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Western Union Company: Western Union Reports Third Quarter Results

The following excerpt is from the company's SEC filing.

Revenue $1.4 Billion, Earnings per Share $0.45

$204 Million Returned to Shareholders through Dividends and Repurchases

2015 Full Year Outlook Affirmed


- The Western Union Company (NYSE: WU) today reported financial results for the 2015 third quarter and affirmed its full year financial outlook, which was previously provided on July 30, 2015.

On a constant currency basis, third quarter revenues increased 3% compared to the prior year period. Reported revenues declined 3%, primari ly due to the impact of the stronger U.S. dollar. Earnings per share increased 2% to $0.45 in the quarter.

“We delivered another good quarter and are on track with our expectations, as the business remained resilient despite geopolitical and global economic challenges,” said

President and Chief Executive Officer Hikmet Ersek

. “U.S. outbound money transfer provided solid results and our online transaction sites, which are now activated in 33 countries, once again produced strong growth.”

added, “We are also continuing to execute key strategic actions, such as launching the WU Connect platform and expanding our capabilities to transfer funds into accounts. Within our omni-channel strategy we currently have the ability to access hundreds of millions of accounts globally, adding to our distribution network of over 500,000 agent locations and 100,000 ATMs and kiosks.”

Executive Vice President and Chief Financial Officer Raj Agrawal

said, “In the quarter we achieved constant currency revenue growth in each of our segments and generated strong operating margins and cash flow, which we continued to deploy for our shareholders. We are pleased to affirm the full year financial outlook, including the adjusted earnings per share outlook that was raised in July.”

In the third quarter, Consumer-to-Consumer (C2C) constant currency revenues increased 3%, while reported revenues declined 3%. C2C transactions increased 2% in the quarter. C2C constant currency revenue growth was driven by and the U.S. outbound business. C2C revenue increased 22%, or 28% constant currency, on transaction growth of 25%. Electronic channels revenue, which includes, account based money transfer through banks, and mobile money transfer, represented 7% of total Company revenues.

Consumer-to-Business (C2B) revenues grew 6% in the quarter, or 10% constant currency, driven by the Argentina walk-in and the U.S. electronic bill payments businesses.

Western Union Business Solutions revenues decreased 4%, or increased 6% on a constant currency basis. Constant currency growth was driven by Europe and Australia, and aided by strong sales of hedging products.

Operating margin was 21.8% for the quarter, which is consistent with the third quarter of 2014.

Earnings per share were $0.45 compared to $0.44 in the prior year period.

The Company returned $204 million to shareholders in the third quarter, consisting of $125 million of share repurchases and $79 million of dividends. Year-to-date, cash flow from operating activities totaled $804 million, with $670 million returned to shareholders through share repurchases and dividends.

The Company affirmed its full year outlook for 2015 provided on July 30, 2015:

Low to mid-single digit constant currency revenue increase

Low to mid-single digit GAAP revenue decrease

Operating Profit Margin

Adjusted operating margin of approximately 21%

GAAP operating margin of approximately 20%

Adjusted EPS in a range of approximately $1.60 to $1.67

GAAP EPS in a range of approximately $1.55 to $1.62

Cash Flow

Cash flow from operating activities of approximately $1 billion. The Company now expects that the $100 million of anticipated final tax payments relating to the agreement announced with the U.S. Internal Revenue Service in December 2011 will be paid in years subsequent to 2015.

Adjusted operating margin and EPS metrics exclude the impact of the previously announced Paymap settlement charge of $35.3 million pre-tax, or $24.2 million after tax, which occurred in the second quarter.

Additional Statistics

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

Non-GAAP Measures

Western Union presents a number of non-GAAP financial measures because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods. Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.

These non-GAAP financial measures include revenue change constant currency adjusted; Consumer-to-Consumer segment revenue change constant currency adjusted; Consumer-to-Consumer segment region revenue change constant currency adjusted; Consumer-to-Business segment revenue change constant currency adjusted; Business Solutions segment revenue change constant currency adjusted; 2015 operating income margin outlook, excluding Paymap settlement agreement; 2015 earnings per share outlook, excluding Paymap settlement agreement, net of income tax benefit; and additional measures found in the supplemental tables included with this press release.

Reconciliations of non-GAAP to comparable GAAP measures are available in the accompanying schedules and in the “Investor Relations” section of the Company’s website at

Investor and Analyst Conference Call and Slide Presentation

The Company will host a conference call and webcast, including slides, at 4:30 p.m. Eastern Time today. To listen to the conference call via telephone, dial 1 (888) 317-6003 (U.S.) or

+1 (412) 317-6061 (outside the U.S.) ten minutes prior to the start of the call. The pass code is 1130822.

The conference call and accompanying slides will be available via webcast at

. Registration for the event is required, so please register at least five minutes prior to the scheduled start time.

A replay of the call will be available approximately one hour after the call ends through

November 12, 2015, at 1 (877) 344-7529 (U.S.) or +1 (412) 317-0088 (outside the U.S.). The pass code is 10073424. A webcast replay will be available at

Please note: All statements made by Western Union officers on this call are the property of Western Union and subject to copyright protection. Other than the replay, Western Union has not authorized, and disclaims responsibility for, any recording, replay or distribution of any transcription of this call.

Safe Harbor Compliance Statement for Forward-Looking Statements

This press release contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as "expects," "intends," "anticipates," "believes," "estimates," "guides," "provides guidance," "provides outlook" and other similar expressions or future or conditional verbs such as "may," "will," "should," "would," "could," and "might" are intended to identify such forward-looking statements. Readers of this press release of The Western Union Company (the "Company," "Western Union," "we," "our" or "us") should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in the "Risk Factors" section and throughout the Annual Report on Form 10-K for the year ended December 31, 2014. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.

Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events related to our business and industry, such as: changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic and trade downturns, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns, or non-performance by our banks, lenders, insurers, or other financial services providers; failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including card associations, card-based payment providers, electronic, mobile and Internet-based services, digital currencies and related protocols, and other innovations in technology and business models; deterioration in customer confidence in our...