Western Union 2012 Annual Report Download - page 65

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60
2011 compared to 2010
For the year ended December 31, 2011 compared to the same period in 2010, Consumer-to-Consumer money transfer revenue
grew 5%, on transaction growth of 6%. The weakening of the United States dollar compared to most other foreign currencies
positively impacted our revenue growth by approximately 1%, which was offset by slight price reductions for the year ended
December 31, 2011.
Revenue in our Europe and CIS region increased 3% during the year ended December 31, 2011 compared to the same period
in 2010 due to transaction growth of 1% as well as the other factors described above. The United Kingdom, France, and Germany
continued to experience revenue and transaction growth for the year ended December 31, 2011 versus the prior year, which was
partially offset by softness in Southern Europe and Russia.
North America revenue increased 3% due to transaction growth of 7% for the year ended December 31, 2011 compared to
the same period in 2010. Our domestic business experienced revenue growth of 8% for the year ended December 31, 2011 due to
transaction growth of 16%. Transaction growth in our domestic business was higher than revenue growth due to transaction growth
being greater in lower principal bands, which have lower revenue per transaction. Our United States outbound business experienced
both transaction and revenue growth in the year ended December 31, 2011. Mexico revenue increased 2% on flat transactions for
the year ended December 31, 2011. Our Mexico business was affected by changes to our compliance procedures related to the
agreement and settlement with the State of Arizona and other states.
Our Middle East and Africa, APAC, and LACA regions all experienced revenue and transaction growth in the year ended
December 31, 2011 compared to the same period in 2010. Revenues in the Middle East and Africa and APAC regions in the year
ended December 31, 2011 were positively impacted by the weakening of the United States dollar compared to most other foreign
currencies. The Gulf States continued to experience revenue and transaction growth for the year ended December 31, 2011, which
was partially offset by declines resulting from the political unrest in Libya and the Ivory Coast. China's revenue increased 6% for
year ended December 31, 2011 on transaction growth of 4%. Our money transfer business to India experienced revenue growth
of 11% and transaction growth of 10% for the year ended December 31, 2011 versus the prior year. Revenue generated from
transactions initiated at westernunion.com increased for the year ended December 31, 2011 compared to the same period in 2010
due to strong transaction growth.
Foreign exchange revenues for the year ended December 31, 2011 grew compared to the same period in 2010, driven primarily
by increased amounts of cross-border principal sent.
Fluctuations in the exchange rate between the United States dollar and currencies other than the United States dollar resulted
in a benefit to transaction fees and foreign exchange revenues for the year ended December 31, 2011 of $39.1 million over the
same period in 2010, net of foreign currency hedges, that would not have occurred had there been constant currency rates.
Operating income
2012 compared to 2011
Consumer-to-Consumer operating income declined 4% during the year ended December 31, 2012 compared to the prior year
due to investments in our strategic initiatives, including westernunion.com, increased compliance program costs, expenses related
to productivity and cost-savings initiatives, increased bad debt losses, and incremental costs associated with the Finint and Costa
acquisitions, partially offset by positive currency impacts, including the effect of foreign currency hedges, restructuring savings,
and decreased compensation expenses. The changes in operating income margins in the segment are due to the same factors
mentioned above.
2011 compared to 2010
Consumer-to-Consumer operating income increased 6% during the year ended December 31, 2011 compared to the same
period in 2010 due to revenue growth. The change in operating income margin for the year ended December 31, 2011 compared
to the same period in 2010 was primarily due to restructuring savings and revenue leverage, partially offset by negative currency
impacts, including the effect of foreign currency hedges, and spending on initiatives.