Good afternoon, and welcome to the Western Union Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. 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.

On today's call, we will discuss the company's 2018 second quarter results and then we'll 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. Okay. Thank you. 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 & Exchange Commission, including the 2017 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 good afternoon, everyone. Overall, we delivered a solid quarter with good growth across several geographic regions in consumer money transfer, continued strong performance from westernunion.com, and 20% operating margins. The second quarter results once again demonstrated the stability of our core consumer business while our bill payments results were mixed and Business Solutions continued to be soft. Consumer transaction growth in the quarter was a healthy 5% and improvement from the first quarter and cross-border principal increased 9%, indicating we are performing better than World Bank market growth estimates. Our digital business continues to advance with westernunion.com revenues increasing 22% in the quarter. This growth is even more impressive when you consider our multi-year success in the digital channel and our large digital customer and revenue base. Regionally, the Latin America and European regions remain strong, as well as the U.S. outbound market, partially offset by softness in the oil-producing Gulf countries of the Middle East. We view the overall pricing environment as stable and we continue to do – make adjustments, both increases and decreases, wherever we see opportunities to benefit long-term growth. This quarter, we did some reductions in the Middle East, which brought the pricing slightly down, but this was within our outlook and overall competitive environment remains stable. Looking at profits, our efficiency initiatives and expense management programs are delivering good results and I am pleased with our operating margins improvement from the first quarter. We also continued with our share buyback program, repurchasing $250 million in the quarter. Overall, our core money transfer business continues to perform, and we are winning and signing major agents. I'm pleased to announce that we just signed a new contract with Albertsons, one of the largest grocery chains in the U.S. The agreement will add…

Chorus call. Please hold for a conference specialist. Welcome to Chorus Call. Please hold for a Conference Specialist.

Please proceed.

I'm sorry. I'm going to continue where I stopped. There must be an issue on the connections from the operator. Okay. Operationally, we expect our WU Way programs to continue to drive ongoing efficiencies and improvement as we further integrate lean and agile management throughout the company. So, we are excited about the future. Our second quarter results demonstrated solid progress in the core consumer business and good operating margins, as well as near term challenges with some of other businesses. Overall, our full-year outlook remains solid, and we are continuing to make progress on long-term initiatives. Now, I would hike to turn the call over to Raj to give you more details on the quarter's results.

Thank you, Hikmet. Second quarter reported revenues of $1.4 billion increased 2%, compared to the prior year period, or 3% on a constant currency basis. Currency translation net of the impact from hedges reduced second quarter revenue by approximately $9 million compared to the prior year, as significant declines in the Argentine peso offset favorable translation from Europe. The decline in the Argentine peso negatively impacted revenue by approximately 2 percentage points, primarily in the bill payments business. We were able to offset part of this impact through increased revenue per transaction, in local currency terms. We estimate the offset was approximately 1.5 percentage points in the quarter. In the consumer-to-consumer segment, which represented 80% of company revenues in the quarter, revenues increased 4% on a reported basis, or 3% constant currency, while transactions grew 5%. Total C2C cross-border principal increased 9% or 8% on a constant currency basis, while principal per transaction increased 5%, or 3% constant currency. The spread between C2C transaction and revenue growth in the quarter was 1%, with a positive 1% impact from currency. Pricing and mix each had a negative impact of 1% in the quarter compared to the prior year period. Turning to the regional results, I will be referring to constant currency movements as I discuss individual country contributions. North America revenue increased 3% on both a reported and constant currency basis while transactions grew 2%. The U.S. outbound business was, again, driven by strong growth to Latin American and Caribbean countries, and Africa. Trends in the U.S.-to-Mexico business improved sequentially, and returned to positive growth, while the U.S. domestic business had continued softness in the quarter. In the Europe and CIS region, revenue increased 9%, or 4% on a constant currency basis driven primarily by France. Transactions in the region also…

We will now begin the question-and-answer session. Our first question will come from Tien-Tsin Huang of JPMorgan. Tien-Tsin Huang - JPMorgan Chase & Co.: Thank you, good afternoon. Good job. I just wanted to ask, I guess, on the revenue side, the constant currency revenue growth did step down a little bit from Q1, so I'm curious how much of this was cyclical versus maybe pricing or mix or other factors, maybe for both C2C and the non-C2C businesses. Thanks.

Sure. Hi, Tien-Tsin, this is Raj. In the C2C business, some of it was clearly due to pricing, but we have very good trends in the consumer business. We feel very good about the stability of that business. The dot-com business continued to perform well. Latin America, Europe, North America were strong. And then clearly the Middle East region had some issues, we also have some pricing there, so that's what you are seeing in the consumer business. And then the B2B business and Speedpay and the Bill Payments business were somewhat of a drag to the overall growth from quarter-to-quarter, and that's really what you're seeing there. So – but overall, the consumer business had pretty stable trends.

Yeah, I think we are really solid, especially the retail money transfer business has been solid except in Middle East, but that's not new, as you know, Tien-Tsin. And we did some pricing actions there, but – and we do see some good return all the way down transaction-wise. And this is within our normal guidance. It's up and down on the Middle East. You saw our U.S. outbound business doing very well. As Raj mentioned, Europe outbound is doing very well, actually. And in France, particularly, is doing good. And dot-com is still a star and continue to be a star. Given the base compared with the competition, we have a much, much larger base, and we are still growing, with 20%. And we are affirming our outlook on the revenue side, so that's why. But there are some headaches also Tien-Tsin, as we outlined already. The Western Union Business Solutions and payments part has been slower than within our expectations. Tien-Tsin Huang - JPMorgan Chase & Co.: Got it. Sure, everything's still in the range, so that's helpful to get some additional color. I just wanted to ask my quick follow-up, just on the Albertsons win. I know that's a big one. It's a credit takeaway. I know they have some corporate things going on, too. But I'm curious if the pipeline for agent signings, if that's changed? Or could that be up, given what's going on with MoneyGram and maybe with the Walmart, the commitment that they've had and whatnot. Have you seen any change in activity amongst bigger agents becoming available?

No, I think as the agent signings are – any agent signing, and we are competitive on the market, it's a great win. We are very satisfied with that. It's also extension of our Safeway – 30 years of Safeway relationship, and adding Albertsons as they merge together. And that has been a good one. And I could say that we are continuing to be very active on the market. And the agents like us, not only about the cash in payments, right, but also, they liked our stage transactions a lot, where you stage a transaction on mobile and you go and pull the cash there. And that has been growing very fast. So, the digital combination, retail combination, bringing agents, new customers has been a success story. And our compliance programs, I mean, these big agents really look at our compliance programs also. Right? I mean, they trust us, and we trust them. And the customers trust us. And that has been a win/win situation. A great example is Albertsons, and I hope more to come. Tien-Tsin Huang - JPMorgan Chase & Co.: Great. Great. Thank you so much.

Thank you, Tien-Tsin.

Thank you, Tien-Tsin.

Our next question comes from Darrin Peller of Wolfe Research.

Hey, Darrin.

Hey, Darrin.

Thanks very much. Hey, how are you? Thanks for the time. Just first question's on just a bit higher level. The westernunion.com business generally still trends very well. I think there may some questions, obviously, as you highlighted over the Business Solutions segment. I guess, Hikmet, really just asking strategic initiatives, how you think about the options for the company to reposition it for some sort of an acceleration at some point in the next couple years. Is there anything you can do around either adding on, bolting on pieces to westernunion.com? Or pruning some part of the company, that might make sense?

Great question, Darrin. I think we are always looking what is the best return for the shareholders are. Currently, we are, definitely focused to fix the Western Union Business Solutions issues. Part of the Western Union Business Solutions, especially the foreign exchange trading part is not performing well, especially in the U.K., not well. So, there's a specific problem that we are focusing. But it has been for a longer time, you're absolutely right, the performance has not been within – lower than expectations. And we will definitely look for Western Union Business Solution, what's the best for us, and what's best for the shareholder. Saying that, also, our digital expansion is great, we will double on that. We invest more. We will go in 200 countries. We are in 45 countries. Our customer experience programs with westernunion.com is going very well. One thing I mentioned, also, in my opening comment is the white labeling, our programs with our existing agents and our new banks. The account-based digital money transfer is already 2% of our revenue. That's what our agents reported to us. And that's additional to 11% of our revenues were dot-com. So this is also something we are going there. And if there are also acquisition opportunities there, we will go after it. It has to pay back and it has to have the same growth rates, good margins for us.

Okay. That's really helpful. I mean, I guess, just a follow-up to that, Hikmet, are you at all being more aggressive on M&A, specifically on the digital side? .

Well, you know, we always been looking at that. Right? I mean, as you know, thank God we have a good business model with good cash generation, right? And we are always looking at that. But some of the multiples has been, as you know, there – some of them, they don't even make money. They just grow. And we just want to make – and their base is very small, actually. And it has to make kind of a good acquisition for us, and we do have some prospects. We are looking at it, but it has to be a good return.

All right. Just very quickly follow up, the pricing mix – the mix and pricing impact on C2C, I mean it looks like it was a little bit lower – it caused revenue to be a little lower than transactions. It's been generally a pretty stable trend, though, in the last few quarters. I just want to make sure there's nothing from a trend-line that we should keep an eye on, it's just here and there each quarter.

Yeah, generally, it's here and there each quarter. We are pleased. The transaction growth actually went up in the quarter, as you have seen, Darrin, it went to 5%.

Yeah, yeah.

And the cross-border principal was very strong at 9%. So, we are very pleased with that. I think the Middle East is an area that we were trying to invigorate some transaction growth, so that's where a lot of the pricing was focused. Overall, as Hikmet said before, we don't see any significant changes in the pricing environment around the world, and we're always doing increases and decreases, so.

And in the Middle East, I just want to mention that, Raj, maybe for being more clear, in the Middle East, it's not only competitors or price adjustment, but it's also the economical environment, the old prices, the customer behavior has changed and there is – programs like in Saudi Arabia about Saudization that have impacted. So, we are really adapting our prices to the market needs.

It's actually a market issue.

Okay.

Market – more a market issue. Yes, Raj, it's more a market issue. But overall, I feel comfortable, Darrin, with the pricing environment and it's within our guidance. It's nothing unusual.

All right. That's great to hear. Thanks, guys.

Thank you.

The next question will come from Bryan Keane of Deutsche Bank.

Yeah, hi, guys. Just wanted to follow up on that. On the C2C business North America and Europe and CIS transaction growth both accelerated, but the constant currency growth decelerated. So, was there pricing as well that's causing that dynamic?

Yeah, it's a good question, Bryan. We had some prior price increases that we had made in both regions, and we always test things out, so we have rolled back, actually, some prior price increases, and it was less about reductions and more about just getting it back to – in some corridors, back to where it was before. And that's why you see the differential there. In North America, the revenue growth is still higher than the transaction growth and in Europe we are just getting good growth from France. But that's really what it was, more of a rollback of certain price increases we had done before.

Okay. And then on operating margins, C2C operating margins were down on a year-over-year basis and that was due to timing of marketing and compliance-related spend. As we look at our models for the back half of the year, what do some of those trends look like for C2C on a year-over-year basis?

Well, on a year-over-year basis, marketing was higher than last year in the first half. You will probably see an opposite impact year-over-year in the second half. So, you will – for the year, if you look at it on a full-year basis – marketing is still going to be in the same range as it was last year, so about 4% of revenues. That's what we're expecting, but just some timing from first half to second half on a comparable basis. And if you recall, we had much heavier spending in marketing in the second half of last year, so it will not be as high as that spending level. And then there's some other put/takes. Compliance is going to be relatively stable and, otherwise, nothing else really to call out there, Bryan.

And will compliance-related spending be similar as a percentage of revenue as last year?

It's going to be similar. It has been for the last few years, actually. It's been in that similar range, so I don't expect it to be materially different this year either. .

And anything you can do to get those costs down on a going-forward basis?

Well, you know, marketing is something that's really special to us and we want to keep driving growth in our digital business. But on the compliance in the other areas, we are always trying to do things as efficiently as we can. And our WU Way programs and driving operational and lean management, that's really the way we are trying to optimize things. It's not about cutting costs, it's really about putting better processes in place in the company and we're always looking at better ways of doing things, including in the compliance area.

Okay, guys. Thanks for the help.

Thanks.

Thanks.

The next question comes from Jason Kupferberg of Bank of America Merrill Lynch.

Hey, thanks, guys. I just wanted to circle back on the comments about the oil-producing regions. So, I wanted to make sure we kind of understand the dynamics there, because obviously the oil prices have been on a nice upward trend. And I guess we would have thought that, at some point, that's simulating more infrastructure projects and so forth, and bringing in more migrant labor and stimulating, actually, more demand for remittances. But it sounds like there's actually pressure coming out of those send markets. So am I interpreting that right? Or what are the actual dynamics under the hood that are causing some of the pressures and then led you to try and stimulate demand with some pricing actions?

Yeah, there are several things, Jason, which impacts that. First thing is the immigration trends has been – as you know, Middle East, an oil producing country, has a different immigration policies than the rest of the world. You get – it's a two years or three years of visas you get it. And you go – and the country controls the immigration based on the projects they invest in. And generating cash flow, over the years, was less than the year's previous. And the project base really came down with the projects there. Now it's started, it will start now – if the investment started again, it will attract long term, again, new workers to the Middle East. And that's number one. The second thing is that the Saudization project which started in Saudi Arabia, that has been giving jobs to more Saudis than giving jobs to Saud-Asians and that had an impact. And then the third one is that we adjusted the prices to the customer needs because the earned money was less. There were different economic impacts. And that has been particularly in some parts of Middle East – I don't want to mention, because of the competitive reasons – but some parts of the Middle East, not all over the Middle East, we had done some pricing action. It's really responding to the market needs than a overall pricing change in our company's policies or that's really – that's it actually. I don't know what to say more, Jason. That's it.

No, that's comprehensive. That's helpful. And so, just coming back to wu.com for a minute, obviously it continues to slowly but surely increase as a percentage of total C2C revenue. I mean, when you kind of look out longer term, how big can it become as a percent of total? What would you aspire to there? I mean, is this 20-plus-percent revenue trajectory sustainable for another few years or so? I know the base will keep getting bigger, but obviously there's somewhat of a tailwind just structurally for that.

I think we are in the beginning of a journey here, Jason. We are quite satisfied with our growth rates to 20%. And given our base, especially, how that – it's a great question. You have a great base compared with the competitors. Can you continue to grow that space? I think so because we are only in 45 countries, only. And some of the countries we just opened the last, maybe, 24 months, and that'll take – once that get us paid – that will also contribute to the growth rate. In the existing countries, like in the U.S. outbound, or like France outbound, what we are doing is the customer experience. The customers, once they use westernunion.com, we saw that they don't easily go to the competition. They like our system. We are increasing our customer experience programs. I think that's what we are going to continue to do. It's just the beginning of a journey. And we're doing that. The other thing is, also, I want to mention again our bank, dot-coms, right, using our system. Many banks want to offer to their account holders our global network. And it's already 2% of our revenue. And Scotiabank in Canada's a good example, for instance. They use our systems and they transfer money to 200 countries. And that's growing also. And we are have in France the same thing. And that's something also we are excited about that.

Okay. Thank you for the comments.

Thank you.

Our next question comes from Ashwin Shirvaikar of Citi.

Hi. Hi, Hikmet and Raj.

Hey, Ashwin, how are you?

Good, good. Thanks. I wanted to kind of turn the focus a little bit to the B2B business, if I could. Obviously, you guys made these acquisitions almost, I'd say, like, 8 to 10 years ago, spent a couple of billion dollars on them. Over that time period, I mean, the operating earnings from those two acquisitions have been kind of really small. And it seems to be sort of a cycle of continuous investment. So, I guess the question becomes, what's fundamentally wrong with your positioning in that market? And what exactly are you – what's the fix? I mean, can you sort of break that down for us?

Yeah, I think it's a good question, Ashwin. I think the issue is really the FX part of the business, right? The foreign exchange rate part of the business. And it has been – the market volatility has not been favorable for this business also. But that's part of that. What we really believe is the vertical part of the business, like the student pay, like the NGO pay, and these parts of the business going very well, but it doesn't show it at the overall results at the Western Union Business Solutions because it's still a smaller part of the business, but it's growing really, very, very well, and we are very satisfied on that. Look, overall, obviously, that's a great business. It is – we believe on the big opportunity on that, but we also look at that if we can find how we can give the best back to the shareholders and that has been always – for anything, the shareholder value is the highest for us and we look at that. So that's – the team is doing a great job. They are really trying to fix it and the U.K. is a particular issue. And that's an issue that we want to do – we want to focus on that.

Got it. And then the second question is with regards to the tax rate. Can you kind of go into sort of the actions that led to the – and it's a relatively modest difference, the actions that led to the tax rate being slightly lower, and where I'm going with the question is with regards to sort of the – as we think of tax rate in 2019 and beyond, will you be able to then use your tax planning mechanisms to keep the tax rate low?

Ashwin, I just want to make sure I understand your question. You said why is the tax rate higher? Higher than – I didn't quite understand.

No, lower. Lower.

Lower? Oh.

I mean, yeah, yeah. What's the tax planning to keep it at the current levels as opposed to going higher?

Yeah, I think the – we are benefiting from various aspects of the U.S. tax reform, but there are also pieces that are hurting us or going a more negative, if you will. If you look at the overall tax rate, it is about 14% to 15% this year, and that's a combination of the lower U.S. corporate tax rates, as well as the minimum tax on our foreign profits and we earn the majority of our revenues and profits outside the U.S., as you know. So, all of that gives us about a 14% to 15% tax rate this year. The one thing that's still outstanding, as we think about next year, is the beat or the base erosion provisions of the U.S. Tax Act, which generally have a minimum tax on foreign payments or payments to foreign affiliates from the U.S. So, this year, that's not impacting us because that's only at a 5% rate. Next year, when that goes to 10%, that does have an incremental tax effect to us which will be negative to us, unless we can solve the issue. So, we are looking for guidance from Treasury or legislative change to fix that issue because we believe that was unintended in the tax law changes. And then we're also looking at some things structurally to address that. So, we'll have more color for you, Ashwin, as we enter the new year on how much of that issue we saw, but that's worth a few percentage points, so you can imagine that we're putting a full effort behind solving that issue.

Got it. Thank you.

Sure.

The next question will come from Kartik Mehta of Northcoast Research.

Hey, good afternoon, Raj and Hikmet.

Hi, Kartik.

Hikmet, when you initially discussed WU Way, one of the objectives was to hopefully help with top-line growth. Obviously, the underlying thought was to cut expenses but ultimately help with top-line growth. As you are into that program now, are you at a point where WU Way is helping with top-line growth or is that still going to take a little bit of time before you see the benefits of that?

I think it will, because, it's really running the business in a different way and with our lean management tools and our agile management tools being faster in the market. And one the things is that what we use at the WU Way and other programs is that expanding our westernunion.com. No other company has 45 send countries worldwide to send money to 200 countries, to 500,000 locations, to 4 billion accounts. That's definitely using our WU Way tools how we can be faster. One thing we are also using our WU Way tools is in the customer experience one. We know that online users use us more often. They are repeat customers. And this is really done with our WU Way methods, processes, how we attract these customers. These are two examples. Obviously, we already use it. And about – I think it's about 4,000 people or 6,000 people at Western Union get their WU Way training. Our processing centers in different parts of the world, all our employees are really having their agile programs, WU Way training programs, and they go after every project with their lean management tools.

And then, Hikmet, as you look at potentially new agent signings, what's the trend been for signing bonuses and terms? Have you seen any changes in the last 6 to 12 months for either one of those?

Not really different than two, three, four or five years ago. And I think that has been, as you look at our agent commission, spend on sales, I think that has been really going down over the years, which is great, actually. The agent commissions and – which include also agent signings and everything. The effective rate of the agents has been going down. And our agents have been – once we have the agents, they have been for multi-years with us. Our top send agents have been more than 30 years with us.

21 years.

Sorry, Raj, just corrected me, 21 years. And so, that – the long-term relationship has been always here, and we are happy with that and there has nothing changed, it's really being on the market. What changed, though, is that larger agents, especially with good names, are choosing partners like Western Union because of our – not of our global brand and digital offerings, but also about our compliance programs, not to disappoint their customers, work with a company like Western Union which has good compliance programs.

Thank you, gentlemen, I appreciate it.

Thank you.

Okay.

And the next question comes from Andrew Jeffrey of SunTrust.

Hi, this is Jenny Dugan on for Andrew Jeffrey.

Hi.

Hi, Jenny.

Hi. How do you view growth in Zelle and Venmo playing out in terms of your U.S. pricing and volume currently, and then if you look out a few years? .

I think generally, as you know, Jenny, we are – most of our business is coming from cross-border, cross-currency money transfer business, and that's our specialty. We have it in 20,000 corridors, and that's where we really make money. And if you put U.S. aside, none of our countries are bigger than 6% of our revenue. So, it's a very diverse portfolio. On the domestic money transfer business, we have some countries like the U.S. and some other – not many countries like – domestic, it's about...

7%.

...7% of our revenue, if you put it in perspective of total revenue, and that's a smaller part of our business. It's a slower-growth business, but there are certain customers they like it because what happens is that especially if you send money from your mobile app, you immediately get cash in 45,000 locations in the U.S. and this is a huge competitive advantage and these kind of customers like that, immediate cash availability, sending money – let's say, $70 immediately from your phone and someone nationwide can pick up the money in minutes. That has been the case. But it's a slower business than our international business, slow growth business. And it's the certain customer – we respond to the certain customer needs.

On Zelle and Venmo, some customers may be migrating to those, but those are account-to-account services, right? So, it's just different what our business is and that's why it's not – they are not that related, but there might be some migration of customers to those other free services.

Got it.

And we still make money. We charge fees and customers pay for that convenience and I think Venmo and Zelle fees structure is zero, I believe.

Okay, great. And then just real quick on wu.com, you've talked about 80% of new users coming from outside the Western Union base. Is that still the case or are you seeing more transition from your core?

Right. It's still the case. That's a good news. It's still the case. They are new. They like it. They joined westernunion.com and what we hear also from our agents, account-based digital money transfer, they're also new customer segment, and that's great, actually. Digital attracts new customer segments through our global branding.

The great thing about our dot-com business is that it is digitally initiated. But the vast majority of the revenue we earn is still at a retail payout. So, it's not the place where competitors are actually trying to compete with us, they're trying to play in the account-to-account space, which is actually a business that we are going to be very good at as well. We are putting a lot of our resources and growth into account-to-account or online-to-account. And because of our global presence already, we're going to be able to get there faster than anybody else is going to be in 200 countries and territories around the world.

Great. Thank you so much.

And next question we have a question from Rayna Kumar from Evercore ISI.

Hi, thanks for taking my question.

Hi, Rayna.

I just want to better understand your pricing actions in the quarter. Was the pricing decreases in the Middle East and rolled back on pricing in other regions in response to Walmart2World pricing? Or are you seeing some new competition out there? And secondly, do you expect further pricing cuts or rollbacks of pricing in the second half of the year?

Absolutely not. I mean, the pricing actions were really region specific, and it has nothing to do with Walmart2World. Our U.S. outbound business has been going very well, actually. You saw the numbers. And we've been competitive. We do always pricing action in the U.S. or whatever that is. Right? But it's always within our guidance, it's business as unusual. And that has not changed. So, we are very proud of our U.S. outbound business.

And Rayna, we're always testing pricing even in close proximity to the Walmart locations. And we've done some things there, which is a very small fraction of our network, and not a big impact to the overall pricing picture. And we're having some success there as well. So, we feel good about the U.S. outbound, which is where the Walmart2World was focused.

Great. That's really helpful. It's good to see the Albertsons win. When do you expect that to become material to revenue and earnings? And is there some additional upfront spending involved to get that on board?

The Albertsons will be largely live as we start next year. We're going to spend some time to make sure we launch it really well.

Within the Albertsons umbrella, we have Safeway already.

We already have Safeway, which is the majority of the network. But we'll be adding the additional locations or additional 1,000 locations by early next year. And so, it's a nice win for us, and we're looking forward to that revenue ramp-up.

Great. And just one final question from me. The higher compliance spend in the quarter, was that above the traditional 3.5%, 3.6% of revenue range? And was that, like, a pull forward of compliance spend? Or are you seeing something out there in the regulatory front which you're reacting to?

Rayna, it was more about lower spending last year's second quarter. That was unusually low because we had a one-time benefit that helped us last year in the second quarter. So, this year is much more normal range. And it's in that range that we've been at for a while.

Thank you very much.

Sure.

Thank you.

Next, we have a question from Jim Schneider of Goldman Sachs.

Hey, Jim. James Schneider - Goldman Sachs & Co. LLC: Thank you. Yeah, good morning. Or good afternoon, thanks for taking my question. I'm not sure what time it is anymore. I guess there was a couple questions on pricing, but I did want to ask you about the Asia Pacific, where I think transactions outrun the constant currency revenue change by quite a bit. You didn't call that out, I don't believe, in your prepared remarks. Can you maybe just talk about what's happening in that region?

Yeah, I mean, APAC is a relatively small portion of our overall revenues. And this is outbound revenue from APAC, which is about 7%. I would say, there are two key drivers there were in Malaysia and Singapore. Those were the two countries. We had done some prior price actions, but that was back in the fourth quarter, so we're still continuing through that. But Australia is probably the biggest market there. The APAC region overall has been relatively flattish for us, and not a big contributor either way. So, we are doing some things there and launching digital in some markets soon and some other things as well, so. James Schneider - Goldman Sachs & Co. LLC: Fair enough. And then maybe, Hikmet, on the digital strategy, I think you've talked in the past about partnerships with social media companies as being a potential driver to stimulate volume. Can you maybe give us an update there in terms of how much have those partnerships to date kind of turned into revenue? Any kind of sizing would be helpful. And then I guess going forward, would you expect there's a pipeline of additional partnerships that actually might jumpstart that business even further? Thank you.

First of all, great question, Jim. We always look for additional partners and we are in acquisition mode, so our salespeople doing a good job, our account people doing a good job. So, I think there will be definitely a new announcement because people are really joining our network and they like that – the global network. On the partnerships, I would say that the main growth, as you saw, primarily comes from westernunion.com. The send customers do trust the Western Union brand and they want to use the Western Union brand that – when they receive. The other big partnerships are those banks, where the funds are already on the banks and this is a growth area we believe that we can offer our platform to the banks and we are doing it, and it's already 2% of our revenue and it's going very good. And there will be more announcements there also, I believe, coming. And like banks using their own brand, but on the back is our processing machine, our network, payout network, everything. That has been also very good. James Schneider - Goldman Sachs & Co. LLC: Thank you.

Thank you, Jim.

Sure. Thanks, Jim.

Well, I understand we have one more question, so we'll take the final caller.

Yes, our final question will come from David Scharf of JMP Securities.

Hi, David.

Hi, good afternoon. Thanks for squeezing me in here. Hey, two questions, one specific, one general. On the specific side, Latin America has obviously remained sort of the bright spot in terms of growth. I'm trying to get a sense for wu.com's impact there. Can you remind us sort of the geographic focus of wu.com, whether...

Sure.

...remittances to Latin America on that channel are proportional to Latin America's overall representation of revenue?

So generally, what we see also it's a general – although the base is always a – kind of an outbound trends for the emerging markets, which Latin America is there also. We see good growth from some traditional inbound countries, also now new outbound transactions, and Latin America is a part of that. So, you see that growth there. From westernunion.com, obviously, we're for years very focused on the U.S. outbound and Anglo-Saxon environment like U.K., Canada, and Australia, but the big growth also is coming from Europe, Europe outbound, westernunion.com is growing. And I have to say that we just stretched the potential there. We just started there, I think the team is doing good with customer experience, and then the expansion is definitely to the new countries in the Gulf states; the traditional outbound countries is also the next expansion, and in Asia we are hoping that we can expand – a new signed – is going to Brazil. We just signed Brazil outbound with our westernunion.com and others to come.

Yeah. And, David, just to clarify this, the regional reporting that we do is on an outbound basis, so the Latin America revenue growth and constant transaction growth is outbound. So, the U.S. to Latin America sends from wu.com would be in the North America region and it is a big important part of the business.

Got it. Got it. That's helpful. And then just to wrap up, maybe kind of bigger-picture question. When I reflect on kind of the bullet point in your strategic initiative slide about entering new cross-border opportunities, even considering signing up Albertsons, as a takeaway. I'm trying to get – maybe you can help us understand a little bit from a capital allocation standpoint – how you compare the returns of those opportunities to just buying back more stock. Because it does feel like you're so large, so sprawling, that eight years into a global recovery, no matter how much you spent on marketing, promotion, restructuring, WU Way, the aggregate numbers are still sort of 2% here, 4% there, 3% growth there. Has the board ever considered the opposite tact of perhaps rationalizing your footprint, maybe paring back slower growth regions that might be more secularly changing like the Middle East, and not just a result of certain cyclical factors?

Well, you know our business very well, David. I mean, the big advantage of our business is that being in 20,000 corridors, right? And as you know, if you followed us for many years, you saw some regions are growing, some regions are coming down. The portfolio management with our pricing – artificial intelligence, with our pricing what we do here is our competitive advantage. Sending money from U.S. to 200 countries is huge. Sending money from Italy to 200 countries is huge. No other company do that. And we are not losing money. We are always making money. Or most of our costs are variable costs, and we need the growth, and that's what adds it. And if you are only in a few corridors, let's assume that one economical crisis happens at that region, it will be even more risky. And we do allocate our marking investment, our investment against opportunities. And we are all constantly looking at our operating model with WU Way activities, how we can optimize it to drive the shareholder value.

Got it. Thanks very much.

Thank you.

Thank you.

Okay, thanks, everyone, for joining the call. Also, thank you for not asking us any questions about beer sales. So, we hope you have a good day. Thanks.

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