The following press release was issued by Western Union. I do not
work for Western Union, but I thought the press release might be be of
interest.
Attention Business Editors:
Western Union Begins Investor Road Show for Upcoming Spin-off;
Provides Financial Outlook as Standalone Company
DENVER, September 18 /CNW/ - Western Union today announced that it
will be making presentations to the equity investment community in
preparation for its planned September 29, 2006 spin-off from First
Data Corp. (NYSE:FDC). The meetings will be led by Christina Gold,
President and Chief Executive Officer of Western Union, David Barnes,
Executive Vice President of Finance and Strategic Development, and
Scott Scheirman, Executive Vice President and Chief Financial
Officer. The company's road show presentation is available at
http://www.westernunion.com
Financial Outlook
Western Union will provide financial guidance during the
presentations. Assuming completion of its separation from First Data
on September 29, 2006, Western Union expects revenue for 2006 of $4.4
billion to $4.5 billion, an increase of between 11% and 12% from 2005
revenue of $4.0 billion. For 2006, the company expects operating
income of $1.32 billion to $1.34 billion, excluding expenses related
to its spin-off from First Data, which is 4% to 6% higher than 2005.
For 2007, Western Union expects revenue growth in the range of 10% to
12%, excluding acquisitions. In addition, the company expects
operating income growth of 6% to 9%, excluding the impact of expenses
related to its spin-off from First Data.
A chart detailing the company's guidance is attached to this release.
Western Union's long-term objective beyond 2007 is to deliver revenue
and operating profit growth of 10% to 12% on an annual basis and
annual EPS growth of 12% to 14%.
Ms. Gold said: "Western Union has a compelling long-term growth story,
with the proven strategy and track record, global agent network,
seasoned management team and financial strength to remain the
preeminent provider of money transfer services across the globe. The
separation from First Data creates rich new opportunities for the
company to invest its strong cash flow in continuing to expand
services in key growth regions of the world; in marketing efforts,
including our highly successful Gold Card Loyalty program; and in
continuing to enhance customer convenience and choice. We see
favorable long-term trends in the global money transfer market and, as
an independent company, will be better positioned to capture them."
Ms. Gold continued: "In the near term, we expect the company will
continue to be affected by softness in its U.S. domestic and U.S. to
Mexico consumer-to-consumer money transfer businesses. As previously
discussed, we believe the slower growth rates in these markets largely
reflect the uncertainty caused by the immigration debate and the
related activities in the U.S. In addition, our operating profits for
2006 and 2007 will reflect increased investment in the business to
address this issue, to secure future growth, as well as the shift in
our business mix, reflecting higher growth from our international
business, which carries lower profit margins."
Ms. Gold concluded: "We believe the slowdown related to the
immigration debate is a temporary issue, and our 2007 guidance assumes
revenue growth in the U.S. and U.S. to Mexico businesses will begin to
improve but will not reach levels experienced in 2005. In addition, we
expect that our international consumer-to-consumer money transfer
business, which currently represents 60% of our revenues and does not
include U.S. to Mexico transactions, will remain strong throughout
2006 and 2007. The geographic diversity of our business, which is a
key strength for Western Union, should enable us to generate solid
results despite the temporary issues we are addressing in the U.S. and
U.S. to Mexico markets."
hird Quarter Financial Update
During its road show presentation, Western Union will also provide
updates on several transaction growth rates excluding Vigo. For the
third quarter through September 14, the company's overall
consumer-to-consumer transactions grew 15% on a year-over-year
basis. International transactions grew 23% for the same period. In
addition, for the third quarter through September 14, Western
Union-branded transactions from the U.S. to Mexico grew 3% on a
year-over-year basis, while domestic transactions declined by 4%.
Western Union expects to issue its third quarter 2006 earnings press
release after the market close on October 23. The company will also
host a conference call.
Non-GAAP Measures
In certain circumstances results have been presented that are non-GAAP
(generally accepted accounting principles) measures and should be
viewed in addition to, and not in lieu of, the company's reported
results. Reconciliations to comparable GAAP measures are available in
the accompanying schedule to this press release.
About Western Union
Western Union, together with its affiliates Orlandi Valuta and Vigo,
are leaders in global money transfer, providing people with fast,
reliable and convenient ways to send money around the world, pay bills
and purchase money orders through a network of over 270,000 agent
locations in more than 200 countries and territories. For more
information, visit www.westernunion.com.
Guidance Tables
<< 2006 Financial Guidance
6 Months
June 30, 2006 FY 2006
-------------------------------------
Total Revenue $2.2B (A) $4.4B - $4.5B
Growth 13% 11% - 12%
----------------------------------------------------------------------
Operating Income, excluding spin
expenses (C): non-recurring and
ongoing $641M (B) $1,320M - $1,340M (D)
Growth 5% 4% - 6%
(A) Includes $68 million of revenue related to the acquisition of Vigo
in October 2005.
(B) Includes $11 million of stock compensation, SFAS 123R expense.
(C) Spin expenses represent estimated incremental expenses associated
with operating as a stand-alone company. Ongoing spin 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, and other expenses related to being a
stand-alone company. Non-recurring spin expenses relate to
recruiting and relocation expenses associated with hiring key
management positions new to our company, other employee
compensation expenses and temporary labor used to develop ongoing
processes. See reconciliation to Operating Income (GAAP) in
Appendix.
(D) Growth in Operating Income excluding spin expenses: non-recurring
and ongoing in Q3 06 is expected to be below the 4% - 6% range and
Operating Income excluding spin expenses in Q4 06 is expected to
be above the 4% - 6% range. Expense timing and other factors drive
the majority of the expected profit growth differences in Q3 and
Q4.
2007 Growth Outlook
Total Revenue 10% - 12%
Operating Income, excluding spin expenses (A):
non-recurring and ongoing 6% - 9%
(A) Spin expenses represent estimated incremental expenses associated
with operating as a stand-alone company. Ongoing spin 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, and other expenses related to being a
stand-alone company. Non-recurring spin expenses relate to
recruiting and relocation expenses associated with hiring key
management positions new to our company, other employee
compensation expenses and temporary labor used to develop ongoing
processes. See reconciliation to Operating Income (GAAP) in
Appendix.
Note: Revenue and operating income guidance exclude any potential
impact from future acquisitions
Reg G Reconciliation - Operating Income
(in Millions)
6 Months
June 30,2006 FY 2006
-------------------------------------
Operating Income, $641 $1,320 to $1,340
excluding spin expenses: 4% 6%
non-recurring and ongoing
Less spin expenses Non-recurring
$2
20 20
Ongoing 20 20
Operating Income (GAAP) $639 $1,280 to $1,300
1% 2%
Operating Income excluding spin expenses: non-recurring and ongoing
has been displayed to allow the financial reader improved
comparability of 2006 financial performance. However, the financial
reader should be aware that ongoing spin expenses are part of the
company's future cost structure.
For further information: The Western Union Company Media Sherry Johnson,
720-332-4750 Sherry.l.Johnson@westernunion.com or Investors Gary Kohn,
720-332-8276 Gary.Kohn@westernunion.com
Nigel Allen (ndallen@interlog.com)