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Western Union Q3 Profit Drops

Due to lower revenues and a charge related to an anticipatory regulatory settlement

The Western Union has reported its financial results for the third quarter of 2009. Reportedly, the highlights of the results include: consolidated revenue of $1.3 billion, a decrease of 5% compared to last year’s third quarter; constant currency adjusted consolidated revenue down 2%; a pre-tax accrual of $71 million for an anticipated agreement to resolve the company’s disputes with the State of Arizona and to fund a multi-state not-for-profit organization (the settlement accrual); GAAP EPS of $0.26, or EPS of $0.33 excluding the settlement accrual; constant currency EPS $0.01 lower than EPS excluding the settlement accrual; GAAP operating income margin of 21%, or 27% excluding the settlement accrual; and year-to-date cash provided by operating activities of $958 million.

Christina Gold, president and CEO of Western Union, said: “We were pleased to see consistency in transaction and revenue trends relative to the prior quarter. Our geographically diverse portfolio delivered 3% growth in consumer-to-consumer transactions, as strength in key international markets offset softness in other countries. We also achieved our 2009 goal of surpassing 400,000 agent locations.”

“We made strong progress on our focused set of strategic growth initiatives. We achieved advances with our Americas banking strategy, signed letters of agreement with key retail agents in Europe, and concluded the acquisition of Custom House, which gives us a strong platform to grow in the cross-border, business-to-business payments market. We expanded our presence in mobile money transfer with new carriers and additional mobile-enabled locations. Additionally, we continued to pilot programs positioning the company for the long-term opportunities available in prepaid,” he added.