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Western Union Reports Fourth Quarter And Full Year Results

Financial highlights for the 2012 full year

  • Revenue of $5.7 billion, a reported increase of 3%, or 5% constant currency, compared to 2011
  • Pro forma revenue increase of 1% constant currency, including Travelex Global Business Payments in the prior year
  • Operating margin of 23.5%, or 24.2% excluding TGBP integration expenses of $43 million, compared to 25.2%, or 26.2% excluding restructuring expenses of $47 million and TGBP integration expenses of $5 million, in 2011. The 2012 operating margin includes $31 million of expenses incurred in the fourth quarter related to new cost savings initiatives
  • EBITDA margin excluding TGBP integration expenses of 28.5%, compared to 29.6% excluding restructuring expenses and TGBP integration expenses in the prior year
  • Other expense, net, of $161 million, compared to $110 million in the prior year. The prior year includes gains of $50 million related to the revaluation of the Company’s previous 30% ownership interests in both Angelo Costa S.r.l. and Finint S.r.l. and $21 million related to foreign currency forward contracts primarily for the acquisition of TGBP
  • Effective tax rate of 12.2%, compared to 8.6% in the prior year. The 2012 rate includes various benefits from favorable tax settlements and changes in the mix of foreign and U.S. earnings and applicable tax rates, while the 2011 rate includes a $205 million benefit related to the IRS Agreement
  • GAAP EPS of $1.69, compared to $1.84 in the prior year. EPS of $1.74 excluding TGBP integration expenses, compared to $1.57 excluding restructuring expenses and the tax benefit related to the IRS Agreement in the prior year. The 2012 EPS includes $0.03 of expense related to new cost savings initiatives
  • Cash provided by operating activities of approximately $1.2 billion, including the impact of tax payments of $92 million relating to the IRS Agreement
  • Share repurchases of $772 million and dividends paid of $254 million for the full year

Fourth Quarter 2012 Highlights

Financial highlights for the 2012 fourth quarter

  • Revenue of $1.4 billion, flat on a reported and constant currency basis compared to last year’s fourth quarter
  • Pro forma revenue decrease of 1% constant currency, including TGBP in the prior year period
  • Operating margin of 20.1%, or 20.9% excluding TGBP integration expenses of $12 million, compared to 25.0%, or 25.4% excluding TGBP integration expenses of $5 million, in the prior year period. The current quarter includes $31 million of expenses related to new cost savings initiatives
  • EBITDA margin excluding TGBP integration expenses of 25.2%, compared to 29.2% in the prior year period
  • Other expense, net, of $41 million, compared to $6 million in the prior year period. The prior year period includes gains of $20 million related to the revaluation of the Company’s previous 30% ownership interest in Finint S.r.l. and $21 million related to foreign currency forward contracts primarily for the acquisition of TGBP
  • GAAP EPS of $0.40, compared to $0.73 in the prior year quarter. EPS of $0.42 excluding TGBP integration expense, compared to $0.40 excluding the tax benefit related to the IRS Agreement in the prior year quarter. EPS in the current year quarter includes $0.03 of expense related to cost savings initiatives

Additional highlights for the 2012 fourth quarter

  • Consumer-to-Consumer revenue decrease of 2% on a reported and constant currency basis, with a transaction decline of 1%, compared to the prior year period. For the Western Union brand, transactions increased 3% and constant currency revenue increased slightly. Transactions and revenue for the Vigo and Orlandi Valuta brands declined as a result of compliance changes related to the Southwest Border Agreement
    • C2C represented 81% of Company revenue
    • North America region revenue decrease of 9% from the prior year period, primarily due to the impact of compliance related actions affecting the Vigo and Orlandi Valuta brands serving the U.S. to Mexico and various Latin American countries
    • Europe and the CIS region revenue decrease of 5%, including a negative 2% impact from currency translation
    • Middle East and Africa (MEA) region revenue increase of 3%, including a negative 2% impact from currency translation
    • Asia Pacific (APAC) region revenue flat, including a positive 1% impact from currency translation
    • Latin America and the Caribbean (LACA) region revenue increase of 2%, including a negative 2% impact from currency translation
    • westernunion.com revenue increase of 16%, with no impact from currency translation
    • C2C operating margin of 25.0% compared to 28.0% in the prior year
  • Consumer-to-Business (C2B) payments revenue decrease of 1% reported, including a negative 3% impact from currency translation
    • C2B represented 11% of Company revenue
    • C2B operating margin of 17.0% compared to 27.3% in the prior year period
  • Business Solutions revenue of $93 million, compared to $68 million in the prior year
    • Business Solutions represented 6% of Company revenue
    • Pro forma revenue down 2% on a constant currency basis, including TGBP revenue in the prior year period
    • Operating loss of $18 million, including $18 million of depreciation and amortization and $12 million of TGBP integration expenses, compared to an operating loss of $2 million in the prior year (prior year includes a partial quarter of TGBP)
  • Electronic channels revenue increase of 22%
    • Electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer, represented 4% of total Company revenue (included in the various segments), compared to 3% of Company revenue in the prior year period
  • Prepaid revenue increase of 16%
    • Prepaid including third party top-up represented 1% of Company revenue
  • Agent locations of approximately 510,000 as of December 31
  • Share repurchases of $351 million (27 million shares at an average price of $13.12 per share) and dividends declared of $0.125 per share or $72 million in the quarter

Additional Statistics

Additional key statistics for the quarter and historical trends can be found in the supplemental tables included with this press release.

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