Good day, and welcome to the Western Union Third Quarter 2012 Earnings Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mike Salop, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Valerie, and good morning, everyone. We know many of you on the East Coast are joining us from home today, and we hope everyone is safe. We considered delaying today's release, but given the nature of the information being provided, we felt it was best to move ahead as planned. On today's call, Hikmet Ersek, Western Union's President and Chief Executive Officer; and Scott Scheirman, EVP, Chief Financial Officer and Global Operations, will discuss 2012 third quarter results. Following their 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 supplemental tables with our press release. Today's call is being recorded and our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2011 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've 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. First, I want to say that our thoughts are with those who have been impacted by Tropical Storm Sandy. As we always do in times of need, we are supporting our customers, colleagues and partners in parts of the Caribbean and the East Coast of the U.S. where the storm has caused damage. As is our tradition, when disaster strikes, we will be working with our agents and partners to provide support to people and NGOs in the impacted areas. Turning back to the third quarter results. Our revenues increased 1% in the quarter. Similar to what many other global companies have reported recently, we have felt the effect of softer global economic conditions. Our retail money transfer business was also impacted by compliance-related changes in a number of markets and competitive pricing pressures in certain corridors. In constant currency terms, our Western Union branded C2C revenues increased slightly in the quarter, but trends slowed from the first half of the year. We are implementing a series of action plans to spur long-term growth in the current retail money transfer environment, which I will discuss with you in a few minutes. Western Union Business Solutions, pro forma revenues were flat in constant currency terms, due primarily to soft global trade conditions and very challenging comparison with the third quarter of last year. As you may recall, we had an extraordinarily strong third quarter with Business Solutions in 2011. We are continuing to execute our strategies for future growth in business-to-business, adding new customers and expanding to new countries. Our Business Solutions customers count increased 5% from prior year, and we are expanding our presence to 3 new countries, bringing the total to 29. We are also continuing to make great progress in the fast…

Thank you, Hikmet. Overall, for the quarter, we reported consolidated revenue growth of 1% on a reported basis and 3% in constant currency. Consolidated pro forma revenue decreased 1% constant currency, including Travelex Global Business Payments in the prior year period. Constant currency revenue was negatively impacted by approximately 2 percentage points due to declines in the Vigo and Orlandi Valuta brands, which resulted from Southwest Border compliance-related changes. In the consumer-to-consumer segment, reported revenue decreased 4% or 1% constant currency, while transactions were flat compared with the prior year period. Excluding the Vigo and Orlandi Valuta brands, Western Union branded consumer-to-consumer constant currency revenue grew 1% on transaction growth of 3%. We are generally seeing softer economic conditions in much of the world, including continued weakness in Southern Europe and some slowing in the U.S. C2C cross-border principal declined 7% in the quarter or 4% on a constant currency basis. C2C principal per transaction declined 6% year-over-year and 3% on a constant currency basis. Turning to the regions. C2C revenue in the Europe and CIS region, which represented 22% of consolidated revenues, decreased 9% year-over-year. This decline included a negative 5% impact from currency translation. Transactions in the region declined 3%. Germany continued to hold up well with strong growth in the quarter. And many other parts of Europe have slowed and Southern Europe remained soft. Russia is down, but tracking to our outlook, as we implement our turnaround strategies and build our retail network in that market. Turning to North America. Revenue declined 8% from the prior year, while transactions were down 5%. The region represented 20% of total company revenue. U.S. outbound revenue declined, while domestic money transfer revenue remained flat on transaction growth of 7% in the quarter. Domestic $5 for $50 program continue to have…

[Operator Instructions] The first question comes from Darrin Peller of Barclays.

Hikmet, I'd like to just hear, if you don't mind your overview of long-term strategically where you these -- each of these businesses' growth profile looking like? I know generally and historically, you said this is a company you thought should be a growth company. Can you just tell us, the B2B segment at first maybe, where do you see that being kind of long-term average growth rates? And what can you do to get it back to that kind of growth rate that I think you initially thought it would be when you had bought Travelex? And then maybe just touch on similar answers for the other 2 segments, that would be appreciated.

Sure. Darrin, generally, I would say that the global economic environment, like with many companies, has been also challenging for us, especially the global trade has been slower than we thought. The transaction-wise, I think, the B2B business is doing pretty well, had a good quarter. Also comparing with the last quarter, quarter 3 2011, which we had a extraordinary, very strong growth there. So the revenues were flat, but it impacted also from global trade things. Don't forget that the principal amount in this quarter was quite flat, lower than we thought. So it was -- it impacted the revenue. But long term, we believe that our business in fact, the integration is growing very well. Our margins are increasing quarter-by-quarter on the B2B segment. We are now in 29 countries. As we started with the B2B business after the integration, we were at 16 countries, we're already on 29 countries. We recently launched India, which I believe that's a big opportunity also for the B2B segment. But globally, I would say that the economic environment is challenging. It reflects, not only the B2B, I would say, the total business also and the consumer behavior, the Southern European softness and European softness are continuing. And then also in the U.S., we see some economic challenges, it impacts our business.

Okay. I guess what I'm trying to just understand is though, let's just hypothetically say, if you were in a macroeconomic environment where GDP was growing at a more normal state, maybe in a few percentage points range, do you continue to expect you'd be gaining market share globally? And if so, what kind of growth rate should that generate for the company long term? And I know that's not -- I'm not asking for guidance, I guess I'm just trying to think about whether this truly -- how much of a growth story this could be down the road?

I think we will -- on the -- if you look at our business, generally, I think our business is built on growth. We have the fundamentals. We have the 500,000 locations. We are in 200 countries. We are expanding in electronic channels, very, very good. We have a 25% revenue growth in electronic channels. We've been investing in dot com. We have about 40% transaction growth. I think we are reaching new customers here. So digital is very good. I think I'm also satisfied that the B2B as we -- in the global trend -- global trade comes back, that will also be very good. We have only 2% market share at the B2B business. I believe there is a huge opportunity. We do have, current some challenges in certain corridors, which we are fixing and we are very focused on that. Long-term, I believe that, given our multiproduct, multichannel approach, I think we are on the road again, when -- economy comes back on the growth track. And we giving -- going to give you more color also on the 2013 in February numbers, we will give you also more color there.

The next question comes from Julio Quinteros of Goldman Sachs.

Hikmet, I'm trying to sort of get my arms around the organizational changes and what effect do you think these are going to have? Is the problem for you been lack of information or lack of real-time color in terms of what's happening on the field? Do you expect that having this direct alignment to you will fix that? Or is it more an information system seat back mechanism that you don't have to really understand what's happening with the business right now, because it really feels like a lot of things have kind of gotten away from you terms of having visibility into the model. So can help us understand how these changes, you think, will help you get a better feel for what's happening with the business on a real-time basis?

Well, Julio, first of all, as you know, I think the -- Stewart's position has been eliminated, right? I think these regions will direct reporting to me. And Stewart did 4 years of good job here, and we really wish him, really, everything best for his future. But what I would like to do here, also saying that I'm coming from the markets, as you know, I've been 14 years there. I know how that works. I know the agents very well. I've been, before I was coming over to U.S., I was running 125 countries. I built the international business. So also, knowing the regional heads very well. So I'm very confident that we have the right information with the market and with the regional leaders and with the agents to grow this, continue to grow this business. Also, I believe we are aligning the organization to multiproduct, multichannel organization in the future, regions will not only sell retail money transfer, we'll also have other products, like prepaid cards, which we -- it's happening currently, or stored value products selling on the regions, which is the alignment of the new organization. So I'm very confident that we are going to execute against our goals, which we just disclosed.

So having the people report directly to you in terms of alignment, what is -- what's different about that? Obviously, you don't have Stewart, that layer there anymore, but what do you expect to learn differently, I guess, from the alignment of the new alignment of these people actually reporting to you? And how much time do you think that's going to take for us to get a good feel, whether or not that's actually working?

I think, I'm very confident that regional heads know the business very well. So they're going to execute that, and they know the business very well and they're continue to execute very well. I think having also focus on the big part of our business, the retail money transfer, and having me personally involved here and I understand the business environment, then allocating the resources to the right part will definitely help us executing our strategy. And especially the recently announced price promotions, which we're going to launch immediately in the key corridors will help to drive the organizational alignment behind that.

The next question comes from Jason Kupferberg of Jefferies. Jason Kupferberg - Jefferies & Company, Inc., Research Division: So I wanted to get your read on how much of all this change in the outlook is a function of industry wide factors versus company-specific? I mean it frankly sounds mostly company-specific, but you keep talking about macro softness. What's your take on that? I mean, how much of this is really specific to Western Union versus reflective of any broader industry trends?

Sure. I can't give you -- I think there are big, 3 big areas. First of all, as you said, it's the economic environment, macroeconomic environment does impact our business. We have some challenges in part of the world, which are increasing. And that unfortunately, don't look very bright for the future. The second one is the compliance environment. As we have regulatory environments changing, and we are investing more in being an industry leader, putting some compliance requirements for our customers, which are tougher and higher than it was in the past. And that's, I believe, also that's the, in the future, that the competitors will adapt to this compliance environment. We believe we as an industry leader, we are leading that, and I think we are protecting our customer. And the third part is definitely -- in some corridors, we do have some competitive pricing pressures, which impacted our business, and we recognize them. Just to give you some numbers in Q2, Scott, we were minus 2% on principal, right? In Q3, we had minus 7% on the principal. And that was under specific key markets. So we are reacting immediately to do some pricing promotions in that corridors to win the customer back. As you know, the last we've been investing only 1% in 2011. And on this year, it will also about 1%.

About 1%, yes.

1%, Scott, in this environment from our revenue, pricing investments. But we were been a little concerned I think, but now we are reacting to immediate to the -- fix these key markets. Jason Kupferberg - Jefferies & Company, Inc., Research Division: Okay. And can you just give us a little more color on which specific corridors had this sudden change in competitive dynamics over the last couple of months, it just seems a little unusual for things to change so quickly. Maybe you saw some initial signs of it a quarter or so ago. But can you just help us understand what specific corridors? Because the compliance stuff in Mexico, for example, I think was pretty well explained by you guys earlier this year, but it sounds like there may be some newer corridors that now are experiencing the need for a greater pricing investment. And if that's the case, can you tell us which ones those are?

Yes, hey, Jason, a couple of things related to that. And prior that, to reiterate what Hikmet said a minute ago is that, if you look at the cross-border principal that we transfer, it grew 2% in the first quarter. It was down 2% in the second quarter, then it was minus 7% in the third quarter. So we did see some sudden changes. And there clearly had been some compliance challenges, as we've we shared, and as you alluded to, including, not only in Mexico, but we had to do things with the Vigo brand that impacted Latin America. So compliance is -- stretches beyond Mexico, if you will, into some other corridors. As far as pricing and actions, hopefully, what you appreciate from competitive standpoint, I'm not getting into a lot of detail of where we're heading with some of our pricing actions, but we know they were, we've done hundreds of pricing actions. We know how to do these. And the key for us, it's about getting more transactions, more customers, improving our share. We know near-term, that will impact the financial results. But long-term, that will help grow -- help revenues and profits. But I just -- I don't want to give a lot of color on specific corridors for competitive reasons.

Your next question comes from Bryan Keane of Deutsche Bank.

It sounds like Mexico, obviously, was soft. What other corridors were kind of softer than you originally expected in this quarter?

Hey, Bryan. It was Mexico that was definitely soft. But also, resetting Vigo and Orlandi Valuta, especially Vigo, has impacted some of our Southern -- Latin American corridors also. Obviously, having, closing down also 7,000 locations, resetting Vigo in the -- and taking Vigo platform to our platform and putting different compliance regulations has impacted our business here.

And it sounds like, I mean, almost everywhere, U.S. sounded weaker. Asia sounded weaker. Middle East and Africa sounded weaker. What was the cause of those weaknesses in those areas?

I think part of this weakness was Europe, was definitely economic environment, part of it is competitive pressure. But part of this is in the Asia and it's economic environment. You could see that the softness of macro environment has impacted our business. But part of that, Germany's still holding. But part of the Western European countries started to soften also, given the global economical environment.

So it sounds like, just looking back, the pricing actions were about -- will be about 1% this year and 1% in 2011. They rise to mid-single digits in 2013, which I think is probably the highest in the company's history. So I guess, 2 questions. One, should you have had more pricing actions earlier, when it was only 1% the past 2 years? And 2, it really feels like competitively, the environments changed a lot from what Western Union used to be?

Bryan, maybe, your pricing action maybe, we could do differently in 2010 and '11. Maybe, but these are really certain corridors, Bryan. They are key corridors, which has been under pressure. It's not -- don't forget that we are in 16,000 corridors in 200 countries. There is not overall price pressure, our presence [ph] is still here. The market is growing. And we are in a growing market. So I would say that, this has been certain corridors impacted our business. Now don't forget also in 2010, we had a pricing action about 2% to 4%, including our DMT business. So we had -- it's a very success story. You'd recall we turned around this business and has been delivering very good numbers. And we did -- I personally did more than 100 price actions in my career, and which has been paying back after a year. And I believe this pricing action we're going to do, immediate price action will pay back by 2014.

Okay. Just last question for me. Scott, I know in the Analyst Day we talked about maybe getting some margin leverage as we head into '13. And I know we're expecting some of the recent acquisitions to show some leverage in margin in 2013. But it sounds like from the comments today that due to some other activities, it doesn't look like we're going to see much margin leverage. So A, is that true? And B, what is -- what should we expect from margin expansion x restructuring costs? Will we actually be able to see margin expansion or more flat or down still?

For 2013, and again, Bryan, we'll give more color in February. But margins will be down somewhat in 2013, if you will. And probably, one of the most important factors for us is growing the top line, growing revenue, it does help with margin leverage from that standpoint. So the actions we're announcing today is really focused at growing that top line and growing profits, if you will. But even though revenues will be slightly down in 2013, we believe, as we move into '14, we have the opportunity to grow revenues and grow profits. And when I get ahead of myself about talking about 2014 today, let alone 2013, but what we're very focused on is more customers, more transactions. We're regaining the market share. And we think we've got the plans in place to do that as we move forward.

The next question comes from Tien-Tsin Huang of JPMorgan. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Just a few follow-up questions. Just the first one, just the competitive pricing pressure. Is it coming from the usual suspects? Or is it from some of the newer digital players? I'm curious.

It's both. I would say that in parts of Russia, for instance, which we have told already, it's coming from new competitors, which it will take us about the next few months and the end of 2000, middle, I would say, second, third quarter of 2013, turnaround this business because we have the open retail here. But in some parts of the competitors, like in, with existing corridors, big corridors, key markets has been coming from existing corridors. It's a mix of parts. Parts of it also is digital, although we are growing the digital very fast in the higher principals, Tien-Tsin, like 5,000 plus principal has been a big growth in this area, and it -- we are very small here. And the lower principal a month, on the remittance market, is -- was not growing that fast, and we have a good market share there.

We continue to see on our online businesses, mostly incremental consumers. We continue to see that 80% new consumers that are -- they're using our online business, that are new to the Western Union franchise. So we're not seeing a big crossover from digital to cash, if that's what you're asking. So the pressure is really, more from the cash to cash players that we're seeing around the world. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Okay, got it, perfect. Just wanted to make sure. And just -- I know you can't give details on the pricing, but is there going to be -- it sounds like there's going to be still, sort of surgical promotions in key corridors but is it -- are we going to see a change in philosophy around pricing as well, and introduce new products like $5 for $50?

Well, obviously, every -- I can't give more color. But every pricing has a story behind that. And we are adapting our prices, in corridor by corridor obviously. In some corridors, we are aiding an account-based money transfer. In some quarters, it's cash-to-cash retail money transfer business. And -- but generally, from philosophy, we are a premium priced product, with stay service. We're going to stay at premium price. And because we can't -- we have the 500,000 locations, we are in 200 countries, we have a great compliance, we have a great brand, I think the premium price will continue, Tien-Tsin. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Okay. So far there's no change. Okay, good. Last one, just a quick one. Vigo, OV, what percentage of revenue is that today? Have you given that before?

I don't think we have. Scott, did we given that?

No. It's -- we haven't given it, and I'll put it out here. It's about 3%, 3% of our top line in 2011, but that business was hit hard in the third quarter with both Mexico and Latin America.

It was about half of our Mexico business, prior, but it's less than that now. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Yes, I think you do with something like 3% or 4%.

The next question comes from James Friedman of Susquehanna.

I had a couple of questions, in particular about the margin. Scott, I was referring to Slide 16, and I think it's Slide 18. So in your margin comments, you highlighted that currency and the compensation in Durbin for their combined margin. I was wondering if you could proportionalize the impact of each of those?

Yes. And have me probably work back from the consolidated margins, even though on Slide 16, C2C is 80% plus of our business. But if I had to give you a sense of the things that are helping the margin, directionally, currency compensation adjustments and the Durbin fee is where, directionally all having about an equal impact on the plus side. And then a few things that are impacting the margin the other way is the incremental amortization because of the Travelex acquisition. We've got incremental cost on Southwest Border in compliance. Then we have some more investments in IT and dot com. So each of those have pluses and minuses. And the pluses directionally cancel out the minuses, where the margins were down about 30 basis points for the quarter.

Yes, I know. It was a good job with the margins. Just a follow-up on that with the Business Solutions. That's my fault for not understanding this, but why is it that there's $17 million in D&A now, whereas it was only $5 million in the Q3 last year? If you could share the timing on that, that will be helpful.

Sure. We closed the Travelex Global Business Payments acquisition in November of last year. So if you go back to the third quarter of last year, we did not own that business. And that's where the amortization with the old Custom House Business Solutions, it was about $5 million. And because of the acquisition of Travelex Global Business Payments, we picked up an incremental $12 million in amortization expense as it relates to the purchase price.

Okay. And then the last thing for me is, at the Analyst Day, you had shared what you felt were the long-term growth targets of the business. Could you repeat what those were, and just kind of contextualize if you're still comfortable with those long-term growth objectives?

Yes, let me kind of give an overview of what the growth rates are, and then I'll let Hikmet give some color commentary. And I just say, on a macro basis first, key -- given the economy, the things we're seeing with compliance and the competitive dynamics, achieving some of those objectives, at least in the near term, could be challenging, if you will, for sure. Especially as we think about '13 and '14. But the color we gave, kind of set around a couple of things is that in the C2C business, at that time, back in May, we expected that revenue growth to be above that 4% range. In the C2B business, we saw single-digit revenue growth. In Business Solutions, we saw that as a double-digit grower, low double-digit grower on a long-term basis. And then in Prepaid, we had the top line growing 20%, if you will. But Hikmet, I'll let Hikmet give some color on the long-term objectives.

Sure. I mean, the current economic environment did impact, especially our retail money transfer business. We are on the digital, pretty much on the road to achieve our 2015 goal, about $500 million business, and it's growing very well. I think that we have the right fundamentals also on the B2B business. I am very satisfied here. I think the global trade will help us and Raj and the team is doing a good job expanding that business also. On the Retail Money Transfer business, we can -- we will give you -- given the current environment, we'll give you a more color in our February meeting. But we have to adjust some numbers, given the investment, given the slower revenue, given the economic environment, we have to adjust our numbers for 2013 and will have some impact on 2014. But I believe that we are doing the right things here to fix that, and to come back to the strong growth rates.

The next question is going to come from Tim Willi of Wells Fargo.

I had 2 questions. First was just -- wanted to clarify something on your preliminary '13 guidance. Scott, I think you referenced a decline in GAAP operating income of 10% to 15%. Do you contemplate any additional charges in '13? Or will this $30 million in 4Q sort to take care of these new strategic actions?

We're -- Tim, we're currently evaluating and preparing our plans and so forth. We've got some overall strategies. And part of those overall strategies continue to be improving productivity, optimizing our cost structure and so forth. So right now, I'd say, yes, I would anticipate taking some additional expenses in 2013. And those additional expenses, I would take, you would not -- likely not see a net benefit until 2014 from an expense standpoint. But the -- yes, we'll likely take more charges as we look at the cost structure.

Okay. And then the second question I had, I think it's been touched on a couple of different times. But competitively, I guess thinking about what you're trying to do on price and product and consumer experience, all those things you referenced, but don't want to go on a ton of specifics on yet. When you think about MoneyGram and Ria and maybe some others who have greatly expanded their footprints, potentially I guess you can say I have a little bit more visibility with the consumer that might have really only saw the Western Union brand in select locations, and now they're seeing these other brands emerge with more signs, more locations. And when you talk about dropping price to win those customers back, it may have left you to go to other brands so that they become more visible. Where do you get that confidence that once you put the pricing in, and bring them back into your store, that they will stay, given that those 2 brands and probably others intend to continue to build out signage and store locations? And one would assume, continue to innovate their businesses as well?

First of all, thanks for the question, Tim. I think, first of all, we are growing our retail network and we will grow our presence, global presence, constantly. One million point-of-sale presence will continue to happen. Don't forget that we just, as just as I said in the call, just announced about 44,000 ATMs in Brazil. And we have about 5 -- more than 500,000 locations globally. We just opened -- we are the first in a new country, Myanmar, we just opened the country. So our global presence, will continue to expand and also, our PSD presence happening very well in Germany. We are opening to, in also in Europe. We are opening more and more retail locations for our consumers. The second thing is that, don't forget, our brand awareness is still very high. Our brand awareness is 90 plus in many receiving countries and also in sending countries. In Africa, 90 plus. In receiving countries, South Asia, 95%. So that fundamentals are here, and going to continue to grow above that. Though in some parts of the corridors, in some parts of the key markets, we did have a very high prices, and adjustment of that will continue to give the consumers their convenience. I can tell you, when an example from U.S. domestic money transfer. As we had our -- we have the locations in the U.S., we have the globe awareness, adapting our prices, whilst gaining market share and the revenue came up to 12 to 18 months in a very strong way. And we win, again, market share here. And the similar things we have done, I have personally done in 100 corridors. I know how to do it. I know it's about 12 to 18 months. It may -- in most of the time, within the 12 months, the revenues are coming back. And the first 2 months, you will immediately see the transaction increase market share's gain, and we have done that, and we will be active on the market to gain market share.

Can I just ask one last one on that topic, and that'll be it. There's been a lot of, I guess, changes in reporting styles and organization of the company. I guess I'd be curious if you see areas to add to the bench, or maybe a different perspective would be helpful. And I guess I think about what you're trying to do or really trying to manage a brand and develop product here. Is there a role for somebody that comes from a large global consumer brand company to come in and give a perspective? Or do you feel like within Western Union, you've got the right capabilities to move forward on that front of the business?

I think we have a very strong team. We just hired also a very strong CIO, which comes from the -- a very strong capability, David Thompson. We have the -- a very strong General Counsel, our HR leader. We -- the new hires has been very strong to the company. And especially, our regional business heads. They know how to run the business. I think we have also a very strong CMO, Diane Scott, on the team. The business is unique. Has its uniqueness, has its challenges, but it's also a very different business. It's always, and by the way, we have also a very strong board, which advises and support us, a very diverse board, and we are constantly talking to them, and I believe that we have the right organization to grow this business. And we are a strong brand. You have this -- we have almost a $6 billion business. We have high margins. We generate high income. I think we have the right structures, the right organization in place.

Your next question comes from Andrew Jeffrey of SunTrust.

Hikmet, I wonder if you could just, in very, sort of concise terms, articulate why you believe what you're doing is truly a strategic repositioning of the business? You, for example, referenced to the price changes in the U.S., which had some beneficial, would appear tactical, changes, as you look kind of at 2010 and in the beginning of '11. But I wonder just if you could make, in an elevator pitch style, the strategic defense of Western Union because we've kind of been sliding down a slippery slope here on pricing and on margins for the last few years, at least that's how it feels to me.

Well, first of all, on the pricing, if you look at our pricing structure the last years, we have been doing 4% investment in 2010, 1% on the, for I mean, in 2011 and 1% in 2012. But given the Western Union, if you lean back, Andrew, as you said, and look at Western Union, we have the global presence. We are in 200 countries. We operate in 16,000 corridors. We have different business in Latin America. We have bill payment business in North America. We have bill payment business. We have the B2B business. I think these assets are enormous. Now if you look at this business, we are a premium price. We are growing this business in many corridors, but we do have recent challenges in key corridors, which we have to fix it. You could call that a tactical, but I think it's strategic decisions here, which we are doing because these are fun, one-time corrections, which we will like to do it now, and move forward in 2014 with strong growth again. And that's in the correction, in the core business. But strategically, also, you look at our digital business, Andrew, growing very strong. And we did the right investment in San Francisco office, we opened, we built the right team. We have the right talent there to grow this business very strong. And no one else, but Western Union can connect the digital with physical location as we do it in 200 countries, in 16,000 corridors. That's one of the reason why it's growing so fast. And I am pleased on that.

Okay, that's helpful. And then is there -- does there come a point, because I know you've articulated in the past, I believe the desire to have, perhaps as many as a million branches globally. Does there come a point at which there's a change in the balance between return of capital to shareholders or a thought about the capital structure versus the investment in branches? Because it does sound like there's a little bit of a hand off of the baton here from physical, location-based money transfer to electronic or account-to-account money transfer. Does that change strategic capital allocation considerations for Western Union here of -- might we hear about that next, I guess, is what I'm asking.

So well, our vision of 1 million touch points has not changed. I think we are expanding that, and I'm very pleased with the expansion plans on that and we are on target. But on the existing capital structure for existing retail locations, these are not lot of capital investments, except sometimes signing bonuses, right? But these are not capital expense because the retail locations already exist there. And what happens if you sign a post office or if you sign a bank in China, you do act on the -- on your service, on the existing banks or existing retails or existing shops, which doesn't impact our capital structure much here. Of course, we're going to further connect the electronic with retail, retail with electronic, account with electronic, account with retail, that's the beauty of the new strategy, that's the beauty of the Western Union growth.

And I think and if you look at the external forecast, I mean as people are, other agencies are projecting that the cash to cash piece of the business is going to continue to grow, which we would agree with. But the digital side is growing faster. So we want to continue to invest there and connect more channels and choices for consumers.

The next question, or final question, rather, comes from Kartik Mehta of Northcoast.

I just wanted to go back to the statement you said, Western Union being a premium price brand. Do you think considering what you had to do domestically and now it appears what you're having to do in some of these other corridors for pricing, can Western Union, in this environment, still remain a premium priced brand, in your opinion?

Absolutely. I think, don't forget that we are in 16,000 corridors, price correction, we are doing currently in on certain corridors. It's -- we're not touching all market, we are doing the certain corridors. We did that several times. I mean, if you recall, Kartik, our investments in Middle East, pricing investment in Middle East, to adopt our prices. And our Middle East outbound has been bought out and has been a success story for many years and still a success story. And I think, and there, we have a premium pricing. And in many, our westernunion.com business is a premium prices in many parts of that. And our existing business is compared with the competition that premium prices because we can -- we have the brand, we have the regulation involved, we have set the best settlement system. We have 500,000 locations. I think these are very much valued by the consumers, and that's why, I believe, the premium price philosophy will exist.

So based on your past experience, when you put in price corrections such as this, what does that usually mean for transaction growth, Hikmet? What would you anticipate this resulting in, as you go forward?

First of all, dependent, really. I mean, it sounds almost like a politician, but it depends on the corridor. It depends on the market environment. It depends on which bands you to the pricing investments. And as you recall, as we did the $5 for $50, that most increase came from lower bands. And the increase was significant, as you recall that, I think in the beginning, we had about 20% increase, right, on the transactions.

Yes, I mean, near-term we expect more customers, more transactions. It'll take about a year to lap the revenue declines, but we almost immediately see transaction uplift and a lot more customers. And that's the goal of this program here, is to do that.

That's immediately transaction growth. And customer growth, actually, Kartik.

And then there's just one last question, Scott. You talked about, obviously, 2013 margins. It probably won't grow, considering the environment we're in. As you look at this company, as we move forward, what kind of revenue growth do you think is necessary in the new cost structure for you to have a positive margin?

Kartik, I don't want to get too far ahead of myself for '13 or '14. But clearly, and you hit the nail on the head, as we need revenue growth and, year in, year out, if you think about inflation runs, 1% or 2% or 3%, kind of pick your number, whatever you may. But clearly, the goal of the programs is to get back to more customers, more transaction and revenue growth. And we clearly do need revenue growth to be helpful to margin expansion on a long-term basis.

This concludes our question-and-answer session. I would like to turn the conference back over to the management for any closing remarks.

Okay, thank you, Valerie. We just want to thank everyone for joining us on the call today. We know it was inconvenient for a lot of you to try to find phone lines today and hard to join. So we appreciate you joining. And we're around all week for any further questions if you want to discuss things further. Thanks very much.

Thank you.

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.