The Western Union Company reported financial results for the 2011

• Highest Full Year Revenue Growth since 2008
• Strong Electronic Channels Growth
• 2012 Expected to Be Impacted by Macro Challenges and Currency
• 25% Increase in Quarterly Dividend Announced 

ENGLEWOOD, Colo.--(BUSINESS WIRE) -- The Western Union Company (NYSE: WU) reported financial results for the 2011 fourth quarter and full year, and its financial outlook for 2012. 

Financial highlights for the full year included: 

• Revenue of $5.5 billion, an increase of 6% compared to 2010, or 5% excluding Travelex Global Business Payments (TGBP) 
• Constant currency adjusted revenue increase of 5%, or 4% excluding TGBP 
• Operating margin of 25.2%, or 26.1% excluding restructuring expenses, compared to 25.0%, or 26.2% excluding restructuring expenses in 2010. The current year includes $21 million in costs related to the completion of the TGBP acquisition 
• Gains in Other income / (expense) of $50 million related to the revaluation of the Company's previous 30% ownership interests in both Angelo Costa S.r.l. and Finint S.r.l., as expected, and $21 million related to foreign currency forward contracts primarily for the acquisition of TGBP 
• Benefit of approximately $205 million in Provision for income taxes related to the agreement with the U.S. Internal Revenue Service announced December 15, 2011. The full year effective tax rate was 8.6%, or 24.9% excluding this benefit and the impact of restructuring expenses 
• EPS of $1.84, or $1.57 excluding restructuring expenses and the tax benefit, compared to $1.36 in the prior year, or $1.42 in the prior year excluding restructuring expenses 
• Cash provided by operating activities of $1.2 billion 
• Restructuring expenses of $47 million, or $32 million after-tax, related to organizational changes and other actions as previously disclosed by the Company 

Financial highlights for the quarter included: 

• Revenue of $1.4 billion, an increase of 5% compared to last year's fourth quarter. Revenue increased 3% excluding $35 million of revenue from the TGBP acquisition 
• Constant currency adjusted revenue increase of 6%, or 4% excluding TGBP 
• Operating margin of 25.0%, compared to 23.7%, or 24.5% excluding restructuring expenses, in the prior year. TGBP results, including intangibles amortization, negatively impacted current period operating margin by approximately 100 basis points. In addition, the current quarter includes $9 million in costs related to the completion of the acquisition 
• Gains in Other income / (expense) of $20 million related to the revaluation of the Company's previous 30% ownership interest in Finint S.r.l., as expected, and $21 million related to foreign currency forward contracts primarily for the acquisition of TGBP 
• Benefit of approximately $205 million in Provision for income taxes related to the agreement with the U.S. Internal Revenue Service. The fourth quarter effective tax rate was (28.3%), or 29.8% excluding this benefit 
• EPS of $0.73, or $0.40 excluding the tax benefit, compared to $0.37 in the prior year, or $0.38 in the prior year excluding restructuring expenses

Additional highlights for the quarter included: 

• Consumer-to-consumer (C2C) revenue increase of 3% reported and 3% constant currency on transaction growth of 5%; C2C represented 83% of Company revenues 
• Europe, Middle East, Africa and South Asia (EMEASA) region revenue increase of 2% on transaction growth of 3% 
• Americas region revenue increase of 3% on transaction growth of 6% 
• Asia Pacific (APAC) region revenue increase of 6% on transaction growth of 8% 
• C2C operating margin of 28.0% compared to 27.0% in prior year 
• Global Business Payments revenue increase of 24% 
• Consumer bill payments revenue increase of 2% 
• Western Union Business Solutions (WUBS) revenue increase of 130%, or 13% excluding TGBP 
• Global Business Payments operating margin of 17.5%, compared to 13.3% in the prior year 
• Electronic channels revenue grew 36%. Electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer, represented 3% of total Company revenue for the quarter 
• Prepaid cards in force of nearly 1.5 million, with retail distribution available at over 15,000 U.S. locations 
• Agent locations of 485,000 
• Completion of acquisition of TGBP, a leading specialist provider of international business payments, which enhances the Company's position in one of its key strategic growth areas, business-to-business cross border payments 
• Completion of acquisition of Finint S.r.l., one of Western Union's leading money transfer network Agents in Europe 
• Dividends declared of $50 million in the quarter

Additional Statistics 

Additional key statistics for the quarter and historical trends can be found HERE

Dividend Increase 

The Company also announced today that its board of directors has declared a 25% increase in the Company's quarterly dividend, to $0.10 per common share. The Company's previous quarterly dividend was $0.08 per common share. The board of directors declared a quarterly cash dividend of $0.10 per common share, payable March 30, 2012 to shareholders of record at the close of business on March 16, 2012. 

Western Union President and Chief Executive Officer Hikmet Ersek commented, "We realized many accomplishments in 2011. We exceeded our initial outlook for earnings per share, and delivered our highest full year revenue growth rate since 2008. Each of our consumer-to-consumer regions grew, with strong performance in electronic channels. Consumer bill payments continued its turnaround, and Western Union Business Solutions delivered double-digit revenue growth. We also returned $1 billion to shareholders through share repurchase and dividends.” 

Ersek continued, "In 2011 we further identified our long-term opportunities and needs, and created the strategic roadmaps that will drive our future growth. We structured our business around three growth areas: core consumer money transfer, business-to-business payments, and new ventures and services, including further expansion of electronic channels. We acquired two major super-agents, furthering our European consumer strategies, and expanded our agent network to 485,000 locations. We also completed the acquisition of Travelex Global Business Payments, which in combination with our existing Western Union Business Solutions gives us a strong foundation for growth in SME business-to-business payments.” 

Ersek added, "In 2012 our focus is on execution against the strategic roadmaps. While there are some near-term market challenges in parts of the world, the long-term opportunities for revenue growth and margin expansion are strong. We are committed to investing in our business to realize these opportunities, including building our business-to-business foundation and further developing our separate digital business in San Francisco, which will allow us to achieve true leadership and scale in e-channels. We also remain focused on generating and deploying strong cash flow, and today's announcement that we will be raising our quarterly dividend to ten cents per share reflects that commitment.” 

2012 Outlook 

The Company expects the following financial outlook for 2012: 

Revenue 

• Constant currency revenue growth in a range of +6% to +8%, including a +4% benefit from the full year inclusion of TGBP 
• GAAP revenue growth 2% lower than constant currency, due to the significant strengthening of the U.S. dollar relative to European and other currencies compared to 2011 

The Company generally expects overall consumer-to-consumer constant currency revenue trends to be similar to the fourth quarter of 2011, and anticipates softness in Europe in 2012. The Company expects low double-digit constant currency revenue growth in Western Union Business Solutions, compared to pro forma full year 2011 results (TGBP was acquired November 7, 2011). 

Operating Margins 

• GAAP operating margin of approximately 25%, which compares to 25.2% in 2011 
• Operating margin of approximately 26% excluding TGBP integration costs, which compares to 26.2% excluding restructuring expenses and TGBP integration costs in 2011 
• EBITDA margin excluding TGBP integration costs of approximately 30%, which compares to 29.6% excluding restructuring expenses and TGBP integration costs in 2011 

Operating margins are expected to remain approximately the same as 2011 levels, excluding the impact of the TGBP integration expenses and prior year restructuring expenses. The Company anticipates 2012 margin benefits from revenue growth, currency hedges, consumer bill payments, lower deal costs and restructuring savings to be offset by acquisition related amortization, expanded infrastructure for its digital platforms, and other investments. 

The 2012 GAAP operating margin includes approximately $50 million of integration expense related to the TGBP acquisition. Acquisition related intangibles amortization for Western Union Business Solutions, including TGBP, is expected to be approximately $60 million in 2012, which compares to approximately $20 million in 2011. 

Other Income / Expense and Tax Rate 

The Company anticipates 2012 net Other expense to increase from the prior year due to the $71 million of one-time gains in 2011 related to revaluation of the Angelo Costa S.r.l. and Finint S.r.l. equity investments and currency gains from foreign currency forward contracts on the TGBP acquisition. 

The Company anticipates an effective tax rate in a range of 16% to 17% in 2012. 

Earnings Per Share 

• GAAP EPS in a range of $1.65 to $1.70 
• EPS excluding TGBP integration expenses of $1.70 to $1.75 

The 2012 EPS range excluding TBGP integration expenses of $1.70 to $1.75 compares to $1.57 in 2011 excluding restructuring expenses and the tax benefit related to the IRS agreement. The expected EPS increase in 2012 is driven by increased revenue and a lower effective tax rate, partially offset by the $71 million of acquisition related non-recurring gains in 2011 in Other income / (expense). Operating margins in 2012 are expected to be similar to 2011. 

Cash Flow from Operations 

Cash flow from operations in a range of $1.0 billion to $1.1 billion, or $1.2 billion to $1.3 billion excluding anticipated tax payments of approximately $200 million relating to the IRS agreement announced on December 15, 2011 

About Western Union 

The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of December 31, 2011, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of approximately 485,000 agent locations in 200 countries and territories. In 2011, The Western Union Company completed 226 million consumer-to-consumer transactions worldwide, moving $81 billion of principal between consumers, and 425 million business payments. For more information, visit www.westernunion.com.