Western Union CO

Previous wording

The following discussion of our consolidated results of operations and segment results refers to the three and six months ended June 30, 2024 compared to the same periods in 2023. The results of operations should be read in conjunction with the discussion of our segment results of operations, which provides more detailed discussions concerning certain components of the Condensed Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated. The below information has been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.

Current wording

The following discussion of our consolidated results of operations and segment results refers to the three and nine months ended September 30, 2024 compared to the same periods in 2023. The results of operations should be read in conjunction with the discussion of our segment results of operations, which provides more detailed discussions concerning certain components of the Condensed Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated. The below information has been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.

Previous wording

The following table sets forth our consolidated results of operations for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Due to the significance of the effect that foreign exchange fluctuations against the United States dollar can have on our reported revenues, constant currency results have been provided in the table below for consolidated revenues. Constant currency results assume foreign revenues are translated from foreign currencies to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. Constant currency results are also net of the impact of Argentina inflation due to its economy being hyperinflationary. We have also disclosed the impact of the Business Solutions divestiture on our revenues in the table below. Constant currency measures and measures that exclude the impact of divestitures are non-GAAP financial measures and are provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, net of the hyperinflationary Argentine economy, and divestitures of our businesses, which is consistent with how management evaluates our revenue results and trends. We believe that these measures provide management and investors with information about revenue results and trends that eliminates currency volatility and divestitures, thereby providing greater clarity regarding, and increasing the comparability of, our underlying results and trends. These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the three and six months ended June 30, 2024 compared to the corresponding periods in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.

Current wording

Due to the significance of the effect that foreign exchange fluctuations against the United States dollar can have on our reported revenues, constant currency results have been provided in the table below for consolidated revenues. Constant currency results assume foreign revenues are translated from foreign currencies to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. Constant currency results are also net of the impact of Argentina inflation due to its economy being hyperinflationary. We have also disclosed the impact of the Business Solutions divestiture on our revenues in the table below. Constant currency measures and measures that exclude the impact of divestitures are non-GAAP financial measures and are provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, net of the hyperinflationary Argentine economy, and divestitures of our businesses, which is consistent with how management evaluates our revenue results and trends. We believe that these measures provide management and investors with information about revenue results and trends that eliminates currency volatility and divestitures, thereby providing greater clarity regarding, and increasing the comparability of, our underlying results and trends. These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the three and nine months ended September 30, 2024 compared to the corresponding periods in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.

Previous wording

The following table sets forth our consolidated revenue results for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth our consolidated revenue results for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges and Argentina inflation, resulted in a decrease to revenues of $6.4 million and $12.0 million for the three and six months ended June 30, 2024, respectively, when compared to the corresponding periods in the prior year. We calculate Argentina inflation as the revenue growth not attributable to either transaction growth or the change in price (revenue divided by principal).

Current wording

Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges and Argentina inflation, resulted in an increase to revenues of $5.5 million and a decrease to revenues of $6.5 million for the three and nine months ended September 30, 2024, respectively, when compared to the corresponding periods in the prior year. We calculate Argentina inflation as the revenue growth not attributable to either transaction growth or the change in price (revenue divided by principal).

Previous wording

Business Solutions revenues included in our results were $14.3 million and $29.7 million for the three and six months ended June 30, 2023, respectively.

Current wording

Business Solutions revenues included in our results were $29.7 million for the nine months ended September 30, 2023.

Previous wording

In addition to the negative impacts from foreign currency, net of Argentina inflation, and the divestiture of our Business Solutions business, for the three and six months ended June 30, 2024 when compared to the corresponding periods in the prior year, GAAP and non-GAAP revenues decreased due to a reduction in transactions originating from Iraq, which negatively impacted revenues by 7% and 2% for the three and six months ended June 30, 2024 relative to the corresponding prior periods. We believe that we will continue to see a reduction in transactions originating in Iraq, compared to prior year periods, in the remainder of 2024 and possibly thereafter.

Current wording

In addition to the impacts from foreign currency, net of Argentina inflation, and the divestiture of our Business Solutions business, for the three and nine months ended September 30, 2024 when compared to the corresponding periods in the prior year, GAAP and Adjusted revenues decreased due to a reduction in transactions originating from Iraq, which negatively impacted revenues by 7% and 4% for the three and nine months ended September 30, 2024, respectively, relative to the corresponding prior periods. We believe that we will continue to see a reduction in transactions originating in Iraq, compared to prior year periods, in the remainder of 2024 and possibly thereafter primarily driven by changes in monetary policy and related central bank actions.

Previous wording

On October 20, 2022, we announced an operating expense redeployment program which aims to redeploy approximately $150 million in expenses in our current cost base through 2027, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people strategy. We believe these changes will allow us to invest in strategic initiatives. The timing and pace of this redeployment may vary, and we believe that we will continue to refine aspects of the program as we progress. We have incurred and expect to incur incremental expenses associated with the implementation of this program. We have incurred $74.7 million of total expenses under this program from inception through June 30, 2024.

Current wording

On October 20, 2022, we announced an operating expense redeployment program which aims to redeploy expenses in our current cost base, accomplished through optimizations in vendor management, our real estate footprint, marketing, and people strategy. We believe these changes will allow us to invest in strategic initiatives. The timing and pace of this redeployment may vary. We have incurred $92.7 million of total expenses under this program from inception through September 30, 2024.

Previous wording

The following table presents the location and amount of operating expenses associated with our redeployment program in the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023.

Current wording

The following table presents the location and amount of operating expenses associated with our redeployment program in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023.

Previous wording

Cost of services primarily consists of agent commissions, which represented approximately 60% of total cost of services for the three and six months ended June 30, 2024 and 2023. For the three and six months ended June 30, 2024, Cost of services decreased compared to the corresponding periods in the prior year primarily due to decreases in agent commissions, which generally vary with revenue, and a decrease associated with the Business Solutions divestiture, partially offset by increases in certain variable expenses, including non-credit losses and bank fees, and higher employee compensation primarily associated with our expansion of Company-owned locations.

Current wording

Cost of services primarily consists of agent commissions, which represented approximately 60% of total cost of services for the three and nine months ended September 30, 2024 and 2023. For the three and nine months ended September 30, 2024, Cost of services decreased compared to the corresponding periods in the prior year primarily due to decreases in agent commissions, which generally vary with revenue, partially offset by increases in certain variable expenses, including bank fees and credit and non-credit losses, as well as higher employee compensation primarily associated with our expansion of Company-owned locations. In addition, for the nine months ended September 30, 2024 compared to the corresponding period in the prior year, Cost of services was impacted by a decrease associated with the Business Solutions divestiture.

Previous wording

Selling, general and administrative expenses decreased for the three and six months ended June 30, 2024 when compared to the corresponding periods in the prior year due to the Business Solutions divestiture and a reduction in employee incentive compensation, partially offset by fluctuations in the United States dollar compared to foreign currencies. For the six months ended June 30, 2024 compared to the corresponding period in the prior year, the decrease in Selling, general and administrative expenses was partially offset by an increase in advertising expenses and an increase in costs associated with our operating expense redeployment program.

Current wording

Selling, general and administrative expenses increased for the three and nine months ended September 30, 2024 when compared to the corresponding periods in the prior year due to impairments related to our assets in Russia, as well as an increase in costs associated with our operating expense redeployment program, partially offset by a reduction in employee incentive compensation. For the nine months ended September 30, 2024 compared to the corresponding period in the prior year, the increase in Selling, general and administrative expenses was also due to fluctuations between the United States dollar and foreign currencies, and an increase in advertising expenditure, partially offset by the Business Solutions divestiture.

Previous wording

Total other expense, net for the three and six months ended June 30, 2024, when compared to the corresponding periods in the prior year, was impacted by the prior year expense associated with payment obligations to the buyer of the Business Solutions business for a measure of the profits, as contractually agreed, from the European Union operations, while owned by us.

Current wording

Total other expense, net for the three and nine months ended September 30, 2024, when compared to the corresponding periods in the prior year, was impacted by the gain on the final closing of the Business Solutions divestiture, which occurred on July 1, 2023.

Previous wording

Our effective tax rates on pre-tax income were 14.7% and 18.6% for the three months ended June 30, 2024 and 2023, respectively, and 15.4% and 17.4% for the six months ended June 30, 2024 and 2023, respectively. The decrease in our effective tax rates for the three and six months ended June 30, 2024 compared to the corresponding periods in the prior year was primarily due to a reduction in domestic income before income taxes and discrete tax benefits in the current periods.

Current wording

Our effective tax rates on pre-tax income were (95.2)% and 16.3% for the three months ended September 30, 2024 and 2023, respectively, and (16.5)% and 17.1% for the nine months ended September 30, 2024 and 2023, respectively. The change in our effective tax rates for the three and nine months ended September 30, 2024 compared to the corresponding periods in the prior year was primarily due to a settlement of the IRS examination of our 2017 and 2018 federal income tax returns, which resulted in a tax benefit of $137.8 million for the nine months ended September 30, 2024, partially offset by the effects of the sale of our Business Solutions business in the prior periods.

Previous wording

During the three months ended June 30, 2024 basic and diluted earnings per share were $0.42 and $0.41, respectively. During the three months ended June 30, 2023, basic and diluted earnings per share were $0.47. During the six months ended June 30, 2024, basic and diluted earnings per share were $0.83, and during the six months ended June 30, 2023, basic and diluted earnings per share were $0.88 and $0.87, respectively. 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. Shares excluded from the diluted earnings per share calculation were 12.4 million and 10.1 million for the three months ended June 30, 2024 and 2023, respectively, and 11.9 million and 9.7 million for the six months ended June 30, 2024 and 2023, respectively. The effect of these shares was anti-dilutive under the treasury stock method, as the assumed proceeds of the options and restricted stock per unit were above our average share price during the periods.

Current wording

During the three months ended September 30, 2024 and 2023, both basic and diluted earnings per share were $0.78 and $0.46, respectively. During the nine months ended September 30, 2024 and 2023, both basic and diluted earnings per share were $1.61 and $1.33, respectively. 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. Shares excluded from the diluted earnings per share calculation were 11.3 million and 9.5 million for the three months ended September 30, 2024 and 2023, respectively, and 11.7 million and 9.6 million for the nine months ended September 30, 2024 and 2023, respectively. The effect of these shares was anti-dilutive under the treasury stock method, as the assumed proceeds of the options and restricted stock per unit were above our average share price during the periods.

Previous wording

Earnings per share for the three and six months ended June 30, 2024 compared to the corresponding periods in the prior year were impacted by a lower number of average shares outstanding, partially offset by the previously described factors impacting net income.

Current wording

Earnings per share for the three and nine months ended September 30, 2024 compared to the corresponding periods in the prior year were impacted by the previously described factors impacting net income and a lower number of average shares outstanding.

Previous wording

We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our segments addresses a different combination of customer groups, distribution networks, and services offered. Our segments are Consumer Money Transfer and Consumer Services. On August 4, 2021, we entered into an agreement to sell our Business Solutions business and the final closing for this transaction was on July 1, 2023. Accordingly, we no longer report Business Solutions revenues and operating expenses after July 1, 2023. Business Solutions revenues included in our Condensed Consolidated Statements of Income were $14.3 million and $29.7 million and operating income was $1.7 million and $3.6 million for the three and six months ended June 30, 2023, respectively.

Current wording

We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our segments addresses a different combination of customer groups, distribution networks, and services offered. Our segments are Consumer Money Transfer and Consumer Services. On August 4, 2021, we entered into an agreement to sell our Business Solutions business and the final closing for this transaction was on July 1, 2023. Accordingly, we no longer report Business Solutions revenues and operating expenses after July 1, 2023. Business Solutions revenues included in our Condensed Consolidated Statements of Income were $29.7 million and operating income was $3.7 million for the nine months ended September 30, 2023.

Previous wording

During the three and six months ended June 30, 2024 and 2023, we incurred costs associated with our operating expense redeployment program, as described above, primarily related to severance and expenses associated with streamlining our organizational and legal structure. In addition, we incurred costs related to the incremental non-cash amortization and impairment of acquired intangible assets in connection with recent business acquisitions. While certain of these expenses are identifiable to our segments, the expenses 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 therefore excluded from our segment operating income results.

Current wording

During the three and nine months ended September 30, 2024 and 2023, we incurred costs associated with our operating expense redeployment program, as described above, primarily related to severance and expenses associated with streamlining our organizational and legal structure as well as costs related to the incremental non-cash amortization and impairment of acquired intangible assets in connection with recent business acquisitions. In addition, during the three and nine months ended September 30, 2024, we incurred impairment costs related to our assets in Russia and costs associated with operating the Russian entity, as we have decided to pursue either liquidating or selling these assets. In estimating this impairment, we did not impair the cash that we believe will be necessary to pay for future costs as we work to liquidate and exit the business. While certain of these expenses are identifiable to our segments, the expenses 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 therefore excluded from our segment operating income results.

Previous wording

Beginning in 2024, we changed our segment reporting methodology to no longer allocate acquisition, separation, and integration costs to our segments. These costs were previously allocated entirely to Consumer Services, and the amounts included in the Consumer Services segment were immaterial for the three and six months ended June 30, 2023. The expenses are no longer included in the measurement of segment operating income provided to the CODM for purposes of performance assessment and resource allocation.

Current wording

Beginning in 2024, we changed our segment reporting methodology to no longer allocate acquisition, separation, and integration costs to our segments. These costs were previously allocated entirely to Consumer Services while it was called Other, and the amounts included in the segment were immaterial for the three and nine months ended September 30, 2023. The expenses are no longer included in the measurement of segment operating income provided to the CODM for purposes of performance assessment and resource allocation.

Previous wording

The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table sets forth our Consumer Money Transfer segment results of operations for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth our Consumer Money Transfer segment results of operations for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Transaction volume is the primary generator of revenue in our Consumer Money Transfer segment. A Consumer Money Transfer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows is determined based upon the region where the money transfer is initiated. Included in each region’s transaction and revenue percentages in the tables below are Branded Digital transactions for the three and six months ended June 30, 2024 and 2023. Where reported separately in the discussion below, Branded Digital consists of 100% of the transactions conducted and funded through that channel.

Current wording

Transaction volume is the primary generator of revenue in our Consumer Money Transfer segment. A Consumer Money Transfer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows is determined based upon the region where the money transfer is initiated. Included in each region’s transaction and revenue percentages in the tables below are Branded Digital transactions for the three and nine months ended September 30, 2024 and 2023. Where reported separately in the discussion below, Branded Digital consists of 100% of the transactions conducted and funded through that channel.

Previous wording

The table below sets forth regional revenues as a percentage of our Consumer Money Transfer revenue for the three and six months ended June 30, 2024 and 2023:

Current wording

The table below sets forth regional revenues as a percentage of our Consumer Money Transfer revenue for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Branded Digital, which is included in the regional percentages above, represented approximately 24% and 21% of our Consumer Money Transfer revenues for the three months ended June 30, 2024 and 2023, respectively, as well as for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Branded Digital, which is included in the regional percentages above, represented approximately 25% and 21% of our Consumer Money Transfer revenues for the three months ended September 30, 2024 and 2023, respectively, and 24% and 21% for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Our consumers transferred $25.9 billion and $27.5 billion in cross-border principal for the three months ended June 30, 2024 and 2023, respectively, and $50.5 billion in cross-border principal for both the six months ended June 30, 2024 and 2023. The decrease in cross-border principal transferred during the three months ended June 30, 2024 compared to the corresponding periods in the prior year was primarily attributable to a decline in our MEASA region primarily driven by a reduction in transactions originating from Iraq. Consumer Money Transfer cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated. Consumer Money Transfer cross-border principal is a metric used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances.

Current wording

Our consumers transferred $25.9 billion and $26.0 billion in cross-border principal for the three months ended September 30, 2024 and 2023, respectively, and $76.4 billion and $76.5 billion in cross-border principal for the nine months ended September 30, 2024 and 2023, respectively. Consumer Money Transfer cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated. Consumer Money Transfer cross-border principal is a metric used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances.

Previous wording

Consumer Money Transfer revenue decreased 10% and 4%, and transactions increased 4% and 5% for the three and six months ended June 30, 2024, respectively, compared to the corresponding periods in the prior year. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges and Argentina inflation, negatively impacted revenue by 1% for both the three and six months ended June 30, 2024, compared to the corresponding periods in the prior year.

Current wording

Consumer Money Transfer revenue decreased 9% and 6%, and transactions increased 3% and 4% for the three and nine months ended September 30, 2024, respectively, compared to the corresponding periods in the prior year. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges and Argentina inflation, negatively impacted revenue by 1% for both the three and nine months ended September 30, 2024, compared to the corresponding periods in the prior year.

Previous wording

For the three and six months ended June 30, 2024, in our Consumer Money Transfer regions, NA revenue and transactions increased compared to the corresponding periods in the prior year primarily due to growth in cross-border transactions sent from the United States, partially offset by price reductions and declines in transactions sent within the United States. For the three and six months ended June 30, 2024, our EU & CIS revenues were negatively impacted by price reductions and by one of our retail agents no longer offering cash-based services at its retail locations. Fluctuations in revenue in the MEASA region were driven by a reduction in transactions originating from Iraq, as discussed above. Revenue growth in the LACA region benefited from strength in Mexico, Ecuador and Venezuela. Our APAC region was also impacted by price reductions.

Current wording

For the three and nine months ended September 30, 2024, in our Consumer Money Transfer regions, NA revenue decreased and was flat, respectively, and transactions increased compared to the corresponding periods in the prior year. Price reductions and declines in transactions sent within the United States were partially offset by growth in cross-border transactions sent from the United States. For the three and nine months ended September 30, 2024, our EU & CIS revenues were negatively impacted by price reductions and by one of our retail agents no longer offering cash-based services at its retail locations. Declines in revenue in the MEASA region were driven by a reduction in transactions originating from Iraq primarily driven by changes in monetary policy and related central bank actions, as discussed above.

Previous wording

We have historically implemented price reductions or price increases throughout many of our global corridors. We will likely continue to implement price changes from time to time in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently. Price increases may adversely affect transaction volumes, as consumers may not use our services if we fail to price them appropriately. We believe revenues could continue to be adversely impacted by price reductions we have implemented in connection with our go-to-market strategy.

Current wording

We have historically implemented price reductions or price increases throughout many of our global corridors. We will likely continue to implement price changes from time to time in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently. Price increases may adversely affect transaction volumes, as consumers may not use our services if we fail to price them appropriately.

Previous wording

Consumer Money Transfer operating income for the three and six months ended June 30, 2024 decreased compared to the corresponding periods in the prior year due to a decrease in revenue, as discussed above, increases in certain variable expenses, including non-credit losses and bank fees, and fluctuations in the United States dollar compared to foreign currencies, partially offset by reduced agent commissions, as well as reduced employee incentive compensation. In addition, for the six months ended June 30, 2024, operating income was negatively impacted by an increase in advertising expenses.

Current wording

Consumer Money Transfer operating income for the three and nine months ended September 30, 2024 decreased compared to the corresponding periods in the prior year due to a decrease in revenue, as discussed above, partially offset by reduced agent commissions and employee incentive compensation. In addition, for the nine months ended September 30, 2024, operating income was negatively impacted by increases in certain variable expenses, including non-credit losses and bank fees, fluctuations in the United States dollar compared to foreign currencies, and an increase in advertising expenditure.

Previous wording

The following table sets forth Consumer Services results for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table sets forth Consumer Services results for the three and nine months ended September 30, 2024 and 2023:

Previous wording

For the three and six months ended June 30, 2024 compared to the corresponding periods in the prior year, Consumer Services revenues increased primarily due to an increase in retail foreign exchange services, growth in new services we are continuing to introduce to our customers, including media network, and an increase in our money order business, partially offset by a decrease in revenue in our cash-based bill payments services offered at retail locations. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of Argentina inflation, resulted in an increase to revenue growth of 7% and 2% for the three and six months ended June 30, 2024, respectively, relative to the corresponding periods in the prior year.

Current wording

For the three and nine months ended September 30, 2024 compared to the corresponding periods in the prior year, Consumer Services revenues increased primarily due to an increase in retail foreign exchange services, growth in new services we are continuing to introduce to our customers, including media network, and an increase in our money order business. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of Argentina inflation, resulted in an increase to revenue growth of 17% and 6% for the three and nine months ended September 30, 2024, respectively, relative to the corresponding periods in the prior year.

Previous wording

Consumer Services operating income for the three and six months ended June 30, 2024 compared to the corresponding periods in the prior year was negatively impacted by increased expenses associated with our retail foreign exchange services and new services we are continuing to introduce to our customers, including media network, partially offset by revenue growth, as discussed above. In addition, for the six months ended June 30, 2024 compared to the corresponding period in the prior year, Consumer Services operating income was negatively impacted by increased investment in information technology and a reduction in the reimbursement of expenses associated with the transition services provided after the sale of the Business Solutions business.

Current wording

Consumer Services operating income for the three and nine months ended September 30, 2024 compared to the corresponding periods in the prior year was negatively impacted by expenses associated with our retail foreign exchange services and new services we are continuing to introduce to our customers, including media network, increased investment in information technology, and higher credit losses, partially offset by revenue growth, as discussed above. In addition, for the nine months ended September 30, 2024 compared to the corresponding period in the prior year, Consumer Services operating income was negatively impacted by a reduction in the reimbursement of expenses associated with the transition services provided after the sale of the Business Solutions business.

Previous wording

We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, and our $1.25 billion revolving credit facility (“Revolving Credit Facility”), which expires in November 2028 and supports our commercial paper program. Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility. In addition, we have the capacity to borrow up to $800 million under the Term Loan Facility we entered into on June 25, 2024, with the option to increase the commitments under the agreement by an amount such that the commitments do not exceed $1.0 billion in the aggregate (after giving effect to any such increases), subject to certain provisions, as further described below.

Current wording

We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, and our $1.25 billion revolving credit facility (“Revolving Credit Facility”), which expires in November 2028 and supports our commercial paper program. Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility. In addition, on June 25, 2024, we entered into a delayed draw term loan credit agreement providing the capacity to borrow up to $800 million under an unsecured term loan facility (the “Term Loan Facility”), with the option to increase the commitments under the agreement by an amount such that the commitments do not exceed $1.0 billion in the aggregate (after giving effect to any such increases), subject to certain provisions, as further described below.

Previous wording

As of June 30, 2024 and December 31, 2023, we had Cash and cash equivalents of $1,033.0 million and $1,268.6 million, respectively.

Current wording

As of September 30, 2024 and December 31, 2023, we had Cash and cash equivalents of $1,097.6 million and $1,268.6 million, respectively.

Previous wording

Investment securities, classified within Settlement assets on the Condensed Consolidated Balance Sheets, were $1,436.7 million and $1,458.1 million as of June 30, 2024 and December 31, 2023, respectively, and consist primarily of highly-rated state and municipal debt securities. These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of “A-” or better from a major credit rating agency. Refer to Part 1, Item 1, Financial Statements, Note 8, Settlement Assets and Obligations for more details regarding investment securities.

Current wording

Investment securities, classified within Settlement assets on the Condensed Consolidated Balance Sheets, were $1,512.3 million and $1,458.1 million as of September 30, 2024 and December 31, 2023, respectively, and consist primarily of highly-rated state and municipal debt securities. These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of “A-” or better from a major credit rating agency. Refer to Part 1, Item 1, Financial Statements, Note 8, Settlement Assets and Obligations for more details regarding investment securities.

Previous wording

Cash provided by operating activities decreased to $60.2 million during the six months ended June 30, 2024, from $264.0 million in the corresponding period in the prior year. Cash provided by operating activities for the six months ended June 30, 2024 was negatively impacted by higher income taxes paid, including those related to the Tax Act, as further discussed below, and a refundable tax deposit made relating to potential United States federal tax liabilities, including those arising from the examination of our consolidated federal income tax returns for 2017 and 2018. Cash provided by operating activities was also impacted by a decrease in our consolidated net income, in addition to higher payments for employee incentive compensation during the six months ended June 30, 2024.

Current wording

Cash provided by operating activities decreased to $272.3 million during the nine months ended September 30, 2024, from $518.6 million in the corresponding period in the prior year. Cash provided by operating activities for the nine months ended September 30, 2024 was negatively impacted by higher income taxes paid, including those related to the Tax Act, as further discussed below, as well as refundable deposits made relating to United States federal tax liabilities arising from the examination of our tax returns for the 2017 and 2018 tax years. Excluding the $137.8 million non-cash tax benefit for a settlement of the IRS examination of our 2017 and 2018 federal income tax returns, our net income would have decreased for the nine months ended September 30, 2024, which resulted in a decrease to cash provided by operating activities.

Previous wording

As of June 30, 2024, we had outstanding borrowings at par value of $2,644.8 million. The significant majority of these outstanding borrowings consist of unsecured fixed-rate notes with maturities ranging from 2025 to 2040.

Current wording

As of September 30, 2024, we had outstanding borrowings at par value of $2,595.0 million. The significant majority of these outstanding borrowings consist of unsecured fixed-rate notes with maturities ranging from 2025 to 2040.

Previous wording

Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility. Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. We had $494.8 million of commercial paper borrowings outstanding as of June 30, 2024. Our commercial paper borrowings as of June 30, 2024 had a weighted-average annual interest rate of approximately 5.6% and a weighted-average term of approximately 4 days. During the six months ended June 30, 2024, the average commercial paper balance outstanding was $544.8 million, and the maximum balance outstanding was $880.0 million. Proceeds from our commercial paper borrowings were used for general corporate purposes and working capital needs, including the settlement of our money transfer obligations prior to collecting receivables from agents or others.

Current wording

Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.25 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility. Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. We had $445.0 million of commercial paper borrowings outstanding as of September 30, 2024. Our commercial paper borrowings as of September 30, 2024 had a weighted-average annual interest rate of approximately 5.1% and a weighted-average term of approximately 2 days. During the nine months ended September 30, 2024, the average commercial paper balance outstanding was $632.6 million, and the maximum balance outstanding was $880.3 million. Proceeds from our commercial paper borrowings were used for general corporate purposes and working capital needs, including the settlement of our money transfer obligations prior to collecting receivables from agents or others.

Previous wording

The total aggregate amount paid for purchased and developed software, contract costs, and purchases of property and equipment was $64.5 million and $90.1 million for the six months ended June 30, 2024 and 2023, respectively. Amounts paid for new and renewed agent contracts vary depending on the terms of existing contracts as well as the timing of new and renewed contract signings. Other capital expenditures during these periods included investments in our information technology infrastructure.

Current wording

The total aggregate amount paid for purchased and developed software, contract costs, and purchases of property and equipment was $91.8 million and $117.2 million for the nine months ended September 30, 2024 and 2023, respectively. Amounts paid for new and renewed agent contracts vary depending on the terms of existing contracts as well as the timing of new and renewed contract signings. Other capital expenditures during these periods included investments in our information technology infrastructure.

Previous wording

On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024. During the six months ended June 30, 2024, 13.8 million shares were repurchased under this authorization for $176.2 million, excluding commissions, at an average cost of $12.76. No shares were repurchased during the six months ended June 30, 2023 under this share repurchase authorization. As of June 30, 2024, $172.0 million remained available under this share repurchase authorization.

Current wording

On February 10, 2022, our Board of Directors authorized $1.0 billion of common stock repurchases through December 31, 2024. During the nine months ended September 30, 2024 and 2023, 13.9 million and 7.8 million shares were repurchased under this authorization for $177.3 million and $100.0 million, respectively, excluding commissions, at an average cost of $12.75 and $12.88, respectively. As of September 30, 2024, $170.9 million remained available under this share repurchase authorization.

Previous wording

Our Board of Directors declared quarterly cash dividends of $0.235 per common share in the first and second quarters of 2024, representing $159.5 million in total dividends. On July 24, 2024, our Board of Directors declared a quarterly cash dividend of $0.235 per common share, payable on September 30, 2024.

Current wording

Our Board of Directors declared quarterly cash dividends of $0.235 per common share in the first, second, and third quarters of 2024, representing $238.9 million in total dividends.