Slide 1: Second Quarter 2009 Earnings Webcast & Conference Call
Second Quarter 2009 Earnings Webcast & Conference Call July 21, 2009 Exhibit 99.2
Slide 2: Gary Kohn, Vice President Investor Relations
Gary Kohn 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 Results – Q2 2009
$1.8 billion cash on hand Financial Results – Q2 2009 Revenue $1.3B (7)% Note: See appendix for reconciliation of Non-GAAP to GAAP measures. EPS $0.31 flat Revenue, constant currency (2)% EPS , excluding Q2 2008 restructuring (6)% Operating margin 27% YTD Cash flow from operations $606M
Slide 6: C2C Transaction Growth – Up 3%
Up 3% C2C Transaction Growth – Q2 2009 Q2 2008 Q2 2009 Principal per transaction Lower vs. Q2 2008 Consistent vs. Q1 2009 Revenue per transaction consistent with Q1 2009 Remittances not discretionary Consumers have need to send money home in millions
Slide 7: Geographically Diverse Portfolio: EMEA & S. Asia
Geographically Diverse Portfolio Revenue Transactions Q2 09 (5)% 11% Europe, Middle East, Africa, S. Asia 45% of Western Union revenue Western Europe consistent with Q1 2009 Spain and Russia remain challenged Gulf States and India strong growth but slowed from Q1 2009
Slide 8: Geographically Diverse Portfolio: Americas
Geographically Diverse Portfolio Revenue Transactions Q2 09 Americas (11)% (5)% 32% of Western Union revenue Mexico and domestic challenged in 2009 U.S outbound consistent with recent quarters Focused on growth initiatives
Slide 9: Geographically Diverse Portfolio: Asia Pacific
Geographically Diverse Portfolio Revenue Transactions Q2 09 Asia Pacific flat 19% 8% of Western Union revenue China transactions turned positive, revenue decline moderated Philippines strong transaction growth but slowed from Q1 2009 Asia Pacific region represents significant growth opportunity
Slide 10: Global Payments (formerly C2B)
Revenue Transactions Q2 09 Global Payments (8)% 3% 13% of Western Union revenue Comparable trends to Q1 2009 Implementing bill payment in Peru and Panama Brazil opportunities International and product expansion key Entering B2B market with announced Custom House acquisition Global Payments (formerly
Slide 11: Scott Scheirman, Executive Vice President & Chief Financial Officer
Scott Scheirman Executive Vice President & Chief Financial Officer
Slide 12: Financial Results – Q2 2009
Financial Results – Q2 2009 Revenue $1.3B (7)% Note: See appendix for reconciliation of Non-GAAP to GAAP measures. EPS, GAAP and constant currency $0.31 flat Revenue, constant currency (2)% EPS, excluding Q2 2008 restructuring (6)%
Slide 13: Components of Revenue
(8)% (7)% Transaction Fee Components of Revenue $ in millions Q2 08 Q2 09 Foreign Exchange Q2 08 Q2 09 $1,081 $1,000 $232 $217
Slide 14: Market Trends
Market Trends July 2009 World Bank Report remittances to developing countries* July Outlook: (7)% to (10)% (revised downward from March 2009) Migrants remaining in host countries Expect modest growth in 2010 * Migration and Development Brief 10 on remittance cross-border flows to developing countrie
Slide 15: Western Union Trends
Western Union Trends Total principal YTD total cross border principal (5)%; 1% constant currency adjusted Q2 total cross border principal (8)%; (1)% constant currency adjusted Business model benefits from: Transaction-based revenue model Geographic diversification Note: See appendix for reconciliati
Slide 16: Cost of Services – As a Percent of Revenue
Cost of Services – As a Percent of Revenue Note: See appendix for reconciliation of Non-GAAP to GAAP measures. 59.3% 57.9% 55.8% Reported Reported Excl. Restructuring Second Quarter
Slide 17: SG&A – As a Percent of Revenue
15.7% 15.4% 16.9% SG&A – As a Percent of Revenue Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Reported Reported Excl. Restructuring Second Quarter
Slide 18: Strong Operating Margin
25.0% 26.7% 27.2% Strong Operating Margin Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Second Quarter Reported Reported Excl. Restructuring
Slide 19: Tax Rate
Tax Rate Note: See appendix for reconciliation of Non-GAAP to GAAP measures. 24.8% 26.2% 25.5% Second Quarter Reported Reported Excl. Restructuring
Slide 20: Consumer-to-Consumer – 85% of revenue
85% of revenue Consumer-to-Consumer Q2 2009 Change (millions) Transactions 3% Revenue $1,065 (7)% Revenue, constant currency (2)% Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Operating Income (4)% Operating Margin 90 bps 27.6% $294
Slide 21: C2C Transaction and Revenue Growth
-7% 3% Currency and mix drive difference between transaction and revenue growth -2% Transaction Growth Mix Price Reductions Constant Currency Revenue Growth Currency Impact Reported Revenue Growth C2C Transaction and Revenue Growth Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 22: Global Payments (formerly C2B) – 13% of revenue
13% of revenue Global Payments (formerly C2B) Q2 2009 Change (millions) Transactions 3% Revenue $164 (8)% Operating Income $44 (11)% Operating Margin 26.8% (90) bps
Slide 23: Liquidity is a Distinct Advantage
Liquidity is a Distinct Advantage Cash Flows From Operations, YTD $606 million Cash Balance, June 30, 2009 $1.8 billion Debt Balance, June 30, 2009 $3.0 billion Capital Expenditures, YTD $40 million $1 billion due in 2011 $500 million due in 2014 $1 billion due in 2016 $500 million due in 2036
Slide 24: Reaffirm 2009 Outlook
Reaffirm 2009 Outlook Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Constant Currency Revenue to be down 2% to 5% GAAP Revenue to be down 5% to 8% Constant Currency EPS of $1.16 to $1.26 GAAP EPS of $1.18 to $1.28
Slide 25: Reaffirm 2009 Outlook
Reaffirm 2009 Outlook Cash Flow from Operations to exceed $1.1 billion Capital Expenditures of less than $150 million Targeting $400 million of stock repurchases Tax rate of approximately 26%
Slide 26: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer
Slide 27: Foundation for sustainable, diversified growth
Foundation for sustainable, diversified growth 2009 a year of opportunity Balancing profitability and investment Focusing on the core money transfer business – Asia, Westernunion.com, and Intra Significant global opportunities New customers and product offerings Strong Get Stronger
Slide 28: Building on Success – Attract New, Incremental Customers
Building on Success – Attract New, Incremental Customers Banking Strategy Expand distribution, reach new customers Payment Services Directive Acquired FEXCO Money Transfer (sales force and operating infrastructure) Custom House Expand into global business-to-business payments
Slide 29: Building on Success – Prepaid and Mobile
Prepaid MoneyWise Visa card Reloadable Visa Gold Card Mobile Forming key alliances Building on Success – Attract New, Incremental Customers ™ ® ®
Slide 30: Well positioned for long-term growth
Well positioned for long-term growth Global Leader Leadership position Expanding into broader payments markets 385,000 agent locations World-class brand Geographically diverse revenue stream Scalable infrastructure Industry-leading compliance capabilities Solid financial position
Slide 31: Appendix
Second Quarter 2009 Earnings Webcast & Conference Call July 21, 2009 Appendix
Slide 32: Non-GAAP Measures
Non-GAAP Measures Western Union's management has presented: (1) Consolidated and consumer-to-consumer segment revenue declines, international consumer-to-consumer revenue decline and international consumer-to-consumer excluding United States originated transactions revenue decline, excluding the imp
Slide 33: Reconciliation of Non-GAAP Measures: Revenue
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Consolidated Consumer-to- Consumer segment International Consumer-to- Consumer International Consumer-to- Consumer excluding United States originated transactions 2009 Revenues, as reported (GAAP) $ 1,254.3 $ 1,0
Slide 34: Reconciliation of Non-GAAP Measures: Cost of Services
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Revenues $ 1,254.3 $ 1,347.1 $ 700.3 $ 799.4 Restructuring and related expenses (b) - (19.5) $ 700.3 $ 779.9 55.8% 59.3% 55.8% 57.9% Refer to footnote explanations at the end of this "Reconciliation of Non-GAAP M
Slide 35: Reconciliation of Non-GAAP Measures: SG&A
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Revenues $ 1,254.3 $ 1,347.1 $ 212.3 $ 211.5 Restructuring and related expenses (b) - (3.4) $ 212.3 $ 208.1 16.9% 15.7% 16.9% 15.4% Refer to footnote explanations at the end of this "Reconciliation of Non-GAAP Me
Slide 36: Reconciliation of Non-GAAP Measures: Net Income and EPS
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) $ 220.2 $ 231.5 Restructuring and related expenses, net of income tax benefit of $10.2 million for the three months ended June 30, 2008 (b) - 12.7 $ 220.2 $ 244.2 As reported (GAAP) $ 0.
Slide 37: Reconciliation of Non-GAAP Measures: Operating Income
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Revenues $ 1,254.3 $ 1,347.1 $ 341.7 $ 336.2 Restructuring and related expenses (b) - 22.9 $ 341.7 $ 359.1 Operating income margin, as reported (GAAP) 27.2% 25.0% Operating income margin, adjusted 27.2% 26.7% Ref
Slide 38: Reconciliation of Non-GAAP Measures: Constant Currency EPS
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) Three Months Ended June 30, 2009 $ 220.2 Reversal of impact from translation of foreign currency denominated amounts into United States dollars, net of income tax expense of $1.1 million
Slide 39: Reconciliation of Non-GAAP Measures: Tax Rate
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Income before income taxes, as reported (GAAP) $ 295.7 308.0 $ Adjustments: Restructuring and related expenses (b) - 22.9 Income before income taxes, adjusted $ 295.7 $ 330.9 Provision for income taxes, as report
Slide 40: Reconciliation of Non-GAAP Measures: Principal per Transaction
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES $ $ Reversal of impact from translation of foreign currency denominated amounts into United States dollars (a) - $ $ Consumer-to-consumer principal per transaction decline, as reported (GAAP) (11)% Consumer-to-consumer princip
Slide 41: Reconciliation of Non-GAAP Measures: Cross-Border Principal
(in billions) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (unaudited) $ 15.9 $ 17.2 $ 30.9 $ 32.7 Reversal of impact from translation of foreign currency denominated amounts into United States dollars (a) 1.1 - 2.2 - $ 17.0 $ 17.2 $ 33.1 $ 32.7 Consumer-to-consumer cross-border pri
Slide 42: Reconciliation of Non-GAAP Measures: 2009 Outlook
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES 2009 Revenue Outlook Revenue declining GAAP basis (5)% (8)% Adjustments: Reversal of estimated impact of translation of foreign currency denominated amounts into United States dollars (c) 3% 3% Adjusted estimated revenue decli
Slide 43: Footnote explanations
Footnote explanations (a) 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 Unite
Slide 44: 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, July 21, 2009. If you plan to use this information for any purpose, verification of its continued accur