Western Union 2011 Annual Report Download - page 54

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion in conjunction with the consolidated financial statements and the
notes to those statements included elsewhere in this Annual Report on Form 10-K. This Annual Report on
Form 10-K contains certain statements that are forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. Certain statements contained in the Management’s Discussion and Analysis of
Financial Condition and Results of Operations are forward-looking statements that involve risks and
uncertainties. The forward-looking statements are not historical facts, but rather are based on current
expectations, estimates, assumptions and projections about our industry, business and future financial results.
Our actual results could differ materially from the results contemplated by these forward-looking statements due
to a number of factors, including those discussed in other sections of this Annual Report on Form 10-K. See
“Risk Factors” and “Forward-looking Statements.”
Overview
We are a leading provider of money movement services, operating in two business segments:
•Consumer-to-consumer — money transfer services between consumers, primarily through a global
network of third-party agents using our multi-currency, real-time money transfer processing systems. This
service is available for international cross-border transfers — that is, the transfer of funds from one
country to another—and, in certain countries, intra-country transfers—that is, money transfers from one
location to another in the same country.
•Global business payments — the processing of payments from consumers or businesses to other
businesses. Our business payments services allow consumers to make payments to a variety of
organizations including utilities, auto finance companies, mortgage servicers, financial service providers,
government agencies and other businesses. Our existing Western Union Business Solutions business
(“Business Solutions”) and Travelex Global Business Payments (“TGBP”), which was acquired in
November 2011, are also included in this segment. These businesses facilitate business-to-business
payments, primarily for cross-border, cross-currency transactions. The majority of the segment’s revenue
was generated in the United States during all periods presented. However, international expansion and
other key strategic initiatives, including TGBP, have resulted in international revenue continuing to
increase in this segment.
Businesses not considered part of the segments described above are categorized as “Other” and represented 2%
or less of consolidated revenue during the years ended December 31, 2011, 2010 and 2009.
Significant Financial and Other Highlights
Significant financial and other highlights for the year ended December 31, 2011 included:
• We generated $5,491.4 million in total consolidated revenues compared to $5,192.7 million in the prior
year, representing a year-over-year increase of 6%. The acquisition of TGBP contributed $35.2 million to
revenue for 2011.
• We incurred $46.8 million and $59.5 million of restructuring and related expenses as described within
“Operating expenses overview” in the years ended December 31, 2011 and 2010, respectively.
• We generated $1,385.0 million in consolidated operating income compared to $1,300.1 million in the prior
year, representing an increase of 7%. The results include the restructuring and related expenses mentioned
above.
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