Delaware | 001-32903 | 20-4531180 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
12500 East Belford Avenue Englewood, Colorado | 80112 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 7.01. | Regulation FD Disclosure. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit Number | Description of Exhibit |
99.1 | Earnings press release issued by the Company on February 11, 2014. |
99.2 | Presentation of the Company dated February 11, 2014. |
Dated: February 11, 2014 | THE WESTERN UNION COMPANY | |||||||
By: | /s/ DARREN A. DRAGOVICH | |||||||
Name: | Darren A. Dragovich | |||||||
Title: | Assistant Secretary |
Exhibit Number | Description of Exhibit |
99.1 | Earnings press release issued by The Western Union Company on February 11, 2014. |
99.2 | Presentation of The Western Union Company dated February 11, 2014. |
Contacts: Media | Investors | |
Dan Diaz | Mike Salop | |
720-332-5564 | 720-332-8276 | |
daniel.diaz@westernunion.com | mike.salop@westernunion.com |
• | Low to mid-single digit constant currency revenue increase |
• | Flat to low single digit GAAP revenue growth, which reflects expected negative currency impact from certain emerging market countries |
• | GAAP operating margin in a range of 19% to 20% |
• | Compliance related expenses are expected to total approximately 3.5% to 4.0% of revenue in 2014 |
• | GAAP EPS in a range of $1.40 to $1.50 |
• | Cash flow from operating activities of approximately $900 million, or $1 billion excluding $100 million of anticipated final tax payments relating to the agreement announced with the U.S. Internal Revenue Service in December 2011 |
Notes* | 4Q12 | FY2012 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | FY2013 | ||||||||||||||||||||||
Consolidated Metrics | |||||||||||||||||||||||||||||
Consolidated revenues (GAAP) - YoY % change | 0 | % | 3 | % | (5 | )% | (3 | )% | (1 | )% | 0 | % | (2 | )% | |||||||||||||||
Consolidated revenues (constant currency) - YoY % change | a | 0 | % | 5 | % | (4 | )% | (2 | )% | 0 | % | 1 | % | (1 | )% | ||||||||||||||
Consumer-to-Consumer (C2C) Segment | |||||||||||||||||||||||||||||
Revenues (GAAP) - YoY % change | (2 | )% | (1 | )% | (7 | )% | (4 | )% | (2 | )% | (1 | )% | (3 | )% | |||||||||||||||
Revenues (constant currency) - YoY % change | c | (2 | )% | 1 | % | (6 | )% | (3 | )% | (1 | )% | 0 | % | (3 | )% | ||||||||||||||
Operating margin | 25.0 | % | 27.6 | % | 25.4 | % | 23.2 | % | 24.0 | % | 20.5 | % | 23.2 | % | |||||||||||||||
Transactions (in millions) | 58.65 | 230.98 | 55.44 | 60.26 | 62.45 | 64.19 | 242.34 | ||||||||||||||||||||||
Transactions - YoY % change | (1 | )% | 2 | % | (2 | )% | 3 | % | 9 | % | 9 | % | 5 | % | |||||||||||||||
Total principal ($ - billions) | $ | 20.0 | $ | 79.3 | $ | 18.9 | $ | 20.5 | $ | 21.1 | $ | 21.5 | $ | 82.0 | |||||||||||||||
Principal per transaction ($ - dollars) | $ | 341 | $ | 343 | $ | 341 | $ | 340 | $ | 339 | $ | 335 | $ | 338 | |||||||||||||||
Principal per transaction - YoY % change | (2 | )% | (5 | )% | (1 | )% | (1 | )% | (1 | )% | (2 | )% | (1 | )% | |||||||||||||||
Principal per transaction (constant currency) - YoY % change | d | (2 | )% | (3 | )% | (1 | )% | (1 | )% | (1 | )% | (2 | )% | (1 | )% | ||||||||||||||
Cross-border principal ($ - billions) | $ | 18.0 | $ | 71.3 | $ | 16.9 | $ | 18.5 | $ | 19.0 | $ | 19.5 | $ | 73.9 | |||||||||||||||
Cross-border principal - YoY % change | (3 | )% | (3 | )% | (3 | )% | 2 | % | 8 | % | 8 | % | 4 | % | |||||||||||||||
Cross-border principal (constant currency) - YoY % change | e | (2 | )% | 0 | % | (3 | )% | 2 | % | 8 | % | 8 | % | 4 | % | ||||||||||||||
Europe and CIS region revenues - YoY % change | l, m | (5 | )% | (6 | )% | (6 | )% | (4 | )% | (2 | )% | (2 | )% | (4 | )% | ||||||||||||||
Europe and CIS region transactions - YoY % change | l, m | 0 | % | (1 | )% | (1 | )% | 3 | % | 7 | % | 7 | % | 4 | % | ||||||||||||||
North America region revenues - YoY % change | l, n | (9 | )% | (3 | )% | (15 | )% | (12 | )% | (7 | )% | (2 | )% | (9 | )% | ||||||||||||||
North America region transactions - YoY % change | l, n | (6 | )% | (1 | )% | (7 | )% | (2 | )% | 5 | % | 6 | % | 0 | % | ||||||||||||||
Middle East and Africa region revenues - YoY % change | l, o | 3 | % | 3 | % | 0 | % | 0 | % | 1 | % | 0 | % | 0 | % | ||||||||||||||
Middle East and Africa region transactions - YoY % change | l, o | 6 | % | 7 | % | 4 | % | 6 | % | 10 | % | 8 | % | 7 | % | ||||||||||||||
APAC region revenues - YoY % change | l, p | 0 | % | 3 | % | (5 | )% | (4 | )% | (3 | )% | (2 | )% | (3 | )% | ||||||||||||||
APAC region transactions - YoY % change | l, p | 0 | % | 3 | % | 0 | % | 5 | % | 10 | % | 11 | % | 6 | % | ||||||||||||||
LACA region revenues - YoY % change | l, q | 2 | % | 3 | % | (7 | )% | 0 | % | (3 | )% | (4 | )% | (3 | )% | ||||||||||||||
LACA region transactions - YoY % change | l, q | (5 | )% | 1 | % | (10 | )% | (3 | )% | 4 | % | 6 | % | (1 | )% |
Notes* | 4Q12 | FY2012 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | FY2013 | ||||||||||||||||||||||
westernunion.com region revenues - YoY % change | l, r | 16 | % | 24 | % | 13 | % | 25 | % | 24 | % | 34 | % | 24 | % | ||||||||||||||
westernunion.com region transactions - YoY % change | l, r | 46 | % | 41 | % | 60 | % | 68 | % | 68 | % | 64 | % | 65 | % | ||||||||||||||
International revenues - YoY % change | s | 1 | % | 0 | % | (2 | )% | 0 | % | 0 | % | (1 | )% | (1 | )% | ||||||||||||||
International transactions - YoY % change | s | 3 | % | 4 | % | 1 | % | 6 | % | 10 | % | 10 | % | 7 | % | ||||||||||||||
International revenues - % of C2C segment revenues | s | 73 | % | 71 | % | 72 | % | 72 | % | 73 | % | 73 | % | 73 | % | ||||||||||||||
United States originated revenues - YoY % change | t | (11 | )% | (3 | )% | (17 | )% | (13 | )% | (7 | )% | 0 | % | (9 | )% | ||||||||||||||
United States originated transactions - YoY % change | t | (5 | )% | 0 | % | (5 | )% | (1 | )% | 7 | % | 9 | % | 2 | % | ||||||||||||||
United States originated revenues - % of C2C segment revenues | t | 27 | % | 29 | % | 28 | % | 28 | % | 27 | % | 27 | % | 27 | % | ||||||||||||||
Electronic channels revenues - YoY % change | u | 22 | % | 27 | % | 18 | % | 26 | % | 24 | % | 32 | % | 25 | % | ||||||||||||||
Consumer-to-Business (C2B) Segment | |||||||||||||||||||||||||||||
Revenues (GAAP) - YoY % change | (1 | )% | (2 | )% | (1 | )% | 2 | % | 3 | % | (2 | )% | 1 | % | |||||||||||||||
Revenues (constant currency) - YoY % change | f | 2 | % | 1 | % | 3 | % | 7 | % | 9 | % | 5 | % | 6 | % | ||||||||||||||
Operating margin | 17.0 | % | 22.8 | % | 24.7 | % | 20.5 | % | 19.2 | % | 15.6 | % | 20.0 | % | |||||||||||||||
Business Solutions (B2B) Segment | |||||||||||||||||||||||||||||
Revenues (GAAP) - YoY % change | ** | ** | 7 | % | 6 | % | 6 | % | 8 | % | 7 | % | |||||||||||||||||
Revenues (constant currency) - YoY % change | g | ** | ** | 7 | % | 8 | % | 10 | % | 12 | % | 9 | % | ||||||||||||||||
Operating margin | (19.4 | )% | (14.9 | )% | (6.7 | )% | (7.4 | )% | (2.8 | )% | (10.6 | )% | (6.9 | )% | |||||||||||||||
Depreciation and amortization ($ - millions) | $ | 17.7 | $ | 65.7 | $ | 15.3 | $ | 15.0 | $ | 15.8 | $ | 13.5 | $ | 59.6 | |||||||||||||||
TGBP integration expense ($ - millions) | v | $ | 11.6 | $ | 42.8 | $ | 3.9 | $ | 6.2 | $ | 3.8 | $ | 5.4 | $ | 19.3 | ||||||||||||||
% of Total Company Revenue | |||||||||||||||||||||||||||||
Consumer-to-Consumer segment revenues | 81 | % | 81 | % | 79 | % | 80 | % | 80 | % | 81 | % | 80 | % | |||||||||||||||
Consumer-to-Business segment revenues | 11 | % | 11 | % | 12 | % | 11 | % | 11 | % | 10 | % | 11 | % | |||||||||||||||
Business Solutions segment revenues | 6 | % | 6 | % | 7 | % | 7 | % | 7 | % | 7 | % | 7 | % | |||||||||||||||
Consumer-to-Consumer region revenues: | |||||||||||||||||||||||||||||
Europe and CIS revenues | l, m | 22 | % | 22 | % | 21 | % | 21 | % | 21 | % | 22 | % | 21 | % | ||||||||||||||
North America revenues | l, n | 19 | % | 20 | % | 19 | % | 19 | % | 19 | % | 18 | % | 19 | % | ||||||||||||||
Middle East and Africa revenues | l, o | 16 | % | 15 | % | 16 | % | 16 | % | 16 | % | 16 | % | 16 | % | ||||||||||||||
APAC revenues | l, p | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % | ||||||||||||||
LACA revenues | l, q | 9 | % | 9 | % | 8 | % | 9 | % | 9 | % | 9 | % | 9 | % | ||||||||||||||
westernunion.com revenues | l, r | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 4 | % | 3 | % | ||||||||||||||
Electronic channels revenues | u | 4 | % | 4 | % | 4 | % | 4 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||
Prepaid revenues | w | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % |
* See page 13 of the press release for the applicable Note references and the reconciliation of non-GAAP financial measures. |
** Calculation of growth percentage is not meaningful due to the impact of the TGBP acquisition in November 2011. |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||
Revenues: | |||||||||||||||||||||
Transaction fees | $ | 1,041.6 | $ | 1,057.2 | (1 | )% | $ | 4,065.8 | $ | 4,210.0 | (3 | )% | |||||||||
Foreign exchange revenues | 349.9 | 337.0 | 4 | % | 1,348.0 | 1,332.7 | 1 | % | |||||||||||||
Other revenues | 30.4 | 30.5 | 0 | % | 128.2 | 122.1 | 5 | % | |||||||||||||
Total revenues | 1,421.9 | 1,424.7 | 0 | % | 5,542.0 | 5,664.8 | (2 | )% | |||||||||||||
Expenses: | |||||||||||||||||||||
Cost of services | 845.7 | 817.4 | 3 | % | 3,235.0 | 3,194.2 | 1 | % | |||||||||||||
Selling, general and administrative | 337.8 | 321.3 | 5 | % | 1,199.6 | 1,140.6 | 5 | % | |||||||||||||
Total expenses | 1,183.5 | 1,138.7 | 4 | % | 4,434.6 | 4,334.8 | 2 | % | |||||||||||||
Operating income | 238.4 | 286.0 | (17 | )% | 1,107.4 | 1,330.0 | (17 | )% | |||||||||||||
Other income/(expense): | |||||||||||||||||||||
Interest income | 3.7 | 1.4 | (a) | 9.4 | 5.5 | 71 | % | ||||||||||||||
Interest expense | (49.9 | ) | (45.5 | ) | 10 | % | (195.6 | ) | (179.6 | ) | 9 | % | |||||||||
Derivative gains/(losses), net | (0.7 | ) | (0.5 | ) | 40 | % | (1.3 | ) | 0.5 | (a) | |||||||||||
Other income, net | 1.3 | 3.4 | (62 | )% | 7.0 | 12.4 | (44 | )% | |||||||||||||
Total other expense, net | (45.6 | ) | (41.2 | ) | 11 | % | (180.5 | ) | (161.2 | ) | 12 | % | |||||||||
Income before income taxes | 192.8 | 244.8 | (21 | )% | 926.9 | 1,168.8 | (21 | )% | |||||||||||||
Provision for income taxes | 19.4 | 6.9 | (a) | 128.5 | 142.9 | (10 | )% | ||||||||||||||
Net income | $ | 173.4 | $ | 237.9 | (27 | )% | $ | 798.4 | $ | 1,025.9 | (22 | )% | |||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.31 | $ | 0.40 | (23 | )% | $ | 1.43 | $ | 1.70 | (16 | )% | |||||||||
Diluted | $ | 0.31 | $ | 0.40 | (23 | )% | $ | 1.43 | $ | 1.69 | (15 | )% | |||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 551.2 | 588.0 | 556.6 | 604.9 | |||||||||||||||||
Diluted | 555.0 | 590.2 | 559.7 | 607.4 | |||||||||||||||||
Cash dividends declared per common share | $ | 0.125 | $ | 0.125 | 0 | % | $ | 0.50 | $ | 0.425 | 18 | % |
__________ | |||||||||||
(a) | Calculation not meaningful. |
December 31, | ||||||||
2013 | 2012 | |||||||
Assets | ||||||||
Cash and cash equivalents (a) | $ | 2,073.1 | $ | 1,776.5 | ||||
Settlement assets | 3,270.4 | 3,114.6 | ||||||
Property and equipment, net of accumulated depreciation of | ||||||||
$428.6 and $384.5, respectively | 209.9 | 196.1 | ||||||
Goodwill | 3,172.0 | 3,179.7 | ||||||
Other intangible assets, net of accumulated amortization of | ||||||||
$672.3 and $519.7, respectively | 833.8 | 878.9 | ||||||
Other assets | 562.1 | 319.9 | ||||||
Total assets | $ | 10,121.3 | $ | 9,465.7 | ||||
Liabilities and Stockholders' Equity | ||||||||
Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 638.9 | $ | 556.2 | ||||
Settlement obligations | 3,270.4 | 3,114.6 | ||||||
Income taxes payable | 216.9 | 218.3 | ||||||
Deferred tax liability, net | 319.2 | 352.1 | ||||||
Borrowings | 4,213.0 | 4,029.2 | ||||||
Other liabilities | 358.2 | 254.7 | ||||||
Total liabilities | 9,016.6 | 8,525.1 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $1.00 par value; 10 shares authorized; | ||||||||
no shares issued | — | — | ||||||
Common stock, $0.01 par value; 2,000 shares authorized; | ||||||||
548.8 shares and 572.1 shares issued and outstanding as of | ||||||||
December 31, 2013 and 2012, respectively | 5.5 | 5.7 | ||||||
Capital surplus | 390.9 | 332.8 | ||||||
Retained earnings | 877.3 | 754.7 | ||||||
Accumulated other comprehensive loss | (169.0 | ) | (152.6 | ) | ||||
Total stockholders' equity | 1,104.7 | 940.6 | ||||||
Total liabilities and stockholders' equity | $ | 10,121.3 | $ | 9,465.7 |
__________ | ||||
(a) | Approximately $1.1 billion was held by entities outside of the United States as of December 31, 2013. In February 2014, $500.0 million of 6.50% outstanding notes will mature and will be repaid using cash held by our United States entities. |
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Cash Flows From Operating Activities | ||||||||
Net income | $ | 798.4 | $ | 1,025.9 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 64.2 | 61.7 | ||||||
Amortization | 198.6 | 184.4 | ||||||
Deferred income tax benefit | (39.3 | ) | (35.2 | ) | ||||
Other non-cash items, net | 53.3 | 77.2 | ||||||
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in: | ||||||||
Other assets | (55.4 | ) | (27.8 | ) | ||||
Accounts payable and accrued liabilities | 81.1 | 9.3 | ||||||
Income taxes payable (a) | 3.4 | (79.9 | ) | |||||
Other liabilities | (15.7 | ) | (30.3 | ) | ||||
Net cash provided by operating activities | 1,088.6 | 1,185.3 | ||||||
Cash Flows From Investing Activities | ||||||||
Capitalization of contract costs | (119.3 | ) | (174.9 | ) | ||||
Capitalization of purchased and developed software | (41.8 | ) | (32.4 | ) | ||||
Purchases of property and equipment | (80.2 | ) | (60.9 | ) | ||||
Purchases of non-settlement related investments | (100.0 | ) | — | |||||
Acquisition of business, net | — | 10.0 | ||||||
Net cash used in investing activities | (341.3 | ) | (258.2 | ) | ||||
Cash Flows From Financing Activities | ||||||||
Proceeds from exercise of options | 28.9 | 53.4 | ||||||
Cash dividends paid | (277.2 | ) | (254.2 | ) | ||||
Common stock repurchased | (399.7 | ) | (766.5 | ) | ||||
Net repayments of commercial paper | — | (297.0 | ) | |||||
Net proceeds from issuance of borrowings | 497.3 | 742.8 | ||||||
Principal payments on borrowings | (300.0 | ) | — | |||||
Net cash used in financing activities | (450.7 | ) | (521.5 | ) | ||||
Net change in cash and cash equivalents | 296.6 | 405.6 | ||||||
Cash and cash equivalents at beginning of year | 1,776.5 | 1,370.9 | ||||||
Cash and cash equivalents at end of year | $ | 2,073.1 | $ | 1,776.5 |
__________ | |||||
(a) | The Company made tax payments of $92.4 million through the fourth quarter of 2012 due to the December 2011 agreement with the United States Internal Revenue Service ("IRS") resolving substantially all of the issues related to the restructuring of our international operations in 2003 ("IRS Agreement"). |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||
Revenues: | |||||||||||||||||||||
Consumer-to-Consumer (C2C): | |||||||||||||||||||||
Transaction fees | $ | 877.0 | $ | 890.4 | (2 | )% | $ | 3,396.1 | $ | 3,545.6 | (4 | )% | |||||||||
Foreign exchange revenues | 256.8 | 250.6 | 2 | % | 981.3 | 988.5 | (1 | )% | |||||||||||||
Other revenues | 12.7 | 12.2 | 4 | % | 56.2 | 50.2 | 12 | % | |||||||||||||
Total Consumer-to-Consumer | 1,146.5 | 1,153.2 | (1 | )% | 4,433.6 | 4,584.3 | (3 | )% | |||||||||||||
Consumer-to-Business (C2B): | |||||||||||||||||||||
Transaction fees | 142.1 | 144.1 | (1 | )% | 579.1 | 573.6 | 1 | % | |||||||||||||
Foreign exchange and other revenues | 7.4 | 8.0 | (8 | )% | 29.4 | 30.3 | (3 | )% | |||||||||||||
Total Consumer-to-Business | 149.5 | 152.1 | (2 | )% | 608.5 | 603.9 | 1 | % | |||||||||||||
Business Solutions (B2B): | |||||||||||||||||||||
Foreign exchange revenues | 90.6 | 83.5 | 9 | % | 355.5 | 332.0 | 7 | % | |||||||||||||
Transaction fees and other revenues | 9.6 | 9.1 | 7 | % | 37.4 | 35.4 | 6 | % | |||||||||||||
Total Business Solutions | 100.2 | 92.6 | 8 | % | 392.9 | 367.4 | 7 | % | |||||||||||||
Other: | |||||||||||||||||||||
Total revenues | 25.7 | 26.8 | (4 | )% | 107.0 | 109.2 | (2 | )% | |||||||||||||
Total consolidated revenues | $ | 1,421.9 | $ | 1,424.7 | 0 | % | $ | 5,542.0 | $ | 5,664.8 | (2 | )% | |||||||||
Operating income/(loss): | |||||||||||||||||||||
Consumer-to-Consumer | $ | 234.9 | $ | 287.9 | (18 | )% | $ | 1,030.4 | $ | 1,266.9 | (19 | )% | |||||||||
Consumer-to-Business | 23.3 | 25.8 | (10 | )% | 121.9 | 137.6 | (11 | )% | |||||||||||||
Business Solutions (a) | (10.7 | ) | (18.0 | ) | (b) | (27.0 | ) | (54.8 | ) | (b) | |||||||||||
Other | (9.1 | ) | (9.7 | ) | (b) | (17.9 | ) | (19.7 | ) | (b) | |||||||||||
Total consolidated operating income | $ | 238.4 | $ | 286.0 | (17 | )% | $ | 1,107.4 | $ | 1,330.0 | (17 | )% | |||||||||
Operating income/(loss) margin: | |||||||||||||||||||||
Consumer-to-Consumer | 20.5 | % | 25.0 | % | (4.5 | )% | 23.2 | % | 27.6 | % | (4.4 | )% | |||||||||
Consumer-to-Business | 15.6 | % | 17.0 | % | (1.4 | )% | 20.0 | % | 22.8 | % | (2.8 | )% | |||||||||
Business Solutions | (10.6 | )% | (19.4 | )% | 8.8 | % | (6.9 | )% | (14.9 | )% | 8.0 | % | |||||||||
Total consolidated operating income margin | 16.8 | % | 20.1 | % | (3.3 | )% | 20.0 | % | 23.5 | % | (3.5 | )% | |||||||||
Depreciation and amortization: | |||||||||||||||||||||
Consumer-to-Consumer | $ | 46.2 | $ | 39.0 | 18 | % | $ | 179.4 | $ | 158.2 | 13 | % | |||||||||
Consumer-to-Business | 3.6 | 3.4 | 6 | % | 15.8 | 14.7 | 7 | % | |||||||||||||
Business Solutions | 13.5 | 17.7 | (24 | )% | 59.6 | 65.7 | (9 | )% | |||||||||||||
Other | 1.6 | 1.9 | (16 | )% | 8.0 | 7.5 | 7 | % | |||||||||||||
Total consolidated depreciation and amortization | $ | 64.9 | $ | 62.0 | 5 | % | $ | 262.8 | $ | 246.1 | 7 | % |
__________ | ||||||||||||
(a) | Business Solutions operating loss includes TGBP integration expense of $5.4 million and $19.3 million for the three and twelve months ended December 31, 2013, respectively and $11.6 million and $42.8 million for the three and twelve months ended December 31, 2012, respectively. | |||||||||||
(b) | Calculation not meaningful. |
4Q12 | FY2012 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | FY2013 | |||||||||||||||||||||||
Consolidated Metrics | |||||||||||||||||||||||||||||
(a) | Revenues, as reported (GAAP) | $ | 1,424.7 | $ | 5,664.8 | $ | 1,325.4 | $ | 1,385.9 | $ | 1,408.8 | $ | 1,421.9 | $ | 5,542.0 | ||||||||||||||
Foreign currency translation impact (h) | 13.4 | 93.8 | 12.3 | 14.9 | 19.2 | 23.9 | 70.3 | ||||||||||||||||||||||
Revenues, constant currency adjusted | $ | 1,438.1 | $ | 5,758.6 | $ | 1,337.7 | $ | 1,400.8 | $ | 1,428.0 | $ | 1,445.8 | $ | 5,612.3 | |||||||||||||||
Prior year revenues, as reported (GAAP) | $ | 1,431.3 | $ | 5,491.4 | $ | 1,393.4 | $ | 1,425.1 | $ | 1,421.6 | $ | 1,424.7 | $ | 5,664.8 | |||||||||||||||
Pro forma prior year revenues, TGBP adjusted (i) | $ | 1,456.2 | $ | 5,695.0 | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Revenue change, as reported (GAAP) | 0 | % | 3 | % | (5 | )% | (3 | )% | (1 | )% | 0 | % | (2 | )% | |||||||||||||||
Revenue change, constant currency adjusted | 0 | % | 5 | % | (4 | )% | (2 | )% | 0 | % | 1 | % | (1 | )% | |||||||||||||||
Pro forma revenue change, TGBP adjusted | (2 | )% | (1 | )% | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Pro forma revenue change, TGBP and constant currency adjusted | (1 | )% | 1 | % | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
(b) | Operating income, as reported (GAAP) | $ | 286.0 | $ | 1,330.0 | $ | 296.9 | $ | 276.8 | $ | 295.3 | $ | 238.4 | $ | 1,107.4 | ||||||||||||||
Reversal of depreciation and amortization (j) | 62.0 | 246.1 | 62.9 | 66.4 | 68.6 | 64.9 | 262.8 | ||||||||||||||||||||||
EBITDA (j) | $ | 348.0 | $ | 1,576.1 | $ | 359.8 | $ | 343.2 | $ | 363.9 | $ | 303.3 | $ | 1,370.2 | |||||||||||||||
Operating income margin, as reported (GAAP) | 20.1 | % | 23.5 | % | 22.4 | % | 20.0 | % | 21.0 | % | 16.8 | % | 20.0 | % | |||||||||||||||
EBITDA margin | 24.4 | % | 27.8 | % | 27.1 | % | 24.8 | % | 25.8 | % | 21.3 | % | 24.7 | % |
4Q12 | FY2012 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | FY2013 | |||||||||||||||||||||||
Consumer-to-Consumer Segment | |||||||||||||||||||||||||||||
(c) | Revenues, as reported (GAAP) | $ | 1,153.2 | $ | 4,584.3 | $ | 1,050.2 | $ | 1,108.8 | $ | 1,128.1 | $ | 1,146.5 | $ | 4,433.6 | ||||||||||||||
Foreign currency translation impact (h) | 9.5 | 77.6 | 6.1 | 6.1 | 7.2 | 10.2 | 29.6 | ||||||||||||||||||||||
Revenues, constant currency adjusted | $ | 1,162.7 | $ | 4,661.9 | $ | 1,056.3 | $ | 1,114.9 | $ | 1,135.3 | $ | 1,156.7 | $ | 4,463.2 | |||||||||||||||
Prior year revenues, as reported (GAAP) | $ | 1,181.9 | $ | 4,608.4 | $ | 1,124.6 | $ | 1,155.0 | $ | 1,151.5 | $ | 1,153.2 | $ | 4,584.3 | |||||||||||||||
Revenue change, as reported (GAAP) | (2 | )% | (1 | )% | (7 | )% | (4 | )% | (2 | )% | (1 | )% | (3 | )% | |||||||||||||||
Revenue change, constant currency adjusted | (2 | )% | 1 | % | (6 | )% | (3 | )% | (1 | )% | 0 | % | (3 | )% | |||||||||||||||
(d) | Principal per transaction, as reported ($ - dollars) | $ | 341 | $ | 343 | $ | 341 | $ | 340 | $ | 339 | $ | 335 | $ | 338 | ||||||||||||||
Foreign currency translation impact (h) ($ - dollars) | 2 | 8 | — | 1 | — | — | 1 | ||||||||||||||||||||||
Principal per transaction, constant currency adjusted ($ - dollars) | $ | 343 | $ | 351 | $ | 341 | $ | 341 | $ | 339 | $ | 335 | $ | 339 | |||||||||||||||
Prior year principal per transaction, as reported ($ - dollars) | $ | 349 | $ | 360 | $ | 346 | $ | 344 | $ | 342 | $ | 341 | $ | 343 | |||||||||||||||
Principal per transaction change, as reported | (2 | )% | (5 | )% | (1 | )% | (1 | )% | (1 | )% | (2 | )% | (1 | )% | |||||||||||||||
Principal per transaction change, constant currency adjusted | (2 | )% | (3 | )% | (1 | )% | (1 | )% | (1 | )% | (2 | )% | (1 | )% | |||||||||||||||
(e) | Cross-border principal, as reported ($ - billions) | $ | 18.0 | $ | 71.3 | $ | 16.9 | $ | 18.5 | $ | 19.0 | $ | 19.5 | $ | 73.9 | ||||||||||||||
Foreign currency translation impact (h) ($ - billions) | 0.1 | 1.6 | 0.1 | — | — | — | 0.1 | ||||||||||||||||||||||
Cross-border principal, constant currency adjusted ($ - billions) | $ | 18.1 | $ | 72.9 | $ | 17.0 | $ | 18.5 | $ | 19.0 | $ | 19.5 | $ | 74.0 | |||||||||||||||
Prior year cross-border principal, as reported ($ - billions) | $ | 18.5 | $ | 73.2 | $ | 17.5 | $ | 18.2 | $ | 17.6 | $ | 18.0 | $ | 71.3 | |||||||||||||||
Cross-border principal change, as reported | (3 | )% | (3 | )% | (3 | )% | 2 | % | 8 | % | 8 | % | 4 | % | |||||||||||||||
Cross-border principal change, constant currency adjusted | (2 | )% | 0 | % | (3 | )% | 2 | % | 8 | % | 8 | % | 4 | % |
4Q12 | FY2012 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | FY2013 | |||||||||||||||||||||||
Consumer-to-Business Segment | |||||||||||||||||||||||||||||
(f) | Revenues, as reported (GAAP) | $ | 152.1 | $ | 603.9 | $ | 153.7 | $ | 153.0 | $ | 152.3 | $ | 149.5 | $ | 608.5 | ||||||||||||||
Foreign currency translation impact (h) | 4.9 | 15.5 | 5.9 | 7.2 | 8.3 | 10.2 | 31.6 | ||||||||||||||||||||||
Revenues, constant currency adjusted | $ | 157.0 | $ | 619.4 | $ | 159.6 | $ | 160.2 | $ | 160.6 | $ | 159.7 | $ | 640.1 | |||||||||||||||
Prior year revenues, as reported (GAAP) | $ | 153.9 | $ | 615.9 | $ | 155.1 | $ | 149.4 | $ | 147.3 | $ | 152.1 | $ | 603.9 | |||||||||||||||
Revenue change, as reported (GAAP) | (1 | )% | (2 | )% | (1 | )% | 2 | % | 3 | % | (2 | )% | 1 | % | |||||||||||||||
Revenue change, constant currency adjusted | 2 | % | 1 | % | 3 | % | 7 | % | 9 | % | 5 | % | 6 | % | |||||||||||||||
Business Solutions Segment | |||||||||||||||||||||||||||||
(g) | Revenues, as reported (GAAP) | $ | 92.6 | $ | 367.4 | $ | 92.8 | $ | 98.3 | $ | 101.6 | $ | 100.2 | $ | 392.9 | ||||||||||||||
Foreign currency translation impact (h) | (1.0 | ) | 0.4 | 0.2 | 1.2 | 3.5 | 3.1 | 8.0 | |||||||||||||||||||||
Revenues, constant currency adjusted | $ | 91.6 | $ | 367.8 | $ | 93.0 | $ | 99.5 | $ | 105.1 | $ | 103.3 | $ | 400.9 | |||||||||||||||
Prior year revenues, as reported (GAAP) | $ | 68.2 | $ | 161.1 | $ | 86.9 | $ | 92.5 | $ | 95.4 | $ | 92.6 | $ | 367.4 | |||||||||||||||
Pro forma prior year revenues, TGBP adjusted (i) | $ | 93.1 | $ | 364.7 | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Revenue change, as reported (GAAP) | ** | ** | 7 | % | 6 | % | 6 | % | 8 | % | 7 | % | |||||||||||||||||
Revenue change, constant currency adjusted | ** | ** | 7 | % | 8 | % | 10 | % | 12 | % | 9 | % | |||||||||||||||||
Pro forma revenue change, TGBP adjusted | (1 | )% | 1 | % | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Pro forma revenue change, TGBP and constant currency adjusted | (2 | )% | 2 | % | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
2014 Outlook Metrics | |||||||||||||||||||||||||||||
Operating cash flow (GAAP) | $ | 900 | |||||||||||||||||||||||||||
Payments on IRS Agreement (k) | 100 | ||||||||||||||||||||||||||||
Operating cash flow, IRS Agreement adjusted | $ | 1,000 |
Non-GAAP related notes: | ||||||||||||||
(h) | 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. | |||||||||||||
(i) | Represents the pro forma incremental impact of Travelex Global Business Payments ("TGBP") on Consolidated and Business Solutions segment revenues. Pro forma revenues presents the results of operations of the Company and its Business Solutions segment as they may have appeared had the acquisition of TGBP occurred as of January 1, 2011. The pro forma information is provided for illustrative purposes only and does not purport to present what the actual results of operations would have been had the acquisition actually occurred on the date indicated. The results of operations for TGBP have been included in Consolidated and Business Solutions segment revenues from November 7, 2011, the date of acquisition. | |||||||||||||
(j) | 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. | |||||||||||||
(k) | Represents the remaining tax payments of approximately $100 million the Company expects to make due to the December 2011 agreement with the IRS resolving substantially all of the issues related to the restructuring of our international operations in 2003. | |||||||||||||
Other notes: | ||||||||||||||
(l) | 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 that business. | |||||||||||||
(m) | Represents the Europe and the Commonwealth of Independent States ("CIS") region of our Consumer-to-Consumer segment. | |||||||||||||
(n) | Represents the North America region of our Consumer-to-Consumer segment, including the United States, Mexico, and Canada. | |||||||||||||
(o) | Represents the Middle East and Africa region of our Consumer-to-Consumer segment. | |||||||||||||
(p) | Represents the Asia Pacific ("APAC") region of our Consumer-to-Consumer segment, including India, China, and South Asia. | |||||||||||||
(q) | Represents the Latin America and the Caribbean ("LACA") region of our Consumer-to-Consumer segment. | |||||||||||||
(r) | Represents transactions initiated on westernunion.com which are primarily paid out at Western Union agent locations in the respective regions. | |||||||||||||
(s) | Represents transactions between and within foreign countries (including Canada and Mexico). Excludes all transactions originated in the United States. | |||||||||||||
(t) | Represents transactions originated in the United States, including intra-country transactions. | |||||||||||||
(u) | Represents revenue generated from electronic channels, which include westernunion.com, account based money transfer and mobile money transfer (included in the various segments). | |||||||||||||
(v) | TGBP integration expense consists of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition. | |||||||||||||
(w) | Represents revenue from prepaid services. This revenue is included within the Other segment. |
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