Western Union Q1 in line

Financial highlights for the quarter included:

Revenue of $1.4 billion, a reported and constant currency increase of 9% compared to last year's first quarter. Pro forma revenue increase of 4%, or 5% constant currency including Travelex Global Business Payments (TGBP) in the prior year period
Operating margin of 23.9% compared to 24.4% in the prior year. Excluding TGBP integration expenses of $6 million operating margin was 24.3%, compared to 26.3% excluding $24 million of restructuring expenses in the prior year period
The decrease in operating margin was primarily due to an increased operating loss in Business Solutions, including TGBP intangibles amortization, and incremental costs related to investments, compliance, and timing of certain expenses. The Company maintains its full year outlook for GAAP operating margin of approximately 25% and operating margin excluding TGBP integration costs of approximately 26%
EBITDA margin excluding TGBP integration expenses of 28.9%, compared to 29.7% excluding restructuring expenses in the prior year period
Cash provided by operating activities of $215 million, including the impact of tax payments of approximately $65 million relating to the agreement with the U.S. Internal Revenue Service announced December 15, 2011
EPS of $0.40, compared to $0.32 in the prior year, or $0.35 in the prior year excluding restructuring expenses. EPS excluding TGBP integration expenses was also $0.40

Additional highlights for the quarter included:

Consumer-to-Consumer (C2C) revenue increase of 4% reported and 5% constant currency, on transaction growth of 7%
C2C represented 81% of Company revenue
North America region revenue increase of 5%
Europe and the CIS region revenue flat with the prior year period
Middle East and Africa (MEA) region revenue increase of 6%
Asia Pacific (APAC) region revenue increase of 7%
Latin America and the Caribbean (LACA) region revenue increase of 2%
westeue increase of 7%
Latin America and the Caribbean (LACA) region revenue increase of 2%
westernunion.com revenue increase of 39%
C2C operating margin of 27.7% compared to 28.6% in the prior year
Consumer-to-Business (C2B) payments revenue increase of 1% reported and 3% constant currency
C2B represented 11% of Company revenue
C2B operating margin of 26.5% compared to 22.6% in the prior year
Business Solutions revenue of $87 million, compared to $28 million in the prior year
Business Solutions represented 6% of Company revenue
Pro forma revenue increase of 5%, or 4% constant currency, including TGBP revenue in the prior year period
Operating loss of $15 million, including $14 million of intangibles amortization and $6 million of TGBP integration expenses, compared to an operating loss of $4 million in the prior year (prior year does not include TGBP)
Electronic channels revenue increase of 38%
Electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer, represented 3% of total Company revenue (included in the various segments)
Prepaid revenue increase of 17%
Prepaid including third party top-up represented 1% of Company revenue
Agent locations of 495,000 as of March 31
Share repurchases of $147 million (8 million shares at an average price of $17.69 per share) and dividends declared of $0.10 per share or $62 million in the quarter (dividend per share increased 25% from prior quarter)

Additional Statistics

Additional key statistics for the quarter and historical trends can be found in the supplemental tables included with this press release.

Western Union President and Chief Executive Officer Hikmet Ersek commented, "Overall, we started off the year in line with our outlook. Our Consumer-to-Consumer segment growth accelerated compared to the fourth quarter, as strength in North America and the Middle East and Africa offset some expected softness in the Europe and CIS region. We further expanded our global network, including increasing our U.S. banking and European retail presence, and in April we reached 500,000 Agent locations across the world."

Ersek continued, "While our core is delivering, we are also making progress on evolving our new businesses. The integration of Travelex Global Business Payments is on track, as we continue to establish the foundation for growth in Business Solutions. In Ventures, our westernunion.com on-line money transfer service delivered almost 40% revenue growth in the quarter, and is now available from 23 countries. We also advanced our strategy of offering more services to more customers with the introduction of WU Pay. This innovative electronic payments platform allows on-line shoppers to pay for purchases directly from their bank account or in cash at Western Union locations. Westernunion.com consumers will also be able to utilize WU Pay to fund on-line money transfers."

Ersek added, "Strong capital deployment remains a priority. In addition to reinvesting in the business, we returned over $200 million to shareholders through the combination of share repurchase and dividends, and we plan to remain active with capital deployment throughout the year."

2012 Outlook

The Company affirms its full year 2012 financial outlook provided on February 7:

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

Operating Margins

GAAP operating margin of approximately 25%
Operating margin of approximately 26% excluding TGBP integration costs
EBITDA margin excluding TGBP integration costs of approximately 30%

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

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