Slide 1: Third Quarter 2009 Earnings Webcast & Conference Call
Third Quarter 2009 Earnings Webcast & Conference Call October 20, 2009 Exhibit 99.2
Slide 2: Mike Salop, Senior Vice President Investor Relations
Mike Salop Senior Vice President Investor Relations
Slide 3: Safe Harbor
Safe Harbor This presentation 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 pred
Slide 4: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer
Slide 5: Financial Highlights – Q3 2009
Geographic diversity Financial Highlights – Q3 2009 Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Consolidated Revenue $1.3B GAAP EPS $0.26 EPS, excluding settlement accrual $0.33 C2C Revenue - YoY Change (5)% C2C Revenue - YoY Change, constant currency (3)% C2C Transactions -
Slide 6: Geographically Diverse Portfolio: Europe, Middle East, Africa, S. Asia
Geographically Diverse Portfolio Revenue Transactions Q3 09 (3)% 8% Europe, Middle East, Africa, S. Asia 46% of Western Union revenue Western Europe consistent with Q2 2009 Spain and Russia remain challenged Gulf States strong transaction growth but moderated from Q2 2009
Slide 7: Geographically Diverse Portfolio: Americas
Geographically Diverse Portfolio Revenue Transactions Q3 09 Americas (10)% (4)% 31% of Western Union revenue Americas trends improved slightly from Q2 2009 Mexico continues to be challenged U.S outbound consistent with recent quarters Repositioning U.S. domestic money transfer
Slide 8: Geographically Diverse Portfolio: Asia Pacific
Geographically Diverse Portfolio Revenue Transactions Q3 09 Asia Pacific 5% 15% 8% of Western Union revenue China 7% transaction and revenue growth Renewal of Agricultural Bank of China adding 15,000 locations by Asia Pacific region represents significant growth opportunity Philippines transaction g
Slide 9: C2C Channel Initiatives: Intra-country
Intra-country Leverage network and high brand awareness Westernunion.com 14 send countries Profitable, high growth Account-to-cash New customers C2C Channel Initiatives
Slide 10: Global Business Payments
Revenue Transactions Q3 09 Global Business Payments (3)% 2% 13% of Western Union revenue Custom House closed September Comparable trends to Q2 2009, excluding Custom House Global Business Payments st
Slide 11: Scott Scheirman, Executive Vice President & Chief Financial Officer
Scott Scheirman Executive Vice President & Chief Financial Officer
Slide 12: Financial Results – Q3 2009
Financial Results – Q3 2009 Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Revenue $1.3B Revenue - YoY Change (5)% Revenue - YoY Change, constant currency (2)% GAAP EPS $0.26 EPS, excluding settlement accrual $0.33 $71 million pre-tax accrual for anticipated regulatory settlemen
Slide 13: Components of Revenue
(5)% flat Transaction Fee Components of Revenue Foreign Exchange $1,099 $1,040 $239 $238 ($ in millions) Q3 2008 Q3 2009 Q3 2008 Q3 2009
Slide 14: Remittance Trends
Up 3% Remittance Trends World Bank Report forecasts remittances to developing countries down 7% to 10% in 2009* Expects modest growth in 2010 Total YTD Western Union cross- border principal of $48 billion, down 5% (flat constant currency) Principal and revenue per transaction Comparable to 1H09 YoY
Slide 15: Cost of Services – As a Percent of Revenue
Cost of Services – As a Percent of Revenue Strong gross margins FEXCO acquisition Cost reductions Selective agent commission reductions Overall expense management Q3 2008 Q3 2009 57.0 % 56.5 %
Slide 16: SG&A – As a Percent of Revenue
SG&A – As a Percent of Revenue Settlement accrual five percentage points impact SG&A consistent with Q2 2009, excluding settlement accrual 4.5% marketing spend 15.7% 22.1% Q3 2008 Q3 2009
Slide 17: Operating Margin
Operating Margin Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Consistent operating margin, excluding settlement accrual Variable cost structure Cost reductions 27.2% 21.4% 26.8% Q3 2008 Reported Q3 2009 Reported Q3 2009 Ex Accrual
Slide 18: Tax Rate
Tax Rate Higher foreign-derived profits Tax efficient strategies 27.7% 26.6% Q3 2008 Q3 2009
Slide 19: Consumer-to-Consumer
85% of revenue Consumer-to-Consumer Q3 2009 Change (millions) Transactions 3% Revenue $1,118 (5)% Revenue, constant currency (3)% Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Operating Income (6)% Operating Margin (20) bps 27.6% $309
Slide 20: C2C Transaction and Revenue Growth
3% -3% -5% + Mix and price reductions consistent with recent quarters Transaction Growth Mix Price Reductions Constant Currency Revenue Decline Currency Impact Reported Revenue Decline C2C Transaction and Revenue Growth Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Q3 2009
Slide 21: Global Business Payments
13% of revenue Global Business Payments Q3 2009 Change (millions) Transactions 2% Revenue $171 (3)% Operating Income $42 (11)% Operating Margin 24.3% (210) bps Revenue, excluding Custom House Note: See appendix for reconciliation of Non-GAAP to GAAP measures. $163 Operating Margin, excluding Custom
Slide 22: Liquidity is a Distinct Advantage
Liquidity is a Distinct Advantage Cash Flows From Operations, YTD $958 million Cash Balance, September 30, 2009 $1.6 billion Debt Outstanding, September 30, 2009 $3.0 billion Capital Expenditures, YTD $67 million $1 billion due in 2011 $500 million due in 2014 $1 billion due in 2016 $500 million due
Slide 23: 2009 Outlook
2009 Outlook Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Constant currency revenue down 1% to 2% GAAP revenue down 4% to 5% GAAP operating income margin of approx. 25% Approx. 27% excluding the settlement accrual GAAP EPS of $1.15 to $1.20 $1.23 to $1.28 excluding $0.08 from
Slide 24: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer
Slide 25: Focused Strategy
Extending leadership position Focused Strategy Priority growth initiatives gaining momentum Balancing profitability and investment Significant global opportunities New customers and product offerings
Slide 26: Building on Success – Attract New, Incremental Customers
Building on Success – Attract New, Incremental Customers Banking Strategy Expand distribution, reach new customers Payment Services Directive Grow retail class of trade in Europe Custom House Investing to grow global business-to-business payments Prepaid MoneyWise Visa card Western Union Visa Gold C
Slide 27: Mobile
Mobile Active pilots Expanding mobile enabled send locations Developing mobile send capability Building on Success – Attract New, Incremental Customers
Slide 28: Positioned for Growth
Global leader Positioned for Growth World-class brand 400,000 agent locations Strong financial position Expanding into broader payments markets Multiple channel strategy Geographically diverse revenue stream Scalable infrastructure Industry-leading compliance capabilities
Slide 29: Third Quarter 2009 Earnings Appendix
Third Quarter 2009 Earnings Webcast & Conference Call October 20, 2009 Appendix
Slide 30: Non-GAAP Measures
Non-GAAP Measures Western Union's management has presented: (1) Consolidated, consumer-to-consumer segment, international consumer-to-consumer, and international consumer-to-consumer excluding United States originated transactions revenue declines, excluding the impact of translating foreign currenc
Slide 31: Reconciliation of Non-GAAP Measures
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) (unaudited) Consolidated Consumer-to- Consumer Segment International Consumer-to- Consumer International Consumer-to- Consumer excluding United States originated transactions 2009 Revenues, as reported (GAAP) $ 1,314.1 $ 1,1
Slide 32: Reconciliation of Non-GAAP Measures
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) (unaudited) Revenues $ 1,314.1 $ 3,769.6 $ 281.5 $ 964.1 Settlement accrual (b) 71.0 $ 352.5 $ 1,035.1 Operating income margin, as reported (GAAP) 21.4% 25.6% Operating income margin, adjusted 26.8% 27.5% Operating income, a
Slide 33: Reconciliation of Non-GAAP Measures
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) Three Months Ended September 30, 2009 $ 181.0 Reversal of impact from the settlement accrual, net of income tax benefit of $17.1 million (b) Net income, adjusted $ 234.9 As reported (GAA
Slide 34: Reconciliation of Non-GAAP Measures
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) (unaudited) $ 16,990 $ 17,796 $ 47,899 $ 50,488 Reversal of impact from translation of foreign currency denominated amounts into United States dollars (a) - 2,680 - $ 17,532 $ 17,796 $ 50,579 $ 50,488 Consumer-to-consumer cr
Slide 35: Reconciliation of Non-GAAP Measures
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (unaudited) $ $ Reversal of impact from translation of foreign currency denominated amounts into United States dollars (a) - $ $ Consumer-to-consumer principal per transaction decline, as reported (7)% Consumer-to-consumer principal per t
Slide 36: Slide 36
Slide 37: Reconciliation of Non-GAAP Measures: 2009 Outlook
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (unaudited) 2009 Revenue Outlook Revenue declines GAAP basis (4)% (5)% Adjustment: Reversal of estimated impact of translation of foreign currency denominated amounts into United States dollars (d) 3% 3% Adjusted estimated revenue decline
Slide 38: Footnote explanations
Footnote explanations (a) (b) (c) (d) 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 a
Slide 39: Use of Material
Use of Material The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation, October 20, 2009. If you plan to use this information for any purpose, verification of its continued ac