DST Systems, Inc. Q1 2008 Earnings Call Transcript

DST Systems Inc. (DST)

Q1 FY08 Earnings Call

April 22, 2008, 11:00 A.M. ET

Executives

Thomas A. McDonnell - President, CEO

Kenneth V. Hager - CFO, VP, Treasurer

Analysts

Pat Burton - Citi

James Kissane - Bear, Stearns & Co.

Charlie Murphy - Morgan Stanley

Greg Smith - Merrill Lynch

Murali Gopal - KBW

Tien-Tsin Huang - JP Morgan

Ken Cornick - Arience Capital

Presentation

Operator

Ladies and gentlemen we'd like to thank you for standing by and welcome to the DST Systems First Quarter Earnings Release teleconference call. At this time, all participants are in a listen-only mode, later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, today's conference call will be recorded.

I would now like to turn the conference over to your host, President and CEO, Tom McDonnell. Please go ahead, sir.

Thomas A. McDonnell - President, Chief Executive Officer

Good morning. Before proceeding today, I would like to make a statement under SEC procedures and rules. If in the course of our conference call today we make forward-looking statements respecting DST and its businesses, such statements would be based on our views as of today and actual results could differ. There could be a number of factors affecting future results including those set forth in DST's latest periodic report, which we filed with the SEC. All such factors should be considered in evaluating any forward-looking statements, which we may make today. Joining me on the call today is Ken Hager. Tom McCullough our COO, who normally joins the call is traveling today so he was unable to join us.

I'd like to highlight two items that occurred in the first quarter. Certain income tax uncertainties were resolved this quarter resulting in a $23.6 million income tax benefit. In addition DST recorded approximately $10.5 million of losses on the securities held during the quarter. Most of the loss was attributable to impairments on common stocks that are deemed other than temporarily impaired under accounting rules. The reminder of the comments that I'll make today are based on the results excluding the effect of these two items and certain other items set forth in the press release under the section description of non-GAAP adjustments. A reconciliation of reported GAAP results to income adjusted for certain non-GAAP items accompanies the earnings release.

On a non-GAAP basis, net income for the first quarter of 2008 totaled $55.2 million or $0.86 per diluted share. That compares to $62.6 million or $0.87 per diluted share for the first quarter of 2007. That's a decrease of 11.8% of net income and 1.1% in diluted EPS. Our consolidated operating revenues increased $7.7 million or 1.8% over the first quarter of 2007 to $430 million... $430.8 million. Consolidated net income from operations in the first quarter of 2008 increased by $5.1 million or 6.4% to $84.4 million. The consolidated operating margins increased from 18.7% in the first quarter of 2007 to 19.6% in the first quarter of 2008. Equity and earnings of unconsolidated affiliates declined by $16.1 million to a level of $8.7 million and we'll discuss that further later.

Financial services revenues increased $11.3 million or 4.1% to $286.8 million. That reflects increased mutual fund shareowner account service but was partially offset by lower AWD and investment management accounting software sales and service revenues. That was primarily a result of reduced software license fees in international and AWD. Those license fee revenues decreased by $5.6 million or 33.5% to $11.1 million as compared to the first quarter of 2007. And as we point out while software licenses are relatively modest portion of our overall revenue, the quarters in which they are recognized can be significantly impacted by their presence or absence based on the cost associated with the license itself.

Financial Services income from operations increased $2.8 million or 4.2% from the first quarter of 2007 to $69.4 million. Increased contributions for mutual fund shareowner processing were partially offset by lower software license fee revenues and lower contributions from international ops. Operating margin for the first quarter of 2008 in Financial Services was 24.2%. That was virtually unchanged from the first quarter of 2007.

Turning to Output, starting in 2008 DST changed the measurement of certain cost components of its Output Solutions segment. Output leases several of its US production facilities from the Investments and Other segment. During 2008, the company began reporting financial results for the Output Solutions segment on the basis of the segment owned instead of leased these production facilities. We believe this action will improve our ability to analyze operating results taking into consideration the special purpose nature and in some cases single purpose nature of the production plants. Reported results for Output Solutions segment and the elimination adjustments for the periods prior to 2008 have been restated to reflect this change. The impact of this change increased Output Solutions income from operations by $1.7 million and $1.8 million for the three months ended March 31, 2008 and for the three months ended March 31, 2007 respectively and correspondingly increased the segment eliminations loss from operations by the same amounts for the two... for the same two periods.

Output Solutions operating revenues decreased by $3.4 million or 2.3% to a $142.7 million. Items mailed increased by 2.3% to 709.9 million items. While images produced decreased by 11.6% to 3.8 billion, the new telecommunications client, which converted during the fourth quarter of 2007 and higher volumes from existing clients contributed to the increase in the items mailed, the decrease in images produced as a result of number of telecommunications clients reducing the amount of transaction information that they print on their invoices. As a result, the operating revenue per image increased by approximately 11.2% compared to the first quarter of 2007, as there were lower relative volumes from customers with lower unit pricing.

Output Solutions operating income for the quarter totaled $13.8 million as compared to $11 million in the first quarter of 2007 and that's due to lower material costs, lower leased equipment costs resulting from implementation of owned digital printing and insertion technologies. As a result of the company's use of accelerated depreciation methods on printers and inserters, depreciation and amortization decreased by $600,000 as compared to the first quarter of 2007.

Equity and earnings of unconsolidated affiliates was $8.7 million in the first quarter of 2008. This is the decrease of $16.1 million referred to earlier compared to the first quarter 2007. There are several items that comprise the change quarter-to-quarter. As previously announced, the company sold a majority of its equity interest in Asurion during the third quarter of 2007 and now accounts for this investment under the cost basis. DST had recorded $11.4 million of equity and earnings of Asurion in the first quarter of 2007.

Turning to joint ventures. As pointed out in the press release, both Argus and BFDS maintain customer accounts, holding cash balances in connection with their processing activities. During the first quarter of 2008, these balances averaged approximately $1.5 billion. Normally, the earnings from their balances is reasonably stable as Fed funds rate fluctuate in a narrow range. The actions of the federal reserve of lowering the rate drastically over the past several months resulted in a significant impact to the earnings of these two joint ventures.

We pointed out the interest rate level for the first quarter currently rates have continued to decline in this area and are approximately at 2.3% today. About $2 million of lower earnings were recorded at BFDS and that was from lower investment earnings, the earnings on balances I just referred to. That results again from the lower interest rates on cash balances maintained on behalf of customers and they also had some higher cost associated with increased levels of account serviced.

During the quarter IFDS Canada converted a new remote client with 3.2 million shareowner accounts. The $2.4 million earnings decrease at IFDS reflected new customer conversion costs many of which were included in the first quarter and higher income taxes of $1.2 million deferred tax income benefit was recorded in the first quarter of 2007. So that is part of the comparison necessary. And some of the other income was partially offset by higher or probably some of the other costs were partially offset by higher operating revenues from the increased number of shareowner account service.

Earnings at Argus decreased as a result of slightly lower operating revenues, higher operating cost in connection with the processing of higher volumes of claims and lower investment earnings, from lower interest rates on cash balances maintained on behalf of their customers. The increase in equity and earnings of Other is primarily the result of increases in contributions recorded by certain real estate joint ventures. Other income was $6.1 million for the first quarter of 2008, that's a decrease of $2.4 million as compared to the first quarter of 2007. The decrease is due to unrealized losses on marketable securities designated as trading and account receivable securitization program fees partially offset by higher dividend income.

Interest expense was $12.7 million for first quarter of 2008, that’s a decrease of $5.5 million from the first quarter of 2007. The decrease in interest expense is a result of lower average debt balances and interest rates. Cost associated with accounts receivables securitization program are included in other income. Share repurchase activities during the quarter significantly increased debt levels, which should increase interest expense in future quarters. The income tax rate was 36.2% for the first quarter of 2008 compared to 33.7% for the first quarter of 2007. The increase in the tax rate is primarily due to changes in the relative proportions of domestic, international and corporate joint venture income. Currently DST expects its tax rate for the remainder of 2008 to be approximately 362%.

Turning to mutual fund accounts, total accounts serviced were $119.9 million at March 31, 2008. That's an increase of 800,000 accounts from December 31, 2007. Registered shareowner account and this was... refers to some of the information provided in the press release. Those are shown in accounts that are actually recorded on the books and records of the transfer agents. And total registered shareowner accounts processed totaled $115 million at March 31 and that was a net decrease of $2.2 million or 1.9% since December 31, 2007. New account conversions of 500,000 accounts and net account growth of existing clients of 800,000 accounts are 0.7% overall were offset by conversions of 100,000 of... to accounts to DST's sub-accounting platform from a registered platform. And an additional 3.4 million accounts to non-DST sub-accounting platforms.

Tax-advantaged account service totaled 46.9 million accounts at March 31, 2008. That's a net increase of 700,000 accounts or 1.5% since December 31, 2007. Of which 40,000 or 0.10% came from conversions and 660,000 accounts or 1.4% represented account growth from existing clients. We usually comment on account growth for early April given that’s the IRA season. So for the period April 1, 2008 through April 15, 2008 shareowner accounts serviced increased by approximately 300,000, of which 250,000 were tax-advantaged retirement and educational savings accounts.

Sub-accounts are those mutual fund… individual mutual fund account positions maintained on behalf of broker/dealers using the TA2000 sub-accounting platform. Sub-accounts totaled 4.9 million at March 31, 2008 and that's an increase of 3 million or a 157.9% since December 31, 2007, results from the conversion of 2.9 million new sub-accounts from non-DST platforms and conversion of 100,000 registered accounts from the regular TA2000 platform. In all of this mix, defined contribution participants increased by 120,000 or 2.5% to 4.9 million for the quarter.

During the quarter the company received four new client commitments totaling approximately 1.9 million registered accounts based on their current levels. At March 31, 2008 new client commitments of 2 million registered accounts are scheduled to convert in the third quarter of 2008 and new client commitments of 3.6 million sub-accounts are scheduled to convert in the third quarter of 2008.

During the quarter, the company repurchased 5.6 million shares of its common stock at an aggregated cost of $394.9 million or approximately $70.20 a share. At the end of the quarter, March 31, 2008, the company had approximately 1.2 million shares remaining to be repurchased under the existing share repurchase plan. Total debt at March 31, 2008 was $1.4 billion, which approximates the debt levels prior to the sale of Asurion. At that level, that’s a level of leverage and debt that the company is comfortable with. So, accordingly DST anticipates that repurchases for the remainder of the year subject to the existing share repurchase plan will be at substantial reduced levels compared to the first quarter of 2008 and will generally be governed by the level of the company's free cash flow.

Outstanding shares, DST had 55.2 million shares outstanding at March 31, 2008, including 2.7 million unvested restricted shares, which are excluded from the determination of average common shares outstanding used in the calculation of basic earnings per share. The net effect of share repurchases and shared issues from stock option exercises resulted in shares... in a decrease in shares outstanding to $5.6 million shares, since December 31, 2007. The average diluted shares outstanding for the first quarter of 2008 were 64.3 million shares. That's a decrease of 7.5 million or 10.4% from the first quarter of 2007 and a decrease of 5.1 million or 7.3% from the fourth quarter of 2007.

At March 31, 2008, the dilutive effect of the convertible debentures was 5.3 million shares of outstanding stock options was 1.5 million shares and of restricted stock was 1.5 million shares for an aggregate dilution of 8.3 million shares, which decreased 400,000 shares from the prior year quarter as a result of lower number of outstanding stock options. Total stock options and restricted stock equity units outstanding at March 31, 2008 were 8.7 million. That actually is an increase of 100,000 equity units or 1.2% from December 31, 2007 and a decrease of 2 million equity units or 18.7% from March 31 of 2007.

With that, we will now open the call to questions.

Question and Answer

Operator

Our first question in queue comes from the line of Pat Burton of Citi. Please go ahead.

Patrick Burton - Citi

Hi. Two part question guys. The first one is on the 3.4 million accounts… sub-accounts in the non-DST… to the non-DST competitor, could you provide a little background on that and then I have one follow-up please?

Thomas A. McDonnell - President, Chief Executive Officer

Well, that was a relatively high concentration of accounts moving in the quarter and since we are now in the sub-accounting market, I think Pat you can see a likelihood of some accounts will be moving both directions. The sub-accounting phenomenon has been around for some period of time basically that's where brokerage firms internalize the accounting for accounts in collaboration with the mutual funds sponsors allowing them to do so. It's a phenomena that we think will continue, you can look at our... one of our main competitors have published numbers and they have a very significant numbers of sub-accounts, that's been a factor for period of time and will continue to be. I think, we view ourselves now in the position of rather than totally losing the revenue that was associated with the organizations moving to sub-accounting platforms that we will retain the revenue in the client relationships albeit at a substantially lower rate than for full service or for remote processing of those accounts.

Patrick Burton - Citi

Okay. And the follow-up is and you've talked about the software business for a long time being lumpy, did anything change in the environment year-to-date with weakness in financial institutions or would you just say this is just a regular puts and takes of the software sales?

Thomas A. McDonnell - President, Chief Executive Officer

No, I would say that large multinational financial organizations that are the primary buyers of the investment management products, that's where a lot of the weakness was are in a state of total non-activity, I mean, when you look at and I mean to recount the names for you of major global financial services firms that would use investment accounting things with the aggregate write-offs, some 250 billion, most of them have suspended budgets, reduced staffing and so forth. So I think as to the likelihood of being able to predict any sort of improvement or even positive outlook for investment management software sales for the foreseeable future is going to be quite difficult. This is not what we would see as just a normal fluctuation and not being able to conclude contracts in the period. This is as best we can tell sort of a total pullback by global financial organizations from any spending not only in the software side but on a broader basis. So I would anticipate that the international business will pretty much be driven this year by its historical relationships, maintenance consulting and possibly a little better results in Asia than the US and Europe, but US and Europe are very significant markets and I from the standpoint of the major financial institutions, I anticipate that to be a very difficult environment for the foreseeable future.

Patrick Burton - Citi

Okay. Thanks for the direct response Tom.

Thomas A. McDonnell - President, Chief Executive Officer

Yeah.

Operator

Our next question comes from the line of James Kissane of Bear Stearns. Please go ahead.

James Kissane - Bear, Stearns & Co.

Thanks. Tom, what portion of your registered accounts will be vulnerable to shifting to sub-accounts and maybe provide little more color in terms of what's driving that, like, was the $3.4 million loss in the quarter related to M&A activity?

Thomas A. McDonnell - President, Chief Executive Officer

No. I think it just was a couple of larger broker-dealer relationships that reached some arrangements with the fund groups to allow them to move some accounts to a sub-accounting platform. I think that quarter was exaggerated. There is no way to tell Jim exactly how many accounts would be vulnerable and I guess in some ways you could say broker-dealers could internalize all of them. But generally I don't think that's accurate. And by the way, for practical purposes, sub-accounting phenomena usually only encompasses non-retirement accounts. So usually those stay on the books and records of the funds. There is a natural tension between the brokers and the funds. The funds prefer to have the relationships with the shareowners directly even though they have sold by a broker and have a registered representative on them. The brokers of course prefer to have them internalize not only from the customer relationships, but many brokerage organizations, let's say very, very significant and very profitable piece of revenue to them. So that tension will continue. We think with the introduction of our sub-accounting product, we should be... we think it's a superior product. Hopefully that's an objective and not a subjective view that we will be able to move some market share there. But I don't see a disproportionate percentage shift in the number of accounts that are sub-accounted for. I think a greater issue is given the turmoil in the markets, given the election year, not knowing where tax changes are going, where… with some of the status of retirement accounts and so forth will be on a going-forward basis. I would hope enhanced. It's very difficult to predict just the overall growth of shareowner accounts. But some accounting I said earlier is not a new phenomena, we have been dealing with it for years. And overall in the aggregate I would anticipate that some relatively consistent percentage of new account openings over a period of time will be on sub-accounting platforms.

James Kissane - Bear, Stearns & Co.

And can you give a little insight in terms of the service levels for registered accounts versus sub-accounts in terms of the level of work that you provide or service you provide?

Thomas A. McDonnell - President, Chief Executive Officer

Well you really end up with almost three categories now. You got full service, which you know we are heavily... that's heavily oriented towards BFDS business, but we do have a book of that business of DST also and that's where you virtually do everything, take the calls, receive the checks and so forth. Remote is generally supporting the activities of the remote client, which includes a lot of ancillary support and systems whether it's a reconciliation system, whether it's AWD scanning systems and all of that kind of stuff. When you pass in effect on the sub-accounting basically all of that customer interface and interaction is handled in the broker-dealers office and what we do is maintain in effect just the account position and what we believe to be a very accurate form because since it's maintained as a subset of the trend of the TA2000 system, all of the accounting totally confirms to this prospectus of the fund itself and allows you to more efficient way to reconcile that back to the overall fund positions where a third party system that doesn't integrate back to the underlying transfer agency system has some issues as to how one reconciles those differences. This goes back in some cases to some of the concerns that we came about in the industry a few years ago with the way discounts and so forth were being applied to shares. So in effect, Jim it’s kind of the lowest level of service, because it really is truly a technical back-office maintaining the share position and interfacing that into the brokerage systems so they can present it to the customer. But all of those are the things I mentioned like AWD and so forth really are not involved when you get out to the broker-dealer front end.

James Kissane - Bear, Stearns & Co.

All right. And just one last question. Back in '02 and '03, BFDS managed pretty well through the rate declines and you didn't have to flag the impact of the rate declines in your releases or your Qs, what’s changed this time around?

Thomas A. McDonnell - President, Chief Executive Officer

Well, I think one, overall level of business at BFDS and also at Argus because remember Argus has picked up quite a bit of volume with Medicare Part D and customer growth and then just overall levels of activity within the customer basis have tended to increase which generate more in the way of balances and float in. It’s always been a component of business but it's been a fairly stable component, Jim even with the declines in the period you talk about. I haven't gone back and looked at actual how long it took to reduce rates before these ones that were reduced recently were fairly precipitous and I think everybody anticipate yet another reduction. So that's an issue we'll have to deal with for the foreseeable future but absent and extended recession or economic downturn whatever you want to call it. At some point we would anticipate a reversal of that phenomena with because I think we all recognize that there is a sort of inherent long-term rate that is economically justifiable and it would appear to be above where they are right now.

James Kissane - Bear, Stearns & Co.

Thanks. Tom.

Operator

Our next question in queue comes from the line of Charlie Murphy with Morgan Stanley. Please go ahead.

Charlie Murphy - Morgan Stanley

Thanks Tom. I think I heard you say on the sub-accounting issue that this quarter's impact you thought was exaggerated. So I was wondering if you could just describe why you think that is and is it fair to say you don't expect to loose 3 million accounts every quarter this year to sub-accounting?

Thomas A. McDonnell - President, Chief Executive Officer

The second is fair. I don't know if I can describe my thought process, is sometimes it’s random. But I think that it wasn't exaggerated quarter. I think as you noticed we announced that we will be converting sub-accounts from a competitor later in the year of fairly significant order of magnitude. So I think you'll see some back and forth. We will continue to see movement to sub-accounting, but I think it's absolutely fair to say we don't anticipate 3 million a quarter by any stretch. There is no way to exactly predict it and in and of itself will be lumpy because when they occur they are sort of a conversion in and of themselves. So they are not always instantaneous. We would say… at this point I would say our expectation is that it will be substantially less than the rate of the first quarter.

Charlie Murphy - Morgan Stanley

Okay. And --

Thomas A. McDonnell - President, Chief Executive Officer

And by the way I think some of that will be offset by us having competitive wins or moving sub-accounts our way. Now the overall implication is that at some point the mix of accounts and therefore revenue may shift over the next two or three years to a content of lower fee sub-accounts which you will also take, should recognize up until introducing our sub-accounting platform one step… when sub-accounting we lost all revenues. So I think there is at least some sort of for lack of a better term, inherent insurance built in by us been able to be competitive in that area.

Charlie Murphy - Morgan Stanley

Okay great. And I was wondering if you could address the tone of new business out there. Are there any sizable RFPs in your remote business?

Thomas A. McDonnell - President, Chief Executive Officer

Not currently of any significance. I mean, there is always 10,12 million accounts floating around other in one fashion or another but we did announce in this quarter some signings. Again, I think that the overall market's cost concerns and everything else tend to slowdown that type of activity. So I don't see a lot out there at the moment.

Charlie Murphy - Morgan Stanley

Okay. Thank you.

Operator

Our next question comes from the line of Greg Smith with Merrill Lynch. Please go ahead.

Greg Smith - Merrill Lynch

Yes. Hi guys. Just a question on some of the mechanics of sub-accounting, when a broker/dealer tends to make the switch I understand you said it doesn't usually cover tax advantaged account, but with the rest of the accounts is it usually all or nothing or can they actually cherry pick among the fund families that they want to do the sub-accounting?

Thomas A. McDonnell - President, Chief Executive Officer

What's not usually all or nothing they have to have an arrangement with each individual fund family. I don't know what you mean by cherry pick per se, it's really what fund groups allow it... some don't, some allow it on very restricted basis. But, basically it's an issue of the broker/dealer using their influence, for lack of a better word with the fund family by virtue of their distribution to enter into an arrangement that it may or may not be attractive to the fund or the other fund shareowners

Greg Smith - Merrill Lynch

Okay. Got it, that answered the question. But it does seem like there is just an accelerated ways here, would you agree with that or is this sort of normal course of business and I guess if there is this acceleration and what really is that the root cause of this?

Thomas A. McDonnell - President, Chief Executive Officer

Well, I think, first, I am not sure we see the acceleration again. I think that the first quarter and if you look at the quarter where we're going to be moving a sub- account block later in the year from the other side of that equation that may look like an unusual quarter to the competition. I think first quarter was in fact unusual by its order of magnitude. The root cause is very simply a broker/dealer organization seeking more revenue and more profitability by pushing fund families to move processing off of their own books on to those of the broker/ dealer.

Greg Smith - Merrill Lynch

Okay.

Thomas A. McDonnell - President, Chief Executive Officer

That's a root cause.

Greg Smith - Merrill Lynch

Yes. And then any update on the healthcare business? I haven't heard much about that.

Thomas A. McDonnell - President, Chief Executive Officer

Well, we comment a little bit on Argus Healthcare was just pretty much modest improvement in the quarter, I think that’s… again, I think we've successfully integrated the two businesses. We see some movement now of our strategy, which is to go to a lot of the licensed clients and try to move them to remote processing or in that business what we call BPO full-service processing. We are starting to see some traction there. This point I would say it's a little slower than we had anticipated and I'm not sure again, and we have certain factors impacting buying decisions in the international side because of the financial trauma of the big organizations. I think you might see a little bit of that in the healthcare sector and then some concern about decision-making this year in an election year when some view the... a new administration taking a much different view to healthcare. So I think the business right now is kind of steady as it's been. We still think it has potential upside but it may be slower than we thought.

Greg Smith - Merrill Lynch

Okay. And then lastly just on the change in accounting for Output what was really the catalyst for that, was driven by your auditors or was this just a subjective change you thought made sense to do to have a more accurate picture of the profitability of that business?

Thomas A. McDonnell - President, Chief Executive Officer

Well generally we found that a lot of the competition there owns all of its facilities. And historically we have operated our businesses all of them by centrally owning real estate and charging it out to the various subs at market rates. And in effect given that people like to compare Output’s numbers with other organizations that treat their physical plans substantially differently. In fact, some of the organizations have been around a quite a while, I'm sure that physical plans are totally written off. So, we felt longer-term it was more appropriate to align from an operating standpoint the structural way that facilities were accounted for and in effect caused it by what would seem to be the logical way over standalone business. Also I think that when you look at Output, I mean the facilities are, unlike our office facilities that we can use ourselves or rent to others, these are very much unique or single purpose facilities for Outputs. So, it seemed like a more appropriate way to represent the value that output really provides to the company because in effect it was transferring profitability to the other segment, which we thought may be unrealistically distorted the view of Output itself.

Greg Smith - Merrill Lynch

Okay, got it. Thanks a lot.

Operator

Our next question comes from the line of Murali Gopal of KBW. Please go ahead.

Murali Gopal - KBW

Just staying with health plan processing business for a minute. How should we, I know you have said the operating margin in that business is probably a little lower than the Financial Services segment as a whole. But, just in terms of without getting into specifics, are you seeing the operating margins in that business trending up or you think it's... there is not a whole lot of upside to operating margin. Can you just comment a little bit on that?

Thomas A. McDonnell - President, Chief Executive Officer

I would say at this point operating margins are not trending any particular direction because revenue is not trending up significantly. With some reasonable increases in revenue over the next couple of years I think you will see improved operating margins but within the current environment where there is modest revenue growth probably we will not see that and but margin improvement I think should also be function of changing some of the methodology of the business. As I mentioned earlier if we can move people that currently have licenses to a processing environment then I think we will see increased revenues with more attractive margins then we've actually realize on the third party licenses because the third party license revenue now really is not new license revenue, we don't sell many new licenses. It’s pretty much a function of residual maintenance revenues and any consulting that periodically derives from those relationships.

Murali Gopal - KBW

Okay. And in terms of the software license fees of recognizing the fact that it tends to be lumpy quarter-to-quarter, is this really a function of... is there some amount of software licensing decision-making that got pushed into the next quarter or how should we think about the decline? Is there some element of that going on there?

Thomas A. McDonnell - President, Chief Executive Officer

You term it overall software license?

Murali Gopal - KBW

Yeah. That's right.

Thomas A. McDonnell - President, Chief Executive Officer

Well. I Think clearly the investment management software business I would say is, if not as a standstill close to it because the primary customer base there are multinational global financial operations. Given the losses they have incurred with exposure to sub prime and other financial issues most of them just stopped spending. So until that clarifies and until their businesses improve I would not anticipate seeing any IT but IT departments of the big multinationals having sufficient approved budgets to be back in the software acquisition business rather it’s from us or anyone else. And AWD is a little different because we have a much wider customer set there but to the extent that some of their businesses is associated with those types of firms I think there would be a similar impact. So I think at this point it is very difficult to anticipate a recovery in software licenses until we see an overall economic recovery in some of these larger organizations get through a few quarters of hopefully improved results if they get back on a more stable footing.

Murali Gopal - KBW

Okay. And in terms of the new client commitments for 1.9 million accounts, what's the timeframe for conversion there?

Thomas A. McDonnell - President, Chief Executive Officer

Mostly third quarter of this year.

Murali Gopal - KBW

Okay. And I know Argus was down declined 900,000 year-over-year. How much was that attributable to the lower interest rates versus just the function of operating earnings?

Thomas A. McDonnell - President, Chief Executive Officer

Well, we don't normally break that out at the divisional level, but it was certainly an impact to them on the rates but part of it was clearly also cost associated with processing higher volumes of transactions.

Murali Gopal - KBW

Okay. And lastly, I was going to ask just in terms of looking at your long-term revenue growth, it looks like the largest business is fairly mature, just thinking in terms of... and you have said this in the past that the mutual fund shareowner processing is probably going to grow in the low to mid-single digits. In terms of looking at the long-term growth, are you... what are some of the strategies looking at to kind of get this revenue growth's top line growth higher or are you just looking at it as mature businesses and focusing more on expense saves and getting more of the free cash flow rather than just focusing on the top line. How should we think about longer-term plans for improving the top line growth?

Thomas A. McDonnell - President, Chief Executive Officer

One we think that at some point we will see some growth in other areas and some return to growth internationally. But there is no question that the mutual fund business is a significant business to us and I guess you would find it as mature. Overtime however though, like number of years back when we introduced AWD or we introduced some web front-end stuff in our vision products and so forth we have overtime found ways to increment revenue from the existing client base with new features and functions. But I think when we view it is that we have only a set of businesses that we are comfortable with. We know and understand their characteristics. We do think we can improve some of the businesses on an ongoing basis like Output and so forth. But I think the nature of the business will be, the top line growth will be mostly a function of organic growth from client basis with some market share movement because there are still accounts out there that we believe could be attracted either from competitors or in-house operations but the in-house group of accounts with the exception of like a Fidelity and a Vanguard that we don't anticipate will ever change the way they do business is obviously a shrinking target market. So basically, I think you can anticipate that while we will work to get top line growth and look for new opportunities that for the foreseeable future the top line growth might be somewhat modest but we continue to focus on having a legitimate balance sheet from proper leverage to produce returns to shareowners. So you can look for us to continue share repurchases although as we indicated at a lower rate for the rest of the year just because it will be... now that we got back just sort of a debt level that we think is appropriate and provides the legitimate level of leverage for the organization that the purchase going forward will be confined more to free cash flow and that will have some hopefully positive leverage. But I think the assessment that the business is going to be a challenged by the growth of the mutual fund industry overall is accurate.

Murali Gopal - KBW

Thank you very much. I appreciate it.

Operator

Our next question comes from the line of Tien-Tsin Huang of JP Morgan. Please go ahead.

Tien-Tsin Huang - JP Morgan

Hi, good morning, it's Tien-Tsin. I just had a couple of questions on the Output business, specifically the decline in images produced, it looks like that accelerated, but it was mostly offset by higher revenues per image. So is this really by design or is this coincidental and also may be if you can comment on the images produced, what that would have looked like excluding the telecom clients reducing their information content?

Thomas A. McDonnell - President, Chief Executive Officer

We don't have in front of us a break out of images by client category. I guess my intuitive reaction would be that the other images increased because you'd have to think that the net of it given that decline in the telecom side would have indicated some increase elsewhere. But I am not absolutely positive with that. In effect the general pricing algorithms in the print mail businesses is it’s one price for the first page, reduced prices for incremental pages. So you are losing incremental pages, so your average per page actually in print goes up. So obviously you get less absolute revenue because you are not printing the extra pages, but the flipside of that is it does free up incremental capacity for growth in other areas. That answered or --

Tien-Tsin Huang - JP Morgan

It does. So I am just curious and is this... what's going on in telecom side. Is this a secular issue? Is there a risk that the telecom trend of reducing content is actually contagious to the rest of the business?

Thomas A. McDonnell - President, Chief Executive Officer

Not outside telecom, because telecom, most of this and a lot we had to do with cellular bills where they printed every phone call and we felt a long time that was very uneconomic way to preserve the bills. But the telecom companies can't necessarily unilaterally make the decision to do that. Often times they have to go to the rate makers in various jurisdictions in order to get permission not to provide all the detail to the customer and so forth. But it's not a non-anticipated and it is fairly unique to the telecom business because like we get the utility bill it doesn't have 20 pages because it doesn't keep track of every time you turned on off the light which gives the sort of the comparison every time you make a call or you send a text message on your cell phone. So I think it's, as I said unique to telecom but it will probably pretty much continue until the telecom bills are sort of rationalized to a presentment without the extreme level of detail that's been there in the past.

Tien-Tsin Huang - JP Morgan

When do you expect that to the flushed out?

Thomas A. McDonnell - President, Chief Executive Officer

It's hard to tell because of the regulatory stuff but a lot of it is out there now because the impacts have been from the very large customers and lot of them have been on these programs for a while and I would say a significant portion. But I certainly wouldn't think, I would think all of the impact would probably occur within '08 a very little would bleed beyond that I think.

Tien-Tsin Huang - JP Morgan

Okay, very good. And just a pipeline on the outlook business in general, I don't think I heard commentary on that?

Thomas A. McDonnell - President, Chief Executive Officer

Well. We didn't make any. There are generally as a sales force and a degree of interest in that when you talk about a pipeline, you know the business breakdown in most cases like many some very large customers and a lot of small ones. There is some legitimate prospects on the large-sized customer particularly couple in the healthcare and the credit card arena but again it's… that's a very competitive business and very difficult to predict when and if decisions will be made.

Tien-Tsin Huang - JP Morgan

Okay. Very good and just one last, just back to sub-accounting, how much lead time you typically get from your clients on conversions to sub-accounting?

Thomas A. McDonnell - President, Chief Executive Officer

It varies, I would say 90 to 180 days.

Tien-Tsin Huang - JP Morgan

It's a win side of the quarter. Very good, thank you.

Operator

Our next question in queue comes from the line of Tim Woods [ph] of Robert W. Baird. Please go ahead.

Unidentified Analyst

Hi guys. Just on the economic of sub-accounting, just assuming half of the revenues of remote account, we also assumed is it fair to say that roughly half is profitable and are there any other characteristics like free cash flow and so on that you are better at sub-accounting levels and on the remote level?

Thomas A. McDonnell - President, Chief Executive Officer

I don't know that you could assume that it’s half of remote because you know there is lot of different services delivered in remote that maybe little on the high side, the sub-accounting platform has been modified to have a lower cost attribute to it. I would guess overall blended margins are about the same as remote and the rest of the business. So I'm not sure that we have done a specific margin analysis there. But cash flow would be whatever the earnings are on it because basically the rest of the cash flow is generated pretty much from depreciation and amortization that involves the amortization of the software that's there and the data center equipment and so forth. So that's pretty much not materially impacted by whether it's a sub-account or whether it's a remote or full service.

Unidentified Analyst

Great. Yes that does answer the question, thank you. And then secondly just given some of the soft... some of the license sales that you've seen at software. Can we expect margins in financial services to be up year-over-year? Should we think more of kind of flat with those debt levels?

Thomas A. McDonnell - President, Chief Executive Officer

I think with some software sales is going to be hard to see significant increases. I think hopefully that will be at least stable with where they are. I am not sure I understood the first part of your question.

Unidentified Analyst

I'm just wondering if in general, financial services margins, if we can see those increase to a 100 basis points or so in '08 versus '07?

Thomas A. McDonnell - President, Chief Executive Officer

I think I would take a little stronger content of software sales either from AWD or international than we have seen to date or some improved growth rate in the organic side. And I think also for the year, in some ways this is a good phenomena is that when we have accounts that we will be coming on, we tend to have incur conversion costs, certain customization cost for the client and certain amount of incremental equipment cost and there we brought on advance of the conversion. So I think you'll see with the 2 million accounts we still have some level of spend throughout the next two quarters before those get converted. So I think you take that factor plus the fact we most likely are not going to see a real resurgence in software licenses, I wouldn't… I think it will take some combination of some more internal growth plus software licenses to see that kind of improvement in margins.

Unidentified Analyst

Okay, very good. Thanks.

Operator

Our next question in queue comes from the line of Ben Cadillac [ph] of First Investors. Please go ahead.

Unidentified Analyst

Hi. Thanks for taking the call. I have a question... just a couple of questions. On the loss of the sub-account business, I was wondering why they didn’t stay with you? Was that a pricing functionality or relationship issue?

Thomas A. McDonnell - President, Chief Executive Officer

No it's really... actually none of the above. I mean basically there was a number of broker/dealers out there who have already established sub-accounting relationships with our competitors. And to the extent that they have a sub-accounting solution within that particular brokerage firm, when they get additional sub-accounts they go on that platform. The sub-accounts that we are going to be converting later this year or brokerage firm that switch to our sub-accounting platforms from someone else's. So I think overtime, you'll see a bit of a repositioning there. But it really has nothing to do with our relationship with the fund group or pricing with the fund group. It's really a function of who the broker/dealer has selected for their sub-accounting activities and that's a market that we are now selling more aggressively into the market that we really quite frankly did not address up until couple of years ago.

Unidentified Analyst

Okay. And then, my second question is, I mean, are brokers trying to get more revenue in this difficult environment. Is that one of the reasons why you think you are seeing, are they being more aggressive on this sub-accounting or just trying for some revenue?

Thomas A. McDonnell - President, Chief Executive Officer

I think they are trying to get more revenue. I think there is again a natural tension between the broker and the fund groups. The fund groups obviously are dependent to some degree on the broker. Whether or not brokers are doing the sub-accounting that the cost that they demand for them is economic for the fund groups overtime is a legitimate question but I think you can suggest that for the foreseeable future like all firms trying to get more revenue that they will pursue the avenues, any avenue they can.

Unidentified Analyst

Okay. And then are you seeing a lot of sub-account RFPs on your current remote business out there? I mean, what sort of...how does that work, did they put out RFPs?

Thomas A. McDonnell - President, Chief Executive Officer

No, it's really pretty much a broker decides they want to go sub-accounting, which case they may come to us or a sub-accounting platform or we may be selling into brokerages who already have a sub-accounting platforms, suggesting ours is a better alternative. But the actual movement to sub-accounting is simply a negotiation between the broker and the fund groups to say we want to keep these accounts that we are the broker/dealer for on our systems versus have them on yours so...

Unidentified Analyst

Okay.

Thomas A. McDonnell - President, Chief Executive Officer

It's not the traditional accounts solicitation or processing or a remote processing solicitation that we typically think of as an RFP from a fund group.

Unidentified Analyst

Okay. I understand. And then two more quick ones. Did the JP Morgan, Bear Stearns sort of combination have any negative effect on your business this quarter?

Thomas A. McDonnell - President, Chief Executive Officer

That, well. It may have on international software sales.

Unidentified Analyst

Okay.

Thomas A. McDonnell - President, Chief Executive Officer

But beyond that you know...

Unidentified Analyst

Not on the account… on the base business?

Thomas A. McDonnell - President, Chief Executive Officer

No, I mean unless you would suggest that the relatively precipitous decline in Bear Stearns fortunes had an impact on the financial services industry. Generally I mean, that sort of by attribution, but not directly.

Unidentified Analyst

Okay. And my last question. I was wondering how... why you sort of used out the rest of your buyback ahead of a weak quarter, I'd have thought that may be you had kept some dry powder with your stock kind of down a lot today?

Thomas A. McDonnell - President, Chief Executive Officer

Well, it's hard for us to predict futures while we... and I guess, we buy when we think it's sensible and based on what we had budgeted for buybacks for the year. we felt accelerate first quarter made sense. We did not anticipate the market changes that impacted some of our investment portfolios and therefore the charges relative to other than temporarily impaired assets. So we do not anticipate the precipitous decline in interest rates, which knocked some earnings out and we certainly didn't anticipate sort of collapse of financial markets that sort of dried up the software side. So, I don't think that we looked at it from the standpoint that hey, why don't we hang around for a bit because the things will be a lot cheaper later. We just buy when we think is sensible and we will continue within confines of predictable free cash flow to complete our buybacks. I mean we've never announced a buyback, we didn't complete. But I mean, I guess if you can go back to timings everything and may be ours wasn’t the best.

Unidentified Analyst

Okay, fair enough. Thank you very much.

Operator

And our last question in queue comes from the line of Ken Cornick of Arience Capital. Please go ahead.

Ken Cornick - Arience Capital

Hi, guys. Good morning. I didn't see the disclosure for international revenues in total. Are you able to give us that?

Thomas A. McDonnell - President, Chief Executive Officer

Ken is looking that up as we speak, you got another question Ken or --.

Ken Cornick - Arience Capital

Yes, the next question is really, I think the big disconnect here is that the market is interpreting the sub-accounting issue as a structural change to the business, whereas you guys were very aggressive on your balance sheet at higher levels. So can you just again go back to the sub-accounting issue and explain to us why this is not a structural change to the business?

Thomas A. McDonnell - President, Chief Executive Officer

Well if is a structural change, Ken it started occurring six, eight years ago?

Ken Cornick - Arience Capital

Right.

Thomas A. McDonnell - President, Chief Executive Officer

I think the change now and may be it's more the visibility in the way we are now choosing to report accounts are not choosing to the way we think it's appropriate to report accounts because now we're in the sub-accounting business more aggressively ourselves. And before you know you would have seen accounts move off, net decline with no offsetting movement of sub-accounts to any of our systems. I think if there is 300 million mutual fund accounts on registered basis or whatever the number is on that don't take that as exactly accurate, I think that’s ballpark, there could... I mean it is hard to determine the total number of sub- accounts. But if you look at... our competition discloses as a book of business or maybe a 100 millions sub-accounts. So going forward will it much different than a 75-25. I'm not convinced that it will be as far as percentages of overall accounts there part of the difference though is we will be able to participate more in the 25% portion than we have historically because we now have I think a viable product in that area and I hope I'm not seeing next quarter Tony, that the first quarter wasn't an aberration. I think it was... it just happened to be a couple of decisions that were made in the quarter that move the greater number of accounts than you would normally have seen, and to some extent historically while there has been sub-account movement based on the internal rate of growth of the underlying business or conversions like [inaudible] and so forth. They tended to offset the disintermediation to sub-accounts. But at least where we feel we are now as we have a participation in that other x% of the marketplace that we had not before. So if it is structural, it's been there and I think now to be more visibly structural and you will probably see more comparisons on a sub-account to the sub-accounts of our competitor. But then you will also see continuing comparison of our registered accounts to some of our competition because we still knock on wood, tend to stack up fairly well with them and we've moved some market share in that particular area.

Ken Cornick - Arience Capital

So it is fair to say that the growth rate that we've seen some from you on an organic basis over the past few years has been impacted negatively although were not called out by sub-accounting?

Thomas A. McDonnell - President, Chief Executive Officer

Oh absolutely. I mean I don't think there is any... and I don't think we ever indicated that was not a factor because whenever there is sub-account and these are no longer registered accounts. But I think because now we are aggressively in that business and that's why we're breaking the numbers out differently. So you can get a clear distinction as to which segments of the market are moving, but no, I mean I think if there were no sub-accounting all of the registered book to business or it's Fidelity, Vanguard, or the books we service for our clients would be substantially higher, but this has been going on for 10 years.

Ken Cornick - Arience Capital

And so just one quick clarification as well. On the tax-advantaged side which is about 40% of your accounts, those are as you said sort of not at risk and of the balance of the accounts, some are held directly at the fund families now? In other words, in that level three accounts are broker/dealers but if I actually had an account at Janus.

Thomas A. McDonnell - President, Chief Executive Officer

Oh, yes, in fact that is bulk of the 119 million registered with the fund group itself. Some of them are level three because that is registered with the fund also, but yes the bulk of them are really registered on the books of the firms.

Ken Cornick - Arience Capital

So the ones at risk are the level three accounts?

Thomas A. McDonnell - President, Chief Executive Officer

Well not to a degree, yes but not totally, if there are brokers who have, if there is a broker/dealer on accounts, even if they are mailed directly with the fund I mean to the extent that broker/dealer can consolidate those over the period of time that I think you have to say those are part of that mix.

Ken Cornick - Arience Capital

Right. But If I don't have a brokerage account, I just have an account at Janus, that is not a risk?

Thomas A. McDonnell - President, Chief Executive Officer

No, It shouldn't be unless you all of a sudden decide to get a broker.

Ken Cornick - Arience Capital

Right. And so what percentage are not brokers?

Thomas A. McDonnell - President, Chief Executive Officer

You know, I don't...we don't have that in front of us but it is...I really don't know off of the top of my head.

Ken Cornick - Arience Capital

Do you think you would be a material portion of the non-tax advantaged accounts?

Thomas A. McDonnell - President, Chief Executive Officer

It depends to what level we define as material because a lot of them have come from historically what we are no-load funds like [inaudible] and Janus and Scudder Stevens & Clark and people like that in the past although many of those groups have altered their distribution through people like Schwab and so forth.

Ken Cornick - Arience Capital

All right.

Thomas A. McDonnell - President, Chief Executive Officer

So I just can't give you that of top of my head of, I would really need to look at some numbers before I speculated on that.

Ken Cornick - Arience Capital

Okay. And just last question what percentage of the large broker/dealers out there have already moved to sub-accounting?

Thomas A. McDonnell - President, Chief Executive Officer

Well certainly all the major ones, the Merrill’s, and I would say the large brokers substantially all of them. Smith Barney you know it's the pretty high penetration in the large broker/dealers.

Ken Cornick - Arience Capital

And so from a small broker/dealer perspective on a go-forward basis and this ties into your acquisition of task. Would they be more likely to go more of a full service sub-accounting route rather than doing it in-house?

Thomas A. McDonnell - President, Chief Executive Officer

Well, we hope so because we think task and address that lower market, I think one of the questions Ken is what happens to the middle market you got the top part and you got the bottom coming up, but there is also a better sized middle market in there and I'm not sure, what is clear there, which direction they would jump, but you know I think there is certainly a opportunity there and also a number of our clients are actually broker/dealers with fund groups themselves we should have some probably hopefully... hopeful advantage to addressing those groups with our sub-accounting solutions versus somebody else's?

Ken Cornick - Arience Capital

All right. And just quickly on international just before we get to the disclosure of the actual revenues I assume they were, you know not up dramatically, but what's going on there in terms of operating profit contribution? It seems like the revenues last year, the revenue growth is pretty strong and it didn't follow the bottom line and you guys cited professional service revenues. What exactly are those? Are those implementation of software sales that have already been done or will they lead to future revenues how does that work?

Thomas A. McDonnell - President, Chief Executive Officer

Well, Some of them were installation software already done. Some of them were modifications of existing systems where they buy the professional services from us. But I think in that particular business I think given some of the strength in the last couple of years, we probably had overstaff relative to actual legitimate realization of revenue in the fourth quarter last year and in the first couple of quarters this year. So we are trying to adjust some of that cost basis also, but most of those costs are not predicting increased license revenue. In fact usually it is the reverse, usually the… well it’s two sides, one people already have this software if they want to make a change often, they will have us come in and modify the software, that's a professional service. But lot of the professional services are around conversion and installation and often times will occur for a reasonable period of time after the installation where that the client finds out they want incremental features that they had not anticipated when they originally acquired the software.

Ken Cornick - Arience Capital

It’s fair over the next couple of quarters that margin should improve there regardless of the weakness from the top line perspective?

Thomas A. McDonnell - President, Chief Executive Officer

Well, it just depends on the how weak the top line is, but I think that's probably generally an okay assumption.

Ken Cornick - Arience Capital

And just last question and I will let you guys go. This year --

Thomas McDonnell - President, CEO

I’m going to have to leave because I've got a plane shortly.

Ken Cornick - Arience Capital

Okay. Just quickly the share of purchase, it's not as if these omnibus conversions happened without, I mean you knew about these when you're buying back stock? Correct. I mean this is not... this is not something that happened in the last minute?

Thomas A. McDonnell - President, Chief Executive Officer

No that's true. I don't think that the omnibus impacted our decision at all. I mean and quite frankly the major pressure on earnings came from some of these other factors we mentioned because that the omnibus conversions are future quarters yield, we have a dampening effect to a degree going forward. But no we didn't tie... we didn't see that as a factor relative to given the decline from the fourth quarter into the first quarter we just felt that was legitimate to expand the budget that we'd anticipated for the year more on a front-end basis.

Ken Cornick - Arience Capital

Okay. And Ken, just the international revenues if you had them?

Kenneth V. Hager - Chief Financial Officer, Vice President, Treasurer

International revenues were $39.4 million that's decline $1.5 million from the first quarter last year.

Ken Cornick - Arience Capital

Great. Thank you very much.

Thomas A. McDonnell - President, Chief Executive Officer

That was the last question?

Operator

We do have a follow-up question from the line of Murali Gopal of KBW. Please go ahead.

Murali Gopal - KBW

I think you said the sub-accounting loss this quarter was unusual. Just to put things in perspective, can you just give us an idea of what it's been in the last few quarters?

Thomas A. McDonnell - President, Chief Executive Officer

We don't have that data in front of us and we're going to have to wind up the call because I've got to leave in an airplane.

Murali Gopal - KBW

Okay. Thanks.

Operator

There are no further questions in queue at this time Mr. McDonnell. Please continue.

Thomas A. McDonnell - President, Chief Executive Officer

Well, we thank everyone for being on the call.

Operator

Ladies and gentlemen that does conclude our conference call for today. We would like to thank you for your participation and also make you aware of the replay information of the recorded conference call which will begin at 12:00 PM today lasting for one week until April 29th midnight on that day. You may access the conference by dialing 1-800-475-6701 and entering access code 915813. If you're dialing from an international location, please dial 320-365-3844 and the access code 915813. Thank you for your participation on behalf of today's panel and thank you for using AT&T Executive Teleconference. Have a good day. You may now disconnect.

Copyright policy: All transcripts on this site are copyright Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

Comments

[jimsep:]

Great job, management! In the quarter you repurchased over 5 1/2 million shares of your stock at an average price of $70.20 per share. The stock closed at $57 to-day after you produced a quarter of a 1.8% revenue increase. Is that what we pay you for?

Shareholders should be screaming about this! This is a perfect example as to why stock buybacks are almost always folly and in no way a "return to shareholders" which is a myth perpetuated by management and parroted by the media.

2008 Apr 22 09:18 PM