9
)
%
(6
)
%
(13
)
%
(14
)
%
(13
)
%
(13
)
%
APAC region foreign currency translation impact (r)
1
%
1
%
0
%
2
%
2
%
0
%
1
%
APAC region revenue change, constant currency adjusted
(9
)
%
(8
)
%
(6
)
%
(11
)
%
(12
)
%
(13
)
%
(12
)
%
(o) westernunion.com revenue change, as reported (GAAP)
19
%
21
%
21
%
17
%
18
%
16
%
17
%
westernunion.com foreign currency translation impact (r)
1
%
1
%
0
%
2
%
2
%
1
%
2
%
westernunion.com revenue change, constant currency adjusted
20
%
22
%
21
%
19
%
20
%
17
%
19
%
Business Solutions Segment (p) Revenues, as reported
(GAAP)
$
100.2
$
96.8
$
386.8
$
95.6
$
95.6
$
100.6
$
291.8
Foreign currency translation impact (r)
2.3
2.6
(2.6
)
4.6
3.6
2.9
11.1
Revenues, constant currency adjusted
$
102.5
$
99.4
$
384.2
$
100.2
$
99.2
$
103.5
$
302.9
Prior year revenues, as reported (GAAP)
$
99.4
$
94.3
$
383.9
$
96.7
$
93.1
$
100.2
$
290.0
Revenue change, as reported (GAAP)
1
%
3
%
1
%
(1
)
%
3
%
0
%
1
%
Revenue change, constant currency adjusted
3
%
5
%
0
%
4
%
7
%
3
%
4
%
(q) Operating income, as reported (GAAP)
$
14.3
$
5.2
$
23.4
$
8.6
$
10.5
$
16.7
$
35.8
Depreciation and amortization
10.4
10.4
41.9
10.2
9.7
9.9
29.8
EBITDA (u)
$
24.7
$
15.6
$
65.3
$
18.8
$
20.2
$
26.6
$
65.6
Operating income margin, as reported (GAAP)
14.2
%
5.4
%
6.1
%
9.0
%
10.9
%
16.7
%
12.3
%
EBITDA margin
24.6
%
16.2
%
16.9
%
19.7
%
21.1
%
26.4
%
22.5
%
2019 Consolidated Outlook Metrics Operating
margin (GAAP)
18
%
Impact from restructuring-related expenses and acquisition and
divestiture costs (v), (w)
2
%
Operating margin, adjusted, excluding restructuring-related
expenses and acquisition and divestiture costs
20
%
Range Effective tax rate (GAAP)
18
%
19
%
Impact from restructuring-related expenses and acquisition and
divestiture costs (v), (w)
1
%
0
%
Impact from net gain on sales of Speedpay and Paymap (s)
0
%
0
%
Effective tax rate, adjusted, excluding restructuring-related
expenses, acquisition and divestiture costs, and net gain on sales
of Speedpay and Paymap
19
%
19
%
Range Earnings per share (GAAP) ($- dollars)
$
2.47
$
2.57
Impact from restructuring-related expenses and acquisition and
divestiture costs ($- dollars) (v), (w)
0.23
0.23
Impact from net gain on sales of Speedpay and Paymap ($- dollars)
(s)
(1.00
)
(1.00
)
Earnings per share, adjusted, excluding restructuring-related
expenses, acquisition and divestiture costs, and net gain on sales
of Speedpay and Paymap ($- dollars)
$
1.70
$
1.80
Operating cash flow (GAAP) ($- millions)
$
800
Impact from estimated cash payments related to
restructuring-related expenses and acquisition and divestiture
costs ($- millions) (v), (w)
60
Impact from tax payments related to net gain on Speedpay and Paymap
divestiture, net of related reductions to tax payments ($-
millions) (s)
90
Operating cash flow, excluding estimated cash payments related to
restructuring-related expenses, acquisition and divestiture costs,
and impact from tax payments related to net gain on Speedpay and
Paymap divestiture, net of related reductions to tax payments ($-
millions)
$
950
Non-GAAP related notes:
(r) 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. We believe that this measure provides management and
investors with information about operating results and trends that
eliminates currency volatility while increasing the comparability
of our underlying results and trends. (s) On May 9, 2019, we
completed the sale of our United States electronic bill payments
business known as Speedpay to ACI Worldwide Corp. and ACW
Worldwide, Inc. (“ACI”) for approximately $750 million in cash. In
the third quarter of 2019, the working capital calculation,
pursuant to the divestiture agreement, was completed and resulted
in a payment of approximately $21 million to ACI. In addition, on
May 6, 2019, we completed the sale of Paymap Inc. ("Paymap"), which
provides electronic mortgage bill payment services, for contingent
consideration and immaterial cash proceeds received at closing.
Both Speedpay and Paymap were included as a component of Other in
our segment reporting. Revenue has been adjusted to exclude the
carved out financial information for Speedpay and Paymap. The gain
on the sales and the income taxes on the gain, including the
elimination of previously forecasted annual base-erosion anti-abuse
taxes, has been removed from adjusted net income and adjusted
effective tax rate. Additionally, cash flows from operating
activities outlook has been adjusted to exclude taxes paid on the
gain from Speedpay and Paymap divestitures, net of related
reductions to previously expected base-erosion anti-abuse tax
payments. These financial measures are non-GAAP measures and should
not be considered a substitute for the GAAP measures. We have
included this information because management believes that
presenting these measures as adjusted to exclude divestitures will
provide investors with a more meaningful comparison of results
within the periods presented. Additionally, Speedpay and Paymap
contributions to operating income exclude corporate overhead
allocations. (t) Represents the impact to our provision for
income taxes related to the December 2017 enactment of tax reform
in the United States (“Tax Act”), primarily due to a tax on
previously undistributed earnings of certain foreign subsidiaries,
partially offset by the remeasurement of deferred tax assets and
liabilities and other tax balances to reflect the lower federal
income tax rate, among other effects. During the fourth quarter of
2018, we completed our accounting for the Tax Act. (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. (v) Represents impact from expenses incurred in
connection with an overall restructuring plan, approved by the
Board of Directors on August 1, 2019, to improve our business
processes and cost structure by reducing headcount and
consolidating various facilities. While these expenses are
identifiable to our business segments, primarily to our
Consumer-to-Consumer segment, they have been excluded from the
measurement of segment operating income provided to the Chief
Operating Decision Maker for purposes of assessing segment
performance and decision making with respect to resource
allocation. These expenses are therefore excluded from the
Company’s segment operating income results. While these expenses
are specific to this initiative, the types of expenses related to
this initiative are similar to expenses that we have previously
incurred and can reasonably be expected to incur in the future. We
believe that, by excluding the effects of these charges that can
impact operating trends, management and investors are provided with
a measure that increases the comparability of our underlying
operating results. (w) Represents the impact from expenses
incurred in connection with our acquisition and divestiture
activity, including the Speedpay and Paymap divestitures. These
expenses have been excluded from operating and net income. The 2018
and first quarter 2019 presentations have been recast to provide
consistency with the second quarter 2019 and year-to-date 2019
presentations and exclude these expenses from our operating and net
income. We believe that, by excluding the effects of these charges
that can impact operating trends, management and investors are
provided with a measure that increases the comparability of our
underlying operating results.
Other
notes: (aa) Geographic split for transactions and
revenue, including transactions initiated through westernunion.com,
is determined entirely based upon the region where the money
transfer is initiated. (bb) Represents the North America
(United States and Canada) ("NA") region of our
Consumer-to-Consumer segment. (cc) Represents the Europe and
the Russia/Commonwealth of Independent States ("EU & CIS")
region of our Consumer-to-Consumer segment. (dd) Represents
the Middle East, Africa, and South Asia ("MEASA") region of our
Consumer-to-Consumer segment, including India and certain South
Asian countries, which consist of Bangladesh, Bhutan, Maldives,
Nepal, and Sri Lanka. (ee) Represents the Latin America and
the Caribbean ("LACA") region of our Consumer-to-Consumer segment,
including Mexico. (ff) Represents the East Asia and Oceania
("APAC") region of our Consumer-to-Consumer segment. (gg)
Represents transactions, including westernunion.com transactions
initiated outside the United States, between and within foreign
countries (including Canada and Mexico). Excludes all transactions
originated in the United States. (hh) Represents
transactions originated in the United States, including
intra-country transactions and westernunion.com transactions
initiated from the United States. (ii) Represents
transactions conducted and funded through Western Union branded
websites and mobile apps (referred to throughout as
"westernunion.com").
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191031005740/en/
Media Relations: Pia De Lima +1 (954) 260-5732
Pia.DeLima@westernunion.com
Investor Relations: Brad Windbigler +1 (720) 332-2510
brad.windbigler@westernunion.com
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