Western Union(WU) - 2022 Q3 - Quarterly Report

PART I FINANCIAL INFORMATION This section provides unaudited financial statements and management's discussion of financial condition and results Item 1. Financial Statements (Unaudited) This section presents unaudited condensed consolidated financial statements, including income, balance sheets, cash flows, and equity Condensed Consolidated Statements of Income This statement summarizes the Company's revenues, expenses, operating income, and net income Condensed Consolidated Statements of Income (in millions, except per share) | Metric (in millions, except per share) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | % Change (YoY) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | % Change (YoY) | |:---------------------------------------|:--------------------------------|:--------------------------------|:---------------|:-------------------------------|:-------------------------------|:---------------| | Revenues | $1,089.6 | $1,286.3 | (15)% | $3,383.6 | $3,786.0 | (11)% | | Total expenses | $857.8 | $967.7 | (11)% | $2,650.3 | $2,979.7 | (11)% | | Operating income | $231.8 | $318.6 | (27)% | $733.3 | $806.3 | (9)% | | Income before income taxes | $193.7 | $291.5 | (34)% | $792.1 | $754.5 | 5% | | Net income | $173.9 | $232.7 | (25)% | $661.2 | $637.0 | 4% | | Basic EPS | $0.45 | $0.57 | (21)% | $1.70 | $1.56 | 9% | | Diluted EPS | $0.45 | $0.57 | (21)% | $1.70 | $1.55 | 10% | | Basic weighted-average shares | 386.5 | 406.3 | | 388.8 | 409.1 | | | Diluted weighted-average shares | 387.6 | 408.0 | | 389.9 | 411.3 | | Condensed Consolidated Statements of Comprehensive Income This statement details net income and other comprehensive income components, leading to total comprehensive income Condensed Consolidated Statements of Comprehensive Income (in millions) | Metric (in millions) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | |:---------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Net income | $173.9 | $232.7 | $661.2 | $637.0 | | Total other comprehensive income/(loss) | $(4.4) | $12.6 | $(69.1) | $32.8 | | Comprehensive income | $169.5 | $245.3 | $592.1 | $669.8 | Condensed Consolidated Balance Sheets This statement presents the Company's financial position, including total assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in millions) | Metric (in millions) | September 30, 2022 | December 31, 2021 | |:---------------------|:-------------------|:------------------| | Total assets | $8,901.3 | $8,823.5 | | Total liabilities | $8,373.0 | $8,467.9 | | Total stockholders' equity | $528.3 | $355.6 | Condensed Consolidated Statements of Cash Flows This statement summarizes cash flows from operating, investing, and financing activities, showing changes in cash Condensed Consolidated Statements of Cash Flows (in millions) | Metric (in millions) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | |:---------------------|:-------------------------------|:-------------------------------| | Net cash provided by operating activities | $522.4 | $686.0 | | Net cash provided by investing activities | $366.7 | $192.6 | | Net cash used in financing activities | $(890.3) | $(883.8) | | Net change in cash and cash equivalents, including settlement, and restricted cash | $(1.2) | $(5.2) | | Cash and cash equivalents, including settlement, and restricted cash at end of period | $2,109.7 | $2,137.9 | - The Company revised its cash flow presentation in Q4 2021 to classify changes in settlement cash associated with settlement obligations as a financing activity and changes from settlement investments as an investing activity. Prior periods were revised to conform, with no impact on net income, financial position, or operating cash flows[29][30] Condensed Consolidated Statements of Stockholders' Equity This statement outlines changes in stockholders' equity components, including common shares, capital surplus, and deficit Condensed Consolidated Statements of Stockholders' Equity (in millions) | Metric (in millions) | Balance, Dec 31, 2021 | Balance, Sep 30, 2022 | |:---------------------|:----------------------|:----------------------| | Common Shares | 393.8 | 385.9 | | Common Stock Amount | $3.9 | $3.9 | | Capital Surplus | $941.0 | $983.0 | | Accumulated Deficit | $(537.2) | $(337.4) | | Accumulated Other Comprehensive Loss | $(52.1) | $(121.2) | | Total Stockholders' Equity | $355.6 | $528.3 | - Total stockholders' equity increased from $355.6 million at December 31, 2021, to $528.3 million at September 30, 2022, driven by net income and stock-based compensation, partially offset by common stock dividends and share repurchases[17] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Business and Basis of Presentation This note describes the Company's business segments, financial statement basis, and cash flow presentation revisions - Western Union is a global leader in money movement and payment services, operating through Consumer-to-Consumer, Business Solutions, and Other segments. The Business Solutions segment is currently undergoing a three-phase divestiture, with the first closing completed in March 2022[20][21][22] - The Company's financial statements are unaudited and prepared in accordance with Form 10-Q and Article 10 of Regulation S-X, with certain information condensed or omitted compared to annual GAAP statements[24][26] - Beginning in Q4 2021, the Company revised its cash flow presentation to classify changes in settlement cash associated with settlement obligations as a financing activity and changes from settlement investments as an investing activity. This change was immaterial and did not affect previously reported net income, financial position, or operating cash flows[29][30] 2. Revenue This note details revenue recognition policies and provides a breakdown of revenues by product and region - Revenues are primarily derived from customer consideration for money transfers, varying by channel, locations, principal amount, currency exchange rates, and service speed. The Company acts as principal for most transactions, recognizing revenue on a gross basis[34] Revenues from Contracts with Customers by Product Type and Region (in millions) | Regions (3 Months Ended Sep 30, 2022) | Consumer Money Transfers | Foreign Exchange and Payment Services | Consumer Bill Payments | Other Services | Total | |:--------------------------------------|:-------------------------|:--------------------------------------|:-----------------------|:---------------|:------| | North America | $383.6 | $— | $17.2 | $15.2 | $416.0 | | Europe and CIS | $251.3 | $26.0 | $6.0 | $— | $283.3 | | Middle East, Africa, and South Asia | $156.6 | $— | $0.1 | $— | $156.7 | | Latin America and the Caribbean | $97.0 | $— | $23.4 | $2.1 | $1