Company Quick10K Filing
Western Union
Price21.91 EPS3
Shares433 P/E8
MCap9,487 P/FCF14
Net Debt-1,398 EBIT1,359
TEV8,089 TEV/EBIT6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-04
10-K 2020-12-31 Filed 2021-02-19
10-Q 2020-09-30 Filed 2020-10-29
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-05-05
10-K 2019-12-31 Filed 2020-02-20
10-Q 2019-09-30 Filed 2019-10-31
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-01
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-02-22
10-Q 2016-09-30 Filed 2016-11-01
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-02-19
10-Q 2015-09-30 Filed 2015-10-29
10-Q 2015-06-30 Filed 2015-07-30
10-Q 2015-03-31 Filed 2015-04-30
10-K 2014-12-31 Filed 2015-02-20
10-Q 2014-09-30 Filed 2014-10-30
10-Q 2014-06-30 Filed 2014-07-31
10-Q 2014-03-31 Filed 2014-05-01
10-K 2013-12-31 Filed 2014-02-24
10-Q 2013-09-30 Filed 2013-11-04
10-Q 2013-06-30 Filed 2013-08-07
10-Q 2013-03-31 Filed 2013-05-06
10-K 2012-12-31 Filed 2013-02-22
10-Q 2012-09-30 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-01
10-Q 2011-09-30 Filed 2011-11-03
10-Q 2011-06-30 Filed 2011-08-02
10-Q 2011-03-31 Filed 2011-05-04
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-04
10-Q 2010-03-31 Filed 2010-05-06
10-K 2009-12-31 Filed 2010-02-26
8-K 2020-10-29
8-K 2020-08-04
8-K 2020-07-01
8-K 2020-06-02
8-K 2020-05-28
8-K 2020-05-14
8-K 2020-05-05
8-K 2020-03-27
8-K 2020-03-24
8-K 2020-02-11
8-K 2019-12-18
8-K 2019-12-04
8-K 2019-11-25
8-K 2019-11-18
8-K 2019-10-31
8-K 2019-09-24
8-K 2019-08-01
8-K 2019-05-29
8-K 2019-05-17
8-K 2019-05-09
8-K 2019-05-07
8-K 2019-03-12
8-K 2019-02-28
8-K 2019-02-07
8-K 2018-12-18
8-K 2018-12-11
8-K 2018-07-19
8-K 2018-06-11
8-K 2018-05-18
8-K 2018-05-01
8-K 2018-02-13
8-K 2018-01-04

WU 10Q Quarterly Report

Part I
Item 1. Financial Statements
Item 2.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 wu-20210331xex10d1.htm
EX-10.2 wu-20210331xex10d2.htm
EX-15 wu-20210331xex15.htm
EX-31.1 wu-20210331xex31d1.htm
EX-31.2 wu-20210331xex31d2.htm
EX-32 wu-20210331xex32.htm

Western Union Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
151296302012201420172020
Assets, Equity
1.51.00.4-0.1-0.7-1.22012201420172020
Rev, G Profit, Net Income
0.80.50.2-0.1-0.4-0.72012201420172020
Ops, Inv, Fin

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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to

Commission File Number: 001-32903

Graphic

THE WESTERN UNION COMPANY

(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

20-4531180
(I.R.S. Employer
Identification No.)

7001 EAST BELLEVIEW AVENUE
Denver, Colorado 80237
(Address of principal executive offices)

Registrant’s telephone number, including area code: (866405-5012

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.01 Par Value

WU

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer         Accelerated filer        Non-accelerated filer 

Smaller reporting company         Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

As of April 30, 2021, 409,252,217 shares of the registrant’s common stock were outstanding.

Table of Contents

THE WESTERN UNION COMPANY

INDEX

PAGE
NUMBER

PART I FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

3

Condensed Consolidated Statements of Income for the three months ended March 31, 2021 and 2020

3

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020

4

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

5

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020

6

Condensed Consolidated Statements of Stockholders’ Equity/(Deficit) for the three months ended March 31, 2021 and 2020

7

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

50

Item 4.

Controls and Procedures

50

Review Report of Independent Registered Public Accounting Firm

51

PART II OTHER INFORMATION

Item 1.

Legal Proceedings

52

Item 1A.

Risk Factors

52

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 3.

Defaults Upon Senior Securities

52

Item 4.

Mine Safety Disclosures

52

Item 5.

Other Information

52

Item 6.

Exhibits

53

2

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

Three Months Ended

March 31, 

    

2021

    

2020

    

Revenues

$

1,210.0

$

1,190.0

Expenses:

 

  

 

  

Cost of services

 

706.0

 

683.4

Selling, general, and administrative

 

271.2

 

273.4

Total expenses

 

977.2

 

956.8

Operating income

 

232.8

 

233.2

Other income/(expense):

 

  

 

  

Interest income

 

0.4

 

1.6

Interest expense

 

(28.4)

 

(32.9)

Other expense, net

 

(1.9)

 

Total other expense, net

 

(29.9)

 

(31.3)

Income before income taxes

 

202.9

 

201.9

Provision for income taxes

 

21.1

 

25.2

Net income

$

181.8

$

176.7

Earnings per share:

 

  

 

  

Basic

$

0.44

$

0.43

Diluted

$

0.44

$

0.42

Weighted-average shares outstanding:

 

  

 

  

Basic

 

411.7

 

414.3

Diluted

 

414.3

 

418.3

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in millions)

Three Months Ended

March 31, 

    

2021

    

2020

    

Net income

$

181.8

$

176.7

Other comprehensive income, net of reclassifications and tax (Note 10):

 

  

 

  

Unrealized gains/(losses) on investment securities

 

(13.0)

 

5.7

Unrealized gains on hedging activities

 

28.9

 

20.7

Defined benefit pension plan adjustments

 

2.5

 

2.3

Total other comprehensive income

 

18.4

 

28.7

Comprehensive income

$

200.2

$

205.4

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions, except per share amounts)

    

March 31, 

December 31, 

2021

2020

    

Assets

 

  

 

  

Cash and cash equivalents

$

1,502.6

$

1,428.2

Settlement assets

 

3,638.2

 

3,821.4

Property and equipment, net of accumulated depreciation of $665.7 and $659.9, respectively

 

144.9

 

150.4

Goodwill

 

2,566.6

 

2,566.6

Other intangible assets, net of accumulated amortization of $1,064.7 and $1,044.6, respectively

 

523.0

 

505.0

Other assets

 

905.7

 

1,024.7

Total assets

$

9,281.0

$

9,496.3

Liabilities and stockholders' equity

 

  

 

  

Liabilities:

 

  

 

  

Accounts payable and accrued liabilities

$

513.3

$

500.9

Settlement obligations

 

3,638.2

 

3,821.4

Income taxes payable

 

933.1

 

928.9

Deferred tax liability, net

 

187.2

 

188.9

Borrowings

 

3,230.5

 

3,067.2

Other liabilities

 

559.9

 

802.4

Total liabilities

 

9,062.2

 

9,309.7

Commitments and contingencies (Note 7)

 

  

 

  

Stockholders' equity:

 

  

 

  

Preferred stock, $1.00 par value; 10 shares authorized; no shares issued

 

 

Common stock, $0.01 par value; 2,000 shares authorized; 409.8 shares and 411.2 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

 

4.1

 

4.1

Capital surplus

 

904.0

 

885.1

Accumulated deficit

 

(548.2)

 

(543.1)

Accumulated other comprehensive loss

 

(141.1)

 

(159.5)

Total stockholders' equity

 

218.8

 

186.6

Total liabilities and stockholders' equity

$

9,281.0

$

9,496.3

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

Three Months Ended

March 31, 

    

2021

    

2020

Cash flows from operating activities

 

  

 

  

Net income

$

181.8

$

176.7

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

  

Depreciation

 

12.8

 

16.5

Amortization

 

40.6

 

41.7

Other non-cash items, net

 

30.3

 

20.8

Increase/(decrease) in cash resulting from changes in:

 

 

Other assets

 

(46.9)

 

(23.1)

Accounts payable and accrued liabilities

 

(35.8)

 

(109.3)

Income taxes payable

 

5.5

 

(2.8)

Other liabilities

 

(12.5)

 

(8.1)

Net cash provided by operating activities

 

175.8

 

112.4

Cash flows from investing activities

 

  

 

  

Payments for capitalized contract costs

 

(78.3)

 

(21.5)

Payments for internal use software

 

(9.9)

 

(7.9)

Purchases of property and equipment

 

(8.7)

 

(6.3)

Proceeds from the sale of former corporate headquarters

44.2

Purchases of non-settlement related investments

 

(0.9)

 

Proceeds from maturity of non-settlement related investments

 

0.5

 

0.3

Other investing activities

1.1

 

Net cash (used in)/provided by investing activities

 

(96.2)

 

8.8

Cash flows from financing activities

 

 

  

Cash dividends and dividend equivalents paid

 

(96.7)

 

(92.4)

Common stock repurchased (Note 10)

 

(84.5)

 

(237.1)

Net repayments of commercial paper

 

(80.0)

 

(160.0)

Net proceeds from issuance of borrowings

 

892.6

 

Principal payments on borrowings

 

(650.0)

 

Proceeds from exercise of options

 

8.1

 

1.0

Other financing activities

 

0.1

 

(0.7)

Net cash used in financing activities

 

(10.4)

 

(489.2)

Net change in cash, cash equivalents, and restricted cash

 

69.2

 

(368.0)

Cash, cash equivalents, and restricted cash at beginning of period

 

1,447.4

 

1,456.8

Cash, cash equivalents, and restricted cash at end of period

$

1,516.6

$

1,088.8

Supplemental cash flow information:

 

  

 

  

Interest paid

$

19.6

$

18.2

Income taxes paid

$

15.0

$

23.1

Restricted cash at end of period (included in Other assets)

$

14.0

$

16.0

Internal use software capitalized but not yet paid

$

42.0

$

4.3

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

THE WESTERN UNION COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)

(Unaudited)

(in millions)

Accumulated

Other

Total

Common Stock

Capital

Accumulated 

Comprehensive

Stockholders'

Shares

    

Amount

    

Surplus

    

Deficit

    

Loss

    

Equity

Balance, December 31, 2020

411.2

$

4.1

$

885.1

$

(543.1)

$

(159.5)

$

186.6

Net income

181.8

181.8

Stock-based compensation

10.8

10.8

Common stock dividends and dividend equivalents declared ($0.235 per share)

(97.9)

(97.9)

Repurchase and retirement of common shares

(3.7)

(89.0)

(89.0)

Shares issued under stock-based compensation plans

2.3

8.1

8.1

Other comprehensive income (Note 10)

18.4

18.4

Balance, March 31, 2021

409.8

$

4.1

$

904.0

$

(548.2)

$

(141.1)

$

218.8

Accumulated

Other

Total

Common Stock

Capital

Accumulated 

Comprehensive

Stockholders'

Shares

    

Amount

    

Surplus

    

Deficit

    

Loss

    

Deficit

Balance, December 31, 2019

418.0

$

4.2

$

841.2

$

(675.9)

$

(209.0)

$

(39.5)

Adoption of new accounting pronouncement (Note 1)

(0.6)

(0.6)

Net income

176.7

176.7

Stock-based compensation

12.5

12.5

Common stock dividends and dividend equivalents declared ($0.225 per share)

(93.3)

(93.3)

Repurchase and retirement of common shares

(9.2)

(0.1)

(235.1)

(235.2)

Shares issued under stock-based compensation plans

2.1

1.0

1.0

Other comprehensive income (Note 10)

28.7

28.7

Balance, March 31, 2020

410.9

$

4.1

$

854.7

$

(828.2)

$

(180.3)

$

(149.7)

See Notes to Condensed Consolidated Financial Statements.

7

Table of Contents

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Basis of Presentation

Business

The Western Union Company ("Western Union" or the "Company") is a leader in global money movement and payment services, providing people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. The Western Union® brand is globally recognized. The Company’s services are available through a network of agent locations in more than 200 countries and territories and also through money transfer transactions conducted and funded through websites and mobile applications marketed under the Company’s brands (“westernunion.com”) and transactions initiated on internet and mobile applications hosted by the Company’s third-party white label or co-branded digital partners (together with westernunion.com, “Digital Money Transfer”). Each location in the Company’s agent network is capable of providing one or more of the Company’s services.

The Western Union business consists of the following segments:

Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers which are sent from retail agent locations worldwide or through websites and mobile devices, including Digital Money Transfer services. The Company’s money transfer service is provided through one interconnected global network. This service is available for international cross-border transfers and, in certain countries, intra-country transfers.
Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises, and other organizations and individuals. The majority of the segment’s business relates to exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments.

All businesses and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services. The Company’s other services, in addition to certain corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. See Note 15 for further information regarding the Company’s segments.

There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2020, the amount of these net asset limitations totaled approximately $680 million.

Various aspects of the Company’s services and businesses are subject to United States federal, state, and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows

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THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of March 31, 2021 and December 31, 2020 and for all periods presented.

In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2021 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Recently Adopted Accounting Pronouncements

On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an adjustment to the January 1, 2020 balance of Accumulated deficit in the Condensed Consolidated Balance Sheets, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. Refer to Note 9 for additional information and the related disclosures.

2. Revenue

The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company recognized $1,166.3 million and $1,122.6 million in revenues from contracts with customers for the three months ended March 31, 2021 and 2020, respectively. There were no material upfront costs incurred to obtain contracts with customers during these same periods. Under the Company’s loyalty programs, which are primarily offered

9

Table of Contents

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

in its money transfer services, the Company must fulfill loyalty program rewards earned by customers. The loyalty program redemption activity has been and continues to be insignificant to the Company’s results of operations, and the Company has immaterial contract liability balances, which primarily relate to its customer loyalty programs and other services. Contract asset balances related to customers were also immaterial as of the periods presented, as the Company typically receives payment of consideration from its customers prior to satisfying performance obligations under the customer contracts. In addition to revenue generated from contracts with customers, the Company recognizes revenue from other sources, including the sale of derivative financial instruments and investment income generated on settlement assets primarily related to money transfer and money order services.

The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Revenues from consumer money transfers are included in the Company’s Consumer-to- Consumer segment, revenues from foreign exchange and payment services are included in the Company’s Business Solutions segment, and revenues from consumer bill payments and other services are not included in the Company’s segments and are reported as Other. See Note 15 for further information on the Company’s segments.

Consumer Money Transfers

For the Company’s money transfer services, customers agree to the Company’s terms and conditions at the time of initiating a transaction. In a money transfer, the Company has one performance obligation as the customer engages the Company to perform one integrated service which typically occurs within minutes — collect the customer’s money and make funds available for payment to a designated person in the currency requested. Therefore, the Company recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of the Company’s terms and conditions and payment information has been received by the Company, (ii) the Company has agreed to process the money transfer, (iii) the Company has provided the customer a unique transaction identification number, and (iv) funds are available to be picked up by the customer’s designated receiving party. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated.

Foreign Exchange and Payment Services

For the Company’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with the Company to provide payment services on the customer’s behalf. In the majority of the Company’s foreign exchange and payment services, the Company makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, the Company recognizes revenue on foreign exchange and payment services when this performance obligation has been fulfilled. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market.

Consumer Bill Payments and Other

The Company offers bill payments and other services that vary by contractual features, including the types and amounts of fixed charges and with respect to how fees are billed and collected. The identification of the contract with the customer for revenue recognition purposes is consistent with these features for each of the Company’s bill payment and other services. As with consumer money transfers, customers engage the Company to perform one integrated service — collect money from the consumer and process the transaction, thereby providing billers with real-time or near real-time information regarding consumer payments and simplifying the billers’ collection efforts.

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Table of Contents

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Management has determined that the substantial majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the three months ended March 31, 2021 and 2020 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated.

Three Months Ended March 31, 2021

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

386.6

$

21.2

$

18.6

$

14.5

$

440.9

Europe and Russia/CIS

 

338.7

 

34.3

 

1.1

 

0.4

 

374.5

Middle East, Africa, and South Asia

 

159.7

 

0.5

 

0.1

 

 

160.3

Latin America and the Caribbean

 

86.7

 

0.8

 

17.7

 

1.8

 

107.0

East Asia and Oceania

 

66.7

 

16.6

 

0.3

 

 

83.6

Revenues from contracts with customers

$

1,038.4

$

73.4

$

37.8

$

16.7

$

1,166.3

Other revenues (a)

 

12.5

 

23.1

 

3.0

 

5.1

 

43.7

Total revenues

$

1,050.9

$

96.5

$

40.8

$

21.8

$

1,210.0

Three Months Ended March 31, 2020

    

    

Foreign 

    

    

    

Consumer 

Exchange 

Money 

and Payment 

Consumer 

Other 

Transfers

Services

Bill Payments

Services

Total

Regions:

 

  

 

  

 

  

 

  

 

  

North America

$

384.8

$

22.2

$

22.7

$

14.4

$

444.1

Europe and Russia/CIS

 

300.9

 

31.5

 

0.8

 

0.7

 

333.9

Middle East, Africa, and South Asia

 

156.9

 

0.5

 

0.1

 

 

157.5

Latin America and the Caribbean

 

84.4

 

0.6

 

23.8

 

2.1

 

110.9

East Asia and Oceania

 

59.1

 

16.8

 

0.3

 

 

76.2

Revenues from contracts with customers

$

986.1

$

71.6

$

47.7

$

17.2

$

1,122.6

Other revenues (a)

 

29.3

 

26.8

 

5.3

 

6.0

 

67.4

Total revenues

$

1,015.4

$

98.4

$

53.0

$

23.2

$

1,190.0

(a)Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources.

3. Earnings Per Share

The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options and the unamortized compensation expense of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.

Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the

11

Table of Contents

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

restricted stock and options per unit were above the Company’s average share price during the periods and their effect was anti-dilutive, were 1.4 million and 1.1 million for the three months ended March 31, 2021 and 2020, respectively.

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):

Three Months Ended

March 31, 

    

2021

    

2020

Basic weighted-average shares outstanding

 

411.7

 

414.3

Common stock equivalents

 

2.6

 

4.0

Diluted weighted-average shares outstanding

 

414.3

 

418.3

4. Investment Activities

On November 21, 2020, the Company entered into an agreement to acquire an ownership interest in Saudi Digital Payments Company (“stc pay”), a subsidiary of Saudi Telecom Company and one of the Company’s Consumer-to- Consumer digital white label partners. Under the terms of the agreement, the Company has agreed to invest up to approximately $200 million for up to a 15% investment in stc pay, and this transaction is expected to close in the second quarter of 2021. In conjunction with the transaction, the Company and stc pay have also agreed to extend and expand the terms of their commercial agreement.

The Company expects to measure this investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments in stc pay.

On April 12, 2021, the Company sold a substantial majority of the shares it held as a minority investor in a private company for cash proceeds of $50.9 million. The Company recorded a gain of approximately $48 million within Other income/(expense), net in the second quarter of 2021. The Company will continue to measure the retained portion of this investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments.  

5. Restructuring-Related Expenses

During the three months ended March 31, 2020, the Company incurred $10.5 million of expenses related to a restructuring initiative approved by the Company’s Board of Directors on August 1, 2019. All expenses for this initiative had been incurred as of December 31, 2020, and substantially all have been and will continue to be paid in cash. For the three months ended March 31, 2020, $0.9 million and $9.6 million of these expenses were included in Cost of services and Selling, general, and administrative, respectively, in the Condensed Consolidated Statements of Income. While certain of the expenses may be identifiable to the Company’s segments, primarily to the Company’s Consumer-to-Consumer segment, the expenses are excluded from the Company’s segment operating income results as they are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker (“CODM”) for purposes of performance assessment and resource allocation. These expenses are specific to this initiative; however, the types of expenses related to this initiative are similar to expenses that the Company has previously incurred and can reasonably be expected to incur in the future.

As of March 31, 2021 and December 31, 2020, the total restructuring-related accrual was $14.5 million and $26.2 million, respectively. These amounts are included in Accounts payable and accrued liabilities in the Company’s Condensed Consolidated Balance Sheets.

12

Table of Contents

THE WESTERN UNION COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6. Fair Value Measurements

Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring basis, by balance sheet line item (in millions):

Fair Value Measurement Using

Total

March 31, 2021

    

Level 1

    

Level 2

    

Fair Value

Assets:

 

  

 

  

 

  

Settlement assets:

 

  

 

  

 

  

Measured at fair value through net income:

 

  

 

  

 

  

Money market funds

$

15.7

$

$