Fiserv Inc (FISV) 2009 Q1 法說會逐字稿

Welcome to the Fiserv first quarter 2009 earnings conference call. All participants will be in listen-only mode until the question-and-answer session begins following the presentation. Today's call is being recorded and is also being broadcast live over the Internet at www.fiserv.com. In addition, there are supplemental materials that will be referenced on today's call, available at the company's web site. To access those materials, go to www.Fiserv.com, and click on the "access presentation" link on the home page. The call is expected to last about an hour. And you may disconnect from the call at any time.

Now I will turn the call over to Jeff Yabuki, President and CEO of Fiserv.

Great. Thanks. Good afternoon, everyone. Thanks for joining us today for our first quarter 2009 earnings conference call. As always I'm joined by our Chief Financial Officer, Tom Hirsch.

Our remarks today will include forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. We will make forward-looking statements about among other matters, adjusted revenue growth, adjusted earnings per share, adjusted operating margin, EBITDA, cash flow targets, sales pipeline, our CheckFree integration efforts, the disposition of certain Fiserv businesses, and our strategic initiative, Fiserv 2.0. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. Please refer to our earnings release which can be found on our web site at www.Fiserv.com for a discussion of these risk factors.

You should also refer to our earning release for an explanation of the non-GAAP financial measures discussed in this conference call, and for a reconciliation of those measures to the nearest applicable GAAP measure. These non-GAAP measures are indicators that management uses to provide additional, meaningful comparisons between current results and prior reported results. And as a basis for planning and forecasting for future periods.

Let me say up-front that I'm pleased with our result for the quarter and our strong start to the year. As we shared with you at the beginning of 2009, we anticipated that the environmental factors would pressure revenue growth in the first half of the year, and it has. In these times, we are intensely focused on serving clients well while taking actions that enable us to continue building our business for the long term. Strong execution of our plan led to solid earnings and cash flow growth in the quarter. Adjusted EPS grew 10% over last year to $0.88. Our industry-leading free cash flow grew 9% to $189 million, and up 15% on a per-share basis.

Adjusted revenue declined in the quarter by 3% compared with last year's first quarter, which was also our highest revenue growth quarter in 2008. The vast majority of this expected drop was related to external factors such as almost nonexistent termination fees, weak lending markets, low interest rates, and spotty discretionary spending. This was partially offset by good performance in our account processing and payments businesses. Acquisitions impacted revenue by less than 1% in the quarter. Excluding unusual items, our first quarter internal revenue growth rate would have been 1%, including 4% growth in our payment segment. Overall revenue for the quarter was within our internal expectations.

As I shared last quarter, our key three priorities for the year are, first, to meet our earnings commitments while maintaining capital flexibility. Next, to continue integration efforts with increased focus on revenue opportunities and product innovation. And third, to enhance our go-to-market approach leading to increased sales results to new and existing clients. We are on track to meet our full-year earnings commitments.

As I mentioned, we delivered 10% growth in adjusted earnings per share and 9% growth in free cash flow. This performance in light of the expected weak revenue led to adjusted operating margin of 27.9% which improved on both a sequential quarter and year-over-year basis. The combination of our strong business model, a focus on providing highly valued products to clients, and a growing culture of operational excellence led to the margin expansion for the quarter. On the capital front, we reduced our debt by $100 million, repurchased shares opportunistically and increased our available cash by $80 million in the quarter. We are continuing to build upon our strong financial position while maintaining capital flexibility given the potential opportunities across the landscape.

Our second priority, continuing integration efforts with an increased focus on innovation. Again, showed progress in the quarter. We generated $21 million in incremental operational efficiency savings in the quarter, more than one-third of our full-year above. You will recall that this metric now combines the results of our historic Fiserv 2.0 efficiency initiatives with the CheckFree synergy savings. Since completing the CheckFree acquisition, we have now generated $77 million of savings versus our $100 million annual synergy target. While we remain focused on cost actions, more of our collective effort is now shifting to product innovation and growing revenue.

Electronic bill payment sales were again strong. Even in a difficult environment, we signed 107 new clients in the quarter, including 38 competitive wins. A higher takeaway rate than 2008. The initial rollout of our new Corillian online banking platform is proceeding well with significant interest in this state-of-the-art products. While we are excited we still don't anticipate product revenue until 2010.

We continue to integrate the organization and win new business. Whether a client is looking for account processing, bill payment, debit services, revenue enhancement consulting, risk management, or hundreds of other relevant solutions, we are facing off to the market with far fewer internal boundaries than ever before.

We believe we can say with candor there are no shortcuts to integration. It's a monumental effort to integrate businesses and assimilate cultures. The CheckFree integration activities that we've been executing for the last 17 months have positioned us to serve the market in unique ways now when clients need it most. At this point, we believe that the majority of the basic integration is behind us. We are enthusiastic about our position in the competitive market in this extraordinary time.

Our third priority is to enhance how we go to market. During the quarter, we rolled out a new market approach in brand identity. The financial services industry is changing, and so are we. Our new identity speaks to an organization that is vibrant and energized. We are unified in our commitment to be our best for clients, period. The market is asking for more integration of our businesses and products, and we are delivering. We estimate that our February 23rd launch effort yielded more than 200 million media impressions through our global advertising and be editorial coverage in newspapers, trade publications, and on the world wide web. Our marketing and business teams turned their hard work and commitment into a fantastic launch. And what you've seen so far is only the start.

We've also been increasing our investment in innovation and some of that is game changing. An example of one such investment is data analytics. Our ability to provide financial institutions with relevant insights based on their customer data, has the potential to change the way consumers access financial services and interact with their institution. The quality of these insights will be directly proportionate to the number of relationships and hence the amount of available data clients have with us. This is just another example of how a highly integrated relationship can deliver more value to client. All in all, it's a very good start to the year.

With that, let me turn the call over to Tom for a more detailed discussion of our financial results.

Thanks, Jeff. And good afternoon, everyone. I will refer to the supplemental information included in the slide presentation which, as we mentioned earlier, is available on our web site.

As shown on slide three, adjusted revenue in the quarter was $989 million, down 3% from the prior year, excluding the results of Fiserv Insurance. Acquisition related revenue contributed less than 1% for the quarter. Adjusted EPS in the quarter was $0.88, up 10% over the prior year. Adjusted operating income was $276 million for the quarter.

As shown on slide four, adjusted operating margin increased 210 basis points to 27.9% compared to the prior year. Operating margin increased sequentially by 110 basis points, with strong improvement in both of our operating segments. We have continued to expand operating margins over the last couple of years through operating efficiency initiatives, CheckFree acquisition synergies, improved business mix, and high-quality new revenues.

As we have shared over the past several years, we are focused on businesses that deliver incremental value for our clients and that are also scalable across our system. Examples of these businesses include bill payment, debit and EFT processing, and our bank and credit union account processing businesses. We took a charge of $15 million or $0.06 per share in the quarter related to an announced reduction of approximately 700 employees or about 3.5% of our total work force. This action, which occurred late in the first quarter, was primarily targeted in those businesses most impacted by negative market forces. Including our lending and investment services operations. The announced reductions will occur throughout 2009. A large part of these cost savings will be used to fund increased investment to enhance our competitive differentiation, deliver more value to clients, and drive future revenue growth.

We continue to focus on high-quality business that contributes to our very strong, free cash flow characteristics. Total free cash flow grew 9% to $189 million in the quarter. The cash flow growth was positively impacted by our continuing attention to capital management and working capital improvements. Free cash flow per share increased 15% in the quarter to $1.21 and continued to exceed adjusted earnings per share.

Adjusted internal revenue declined by 4% in the quarter. As shown on slide five of the presentation, we continue to be negatively impacted by some significant items which carried over from last year. The home equity processing business, the large bill payment contract repricing, lower float income, and in this quarter negative currency impact and much lower termination fees. Adjusting for these items, our growth rate was 1%. Home equity processing revenues were $23 million in the quarter. Down $19 million from the $42 million generated in the first quarter of 2008. This alone reduced total Company internal revenue by 2 percentage points, and financial segment internal revenue by more than 3 percentage points.

As in the fourth quarter the revenue reduction resulted primarily from the negative market impact on home equity processing revenue, and the absence of any home retention product revenue in 2009. This month in April, we began to see healthier levels of new home retention volume. For context, we anticipate that April revenue in this business will be in excess of $10 million. A much better start to the second quarter. Although we expect volatility in this business will continue, we are encouraged by the current level of home retention activity and the quality of the near-term pipeline. As a reminder, the negative impact of the home equity business on our free cash flow and operating income is not significant. This is evidenced by the strong financial segment margins in the quarter.

The high margin contract termination fees we received in the quarter were extremely low. Termination fees decreased significantly to $1 million in the quarter, compared with $17 million in the prior year. This decrease impacted total Company internal revenue by one percentage point, and financial segment internal revenue by 3 percentage points. The low termination fees in the quarter reflect a slowdown in merger and acquisition activity among financial institutions. While it bodes well for future recurring revenue, the material decrease creates comparability challenges in terms of revenue, earnings, and margins. We expect a similar comparable decrease in termination fee revenue in the second quarter with somewhat more normalized comparisons in the second half of 2009. As a reminder, termination fees were about $18 million in last year's second quarter.

For the fourth consecutive quarter, we had a negative impact from the combination of low interest rates on our float income and a large client renewal we announced in early 2008. The negative impact to our internal revenue was 1% for the Company, and 2% in the payment segment. We anticipate the impact of this negative drag to dissipate for the remainder of the year as we anniversary the large contract renewal, and year-over-year interest rate variances tighten.

The payment segment adjusted revenue was $487 million, net of the pass-through cost for postage. Adjusted internal revenue growth in the quarter was 1%. And would have been 4% without the impact of the large client repricing, currency, and float. Soft revenue in the investment services business reflective of equity market challenges, was more than offset by solid performance in our output solutions and payment-driven business. We realized strong, double-digit transaction growth in our EFD -- EFT and debit processing business in the quarter.

The much higher growth rates came on two fronts. First, we are adding new clients to our platform, reflecting the great progress we have made in extending these capabilities to our account processing clients. In addition, we see a higher underlying transaction growth rate as the community based institutions appear to be much earlier in the debit maturity curve. Segment operating income was up 11% to $155 million in the quarter. First quarter adjusted operating margin of 31.9% was up 280 basis points over last year, and 60 basis points sequentially. We continue to gain leverage from higher margin products and services, synergy benefits from our CheckFree acquisition, and strong results in our output solutions group.

The financial institution segment generated revenue of $509 million in the quarter. Down 7% compared with the prior year. Adjusted internal revenues contracted by 8% in the quarter. Excluding the impact of home equity processing, termination fees and currency, internal revenues were down by 1% for the quarter, consistent with the fourth quarter 2008 performance and our expectations. Operating income in the financial segment was $137 million for the quarter, down $1 million from the first quarter of 2008. In spite of the decrease in revenue.

Let me highlight several contributors to the strong operating income and margin performance in the quarter. As I highlighted earlier, we continued to build our community based account processing business. Delivering more products and solutions to existing clients and generating significant operating leverage as a business. These market-leading businesses comprise about 70% of total segment revenue and had a strong quarter. Even in this difficult environment, these businesses continue to grow revenue in the mid-single digits excluding termination fees, which translates to attractive bottom line result.

Second, the areas with large revenue decreases came from lower margin businesses such as lending and check processing. Also and importantly, our higher margin license fee revenue was in line with the first quarter of last year. And finally, the negative currency impact on revenues in the segment had a negligible impact on our bottom line due the currency impact on expenses and proactive cost management efforts. These factors helped us achieve a 27% operating margin in the segment, up 180 basis points year over year in spite of the negative impact of termination fees.

As we've mentioned, we generated $189 million of free cash flow for the quarter. First quarter capital expenditures were $45 million, down from $50 million last year, and were about 5% of adjusted revenue. Our adjusted EBITDA for the quarter was $334 million. As Jeff highlighted during our year-end call, we are being even more pragmatic in allocating capital this year to ensure optimal flexibility. We repurchased approximately 780,000 shares in the quarter at an average cost of $32.42 per share.

We also repaid about $100 million of revolver debt, and after all of that, still added $80 million of cash to our balance in the quarter. We have about 500,000 shares remaining in our current share repurchase authorization. Our effective tax rate was 38.2% for the quarter, just slightly lower than the 38.5% effective tax rate we expect for the balance of the year. Net interest expense was $54 million in the quarter, and that should continue to trend down as our average debt balance declines.

Now I'd like to turn the call back over to Jeff.

Thanks, Tom. Sales results started slowly, ending the quarter at 85% of quota. However, we're having a strong April, which will get us much closer to our 100% of quota target. This appears to reflect the longer than typical sales decisioning process that began last year. We continue to see more interest in larger, complex sales opportunities as a result of the environment. Overall pipelines remain solid across most of our businesses, and we're cautiously optimistic about our full-year sales performance.

Integrated sales for the first quarter were $20 million. While performance in the quarter was slightly lower than ratable attainment against our $90 million target for the year, sales increased 43% or $6 million over the level achieved in the first quarter of 2008. Our leading areas of success in the quarter were payments and efficiency-based products.

Before I wrap up, let me quickly update you on our view of the environment and guidance for 2009 which is generally similar from where it was when we originally provided our 2009 outlook. The number of regulatory actions so far this year continues to fit comfortably within our range of expectations. 29 banks have been subject to takeover by the FDIC in 2009, which represents less than one quarter of 1% of all financial institutions in the US. Couple this with an almost nonexistent level of bank mergers so far this year, and in total we could actually see a slower decline in the number of depository institutions this year than we had in the past. In any event, we continue to expect that the current pace of actions is far less draconian than the pessimists would have us believe.

We remain about even with wins and lose since the commencement of the regulatory actions. Keep in mind, however, that even when closures occur the processing revenue doesn't leave the system, it merely follows the accounts. Traditional deNovo activity is still at a near standstill, and unfortunately we have no reason to expect that to change in the near term. We remain actively engaged with parties that are exploring alternatives to capture the opportunity that does exist in the face of the rapidly changing bank market.

Although pressured, we anticipate technology spending across the community banking space to be about flat in 2009. Slightly lower than we estimated originally. As these institutions struggle with larger assessments from their respective deposit insurance bodies. We continue to expect weak technology spending at the larger institutions. Although there has been recent movement toward industry stabilization, we don't anticipate a comeback in discretionary spending this year.

Lastly, as I mentioned, we continue to see reasonable sales activity as larger financial institutions look for innovative ways to reduce their infrastructure costs. Given our results for the quarter and view on the environment, our 2009 guidance remains unchanged. We expect adjusted EPS growth in the range of 10% to 14% or $3.61 to $3.75 per share and continue to anticipate better results in the second half of the year on an absolute and comparative basis. We expect free cash flow growth of 6% to 10%, and adjusted internal revenue growth in the range of 0% to 4%. We expect that adjusted operating margin will exceed the 50-plus basis point improvement we mentioned at the beginning of the year, but do not anticipate that the margin expansion for the full year will approximate this quarter's performance.

As I mentioned up front, we are very pleased with our results. We believe that the myriad of challenges in the environment demand caution as we proceed throughout the year. Accordingly, we are taking a view that any perceived over performance in the quarter is best viewed as derisking our 2009 outlook. Finally, I'd like to recognize the dedication of our nearly 20,000 associates around the world, who are working harder than ever with our clients in this extraordinary time. The quality and commitment of our people continue to make the difference.

With that, let's open the line for questions.

Thank you. And our first question comes from Tien-tsin Huang. Thank you, your line is open.

Hi, thanks so much. Hope you can hear me.

Sure, we got you Tien-tsin.

Thanks. Jeff, I guess I'll just start and ask the obligatory [SIS and Megavante] deal. How does this soft of I guess change your go to market strategy? Does it create an opportunity to take share in the interim? Does it elevate the need for Fiserv to do a large deal and add scale? Maybe just some over all thoughts there.

Sure. And I -- didn't know if that would be the very first question, but we certainly anticipated it near the top. We've been saying for a while that we think industry consolidation is a good thing, and that hasn't changed at all. We -- we had anticipated that that someplace in the competitive landscape people would try to begin to come together to maybe more closely emulate what we've been able to accomplish over the last couple of years. And so we certainly see that this is an attempt to do that.

We do think this is going to be a very large and complex integration. Obviously the synergies that have been announced are significant. And we don't obviously know anything more than anyone else about how that's going to come out. But we know that even for us we spent the last 18 months or so working pretty hard on this. And there's a lot of pick and shovel work, and it's difficult to find the right balance between internal and external. And we're pleased that at this stage we believe we can shift the majority of our focus to the external environment. So from that standpoint, we think that there may be opportunities for us. But it's a -- it's a good market, and I think everyone will fare relatively well.

I think the most important point, though, is regardless of who comes together in the marketplace, after that combination or any other combination, we still have the leading positions in account processing, bill payment, risk. We have great position in debit, and many, many others. So we think it will be -- it will take some time to see how it actually comes together. We think clients will have an opportunity to vote on what they think the best thing is, and we're going to look at this as opportunistically as we can.

Does it change your thinking at all in terms of M&A and your appetite to do M&A?

Not at all. I mean, we -- we believe that for us, we have the majority of the products that we need for here in the US. I think it's possible that we could end up doing an acquisition outside the US in order to bolster whatever it is we end up determining that we want to do outside the US. And we've not made that determination yet. And -- but we think we have what we need here. We may continue to do smaller acquisitions or tuck-in acquisitions. We think there's a lot of opportunity in the marketplace. And as Tom mentioned, it's one of the reasons why we -- we did things in order to increase our flexibility as those opportunities become available later on in -- in the year. And probably into next year frankly.

Okay. Great. Thanks for that, Jeff. I'll ask a business question. Great job on the cost side obviously. With the risk, the -- I think the 700 employees, is that incremental to the $60 million in savings that you were targeting for fiscal 2009, or is this part of that plan?

No, that -- that was -- it was really in those areas of the business that have really just been impacted by the -- the external market environment. Our lending businesses as you know in the home equity processing area just given the volume declines there, our investment services business, and a little in our check-processing business. So those are incremental. Outside of that targeted amount that we had there.

Yes. I would say one other point on that would be obviously the market, the market is changing. As we kind of saw what was going on in the external environment., it's been important for us to make sure that we have the means to invest in the market or invest in the innovation opportunities that exist in the market.

And we wanted to take this opportunity to -- to reengineer a little bit further our businesses so that we had a higher capacity to invest. Where I think other people are going to be much more internally focused on what they have within their own structure, we did a lot of that over the last couple of years. We saw another opportunity to notch that up a little bit. And then -- and then redirect into investments those kinds of dollars. So it's incremental, it's a change, it's a permanent change to our cost structure. And it just gives us even more flexibility.

Okay. Great. Thanks so much.

Thank you.

Your next question comes from Brian Keane.

My questions are on the segment margins, both financial and payment were a lot stronger than I anticipated. So Tom, I guess my question is to you. What should we -- or how should we think about margins in those two segments going forward?

Yes, and I think we did have a good quarter from a segment operating margin standpoint in both. And it has been something, Brian, over time as we highlight on investor day and in our discussions that we've really continued to focus on the types of revenue that we have. The businesses that we have scale in, including our account processing, and our payments businesses, along with the operational efficiency initiatives that we continue to focus on. And we're not giving guidance obviously by segment.

But as Jeff indicated, for the full year, we are going to do better than our 50-plus margin improvement. It's not going to be at the level that we experienced this quarter because we're going to continue to make additional investments in a number of areas of our products. In the mobile area, in our consumer insights, in integration around EFT, continuing the bill pay area, etc. So for right now, we had a good margin quarter, especially on a comparability basis.

Our license fees in the quarter held up nicely compared to the prior year. And our existing business. And so we're managing the business tightly. But we're going to do better than 50 plus our guidance. But clearly not at the levels that we had in the current quarter, just because of some incremental investments that we want to make over the course of the year.

Yes. Brian, I would say that one of the things that happened in the quarter that we hoped would happen but couldn't -- could not at the time we gave our outlook share it because it was too early is the license fees and the license revenue as Tom mentioned did hold up nicely. But we're seeing a lot of mix benefit. So as we've lost some of these revenues, as these lower margin revenues have left, they've been replaced by much more profitable revenue because they're going -- the revenue is being produced in places where we have scale.

So Tom mentioned the account processing where about 70% of the revenue in that segment is in the account processing business. Well, when you add when these transaction growth occurs, the incremental margins to do another transaction are obviously quite high. And so we -- we got more -- much more mix benefit in the quarter between that and the holding up of the license revenues than we anticipated at the beginning of the year.

Okay. And Tom, just a clarification. The internal revenue growth of zero to four. That's the adjusted guidance? Is there a reported organic growth we should think about? And maybe the five-point drag, is that about right that we saw this quarter?

Yes. It is the reported result. So that was the reported result as a Company, Brian, is minus four. As you know a lot of the adjustments that we made for home equity, the large client termination fees, those are going to get much better as we go through the year. So our guidance is zero to four. Reported. So the first quarter was minus four. Our adjusted result is 1%.

But as you know, a lot of those items are going to fall off as we go through 2009 as those comparables improve. Things like termination fees, as you know, the first half of 2008 was very high, around $35 million. And we don't anticipate a lot in the first half of 2009. Which is really good for the long term of the business, but obviously the year-over-year comparisons can be difficult from that standpoint.

Okay. Let me just make sure I got that. It's a reported internal revenue growth guidance of zero to four or is it the adjusted one with some of the add-backs that we saw --

It's reported, Brian.

Okay. All right. I just wanted to clarify. Then last question from me. Jeff, obviously the -- lot of talk about the Fis Medevante proposed acquisition. Does it put Fiserv at any disadvantage, or on the flip side of that, is there any new opportunity that this presents?

Well, I -- let me I guess be clear. I don't think it puts us at any disadvantage whatsoever. We don't do a lot of business, we don't do a lot of competition with Medevante and Fidelity. Although we all likely do business together, so we do have to get along to some extent.

I think the opportunity is created, Brian, if you -- if you go in and look at what they announced originally in their synergies, I mean they're taking a lot of cost out of areas -- I think as I recall, areas like payments and account processing and other -- in other areas where we are, pretty strong. So from our standpoint, because we've just gone through it and we know how hard this integration work is, and the -- what we accomplish on a cost synergy level is way less than what -- what that merger contemplates. So we think that it's possible that they -- that others in the industry will not be quite as externally focused as we will.

And so we're turning a lot of energy to the external market right now. We would have done it anyway, but we think this gives everyone something a little bit more to talk about. And we think we're able to talk about the fact that our integration is largely behind us. And that we can serve them in a more proactive way. So it's going to create conversations, and we're hopeful that that will turn to opportunity.

Okay last question from me, Jeff. Just on pricing, can you talk about how pricing looks in the core industry? And then maybe if this acquisition does take place, then does that mean potentially less pricing competition going forward?

Yes. At least the anecdotes that I've seen would not -- would not say that there's been any material deterioration in the pricing environment versus where it was, say, in the fourth quarter of last year. That's not to say that there isn't a lot of pricing activity because there is. But I would say that -- that at least the economic theorists would say that the lesser number of competitors, the more rational those remaining eight or nine competitors will be. So it -- my guess is, frankly, based on the people in the industry that it probably won't change. So I don't think that we're going to see any change to the pricing environment, but time will tell.

Okay. Congratulations on the quarter.

Thanks, Brian.

Thanks, Brian.

Our next question comes from John Kraft.

Good afternoon, gentlemen. Nice work on keeping the costs down.

Thank you.

Thanks.

Tom, I wanted to go back to something you said about the EFT transactions and the community banks being so strong. I guess really the question is, how did those trend throughout the quarter? And what did they look like in April? And I guess attached to that is, what similar transactions for bill pay might have done throughout the quarter and how did they trend?

Yes. And I I'll hit it and then turn it over to Jeff a little bit to give some color on this topic. But John, as you know, over the last years as we highlight on investor day, we've been really focused on integrating our debit processing EFT into a lot of our core products. And that integration is nearly complete.

And as part of our theme, too, integration sales initiative, we've been focused on distributing that to our 6,000 institutions that we have core account processing with. As you know, I think we started off 20%, 25% penetrated, and we continue through our integration to deliver more value to our clients and continue to sign more and more clients. We signed another 50 I believe in this quarter of new relationships. And so that has really helped. And I think when you look at community-based institutions, our debit processing is not in a very large institution. It is in the smaller and mid-tier institutions. And so we're just seeing increased consumer activity around those volumes. So it's a combination of both market share gains and volume increases.

And John, I would say that the comparables were a little bit odd as I'm sure you know for the quarter because Easter was in a different period. Easter across the quarter line. But I would say that we actually saw acceleration in each of the months of the quarter. So we had -- obviously like everyone else, I think January was a little bit slow. But we got nice pickup, and we saw that in March. And we've continued to see that. So we -- we actually had escalation in April versus March.

So I would say we feel very good about what we're doing, and the -- and the largest -- the largest, most important driver of our growth is the integration point that Tom made earlier. We've been doing a lot of -- of selling to our clients delivering the debit and EFT capability into the account processing group. And it takes time for that mass to build up because community-based institutions don't have the marketing machines that the larger institutions have. So in that business, while we have a very strong leading position, we don't have such a large position like we do in bill pay that it's -- you can start to see the benefit of the debit-EFT integrated sales starting to now move our volumes. And we would anticipate that those volumes as we've been saying for a while will now continue to push us at levels that are higher than some others.

On the bill pay side, you have a little bit of the opposite effect. Where we're doing lots of bill pay services, but because the CheckFree business that we acquired is so large, it's a little bit like I would guess Visa and MasterCard, the law of large numbers, it's hard to move that. But one of the things that we're benefiting from is revenues are coming in. And even though it's not moving the growth rate or the transaction rate because we don't have enough movement on the maturity curve that Tom referenced, we've continued to see good underlying transaction growth in that community-based institution group that we don't break that -- we don't break out separately.

So we feel pretty good about that. Bill payment volume did get stronger throughout the quarter, as well. So net-net we think we have some reasonable momentum moving into the Q2 and the remainder of the year.

Okay. Good to hear. And then can you also just remind us again what percent of your revenue is currently discretionary? Software related.

Our software licenses have typically been roughly about 5% of the total revenues, John.

And then so professional services, another five or so?

In that range.

Okay.

Yes.

And last question regarding the severance. And one-time costs. Are you expecting to have any run-off there into Q2, as well?

No. We have accrued all of the expense -- we haven't paid it all out yet.

Sure.

We h aven't pay it out, but we picked it up in the accrual right away.

Got you, okay, thanks, guys.

Thank you.

Our next question comes from David Koning.

Yes. Hi, guys, nice job.

Thanks, David.

I guess first of all on the mortgage business, I guess the loan modification business now that's -- that virtually had no revenue in Q1, but it sound like $10 million just in April alone. If that does $10 million a month through Q2, it looks like in the ballpark of flat year over year with the $50 million you did in Q2 of last year. Is that fair to say?

No, Dave. What we tried to give -- this business did about $20 million of revenue in the first quarter in total. Our home equity business. We said about $23 million. We anticipate a minimum of $10 million of revenue just in April as some of the HRM has started to ramp up in that particular month. So we don't know what that means for the remainder of the quarter, but as we indicated the pipelines are good. We continue to see more volume there, but it's not $10 million incremental in HRM. It's $10 million for the entire business.

Yes.

Does that make sense?

Yes. I think so. So it means that in the quarter, though, you'd end up with about $50 million in that total business if but about $10 million per month in the loan modification business --

Yes. I'm sorry, Dave. I'll-- it's $10 million in total HRM, plus the home equity processing so just $10 million in that line of business. So if you annualized it for the quarter it would be 30 if you continued at April's run rate. Instead of 23 now.

30-plus.

Yes. 30-plus because we said April will be at a minimum of $10 million of revenue. So we do have some good pipes there. We see the volume coming in, but it can be volatile, so we again want to be cautious in regards to what we put out there. But the key characteristic there, again, is this is good revenue. But again, it is lower margin as we said over the last several years as this business has come down. We have exceedingly been able to increase our operating margins in the segment.

Okay. And then so the two kind of headwinds or the moving parts that dissipate a little bit in Q2, one would be on that -- the mortgage business, and the other would be the repricing. Those would be kind of the two biggest ones that have the potential to go away in Q2?

That's correct. And then the -- obviously the large client reprice and the float.

Yes.

Float's going to get better, too, as we go quarter by quarter.

It's going to continue to be negative. But the delta is going to get a little bit easier.

Okay. Good. And then I guess the other thing is, is it fair to say you expect EBIT to grow sequentially throughout the year?

Yes. We continue, as Jeff indicated in his comments, Dave, that the -- we still anticipate that the second half is going to be better than the first half of the year. Both on an absolute and a comparative basis as we indicated. So we continue -- that's our guidance for the year. So we anticipate a stronger second half than we do in the first half. Especially on a comparative basis given what we have to compare it with in 2008. But we should continue to continue to grow as we go through the year.

Yes. Dave, I think the only other thing that is a little bit challenging -- well, one of the things that's challenging in the second quarter are the -- is the big delta, I'm sorry the big gap again in termination fees. So that -- that is still a pretty big hole you have to fill. We're assuming we're going to have a pretty low level of collected termination fees in the second quarter of this year, and what was it last year? 18?

About 18.

$18 million.

Okay. Great. Thank you.

Thank you.

Our your next question question comes from Darrin Peller.

Thanks, guys. Just to quickly follow up on the severance costs item. I think you -- you may have mentioned this around the $15 million one time. But how much will that generate in annualized savings maybe this year and next? And are there going to be additional items like that?

Yes. I think we said overall for the -- we think in the range of $25 million to $30 million when it's fully ramped up on annual basis. But again, as we indicated, we accrued -- we announced this action in the first quarter. We accrued the entire cost. We paid about roughly 50% of that severance in the first quarter, and -- and will pay out the rest as we go through the remainder of 2009. So the full ramp-up of that will be as we go into 2010. And as Jeff highlighted earlier, we are going to be investing a lot of that from those businesses into other things within our business as we go through the year.

All right. And then, just talk quickly, I mean comparables are expected to improve in the second half of the year. But first quarter, if you look at it, it was still I think negative 4%, reported one percentage of growth for total revenue. Based on your guidance, it would imply a fairly meaningful pickup in certain revenue streams in the second half of the year. So can you just help us understand some of the economic assumptions underlying your view of 0% to 4% total reported revenue growing for the full year?

Yes, I mean, I think overall we have a -- we started off here in the first quarter. We have some good things from a standpoint of our EFT businesses and our payments businesses that continue to ramp up. With new clients. We again believe that from a home equity standpoint, that business is extraordinarily low. At $20 million. We anticipated that business was going to ramp up in the low modification area. We continue to have very good sales in our service bureau and account processing businesses. So we see a lot of good things in the base business that we should be able to build on off of the first quarter. And again, we see sequential improvement as far as our organic revenue growth rate as we go through the year. With the second half being the big improvement from where we were in the first half of the year.

Yes. And basically, Darrin, you've got the easing of some of the -- the items that if -- on page five of the slide deck, you've got the things going the wrong way that will be adding back, as Tom said a minute ago. Something like the large client repricing. That's now out of the system. So that -- that ends up -- you end up taking that pressure away, and these businesses are businesses that keep growing. So --

Right.

The tran volume is there, it's just getting hidden a little bit by some of the negativity and -- as the negativity compresses, you just get -- you end up creating the benefit.

Okay. So with -- with negative 4% reported revenue growth this quarter and 0% to 4% full year reported, it's probably a correct assumption to assume that you're looking for roughly 6% or more revenue growth in the second half of the year to offset that?

Yes. I mean on a quarter basis, you'd have to watch -- on a quarter basis, you'd have to kind of ramp up to get to that particular range. We again, our guidance is 0% to 4% on a reported basis we had 4% minus, in line with our expectations. A lot of the things like termination fees, the home equity processing are going to get much better. We had 5% negative impacts just from those as we look at them kind of one-time-type items. Along with underlying growth in the business. But, we continue to manage the business very prudently. But we do anticipate that the growth rates are going to improve as we go through 2009.

That's great, guys. Appreciate it.

Thank you.

And our next question comes from Franco Turrinelli. Thank you, your line is open.

Good afternoon, gentlemen.

Hi, Franco.

Hi, first I apologize, Tom. We were scribbling frantically, but we're not fast enough. We need to learn shorthand. Can you go back over some of the uses of cash in the quarter in terms of debt paydown, share buyback, etc., etc.?

Yes. And I think we -- regarding what we do with our cash flow, I think as we highlighted our free cash flow was very strong in the quarter, about $189 million generated in the first quarter. About $1.21 per share. And the uses -- and we have our cash flow statement on page eight. But -- of the press release. But about $100 million we used for debt paydown. About $25 million we used for the purchases of stock, and then we put about $80 million in our cash balances. As Jeff indicated and I have is that we want to have a lot of flexibility just given the environment. And so that's basically where we allocated that capital in the first quarter.

And is that any kind of -- I guess I'm trying to figure out if that kind of relative allocation is what you think you might do in the future, or are you being particularly cautious right now with debt loads, or -- what insight can you give us on future plans?

I would just say that we are being particularly cautious as we were in the first quarter. That doesn't necessarily mean that's what we'll do going forward. We will allocate our capital as you know over the last several years, we have done that a number of different ways. We will allocate it first internal investment, we'll meet our debt commitments. But then we will allocate capital to both acquisitions to the extent they're there, and additional share repurchase. And that would be our plans for this year. Like any other year. It's just that we were much more cautious just given the environment that we had in the first quarter of the year.

But to remind us, Tom, you have no material debt repayments, and the -- the leverage of the business is quite acceptable, I think, to the management team, right?

Yes. That's correct. I mean, we have certain ratios we want to hit from our standpoint as far as giving us the flexibility going forward from a debt-to-EBITDA standpoint. And we're marching toward those target. But again, we have some available capital that will we will continue to deploy as we go through the year. Outside of debt repayment.

Hi. Jeff, I -- I have a question for you. I'm very, very interested in your comment regarding the Corillian product. And also what you were saying, though, about budgets remaining constrained by other demands on -- on companies, on banks profitability this year.

Yes.

What I'm kind of interested in is what do you think it's going to take to kind of reach the tipping point of a large-scale pick back up if -- that's not said properly, but you know what I mean, in IT budgets? Because it feels like we've been waiting for so many years for that core processing replacement cycle that never actually seems to show up. But I'm kind of wonder figure you feel that you've now got the product to cause that cycle to start once things get a little bit better?

Yes. I mean that's obviously an interesting question. I've been here for about 3.5 years now. And every year is going to be the year of the core replacements, and I bet it was ten years at least before that. My -- my take is there is going to be less reticence -- I'm sorry, there's going to be continuing reticence, less -- less reason for people to spend the money on a real core replacement at the larger level. I just think there's so much economic pressure right now. I think it's going to be a couple of years more before -- I think people are going to continue to talk about it, Franco. But I don't -- I just don't see it happening in terms of -- of people -- people going in and ripping out their core.

Now there are a couple of institutions who are looking at that right now. And so we -- we're involved in that, and others are, as well. But to have that happen on a scale basis, even if -- even if you could find the product that would make everyone want to switch, the level of effort that it would take to do multiple institutions simultaneously would I think be very challenging.

The Corillian online product is not as much a core product is as it is a fully integrated online banking -- basically a digital channel for financial institutions to be able to offer all of their wares via the -- the digital channel. That is merely an integration into the core where -- where you can to some extent remediate the rationale for having to swap out the core with Corillian on line. I think that's one of the reasons why I think we're having a lot of interesting demand on the product. We'll I think we do a fair amount of installation on that product this year, and start the season revenue and better transaction growth in 2010 and beyond.

Thank you.

Yes, Franco, I would just add to what Jeff indicated. He may want to comment on this a little bit, too. I think in the small and mid-tier, though, we continue to see good activity from a standpoint of looking at outsource solutions. And we've seen that trend kind of accelerate to go into those mid-tier institution where's they're looking to outsource more of their core processing solutions. So we continue to do well in that particular area, but we continue to see an appetite there from that standpoint, too.

And to go back to the several questions that have been asked about the internal growth rampup in the back half of the year, that -- that rampup is -- does not incorporate any improvement in the IT budgets or IT spending habits of the banks relative to what you're seeing so far, right?

No. Exactly right. It is -- that guidance or outlook is consistent with what we talked about on the phone today. So kind of flattish in the community banking sector, and a very low level of discretionary spending at the large institutions.

Great. Thank you very much.

Thank you.

Our next question comes from Glenn Greene.

Thank you, good afternoon, guys.

Hi.

All right. Just a first question -- I was wondering if you could give us a little more color on actually the bookings trends that you realized in the quarter? And if there's any way you could give us color on the backlog of conversions that may happen toward the back half of the year? To get us more comfortable with that sort of organic growth ramp other than the comparison issues that obviously have subsided in the back half.

Yes. I mean, Glenn, you -- you probably know as well as we that most of our revenue because it's recurring transactional-oriented revenue, is not contingent on giant pipelines of booking-deferred revenue, those kind of things. So for us, while we certainly have about 5% of our revenue is in license oriented and maybe little less than five in professional services related to installation and those kinds of things, we -- we just don't have the kinds of large deals that can swing our growth rates in a material way. Therefore, we don't think sharing kind of the -- the bookings or that kind of a pipeline is necessarily insightful to our future performance.

For us, what matters most is transaction volume, wins in the account processing space, those kinds of things, and obviously around the smaller ticket license revenues that we have. So because we have over 700 different products, there's a lot of different movement that has to occur.

It's just that where we sit right now, we have a degree of comfort that we will, as these comparable issues diminish, that based on the results that we've had in the last few quarters and on the occurring revenue that we've been able to basically layer into the Company that we have a -- a good degree of confidence that we will be able to deliver revenue growth for the full year within the 0% to 4% guidance.

Okay. Different direction. The bank consolidation at the large bank market with a lot of events that obviously happened in the Fall, JPMorgan, Washington Mutual, Wells, etc. Some of these positive, some of them negative for you perhaps. I was wondering if you could give us some sense for what the impacts may or may not be? And if -- what color your getting from the banks and having discussions from them in terms of either pricing or whether they're going to give you more business or perhaps take more business in house? How is that sort of working out? And I know some of it's a benefit for you. But some may perhaps be a drag.

The way -- that's a great question, Glenn. The way we -- obviously going to win some, and we're going to lose some. And whether thats at up the 29 bank level of regulatory actions this year or at the larger level, Wachovia, National City, WaMu, those kinds of things. What I would say is we've won the ones that we thought we would win, and we've lost the ones that we thought we would lose. But net-net, we believe -- we've accounted for that. And for purposes of thinking about our 2009 results, and -- and we think that the we're pretty balanced in that win-loss rate at least for now.

Okay. That's very helpful. Thank you.

Thank you.

Our next question comes from Julio Quinteros.

Hi. This is [Helio] sitting in for Julio. We just had a question on the operating margin side. You said 50 basis points plus for the whole year. But the first quarter came in 210 bips. It was an increase of 210 bips. Could you give us a sense of like what the margin progression will be throughout the year?

Yes, Helio, it's difficult to tell you exactly what the progression is. And obviously we don't give quarterly guidance so we can't do that. What we said when we gave guidance originally is that our margin target was 50-plus. And what we said today is it will definitely be plus to 50, but it won't be as high as it was this quarter. So, I think -- I from our standpoint, it also depends on what revenue we bring in, and what are the margin characteristics of those revenues. But it will be above 50. And I think we're quite comfortable saying that at this stage.

Yes, and I think to the point that we made earlier is that we did increase over -- 200 basis points this quarter. We gave guidance at 50-plus. We are going to do better than that. But there are a number of investments as we've talked about that we want to make as a Company in line with obviously hitting our commitments as far as our earnings numbers go for the year. So we want to be able to get as many of those investments as we can to drive long-term growth and that's going to be our focus.

Hi, Tom, sorry, it's Julio. I just jumped on. I've been going back and forth. One quick followup, and I apologize if I missed this on the organic growth assumption from this quarter to the kind of 0%, 4% target. If I heard correctly I think you have things that are falling off in terms of the drags. But I guess I'm wondering if you look at it -- and I don't know if this is possible or not, but if you look at it more like a same-store sales growth, are you expecting to actually grow the base of clients that you have in terms of revenue? Or is it just to the optics get better because you have some of these drags falling off into the back half of the year? Do you kind of get --

Yes. Absolutely. I think it's a combination of both. Obviously as a company we had about 5% impact on our negative 4% from a number of different items. So I think that -- we don't anticipate having as we get a large part of those as we get into the second half of the year.

But it is also the signing as we talk about. New EFT relationship, new service bureau transactions, new sales to existing clients, continued run rate improvement in our businesses. So it's a combination of both of those things. And our businesses overall, many of them have continued to perform very well. We've-- we've obviously had businesses like home equity processing, we had the large client reprice and the float and other things that have happen there. But our base business forecast as we go through the year is improvement as far as the run rate of those revenues go.

Okay. Great. Thanks, guys. Good luck.

Thanks, Julio.

Our next question comes from Chitra Sundaram. Thank you, your line is open.

Yes, actually almost of the questions have been answered. So just a quick followup on the license fees. Was there any quarter last year where the license fee as a percentage of total revenues might have been materially different from the 5% where it typically falls?

It can change it can go up and down by quarter. I mean, when you're talking 5% of revs, you can have some corse that can be higher by segment. We're not going into that as far as that level of detail. But, overall it's been roughly 5% of revenues. But that can vary by quarter. Typically, sometimes the first quarter's been stronger. We had a good fourth quarter in one of our segments in 2008. So it can vary by the nature of the type of business. But overall 5% and it's been on either side of that by quarter. But we don't really manage the business in that fashion. So again, that 5% is -- is a pretty good fashion for the full year.

Yes, I know, I know. But after all we do look at these things on a quarterly basis. So I just wanted to understand if there had been been in in the second, third, or fourth quarter where it was either materially low number or materially higher number than one would typically expect so that it doesn't come out as a surprise?

Chitra, typically, typically in our business we're going to have -- we're going to have good first-quarter license, kind of if you just thought about it on a normalized noncomparison basis, the first quarter is going to be little bit higher. The second and third quarters are going to be weaker, the third is usually going to be weaker than the second and the fourth is going to be stronger.

Okay. Actually, that's very helpful. Thank you and congratulations.

Thank you.

Our next question comes from Moshe Katri. Thank you your line is open.

Hi. It is [Avi Shye] for Moshe. Two questions. One, the 0% to 4% reported revenue, internal revenue growth is still pretty wide. If you can please provide us what factors or variables basically are factored into the low end versus the high end of that range? And the second question is I guess what's your long-term target for internal revenue growth?

Well, I think -- I federal funding our standpoint the reason why it's wide is there's a heck of a lot of variability in the market. And we want to respect that for purposes of giving our performance outlook. So, we -- I don't know if we can add anything to the -- to the points that we were making earlier, but we think -- we think it's right. That's the right range for us given where we are right now. On -- I'm sorry, what was the second question?

What's the long-term target for internal revenue growth?

Yes. I mean, the long-term target for internal revenue growth for the Company is 6% to 9%. When we did our most recent investor day, we indicated at the time that we thought that the performance in this -- in this extraordinary time would be far less. And-- and I think it was 2% to 4% or 2% to 6%. So basically taking it down a few points on both sides.

Thank you.

Thank you.

Our next question comes from Scott Kessler.

Thanks a lot. This is Scott Kessler from Standard and Poor's Equity Research. A couple of questions. Can you comment on what percentage of your revenues is currently recurring in nature.

We have always given a range of 80% to 85% as far as our recurring revenue.

Okay. And so that hasn't changed t all over the last I guess couple of quarters?

It -- I think if anything it's gotten a little higher.

Yes. A little higher with the decline in the, the overall and some of the home equity and other parts of that business.

Right. Okay. My second question is, Jeff, you referenced international and opportunities there. Can you talk at all about some of the things -- some of the businesses and offerings that you're thinking about and looking at outside the US?

Sure. Scott, the -- I mean, we have -- we actually today operate in about 60 countries around the -- around the world in areas like risk, retail account processing, some of the other -- other areas, some of the payments areas. And so we're really taking a look at based on where are the best opportunities in rest of the world. Looking at what we do well, and then -- and then taking a look at what will we have to do investment wise whether it be organic investment or acquisition-oriented investment.

And then we're actually in that process right now. And at our investor day in the Fall, we're going to talk about what we see as our strategy. So it's probably premature for me to talk much more about that, but it's basically having a more I think a more defined approach to the rest of the world.

Okay. Because I'm looking and obviously everyone on the call is probably well aware of the fact that I guess for last year, for example, I think you guys posted 5% of your revenues from international sources. Do you have that kind of a -- a longer term vision of what kind of percentage you'd be looking for from international?

Yes, it's -- I think from our standpoint, until we understand strategically what makes sense for us, it's difficult to even say over the long term what that number should be. So I think it's probably best waiting until September where we're going to cover that in more detail.

Okay. And the last and I would imagine the second question that you guys were probably expecting -- I'm going ask it, but I'm going to ask it in a gentle fashion. Which is can you comment at all on the class-action lawsuit that was filed earlier this month by Zymanski and Associates?

Yes. We've issued statements on this. I would say we think the case has no merit. We're going to vigorously defend against the assertions. This is litigation where -- related to some businesses that we acquired prior to 1996. Businesses that act as custodians with individual felt-directed IRAs. As you know, these are accounts, these self-directed IRAs. The people who own these accounts are solely responsible for selecting their financial advisors, and the underlying investments. We're not investment advisors, we don't claim to be investment advisors. And we don't counsel or advise anyone on what to buy.

Our role is to follow the account owner's advice, each account owner acknowledged in writing that we didn't provide investment advice or investment management. It's obviously a difficult -- difficult on a lot of people were injured by what Madoff did, and that's a terrible thing. And unfortunately, the class-action lawyers are going to look to -- to try to do what class-action lawyers do. All I can tell you is we are absolutely confident that these allegations have no merit, and we are going to -- to make sure that we are exonerated accordingly.

All right. That's encouraging to hear. Thanks a lot.

Thank you.

Our next question comes from Paul Bartolai.

Thanks, good afternoon, guys.

Hi, Paul.

Just a couple quick followups here. First on the margins and financial. I mean you guys ran through the -- the benefits there, but still just trying to make sure I understand, kind of given the -- the strong growth this quarter and the margins especially given the termination fees relative to the margin performance the last couple of quarters. I mean, can you maybe give us a better sense of what changed kind of and to drive that big jump in margins in financial?

Yes, I mean, I think as I encourage you to go back to our remarks on that. But what I will say is that the first thing is the revenue decline that we had on a quarter-over-quarter basis compared to last year, about $25 million of that came from our home equity business. That did not result as we've indicated, we have done a lot of expense management in that particular business over the last year. So that did not have any incremental impact, negative impact on our operating income from a standpoint of a year-over-year comparison. Nonetheless, that revenue did come down.

Now the other piece that did come down that was higher margin revenue was the contract termination fees. And what we've done is we've replaced that in our account processing businesses. I've highlighted at investor day. That's about 70% of this particular segment. That business continues to layer on incremental revenue at a very good rate. Its service bureau, account processing, transaction processing. And so that layering on top delivered some very strong incremental margins in the quarter along with some solid additional product sales declines for license fees. So that incremental piece was very helpful.

We also had some declines in revenue that offset that increase in revenue in account processing in our check business. And our international business, which again we have taken cost out of those businesses and those were lower margins to begin with. So that revenue decline did not really impact operating income either.

And on the other side, the final thing is as a Company, and what we've been saying for the last two, three years, is that we have continued to focus on building good revenue streams in our scalable businesses. We have a lot of operational efficiency initiatives that we're doing inside the Company. And some of that came through in the quarter also. And those are primarily the key components there. Really a very good product mix in the quarter. Aligns with our overall strategy, and we'll continue to be focused on that going forward.

But was it really that different from the -- the trends that you would have seen in the fourth quarter? I guess I don't understand real what he changed from 4Q to 1Q where all of a sudden you have the big margin expansion year-on-year versus 4Q where you had a pretty big drop.

Yes, the fourth quarter we typically have a different mix of business that typically hits the fourth quarter than we do in the first quarter. If you go back historically, you'll see some of that also. When you look at the -- the fourth quarter compares to the first quarter, we have a different mix of business around both license fees which are generally stronger in the fourth quarter -- first quarter, in this particular segment. We have a lot of professional services revenue that we typically close out in the fourth quarter. That also impacts this particular margin.

We also had some costs in our home equity processing business even though the revenues were flat. We actually made more money because of the cost takeouts that we have been taking out of those businesses as that revenue has declined. So that business lost a lot more money in the fourth quarter than it actual did in the first quarter. And then again, some of the currency impacts on the quarter-over-quarter basis, the revenues come down, the expenses come down the same. And that was replacing the first quarter by higher margin incremental revenues in our account processing business.

Okay, but there's really nothing that you would call kind of one time in 1Q that we won't see?

No, the only thing I continue to say is the license fees in our account processing business were very strong. I mean, they were good. They were solid with the first quarter of 2008. Now, that has high incremental margin obviously. And that's something we will watch. But typically the first quarter has been higher historically. And that kind of -- we had a good quarter in that regard in those license fees compared to some of what we did in the fourth quarter.

Okay. Great, thanks, guys.

Thank you.

Our next question comes from Matthew Roswell. Thank you, your line is open.

Yes. Good afternoon. Thank you, gentlemen. It's been a long call so I'll try and keep them really short.

Thanks.

Just wanted to -- the $255 million short-term debt, that comes due this year, correct?

That's correct. We have 250 that's due at the end of the year in December.

Okay. So it's due in December.

Yes.

And then on the -- the margins, I know it's been done to death already. Wanted to make sure -- you mentioned that you got $21 million associated with the CheckFree synergy, target is 60. You're still good on that, correct?

Absolutely. And that 21 is a combination of CheckFree and our regular operational efficiency initiatives. For the CheckFree acquisition, we said at the time of the deal we were going to do 100, we've done 77. And we're well on our way to that target.

And we got a little bit more in the quarter than we anticipated originally.

Okay. And then if I could slide one in that you're probably not going to answer -- Fiserv 2.0, you decided to set out really nice sales targets that you beat. Are you comfortable setting any kind of sales targets for sort of the outward-facing initiatives you've been talking about?

No. Not-- not at this point.

I had to try.

I understand.

Thank you. Thank you very much.

Yes. Sure. Thank you. Well, thanks, everyone. I know the call went a little bit longer. If you have any further questions, please don't hesitate to call our IR team. And have a nice day.

Thank you, that does conclude today's conference. And you may disconnect at this time.