Good afternoon, and welcome to The Western Union Second Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mike Salop, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, Laura. On today's call, Hikmet Ersek, Western Union's President and Chief Executive Officer, and Raj Agrawal, Executive Vice President and Chief Financial Officer, will discuss the company's 2016 second quarter results, and then we will take your 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 2015 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. Hikmet Ersek - President, Chief Executive Officer & Director: Thank you, Mike, and good afternoon, everyone. I am pleased with our second quarter results and with the resilience of our business. Revenue increased 3% on a constant currency basis, consistent with the last several quarters, despite the challenging global market environment. Our consumer money transfer business was once again led by strong performance from westernunion.com, which delivered 20%…

Thank you. We will now begin the question-and-answer session. And our first question comes from Tien-Tsin Huang of JPMorgan. Hikmet Ersek - President, Chief Executive Officer & Director: Hi, Tien-Tsin. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hello, Tien-Tsin.

Hello. Good afternoon. Thanks for all the slides and the details. Just a couple questions. The digital piece, it looks like, accelerated a little bit here despite the macro. I think MoneyGram saw some decel there. What's driving that acceleration within the digital piece? Is it more distribution or are you seeing more effectiveness with your marketing? Hikmet Ersek - President, Chief Executive Officer & Director: It's both, but mainly our strong growth comes from the U.S. and 60% of the transactions done in the U.S., westernunion.com are mobile transactions, U.S. outbound and U.S. intra was very good. But also the global expansion, Europe, we see also very strong growth on mobile and on the westernunion.com. Currently, we do have about 11 countries grew mobile apps and as you recall, Tien-Tsin, we opened also an office in Singapore to expand our success, which Khalid and the team did in Singapore, sorry, in San Francisco, the same success, we want to do that also in Singapore, expanding globally and that has been paying off. So the growth has been very strong. So – also I would say also the customer's staying loyal there. Once they are – they are still new customers, still we don't see cannibalization, 80% of the transactions looks like are new and the pricing has been – we did some pricing action but some pricing has been stable also. And I think we have the right strategy, Tien-Tsin.

Right. No, that's great. It sounds like it. Let me ask as my follow-up to both of you just on the revenue guidance. You're keeping it constant. It looks like you're running 2% to 3% FX-neutral revenue growth first half of the year. You're still guiding low to mid-single digits. Given what you called out in terms of the macro and the tax, what-not, is it more likely we'll see it at the lower end of that, or is there still potential for it to accelerate into the mid-single digits given what you see? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yes Tien-Tsin, this is Raj. I would just say that we've given a range of possible outcomes. There's still potential for it to change. There are some components of our business that are accelerating. You saw digital accelerate in the second quarter. We have high growth expectations there. We have some other areas that are accelerating as well. But we're also cautious with some of the challenges that we see in other parts of the world. So we'll see what happens in some of the oil-related markets like Saudi Arabia or Nigeria and Libya, and we're watching those very closely. So those will certainly have an impact and that will have an impact on the overall outcome in the end. Hikmet Ersek - President, Chief Executive Officer & Director: We're overall confident with our outlook.

Understood. Appreciate that. Thanks.

The next question will come from Sara Gubins of Bank of America Merrill Lynch.

Hi, thanks. Good afternoon. Could you give us an update on how your conversations on WU Connect are going, conversations with prospective social media companies, and the potential for new signings in the near term? Hikmet Ersek - President, Chief Executive Officer & Director: Yeah, good question, Sara. Hi. Viber and WeChat is still on. We have the U.S. agreements there. We just signed Yandex in Russia, which is also same like a mobile operator and a social media company, consumer do use Yandex and they can send also money from their mobile phones worldwide to 200 countries. The other ones are – obviously we are not making a comment for the ongoing negotiations, but we are still in a testing phase. It's not material yet, right, Sara, but we are still learning. We started recently a few weeks ago with some of the marketing activities with Viber and WeChat. I think we can give you more color about how their customers are reacting in end of Q3, maybe end of Q4. It takes time, but we are still very excited and we are still also in contact with other social media companies.

Great. Thanks. And then just a quick cost question – could you talk about the incremental tech spending, how that's been trending, if we're at a full $50 million (22:50) annualized run rate exiting the quarter? And do you get any benefit from having now successfully completed the recommendations made by the monitor? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yes. Sara, this is Raj. The technology spend, I would say, continues to ramp and this year we'll be spending well over $50 million incremental to last year. In any given quarter it's going to be dependent on which activities we actually have going on in the technology area. But I would say we're seeing a good level of technology spend in the second quarter and we're continuing to ramp there. From a Southwest border standpoint, we've been – our spending there has been coming down for the last couple of years as we've been putting some of these programs in place, and that's related to the primary recommendations, but we've also got secondary recommendations that we're putting in place where some spending will continue. And then obviously we have a global compliance program where we're spending in various parts of the world for various kinds of activities, so Southwest border was only a small piece of that.

Great. Thank you very much. Hikmet Ersek - President, Chief Executive Officer & Director: Sure.

And next we have a question from Bryan Keane of Deutsche Bank.

Hi. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hi, Bryan.

This is Ashish Sabadra calling on behalf of Bryan. A question on the third quarter. When I look at the comps, the comps get easier in Europe and APAC. And you also talked about increased B2B transaction post the Brexit. So, as we think about the third quarter -- and I understand you don't give quarterly guidance – but should we just think about the comps being slightly easier, which helps you on the transaction side? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yes. Ashish, as you said, we don't give a quarterly outlook, but the U.K. activity and Brexit, we saw strong activity in the last week, but eventually things will level out there. So it remains to be seen on how much heightened activity will continue, but we're watching that closely, obviously. You have a lot of things that are going on around the world, a lot of different activities. We've continued to see good growth in our U.S. business. The European business, we've gotten good growth from Germany in the quarter, but that's been offset by challenges in other parts of the European business like Russia, given the situation there. So there are continued challenges in various parts of the world as well as in Europe that we're continuing to monitor.

No. That's helpful. Thanks. And then maybe a question on Brexit. Just as we think about the longer term – and I understand it still all needs to be formalized – but what are the different areas we should think about in terms of the impact? Could there be any impact from a regulatory perspective, technology upgrades and the investment that's required, or any impact to the volumes as you think about it, like just longer-term impact from Brexit. Hikmet Ersek - President, Chief Executive Officer & Director: It's hard to tell what the negotiations between European Union and the U.K. will be. I think I'm in the same boat with other CEOs, which are active in this area. However, I would say that as it is today it's really European Union and U.K. agrees on a separation agreement, it affects like licenses, passports, which you can use in different countries, European Union passports. Also immigration policies, it may have an impact on that. So, we don't know. It's really early to say. We don't see any near-term impact on our business. We are pleased with our European – U.K. business. Just to put in perspective also including Western Union Business Solutions and the C2C business, consumer business, our revenue – it's about 7% of our company total revenue. So the beauty of Western Union is how diverse we are, how big portfolio we have, and we can always organize our portfolio. But it's hard to tell. It's too early and I would say that it's not – we can't tell it from today. We have to wait and see.

Thanks for the color. Thank you.

And the next question comes from Darrin Peller of Barclays.

Hi, guys.

Hey, Darrin.

Hey. It's good to see the results show no pricing impact on your revenue this quarter. I just want to get a quick update on your outlook around pricing, what you're really seeing from a competitive landscape, given it seems a little more stable than it's been in years past. And then the mix issue you called out that had the pressure, the 1 point or so of pressure versus transaction growth, was that just the online or the mobile mix or something? Can you give us a little more color? Thanks. Hikmet Ersek - President, Chief Executive Officer & Director: Let me give general market overview, maybe Raj, can give more detail to Darrin about that. Darrin, if you look at the environment, I think the pricing environment's quite stable. That doesn't mean that we are not doing pricing actions. As you know, we are operating 16,000 corridors and we have different areas so we do pricing actions, but overall I would say that pricing is very stable. In some quarters, we even increase prices, in some quarters we decrease. We really react to our business intelligence and market environment, and we adopt the prices generally. I would say that I don't see any big pricing pressure near-term and we are confident with our programs, marketing programs and market environment. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yeah, and just on the second quarter specifically, Darrin, the pricing investment was flat for the quarter. We've had continued impact from the Argentina reductions, price reductions we took earlier in the year. That's continuing to show up in the second quarter. But we also grew over the DMT pricing that we did in April of last year. So we're getting some benefit from that. And then we did have some spread increases in certain parts of our business overall. And then on your mix question, that's just related to mix changes in our business around the world as certain parts of the business grow faster than others. So that has a mix impact on the overall growth.

Okay. All right. That's helpful. Thanks. And then just a quick follow-up on the margin side. The C2B margin was down a little more than we expected. I think you had mentioned technology investments and mix there, as well. Can you give us some sense or any more color on what we should expect there, what actually happened there and what we should expect going forward? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yeah, on the B2B margins, the primary impact as I mentioned, was from technology, we're making technology investments throughout the company, as well as in the electronic business part of the C2B business, so that's what's impacting it. We also had some customer mix where we did have some success in signing new accounts, but they came at a slightly lower margin. But again, the biggest impact was from the technology. We don't want the margins to be down at this level. We expect the margins to be better overtime, but it is going to take us some time to get through some of the spending that we're doing here, on the technology side. Ultimately the goal is to drive a better platform and have better opportunities on growth in this business. So we're pleased with the overall growth, but we want to drive more growth in this business.

Is that of decline – that's embedded in your outlook for margins anyway, though, right? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: It is embedded in our outlook for the year, yes, in our outlook.

Sounds good. Thanks, guys. Hikmet Ersek - President, Chief Executive Officer & Director: Thanks, Darrin.

And our next question comes from Jason Kupferberg of Jefferies.

Hi, guys, this is Ryan Cary for Jason. I know you called out weakness in the petro-linked economies. And I think you said that Saudi Arabia, which had managed to avoid much of the slowdown, has also been starting to slow. Any update you can provide on your expectations for these regions would be appreciated. And then maybe remind us what percent of C2C revs comes from the primary corridors impacted by lower oil prices? Hikmet Ersek - President, Chief Executive Officer & Director: So good question. Generally the main impact on our business maybe on the weakness of the oil related countries were Libya and Nigeria. Saudi Arabia had a little bit slower, but it was not the major impact. The major impact was Libya and Nigeria and that's because of their oil-producing and oil-related economies. In general, OPEC countries, if you take the OPEC countries, it's about 10% to 15% of our revenues. So that puts also in perspective. Some of the – we still see good growth in UAE. We still see good growth in some parts of the businesses. But some parts of the business I have to be cautious also because like Saudi Arabia, where some investments have been slowed down, some construction, some hotels, some big airports have been slowed down and that impacted definitely the workforce there respective to the remittance market. And that slowed down. We could see it. And once the oil prices are getting more stable I'm sure that that's going to go back again. But currently we do see a little bit impact from that area.

Okay, great. And how should we be thinking about compliance trends going forward? It seems like this has remained relatively consistent at the lower end of the 3.5% to 4% range. Is that the right way to be thinking about it? And then anything you see on the horizon that could cause results to trend either above or below that range? Hikmet Ersek - President, Chief Executive Officer & Director: Generally, I would say that we see compliance as a part of our business, right, business as usual. And we see it also long-term competitive advantage. One example is the Southwest border primary agreement that we completed and we definitely upgraded our compliance programs and in many countries we also see that Western Union is a preferred partner because of the compliance programs we put in place. I think the investment will continue. I don't see bigger changes. We operate in 200 countries and regulatory environment constantly changing and the team is doing a great job investing in the technology, but also in the people to extend our licenses. But also you know, it's remainder in the country being active and being a competitive advantage and protect our consumers. That's our main goal. And since the last few years we increasingly invested in the compliance environment, $200 plus million every year and that probably is really also protecting our consumers.

Great. Thanks for taking my questions.

Sure.

And the next question will come from Ashwin Shirvaikar of Citi.

Hey, guys. So I guess Raj, you've given some of this information in the course of the call, but I just want to clarify. As I look at the next 12 months, we should continue from a cost perspective to see the impact of hedge rolloffs with minor uptick in the second half. Tech costs continue to go up. And looking at 1010 (34:05), compensation, restructuring continued to be the offset so that you can guide up on margins. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: I mean, our outlook for margins this year, Ashwin, is 20% and that's really based on everything that we know at this stage. Clearly, we'll have some more hedge gains in the second part of this year and some of the hedge gains will continue into next year as well. But there are a number of other factors that are going to drive margins and profitability. Hedges are just one component. You have cost savings as well. But commissions and compliance costs have been relatively stable. That should be – that's stable for this year and we've been able to stabilize those in the last couple of years, so that's positive. But we don't really have an outlook for next year if that's what you're getting at, Ashwin, but we feel good about the outlook for this year. Hikmet Ersek - President, Chief Executive Officer & Director: However, we are very much focused, Ashwin, on revenue growth and profit growth, profitable growth and revenue growth, that's our focus.

Yes, obviously revenue growth also helps the cause. My next question for you, with regards to digital mobile becoming such a big part of how people access the network and the system, is there any change in how you think of your agent network with regards to the kind of deals you can structure with them with regards to their compensation, and so on and so forth? Any update there would help? Hikmet Ersek - President, Chief Executive Officer & Director: Yeah, Ashwin, currently not. I think that our agent commissions has been favorable for Western Union over the years as you know, and definitely the new agreements we sign has not been signing at the – the rates we've signed years ago. Obviously, that helped also. However, I would like to keep and grow my agent network because one of the biggest things we see is that the new customers, which we signed with mobile, want to drop money on a retail money transfer – retail locations worldwide, right. We do have, for instance, in India more than 100,000 locations. And you can send money immediately from Denver, from your mobile phone immediately to 100,000 locations in India, plus the thousands of millions of accounts in India in a moment (36:42); nobody else can do that, that big, as we can do it. That's a big competitive advantage. Saying that also, we are always looking for optimization for our sales costs, for our retail costs, and I think the team is working very hard on that, and I think long-term definitely some room there to be more efficient.

That's very good color. Thank you. Appreciate it. Hikmet Ersek - President, Chief Executive Officer & Director: Thanks, Ashwin.

The next question comes from Danyal Hussain of Morgan Stanley. Danyal Hussain - Morgan Stanley & Co. LLC: Hi. Thanks for taking my question. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hi, Daniel. Danyal Hussain - Morgan Stanley & Co. LLC: Hi, Raj. I wanted to clarify the $0.01 guidance change. It seems like if before we were assuming tax to be 15% and we lower that to 12% for the year, that's $0.06, when you factor in the $0.02 from the accrual. So, I'm looking for the other $0.03. Some of that looks like it may have been FX headwinds, but I'm wondering what else is in there. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yeah. Hi, Daniel, this is Raj. Our outlook for the full year, it does take into account the tax benefit. I would say the $0.06 that you're calculating is a little bit high. Our new outlook for the tax rate is around 12% and we had given a mid-teens level. So depending on what you assume for the actual tax rate, you'll have to walk down from that. But I would say your estimate's a little bit high, and then we have a $0.02 offset to that from the legal accrual. So that's why we moved up the low end of the range by the net $0.02 effectively. And so that's how we look at it. Nothing really has changed from our operating outlook. We still have the same revenue growth outlook, low to mid-single digits constant currency, profit margins at around 20%. And then our reported revenue is going to be a little bit lower than we thought in the last quarter, but most of that revenue change is going to be – the profit…

The next question comes from Oscar Turner of SunTrust.

Good afternoon. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hi.

Thanks for taking my question. You talked a bit about your competitive advantage in mobile coming from allowing send to either retail locations or accounts. Can you provide any color into transaction or volume growth by payout method – so, looking at either transfers to retail accounts versus just to accounts, and how that has trended? Hikmet Ersek - President, Chief Executive Officer & Director: Yeah, I think one of the biggest competitive advantage is the retail and stays retail. Most of the transactions are paid out in money in minutes in retail in cash and that continues, especially international outbound ones are happening, but we do see very strong certain countries like in South Asian countries that the people do prefer also accounts and our promotions on the westernunion.com has been very successful there, that we can grow – we grew our account payouts also in some countries. In some countries we are just building it. We have now billions of accounts worldwide in 50 countries. That reminds me a little bit, right, how we built the retail money transfer business. Build it, they will come. And we are really building it, now the account network worldwide. Now billions of accounts and now it's all about communicating and building the corridor, making marketing and promotions. But still the most of the payouts are on the retail payouts but very strong growth in certain countries, certain corridors, and also on the account payout.

Okay. Thank you. And then just looking at your account-to-account initiative, could you provide any color on account-to-account volume growth in the quarter? Also, at what point will this start influencing your revenue growth? Hikmet Ersek - President, Chief Executive Officer & Director: When it becomes material definitely we will give you more color on that. It's in the beginning but it's a very strong growth. The big advantage here is that funding method is done by accounts. You have immediately the funds in mobile. You collect the money immediately from funds. We do have it in the U.S. but also very strong in Europe where we have a direct ACH transact, direct debit they call it in Europe and we collect the money immediately from an account then drop in an account worldwide on a billions, which country, more than 50 countries. And the other thing is that we see more banks calling us actually on that. Could you do this transaction for us because you have the technology, they tell us. You have the compliance programs which they have to build it globally. We do have it in 200 countries. So it started to be getting kind of advantage, kind of a focus, but again, we just build it billions of accounts and now we are really designing a product against this account-to-account transactions.

Okay. Thank you. Hikmet Ersek - President, Chief Executive Officer & Director: Thank you.

Our next question will come from Rayna Kumar of Evercore ISI.

Good evening. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hi. Hikmet Ersek - President, Chief Executive Officer & Director: Hi, Rayna.

Hi. Now that PayPal has owned Xoom for roughly a year, have you experienced any impact to your online business? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Well, I think the results really speak for themselves. You can see the great growth that we're getting in our wu.com business, 25% transaction growth, and 20% revenue growth in constant currency. And we have a business that's much broader than just the U.S., right. We have a business that's in 37 countries and we continue to expand those capabilities on an ongoing basis. We already deliver around the world in 200 countries and territories around the world and then our account payout capabilities are getting even stronger. And the unique thing about the account payout is that it's direct delivery into these accounts. It's not going through the correspondent banking system. And so even the newer players, they're playing only in the online space, online to counter account-to-account. They're not playing in the retail space, which is where we have our brand. So that's not the place they're coming after. And as you know, our digital business pays out mostly in a retail location today, right. But the growth opportunity for us is also paying – doing account-to-account or online-to-account and we think we're going to create a better and stronger business there than anybody else will be able to create.

What progress have you made in offering instant ACH? Hikmet Ersek - President, Chief Executive Officer & Director: Most of the transactions in the U.S. instant ACH is a very U.S. focused question I guess, and most of the transactions in the U.S. are still done by credit cards and the people prefer credit cards. We have it, but we see most of the people want to use their credit cards to fund the transaction. We do see also strong growth on the ACH on the – in Europe. They don't call it ACH there. There's direct debit. There are companies like SOFORT, they help us to do that, pull out money from the banks, from consumer accounts. And that's growing also very well. But most of the transactions on the send side is just still done by credit cards.

That's very helpful. Thank you. Hikmet Ersek - President, Chief Executive Officer & Director: Thank you.

And next we have a question from John Davis of Stifel. John Davis - Stifel, Nicolaus & Co., Inc.: Hey, good afternoon, guys. Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Hi, John. John Davis - Stifel, Nicolaus & Co., Inc.: Hikmet, I wondered if you could maybe comment on any potential impact of the EU's new AML directive that just came out recently. Any impact there or thoughts would be helpful. Hikmet Ersek - President, Chief Executive Officer & Director: I don't think that has any impact on our business currently. We probably follow the European Union rules obviously, and we don't see any big impact to our business because we've been doing this already, the regulations, and we adopted them already. One of the biggest things also is that, don't forget that we forget sometimes to mention it we do have a bank license in European Union, which is licensed in 27 European Union countries. And that helps us also. That also is a competitive advantage here. And then we did invest a lot on our anti-money laundering activities in European Union and we work closely with regulators there. I don't see big impact here. John Davis - Stifel, Nicolaus & Co., Inc.: Okay. That's helpful. And then, Raj, maybe a housekeeping item. I think, assuming that the tax rate is going to benefit from one-time items this year, is it safe to assume that it will likely trend back to the mid-teens next year? Rajesh K. Agrawal - Chief Financial Officer & Executive Vice President: Yeah, yeah, I would even say for this year, if we didn't have the various discrete items that we talked about, we would be in the mid-teens range as we had originally thought. And we're not giving specific guidance…

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