Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Western Union Earnings Conference Call. My name is Jeremy, and I'll be your operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Mike Salop, Senior Vice President of Investor Relations.

Thank you. And good afternoon, everyone. On today's call, Hikmet Ersek, our President and Chief Executive Officer; and Scott Scheirman, our Chief Financial Officer, will discuss 2011 fourth quarter and full year performance, and our 2012 outlook. Following the remarks, we will open the call for questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Additional operational statistics have been provided in a supplemental table with our press release. As a reminder, today's call is being recorded and our comments include forward-looking statements. Please refer to the cautionary language and the earnings release and in Western Union's filings with the Securities and Exchange Commission, including that 2010 Form 10-K for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable GAAP measures on our website, westernunion.com, under the Investor Relations section. All statements made by Western Union officers on this call are the property of The Western Union Company and subject to copyright protection. Other than the replay noted in our press release, Western Union has not authorized and disclaims responsibility for any recording, replay or distribution of any transcription of this call. I would now like to turn the call over to Hikmet Ersek.

Thank you, Mike. And welcome, everyone. Overall, 2011 was a good year and we realized many accomplishments. We exceeded our earnings per share outlook from the beginning of the year and delivered our highest full-year revenue rate since 2008. This was accomplished in a challenging environment that included the Arab Spring, economic troubles in Europe and high global unemployment. We believe that we gained cross-border market share, each of our consumer-to-consumer regions grew and the repositioning of our U.S. domestic money transfer business, which began in late 2009, continue to pay off. We advanced our European strategy of being closer to the consumers and optimizing our operating model by completing the Angelo Costa and Finint super-agent acquisitions. In Asia, we've further expanded our network and now have approximately 200,000 locations across China, India and the rest of APAC. With our bank license, we also laid the groundwork for expansion in Brazil and continued the turnaround in consumer bill payments. In business-to-business payments, we completed the Travelex Global Business Payments acquisition in November, which gives us a strong foundation for a second leg of growth well into the future. Within C2C, our electronic channels business continue to advance in 2011 with 35% revenue growth, indicating that our combination of physical network with digital send and receive options is matching consumer needs in the marketplace. We also signed a global prepaid and money transfer agreements with MasterCard, which will help us globalize prepaid services and allow us to leverage MasterCard's world-class global electronic network. Late in the year, we began our launch of prepaid cards in Europe. Other accomplishments in 2011 include completion of the restructuring activities we announced in mid- 2010, which delivered approximately $55 million in cost savings. And also, we resolved our international tax position with the IRS. We…

Thank you, Hikmet. As I review 2011 financial results, I will primarily focus on the fourth quarter. The similar information for the full year can be found in our press release and the attached financial schedules. Overall for the quarter, we delivered consolidated revenue growth of 5% on a reported basis and 6% on a constant currency basis. Excluding $35 million of revenue from the Travelex Global Business Payments acquisition, which closed on November 7, reported revenue increased to 3% or 4% on a constant currency basis for the quarter. Consolidated organic revenue growth was driven by increases in all regions of our consumer-to-consumer segment, both as consumer bill payments and double-digit growth in Western Union Business Solutions. Transaction fee revenue increased 2%, while foreign exchange revenue grew 20%, primarily due to the acquisition of Travelex. In the Consumer-to-consumer segment, reported revenue increased 3%, with transaction fee revenue up 2% and foreign exchange revenue up 6%. C2C constant currency revenue growth was 3% as compared to 4% in the third quarter, while transaction growth was 5%, the same as the third quarter. While we have revenue growth in each region, revenue trends were affected by the slowdown in Southern Europe as well as business challenges in Mexico, Russia and China. C2C cross-border principal grew 2% in the quarter or 3% on a constant currency basis. C2C principal per transaction declined 2% year-over-year or 1% on a constant currency basis. In the international C2C business, revenue grew 2% on a reported basis and 3% on a constant currency basis. International transaction growth was 5%. International principal per transaction declined 1% compared to the prior year on both a reported and constant currency basis. We ended the year with approximately 485,000 agent locations. This was the same number at the end of…

And our first question comes from the line of Tien-Tsin Huang with JPMorgan. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: It's Tien-Tsin here. I just wanted to clarify, on the margins, I heard the flat comment, but just wanted to confirm. Excluding the Travelex intangible amortization, margins will be up 40 bps including the investments. Did I hear that correct? And secondly, the digital investments you're making, what kind of growth do you expect that to drive in fiscal '12? I heard it's 3% of revenue now, but what could that look like this year?

Yes, Tien-Tsin, this is Scott. Let me address the EBITDA margins, then I'll turn it over to Hikmet for the .com for 2012 and forward, which we think can really grow very well. But on the EBITDA margins, 2011, we had an EBITDA margin of 29.6%, excluding restructuring charges and Travelex integration expenses, which were only about $5 million in 2011. In 2012, we expect EBITDA margins of 30%, which excludes the Travelex integration costs. So the EBITDA margins, we anticipate to increase in 2012.

Yes, on the westernunion.com investment, Tien-Tsin, I believe that, that which the company does, and I think that's great, because we're already growing with our limited capabilities about 35% internationally, even 40%. What we do, what the other companies can't do, is that we are connecting the electronic channels with our retail, 485,000 locations, 200 countries. Not many companies have the capabilities to use the iPhone or use a computer to send in minute and payout in 485,000 locations. We believe with special focus within the branches, the team is working very hard in San Francisco, and we hire also digital talent there. We believe that we can grow this business to $500 million. Now it's to about $100 million, right, Scott?

Yes.

$100 million. We can grow to $500 million by 2015. And the roadmap there is very clear, capturing the customers, building on that and growing this business very strong. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Okay. Okay. And just, I guess thinking about the core including the digital piece, I guess you're targeting 2% to 4% growth, excluding the Travelex piece. And you did, I think, 4% growth in the fourth quarter and most of '11. So is that deceleration all just the Mexico and the Russia adjustments that you're making? What's your underlying assumptions, I suppose, here on the macro, to get to the 2% to 4%?

From the macro environment, I stay cautious in Europe. Parts of Europe is doing pretty well. I mean the north part of Europe, like Germany, U.K. and France, we are doing -- growing there very well. And but in the parts of Europe like Southern Europe, we do have some challenges. Here, we see some slowdown. Partly also, which -- in Russia, we do have a lower price competition there and the retail markets. And Mexico, we do have some southwest border compliance issue. We are upgrading there our compliance environment and also changing our business model. But from general environment, economic environment, I would say that I'm a little bit cautious on Europe, generally, but that showed also into Q4, the numbers has been a little bit slower than Q3. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Last one, I promise. Could the digital component add 100 bps to growth again in 2012 versus '11?

Well, we think it's got a lot of opportunity in digital. I won't get specific about '12, but we do expect strong double-digit revenue growth in digital. And we do think that could be a $0.5 billion business by 2015. So it's going to, for sure, add to the growth rates in 2012.

It will be, Tien-Tsin, and we have a roadmap to get to $0.5 billion, and we all feel confident about that.

And our next question comes from Glenn Fodor with Morgan Stanley.

Sorry if I missed it, but the -- what's the goal for fiscal '12 marketing spend as a percent of revs? And you talked about these expansion efforts having more customer-centric view. That's a fine strategy. But I just want to know, what type of impact could this have on marketing spend over the long term. I mean, imagine it should increase, but the offsets possible from the electronic and mobile channels, how do you look at the moving parts there?

I'll take the second part question of Glenn. If you like then, then Scott, you jump in, okay? I think from the digital strategy from the -- being customer focus is really putting the customer in the middle. And see digital as the fixed region besides our 5 region and sending from digital consumers to new -- to our -- sending money globally. I think what we are doing here is really connecting the digital with our network, 500,000 network. One site you have good funds from cards or from accounts, and sending cash globally, but also account -- the account is growing very fast in certain markets. We believe that's a huge opportunity also. Putting the customer in the middle, we don't believe that we need additional huge marketing investment. We already captured the customer. We're communicating to customers in a different way, but still, with our ethnic marketing we'll continue to do, we still believe that we will have -- we have strong brands sending and receiving connection will drive digital, as we do it in the retail money transfer. One thing I just want to make sure also is that our retail money transfers, our core business, is the core and we still believe that there is a huge opportunity to grow that. Otherwise, I wouldn't have this strong ambitions with the team to grow our retail network to 1 million locations.

And then, Glenn, on the marketing for 2012. We'll be right around the same levels we were in 2011, about 4% of the top line we'll spend on marketing.

Okay. And then, second to last question. Just a little more granular color on expectations for C2C versus B2B, well, Business Solutions margins. I know one's going to be under pressure because of the amortization, but just the magnitudes of the trajectories. I mean, you're expecting 25 bps expansion in C2C or 50 bps?

Yes. I'd say, if we look at the overall, company-wide, to give you a sense, Glenn, operating margins, company-wide, we expect them to be flat, if you will, to 26% in '12 and '11. The EBITDA margins, we do expect those to be at 29.6% in '11 versus 30% in 2012. Again, as we've looked at the C2C business, I continue to expect to have strong margins there. Clearly, in the C2B business, because we are through some investment cycle with Custom House integration there, the C2B margins I do expect to strengthen there. But we are going to invest $50 million to integrate Travelex Global Business Payments. And we think that's really important to help move that top line to the low double-digit revenue growth. We have a 2% share. We think we have an opportunity to have much greater than 2% share, so we'll invest behind that. But overall, we expect EBITDA margins to be slightly up next year and operating profit margin to be flattish with 2011.

Our next question comes from Ashwin Shirvaikar with Citi.

It's Ashwin from Citi. So I guess my question is, you run basically a portfolio of corridors. And when I look at the year-over-year comparison of what was not working last year versus what's sort of not working this year, can you provide where we stand? And Europe was weak both years, last year and this year, so where do we stand with Ivory Coast with the -- with countries in the Middle East? And then, is there a timeframe for Russia or China or Mexico to get better here into -- of your own actions?

So Ashwin basically, we have 16,000 corridors, right? So I mean, that detail our business, and it's hard to come up, but generally, I would say that I wouldn't see Europe as weak. Certain corridors in Europe, especially from southern Europe to certain corridors, that had some impact. That our business from Gulf is doing good. Its growth business is back again. I think specially to South Asia, and Philippines, Asia, parts of Asia is doing very well. Our U.S. outbound business is doing well. We did do -- saw some challenges, obviously, to Mexico, do -- as I mentioned before in the call, but I think that's going to. The Russia business is mainly driven to Central Asia business. And that has been impacted by strong pricing competitors, which we think that we can -- we have a plan to compete against it in the long term. But it will take some time. I would say, overall, from corridor point of view, I except Southern Europe, I would say that the business is holding pretty well and the Gulf is back.

Okay. I guess, my next question then would be on growth then, looking at margins and the digital business as you grow that. What should we expect for the margin profile in that business? I mean, given the potential to eliminate the agent on one or both ends. Do you expect margins to be correspondingly higher?

First of all, I don't believe that eliminated agents, Ashwin, as you know, what I said before is that Michael is having 1 million agent locations and I get challenging questions about few years ago, "Would you ever have 500,000 agent locations?" And we are almost there now. First of all, I would say that you need the agent locations to connect the digital with the agent. Otherwise, this business has -- many people tried to build this business and the issue is that building the retail with the digital, and we have it. I would say that, on the send side, we do believe that that's a high-margin business and we're going to increase the margin, definitely, because we had agents on the send side and we do have operating model to drive this business. But we have to invest in the beginning and to grow -- to come to a revenue expansion and margin expansion business.

Okay. Real quick bookkeeping question. How much of the buyback is included in your guidance?

Ashwin, this is Scott. For a variety of reasons, I don't give you a specific number. But maybe let me give you some color of our thinking. And clearly, we want to be returning capital to our shareholders, both in a balanced way through dividends and buyback. In fact, we increased the dividend by 25% today. But what we're trying to do with buyback is get cash for our shareholders, but also balance it out with keeping a strong balance sheet, if you will. So as we think about 2012, you probably won't see buyback to the level we did in 2011 at the $800 million. But I'd probably have you think about the years of 2009, 2010, as we see things today, probably at that type of level as we move forward through 2012.

And our next question comes from Kartik Mehta with Northcoast Research.

Hikmet, I wanted to get your thoughts on the new regulatory environment because of the CFPB, and if you think that'll have any impact on business conditions or your ability to grow market share.

Well, on the consumer protection side, I believe that, first of all, we are looking at it from the U.S. side very carefully on that, how the new regulations are. But our -- Kartik, our business, well, as you know, is quite simple and quite transparent. The sender, we call this fixed offset. The sender exactly knows what the receiver will get, what -- how much we're going to payout. That puts our business model in a very advantaged part that we are quite transparent. Saying that, though, if you look at that -- the new rules, we believe that we cannot adopt our business model also where it's needed to the requirements, and but we don't see a huge change in our business model. We believe that we are -- can apply the regulations very easy.

And then, what are your expectations for the C2C market growing in 2012, considering some of these headwinds that are being posed by the economies of the world?

I would generally say that our C2C business is very well-positioned, right? If you exclude the electronic channels, the digital part, I think we are very well-positioned. The -- I'm still saying cautiously, as I mentioned before, on Europe. Parts of Europe, especially south parts of Europe. Today, I think Spain announced again the unemployment rate of about 22%. And Italy have some issues also. But Germany, U.K., France, our business is doing well. I think the employment rates are -- or they are stable. So it impacts all that. But Europe, I would like to stay on 2012 cautious on Europe. You want to add something on that?

No, I think that, that frames it well, Hikmet.

And then just one last question. The margin decline in Asia-Pacific, was that just pricing pressure or was that Western Union investing more money to grow market share or something else?

Yes, it's still very strong at that 28%-type level. And it's really the latter as you described. We invested more in marketing. We had a little bit more in compliance, which I think is an investment in the brand, too, but really things to help drive the top line on a long-term basis. But overall, strong margins in APAC, it almost -- not quite 30%, but nearly 30%.

Yes, I think, Kartik, I would like to be really invested on that stuff. I mean we have now in Asia-Pacific, including India, China, in APAC about 200,000 locations, Kartik. I mean, that's a huge coverage there. And I think there's still room to grow, though.

Our next question comes from Darrin Peller with Barclays Capital.

Just quick question. Could you just provide some color on thoughts around the new restrictions we're seeing in Italy, maybe how impactful that is to you, and is that in your guidance assumptions? And then maybe on the other side of that, are there any macro assumptions built-in for potential pickup in housing starts? Maybe if you can give us a little more color on what you think might come out of any type of housing recovery and how impactful that could be to your fundamentals?

Yes, jump in, Scott, I'll try to answer the first part and the second of the question. First part is on Italy. I think that has been some impact at some of the higher brands of the revenue on PPT, principal per transaction, has been impacted for putting some regulation from non-European Union Citizen showing ID. But I believe long term, look at Italy, we have the retails and we have the banks there, right? And bank customers don't -- who have the Know Your Customer registered already, don't have to go through the process, only the retail customers have to go through the process. So our portfolio is pretty well settled. And we -- it's not the first time we have it in some countries. In the beginning you'll see some changes on the process that impact on the transaction numbers. But long term, we always come back to customers and they said, well, then -- still use our service. On the housing then, I would say that it will help, right? Everything, building new houses, building in the construction, it helps. They are our first sign in the U.S. that employment rates are picking up. That will definitely help that our customers, many of our customers do work in the construction area, they do make money and send back to their loved ones. In Gulf states, you saw some investments, as you recall, in the last 3 quarters or some -- I talk about the investment in Saudi Arabia. And that started to payback and the customers are sending -- working there and sending back to the south Asian corridors.

Yes, and Darrin, in regard to the outlook. In the fourth quarter, we did see some impact from the Italy regulations, so we've built that into our 2012 outlook. And likewise, for the U.S., we haven't built in an assumption that things are going to improve due to housing.

Okay. That's great and helpful. And then one quick question on the margin again. I know there's been a couple of points discussing it, but correct me if I'm wrong, I was under the impression that depreciation and amortization, or incremental DNA from Travelex was around -- it was, I think, over $50 million in the year. That's somewhere around 90 basis points of pressure on a year-over-year basis. But your guidance on EBITDA margins is really only for mildly higher, right? About 30, 40 basis points. So is there maybe just some conservatism built into that, or is it just an approximation?

Yes. We just called out the intangible amortization, which is going -- combined for business solution and Travelex going from about $20 million to $60 million, so there's a $40 million impact there, which is roughly 70 basis points or so. There is additional depreciation as well. There's additional, I think, about $50 million or so of depreciation coming from Travelex.

All right. And then just last question on Mexico. Can you just give a little more color on what exactly you're doing there? I just, maybe, I think you mentioned before how you're expecting a little bit of slower trend, but maybe give us some -- a little more explanation, and then I'll just go back to the queue after that.

Hey, Darrin, if you look at our Mexico business, it's really -- it's a little bit affected by ongoing compliance pressures which we are changing, especially from southwest border. As you recall, we had agreed on 2009 to work with an independent monitor on our compliance activities. And that we see that some of the activities has been impacted our business. And we're also looking at 2012, all our model of practices in Mexico. We are in process of reviewing some agent agreements and changing our operating model in Mexico. We're going to upgrade our compliance-related changes. We're going to be more -- we really want to be the industry standard and the highest standard of industry. I think we want to really be the highest there. So I believe that we have the right approach there. And just to put the things in perspective, as you know, none of our business -- Mexico is not larger than 6% in 2011 of our business, right? So ...

Our next question comes from Jason Kupferberg with Jefferies. Jason Kupferberg - Jefferies & Company, Inc., Research Division: Just had another question on the margin. Just trying to conceptualize longer-term. I know you guys have always talked to the management team as being committed to long-term margin expansion of the business. And obviously in '12, you've got kind of this one-off situation with the intangibles due to the Travelex deal but at the same time, you're telling us that you don't see any other large acquisitions on your near-term horizon. So if you kind of take that factor out longer-term, can you just talk us through where you guys stand from a strategic perspective in terms of the priority of margin to expand longer-term, both on an EBIT and on EBITDA basis?

Well, I think -- first of all, management is committed for the margin expansion. To do that, we need to grow. And I think we are investing in the right way to do -- to get the growth, right? We have been -- as you saw in 2012, a little bit impacted -- we believe we're going to be impacted from the economic slowdown, especially in Europe. And that will impact our growth rates, which were being similar to 2011 Q4. That's the projection we have it from 2012. So on the growth rate, I have to say that besides the card business will grow on the C2C, but we believe also the B2B growing low double-digit and also electronic channels growing on the 40% approximately. I think we are really set for the growth. And with that investment, they will be definitely a help on the margin expansion. So my team and I am very committed for the margin expansion, but for that, we need definitely growth. You want to jump on that?

Yes. The only thing I would add, Jason, is that these business models are set up to drive margin expansion with roughly 65% of our cost variable, 35% of our costs are fixed. As a management team, on a long-term basis, we're committed to drive margin expansion, whether that's operating margin or EBITDA margin. And just review the 2 things that are impacting the operating margins in '12, the additional amortization, and then, if you will, the investments we're making in the business, the $35 million for digital, we believe that will be a $0.5 billion business in 2015. So we think it's very much well worth the investment today for the future. Jason Kupferberg - Jefferies & Company, Inc., Research Division: That all makes sense. Just to shift gears for a second over to Travelex because I think the execution that, that part, that people are really focused on. And if I recall, when you guys announced the acquisition, you suggest that it would be accretive to cash EPS in 2012. So I wanted to confirm, is that still the case? And any sense you can give us on order of magnitude there?

Yes. It is, for sure, still cash accretive to EPS in 2012. Looking forward to 2013, we expect it to be both GAAP accretive and cash accretive in 2013. As far as magnitude, I'd probably have you think about roughly the intangibles going from $20 million to $60 million as a noncash charge, if you will, Jason. And then, we do have $50 million of integration charges, although those are cash, we expect those to go away in the future, as we get it integrated. Jason Kupferberg - Jefferies & Company, Inc., Research Division: Okay. And then just one follow-up on Travelex, and I guess more broadly on Business Solutions. Can you give us an update on the size of the sales force there and growth plans for the sales force in 2012, as you continue to pursue the double-digit top line growth opportunities on that side of the business?

Yes, I mean, if you think about our business, we are very active on the set, now we are in 23 countries. We have about 500 people selling our products there, getting to SMEs. We have about 100,000 SME customers in our portfolio. Our approach is really using our existing agent network, which do consumer-to-consumer money transfer, also selling B2B. And it works already, we have about 16 agents signed on that, 6 of them are already active selling this, our business. So we are very much active on selling that, and our sales force is about 500 people selling our products there.

Our next question comes from Julio Quinteros with Goldman Sachs.

Great. Just to back up real quickly and to make sure I have the growth rates for 2012 correct. Can you just give us that target growth rates for C2C? And then maybe if you can decouple electronic channels in '12? And then lastly, the Business Solutions piece, please?

Yes, well, I'll work backwards with Business Solutions. What we expect there is low double-digit constant currency revenue growth, not only for 2012, but really over the next several years. For electronics, we expect double-digit, strong double-digit revenue growth in the electronic business. And then, Julio, the color on the C2C business is that the trends that we saw in the fourth quarter, those type of growth rates, we're cautious about Europe, but we expect C2C to see those type of growth rates throughout 2012.

Okay, great. And maybe, Hikmet, this one more directly for you. If we go back and compare the strategy that you laid out back in 2010 at the end of the year. You had identified a lot of the -- quite frankly, a lot of the same things that you're talking about today in terms of areas of investments. And yet, as we go into 2012, it feels like you have to do more in the way of incremental investments to sort of to keep pace. Is it the economy that's driving some of the requirements for incremental investments? Is there more competition? So if you could just kind of help us bridge the gap between what you guys sort of laid out as your investment strategy in 2010 versus where you are now to 2012. Where is the change on the margin in the sense that you guys actually have to go out and invest more to stay more competitive?

Well, I mean, if we -- as we talked in 2010, and as you recall, our investors meeting there, we outlined our strategy. I think we are really executing against our strategy now. What we did is also -- we won't forget that we expect the margin in 2011, and think we are doing the right thing. We grow the revenue since 2008. The highest growth was in 2011, the best year on the top line. So I think we have the right strategy. Plus last year, we built a second leg on the B2B. We have, on customers and Travelex put together to rescue Business Solutions, and we want to grow that by double-digit, low double-digit growth. So on the electronic channels, Julio, really, we are -- one, that was growing 35% to 40% already with limited capabilities. So what we are doing here is that taking this business channel, a new region called, or whatever it is they call it, the new channels to $500 million, $0.5 billion business. And that needs some capability investments. That needs some investments to around the consumers and that's what we are really doing on that part. I wouldn't say that big pricing -- big pricing challenge globally. As you recall, our pricing investment was around 1% 2011, and we assume that it will be 1% to 2% in 2012.

Okay. And just lastly on the competitive front, with all of the different P2P options that have popped up over the last couple of months now with, obviously, PayPal and Fiserv, and in MCR, yesterday, all kind of jump in to B2B. How do you think about that from a competitive dynamic going forward?

Well, from the competition side, I think we are very well-positioned. What differentiates us from the competition, as I said, is our global brand, our regulator relationship present in 200 countries, and our connecting the electronic with the retail. Plus, I just wanted to say also, on the prepaid side and also on the top up side, we have a partnership with MasterCard. And I'm very excited, actually, with our partnership with Ajay Banga and I sit together, we talked about how that could be. These 2 companies, Western Union serving the underserved customers having the brand awareness in emerging markets combining with MasterCard's capability with electronic capability makes big sense to take that, our stored value, to the next stage.

Our next question comes from Jim Kissane with Crédit Suisse. James F. Kissane - Crédit Suisse AG, Research Division: Just following up on Darrin's question. The compliance issues in Mexico, are those industry-wide or company-specific? And maybe, if you can be a little more specific in terms of how you're going to change the model and maybe some of the agent, how you deal with the agents, and will there be any impact on pricing in Mexico?

Thanks, Jim. On Mexico, I would say that it's more company-specific because we came on the 2009 in an agreement, as you recall, and we are implementing really with the independent monitor, the agreement requirements. And it does impact our business. I would say that also it sets industry standard, at which we are very proud. I think we are building on that, but it does impact our business, especially in some southwest border. I think that's where we are really focused on that. And that's really -- it's a high priority within the company, and we believe that long-term, we're in a very well-positioned environment with that.

And Jim, on the agent model, we're currently in negotiations for agent renewals in Mexico. So it's premature for us to talk about what's going to happen there. But once things are finalized, we'll be able on the discuss that. James F. Kissane - Crédit Suisse AG, Research Division: Okay. But that's on the receive side, not so much on the send side?

Yes, you're right.

Yes. On the southwest border is on the send side, the compliance issues, Jim. James F. Kissane - Crédit Suisse AG, Research Division: And then in Russia, you talked about the retail competition being more intense. Looking out, how are you -- plan on countering the retail competition in Russia?

Well, we're going to do that same things which we do with the European Union with the PSD. I think we will have the right sales force there also. The big thing is also it's a pricing issue there. I think we have to balance between pricing and gaining market share and gaining transactions. I think that that's all in our business plan, and we have the right plan to expand that. James F. Kissane - Crédit Suisse AG, Research Division: Okay. And just last question on China. Can you give us an outlook on the revenue growth there, and did the time or the new year have any impact on the fourth quarter growth?

As you know, we don't give -- we didn't -- we never give specific numbers on China. But generally, I think we are very well-positioned in China. It had some currency impact, Scott, believe me, right? That's currency. It had impact, some on the higher RPG. Also, some corridors had some regulations from Africa to China and to South America...

To South America.

To South America, was not China. But China have some impact on our business on the regulation side. But generally, I would say that with our locations there, we had top banks, now we have also the regional banks there, I would say that we've -- good position. And don't forget, China is currently an inbound country only.

Our next question comes from Bob Napoli with William Blair. Robert P. Napoli - William Blair & Company L.L.C., Research Division: Follow-up on the Travelex or the B2B business. I think when you bought Travelex, you were looking for about $400 million in revenue in 2012, and I know currencies moved, then the dollar strengthened a little bit since then. But what is your outlook for revenue for that B2B piece in 2012?

Yes, it's very similar to use a round number as we combine Travelex-Western Union Business Solutions, we expect it's about that $400 million number.

Okay. And then just on your digital business. $100 million to $500 million. I mean, that's a 50% annualized growth rate. Are you on track for that in 2012, that kind of growth organically? And this is all without acquisitions?

I think, yes, that's without acquisitions. And I believe that we are on track on to reach our $500 million business. We are very confident about that.

And Bob, you can imagine, we're investing in a lot of these things that's going to help the business. So until the investments are in place, the growth will come a little bit later. But we have strong growth last year in the existing business, we expect strong growth, but the growth will probably ramp up as we go out towards 2015. Robert P. Napoli - William Blair & Company L.L.C., Research Division: Okay. And then just on your growth rate, I mean, do you think you're losing some market share now? I mean, the World Bank is looking for, I think, upper mid-single digit transaction growth. I mean, you saw MoneyGram report mid-double digit near, I think, 13% transaction growth. I mean are some of these issues in Mexico, in Italy, in Russia, are you currently losing market share, do you think?

We believe in the cross-border money transfer, we gain market share. We compare, as you know, Rob, usually with Aite, our numbers. We believe we gain share. We do have, as I mentioned before, seen some countries like Russia or Southern Europe, some challenges. But I would say that our belief is gaining market share, and we believe we've gained market share in 2011. Robert P. Napoli - William Blair & Company L.L.C., Research Division: And if you look -- yes, last question. Your Bill Pay business. If you go back several years, I mean, that Bill Pay business, the U.S. piece, I think, was -- a lot of that was rapid pay. Your margins, you were generating operating margins in the 30% range. And granted the mortgage piece isn't coming back to rapid pay, but the auto finance is screaming back in the U.S. as far as the growth and -- or I mean, is that business changed such that you don't have the operating leverage, you're not going to get -- I mean, I would have expected to see a little bit more acceleration in growth in the U.S. business, given the growth of -- I think, auto was -- is a big piece of that business. You've added a lot of billers. But what is going on with that business? Can -- I mean, are the margins that we saw in the past just not achievable in the future? Is there more competition?

Yes. Definitely, that business has evolved over time, especially as we move through the financial crisis of 2009 and 2010 with subprime and so forth. We do now have 10,000 billers, so we're further diversifying our biller base. The one thing I'd probably point out, Bob, that might be helpful in the fourth quarter, out of the Global Business Payments segment, if you take out Travelex now in that -- if you take Travelex out of that, that segment would have had margins over 20%. So the margins are getting better there. When you kind of look more on of an apples-to-apples basis. And we do believe that business, in 2012, the C2B business would be steady. Although the revenue could be somewhat impacted by some of the Durbin pass-through, but we do see a steady C -- C2B business in 2012. In the last 3 quarters, we have grown that business 2%, where it was declining before that. So we feel like we are on the right path to improving that business. Robert P. Napoli - William Blair & Company L.L.C., Research Division: Didn't Travelex have margins in the 30% range, excluding amortization expense?

Yes. Travelex had EBITDA margins right about 30% range. Travelex Global Business Payments. But you have to remember, in the fourth quarter, we had $5 million of integration expense, we had depreciation and amortization, so all those things impacted that segment.

Our next question comes from David Togut with Evercore Partners.

Just a few very quick questions. First, Hikmet, at the time of the September 2010 Analyst Day, you highlighted agent commission as a significant source of possible cost savings as you go through the 5-year contract renewal cycle. Where do you stand with respect to that renewal cycle? And do you still believe that you could bring commission rates down over time?

Yes. I think, yes. The answer is yes. We are bringing down and it's -- especially the agent contract renegotiation, there's always the seasonality. In some years, it's higher because of the agent contracts are coming to renewals with CapEx investments, everything, the effective rates impacts there. But generally, our current cost of services going south, which is going down, which is great, and helps us. And it's also win-win situation, long-term agreements, I think we have the right formula here, bringing the agent commissions long-term down, and keeping the agents for a longer time with -- in our network.

And second, Scott, do you still expect to have ballpark $70 million of restructuring cost savings in 2012?

We do. It was $55 million in '11. We think there'll be an incremental $15 million. So $70 million in 2012.

Great. And just a quick final question, nice to see the 25% dividend increase. Can you be a little more granular on your acquisition appetite? Are you done with the big deals for now and it's, basically, all share repurchase and dividends? Or are you still on a lookout for large transactions?

Oh, I think obviously, constant -- as a business leader, you are constantly look on acquisition opportunities, right? That's my -- is that an opportunity, we have a healthy capital structure, so we do look at it. But I think our focus for 2012 is mainly on the integration of Travelex. We did a big move in 2011. We built a second leg of business and we are focused on our -- now I don't see from today's point of view, on a bigger acquisition like the Travelex one, but we do see opportunities on the smaller one, which will expand our capabilities in electronic channels or in other parts of the business. So I will say that we are constantly looking for an acquisition but not on a larger scale. Current, I don't see another opportunity.

Quick final question. Where are the TGBP integration costs located in the P&L? Are they cost of services or SG&A?

The $5 billion, it's split, a little bit in cost of services and SG&A. And what we may do, David, on a go-forward basis in 2012, is give you color on how those break between the 2 lines.

Our next question comes from Tim Willi with Wells Fargo.

I had 2 questions. First one, just going back to the capital a bit. Can you at all talk about ultimately what you think the capital returns, sort of what the profile might look like between buyback and dividend? You currently sit, I guess, roughly around a 20%, 25% payout ratio, which is obviously much better than it was, and you've done a good job there. Do you see that as a ratio, as we look out 3, 4, 5 years, that it could be notably higher than the current payout ratio, with more emphasis on the dividend versus the buyback?

Tim, it's Scott. As we think about our business, we clearly want to invest in our business, but also get cash back to our shareholders, and we want to do that in a balanced way. Probably, one way to look at that historically is the last 4 years, we've raised the dividend, at least once per year, if you will, from that standpoint. So we'll continue to work closely with our board and our management team to have dialogue around that. But as the business performs, as things work, we would like to do things to move the dividend up. But also be balanced with the stock buyback. The good news with our business, we generate so much cash flow, it allows us to do a number of things, whether it's investing in the business, moving the dividend up like we did today, about 25%, and returning cash to our shareholders through stock buyback.

Also, keeping the -- in the right balance cash availability, because it's important also for us in parts of the world to have the ratings in place. And if you go to the several parts of the world, you want to keep a good rating company, which other big companies want to work with you. That's the financial strength is also important to keep the business and have a good relationship with many partners.

Okay. And then the follow-up I have was just going back to the electronic channels. I apologize if you hit on this in prior answers in your comments. But do you at all have any kind of feel for, if there's any, even if it's minor, cannibalization of sort of the legacy customer base or legacy transaction that is occurring with your growth of account-to-cash or through mobile? And then as you think about this $500 million target, do you all expect people that are typically going in and sending money as an agent are going to be part of that equation, and now they're going to do it from their mobile phone or off the computer instead going to an agent and sending money to a relative or somebody overseas?

Yes, well, most of the customers are new customers, we are getting to New Customer segment. There may be some of the cannibalization. But depending also on the geography where you are. In some countries, it's really new. In some countries, the existing ones are using. That I would say that generally, I would say, it's the new customers. We believe we are really coming to a New Customer segment. And on the receive side, we are being -- I mean, I give also me as an example, right? I used to go to a location, Safeway location, since we have westernunion.com in the U.S. and me, I'm a new migrant, I send money to my father in Istanbul with electronic because I don't have time to go through that. But I still on Saturdays and Sundays, I go to Safeway and still use it. So it's a balance between that, absolutely.

And our next question comes from Dan Perlin with RBC Capital Markets.

I just want to go back to segments and these investments for the year. You called out the $35 million incremental for the digital channel. But could you either put a round number around the consolidated investment that you're looking at this year, or at least can you help us with your costs to the build out the sales force? And then these other incremental expenses as it relates to Mexico, Italy and Russia?

Yes, to kind of give you a sense, and you hit on the $35 million to the digital investment, and I would say that's, of all the investments, that's the larger piece of it for sure. We are investing in the sales force. We think, we believe, we have opportunities to increase even more market shares and march towards that 1 million locations down the road, if you will. Also to make some investments behind the technology and customer acquisitions. But I don't want to parse it too fine, Dan. But think about digital, $35 million is the bigger -- biggest part of that investment.

Yes, as you think of -- yes, so when you think about these investments in WU-dot-com, and sales force, I mean, these are infrastructure investments, so we're hiring people and creating technology that will be there as ongoing as well.

Okay. And as you think about doubling your agent network from here, how do we think about the incremental margins associated with those? I suspect they're smaller in size, will there be any super agents that you have to rely on? Is there a new infrastructure that you think you have to have in order to get you to doubling of that size? It's a pretty significant call-out for you guys.

Well, it is significant expansion of our retail thing. Don't forget that we really started to get -- first of all, we do have direct agent relationship. I think the super agent model, what we had in the past, opening account to be done, entrepreneur, and expanding, it's all where you are really having the direct agent model, which is also more cost efficient with us. So we believe that certain geography, certain class of trade is still untapped. Certain banks in U.S. are still untapped, and some retailers in Europe. But most importantly, emerging markets, there are still a huge numbers, as we -- nobody -- as I was over the seas, a few years ago, we wouldn't come up, coming up with 200,000 locations in Asia-Pacific. I think we significantly changed the environment. And knowing the market a little bit, there are still opportunities to grow that, and I believe we can do that.

And on the types of the transactions that you would expect from this kind of the next bucket of agents. are you expecting as much cross-border transaction or more kind of intra-country transactions, where you might not get the spread?

Several financial services, which I outlined from my strategy could be cross-border, intra-transactions also, but cross-border also. And some of the countries which are inbound-only will be turned to outbound also, because the migration patterns are changing. And in the rural areas, still, we have a need to expand that. Also, could be with our MasterCard agreement, some of them using as a top up location as we expand the -- our prepaid and stored value activities, globally, with partners. That will be also part of it.

Okay. And then lastly, can you just from the appetite that the super agents are having to sell this business-to-business or Business Solutions -- I know you said there are 16 that signed up, 6 are active. Are you expecting that to be at all significant as you look at maybe just Business Solutions as a standalone segment in 2012 and '13? Or is that in the still kind of early days as a cross-selling opportunity?

First, we just started with that, right? So I think it's the early days to tell how that will be. But I believe really on that model, the reason for that, it reminds me how we expanded our consumer-to-consumer money transfer business. It's a similar part. And the more and more request is coming actually from the agents saying that, "Yes, eventually, you have a new business segment, we can also send this -- sell before -- besides the C2C also B2B with our existing." Is it in Latin America or is it in Philippines? They say that, "Hey, you have already existing Western Union brand there. We have the regulatory environment there, why shouldn't we sell also to money transfer part also to the small business entities?"

And our last question comes from Bryan Keane with Deutsche Bank.

I'll be quick, just 2 questions. I guess it sounds like compliance and regulatory challenges are hampering the growth rate in several countries, Italy, Mexico, China. I guess, Hikmet, do you worry that, that could spread to other nations and just becomes a global phenomenon?

Well, I think, first of all, with our compliance one, we are really on it. I think Western Union is, I believe, has the focus, and it's a higher priority in our environment. I think they're really setting the industry standard. And my aim is, with our general counsel and with around the money laundering activities, to set up in our very high priority. That's the thing. I would say that regulatory environment and this business has been always challenging in 200 countries. I wouldn't say that as a spread out because we have the right environment, in many countries, don't forget that we have already 0 thresholds, which we did implemented. We work very closely to regulators. And some of the competitive that has been always a challenge to enter some markets because of the regulatory environment. I feel quite confident that we have the right structure to meet the regulatory environment needs.

Okay. And then just one for Scott. I think operating margins ended up at 26.1% for the year. And that's excluding restructuring. I think the guidance was 26% to 26.5%. So that was a little bit on the low end. Just was wondering, Scott, if there were any takes that put us there on that side of the fence towards the low end?

Not particularly. We had a wide range -- or I shouldn't say a wide range, but 26% to 26.5%. FX did have some impact on that. And then we did pick up $9 million of deal cost in the fourth quarter. So there's a variety of things, but they came in, basically, exactly where we expected. And then, 2012, we are expecting to improve the EBITDA margins. So we're on path to do that.

For the full year, we had $20 million of deal cost related to the Travelex acquisitions which at the -- I mean, FX was a big impact on margin last year as well. Well, thanks, everyone, for the call. We hope you have a good evening, and we'll talk to you soon.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.