The Western Union Company (NYSE: WU) today reported financial
results for the fourth quarter and full year 2006 that were in line
with previously announced guidance.
Highlights for the fourth quarter include:
-- Revenue of $1.2 billion, up 10%
-- Operating income of $335 million
-- Net income of $217 million
-- Earnings per share of $0.28
-- Operating income margin of 28.6%
Highlights for 2006 include:
-- Revenue of $4.5 billion, up 12%
-- Operating income of $1.3 billion
-- Cash provided by operating activities of $1.1 billion
-- Agent network totaling more than 295,000 locations at year-end
-- Increased global share of the estimated cross-border
remittance market to 17.4%
"The fourth quarter was in line with our expectations and capped
another strong year for Western Union," said President and CEO
Christina Gold. "We further expanded our global presence, and now have
an agent network totaling approximately 300,000 locations spanning 200
countries and territories. We continued to deliver outstanding
performance in our international consumer-to-consumer business, which
comprises more than 60% of total revenue. In 2006, more than 85% of
the nearly 150 million consumer-to-consumer transactions we handled
involved an agent outside the U.S., continuing a long-standing trend
toward increasing the global diversification of the Western Union
business."
Fourth Quarter Results
Revenue for the fourth quarter increased 10% to $1.2 billion.
Fourth quarter revenue growth was 9% excluding Vigo, which was
acquired October 21, 2005, and Servicio Electronico De Pago S.A.
(SEPSA), a walk-in bill payment company based in Argentina with more
than 3,300 locations, which was acquired December 6, 2006.
Consumer-to-consumer revenue was $990 million, up 11% driven by
transaction growth of 16%, or 14% excluding Vigo. In the quarter, the
international money transfer business continued to deliver strong
results.
Transaction growth in the international business was 23%, or 21%
excluding Vigo. International revenue growth remained strong at 17%.
Two key markets, India and China, continued their robust growth during
the fourth quarter. China posted 31% transaction growth and India
nearly doubled its transactions from the fourth quarter 2005.
Transaction and revenue growth within the Mexico and domestic
businesses continued to be impacted by decreased demand among Hispanic
consumers, partially reflecting the immigration debate in the U.S.
Mexico transactions grew 11%, or 1% excluding Vigo. Domestic
transactions declined 7% impacted by the immigration debate as well as
general softness in the marketplace. For both the Mexico and domestic
businesses, revenue and transaction growth rates were stronger in
December than the first two months of the quarter.
Western Union continued to strengthen its agent network through
key renewals and new signings. Among these were: Rite-Aid in the U.S.,
La Banque Postale in France, Agricultural Bank of China, Weizmann
Forex Limited and Paul Merchant Ltd. in India, United Bank Limited in
Pakistan, National Development Bank in Sri Lanka, Lietuvos Pastas in
Lithuania, Banque du Sud in Tunisia, Indian Oil Corporation, the
Cameroon Post, as well as GE Money Switzerland, and a pilot with GE
Money Austria.
The consumer-to-business segment grew revenue 7% to $162 million.
The SEPSA acquisition, which added $4 million of revenue in the
quarter, marked an important step in the globalization of the
consumer-to-business segment.
Fourth quarter operating income of $335 million included
incremental expenses related to operating as an independent,
stand-alone public company of $9 million. Net income of $217 million
benefited from a tax rate in the fourth quarter of 29%, versus the 32%
recognized in the first three quarters of the year. The lower tax rate
in the quarter was primarily driven by favorable resolution of certain
tax matters.
Full Year Results
Revenue for 2006 increased 12% to $4.5 billion and operating
income was $1.3 billion. Excluding the Vigo and SEPSA acquisitions,
revenue growth was 9%.
The operating margin for the year was 29.3% compared with 31.8% in
2005. Full-year operating margin was primarily impacted by:
-- Ongoing mix shift from the higher margin domestic and Mexico
businesses to the faster growing, lower margin international
business
-- Completion of the Vigo acquisition in the fourth quarter of
2005, which contributed $141 million in revenue in 2006 and
generated a moderate loss
-- $25 million of expenses related to operating as a stand-alone,
independent company
Western Union continues to generate strong cash flow. Cash
provided by operating activities was $1.1 billion, slightly higher
than expected as a result of the timing of a tax payment which was
deferred from 2006 until 2007. Capital expenditures were $202 million.
Cash at year end was $1.4 billion and total outstanding debt was $3.3
billion.
During 2006, Western Union repurchased 875,000 shares for $19.9
million at an average cost of $22.79 per share. Under Western Union's
stock buyback program, $980 million is available to repurchase stock
through 2008.
2007 Outlook
The company reaffirmed the existing 2007 guidance of revenue
growth of 10% to 12% excluding acquisitions and operating income
growth in the range of 6% to 9% excluding the impact of incremental
public company expenses. This guidance reflects management's continued
expectation that international consumer-to-consumer markets will
remain strong, while trends in the U.S. and Mexico money transfer
corridors will improve beginning in the second quarter as a result of
marketing initiatives and easier comparisons with the prior year.
Incremental revenue from Western Union's acquisition of SEPSA on
December 6, 2006 is expected to add approximately 1 percentage point
to revenue growth in 2007. As a result, the company expects 2007 GAAP
revenue growth to be between 11% and 13%.
Management continues to expect that operating income will grow
between 6% to 9% in 2007 excluding incremental public company
expenses, or 3% to 6% on a GAAP basis. Western Union expects GAAP EPS
for 2007 of between $1.07 and $1.11. The EPS range includes an
estimated $60 to $65 million of incremental public company expenses,
an approximately $110 million net expense from interest expense,
interest income and other income, a tax rate of approximately 32% and
weighted average diluted shares outstanding of approximately 780 to
785 million. Profit and EPS growth are expected to accelerate during
the year as investments aimed at improving the domestic and Mexico
consumer-to-consumer businesses are more heavily weighted toward the
first six months of the year, and as revenue growth trends are
anticipated to be stronger in the second half of 2007.
The estimated $60 to $65 million in incremental public company
expenses is an improvement from the previously stated range of $65 to
$75 million. The reduction in this estimate is the result of increased
visibility into the actual expenses required to operate as an
independent company and refinements to the original plan.
Cash provided by operating activities is expected to be
approximately $900 million. The 2007 cash flow will be impacted by a
full year of interest expense, the incremental public company expenses
and the deferral into 2007 of the previously mentioned tax payment.
Capital expenditures are expected in the range of $200 to $250
million.
Gold added, "I am confident in our ability to deliver on the 2007
financial targets we established last year, which anticipate the
Mexico and domestic businesses beginning to improve in the second
quarter. We are confident in our action plans and remain committed to
investing early in the year to deliver the expected results. Equally
important, our international business remains very strong based on the
continued growth of global migration, the power of our brand, and the
continued growth of our agent network. We enter our first full year as
an independent public company more excited than ever about our
prospects."
Non-GAAP Measures
Western Union's management uses operating income growth excluding
the impact from incremental public company expenses and revenue
excluding acquisitions which are non-GAAP measures, as they provide a
more meaningful year-over-year comparison.
Reconciliations of non-GAAP to comparable GAAP measures are
available in the accompanying schedules and in the "Investor
Relations" section of the company's web site at www.westernunion.com.
Investor and Analyst Conference
Western Union will host a conference call and webcast scheduled
for 8:00 a.m. Eastern Time on February 1, 2007. During the conference
call, Western Union President and CEO Christina Gold will discuss
fourth quarter and full-year results, as well as the outlook for 2007.
Joining Christina on the conference call will be David Barnes,
Executive Vice President of Strategy and Finance; and Scott Scheirman,
Executive Vice President and CFO.
To listen to the conference call on February 1 via telephone, dial
800-510-9691 (U.S.) or +1-617-614-3453 (outside the U.S.) ten minutes
prior to the start of the call. The pass code is 18333414.
The conference call will also be available via webcast at
www.westernunion.com. Registration for the event is required, so
please allow at least five minutes to register prior to the scheduled
start time.
A replay of the call will be available one hour after the call
ends through February 9, 2007 at 5:00 p.m. Eastern Time at
888-286-8010 (U.S.) or +1-617-801-6888 (outside the U.S.). The pass
code is 96422645. A webcast replay will be available at
www.westernunion.com for the same time period.
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 forward-looking statements regarding
projected future results. Forward-looking statements include all
statements that do not relate solely to historical or current facts,
and generally can be identified by the use of words such as "may,"
"believe," "will," "expect," "project," "estimate," "anticipate,"
"plan," "could," "would," "likely," "intend," or "continue." All
forward-looking statements are inherently uncertain as they are based
on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties
which could cause actual events or results to differ materially from
those projected. These factors include, but are not limited to: the
impact of our spin-off from First Data Corporation; changes in
immigration laws, patterns and other factors related to immigrants;
the integration of significant businesses and technologies we acquire
and realization of anticipated synergies from these acquisitions;
technological changes, particularly with respect to e-commerce; our
ability to attract and retain qualified key employees; changes in
laws, regulations or industry standards affecting our businesses;
changes in foreign exchange spreads on money transfer transactions;
changes in the political or economic climate in countries in which we
operate; continued growth in the consumer money transfer market and
other markets in which we operate at rates approximating recent
levels; our ability to compete effectively in the money transfer
industry with respect to global and niche or corridor money transfer
providers, United States and international banks, card associations,
card-based payments providers and a number of other types of
competitive service providers; our ability to maintain our agent
network; implementation of Western Union agent agreements with
governmental entities according to schedule and no interruption of
relations with countries in which Western Union has or is implementing
material agent agreements; successfully managing the potential both
for patent protection and patent liability in the context of rapidly
developing legal framework for expansive software patent protection;
successfully managing credit and fraud risks from our agents and from
consumers; unanticipated developments relating to lawsuits,
investigations or similar matters; catastrophic events; any material
breach of security of any of our systems; and other risk factors
described from time to time in Western Union's filings with the SEC .
About Western Union
The Western Union Company (NYSE: WU) is a leader in global money
transfer services. Together with its affiliates, Orlandi Valuta and
Vigo, Western Union provides consumers with fast, reliable and
convenient ways to send and receive money around the world, as well as
send payments and purchase money orders. It operates through a network
of approximately 300,000 Agent locations in over 200 countries and
territories. Famous for its pioneering telegraph services, the
original Western Union dates back to 1851. For more information, visit
www.westernunion.com.
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THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
Three Months Year
Ended December 31, Ended December 31,
------------------------ --------------------------
2006 2005 Change 2006 2005 Change
-------- -------- ------ --------- --------- ------
Revenues:
Transaction fees $964.9 $896.7 8% $3,696.6 $3,354.8 10%
Foreign exchange
revenue 175.3 145.0 21% 653.9 531.0 23%
Commission and
other revenues 33.0 26.5 25% 119.7 102.1 17%
-------- -------- --------- ---------
Total revenues 1,173.2 1,068.2 10% 4,470.2 3,987.9 12%
Expenses:
Cost of services 651.1 595.1 9% 2,430.5 2,118.9 15%
Selling, general
and
administrative 186.9 159.2 17% 728.3 599.8 21%
-------- -------- --------- ---------
Total expenses (b) 838.0 754.3 11% 3,158.8 2,718.7 16%
Operating income 335.2 313.9 7% 1,311.4 1,269.2 3%
Interest expense
(b) (52.3) (0.4) (a) (53.4) (1.7) (a)
Interest income 19.4 2.3 (a) 40.1 7.6 (a)
Interest income
from First Data,
net - 10.0 (a) 35.7 24.3 (a)
Derivative
gains/(losses),
net 0.6 7.2 (a) (21.2) 45.8 (a)
Foreign exchange
effect on notes
receivable from
First Data, net - 4.7 (a) 10.1 (5.9) (a)
Other income, net 3.6 0.5 (a) 12.4 4.8 (a)
-------- -------- --------- ---------
Total other
(expense) /
income (28.7) 24.3 (a) 23.7 74.9 (a)
-------- -------- --------- ---------
Income before
income taxes 306.5 338.2 -9% 1,335.1 1,344.1 -1%
Provision for
income taxes 89.3 104.3 -14% 421.1 416.7 1%
-------- -------- --------- ---------
Net income $217.2 $233.9 -7% $914.0 $927.4 -1%
======== ======== ========= =========
Earnings per
share:
Basic $0.28 $0.31 -10% $1.20 $1.21 -1%
Diluted $0.28 $0.31 -10% $1.19 $1.21 -2%
Weighted-average
shares
outstanding: (c)
Basic 766.2 763.9 764.5 763.9
Diluted 782.3 763.9 768.6 763.9
_________
(a) Calculation not meaningful
(b) During 2006, Western Union incurred higher corporate overhead and
interest costs, many of which are recurring, as a result of its
separation from First Data. Prior to September 29, 2006, the
businesses that comprise Western Union were wholly owned subsidiaries
of First Data.
(c) For all periods prior to September 29, 2006 (date of spin-off from
First Data), basic and diluted earnings per share are computed
utilizing the shares outstanding at September 29, 2006.
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THE WESTERN UNION COMPANY
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(unaudited)
December 31,
2006 2005
--------- ---------
Assets
Cash and cash equivalents $1,421.7 $510.2
Settlement assets 1,284.2 914.4
Receivables from First Data, net - 192.8
Notes receivable from First Data - 751.5
Property and equipment, net of accumulated
depreciation of $213.1 and $183.6, respectively 176.1 82.4
Goodwill 1,648.0 1,618.0
Other intangible assets, net of accumulated
amortization of $211.4 and $155.6, respectively 287.7 180.4
Other assets 503.4 342.0
--------- ---------
Total assets $5,321.1 $4,591.7
========= =========
Liabilities and Stockholders' (Deficiency)/Net
Investment in The Western Union Company
Liabilities:
Accounts payable and accrued liabilities $554.8 $238.6
Settlement obligations 1,282.5 912.0
Pension obligations 52.9 69.8
Deferred tax liability, net 274.8 248.1
Notes payable to First Data - 163.5
Borrowings 3,323.5 -
Other liabilities 147.4 147.9
--------- ---------
Total liabilities 5,635.9 1,779.9
Stockholders' (Deficiency)/Net Investment in The
Western Union Company:
Preferred stock, $1.00 par value; 10 shares
authorized; no shares issued - -
Common stock, $0.01 par value; 2,000 shares
authorized; 772.0 shares issued at December
31, 2006 7.7 -
Capital deficiency (437.1) -
Net investment in The Western Union Company - 2,873.9
Retained earnings 208.0 -
Accumulated other comprehensive loss (73.5) (62.1)
Less: Treasury Stock at cost, 0.9 shares at
December 31, 2006 (19.9) -
Total Stockholders' (Deficiency)/Net Investment
in The Western Union Company (314.8) 2,811.8
--------- ---------
Total Liabilities and Stockholders' (Deficiency)/
Net Investment in The Western Union Company $5,321.1 $4,591.7
========= =========
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THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Year Ended December 31,
-----------------------
2006 2005
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $914.0 $927.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 34.8 32.0
Amortization 68.7 47.5
Deferred income tax provision 12.9 24.9
Realized (gain)/loss on derivative
instruments (4.1) 0.5
Other non-cash items, net 47.6 25.8
Increase (decrease) in cash, excluding the
effects of acquisitions and dispositions,
resulting from changes in:
Other assets (60.7) (8.8)
Accounts payable and accrued liabilities 123.2 (17.9)
Other liabilities (27.5) (28.6)
----------- -----------
Net cash provided by operating activities 1,108.9 1,002.8
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of contract costs (124.1) (22.5)
Capitalization of software development costs (14.4) (7.7)
Purchases of property and equipment (63.8) (34.8)
Notes receivable issued to agents (140.0) (8.4)
Repayments of notes issued to agents 20.0 -
Acquisition of businesses, net of cash acquired
and contingent purchase consideration paid (66.5) (349.1)
Cash received/(paid) on maturity of foreign
currency forwards 4.1 (0.5)
Purchase of equity method investments - (5.4)
----------- -----------
Net cash used in investing activities (384.7) (428.4)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from/(to) affiliates of First Data 160.2 (153.2)
Capital contributed by parent in connection
with acquisitions - 369.2
Notes payable issued to First Data - 400.1
Repayments of notes payable to First Data (154.5) (246.5)
Additions to notes receivable from First Data (7.5) (504.7)
Proceeds from repayments of notes receivable
from First Data 776.2 18.4
Dividends to First Data (2,953.9) (417.2)
Proceeds from issuance of borrowings, net of
debt issue costs 4,386.0 -
Principal payments on borrowings (2,400.0) -
Net proceeds from issuance of commercial paper 324.6 -
Proceeds from net borrowings under credit
facilities 3.0 -
Proceeds from exercise of options 80.8 -
Cash dividends to public shareholders (7.7) -
Purchase of treasury shares (19.9) -
----------- -----------
Net cash provided by/(used in) financing
activities 187.3 (533.9)
Net change in cash and cash equivalents 911.5 40.5
Cash and cash equivalents at beginning of
period 510.2 469.7
----------- -----------
Cash and cash equivalents at end of period $1,421.7 $510.2
=========== ===========
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THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(in millions)
(unaudited)
Three Months Year
Ended December 31, Ended December 31,
-------------------------- --------------------------
2006 2005 Change 2006 2005 Change
--------- --------- ------ --------- --------- ------
Revenues:
Consumer-to-
Consumer:
External
revenue
Transaction
fees $806.0 $738.2 9% $3,059.0 $2,724.0 12%
Foreign
exchange
revenue 174.9 144.6 21% 652.4 529.6 23%
Other revenues 9.0 6.0 50% 33.5 25.6 31%
--------- --------- --------- ---------
Total Consumer-
to-Consumer: 989.9 888.8 11% 3,744.9 3,279.2 14%
Consumer-to-
Business:
External
revenue
Transaction
fees 149.2 142.2 5% 593.7 565.0 5%
Other revenues 12.9 9.6 34% 42.5 35.2 21%
--------- --------- --------- ---------
Total Consumer-
to-Business: 162.1 151.8 7% 636.2 600.2 6%
Other:
External
revenue 21.2 27.6 -23% 89.1 108.5 -18%
Internal (a)
revenue - 1.3 0.9 5.2 (a)
--------- --------- --------- ---------
Total Other: 21.2 28.9 -27% 90.0 113.7 -21%
Eliminations - (1.3) (a) (0.9) (5.2) (a)
--------- --------- --------- ---------
Total revenues $1,173.2 $1,068.2 10% $4,470.2 $3,987.9 12%
========= ========= ========= =========
Operating income:
Consumer-to-
Consumer $272.9 $269.8 1% $1,069.7 $1,047.9 2%
Consumer-to-
Business 57.3 51.8 11% 223.3 220.4 1%
Other 5.0 (7.7) (a) 18.4 0.9 (a)
--------- --------- --------- ---------
Total operating
income $335.2 $313.9 7% $1,311.4 $1,269.2 3%
========= ========= ========= =========
Operating profit
margin:
Consumer-to- -3 -3
Consumer 27.6% 30.4% pts 28.6% 32.0% pts
Consumer-to- 1 pts -2
Business 35.3% 34.1% 35.1% 36.7% pts
Other 23.6% -26.6% (a) 20.4% 0.8% (a)
Total operating -1 -3
profit margin 28.6% 29.4% pts 29.3% 31.8% pts
Depreciation and
Amortization:
Consumer-to-
Consumer $22.7 $15.7 45% $80.6 $54.0 49%
Consumer-to-
Business 4.4 4.7 -6% 18.1 19.8 -9%
Other 1.2 1.2 0% 4.8 5.7 -16%
--------- --------- --------- ---------
Total
depreciation and
amortization $28.3 $21.6 31% $103.5 $79.5 30%
========= ========= ========= =========
_______
(a) Calculation not meaningful
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THE WESTERN UNION COMPANY
KEY INDICATORS
(in millions)
(Unaudited)
Three Months Year
Ended December 31, Ended December 31,
-------------------------- --------------------------
2006 2005 Change 2006 2005 Change
--------- --------- ------ --------- --------- ------
Transactions
Consumer-to-
Consumer 39.6 34.1 16% 147.1 118.5 24%
Consumer-to-
Business 69.3 57.9 20% 249.4 215.1 16%
Revenue
Consumer-to-
Consumer 989.9 888.8 11% 3,744.9 3,279.2 14%
Consumer-to-
Business 162.1 151.8 7% 636.2 600.2 6%
Three Months Year
Ended December 31, 2006 Ended December 31, 2006
-------------------------- --------------------------
Including Excluding Including Excluding
Vigo Vigo Vigo Vigo
--------- --------- --------- ---------
Consumer-to-
Consumer
Transaction
Growth
International
(a) 23% 21% 29% 24%
Domestic (b) -7% -7% -1% -2%
Mexico (c) 11% 1% 35% 6%
Consumer-to-
Consumer 16% 14% 24% 17%
Consumer-to-
Consumer Revenue
Growth
International
(a) 17% 17% 17% 15%
Domestic (b) -10% -10% -3% -3%
Mexico (c) 5% -2% 29% 7%
Consumer-to-
Consumer 11% 10% 14% 11%
Three Months Year
Ended December 31, 2006 Ended December 31, 2006
-------------------------- --------------------------
Including Excluding Including Excluding
SEPSA SEPSA SEPSA SEPSA
--------- --------- --------- ---------
Consumer-to-
Business
Transaction
Growth 20% 3% 16% 11%
Consumer-to-
Business Revenue
Growth 7% 4% 6% 5%
(a) Represents transactions between and within foreign countries
(excluding Canada and Mexico), transactions originated in the United
States or Canada destined for foreign countries and foreign country
transactions destined for the United States or Canada. Excludes all
transactions between or within the United States and Canada and all
transactions to and from Mexico as reflected in (b) and (c) below.
(b) Represents all transactions between and within the United States
and Canada.
(c) Represents all transactions to and from Mexico.
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THE WESTERN UNION COMPANY
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
(in millions)
Western Union believes the following measures provide meaningful
information to assist management, investors, analysts, and others in
understanding our financial results and to better analyze trends in
our underlying business by removing acquisitions from revenue growth
and removing incremental independent public company expenses as a
result of the spin-off from First Data from operating income to help
increase comparability to years where such acquisitions were not
included in the financials and incremental independent public company
expenses were not incurred. 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 our operations that, when viewed
with our GAAP results and the reconciliation to the corresponding
GAAP financial measure, provide a more complete understanding of our
business. Users of the financial statements are encouraged to review
our financial statements and publicly-filed reports in their entirety
and not to rely on any single financial measure. A reconciliation of
non-GAAP measures to the most directly comparable GAAP financial
measures is included below.
Three Months Twelve Months
Ended December 31, Ended December 31,
-------------------------- --------------------------
2006 2005 Change 2006 2005 Change
--------- --------- ------ --------- --------- ------
Revenue, $1,134.7 $1,044.0 9% $4,326.1 $3,963.7 9%
excluding
acquisitions
(a)(b)
Plus Vigo revenue
(a) $34.9 $24.2 $140.5 $24.2
Plus SEPSA
revenue (b) $3.6 $- $3.6 $-
--------- --------- --------- ---------
Revenue (GAAP) $1,173.2 $1,068.2 10% $4,470.2 $3,987.9 12%
========= ========= ========= =========
Full Year 2007
--------------------------
Revenue growth 10% to 12%
excluding
acquisitions
(b)
Plus acquisitions
(b) 1% to 1%
--------- ------
Revenue growth
(GAAP) 11% to 13%
========= ======
Full Year 2007
--------------------------
Operating income
growth, 6% to 9%
excluding
incremental
independent
public company
expenses (c)
Less incremental
independent
public company
expenses (c) 3% to 3%
Operating income
growth (GAAP) 3% to 6%
========= ======
(a) Revenue related to the acquisition of Vigo in October, 2005.
(b) Revenue related to the acquisition of SEPSA in December, 2006.
(c) Incremental independent public company expenses relate to staffing
additions and related costs to replace First Data support, corporate
governance, information technology, corporate branding and global
affairs, benefits and payroll administration, procurement, workforce
reorganization, stock compensation, and other expenses related to
being a stand-alone public company as well as recruiting and
relocation expenses associated with hiring key management positions
new to Western Union, other employee compensation expenses and
temporary labor used to develop ongoing processes. These expenses are
those in excess of amounts allocated to the company by First Data
prior to September 29, 2006 or beyond amounts that the company
presumes First Data would have allocated subsequently thereto. The
company expects most of these expenses will continue to be incurred
in future periods.
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