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Executives

Jeff Yabuki - President and CEO

Tom Hirsch - CFO

Analysts

Bryan Keane - Credit Suisse

Dave Koning - Robert W. Baird

Kartik Mehta - FTN Capital Market

John Kraft - D.A Davidson

Tien-Tsin Huang - JPMorgan

Glenn Greene - Oppenheimer

Julio Quinteros - Goldman Sachs

Paul Bartley - PB Investment Research

Franco Turrinelli - William Blair

Fiserv, Inc. (FISV) Q4 2008 Earnings Call February 3, 2009 5:00 PM ET

Operator

Welcome to the Fiserv fourth quarter and year-end 2008 Earnings Call. All participants will be in a 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 website. 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 Mr. Jeff Yabuki, President and CEO of Fiserv. Sir, you may begin.

Jeff Yabuki

Thank you, good afternoon everyone and thanks for joining us for our fourth quarter and year-end 2008 earnings conference call. As always Tom Hirsch, our Chief Financial Officer will be on the call with me.

Our remarks today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We will make forward-looking statements about among other matter adjusted revenue growth, adjusted earnings per share, adjusted operating margins, EBITDA, cash flow targets, sales pipelines, our CheckFree integration efforts, the disposition of certain Fiserv businesses and our strategic initiatives 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 website at fiserv.com for a discussion of these risk factors.

You should also refer to our earnings 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.

On to 2008, let me say upfront that we are pleased with our results for the fourth quarter and the full year. We knew at the top of the year that 2008 would be one of transformation for the company given our integration with CheckFree.

As we all know, a significant blow was delivered to the financial services industry during the year, further compounding the complexity of the task. Even so Fiserv as it has so many times before, managed through the difficulties by staying focused on serving clients. This focus translated to another year of record earnings and free cash flow.

2009 is a milestone year for the company as we celebrate our 25th anniversary. As we begin our next 25 years, we find ourselves in a great position to extend our market leadership. We have reshaped the company significantly and we will continue to evolve along our chosen course.

We know it is the quality of our people and their commitment to our mission, which creates the basis for our success. We are proud of what we have done in our first 25 years, and could not be more excited about our prospects for the next.

Each quarter, I have updated you on our three key priorities that we have used to gauge our progress for 2008. Those priorities were, first to deliver earnings results consistent with our commitments regardless of environmental conditions. Second, to make significant progress integrating CheckFree and Fiserv. And, finally to enhance our level of competitive differentiation through innovation and integration leading to superior results for our clients and shareholders.

To the first priority, we grew our 2008 adjusted earnings per share by 23% to $3.29 within our range of full year guidance. You will also recall that our full year results included dilution of $0.04 to $0.05 per share related to the July sale of the majority interest in our insurance businesses, which was not an adjustment to our 2008 guidance.

Operating margins continue to expand as a result of high quality revenue and operating efficiency. Our free cash flow conversion of those earnings throughout the year was excellent and the fourth quarter was no exception. We far exceeded our forecast generating $146 million in free cash during the quarter to end the year with a record free cash flow of $611 million up 38% from 2007 and well above our targeted expectations of $540 million to $570 million at the beginning of the year.

Our next key priority was to make substantial progress on integrating CheckFree. A key element of the transformative acquisition was to achieve $100 million of cost synergies. We realized $62 million in 2008, exceeding our year one target of $40 million to $50 million. In addition, we have integrated the organization and are now going to market in a way that is helping us to win more business.

We signed more than 550 new bill payment clients during 2008 with strong sales each quarter. Over 115 of the signings were competitive replacements which mean that in addition to winning existing business, we are also expanding the size of the overall bill payment market both of which will add to our future revenue growth.

In short, we believe the CheckFree has delivered at least this much if not more value for Fiserv than we expected, when we announced the deal in August of 2007. Our third priority, and most important for the future of Fiserv is extending our level of differentiation through innovation and integration.

At Investor Day in November, we showcased several new important product lines, such as Online Advantage, Mobile Money, Source Capture and our new integrated debit solutions.

All these illustrative products are powerful in their own right. We are focused on providing full solutions switch to the market, which are unique to Fiserv. We made significant progress on that front during the year, which shows up in our primary sales metrics. After what we would all say was a challenging year, we ended our sales here very strong obtaining 104% of quota.

As important, we dramatically increased our integrated sales achieving $86 million, which almost tripled last year's level of $30 million. We realized that the dial-on differentiation turn slowly. However, our increasing success expanding the size of our client base along with the Fiserv share of wallet is a clear signal that we are on the right path.

Although we feel quite good about our performance this year, we unsatisfied with the internal revenue growth. Let me comment on this briefly, before I turn the call over to Tom.

The aggregate force of headwinds helped compress our overall internal revenue growth rate for the year, which at 1% is the only real disappointment for the year. A perfect storm of unusual items took their toll on our growth. Historically low interest rates are very weak mortgage lending market, BofA re-pricing and weaker discretionary spending all combined to reduce our top line growth rates.

Rationale aside, we know we must do better on this important driver of long-term growth. We expect our rate to improve as a cumulative benefit of growing our recurring revenue base build enough to offset negative items that we have been facing.

Excluding what we consider to be unusual items, our full year internal revenue growth rate would have been 4% including a very strong 7% growth rate within our payment segment.

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

Tom Hirsch

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 website.

As shown on slide four, adjusted revenue in the quarter was $1.01 billion up 23% over the prior year excluding the results of Fiserv Insurance. Our fourth quarter results continue to reflect the impact of the sale of our majority interest in Fiserv Insurance.

Adjusted EPS in the quarter was $0.85 up 23% over the prior year. Last years results include one month of CheckFree performance.

Adjusted operating income was $269 million for the quarter. Adjusted operating margin excluding Fiserv Insurance increased 240 basis points to 26.8% compared to the prior period.

Additionally, our adjusted operating margin increased sequentially each quarter this year from 25.8% in the first quarter to 26.8% in the fourth quarter.

Slide 5, shows the snapshot some of our key performance metrics for the full year 2008. Adjusted revenue grew 38% to $4 billion compared with 2007 revenue of $2.9 billion, which excludes Fiserv Insurance. Adjusted EPS for the year was up 23% to $3.29 per share compared with $2.67 per share in 2007.

Full year 2008 adjusted operating margin was 26.3% excluding Fiserv Insurance, up 190 basis points over 2007. The continuing expansion and operating margin comes from several factors including business and revenue mix, the addition of CheckFree, operational efficiency and business model leverage.

Our strong margin results are indicative of our ability to manage the business effectively in a variety of environments. Additionally, margins will continue to increase a proportion to our success in distributing higher growth payments products such as EFT and bill payment across our account processing platforms included in our financial segment.

This integration creates more value for our clients and increases operating leverage within our businesses. Keep in mind that we normally expect to experience quarterly variation in our segment operating results due to the timing of certain non-recurring revenue, such as home retention, termination fees and license fees.

As Jeff mentioned earlier, our full year free cash flow grew 38% to a record $611 million. On a per share basis, our 2008 free cash flow per share was $3.75, 14% higher than our adjusted earnings per share of $3.29, and our 2008 free cash flow per share increased 43% from $2.62 per share in 2007.

We continue to generate strong cash flow through a combination of management focus, the recurring cash flow characteristics of our businesses and a relentless focus on capital management. Adjusted internal revenue growth, excluding Fiserv Insurance, declined by 2% in the quarter and grew by 1% for the full year.

As illustrated on slide 7, there are some large unusual items which continued to negatively impact our internal revenue growth, including the home equity processing business, the Bank of America contract re-pricing, declines in float income, and in this quarter some currency impact.

Home equity processing revenues not only did not stabilize in the quarter, but declined further to just $23 million compared with $51 million in the fourth quarter of 2007. This $28 million decline caused a three percentage point decline in the internal revenue growth rate for the company in the quarter and a five percentage point decline in the financial segment.

For the year, our home equity business declined by $70 million in revenue due to external market conditions, which negatively impacted our overall company growth rate by approximately 2%.

The sequential revenue decline in the quarter was due largely to a slowdown in our home retention products, and more specifically in December. Revenue from this product have been providing some stability most of the year to this division.

We anticipate that the home retention product will pick up again, in 2009. However, that timing is dependent on the speed with which the new administration can implement its new economic stimulus package and provide direction to financial institutions on how to deal with these loans.

Our internal revenue growth rate adjusted for these items would have been 3% in the quarter and 4% for the year, consistent with our third quarter results. The payments in industry product segment exceeded the $0.5 billion revenue mark for the first time this quarter, generating adjusted revenues of $501 million, net of the pass through costs for postage. This was a substantial increase over the prior year due primarily to the acquisition of CheckFree.

Adjusted internal revenue growth in the quarter was 3% consistent with the third quarter level. When excluding the approximate $50 million negative impact of the BofA re-pricing and float decline resulting from lower interest rates, revenue growth would have been 7% for the full year, and also 7% for the quarter. Strong performance in our output solutions business and solid transaction growth in our payment processing businesses headlined the growth.

Segment operating income was up a very strong $66 million over last year's fourth quarter to $157 million. Fourth quarter adjusted operating margin of 31.3% was up 90 basis points over last year and 30 basis points over the sequential quarter as we continue to see the synergy benefits from our CheckFree acquisition. Segment operating for the year was $579 million and adjusted operating margin improved 220 basis points to 30%.

The Financial Institution segment generated revenues of $511 million in the quarter, which was a decline of 2% compared with the prior year. Adjusted internal revenue contracted by 6% in the quarter. Excluding the home equity impact, internal revenues declined by 1% for the quarter, and were up 1% for the year.

Weakness in our mortgage related products and lower discretionary license and related professional services fees contributed to the weak results. Operating income in the financial segment was a $126 million for the quarter and $535 million for the full year. Adjusted operating margin was 24.7% for the quarter and 24.9% for the full year.

Segment operating margin was down 60 basis points for the year, due primarily to lower licensee and one-time revenue along with the significant revenue decline in our lending related businesses. While we continue to make progress variablizing our expense base in response to lending market volatility, we were unable to completely offset the revenue decline in the quarter.

As we have mentioned, we generated $611 million of free cash flow or $3.75 per share for the year. Our above forecast free cash flow was aided by exceptionally strong November and December results.

Full year capital expenditures were $199 million, up $43 million from 2007, which did not include CheckFree. As expected, capital spending was slightly higher in the fourth quarter, but for the year was consistent with historic levels at about 5% of adjusted revenue.

We struck a healthy balance in deploying capital across our various priorities in the unusual environment we saw in the fourth quarter. We actively repurchased 5.6 million shares for $187 million, and also paid back $150 million of debt.

I have a schedule; for the full year, we repurchased 10.6 million shares, and reduced our year-end share count by 6% from the end of 2007. We had about 1 million shares remaining in our current repurchase authorization at the end of the year.

We repaid more than $1.3 billion in debt during the year, and closed 2008 with approximately $4.1 billion in debt outstanding. As of December 31, we had about $800 million of availability on our credit facility.

Our EBITDA for the year was $1.3 billion, and our debt-to-EBITDA ratio at the end of 2008 was 3.2 times. Our effective tax rate, excluding taxes associated with sale of Fiserv Insurance would have been 36.6% in the quarter. The fourth quarter rate was impacted positively as anticipated by the research and development tax credit. Going forward, we expect our effective tax rate will be approximately 38.5%.

Now I would like to turn the call back over to Jeff.

Jeff Yabuki

Thanks Tom. As I mentioned upfront, we had good sales result in the fourth quarter and December in particular. For the full year, our sales quarter was a 104% led by strong sales in our account processing and payment areas. Additionally, our pipelines were stable at yearend, which should provide us with the solid start to 2009.

Integrated sales, as I mentioned closed strong at $86 million versus our target of $65 million for the year. We estimate that about third of the $86 million converted to revenue during 2008. As you know, these revenues tend to be recurring in nature and moving forward, add to our organic revenue base. We continue to gain confidence in our ability to expand wallet share with higher value products and services.

Before I get to the 2009 outlook, let me spend a few minutes to updating you on our view of the environment, as well as our key priorities for 2009. Many of our conversations center on how the market environment impacts the company. Clearly, there are issues across all tiers of the financial institution landscape.

We expect the market challenges to continue throughout 2009, as the economy remains relatively weak and the current administration brings more clarity to its plans to address the issues in the financial sector. As we have shared previously, we separate the overall market into two broad segments, based on asset size, for assessing the potential impact of the environment on our results.

The top 50 to 100 institutions as one group and the remaining 17,000 institutions, which we consider community based for purposes of today’s discussion.

As a reminder, our revenue is very well diversified across the industry landscape providing some installation against any concentration risk. Our top client represents about 5% of revenue. The next 49 financial institutions represent about 17% of our revenue and the remainder, almost 80% of revenue is spread across the balance of our very large client base.

For the most part, the smaller institutions tend to be healthier than the mid-tier or the mega banks. That said, we do expect continuing regulatory driven bank and credit union actions resulting in mergers or closures of some intuitions.

There were 39 actions taken against banks and credit unions in 2008 and so far in 2009, six more banks have been subject to action. While we can not be sure how this will play out, we believe that the ultimate number of actions will be well below the doomsday scenarios of thousands of closures we have seen spoken about. Instead, based on what we can see today, we expect the number of actions will ultimately settle out in the low hundreds or less, over a period of the next several years.

It is important to keep in mind that even when closures occur, the processing revenues do not leave the system, they follow the accounts. As we said before, when it is all said and done, we expect to be about where we are today, even in terms of net clients won and lost.

Traditional de novo activity has slowed considerably and we expect it to stay that way for all of 2009. However, we are actively engaged with a variety of parties that are exploring new ways to capture opportunity in a rapidly evolving banking market.

Although pressured, we anticipate the technology spending will likely increase in 2009 across the community banking space. We continue to see demand for products focused on gathering core deposits, managing efficiency and risk and regulatory, all which translate to revenue opportunities for us.

In addition, we expect to see less account processing system switching, which should also benefit us as the market leader.

The largest FIs are likely to remain under pressure, while the business and political issues facing the segment are getting resolved. We believe this group will exhibit more targeted spending primarily focused on deposit growth and efficiency. While the majority of our revenue from this group is recurring and typically integral to the value proposition of the institution we serve. We are walking carefully to understand the trend.

We are also seeing an uptick of activity in the $3 billion to $30 billion FI market. Although this is historically been a relatively small part of our revenue base. We are receiving new increase in to what we as the new Fiserv can do to help these institutions reduce their operating expenses and generate new deposits and capital.

Our recent creative example is our acquisition of the i_Tech data processing center from the First Interstate Bank of Montana. This transaction provided the bank with access to Fiserv void solutions to serve both the bank and the data center clients. While monetizing a processing asset for them, which provided capital flexibility to further expand their core banking business.

The mutual trust from more than 30 year relationship with First Interstate Bank along with our capital resources allowed us to construct a mutually beneficial transaction.

For Fiserv, we were able to obtain over 150 new account processing clients, which will provide opportunities for us to deliver add-on value. We believe the dynamic environment could lead to more innovative opportunities to grow the company.

Two other recent deals with regional banks illustrate the organic opportunity we are seeing in this market. In January, we announced that Commerce Bank of Harrisburg selected Fiserv as its technology provider with 14 integrated technology solutions. Commerce was looking for a partner that could provide a complete solution and they found that partner in Fiserv.

In December, we made a competitive replacement with CheckFree RXP bill pay solution at Associated Bank and existing Fiserv account processing client. They saw there is an opportunity to provide e-Bills and upgrade their users to the best-in-class bill payment solution.

This is an opportunity that's integrated with their other Fiserv solutions including the Corillian online banking platform, while overall technology spending could be flat to down for 2009 across the entire bank and financial institution landscape, when compared with last year. We still believe there will be attractive opportunities for us to deliver value to the market.

There is no question that this market turbulence is pressured our results and we expect that to continue. However, we also believe that our sizeable client base and our position as a leading provider of non-discretionary recurring revenue base products gives us a solid foundation, which will continue to show strength even in these difficult times.

We expect that the market will see more tangible evidence of our progress in 2009 from the transformative work we have done over the last several years. Our three key priorities for 2009, when taken together, enhance our overall differentiation and build long-term shareholder value.

Our first is to meet our earnings commitments regardless of environmental conditions with an emphasis on maintaining capital flexibility. Next, continue CheckFree integration activities with increased focus on revenue opportunities and product innovation. Then, finally, to refine our go-to-market approach leading to enhance sales results and an increased share of wallet with existing clients.

Our 2009 outlook is based on a broad assumption that the general weakness in the end-market will continue for the entire year. However, our guidance does not anticipate that the market will worsen materially from where we are today.

You will recall at our Investor Day in November that we provided insights into Fiserv’s performance outlook based on the market conditions at that point. It is our view that the environment has worsened since that time.

In addition to the negative macro trends, there are several key variables and assumptions that we have accounted for and building up to our performance range for 2009. We are assuming a significant decrease in contract termination fees in 2009 compared with the $46 million we received in 2008.

The substantial majority of those termination fees we received in the first half of 2008, which will negatively impact first half compares. We do not expect the material turnaround in our lending businesses in 2009 and anticipate our home equity revenues to be flatfish for the full year with very challenging first half comparisons. We are continuing to make investments during 2009, which we believe will extend our market leadership and improve into internal efficiency.

We assume that interest rates, and therefore float revenue, will remain at historically low levels, and last, we expect the dollar to continue to be strong versus foreign currencies. All of that considered for 2009, we are targeting adjusted earnings per share to increase 10% to 14%, to $3.61 to $3.75 over $3.29 we earned per share in 2008.

As is typical, this guidance excludes certain costs such as merger and integration, extraordinary gains and losses and intangible amortization. We anticipate that results comparisons for the first six months of the year could be challenging due to reduced revenues from float, termination fees, the BofA re-pricing and home equity volatility.

For these reasons, we expect comparative performance as opposed to absolute performance and this in the second half of the year to me much stronger than the first half. We anticipate 2009 free cash flow to be up 6% to 10% over the record level we generated in 2008. The free cash flow for 2009 will not include the first six months of net income and free cash flow contribution from Fiserv Insurance, the result of which were now reported below the line.

We expect internal revenue growth to be within a range of zero to 4%, which includes the grow-over items I mentioned a moment ago. As we have demonstrated, there is attractive operating leverage within our business model that is allowing us through expense management operational efficiencies and capital allocation to deliver double-digit earnings growth and attractive cash flow, even in a time when organic revenues growing slower than we would prefer.

We expect overall adjusted operating margin to expand by at least 50 basis points for the full year with the strong biased to the second half, given the anticipated reduction in termination fees. Our integrated sales target for the year is an incremental $90 million, which reflects some softness in the market and a very strong performance in 2008.

On the cost side, we expect to realize at least $60 million of incremental savings. This number beginning in 2009 now combines both CheckFree cost synergies and our operational efficiency program saves.

Finally, our 2009 guidance accounts for a variety of scenarios for the allocation of capital, including internal investment, debt repayments, smaller acquisitions and share repurchase. Although we will make the actual capital determinations throughout the year as market conditions evolve, our 2009 guidance includes the benefit of capital deployment for the full year.

Last year we accomplished what we set out to achieve. We delivered 23% EPS growth, 38% free cash flow growth, integrated CheckFree, improved the company's business mix and enhanced our level of market differentiation. We are confident that we will again achieve our key objectives in 2009.

However, we know a lot hard work awaits us over the next 12 months. The market is clearly different that it was a year ago when we were setting expectations for 2008, or managing our business pragmatically given the environment. We continue to invest, and in some cases significantly, in areas where we can build long-term client and shareholder value. We are realigning our market approach in order to make further progress meeting our Fiserv 2.0 objectives.

I assure you that we are taking a number of steps to stay ahead of the curve and deliver the results that you have come to expect from us with the watchful eye on the long term. The strength, diversity, and resilience of our model provides a solid foundation for us to continue to grow. We will emerge from this unique time stronger for the experiences and far better position for the future.

Finally, let me thank our thousands of associates around the world who are responsible for the strong results we delivered in 2008 and for their commitment to serving our more than 16,000 clients in this unique and exciting time.

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

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Bryan Keane with Credit Suisse. Your line is open.

Bryan Keane - Credit Suisse

Hi, good afternoon.

Jeff Yabuki

Hi, Bryan.

Tom Hirsch

Hey, Bryan.

Bryan Keane - Credit Suisse

Just curious to get an update on the non-merger actions that we have seen out there and how that, that your latest conversations are going and how that might affect Fiserv?

Jeff Yabuki

AND Bryan, which mergers are you talking about?

Bryan Keane - Credit Suisse

Wachovia, WaMu some of the bigger ones that are better known and the impact to Fiserv with your conversations over the last quarter?

Jeff Yabuki

Sure. Our conversations over the last quarter are fairly similar to what they were last May when we announced in the third quarter. We continue to talk to both JPMC and Wells Fargo about the opportunities that we can see to continue to serve them and we do continue to do that.

We anticipate that the revenue impacts that we might have from both of those mergers, specifically have been accounted for in our guidance and all of the other known or anticipated mergers, specifically from some of the regulatory actions that I spoke of earlier have been accounted for in our guidance. So we think we are square for where we are in 2009. Hopefully, we will find ways to continue to add more of our services into both of those institutions.

Bryan Keane - Credit Suisse

Okay, great. Jeff you were talking about the payments business and I think you said the fourth quarter would have been 7% internal excluding some one-time items?

Jeff Yabuki

Yes.

Bryan Keane - Credit Suisse

Can you just walk me through those items and maybe when they anniversary, for example the BofA pricing, when is that anniversary exactly?

Jeff Yabuki

Sure.

Tom Hirsch

Let me now start with that, this is Tom, this is Tom and then I will turn it back over to Jeff. The two items are the BofA re-pricing which anniversaries in the first quarter and then the flow, which have been the two items that have been there virtually all year, and the impact on the payment segment has been roughly about three percentage points.

So, we had an adjusted rate of 7% in the fourth quarter, which was actually up over the third quarter of 6%. So those two items are roughly about three to four percentage points' impact, and the BofA should go away in the second quarter of 2009 and the float will decline significantly as we go through the years interest rates have.

Jeff Yabuki

Right. Bryan, on the float side, if you went back and tracked the rate declines that occurred in '08, you will be able to see how that would actually move itself out of the system. Unfortunately, the rates are so low now; we do not think we will actually have to pay anyone. They should not be that thumb in cheek. We are down at a pretty low point at this stage.

Bryan Keane - Credit Suisse

Okay. In the home equity processing, you were flat sequentially, is that right?

Jeff Yabuki

No, it was down sequentially

Bryan Keane - Credit Suisse

No, for the first quarter.

Tom Hirsch

No, we do not. Right now, Brian, as far as our guidance for 2009 for that particular business, we do not see a lot of acceleration in that business. The only thing is, historically, that business has been slow in the fourth quarter. We obviously do not have a lot of role modification revenue in that quarter. That is going to impact us as we go through 2009. What quarter that is going to hit is uncertain at this point in time. I think we have a very low level, you know was down $20 million from the third quarter. So that is a very low baseline as we head into 2009.

Bryan Keane - Credit Suisse

Okay. AND then just finally a clarification. The 0% to 4% organic growth, I assume with those headwinds, some starting after the first quarter we are probably looking at the lower-end for the first quarter and then it picks up from there.

Jeff Yabuki

Yes, I would say my guess is without going back and actually doing the math you are talking about a more of a pick-up in the second half of the year then you are in the first, I think the interest rates were moving down for is significantly in the first part of the year and as that moved its way through the system. I think the most of the pickup is going to occur in the second half.

Tom Hirsch

Yes, I would just add to that Bryan, as Jeff indicated that that we also have a, the contract termination fees are pretty high in the first half too and that will be a very difficult comparison for us. The base business outside the home equity, which again and the float which are really highly dependent on external events that we do not control.

You know we continue in the home equity business to manage our cost structure appropriately. As you saw the revenues went down in the fourth quarter about $20 million, but our margins in that segment actually went up. So we again, do what we need to do to manage that business effectively.

Bryan Keane - Credit Suisse

Okay. Well, given the headwinds congratulations on the results.

Jeff Yabuki

Thanks Bryan. I appreciate it.

Operator

Our next question comes from Dave Koning from Robert W. Baird. Your line is open.

Dave Koning - Robert W. Baird

Yes. Hi.

Jeff Yabuki

Hi, Dave.

Dave Koning - Robert W. Baird

This is a little bit of a follow-up on Bryan’s question, but you know within the zero to 4% guidance you talked about some of the headwinds that do continue into '09 float currency BofA early in '09 is still a headwind and then potentially some de-convergences or transitions of WaMu and Wachovia. If we package all those together, are you looking at those as maybe a 2% headwind or something like that in '09?

Jeff Yabuki

Yes. I mean, obviously, we would not be able to give comment specifically on those items. I do think Tom gave some sense for what the flow in the BofA impact was on as this year. So there is a little bit there and we have not talked at all about the WaMu or the Wachovia impacts. So, it is hard to, I am trying to think about how to parameterize that. Tom you might have –

Tom Hirsch

Yes, I would think Dave, I think, as you know in the current year rate; we had a 1% organic growth rate as a company. In 2008 about $70 million negative from the home equity business which was about a 2% negative impact on that rate. Float in BofA was about 1%.

So the pro forma rate for the company was about 4. Those items had about 3% impact in total on the growth rate, and we anticipate it is going to be less than that obviously from a standpoint of the home equity piece and also the float from that standpoint.

Jeff Yabuki

The termination fees are going down very significantly next year at least from a planning standpoint.

David Koning - Robert W. Baird

Okay, great. Just on the free cash flow. That was obviously very good in the year. Is the 6% to 10% growth after that 611?

Tom Hirsch

Yes.

David Koning - Robert W. Baird

So if we use the end of your, or the Q4 share count, the free cash flow per share in '09, just using that would 410 to 425 per share?

Tom Hirsch

Yes.

David Koning - Robert W. Baird

Okay. Well, that is good. Finally, just on the ISS sale, any update on the timing and amount?

Tom Hirsch

Unfortunately the FDIC continues to be, I do not want to say preoccupied but pretty stretched on the things that they are working on. We actually made some good progress in the fourth quarter and really in the month of January. I do not believe it will close in the first quarter but I do feel quite good that we will see a close early in the second quarter.

David Koning - Robert W. Baird

Still $50 million to $100 million?

Tom Hirsch

Yes, that is around a book value deal, so the equity in the business is about $100 million.

David Koning - Robert W. Baird

Great. Thank you.

Jeff Yabuki

Thank you.

Operator

Our next question comes from Kartik Mehta from FTN Equity Capital Markets. Your line is open.

Kartik Mehta - FTN Capital Market

Thank you. Jeff, I want to go back to your internal growth expectations for 2009; you said zero to 4%, you said the market is still tough and you expect it to be tough in 2009. So, is reaching the high end of that goal just execution on Fiserv’s part or is it your belief that maybe the market gets better in the second half and that is how you get to it?

Jeff Yabuki

I think to get to the high end, you have to see some improvement in the lending businesses in terms of, you have to see the home retention pipeline fill up and have the government stay focused on allowing the institutions to modify the loans, creating the right incentives to have that happen.

So that is a little bit of an environmental factor. You would have to see the financial institutions not just buying at the pace they are buying at, but also getting the products implemented, getting the revenues implemented. One of the things you heard me talk about is of our $86 million of internal sales we had during the year; only about a third of those got installed, so we have to see those installed. BUT those are the kinds of things that we would have to see happen on that level. In order to get up to the higher end of that range.

Kartik Mehta - FTN Capital Market

Right. You said the free cash flow use in 2009, obviously debt share repurchase or even potential acquisitions. As we stand today and where you see where the share price is and where you are from a debt standpoint, what makes more sense? Does it make more sense to reduce your share count in your opinion or does it make more sense to reduce debt?

Tom Hirsch

Well, that question depends to some extent, what hat you are wearing at what time. Our primary obligation is to meet our debt commitments, to meet the commitments we made to the rating agencies, which were in great shape on that point so far.

We firmly believe that we are very attractively valued right now. So, we will obviously we will look at that as one of the serious choices for allocation, as well as we think maintaining capital flexibility right now given what is everything is going on the market is pretty important in terms of opportunities to consolidate, growth through acquisition.

To some extent, Tom mentioned, we have got almost $800 million available on our facility. We will generate a lot of free cash this year that will put us in a pretty attractive place, if transactions open up in the market that we think are interesting, to the extent that we have deployed all that, we would not want to be in a place, where we had change our mind. So, we are being, I would say we are being thoughtful and pragmatic and how we allocate that capital, but suffices to say we will get it allocated during the year.

Kartik Mehta - FTN Capital Markets

If you look at 2009 it will be fair to say that on the downside your fear is more what happen the economy rather than consolidation in the industry considering your statement about how many regulatory actions we could see?

Tom Hirsch

This is Tom Kartik. That is probably the case I think the uncertainty in the overall economic environment, is something at least from my standpoint versus the other side of thousands of institutions, where people have said, certain individuals have said around that because right now our credit unions and are very healthy and a lot of the institutions that we service are doing well until from that standpoint. I think it is going to be ultimately more on the economic side, but I will turn it over to Jeff for any other comments.

Jeff Yabuki

Yes, Kartik the real issue I think is as we mentioned, and as Tom said, it is really not the fear of consolidation in the end-market. I mean, certainly across the community-based institutions space that is not my concern. My concern is far more around the economy locking up more that which closes on buying behavior as across that space and all the other space.

I think that is the thing that we are trying to pay attention to. Fortunately what we are seeing across our client base is a continued desire to acquire products that will help them in areas like gathering core deposits, being more efficient and of course all the regulatory and risk and I do not think we can underplay what is going to happen on the regulatory side.

We still have not seen the changes be implemented that most people expect will come out of this crisis that we are getting navigated to. So, from that standpoint I do think that whether that comes late in ‘09 or 10, I think there is going to be a time where you are going to see people make a series of purchases that answer the regulatory requirement. So, we will ultimately be installed.

Kartik Mehta - FTN Capital Markets

Thanks, Jeff. I appreciate it. Thanks, Tom.

Jeff Yabuki

Yes, thanks Kartik.

Tom Hirsch

Yes, thanks Kartik.

Operator

Your next question comes from John Kraft with D.A Davidson. Your line is open.

John Kraft - D.A Davidson

Hi, Jeff. Hi Tom.

Jeff Yabuki

Hey John.

Tom Hirsch

Hey John.

John Kraft - D.A Davidson

Just wanted to follow-up and then Tom. Just to clarify. It sounds like the home equity processing businesses is what you have been really referring to, the $159 million or so at last count.

Jeff Yabuki

Correct.

John Kraft - D.A Davidson

What about the traditional, that the servicing that business. What is the status? Where would that have been trending up?

Tom Hirsch

That actually has been going very well. We have developed and invested over the last several years in a common loan servicing platform and we have actually had a lot of attraction from clients as far as bringing more efficiencies to their internal environments. That business continues to be sound. Obviously in the loan origination, license area, those areas continue to be flat to down and that is already, where we are at already. So, I would say John from my standpoint this business here is the one that we have had just a lot of volatility and is really tied to the external market ramifications.

Jeff Yabuki

Unfortunately John those the businesses that Tom referred to, the scale is so much smaller that they are just worked by the issues that are being faced in the home equity processing business right now.

John Kraft - D.A Davidson

Sure, what is the total revenue though from all your lending related products?

Tom Hirsch

I have to go check that, but I would say it is probably couple of hundred maybe a $150 million more or $200 million in addition to the home equity piece.

John Kraft - D.A Davidson

Double-digits, okay that is helpful. Then moving onto bill pay it looks like the transaction volume is slowing somewhat. I was wondering if you could do breakout the trends that you are seeing between the bank based users and then the walk-up bill pay users?

Jeff Yabuki

Right, just generically the walk-in bill pay users that growth is far slower than we see through the consolidation the bank sides. I think there are a couple of odd anomalies going on in the fourth quarter. If you go back and look over the six months to six months the growth rates look a lot higher. I just had some odd feeling.

Fortunately bill payment, the number of Mondays and Tuesdays, all of those comparable days make it difficult and in fact we had some of that in the fourth quarter. So, we are still feeling quite good about the level of growth, we are seeing.

We are seeing well onto the double-digits for the six month period and we are projecting good solid growth for this year and all of our payment businesses and especially that one.

Now again, just because we caveated everything else, I mean we are in a very odd environment, people will still pay bills. We continue to believe that you could make a strong argument John that people will pay lower amounts more times and that would benefit us.

For right now, we are cautiously optimistic about how that is looking and we are also quite feeling very good not just gone, the 550 bill pay sales that we had this year, most of those are not implemented at this stage. A lot of those are new installation and it takes time to ramp that up. So, again we are building this base of transactions that is where CheckFree was in their growth six or seven or eight years ago, right.

So, we have not seen the waterfall of growth that we will ultimately get as we further penetrate the Fiserv base.

Tom Hirsch

Just to add to that what Jeff just said. It has been one of our key success stories in 2008 as far as integration of CheckFree is, is really integrating the sales force, the account management to sell, our core account processing clients as Jeff mentioned. There were 500 clients and I think he mentioned in our comments that 120 of those were competitive replacements. So, again we are making good progress there and we are going to continue to grow that base.

John Kraft - D.A Davidson

Okay. Just one last, just on that topic. How many of you core platforms now are fully integrated with the CheckFree and Corillian platforms?

Jeff Yabuki

It is a tiny number. I mean, if you are specifically, John, asking about the CheckFree plus Corillian plus Fiserv account processing or you are talking about just CheckFree or any bill pay with any one of the Fiserv account processing platform.

John Kraft - D.A Davidson

Well, actually both would be helpful. I am assuming that the integration between CheckFree and your cores is mostly done.

Jeff Yabuki

Well, I should clarify, because I may not have heard it write. If you are talking about just the integration work itself that is almost all done. If you are talking about how many clients, I thought you are asking more around client take-up.

John Kraft - D.A Davidson

No. About the actual the technology the product.

Jeff Yabuki

The technology integration CheckFree into all our platforms is virtually complete.

John Kraft - D.A Davidson

Okay. And, then Corillian is that?

Jeff Yabuki

Corillian is only complete in those platforms, where right now, where we see a high opportunity to sell. We are staging that to make sure that we are not doing integration for integration sake.

So, we have got Corillian and we have delivered that several times Corillian with bill payment right into our core, in fact that was the associated deal that we talked about in December. They had Corillian and they added the CheckFree bill pay to that and that is one of the CBS core processing platforms.

John Kraft - D.A Davidson

Got you. Sounds good. Thanks.

Jeff Yabuki

Thank you.

Operator

The next question comes from Tien-Tsin Huang from JPMorgan. Your line is open.

Tien-Tsin Huang - JPMorgan

Thanks so much. Good afternoon.

Jeff Yabuki

Hi, Tien-Tsin.

Tien-Tsin Huang - JPMorgan

I have three questions, home equity, just wanted to clarify. I think you mentioned that you expect revenues to be flat in ’09. Is that flat to the 2008 revenues or flat to the 4Q run rate?

Tom Hirsch

So, flattish overall to the total in 2008 and there were some variability there obviously.

Tien-Tsin Huang - JPMorgan

Right because there is a pretty big step down in 4Q and I may not appreciate the seasonality.

Tom Hirsch

There is historically, last year there was probably a $10 million step down. This stepped down about 20 mainly because this low modification of that home retention business dried up completely. So that piece of business we believe is going to come back, you can read about it, it is going to happen. It is just a timing of that going into 2009 is just more uncertain.

Tien-Tsin Huang - JPMorgan

Understood. Then software license sales, sorry if I missed it in the prepared remarks. Where do that come in relative to plan in the quarter, and what your expectations for this going on?

Tom Hirsch

It really depends on where those are at. I think as far as, as we talk about, and they are not strong, I would not put in the back case at all. As far as new licenses go especially in the loan origination, our international area has been a lot weaker from that standpoint.

I think some of the add-on licenses we do have as far as our baseline goes, but I would say purchases of new licenses are low and that is what we experienced in the fourth quarter.

Jeff Yabuki

Yes. I would say for 2009, we are assuming that license sales and the related services implementations basically are as weak as they were in 2008.

Tien-Tsin Huang - JPMorgan

Got it. Last one from me then is, just the transaction based businesses like debit and EFT, you talked about bill pay a little bit. How did those transaction-based businesses track within the quarter? I am just curious about how December was in terms of run rate and again what your expectations for ’09? Thanks so much.

Jeff Yabuki

Sure. Thank you. Our transaction-based businesses were all actually strong in the quarter. We were pretty happy with how the transactions look in the EFT and debit business and the bill payment business. Again there was a little bit of variation in the quarter mostly on a days basis but net-net felt good and we feel pretty optimistic again about that business moving forward.

Tien-Tsin Huang - JPMorgan

Great. Thanks. Glad to see double-digit earnings growth for the year.

Jeff Yabuki

Thank you.

Operator

Our next question comes from Glenn Greene from Oppenheimer. Your line is open.

Glenn Greene - Oppenheimer

Thank you. Good afternoon.

Jeff Yabuki

Good afternoon, Glenn.

Tom Hirsch

Good afternoon, Glenn.

Glenn Greene - Oppenheimer

First question, just wanted to touch on the pricing environment and contrast between both the core processing and the bill pay, specifically on the bill pay at the high end of the market. With all the consolidation going on, lot of these banks have obviously gotten bigger, does that naturally put them into a more attractive pricing tier from their perspective, I mean tier volume pricing?

Then just commentary on the core processing market, are you seeing any push back from customers or is it gotten more competitive or is there anything really changed there?

Jeff Yabuki

Sure. Great question, Glenn. In the bill payment business and again I will focus, I would say in the middle and down in the community base space that we talked about earlier, I would say the bill payment market really has not changed much over the last year. Some of the competitors are being a little bit more aggressive as they are because we are actually having a lot of success in that market.

The big benefit that we have is frankly CheckFree's bill payment product is so far ahead of most of the competitive options that there is just not a lot of incentive for institutions to switch. I will say at the upper end of the market where we are seeing some pricing discussion is where there are consolidations happening.

So if a bank ends up acquiring another, if a large regional bank acquires another large regional bank and that target large regional bank was not our client, the math ends up rolling into the tier system. So there is some price reduction and there is always going to be conversations around that.

The good news for us is in those cases, we pick up a lot of, at least we would hope we would pick up a lot of incremental volume that is why you would have the tier change. So net-net even where you have all those reductions, we end up having a more revenue and more cash flow and more earning. So we are willing to give on that.

On the organic market, it would not surprise you to know that everyone is asking what can we do and we see opportunities to extend agreements maybe get longer terms and other things both on the bill pay side and on the account processing side.

I would say just more specifically in the account processing environment. As I mentioned, we expect frankly many less system switches this year than we did last year. The cost of doing the switch at the institutional level and again on focus on a community based space because that is really what we play on the account processing side up for the most part.

So, we have been seen pricing people doing pricing as they have been for the last several years, some aggressive pricing out there, people are looking for ways to entice people to switch.

Frankly, we are very focused on value, delivering the multiple solution, the integrated solutions, some of the integration that we have done between our account processing, our internet banking, our bill payment solutions, those kinds of things, the opportunities to integrate on the data and the analytics that surround that. It is a pretty strong argument and price only goes so far and we are seeing value dropping in almost every case.

Glenn Greene - Oppenheimer

Okay. Just in a different direction. The cost savings are articulated, I think it was around $60 million combined between the second year of CheckFree and Fiserv 2.0. Could you give us a sense for what the CheckFree piece of that is, it is just reasonable to assume an incremental 40 to get you to the 100?

Jeff Yabuki

Glenn, I would say, obviously our target was a 100. What we would anticipate it being somewhere in the 30 to 40 range on that item. Obviously, we are going to target to get to that number, but I would say it is in that range. Tom?

Tom Hirsch

Yes, and again, Glenn, the companies are integrated. So when we look at how we are going to save money from an operational efficiency standpoint, work on this as an integrated company between Fiserv and CheckFree. We are on track with that and it is just 0.30 to 0.40 is a reasonable range for that.

Glenn Greene - Oppenheimer

Yes, we are not really going with that. I am just trying to get a sense not to be greedy, but how much cost savings opportunity for CheckFree is there beyond fiscal '09?

Tom Hirsch

We at Investor Day, we put together what we felt we should do, not just at CheckFree, because we are making a number of investments in a lot of areas there. Obviously, with online banking, bill pay, all the rest of that. We outline $250 million of cost saves as a combined organization by 2011. We are well on the way to accomplishing that. I think we are over at Analyst Day we said we were about 78, $80 million. We are at about a $110 million now, and with 60 more we are anticipating 170 of that 250. So, we are on a good pathway as far as that goes overall as an organization. So that is how we are viewing that going from that perspective.

Glenn Greene - Oppenheimer

Okay.

Jeff Yabuki

Glenn, let me just add one other point and that would be that part of those saves that Tom’s talking about and that we have talked about, when you talk about wanting to be greedy, part of what we are trying to is redirect really as much of those saves as we can into investment, so that we can continue to build out our products and our product sets while delivering pretty strong earnings.

So from that standpoint, because a lot of our investment is people and those kinds of things that it does not get capitalized but runs through the P&L. So, just keep that in mind when you are thinking about the level of cost saves.

Glenn Greene - Oppenheimer

Okay. Then just real quickly, what amount of revenue is subject to FX exposure?

Tom Hirsch

It is not a big piece of our revenue Glenn, it is again, the international revenue is about 4% to 5%. We have a piece in Australia, in Europe, the UK et cetera. So it is not huge, but it did have an impact in the fourth quarter, I think just in the segment overall about 1%, but on a top-line basis. So, but again, our total revenues there I think are around 4% or 5%.

Glenn Greene - Oppenheimer

Great. Thanks a lot. I appreciate it.

Jeff Yabuki

Thank you.

Operator

Our next question comes from Julio Quinteros from Goldman Sachs. Your line is open.

Julio Quinteros - Goldman Sachs

I think most of my questions have been answered, and I think the spotlight, more than anything else on the organic growth comments just going back to 2009. Just looking at where you are relative to integration of CheckFree and the pieces that you have there. Is it more about the environment that gets you to the higher end of the zero to 4% growth rate, or is it more a function of really driving against the targets that you have set, because obviously you exceeded those targets this year, so to think about how that translates into growth for next year. What gives us that range in order to get to that higher end of that zero to four for next year?

Jeff Yabuki

I think if I could only choose between environment and what is in our control, I would say, that environment the stabilizing of the environment, so things like having the home, the loan modification, the home retention revenues come in, those kinds of things are going to be the item that will move us closest to there.

I would say the other opportunity that we have is to the extent there are large transactions out there. We had a couple of large revenue transactions that we have been working on for a long time. This year one of them, we said, no to, because we did not like the economics, and other one was said no, for us because the institution ended up changing its name.

So, those kinds of things there is a long tail. You do not know when they are going to happen but that is the other that could shift. I would say, for us so much of our revenue is recurring and gets layered in its difficult to really move that growth rate dynamically in any period. So, I would say, it is the environment. I would say, it is maybe the addition of a larger revenue transaction as the things that move us up towards the other side of the base. The only other I could say is if the Fed changed the interest rates and those kinds of things, There would some positives as well.

Julio Quinteros - Goldman Sachs

Jeff, I apologize, I do not have the deck in front of me here. I was hoping to grab it here. Can you remind us of the waterfall chart that you gave us when we through the Analyst Day had some explicit contributions from the sales that would have been booked in 2008, and what percentage of that contributes to 2009. I am just trying to get what that piece is that flows into the '09 number. What you would have to do on top of that to get to the zero to four if you will?

Tom Hirsch

Sure. Well, what we mentioned today is, of the 86 million of sales that we booked this year just on the integrated sales side. So, not talking about our normal sales quota, but the sales of targeted products to existing clients that is about a third absolutely hits our revenue this year, and then the remaining two-thirds will flow in hopefully this year into 2009.

Julio Quinteros - Goldman Sachs

Got it. Okay, thanks. Good luck.

Tom Hirsch

Thank you.

Operator

Our next question comes from [Paul Bartley from PB Investment Research]. Your line is open.

Paul Bartley - PB Investment Research

Thanks. Good afternoon.

Jeff Yabuki

Hi Paul.

Tom Hirsch

Hi Paul.

Paul Bartley - PB Investment Research

First question, Jeff you mentioned things got a little bit worse in the market from the Analyst Day. Was that mostly the home equity business where did you see broader based weakening of the environment?

Jeff Yabuki

Yes, I would say, where it manifested itself most obviously in our numbers was in the home equity business, in the processing business. Largely because the home retention, the loan modification pipeline just got cemented over. So, that was the largest item. The overall sentiment in the market continued to decline since Investor Day, and that has an impact not on something that we would call out directly, but on sentiment and on people’s willingness to say, alright I will buy that discretionary product, or I will buy this discretionary product.

So, again, on an absolute basis, I would say it is in the home equity processing, but we know there are pipeline deals that we thought were done that for example got extended for 30 days. So, those kinds of things occurred.

Paul Bartley - PB Investment Research

Okay, great. As you look at your guidance, the zero to 4% internal growth for ‘09, any chance you want to give some color around what you are expecting in payments and financial and put downs like the 6% to 7%, where you exited the year adjusted for payments you were comfortable, but what about financial?

Jeff Yabuki

Yes, I would say that we are definitely not going to give any segment growth. I think the performance in ‘08 on a relative basis is pretty representative, but Tom?

Tom Hirsch

Yes, I would say that would probably a baseline going into the year. The thing I would again say as we did on the call is that, when you look at the comparisons Paul, on a year-over-year basis, there are going to be much more difficult in the first half of the year with the termination fees, the home equity business and then the BofA thing in the flow will get better as we go through the year. So, that is it something to keep in mind as you look at 2009.

Paul Bartley - PB Investment Research

Right that is what I was asking, especially with the financial business the real tough grow over in the term fees. It almost seems like things need to deteriorate a little bit further in terms of the growth rate in the first half of ‘09 versus 4Q is that fair?

Tom Hirsch

Yes, I am not going to say it. Again we are not going to say by segment, where that is going to go, but obviously you see the home equity piece, what that is from that standpoint and again to the extent days that we do not, when that loan modification revenue is going to hit, but again the first half is going to be more compressed obviously than the second half.

Paul Bartley - PB Investment Research

Okay, fair enough. Then looking at the margins again in financial down there a bit in the lending business obviously we call it as biggest factor, but if you strip out the lending piece. Is there anyway to give us some sense of what you are seeing in the rest of business in terms of margins and financial?

Jeff Yabuki

Yes, I would say overall, we obviously of the impact in the financial segment that overall in the financial segment, the margins there down about 60 basis points year-over-year, but obviously we had $70 million reduction in revenue when we have taken cost out, but obliviously you cannot take out the amount cost, when you have that type of dramatic change from a top line standpoint.

So, I would put them as stable to slightly increasing on the remainder part of the business. The other items that we have there a little bit lower are the discretionary license fees which are down a little bit which impact margins, but again just in the financial segment, that is where I put it.

Paul Bartley - PB Investment Research

Flat up slightly?

Jeff Yabuki

Yes.

Paul Bartley - PB Investment Research

Okay, great. Thanks.

Jeff Yabuki

Thanks, Paul.

Operator

Our last question comes from Franco Turrinelli from William Blair. Your line is open.

Franco Turrinelli - William Blair

Well, I have the last question, so I should start by echoing Bryan's first comment by congratulating you another getting a tough environment.

Jeff Yabuki

Thanks, Franco.

Franco Turrinelli - William Blair

Hey, Tom, can you just remind us on the capital structure, are there any debt repayment, credit loans expiring term loans, anything that we need to be aware of in terms of needs or requirements on your cash and cash flow?

Tom Hirsch

No, the next term loan payment that we have Franco is $250 million which is mandatory at the end of 2009. We have a revolver with a capacity of $800 million which actually matures in 2011, and that is really the only mandatory debt payments we have are $275 million at the end of the upcoming year, $250 million excuse me and then $375 million in 2010.

Franco Turrinelli - William Blair

Maturities and everything else is all extended as I remember into 2011 and 2017 if I remember correctly?

Tom Hirsch

Well, and there are some in '12 and then '17.

Franco Turrinelli - William Blair

Okay. So from that point of view and flipping this back over to Jeff, obviously times are tough for you. We are seeing some of the results from competitors that are even worse. I am wondering to what extent you think that gives you an opportunity to be aggressive on consolidating the industry either domestically or internationally?

Jeff Yabuki

Yes, and that is one of the reasons why we said in our prepared remarks that we have run a lot of different scenarios for how to deploy in capital this year. I think it is been our position for a while that an industry consolidation would be beneficial. So, we are looking at that. We also talked about the fact that, that we want to have a more stated international strategy and we think using capital internationally will probably jumpstart whatever we want to do. So we are working on that this year as well.

So we are going to keep some powder try to make sure we have those opportunities. I think the biggest challenge for all of us Franco is trying to figure out what value is today, what is the right price for anything. From that perspective, we will look at things and we think notwithstanding some of the fact that we are not satisfied with some of our internal revenue growth, we think we have heck of a lot of progress, integrated CheckFree, generated a lot of free cash flow. We think we are going to grow that again. We think we are in good shape and really looking for opportunities to grow.

Franco Turrinelli - William Blair

Yes. Are you past being the point of integration with CheckFree that have a bandwidth to take on another project?

Jeff Yabuki

Yes.

Franco Turrinelli - William Blair

Great, thanks. Congratulations again.

Jeff Yabuki

Thank you. Well, thanks everyone. I know we went a little bit long on our year, but there was lot of talk about the environment is making a little bit more interesting for everyone. We appreciate your support. If you have any further questions, please do not hesitate to call our Investor Relations team. Have a good day.

Operator

Thank you for participating in today's conference call. You may disconnect at this time.

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Source: Fiserv, Inc. Q4 2008 Earnings Call Transcript
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