Western Union 2015 Annual Report Download - page 170

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Consumer-to-Consumer price reductions totaled approximately 1% of both our Consumer-to-Consumer revenue and
consolidated revenue for the year ended December 31, 2014.
Operating income
2015 compared to 2014
Consumer-to-Consumer operating income declined 1% during the year ended December 31, 2015 compared to the prior year.
Results for the year ended December 31, 2015 were impacted by increased technology expenses, increased compliance program
costs, and increased incentive compensation expenses, partially offset by benefits from and lower costs related to productivity and
cost-savings initiatives. Results were also impacted by foreign currency translation, as the strengthening of the United States dollar
compared to foreign currencies resulted in lower reported revenues and expenses. Revenue declines are described above. The
change in operating margins in the segment was primarily due to benefits from foreign currency hedges, as well as the other factors
mentioned above.
2014 compared to 2013
Consumer-to-Consumer operating income increased 2% during the year ended December 31, 2014 compared to the prior year
primarily due to the revenue increases described above and benefits from our productivity and cost-savings initiatives. These
increases were partially offset by higher agent commissions, which generally increase as revenue increases, including increases
in agent commission rates in our walk-in services primarily due to the renewal of certain strategic agent agreements, and increased
compliance program costs. The change in operating income margins in the segment was due to the same factors mentioned above.
Consumer-to-Business Segment
The table below sets forth our Consumer-to-Business segment results of operations for the years ended December 31, 2015,
2014 and 2013. To assist in evaluating the comparable periods' results, we are including additional line items in the table below
reflecting Consumer-to-Business operating income and operating income margin excluding the effect of the $35.3 million of
expenses related to the Paymap Settlement Agreement, recorded in the second quarter of 2015. Operating income, excluding
Paymap Settlement Agreement, and operating income margin, excluding Paymap Settlement Agreement, are non-GAAP financial
measures and are used by management in evaluating the operating income results and trends of our Consumer-to-Business segment.
This disclosure is provided in addition to, and not as a substitute for, operating income and operating income margin on a GAAP
basis for the year ended December 31, 2015.
% Change
Year Ended December 31, 2015 2014
(dollars in millions) 2015 2014 2013 vs. 2014 vs. 2013
Revenues:
Transaction fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 612.7 $ 572.7 $ 579.1 7 % (1)%
Foreign exchange and other revenues . . . . . . . . . . . . . . . . . . . 25.0 26.1 29.4 (4)% (11)%
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 637.7 $ 598.8 $ 608.5 6 % (2)%
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68.6 $ 98.7 $ 121.9 (30)% (19)%
Less: Paymap Settlement Agreement . . . . . . . . . . . . . . . . . . . . . . 35.3 — —
Operating income, excluding Paymap Settlement Agreement . . . $ 103.9 $ 98.7 $ 121.9
Operating income margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11% 16% 20%
Operating income margin, excluding Paymap Settlement
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16% (a) (a)
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(a) Calculation not meaningful or not applicable
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