Annex A

RECONCILIATION OF NON-GAAP MEASURES

Western Union’s management believes the non-GAAP financial measures presented provide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our underlying business, because they provide consistency and comparability to prior periods.

A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial measure. A non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding of our business. Users of the financial statements are encouraged to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included below. All adjusted year-over-year changes were calculated using prior year reported amounts.

CONSOLIDATED METRICS FY2016 FY2017
Revenues, as reported (GAAP)   $5,524.3
Foreign currency translation impact(a)   $61.3
Revenues, constant currency adjusted   $5,585.6
Prior year revenues, as reported (GAAP)   $5,422.9
Revenue change, as reported (GAAP)   2%
Revenue change, constant currency adjusted   3%
Operating income, as reported (GAAP)   $473.4
        Foreign currency translation impact(a)   44.0
        Goodwill impairment(b)   464.0
        NYDFS Consent Order(c)   60.0
        Joint Settlement Agreements(d)   8.0
Operating income, constant currency adjusted, excluding Goodwill impairment, NYDFS Consent Order and Joint Settlement Agreements   $1,049.4
2016 operating income, excluding Joint Settlement Agreements   $1,084.7
Operating income change, as reported (GAAP)   (2%)
Operating income change, constant currency adjusted, excluding Goodwill impairment, NYDFS Consent Order and Joint Settlement Agreements   (3%)
Operating income, as reported (GAAP) $483.7 $473.4
        Goodwill impairment(b) N/A 464.0
        NYDFS Consent Order(c) N/A 60.0
        Joint Settlement Agreements(d) 601.0 8.0
Operating income, excluding Goodwill impairment, NYDFS Consent Order and Joint Settlement Agreements $1,084.7 $1,005.4
Operating margin, as reported (GAAP) 8.9% 8.6%
Operating margin, excluding Goodwill impairment, NYDFS Consent Order and Joint Settlement Agreements 20.0% 18.2%
westernunion.com revenue change, as reported (GAAP)   23%
westernunion.com foreign currency translation impact(a)   1%
westernunion.com revenue change, constant currency adjusted   24%

Non-GAAP related notes:

  1. Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate. We believe that this measure provides management and investors with information about operating results and trends that eliminates currency volatility and provides greater clarity regarding, and increases the comparability of, our underlying results and trends.

  2. Represents a non-cash goodwill impairment charge related to our Business Solutions reporting unit. We believe that, by excluding the effects of significant charges associated with non-cash impairment charges that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results.

  3. Represents the impact from the NYDFS Consent Order. We believe that, by excluding the effects of significant charges associated with the settlement of litigation that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results.

  4. Represents the impact from the Joint Settlement Agreements. We believe that, by excluding the effects of significant charges associated with the settlement of litigation that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results.