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WESTERN UNION REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
Business Wire Follow
February 10, 2022 4:05pm Comments
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Q4 GAAP earnings per share (EPS) of $0.42, adjusted EPS of $0.64
Full year 2021 digital money transfer revenue grows 22% to more than $1 billion
continuing double-digit revenue growth in the fourth quarter
Company announces new $1 billion 3-year share repurchase authorization and
dividend of $0.235 per share in first quarter of 2022
The Western Union Company (NYSE:WU), a global leader in cross-border,
cross-currency money movement and payments, today reported fourth quarter and
full year financial results and provided its 2022 full year financial outlook.
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The Company's fourth quarter revenue of $1.3 billion increased 1% on a reported
basis and increased 2% on a constant currency basis compared to the prior year
period. Fourth quarter revenue was driven by growth of digital money transfer
and the Business Solutions segment, partially offset by a decline in retail
money transfer.
GAAP EPS in the fourth quarter was $0.42, compared to $0.43 in the prior year
period. The year-over-year decrease in GAAP EPS was primarily due to a non-cash
charge from the termination of the Company's pension plan, partially offset by
increased Business Solutions segment operating profit and lower planned
marketing expense.
Adjusted EPS in the fourth quarter was $0.64, compared to $0.45 in the prior
year period. Year-over-year growth in adjusted EPS was driven by similar factors
that impacted GAAP EPS, adjusted for certain items including a non-cash charge
from the termination of the Company's pension plan and acquisition and
divestiture costs. For a full reconciliation between GAAP and Adjusted EPS,
please see the "Adjustment Items" section of this press release.
The Company announced that its board of directors approved a new $1 billion
share repurchase authorization, expiring December 31, 2024. The Company also
announced a quarterly dividend of $0.235 per common share, payable March 31,
2022, to shareholders of record at the close of business on March 17, 2022.
"I am excited to be at Western Union with its iconic brand, global reach, and an
industry-leading digital offering. I believe these unique assets put the Company
in a strong position to capitalize on future growth opportunities," said Devin
McGranahan, President and Chief Executive Officer of Western Union. "In 2021, in
addition to maintaining our leadership in retail cross border payments, we
continued to make investments to grow our digital customer base and enhance the
long-term success of the Company."
"We delivered another strong quarter across our digital business, with
double-digit growth in the fourth quarter and more than $1 billion in revenue
for the year. We also broadened our capabilities with the commercial launch of
our multi-currency payments wallet and our digital banking platform."
CFO Raj Agrawal stated, "During 2021, we generated over $1 billion of operating
cash flow and returned more than $780 million to shareholders through a
combination of dividends and share repurchases. We are pleased with the
durability our business exhibited over the last twelve months, which allowed us
to maintain strong profitability. We are also happy to announce a new share
repurchase authorization and issue our financial outlook for 2022."
Q4 Business Highlights
* Consumer-to-Consumer (C2C) revenues declined 1% on a reported basis, or were
flat on constant currency basis, while transactions were also flat during the
quarter. Regionally, transaction growth in MEASA, Europe and CIS, and LACA
was offset by declines in APAC and North America.
* Digital money transfer revenues increased 13% on a reported basis, or 12%
constant currency, and represented 24% and 37% of total C2C revenues and
transactions, respectively. Digital money transfer reached new quarterly
highs for revenue, transactions, and principal. Westernunion.com revenue grew
9% on a reported and constant currency basis, including cross-border revenue
growth of 12%. As expected, digital growth rates continued to moderate, given
the significant digital demand the Company experienced in 2020.
* Westernunion.com active users1 for the full year 2021 increased 6%
year-over-year and the Western Union mobile app was again the most downloaded
mobile app among peer money transfer companies during the fourth quarter,
according to data provided by mobile app marketing firm Sensor Tower2.
* Western Union Business Solutions revenues increased 22% on a both reported
and constant currency basis, resulting from improvement in international
trade, as well as increased activity in the education and financial
institution verticals. Other revenues, which consists primarily of retail
bill payments in the U.S. and Argentina and money orders, increased 5% on a
reported basis.
____________________________
1
Active user defined as a unique consumer transacting at least once during the
year
2
Data obtained from Sensor Tower App Install Market Share Report
Q4 Financial Highlights
* GAAP operating margin in the quarter was 24.7%, compared to 17.9% in the
prior year period. The adjusted operating margin in the quarter was 24.9%,
compared to 18.8% in the prior year period. The increase in the Company's
GAAP and adjusted operating margins was primarily due to strong Business
Solutions segment operating profit, lower planned marketing expense, lower
agent losses, and favorable foreign exchange impact. For a detailed
reconciliation between GAAP and Adjusted operating margin, please see the
"Adjustment Items" section of this press release.
* The GAAP effective tax rate in the quarter was 6.7%, compared to 11.0% in the
prior year period, and the adjusted effective tax rate was 12.1% in the
quarter, compared to 11.6% in the prior year period. The decrease in the
Company's GAAP effective tax rate was due to discrete tax benefits associated
with the pension termination.
* The Company returned $268 million to shareholders in the fourth quarter,
consisting of approximately $93 million in dividends and $175 million of
share repurchases.
2021 Full Year Financial Highlights
* The Company's full year revenue of $5.1 billion increased 5% compared to the
prior year, or 4% on a constant currency basis, including a less than 1%
benefit from inflation in Argentina. The revenue increase was driven by a
strong growth in digital money transfer and the Business Solutions segment.
Total C2C revenue grew 4%, while digital money transfer revenue continued
strong double-digit growth, increasing 22% compared to 2020, and exceeded $1
billion for the year. Business Solutions also contributed revenue growth,
increasing 18% year-over-year.
* For the full year, the Business Solutions segment generated $422 million of
revenue, $120 million of EBITDA, and $104 million of operating profit
excluding corporate allocations. In total, Business Solutions contributed
approximately $0.22 to 2021 adjusted EPS.
* GAAP operating margin was 22.1%, compared to 20.0% in the prior year. The
increase in GAAP operating margin was primarily attributable to revenue
growth, mix of commissions and lower other variable costs, the elimination of
restructuring expenses, and foreign exchange impacts, partially offset by
higher technology investment. Adjusted operating margin was 22.5% compared to
20.8% in the prior year with margin expansion driven by the same factors
noted above and adjusted for restructuring expenses and acquisition and
divestiture costs.
* The GAAP effective tax rate for 2021 was 13.9%, compared to 12.9% in the
prior year, and the adjusted tax rate was 12.7%, compared to 13.0% in 2020.
The increase in the GAAP tax rate was primarily due to deferred taxes
recorded on the pending sale of Business Solutions, partially offset by
discrete tax benefits associated with the pension termination.
* GAAP EPS was $1.97, compared to $1.79 in 2020. Adjusted earnings per share
was $2.19, compared to $1.87 in 2020. The increase in GAAP earnings per share
was primarily due to similar factors described above for operating margin
increase, as well as a gain on an investment sale and fewer shares
outstanding. Growth in adjusted EPS was driven by similar factors as above,
adjusted for certain items as described in the "Adjustment Items" section
below.
* GAAP cash flow from operating activities for the year exceeded $1 billion.
The Company returned over $780 million to shareholders in dividends and share
repurchases for the full year.
2022 Outlook
The Company expects the following financial outlook for full year 2022, which
assumes no material change in macro-economic conditions.
GAAP figures reflect an expected partial year of Business Solutions ownership
including contractual payments to the buyer, representing profits between the
first and second closings, associated divestiture and acquisition costs, and an
estimated pre-tax gain of approximately $280 million, subject to regulatory and
working capital adjustments. The recognition of the gain is expected to be split
between two closings with approximately 60% expected to be recognized in the
first quarter of 2022 upon the first closing and the remainder on close two in
the second half of 2022.
Adjusted revenue growth and operating margin exclude contributions from Business
Solutions. In addition, adjusted operating margin excludes associated
divestiture and acquisition costs. The adjusted effective tax rate and EPS
exclude the expected gain on sale and divestiture and acquisition costs.
Revenue
GAAP: mid-single digit decline
Adjusted (constant currency, excluding the impact of Argentina inflation and
proforma for the planned sale of Business Solutions): flat to low-single digit
increase
Operating Profit Margin
GAAP and Adjusted: 21% - 22%
Effective Tax Rate
GAAP: high-teens range
Adjusted: mid-teens range
EPS
GAAP: $2.38 - $2.48
Adjusted: $1.90 - $2.00
Adjustment Items
Adjusted operating profit metrics for 2021 periods exclude acquisition and
divestiture costs. Adjusted tax rate and earnings per share metrics for 2021
periods exclude the following items net of related taxes, as applicable:
acquisition and divestiture costs (all quarters), the impact from the gain on an
investment sale (second quarter), debt retirement expenses (second quarter),
Business Solutions change in permanent reinvestment tax assertion (third
quarter), and non-cash expenses associated with the termination of the Company's
pension plan (fourth quarter).
Adjusted operating profit, tax rate, and earnings per share metrics for 2020
periods exclude restructuring expenses and acquisition and divestiture costs,
net of related taxes, as applicable.
Although the Company has previously incurred and can reasonably be expected to
incur restructuring costs in the future, these expenses were specific to the
implementation of a global strategy initiative and the Company has therefore
provided adjusted financial results that exclude these expenses.
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.
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 https://ir.westernunion.com.
Environmental, Social, and Governance (ESG)
Western Union is committed to making a positive impact. For more details on how
Western Union is addressing some of the most pressing issues facing society, our
shared environment, and our Company, please view our latest ESG report:
https://corporate.westernunion.com/esg
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
(669) 900-6833 or +1 (253) 215-8782 fifteen minutes prior to the start of the
call, followed by the conference code, which is 950 4942 2800 and the passcode,
which is 835005. Alternatively, you can join by clicking the link here.
The conference call and accompanying slides will be available via webcast at
https://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 https://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, 2020. 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 other events, such as
public health emergencies, epidemics, or pandemics, such as COVID-19, civil
unrest, war, terrorism, natural disasters, 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 digital, mobile and internet-based services, card
associations, and card-based payment providers, and with digital currencies and
related exchanges and protocols, and other innovations in technology and
business models; geopolitical tensions, political conditions and related
actions, including trade restrictions and government sanctions, 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, clients, or other partners; deterioration in customer confidence in our
business, or in money transfer and payment service providers generally; failure
to maintain our agent network and business relationships under terms consistent
with or more advantageous to us than those currently in place; 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; 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; 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; changes in tax laws, or their interpretation, any subsequent
regulation, and potential related state income tax impacts, and unfavorable
resolution of tax contingencies; 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; our ability to realize the
anticipated benefits from restructuring-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; failure to manage credit and fraud risks presented by our
agents, clients, and consumers; adverse rating actions by credit rating
agencies; our ability to protect our trademarks, patents, copyrights, and 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; 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, data use, the transfer of personal data between jurisdictions,
and information security, including with respect to the General Data Protection
Regulation ("GDPR") in the European Union ("EU") and the California Consumer
Privacy Act; failure to comply with the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the "Dodd-Frank Act"), as well as regulations issued
pursuant to it and the actions of the Consumer Financial Protection Bureau
("CFPB") 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; (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 and payments. Western Union's platform provides
seamless cross-border flows and its leading global financial network bridges
more than 200 countries and territories and over 130 currencies. We connect
consumers, businesses, financial institutions, and governments through one of
the world's widest reaching networks, accessing billions of bank accounts,
millions of digital wallets and cards, and a substantial global network of
retail locations. Western Union connects the world to bring boundless
possibilities within reach. For more information, visit www.westernunion.com.
WU-G
THE WESTERN UNION COMPANY
KEY STATISTICS
(Unaudited)
Notes*
4Q20
FY2020
1Q21
2Q21
3Q21
4Q21
FY2021
Consolidated Metrics
Consolidated revenues (GAAP) - YoY % change
(3)
%
(9)
%
2
%
16
%
2
%
1
%
5
%
Consolidated revenues (non-GAAP, constant currency and excluding Speedpay and
Paymap) - YoY % change
(a)
(1)
%
(3)
%
2
%
13
%
2
%
2
%
4
%
Consolidated operating margin (GAAP)
17.9
%
20.0
%
19.2
%
19.8
%
24.8
%
24.7
%
22.1
%
Consolidated operating margin, excluding restructuring-related expenses and
acquisition and divestiture costs (non-GAAP)
(b)
18.8
%
20.8
%
19.3
%
20.2
%
25.2
%
24.9
%
22.5
%
EBITDA margin (non-GAAP)
(c)
22.3
%
24.7
%
23.7
%
24.1
%
28.8
%
28.4
%
26.3
%
Consumer-to-Consumer (C2C) Segment Metrics
Revenues (GAAP) - YoY % change
0
%
(4)
%
4
%
15
%
0
%
(1)
%
4
%
Revenues (non-GAAP, constant currency) - YoY % change
(e)
0
%
(3)
%
2
%
12
%
(1)
%
0
%
3
%
Transactions (in millions)
78.4
290.5
73.0
78.0
76.6
78.3
305.9
Transactions - YoY % change
6
%
0
%
9
%
15
%
(1)
%
0
%
5
%
Total principal ($- billions)
$
26.7
$
96.1
$
25.7
$
27.9
$
27.7
$
27.7
$
109.0
Principal per transaction, as reported - YoY % change
14
%
9
%
15
%
11
%
4
%
4
%
8
%
Principal per transaction (constant currency) - YoY % change
(f)
13
%
10
%
12
%
8
%
3
%
4
%
6
%
Cross-border principal, as reported - YoY % change
24
%
12
%
28
%
29
%
4
%
5
%
15
%
Cross-border principal (constant currency) - YoY % change
(g)
23
%
13
%
26
%
25
%
3
%
5
%
14
%
Operating margin
20.5
%
21.9
%
19.6
%
20.7
%
24.3
%
24.2
%
22.2
%
Digital money transfer revenues (GAAP) - YoY % change (1)
36
%
38
%
45
%
22
%
15
%
13
%
22
%
Digital money transfer foreign currency translation impact
(j)
(1)
%
0
%
(1)
%
(3)
%
(1)
%
(1)
%
(1)
%
Digital money transfer revenues (non-GAAP, constant currency) - YoY % change (1)
35
%
38
%
44
%
19
%
14
%
12
%
21
%
Digital money transfer transactions - YoY % change
83
%
81
%
77
%
33
%
19
%
17
%
32
%
westernunion.com revenues (GAAP) - YoY % change
(gg)
27
%
27
%
38
%
18
%
12
%
9
%
18
%
westernunion.com foreign currency translation impact
(j)
(1)
%
0
%
(1)
%
(3)
%
(1)
%
0
%
(1)
%
westernunion.com revenues (non-GAAP, constant currency) - YoY % change
(gg)
26
%
27
%
37
%
15
%
11
%
9
%
17
%
westernunion.com transactions - YoY % change
(gg)
56
%
44
%
55
%
18
%
9
%
6
%
19
%
C2C Segment Regional Metrics - YoY % change
NA region revenues (GAAP)
(aa), (bb)
(3
)%
(3
)%
0
%
4
%
(2
)%
2
%
1
%
NA region foreign currency translation impact
(j)
0
%
0
%
1
%
0
%
0
%
0
%
0
%
NA region revenues (non-GAAP, constant currency)
(aa), (bb)
(3
)%
(3
)%
1
%
4
%
(2
)%
2
%
1
%
NA region transactions
(aa), (bb)
(1
)%
(3
)%
1
%
3
%
(5
)%
(2
)%
(1
)%
EU & CIS region revenues (GAAP)
(aa), (cc)
3
%
(2)
%
8
%
18
%
(3)
%
(8)
%
3
%
EU & CIS region foreign currency translation impact
(j)
(3)
%
(1)
%
(4)
%
(8)
%
(2)
%
1
%
(3)
%
EU & CIS region revenues (non-GAAP, constant currency)
(aa), (cc)
0
%
(3)
%
4
%
10
%
(5)
%
(7)
%
0
%
EU & CIS region transactions
(aa), (cc)
23
%
13
%
28
%
26
%
3
%
1
%
13
%
MEASA region revenues (GAAP)
(aa), (dd)
1
%
(2
)%
1
%
19
%
(2
)%
2
%
4
%
MEASA region foreign currency translation impact
(j)
(1
)%
0
%
(1
)%
(1
)%
0
%
0
%
0
%
MEASA region revenues (non-GAAP, constant currency)
(aa), (dd)
0
%
(2
)%
0
%
18
%
(2
)%
2
%
4
%
MEASA region transactions
(aa), (dd)
12
%
7
%
13
%
22
%
2
%
6
%
10
%
LACA region revenues (GAAP)
(aa), (ee)
(9
)%
(22
)%
3
%
70
%
25
%
8
%
22
%
LACA region foreign currency translation impact
(j)
11
%
11
%
5
%
(2
)%
1
%
4
%
2
%
LACA region revenues (non-GAAP, constant currency)
(aa), (ee)
2
%
(11
)%
8
%
68
%
26
%
12
%
24
%
LACA region transactions
(aa), (ee)
(13
)%
(20
)%
(8
)%
42
%
10
%
2
%
9
%
APAC region revenues (GAAP)
(aa), (ff)
8
%
(3)
%
9
%
20
%
1
%
0
%
6
%
APAC region foreign currency translation impact
(j)
(2)
%
0
%
(6)
%
(7)
%
(2)
%
0
%
(3)
%
APAC region revenues (non-GAAP, constant currency)
(aa), (ff)
6
%
(3)
%
3
%
13
%
(1)
%
0
%
3
%
APAC region transactions
(aa), (ff)
(3)
%
(10)
%
(2)
%
3
%
(13)
%
(13)
%
(7)
%
% of C2C Revenue
NA region revenues
(aa), (bb)
37
%
38
%
37
%
37
%
37
%
38
%
37
%
EU & CIS region revenues
(aa), (cc)
33
%
33
%
33
%
33
%
32
%
31
%
32
%
MEASA region revenues
(aa), (dd)
15
%
15
%
16
%
15
%
15
%
15
%
15
%
LACA region revenues
(aa), (ee)
8
%
8
%
8
%
9
%
9
%
9
%
9
%
APAC region revenues
(aa), (ff)
7
%
6
%
6
%
6
%
7
%
7
%
7
%
Digital money transfer revenues
(aa)
21
%
20
%
23
%
24
%
24
%
24
%
24
%
Business Solutions Segment Metrics
Revenues (GAAP) - YoY % change
(8)
%
(8)
%
(2)
%
25
%
31
%
22
%
18
%
Revenues (non-GAAP, constant currency) - YoY % change
(h)
(11)
%
(8)
%
(8)
%
16
%
28
%
22
%
14
%
Operating margin
(0.2)
%
6.9
%
13.1
%
10.9
%
32.9
%
30.8
%
22.6
%
Other (primarily bill payments businesses in Argentina and the United States and
money orders)
Revenues (GAAP) - YoY % change
(29)
%
(48)
%
(18)
%
8
%
3
%
5
%
(1)
%
Operating margin
15.8
%
21.2
%
22.6
%
16.2
%
18.3
%
21.3
%
19.6
%
% of Total Company Revenue (GAAP)
Consumer-to-Consumer segment revenues
88
%
87
%
87
%
87
%
86
%
87
%
87
%
Business Solutions segment revenues
7
%
8
%
8
%
8
%
9
%
8
%
8
%
Other revenues
5
%
5
%
5
%
5
%
5
%
5
%
5
%
____________________________
(1)
Represents revenue from transactions conducted and funded through
westernunion.com and transactions initiated on websites and mobile applications
hosted by the Company's third-party white label or co-branded digital partners.
* See the "Notes to Key Statistics" section of the press release for the
applicable Note references and the reconciliation of non-GAAP financial
measures, unless already reconciled herein.
THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
% Change
2021
2020
% Change
Revenues $
1,284.8
$
1,271.8
1
%
$
5,070.8
$
4,835.0
5
%
Expenses: Cost of services
715.3
759.2
(6)
%
2,896.4
2,826.5
2
%
Selling, general, and administrative
252.7
285.5
(11)
%
1,051.3
1,041.2
1
%
Total expenses (a)
968.0
1,044.7
(7)
%
3,947.7
3,867.7
2
%
Operating income
316.8
227.1
40
%
1,123.1
967.3
16
%
Other income/(expense): Gain on sale of noncontrolling interest in a private
company
—
—
(b)
47.9
—
(b)
Pension settlement charges
(109.8
)
—
(b)
(109.8
)
—
(b)
Interest income
0.3
0.3
(19)
%
1.4
3.2
(57)
%
Interest expense
(25.8)
(28.1)
(8)
%
(105.5)
(118.5)
(11)
%
Other income/(expense), net
(0.6)
(0.3)
71
%
(21.7)
3.1
(b)
Total other expense, net
(135.9)
(28.1)
(b)
(187.7)
(112.2)
67
%
Income before income taxes
180.9
199.0
(9)
%
935.4
855.1
9
%
Provision for income taxes
12.1
21.9
(44)
%
129.6
110.8
17
%
Net income $
168.8
$
177.1
(5)
%
$
805.8
$
744.3
8
%
Earnings per share: Basic $
0.42
$
0.43
(2)
%
$
1.98
$
1.81
9
%
Diluted $
0.42
$
0.43
(2)
%
$
1.97
$
1.79
10
%
Weighted-average shares outstanding: Basic
400.1
411.7
406.8
412.3
Diluted
401.7
414.5
408.9
415.2
____________________________
(a)
For the three and twelve months ended December 31, 2020, the Company incurred
$12.0 million and $36.8 million, respectively, of expenses related to its
restructuring plan, the majority of which were related to consulting service
fees, severance, and other costs. For the three and twelve months ended December
31, 2020, $2.0 million and $4.5 million, respectively, were included within Cost
of services, and $10.0 million and $32.3 million, respectively, were included
within Selling, general, and administrative.
(b)
Calculation not meaningful.
THE WESTERN UNION COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
December 31,
December 31,
2021
2020
Assets Cash and cash equivalents $
1,208.3
$
1,428.2
Settlement assets
2,843.5
3,821.4
Property and equipment, net of accumulated depreciation of $650.4 and $659.9,
respectively
129.4
150.4
Goodwill
2,034.6
2,566.6
Other intangible assets, net of accumulated amortization of $731.8 and $1,044.6,
respectively
417.1
505.0
Other assets
737.7
1,024.7
Assets held for sale (a)
1,452.9
—
Total assets $
8,823.5
$
9,496.3
Liabilities and stockholders' equity Liabilities: Accounts payable and accrued
liabilities $
450.2
$
500.9
Settlement obligations
2,843.5
3,821.4
Income taxes payable
870.7
928.9
Deferred tax liability, net
203.8
188.9
Borrowings
3,008.4
3,067.2
Other liabilities
269.4
802.4
Liabilities associated with assets held for sale (a)
821.9
—
Total liabilities
8,467.9
9,309.7
Stockholders' equity: Preferred stock, $1.00 par value; 10 shares authorized;
no shares issued
—
—
Common stock, $0.01 par value; 2,000 shares authorized; 393.8 shares and 411.2
shares issued and outstanding as of December 31, 2021 and December 31, 2020,
respectively
3.9
4.1
Capital surplus
941.0
885.1
Accumulated deficit
(537.2
)
(543.1
)
Accumulated other comprehensive loss
(52.1
)
(159.5
)
Total stockholders' equity
355.6
186.6
Total liabilities and stockholders' equity $
8,823.5
$
9,496.3
____________________________
(a)
Includes balances associated with the Company's Business Solutions business,
which were held for sale as of December 31, 2021.
THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
Year Ended December 31,
2021
2020
Cash flows from operating activities Net income $
805.8
$
744.3
Adjustments to reconcile net income to net cash provided by operating
activities: Depreciation
49.6
61.3
Amortization
158.6
164.3
Pension settlement charges
109.8
—
Gain on the sale of noncontrolling interest in a private company
(47.9
)
—
Deferred income tax provision/(benefit)
(2.6
)
13.9
Other non-cash items, net
149.6
145.8
Increase/(decrease) in cash resulting from changes in: Other assets
(73.0
)
(44.4
)
Accounts payable and accrued liabilities
(24.8
)
(96.6
)
Income taxes payable
(56.2
)
(94.4
)
Other liabilities
(23.6
)
(16.7
)
Net cash provided by operating activities
1,045.3
877.5
Cash flows from investing activities Payments for capitalized contract costs
(107.5
)
(69.1
)
Payments for internal use software
(69.4
)
(51.2
)
Purchases of property and equipment
(37.7
)
(36.5
)
Purchases of settlement investments
(433.0
)
(6,421.1
)
Proceeds from the sale of settlement investments
755.3
5,978.4
Maturities of settlement investments
229.7
182.6
Proceeds from the sale of former corporate headquarters and other property
—
49.4
Proceeds from the sale of noncontrolling interest in a private company
50.9
—
Purchase of noncontrolling interest in stc Bank
(200.0
)
—
Other investing activities
3.7
(6.0
)
Net cash provided by/(used in) investing activities
192.0
(373.5
)
Cash flows from financing activities Cash dividends and dividend equivalents
paid
(381.6
)
(370.3
)
Common stock repurchased
(409.9
)
(239.7
)
Net proceeds from/(repayments of) commercial paper
195.0
(165.0
)
Net proceeds from issuance of borrowings
891.7
—
Principal payments on borrowings
(1,150.0
)
—
Make-whole premium on early extinguishment of debt
(14.3
)
—
Proceeds from exercise of options
11.6
2.2
Net change in settlement obligations
(412.2
)
587.6
Other financing activities
0.2
(0.7
)
Net cash used in financing activities
(1,269.5
)
(185.9
)
Net change in cash and cash equivalents, including settlement, and restricted
cash
(32.2
)
318.1
Cash and cash equivalents, including settlement, and restricted cash at
beginning of period
2,143.1
1,825.0
Cash and cash equivalents, including settlement, and restricted cash at end of
period $
2,110.9
$
2,143.1
Reconciliation of balance sheet cash and cash equivalents to cash flows: Cash
and cash equivalents on balance sheet $
1,208.3
$
1,428.2
Settlement cash and cash equivalents
835.5
695.7
Restricted cash in Other assets
29.4
19.2
Cash included in Assets held for sale
37.7
—
Cash and cash equivalents, including settlement, and restricted cash $
2,110.9
$
2,143.1
THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
% Change
2021
2020
% Change
Revenues: Consumer-to-Consumer $
1,111.5
$
1,121.5
(1)
%
$
4,394.0
$
4,220.0
4
%
Business Solutions
109.2
89.2
22
%
421.8
356.1
18
%
Other (a)
64.1
61.1
5
%
255.0
258.9
(1)
%
Total consolidated revenues $
1,284.8
$
1,271.8
1
%
$
5,070.8
$
4,835.0
5
%
Segment operating income/(loss): Consumer-to-Consumer $
269.5
$
229.6
17
%
$
977.6
$
924.7
6
%
Business Solutions
33.6
(0.2)
(c)
95.5
24.4
(c)
Other (a)
13.7
9.7
42
%
50.0
55.0
(9)
%
Total segment operating income
316.8
239.1
32
%
1,123.1
1,004.1
12
%
Restructuring-related expenses (b)
—
(12.0)
(c)
—
(36.8)
(c)
Total consolidated operating income $
316.8
$
227.1
40
%
$
1,123.1
$
967.3
16
%
Segment operating income/(loss) margin Consumer-to-Consumer
24.2
%
20.5
%
3.7
%
22.2
%
21.9
%
0.3
%
Business Solutions
30.8
%
(0.2)
%
31.0
%
22.6
%
6.9
%
15.7
%
Other (a)
21.3
%
15.8
%
5.5
%
19.6
%
21.2
%
(1.6)
%
____________________________
(a)
Other primarily includes the Company's bill payment services which facilitate
payments from consumers to businesses and other organizations and the Company's
money order services.
(b)
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.
(c)
Calculation not meaningful.
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(Unaudited)
(in millions, unless indicated otherwise)
Western Union's management believes the non-GAAP financial measures presented
provide meaningful supplemental information regarding the Company's operating
results to assist management, investors, analysts, and others in understanding
the Company's financial results and to better analyze trends in the Company's
underlying business because they provide consistency and comparability to prior
periods.
A non-GAAP financial measure should not be considered in isolation or as a
substitute for the most comparable GAAP financial measure. A non-GAAP financial
measure reflects an additional way of viewing aspects of the Company's
operations that, when viewed with the Company's GAAP results and the
reconciliation to the corresponding GAAP financial measure, provides a more
complete understanding of the Company's business. Users of the financial
statements are encouraged to review the Company's 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, where not previously
reconciled above.
Three Months Ended December 31, 2021
Notes
Revenues
Operating
Income
Income
Before
Income Taxes
Provision for
Income Taxes
Net
Income
Diluted
Earnings per
Share
(in millions, except per share amounts)
Reported results (GAAP)
$
1,284.8
$
316.8
$
180.9
$
12.1
$
168.8
$
0.42
Acquisition and divestiture costs and related tax benefit
(n)
—
3.7
3.7
0.7
3.0
0.01
Gain on investment sale and related tax expense
(o)
—
—
—
(1.1)
1.1
—
Debt extinguishment costs and related tax benefit
(p)
—
—
—
0.2
(0.2)
—
Change in permanent reinvestment assertion related to the pending sale of
Business Solutions
(r)
—
—
—
0.2
(0.2)
—
Pension plan settlement charge and related tax benefit
(q)
—
—
109.8
23.5
86.3
0.21
Adjusted results (non-GAAP)
$
1,284.8
$
320.5
$
294.4
$
35.6
$
258.8
$
0.64
Foreign currency translation impact
(j)
14.8
Revenues, constant currency adjusted (non-GAAP)
$
1,299.6
Three Months Ended December 31, 2020
Notes
Revenues
Operating
Income
Income
Before
Income Taxes
Provision for
Income Taxes
Net
Income
Diluted
Earnings per
Share
(in millions, except per share amounts)
Reported results (GAAP)
$
1,271.8
$
227.1
$
199.0
$
21.9
$
177.1
$
0.43
Restructuring related expenses and related tax benefit
(m)
—
12.0
12.0
2.6
9.4
0.02
Acquisition and divestiture costs and related tax benefit
(n)
—
0.3
0.3
—
0.3
—
Adjusted results (non-GAAP)
$
1,271.8
$
239.4
$
211.3
$
24.5
$
186.8
$
0.45
Quarter over quarter growth/(decline) (GAAP)
1%
40%
(9)%
(44)%
(5)%
(2)%
Quarter over quarter growth/(decline) (non-GAAP)
2%
34%
39%
46%
39%
42%
Twelve Months Ended December 31, 2021
Notes
Revenues
Operating
Income
Income
Before
Income Taxes
Provision for
Income Taxes
Net
Income
Diluted
Earnings per
Share
(in millions, except per share amounts)
Reported results (GAAP)
$
5,070.8
$
1,123.1
$
935.4
$
129.6
$
805.8
$
1.97
Acquisition and divestiture costs and related tax benefit
(n)
—
15.7
15.7
3.2
12.5
0.03
Gain on investment sale and related tax expense
(o)
—
—
(47.9)
(10.9)
(37.0)
(0.09)
Debt extinguishment costs and related tax benefit
(p)
—
—
14.8
3.2
11.6
0.03
Change in permanent reinvestment assertion related to the pending sale of
Business Solutions
(r)
—
—
—
(17.9)
17.9
0.04
Pension plan settlement charge and related tax benefit
(q)
—
—
109.8
23.5
86.3
0.21
Adjusted results (non-GAAP)
$
5,070.8
$
1,138.8
$
1,027.8
$
130.7
$
897.1
$
2.19
Foreign currency translation impact
(j)
(18.3)
Revenues, constant currency adjusted (non-GAAP)
$
5,052.5
Twelve Months Ended December 31, 2020
Notes
Revenues
Operating
Income
Income
Before
Income Taxes
Provision for
Income Taxes
Net
Income
Diluted
Earnings per
Share
(in millions, except per share amounts)
Reported results (GAAP)
$
4,835.0
$
967.3
$
855.1
$
110.8
$
744.3
$
1.79
Restructuring related expenses and related tax benefit
(m)
—
36.8
36.8
5.3
31.5
0.08
Acquisition and divestiture costs and related tax benefit
(n)
—
2.5
2.5
0.5
2.0
—
Adjusted results (non-GAAP)
$
4,835.0
$
1,006.6
$
894.4
$
116.6
$
777.8
$
1.87
Year over year growth/(decline) (GAAP)
5%
16%
9%
17%
8%
10%
Year over year growth/(decline) (non-GAAP)
4%
13%
15%
12%
15%
17%
THE WESTERN UNION COMPANY
NOTES TO KEY STATISTICS
(Unaudited)
(in millions, unless indicated otherwise)
Notes
4Q20
FY2020
1Q21
2Q21
3Q21
4Q21
FY2021
Consolidated Metrics
(a)
Revenues (GAAP) $
1,271.8
$
4,835.0
$
1,210.0
$
1,289.7
$
1,286.3
$
1,284.8
$
5,070.8
Foreign currency translation impact
(j)
22.4
157.2
(0.9)
(29.4)
(2.8)
14.8
(18.3)
Revenues (non-GAAP, constant currency)
$
1,294.2
$
4,992.2
$
1,209.1
$
1,260.3
$
1,283.5
$
1,299.6
$
5,052.5
Prior year revenues (GAAP)
$
1,307.7
$
5,292.1
$
1,190.0
$
1,114.7
$
1,258.5
$
1,271.8
$
4,835.0
Less prior year revenues from Speedpay and Paymap divestitures
(k)
N/A
(130.7)
N/A
N/A
N/A
N/A
N/A
Prior year revenues, adjusted for divestitures (non-GAAP)
$
1,307.7
$
5,161.4
$
1,190.0
$
1,114.7
$
1,258.5
$
1,271.8
$
4,835.0
Revenues (GAAP) - YoY % Change
(3)%
(9)%
2%
16%
2%
1%
5%
Revenues, constant currency and adjusted for divestitures (non-GAAP) - YoY %
Change
(1)%
(3)%
2%
13%
2%
2%
4%
(b)
Operating income (GAAP)
$
227.1
$
967.3
$
232.8
$
254.9
$
318.6
$
316.8
$
1,123.1
Restructuring-related expenses
(m)
12.0
36.8
N/A
N/A
N/A
N/A
N/A
Acquisition and divestiture costs
(n)
0.3
2.5
0.9
5.6
5.5
3.7
15.7
Operating income, adjusted (non-GAAP)
$
239.4
$
1,006.6
$
233.7
$
260.5
$
324.1
$
320.5
$
1,138.8
Operating margin (GAAP)
17.9%
20.0%
19.2%
19.8%
24.8%
24.7%
22.1%
Operating margin, adjusted (non-GAAP)
18.8%
20.8%
19.3%
20.2%
25.2%
24.9%
22.5%
(c)
Operating income (GAAP)
$
227.1
$
967.3
$
232.8
$
254.9
$
318.6
$
316.8
$
1,123.1
Depreciation and amortization
56.1
225.6
53.4
55.6
51.3
47.9
208.2
EBITDA (non-GAAP)
(l)
$
283.2
$
1,192.9
$
286.2
$
310.5
$
369.9
$
364.7
$
1,331.3
Operating margin (GAAP)
17.9%
20.0%
19.2%
19.8%
24.8%
24.7%
22.1%
EBITDA margin (non-GAAP)
22.3%
24.7%
23.7%
24.1%
28.8%
28.4%
26.3%
(d)
Effective tax rate (GAAP)
11%
13%
10%
14%
20%
7%
14%
Impact from change in permanent reinvestment assertion related to the pending
sale of Business Solutions
(r)
N/A
N/A
N/A
N/A
(6)%
0%
(2)%
Impact from restructuring-related expenses
(m)
1%
0%
N/A
N/A
N/A
N/A
N/A
Impact from acquisition and divestiture costs
(n)
0%
0%
0%
0%
0%
0%
0%
Impact from gain on investment sale
(o)
N/A
N/A
N/A
0%
0%
(1%)
0%
Impact from debt extinguishment costs
(p)
N/A
N/A
N/A
0%
0%
0%
0%
Impact from pension settlement charge
(q)
N/A
N/A
N/A
0%
0%
6%
1%
Effective tax rate, adjusted (non-GAAP)
12%
13%
10%
14%
14%
12%
13%
C2C Segment Metrics
(e)
Revenues (GAAP)
$
1,121.5
$
4,220.0
$
1,050.9
$
1,127.1
$
1,104.5
$
1,111.5
$
4,394.0
Foreign currency translation impact
(j)
(1.2)
41.2
(11.1)
(32.1)
(9.4)
6.2
(46.4)
Revenues (non-GAAP, constant currency)
$
1,120.3
$
4,261.2
$
1,039.8
$
1,095.0
$
1,095.1
$
1,117.7
$
4,347.6
Prior year revenues (GAAP)
$
1,125.0
$
4,407.8
$
1,015.4
$
976.6
$
1,106.5
$
1,121.5
$
4,220.0
Revenues (GAAP) - YoY % change
0%
(4)%
4%
15%
0%
(1)%
4%
Revenues (non-GAAP, constant currency) - YoY % change
0%
(3)%
2%
12%
(1)%
0%
3%
(f)
Principal per transaction, as reported ($- dollars)
$
341
$
331
$
353
$
357
$
361
$
354
$
356
Foreign currency translation impact ($- dollars)
(j)
(2)
2
(7)
(10)
(1)
2
(4)
Principal per transaction (constant currency) ($- dollars)
$
339
$
333
$
346
$
347
$
360
$
356
$
352
Prior year principal per transaction, as reported ($- dollars)
$
300
$
303
$
308
$
322
$
348
$
341
$
331
Principal per transaction, as reported - YoY % change
14%
9%
15%
11%
4%
4%
8%
Principal per transaction (constant currency) - YoY % change
13%
10%
12%
8%
3%
4%
6%
(g)
Cross-border principal, as reported ($- billions)
$
25.3
$
90.6
$
24.5
$
26.6
$
26.5
$
26.5
$
104.1
Foreign currency translation impact ($- billions)
(j)
(0.1)
0.6
(0.5)
(0.7)
(0.2)
0.2
(1.2)
Cross-border principal (constant currency) ($- billions)
$
25.2
$
91.2
$
24.0
$
25.9
$
26.3
$
26.7
$
102.9
Prior year cross-border principal, as reported ($- billions)
$
20.5
$
80.7
$
19.1
$
20.7
$
25.5
$
25.3
$
90.6
Cross-border principal, as reported - YoY % change
24%
12%
28%
29%
4%
5%
15%
Cross-border principal (constant currency) - YoY % change
23%
13%
26%
25%
3%
5%
14%
Business Solutions Segment Metrics
(h)
Revenues (GAAP)
$
89.2
$
356.1
$
96.5
$
99.3
$
116.8
$
109.2
$
421.8
Foreign currency translation impact
(j)
(2.4)
(0.1)
(5.6)
(7.2)
(3.1)
0.0
(15.9)
Revenues (non-GAAP, constant currency)
$
86.8
$
356.0
$
90.9
$
92.1
$
113.7
$
109.2
$
405.9
Prior year revenues (GAAP)
$
97.0
$
388.8
$
98.4
$
79.4
$
89.1
$
89.2
$
356.1
Revenues (GAAP) - YoY % change
(8)%
(8)%
(2)%
25%
31%
22%
18%
Revenues (non-GAAP, constant currency) - YoY % change
(11)%
(8)%
(8)%
16%
28%
22%
14%
(i)
Operating income/(loss) (GAAP)
$
(0.2)
$
24.4
$
12.6
$
10.9
$
38.4
$
33.6
$
95.5
Depreciation and amortization
8.1
36.1
6.9
6.8
2.4
0.0
16.1
EBITDA (non-GAAP)
(l)
$
7.9
$
60.5
$
19.5
$
17.7
$
40.8
$
33.6
$
111.6
Operating income/(loss) margin (GAAP)
(0.2)%
6.9%
13.1%
10.9%
32.9%
30.8%
22.6%
EBITDA margin (non-GAAP)
8.8%
17.0%
20.2%
17.8%
34.9%
30.8%
26.5%
2022 Consolidated Outlook Metrics
Range
Operating margin (GAAP)
21.0%
22.0%
Impact from acquisition and divestiture costs
(n)
0.5%
0.5%
Impact from the pending sale of Business Solutions
(s)
(0.5)%
(0.5)%
Operating margin, adjusted, excluding acquisition and divestiture costs and the
pending sale of Business Solutions (non-GAAP)
21.0%
22.0%
Range
Earnings per share (GAAP) ($- dollars)
$
2.38
$
2.48
Impact from acquisition and divestiture costs
(n)
0.04
0.04
Gain on the sale of Business Solutions, net of related taxes
(s)
(0.52)
(0.52)
Earnings per share, adjusted, excluding the acquisition and divestiture costs
and gain on the sale of Business Solutions, net of related taxes (non-GAAP) ($-
dollars) $
1.90
$
2.00
THE WESTERN UNION COMPANY NOTES TO KEY STATISTICS (in millions, unless indicated
otherwise) (Unaudited) Non-GAAP related notes:
(j)
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. The Company believes that this measure provides management and investors
with information about revenue results and trends that eliminates currency
volatility while increasing the comparability of the Company's underlying
results and trends.
(k)
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. ("ACI") 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. 2019
revenues have been adjusted to exclude the carved out financial information for
Speedpay and Paymap to compare the year-over-year revenue change. These
financial measures are non-GAAP measures and should not be considered a
substitute for the GAAP measures. The Company has 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.
(l)
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. The Company ceased depreciation and
amortization for its Business Solutions business during the second half of 2021
as this business was held for sale.
(m)
Represents impact from expenses incurred in connection with an overall
restructuring plan, approved by the Board of Directors on August 1, 2019, to
improve the Company's business processes and cost structure by reducing
headcount and consolidating various facilities. While certain of these expenses
are identifiable to the Company's business segments, primarily to the Company's
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 the Company has previously incurred and can reasonably be expected
to incur in the future. The Company believes 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 the Company's
underlying operating results. As of December 31, 2020, all expenses associated
with this plan have been incurred.
(n)
Represents the impact from expenses incurred in connection with the Company's
acquisition and divestiture activity, including for the review and closing of
these transactions. The Company believes 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 the Company's underlying
operating results.
(o)
On April 12, 2021, the Company sold a substantial majority of the noncontrolling
interest it held in a private company for cash proceeds of $50.9 million. As a
result, the Company recorded a pre-tax gain in the second quarter of 2021. The
gain on the sale and the income taxes on the gain have been removed from
adjusted results. The Company believes excluding the impact of this gain will
provide investors with a more meaningful comparison of results with the
historical periods presented.
(p)
On April 1, 2021, the Company repaid $500 million of aggregate principal amount
of 3.6% unsecured notes due in 2022 and incurred approximately $14.8 million of
costs, excluding accrued interest, in connection with the repayment. The cost
associated with the repayment was recorded to Other income/(expense), net, in
the second quarter of 2021. The costs associated with the payment and related
tax benefit have been removed from adjusted results. The Company believes
excluding the impact of this charge will provide investors with a more
meaningful comparison of results with the historical periods presented.
(q)
Represents the settlement charges for the Company's defined benefit pension plan
incurred in the fourth quarter of 2021. On July 22, 2021, the Company's Board of
Directors approved a plan to terminate and settle this frozen defined benefit
plan, and during the fourth quarter of 2021, the Company settled its obligations
under the plan and transferred the corresponding amount of plan assets to the
insurer. The expenses associated with the pension settlement were recorded to
Pension settlement charges within Total other expense, net. The Company believes
excluding the impact of this charge will provide investors with a more
meaningful comparison of results with the historical periods presented.
(r)
Represents the tax impact from changes to certain of the Company's permanent
reinvestment assertions related to its decision to classify its Business
Solutions business as held for sale in the third quarter of 2021. The Company
believes excluding the impact of this charge will provide investors with a more
meaningful comparison of results with the historical periods presented.
(s)
During 2021, the Company entered into an agreement to sell its Business
Solutions business to Goldfinch Partners LLC and The Baupost Group LLC for cash
consideration of $910 million, subject to regulatory and working capital
adjustments. In the first quarter of 2022, the Company expects to complete the
first closing of the sale and to receive the entire cash consideration. The
first closing primarily excludes the operations in the European Union and the
United Kingdom. The second closing is expected to occur by late 2022. The sale
is also expected to result in a gain, which will be recognized at each closing,
based on the book values and fair values of the operations sold at each closing.
The Company has excluded Business Solutions revenues, Business Solutions
operating margin, excluding corporate expenses allocated to the Business
Solutions segment, and the expected gain on the sale, net of related taxes from
its 2022 adjusted outlook, as management believes that excluding the impact of
the Business Solutions business, including the gain on sale, from the 2022
adjusted outlook will provide investors with a clearer and more meaningful
comparison of results in 2022 and future periods.
Other notes:
(aa)
Geographic split for transactions and revenue, including transactions initiated
digitally, as earlier defined, 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 the
Company's Consumer-to-Consumer segment.
(cc)
Represents the Europe and the Russia/Commonwealth of Independent States ("EU &
CIS") region of the Company's Consumer-to-Consumer segment.
(dd)
Represents the Middle East, Africa, and South Asia ("MEASA") region of the
Company's 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 the Company's
Consumer-to-Consumer segment, including Mexico.
(ff)
Represents the East Asia and Oceania ("APAC") region of the Company's
Consumer-to-Consumer segment.
(gg)
Represents transactions conducted and funded through websites and mobile
applications marketed under the Company's brands ("westernunion.com").
View source version on businesswire.com:
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