Welcome to the Western Union Fourth Quarter 2015 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Mike Salop, Senior Vice President Investor Relations. Please go ahead.

Thank you Emily. 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 2015 fourth quarter and full-year results and the 2016 outlook 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 2014 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 about 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, I am pleased with our fourth quarter and full-year 2015 results. We delivered solid earnings, despite global economic and geopolitical challenges which demonstrates the resiliency of our consumers and business model. Full-year earnings per share increased 5% in 2015, adjusting for our second quarter payment settlement charge and all three of our business segments produced relatively good constant currency revenue growth during the year. Consumer-to-consumer revenues increased 3% in constant currency, with slight growth in retail-initiated money transfer, boosted by very strong results from digital, as WesternUnion.com constant currency revenues increased 26% for the year. Western Union business solutions constant currency revenue increased 7% and the segment's EBITDA margins improved from 11% to 15%. And consumer bill payments also contributed a strong year, with constant currency revenue growing 11%. From a macro perspective, while the U.S. market was solid, many other parts of the world experienced slowing economic growth, depreciating currencies or geopolitical instability in 2015 and low oil prices affected several send markets. As a result of many of these factors we saw significant outbound declines in markets such as Russia, Angola, Greece and Libya. Despite this, transactions and constant currency revenue in our retail money transfer business increased slightly, showing the ongoing importance of cash to consumers around the world, while they continued to drive strong growth from our digital business. Operating margins increased from 20.3% to 20.9%, excluding the charge. And cash flow was strong again, with approximately $1.1 billion generated from operating activities and over $800 million returned to shareholders through share repurchases and dividends. Today, we also announced a 3% increase in our first quarter dividend which equates to $0.64 per share annually and we remain committed to consistently returning funds to shareholders. In addition to the…

Thank you, Hikmet. As I review 2015 financial results, I will focus primarily on the fourth quarter. The similar information for the full year can be found in our press release and the attached financial schedules. Fourth quarter revenues of $1.4 billion increased 3% on a constant currency basis, compared to the prior-year period, while reported revenues declined 2% due of the impact of the stronger U.S. dollar. The impact of currency translation net of hedge benefits reduced fourth quarter revenue by approximately $74 million, compared to the prior-year period. In the consumer-to-consumer segment revenues increased 2% constant currency and recorded revenues declined 3%, while transactions grew 3% in the quarter. C2C constant currency revenue growth was driven by WesternUnion.com and solid growth from U.S. outbound. In the quarter total C2C cross-border principal declined 4% or increased 1% constant currency. Principal per transaction was down 6% compared to the prior-year period, primarily due to foreign exchange translation as it decreased 1% in constant currency terms. The spread between the C2C transaction growth and the revenue decline in the quarter was approximately 6 percentage points, including a negative 5% impact from currency. The impact of net price decreases was 1%, while mix had minimal impact in the quarter overall. The pricing environment remains stable and our net C2C pricing change for the full year was essentially flat. Turning to the regions, due to the significant fluctuations in foreign exchange rates, I will be referring to constant currency movements as I discuss individual country contributions to the regional results. In the Europe and CIS region, revenue declined 8%, but was flat on a constant currency basis. Transactions increased 1%. In the region, strong revenue growth in Germany was largely offset by continued weakness in Russia. The Greece business improved compared to the…

[Operator Instructions]. Our first question is from Tien-tsin Huang of JPMorgan. Please go ahead.

Can you hear me okay? I'm at the airport. Just on the margins flat margins excluding the foreign exchange effects in 2016, it sounds like you're including a $50 million tech expense there?

Yes.

So I mean I guess is that what's holding back margin expansion that we would normally see, maybe with higher positive revenue growth and the other puts and takes there that I may have missed?

Yes, Tien-tsin. The margins would have been about the same as last year, without the currency impact. And that includes about a $50 million increase in spend in technology. We're saving other costs during the course of this year and that's why we're able to keep relatively flat margins. But certainly, if we had not had that kind of an increase in technology, then margins could have been better. But we're investing in our platforms and upgrading our core processing technology which is a little bit dated and we think that's the right thing to be doing.

Okay. Understood and then maybe if I could just as a follow-up, just M&A appetite or update there? I know there's a lot of news flow in the quarter related to that. What's the latest thinking on M&A?

Well, generally we always, like in the past, we look at M&A opportunities as it fits up with our strategy, definitely interested in digital environment or mobile environment and that environment we continue to look. It has to be -- fit with our strategy and we're very disciplined also on return on M&As and so we're going to continue to look at that. I mean, I don't plan big M&As, but definitely strategic fit will be within our focus area.

Our next question is from Bryan Keane of Deutsche Bank. Please go ahead.

Just want to follow up on that, Raj. Just thinking about the $50 million in incremental technology investment spend. Is there something that's a complete opposite to that, like the cost saving initiatives? I don't know if you gave a number for that to expect in FY '16? Just trying to figure what if there's anything in detail to offset that incremental, to keep margins flat?

We haven't really given any detail on that, but these are general cost reductions and other savings that we're doing and that's really what's allowing us to offset some of that expense for the most part, Bryan.

Okay. And then, pricing was down, I think, 1% in the fourth quarter, but flat for the year. Was there some pricing initiatives taken in the fourth quarter? And then going forward, will pricing be more flat again? Just want to make sure I understand it. Thanks.

Yes. The pricing that you saw in the fourth quarter is nothing out of the ordinary. We still expect a low single-digit pricing environment during the course of this year. Earlier in the year, we had some price increases that were offsetting some of the price declines that we had, so it's really just normal course price changes in the market.

Market looks also quite stable, Bryan so we don't anticipate big pricing investment. The usual ones, but not big ones.

Okay. And then just last one for me, Raj, is there a way to think about the three segments in terms of constant currency, how to model them going forward in 2016?

We haven't really given a segment breakout, but for the B2B business, we still believe long-term that opportunities for low double-digit constant currency revenue growth and that's really a long-term objective. We, overall, the business we expect to be in the low to mid single-digit constant currency growth range for the Company.

Yes.

But from a business unit standpoint we haven't really--

I think generally, we will see very strong growth coming from the digital send transaction, combined with our network worldwide, that drives really the growth, especially being in 34 countries it's very strong and our U.S. business, as you saw, U.S. outbound online business has been very strong and now we're in 34 countries. We expect long-term also similar growth rates like we have in the U.S. globally and we're going to continue to expand that one.

Our next question is from Jason Kupferberg of Jefferies. Please go ahead.

This is Ryan Cary calling in for Jason. With all the global macro volatility we've seen lately, I was hoping you could provide just some additional color about embedded expectations in 2016 by region. Just if there's any particular regions that you think could grow accelerate or any that are probably going to be particularly hard hit by some of the headwinds that we've seen?

I think generally our business is quite resilient. Our customers are quite resilient, even through 2015 economic challenges, the currency volatility, the geopolitical issues, our business and customers has been very resilient. We did see some impact of our global and geopolitical issues, like in Russia, we saw it in Angola, we saw it in Greece. In Libya. These outbound countries had some effect to our revenues, but given, being in 200 countries, I feel quite comfortable to manage that risk. However, there is a huge geopolitical oil prices maybe also have impact in the Middle East outbound business long term. And generally, year to date and last year we saw a quite solid business and our customers are growing -- our growth was also coming from new incremental revenue, new customer segment, adding on that, with our online business, with our mobile business growing really strong. And these are new customers and it's not cannibalizing our strong retail money transfer business which is resilient.

Okay and then looking at the WU Connect platform, I know you've announced a couple partners since launching. I was hoping you could speak broadly to the feedback you have received from potential partners and maybe on top of that how long do you estimate it will take to start getting some more significant traction within this new channel?

Well, it's definitely something that we built over the years, WU Connect which has API connection to our platform which the platform is basically our multi-settlement currency platform, our compliance platform, our IT platform. We now give the platform, make it capable for social media and for operators, messaging operators, that they have an access and use that. To build that takes years to have license 200 countries. It's not easy. And in the past we're opening that platform, there is a kind of a closed platform, for our agents. Now we're opening this platform also, for new social media. One is WeChat obviously and another one as just announced a week ago was Viber and it will take some time, as you know, it takes some time. We have to promote that within the users, within the people who use Viber and WeChat and other social medias. We would like to expand that also to the other social medias, but we have just put programs. One of the recent programs is the Chinese New Year, as you know, yesterday was Chinese New Year and we started promotion with WeChat which is a Chinese communication platform and we'll see the results long-term, definitely incremental results.

Our next question is from Darrin Peller of Barclays Capital. Please go ahead.

I mean overall I think the constant currency trades look fairly stable on most of the businesses. The exceptions I guess look like they are the markets you called out, just in the last question, around the outbound markets, being somewhat oil sensitive markets, Middle East and Asia to some extent. I guess Asia maybe a little bit less. But just give us some color on what your embedded expectations are for those markets? I mean I guess a lot of the copies we see reporting are having a pretty big concerns over those economies, obviously. And when we take it a step further in the U.S., there's parts of the U.S. outbound market, I know, that have historically been somewhat tied to oil-producing areas in the U.S. as well, whether or not that's embedded in your thoughts? So a little color on the expectation for transaction growth in Asia be down 5%, Mideast down 1% and whether that's potentially going to get better or worse in the U.S., also?

I mean if you look at our business, U.S. has been really very solid and even in Saudi Arabia and UAE, we saw good transactions in Germany, we saw good transactions -- I have to be fair Germany is not oil-producing country, but the numbers have been very solid. Saudi Arabia and Middle East, Gulf countries which has a huge outbound business has been stable. Definitely there is some risk looking forward on these areas maybe have some -- oil prices are down, maybe some economic challenges, but I feel quite confident with our resiliency of our business, of our customers. And also, we're start, you'll see some announcements, additional announcements to our 34 countries adding new online capabilities, especially also Middle East, for customers to be able to send not only retail money transfer, but also online money transfer. I believe that will keep that stable. There is some concerns on the economic challenges. There is, global environment is not stable. I'm cautious about that. But customers, don't forget also not of our countries out of the U.S. are bigger than 7%, Raj? I believe revenue, so our portfolio is quite diverse. With that, we manage with marketing actions, with promotions, we really drive our constant currency revenue at least, as you said, biggest impact on the GAAP is the currency impact for next year.

Okay. I mean, so it sounds like your expectation is for something similar to what we're seeing now, more or less? Or you're not expecting much worse? Okay.

Yes.

And then just on the other non-C2C segment C2B and the business solutions segment, again, I guess it's nice to see those constant currency revenue growth rates still at the high single digits. Any thought we could have on the macro factors? I mean I know generally FX volatility has been an impactful driver on the business solutions side of the business. Anything that's impacting that there or anything else we should think about, given all the volatility in macro we're hearing across the board?

Yes. I mean, it's not like 2014 or before the global trade is growing very strong. There is some growth, but trade is not as we would like to see. And as you know, our B2B business is dependent on global trade activities. But I have to say that in Europe, especially the B2B business, we're doing pretty well. At our markets where we're active like UK or other markets like France and Continental Europe, the team has been doing a good job here and growing pretty well. There is, as you know, there is something global trade could be impacting our business but currently, I don't see big changes.

I would also add, Darrin, hedging has also helped some of the results there and that activity continues to expand into more markets around the world.

And just last question for me I'll turn it back to the queue is on the tax rate. I know it comes up this year to a more normalized mid-teens level. I guess just big picture on that, I mean, I imagine that should slowly but surely move to a high double -- more closer to 20%? Is that the right way to think about it for modeling purposes over the next couple of years?

I can't speak to your model, but for us, we believe that the mid-teens tax rate is something that we would still have for the next couple of years. Obviously it's dependent upon tax law changes in other things that may happen, but based on what we know today, that's roughly where we see the tax rate. And this year is coming out to be right where we said. During the course of last year, we thought we would be back in the mid-teens and we're and that's what we see for the next couple of years.

Okay so mid-teens is pretty stable now.

Yes.

Our next question is from Sara Gubins of Bank of America Merrill Lynch. Please go ahead.

Some questions on commission expense. Is this a year that we should expect an outsized amount of agent renewals and how should we think about commission expense for the year?

Sara, well, if you look at our business, if not that we have one year that commission goes up, the other year commission goes down. Normally our agent agreements are four, five, multi-year agreements. Right? And so it comes -- every year comes agent renewals. I don't expect that big changes in 2016, on the commissions. I believe not that the commissions rates will go up or down. I mean sometimes there are some years go up, some years go down, but major changes won't happen, Sarah.

I mean, last year, Sara, we actually had a decline in commission rates, retail commission rates. And this year we expect that commission rates will be relatively stable, as Hikmet said, to last year. And really longer-term the opportunities are around reducing distribution costs as the mix of our business changes, as we have more of rank funding, more bank payout, that's going to naturally shift the overall distribution costs of the Company.

Absolutely.

Following up on that, I know it's really early, but any chance you could help us think about to the economics of WU Connect over time?

I mean, it's really early as you said, Sara. We haven't really gotten into those details. The model itself, there's likely to be some profit-sharing mechanism with a partner and the pricing for transactions could be similar to WU.com for similar channels. And then we do believe that these relationships could have a captive audience that we're marketing to versus the rest of our business, because these are customers that are using these messaging apps and if we're embedded in the messaging app, it makes it a little bit easier to find us, if you will, to use our services. So there's some opportunities here, but too early to talk about specific economics.

And our assumption, Sara, here is also like investing in dot-com. These are additional incremental consumers, additional revenue. We don't expect huge cannibalization, but time will tell us, our first search and first understanding is that these are incremental customers and revenues.

Our next question is from Ashwin Shirvaikar of Citigroup. Please go ahead.

So the tech spending on your network and processing infrastructure, I guess, the question is, why now? Is it a competitive response to newer choices in the market like transfer wise or what's the benefit you get from the investment? And while you are discussing technology I guess a question we do get from investors is impact of block chain. If you could spend a couple of minutes talking about the technology, that would help.

Sure, the tech spending is not a this-year item only. We have been ramping up our tech spending. We have some older platforms that are in place, so we're upgrading our data center, data centers, around the world and in the United States. We're also upgrading our settlement system and we're upgrading our core processing capabilities, so it is definitely in an effort to upgrade our older technology, but it also is going to allow us to be more flexible in the market as we move forward and as we have newer kind of partners. So it is really setting us up for growth the next several years. And then from a block chain standpoint, Hikmet, do you want to add something?

Yes I think we're always looking at technologies like block chain and we also look at can we look -- adapt the block chain in our system and everything. But as you know, Ashwin, our system is unique. The success of our system is that it works in 200 countries, it can pay out in 121 currencies. It can adapt to regulatory systems of 200 countries and make anti-money laundering and process 22 transactions, does how many transactions a second we said? Raj?

More than that.

More than that. I don't know. Every second transaction, so the flexibility of our system is there. It's hard to beat that and we're adapting that, exactly what Raj said, that we're adapting our systems to the given environment. If the block chain is the better one, we will definitely look at it, but our team is very innovative here and Denver and in San Francisco and really looking at our capabilities. I'm quite confident that we're -- we made big steps last two, three years in our technology and going to continue to invest. Otherwise companies like WeChat or Viber or banks, big banks like La Banque Postale or like big retailers won't work with us. They want to have the customer experience good and they want to connect to our systems, so that's what we're doing.

On a separate point, you've been stable at these transaction growth rates for a couple of quarters here. At what point do you decide that the growth rate just isn't good enough? And that maybe a price cut makes more strategic sense? It would seem like the current environment, you are not growing, but it may be your smaller competitors might be suffering a little more, so maybe it might be time to take advantage of that. How do you feel about that?

With all respect, I would like to push back on your growth comment. Maybe in retail money transfer, the transactions are slow growth, but as you know, our WesternUnion.com and digital business is growing very fast. I believe in many markets we're beating the competition and we're very competitive here and I'm very proud of the team. Even in the U.S. which we have been so long in WesternUnion.com, growing I think the transaction last quarter grow 33% or 34%?

28% overall transaction growth, 35% U.S. origination.

U.S. originated transaction 35%. These are quite impressive numbers, so I believe that we're doing the right thing on our online business. And if you compare our business in electronic channels, of about 7% of our revenue, it's a quite big business and if you compare that with other competitors, their absolute numbers are definitely not there and they are only active on a few corridors. Their expansion capabilities is, they don't have the WU Connect platform, their expansion capabilities is I believe not there yet and we're very proud of our platform and I think we're going to continue to expand there. You will hear more announcements, Ashwin, on expansion on digital. Especially on digital you hear more partners and at the same time, you will also hear more WesternUnion.com countries coming on our platform.

Ashwin, I wanted to add to what Hikmet said. The lower growth that we're seeing in the transactions right now is really reflective of the continued global environments around us. I mean, we last year, we had a softer environment globally. We continue to see that this year, so things haven't really changed. It's really reflective of that more than the pricing need.

Our next question is from Jim Schneider of Goldman Sachs. Please go ahead.

This is Jordan on for Jim. I apologize that I missed this, but I just wanted to ask you about the current pricing environment both in the U.S. and Mexico corridor, following MoneyGram's contract expansion with Walmart. Any incremental there that you could point out? And then also in WU.com, have you seen any increment the pricing pressure, as it relates to Xoom following PayPal's acquisition? Thank you.

Sure. As a Raj mentioned earlier, first of all on the Mexico, Latin America U.S. to Mexico corridor, obviously Banco de Mexico data shows that we're definitely doing better than the market and that's not the first time and that's been very consistent over the last quarters and I'm very proud of the team that they are doing a good job. We will -- we're going to continue to do corridor by corridor pricing, sweet corridor quarter pricing, really very intelligent pricing, to attract new customers to compete on that, but I don't see big pricing changes. I really see the pricing environment quite stable. On online, when we enter to a new market, in our online business, we may do some promotions to enter in the market to promote our channel there, but overall, I would say that the market environment has been stable. Look, no one can send money from one corner to 200 corners, like if you're from Denver to 200 countries, in our 500,000, in 100,000 ATMs, now also 1 billion accounts, dropping money really in a fast, very efficient way in 131 currencies. So that's what we're doing. It's not all about price, the customers like our product and they're really working on that. So the last question was on WU.com pricing. As I mentioned on the WU.com pricing, I believe that we will continue to do promotions, like we have been very successful on India promotions. And that our aim is always profitable, being profitable and in all lines, we're making money, just I want to make this point that we do make money and we're increasing our margins also in online and getting profitable.

Our next question is from Kevin McVeigh of Macquarie Research. Please go ahead.

In terms of the uptick in that tax rate, what's the actual EPS impact to that, in terms of just how much of that impact is 2016 guidance?

We haven't given that, Kevin. We're going from a roughly a 12% tax rate last year to mid-teens, so I'll let you just do the math behind that. But you can easily calculate that impact, if you will.

Okay. I didn't know if there was any kind of nuances in there. And then just in terms of the continued spending on the compliance side, the 3.5% to 4%, is it the same type of spend and is that independent of the technology spend or is that all wrapped in one?

Yes. It's similar type of spend. The well over half of the spending is for people costs and we have over 2,000 people in the compliance organization here at Western Union. We obviously have them in various centers around the world so that's where a lot of the spending is. But we're continuing to invest in technology and outside services to optimize our spending there as much as we can, so -- but it is largely the same kind of spending, but just it -- this is a global effort if you will, so we're going to continue to expand these programs around the world.

Our next question is from Tom McCrohan of CLSA. Please go ahead.

What's your expectations this year for total growth in cross-border principal? Which I think end of the year constant currency about 1%.

Yes. Well, the World Bank has estimated principal growth to be 1% this year, but as we know, that information is more directional than anything else and as the data continues to come in and get updated, so we'll see where that ultimately ends up. Last year, our principal grew by 2% on a constant currency basis and then was down 5% on a reported basis.

Okay. And can you give us a sense for the proportion of your total cross-border principal that is oil sensitive or emanating from oil-producing countries?

Yes. I mean, if you look at the oil-producing countries in which we operate, the revenue generated from those countries is in the 10% to 15% range and it's really a mixed story. In those oil-producing nations, as Hikmet mentioned earlier, the UAE and Saudi Arabia have continued to thus far show decent growth, but we have other markets like Angola, Libya and others that are having, Russia as well, that are just having a challenging time. So it's really a mixed bag and then the broader impacts from lower oil prices in other outbound markets is also a mixed story. We have had good growth in some key outbound markets as a result, I think, of just those kinds of situations. So -- but generally a 10% to 15% of revenues is from oil-producing nations.

And the trends post the end of the quarter in Saudi Arabia and UAE -- are they still similar to what you experienced during the quarter?

Well, we don't give any intra quarter information, but from the fourth quarter, that's where we saw the growth, so nothing to update really at this stage.

Our next question is from Bob Napoli of William Blair. Please go ahead.

With your competitors signing a new contract with Walmart, I think that contract -- the old contract excluded Walmart from talking to Western Union, I believe. And this contract, I think, was less exclusive the prior one. So I just wondered if you had -- if there were any thoughts if Western Union was increasingly interested in Walmart, if you think -- maybe leave it there and get an answer to that question. And follow-up.

Good question, but as you know, we don't make any comments on any negotiations or any other specific partnership capabilities, as you could imagine, from competitive reasons and generally I don't do that. But I just can tell you that I'm interested in on any partner to grow out my business. I believe that we will look always to grow our business and to -- but it has to be profitable. It has to pay back not for any price and we want to get new customers. We want to get additional customers and we will definitely look at any potential partnership worldwide, anywhere.

You are not excluded from any of your other partners from working with Walmart and do think of non-exclusive sends are the way of the future in the U.S.?

Well, generally I would say that from -- I can only speak for my business, the exclusivity, generally when the exclusivity has been very stable and our top 40 agents or 35 agents have been exclusive more than 18 years. And most of the agents are choosing this, because they know they have quite stable partners, financially stable, good anti-money-laundering system, good settlement system, long-range capability, great brands and they can drop money in 200 countries immediately, so the activities comes in both sides obviously and they would like to protect good partnership for longer-term. We have also host-to-host connections, we have IT implementation with our partners and so I feel from my part of business quite comfortable on this.

And you're not excluded from working with Walmart, from like Kroger or any of your other partners?

I can't answer that question but I guess not. I don't know. You have to ask that question to the others, not to me.

Okay and Raj, you have -- you mentioned $1 billion of debt coming due in 2016. With credit spread having widened so much, is there any -- what would be the impact if you were to refinance that debt today on your interest expense?

Taking everything into account, Bob, we see interest expense being similar to last year. So potentially higher interest rates for that refinancing, but we have a lower overall average debt balances this year, as we paid off some maturities from last year. So those two things would largely offset, I would expect to see interest expense similar to last year.

Okay. And then last question, with your Investor Day coming up and why now for the Investor Day? And are you planning on giving any medium to longer term financial targets as part of your Investor Day?

Well, as you know, our Investor Day is coming beginning of March. And we're very proud about our strategies, what we want to tell to our shareholders or really how we transformed the company, how we get to the new use cases, how we get the new our WU Connect platform, how our strength -- strong about retail money transfer business. And we would also like to talk to the uniqueness of the Western Union cross-border engine, cross-border platform and I think within that environment, we would like to talk to our long-term and loyal shareholders, how comfortable we feel about the future of the Company.

Our next question is from Daniel Hussain of Morgan Stanley. Please go ahead.

Just another one on that $50 million tax spend. I know it's early to talk about 2017, but I just wanted to get a sense for whether the $50 million is elevated in any way or whether this is maybe a go-forward investment rate for now?

Well, the $50 million certainly has some one-time costs in there, but again, we're trying to upgrade our platforms, so there's also some ongoing costs in that spend. As we add more partners to the mix, especially on the digital side, partners like Viber and WeChat, as we have more of those, we will continue to invest in the technology areas. So too early to say whether it's only one-time in nature or how much of it is one-time in nature. I expect some elevated tech spending to continue, but again, that allows us to be faster to market. It allows us to be more flexible in how we provide services and it also allows us to add new kinds of partners to our business which is really why we're doing it.

And then not to beat a dead horse on oil, but I'll try to ask the question a different way. Saudi Arabia I think they are the second largest send market and they did cut their budget in December. So at this point, are you taking a wait-and-see approach for your expectations for 2016, even if you haven't seen any impact yet? Or are you baking in some sort of headwind now?

Yes, I think generally I'm cautious. Right? About the global economic, it's not Saudi Arabia specific. But generally there is -- the environment didn't get better. It's very volatile. But once again, I just want to make the point, one of our countries from a revenue side is bigger, outside the U.S., bigger than 7%, so we have a really quite balanced environment. I mean, as Raj mentioned earlier, Germany for instance produced pretty good outbound numbers again which is obviously engine of Europe and continued to produce that. So I feel comfortable that being that global, having that portfolio, we could respond better than the other companies to the economic challenges.

Okay. And then if I could just follow up on Darrin's earlier question on tax, this issue does come up a lot for us. So just wondering if it's possible to provide maybe an example of one of these working capital strategies that you use to repatriate cash, without paying the U.S. Marshal impact.

Yes. I would say is that we move a lot of money around the world annually, we move hundreds of billions of dollars around the world globally on an annual basis and we have a lot of payment flows between our various companies around the world, so we try to optimize those as best as we can. And I'm happy to talk more about that off-line if you would like to, but it's really just optimizing the cash flows that we have within the Company.

Our next question is from Tim Willi of Wells Fargo. Please go ahead.

Two questions, one Raj, I missed the full comment but could you just go back over the $25 million of headwind from Argentina? I didn't catch that, I just want to make sure that I understand it. I have a follow-up.

Sure. I think you are referring to -- this year we have an overall impact from currency on profit of about $100 million. $25 million of that is from the Argentine peso devaluation that took place in December of last year. Another $25 million plus is from year-over-year changes in hedge gains, so we have hedge gains this year that are less than last year. So last year we had $78 million in hedge gains. This year we have around $50 million based on our current rate assumptions and that's a negative to the margins. And then the remaining piece of it is just overall translation, so we have a revenue impact of $250 million in our top line this year and $100 million impact to profits and that combination is a negative to our operating margins this year of around 100 basis points. And Argentina is just a translation of our profits is going to translate into $25 million less just based on the devaluation of the currency.

My follow-up, going sort of WesternUnion.com and the global expansion that you seem to be moving on here more aggressively. Is there anything around reallocating marketing budgets or elevated levels of marketing or anything like that, as you really open up this platform, that we should think about in terms of operating leverage, whether pros or cons, as you roll this out more globally and really try to accelerate it?

Yes. I think, absolutely. I think, we're focused on the send countries, major send countries, obviously. The 34 countries which I mentioned earlier are the major send countries. Now we're -- we have almost all European countries, obviously now we're starting to have -- by the way in Europe, we're using our bank license there and to expand WesternUnion.com and now the next step is, in Europe are putting promotions and marketing programs there, to drive the revenue even stronger which is a good strong -- the base is still small, but growing stronger. And now we recently opened an office in Asia to expand our activities, also WesternUnion.com activities to send Asian countries like Singapore, Hong Kong, but also in Middle East, like typical countries in the Middle East, outbound countries. And you'll hear coming up new announcements on that using our capabilities and I believe it's really attracting new customer segments. For instance, people who want to send in a different way, don't want to carry cash in a location and we saw the similar pattern also in Europe, these are additional customers, not ones that use retail, but still you want to use Western Union and add additional growth and that's going to happen, I believe, also in Asia.

So are you comfortable in terms of the P&L impact, that there is not any pressure on margins? This'll just be reallocated your existing marketing budget to different channels and countries? Not anything necessarily incremental -- at a material level?

Tim from a marketing standpoint, we've been spending just under 4% of revenues as a Company for the last few years, but we have been reallocating more to the digital areas and that will probably continue, but not affecting the overall budget.

Our last question today is from Oscar Turner of SunTrust. Please go ahead.

So you mentioned that overall, you expect C2C pricing trends to remain stable in 2016. I was just wondering if you could provide some general color on the proportion of markets where you are typically able to raise prices versus perhaps those that are more competitive?

We have 60,000 corridors that we operate in, so we have a number of different combinations that you could envision, but it's very hard for us to tell you specifically by country. We typically, in many countries, we're priced above the overall average. In other countries, we're priced below and we also have different channels that we're also utilizing. So in our WU.com business we're actually priced quite competitively with similar kinds of products, so it really just depends on which corridors you're talking about which channels and there's a multitude of different combinations that we could be looking at. But in markets where we believe the value proposition is not aligned, then we will take the opportunity to look at that. It could be pricing changes in foreign exchange. It could be in fees, so it's hard for me to tell you a specific area where we do that.

Sometimes we increase prices in different bands, current corridors, lower bands, decrease pricing and increase on the higher bands. So it's really a very intelligent price product we have and this is based on the markets environment. We adapt the prices to the customer needs and that's what we do.

And then second question, you've talked a lot about expanding WU.com geographically and then also growing WU Connect. I'm just wondering how you think about possible cannibalization there or at this point, are they so small that it's not even a concern?

First of all, our WU.com business is growing very, very well and it's in 34 markets, we're paying out everywhere -- almost everywhere in the world in cash and then we're delivering money into accounts into more than 50 markets. So that business continues to have a lot of good growth potential, but we also believe that much of the WU Connect opportunity is incremental in nature. It's too early to really tell you exactly how that's going to play out, but we believe that's going to be a good incremental revenue and profit opportunity for Western Union, because it's a new kind of customer. They may use us in a different way, different use cases that we have in our core business, so there's -- we just need more.

Isn't that today Raj, current customer, 80% of our customers are new to our -- they didn't use --

To WesternUnion.com, yes. I mean, WesternUnion.com, we're getting more than 80% of our customers are still new to Western Union overall, so we think it's largely an incremental opportunity, but we'll see. We'll have more expense over the next several months and years.

Sure. It's the bottom of the hour so thanks everyone for joining our call and we hope you have a good day. Thanks.

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