Jul 30, 2009
Executives
Jeff Yabuki – President and CEO Tom Hirsch – EVP, CFO and Treasurer
Analysts
Bryan Keane - Credit Suisse John Kraft - D. A.
Davidson & Co. David Koning - Robert W.
Baird & Co., Inc. David Cohen - J.P.
Morgan Kartik Mehta - North Coast Research Darrin Peller - Barclays Capital Brett Huff - Stephens, Inc. Kevane Wong - JMP Securities
Operator
Welcome to the Fiserv second quarter 2009 earnings conference call. (Operator Instructions) 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 these materials, go to www.Fiserv.com and click on the Access Presentation link on the homepage.
The call is expected to last about an hour. You may disconnect from the call at anytime.
Now we'll turn the call over to Jeff Yabuki. You may begin.
Jeff Yabuki
Thank you. Good afternoon and thanks for joining us today for our second quarter 2009 earnings conference call.
Joining me on today's call is our Chief Financial Officer, Tom Hirsch. 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 matters, adjusted revenue growth, adjusted earnings per share, adjusted operating margins, EBITDA, cash flow targets, sales pipeline, CheckFree integration, the disposition of certain Fiserv businesses, and our strategic initiative, Fiserv 2.0. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.
Please refer to our earnings release, which can be found on our 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. One quick housekeeping comment before we get started.
We are holding our 2009 Investor Conference on September 29th at the Mandarin Oriental Hotel in New York City. We will send out invitations in mid-August or, if you prefer, contact our Investor Relations Department.
Our results for the quarter and the first half of the year were generally in line with our internal expectations. We are especially pleased with our new business additions in the quarter, along with the continuing improvement in the quality of our revenue and earnings.
Adjusted earnings per share grew 7% in the quarter to $0.90, with year-to-date adjusted earnings per share up 9%. We remain confident that our full year EPS results will be within our previous 2009 guidance.
Adjusted operating margin was exceptional, at 27.9% for both the quarter and the year-to-date, a first half improvement of 200 basis points versus 2008 and over 600 basis points of cumulative improvement since 2006. The combination of providing high-value solutions to our clients and building a culture of operational excellence continues to feed the margin expansion.
We generated nearly $300 million of free cash flow for the first half of the year, reflecting the strength of our business model. The small year-over-year decrease is due primarily to the timing of working capital changes, which we expect will reverse by year end.
Adjusted revenue declined 3% over the prior year's second quarter. Similar to the first quarter, the majority of the drop related to external factors such as very low contract termination fees and float income, weak lending activity, tumultuous equity markets, and spotty discretionary spending.
These negative items were partially offset by solid performance in our payments and account processing businesses. Acquisition impact revenue was less than 1% in the quarter.
Excluding the unusual items which we have called out previously, our second quarter internal revenue would have been flat and led by 3% internal revenue growth in our Payments segment. We shared three key enterprise priorities with you at the beginning of the year.
As we complete the first half of 2009 we are on track to achieve our full year objectives. Our priorities are, first, to meet our earnings commitments while maintaining capital flexibility; next, to continue integration efforts with an increased focus on revenue opportunities and product innovation; and third, to enhance our go-to-market approach, leading to increased sales results to new and existing clients.
To our first priority, as I mentioned, we delivered 7% growth in adjusted earnings per share against a difficult prior year comparison, with year-to-date and earnings per share increasing 9% to $1.78. We are not only on track to meet our 2009 earning commitments, but we continue to add high-quality recurring revenue, delivered with a high degree of operational efficiency.
Consider also that our performance through June 30th includes a revenue decline of about $40 million in extremely high-margin contract termination fees and float income. When compared with 2008, this had a negative impact on our EPS of about $0.15 per share, which if normalized translates to an additional 9 percentage points of earnings growth through June 30.
More compelling than the bottom line itself is the underlying quality of those earnings and the implications on our future economic performance. We continue to see the natural operating margin of the company take shape as a result of revenue growth in areas with attractive scale economics such as bill payment, debit, EFT and other transaction processing businesses.
Even in a year when higher-margin revenue is under extreme pressure we continue to sustainably expand operating margin, which we believe will continue into the future. We repaid $125 million of debt in the quarter, building more flexibility into our already strong balance sheet.
Our cash flow characteristics allow us to take advantage of a variety of capital deployment opportunities. We made solid progress on our integration efforts, with an increased focus on innovation.
On the cost side, we generated $28 million in incremental operational effectiveness savings in the quarter and, at $49 million in year-to-date savings, have now achieved more than 80% of our full year objective. Electronic bill payment sales were again strong.
Even in the challenging environment, we signed 102 clients in the quarter, with more than 40% competitive takeaways. Among these additions is the National City portfolio of PNC, which we expect to start converting before the end of the year.
We continue to gain momentum with next-generation banking products such as Corillian Online and Mobile Money, which provide consumers a differentiated best in class digital experience. We are also making important investments for the long term in areas such as EFT and debit, analytics, the large credit union market and several more.
Our third priority is to enhance how we go to market. We had an outstanding sales quarter as we go to market with a unified single company approach.
We believe there are material opportunities to win more clients and capture more wallet share by substantially increasing our focus on our internal and sales processes. We like that these improvements are within our control and not dependent on exogenous factors.
We're optimistic that we can deliver even better results than our market-leading efforts have yielded historically. We expect the majority of the deals we sign this quarter - a large international company based in the U.K., PNC National City and American Savings Bank in particular - to add new revenue beginning in the second half of this year and to fully ramp in 2010.
Before I turn the call over to Tom for a more detailed discussion of the results, let me comment briefly about revenue guidance for the remainder of the year. As you know, we announced that we were moving our revenue guidance range down slightly for the full year.
We took this step, which we believe is an issue of timing and visibility rather than any systemic business model issue, for two primary reasons. First, the uncertain environment continues to affect our diverse revenue streams with a disproportionate impact in areas such as lending, investment services and those products that tend to be in the center of the economic storm.
While we have called out some of the larger items impacting our growth rate, there are a number of areas which, while negative, don't rise to the level of separate disclosure. However, the sum of those negatives is compressing our growth rate more than we anticipated at the beginning of the year.
Second, the cumulative affect of the longer sales cycle time we have witnessed for the last year or so is also putting downward pressure on our revenue growth. This issue is visible in both the sales process and in our clients' ability to implement new services given their internal resource limitations.
While we just completed one of the best quarters for new sales in my tenure as CEO, the delays in closing these and other transactions has pushed 2009 impact revenue out to a point where we won't realize sufficient benefit in the current year to offset some of the environmental issues I mentioned earlier. All of that said, we still expect second half growth to materially improve, leading to positive revenue growth in the second half of the year.
We anticipate that the sequential revenue growth improvement trend in the second half of the year will continue into 2010. With that, let me turn the call over to Tom.
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 Slides 3 and 4, adjusted revenue in the quarter was $983 million and year-to-date was $1.97 billion, down 3% from the prior year excluding the results of Fiserv Insurance. Acquisition-related revenue contributed less than 1% for the quarter and our internal revenue decline was 4% for the quarter and year-to-date.
Adjusted EPS in the quarter was $0.90, up 7% over the prior year, with year-to-date adjusted EPS up 9% over 2008. Adjusted operating income was $275 million for the quarter.
As shown on Slide 5, our year-to-date adjusted operating margin of 27.9% has increased 200 basis points compared with the first half of 2008. In addition, the earnings per share and margin performance in the first half of 2009 was exceptional given the decline of about $40 million in a combination of contract termination fees and a significant interest rate-based decline in float income within our bill payment business.
The loss of those revenues also has a negative impact on our free cash flow. We have generated $293 million of free cash flow year-to-date, which is down 7% compared to 2008, due primarily to the timing of certain working capital items that we anticipate will reverse by the end of the year.
A change in accounts payable and other liabilities negatively impacted cash flow by $54 million through June 30th compared to 2008. This is due primarily to the timing of our estimated income tax payments, which were $60 million higher in the first half of 2009 compared to 2008.
In addition, our absolute level of cash flow in the first half of the year is typically lower than the second due to employee-related retirement incentive payments that do not recur in the second half of the year. These payments were approximately $60 million in both years.
We anticipate that free cash flow in the second half of the year will be sufficient to meet our full year expectations. Free cash flow per share, which again exceeded adjusted EPS, was $1.88 for the first half of 2009.
Our first half internal revenue declined 4% and excluding the items shown on Slide 7 was up 1% compared with the prior year. We anticipate our second half internal revenue growth will be positive and up materially over the year-to-date results which should carry into 2010.
The revenue growth acceleration in the back half of 2009 is due to several key factors. Revenue related to non-discretionary spending by our clients, core account processing, online bill payment and debit processing continued to perform well; however, a number of environmentally driven items pressured our growth rate in the first half of the year, including home equity processing, float, termination fees, currency, account declines in investment services, and license revenue.
We expect the impact of these items on our growth rate in the second half to improve due to both easier comparisons and a bit more stability. Additionally, we expect to be positively impacted by the new business signed in the first half of 2009 that will begin to come online.
These wins, which were highlighted in our earnings release, are proof points of our success in bringing differentiated products to the market in a very focused way. We signed a large multi-year international transaction in July with a major U.K.-based company to service and expand their financial services business.
In addition, we signed an agreement with PNC to convert the National City bill payment accounts to our award-winning bill payment system. We also signed American Savings Bank, a $5.2 billion financial institution, to our signature enterprise banking platform, with up to 20 additional integrated Fiserv solutions.
These are a few examples of the larger client deals that will ramp up in the second half of 2009. In addition, we have signed over 200 new bill pay agreements and 100 new debit processing agreements in just the first half of 2009, compounding the integration revenue benefits.
And lastly, our market data shows that we are recording a higher win rate in new account processing clients so far this year than in 2008. The payment segment adjusted revenue was $475 million for the quarter and $962 million on a year-to-date basis net of the pass-through cost for postage.
The sequential decline in revenue from the first quarter was due primarily to normal seasonality in our output solutions business, which is seasonally strong in the first and fourth quarters. As indicated on Slide 6, adjusted internal revenue growth in the quarter was 2% in the segment, which was a sequential improvement from the first quarter.
Adjusting for the reduction in float income brings the rate to 3% for the quarter. In addition, revenue declines in our investment services business that was acquired through the CheckFree acquisition also impacted the rate by 1% in the quarter.
If we exclude these items, the core payment segment growth rates would have been 4% for the quarter and on a year-to-date basis. Our output solutions and transaction-based payment businesses continue to perform well.
We realized strong double-digit transaction growth in our EFT and Debit processing business in the quarter. Our transaction growth is linked to current market trends as consumers are trading credit transactions for debit.
Also, as we have shared previously, consumers served by community based institutions tend to be earlier in the adoption of debit, which produces more transaction growth. Both trends are contributing to our success, along with strong client growth.
Segment operating income was up 10% to $147 million in the quarter. Adjusted operating margin of 31% was up 240 basis points over last year.
Year-to-date segment operating income was also up 10% to $302 million and operating margin is up 260 basis points to 31.4%. The increase in adjusted operating margin in this segment was driven primarily by continued positive synergy impact associated with the CheckFree acquisition, strong operating leverage in our transaction-based EFT and bill payment businesses, and good performance at output solutions.
The Financial Institution segment generated revenue of $514 million in the quarter, down 8% compared with the prior year. On a year-to-date basis revenues were $1.02 billion, also down 8% compared to the prior year.
Adjusted internal revenue contracted by 9% in the quarter and year-to-date. Excluding the impact of home equity loan processing, termination fees and currency, internal revenue was down by 3% for the quarter and 2% on a year-to-date basis.
Second quarter revenue growth was also impacted by lower license fees and fewer add-on product sales to existing clients. Home equity loan processing revenues were $34 million in the quarter, up sequentially but down year-over-year by $16 million in the quarter and $35 million for the first half.
This alone reduced segment internal revenue growth by 3 percentage points both for the quarter and year-to-date. The current environment had driven quarter to quarter unpredictability in this revenue stream.
We generate about 10 million of the 34 million in second quarter home equity loan processing revenue from our home retention product. Unfortunately, the visibility for the balance of 2009 for this product has become extremely low as loan servicers have become increasingly cautious about the pace at which they ramp up their loan modification efforts.
This is one of the primary reasons we lowered our revenue guidance for the year. As a reminder, the negative impact of the home equity loan processing business on our free cash flow and operating income is not significant.
Over the last year as revenue has declined in this business we have also lowered its cost structure. The higher-margin contract termination fees we received in the quarter were relatively nonexistent by historic standards.
As we saw in the first quarter, termination fees decreased significantly, from $17 million to $3 million in the quarter, a decline of $14 million. The reduction in termination fees impacted internal revenue growth by 2 percentage points in the quarter and 3 percentage points year-to-date.
The low termination fees in the quarter continued to reflect the slowdown in voluntary merger and acquisition activity among financial institutions. While it should bode well for future recurring revenue, the material decline in termination fees creates year-over-year comparability challenges.
These comparisons should ease in the second half of 2009 as termination fees were only about $11 million during the second half of 2008. A bright spot in this segment is the improved quality of earnings, which reflects the combined benefit of operational efficiency and a much more attractive product mix.
While overall revenue in the segment declined $84 million in the first half of 2009, operating income increased $1 million to $282 million in the same period, and operating margin expanded 210 basis points to 27.5% compared to 2008. Several of the items that drove our operating margin performance in this segment were consistent with the first quarter.
Our community based account processing businesses delivered continued operational efficiencies and generated solid operating leverage as a business. Second, while we continue to see large revenue decreases from lower margin businesses such as lending and check processing, we have been proactively reducing the infrastructure cost to better match the revenue level.
Third, while currency exchange rates impacted our revenue negatively in the segment, the bottom line impact was negligible. Finally, our commitment to operational efficiency is creating much better drop through rates.
These factors helped us achieve a 28.1% operating margin in the segment in the quarter. This is up 250 basis points year-over-year in spite of the negative impact of termination fees and up 110 basis points sequentially over the first quarter.
Capital expenditures were $98 million through June 30th, up $6 million over last year, and are at about 5% of adjusted revenue. We repurchased approximately 975,000 shares in the quarter at an average cost of $43.26 per share and have 4.5 million shares remaining in our share repurchase authorization.
We pre-paid $125 million of our term loan balance in the quarter and incurred net interest expense of $55 million. We had two items impacting cash balances relating to discontinued operations and our insurance joint venture.
First, we received a contingent purchase price payment of $40 million related to our sale of Fiserv ISS to TD AMERITRADE announced in 2007. We also anticipate closing the remaining transaction associated with Fiserv ISS in the second half of 2009.
We estimate proceeds of approximately $70 million related to that transaction. In addition, in the third quarter we finalized a financing agreement to lend approximately $65 million to our insurance joint venture, StoneRiver, which was funded out of excess cash balances at June 30th.
This transaction allowed StoneRiver to refinance all their outstanding debt. Our effective tax rate was 38.2% for the quarter and we still expect our effective tax rate to be 38.5% for the balance of the year.
Now I'll turn the call back to Jeff.
Jeff Yabuki
Thanks, Tom. Sales results for the year are a bit below expectations at 90% of quote, but have been improving over the last 90 days.
We're still seeing long sales cycles impact the timing of new business. Although the pipelines remain relatively strong, the delays are now prompting us to take a bit more cautious stance about our level of sales attainment for the full year.
Integrated sales for the second quarter were $27 million, bringing the six-month total to $47 million or 52% of the $90 million full year target. Integrated sales are up 34% or $12 million over last year's first half.
Our leading areas of sales in the quarter continued to be in payments and efficiency based products. Before I wrap up, let me quickly update you on our view of the environment and provide you with a summary on our outlook for the balance of the year.
The number of regulatory actions so far this year continues to fit comfortably within our range of expectations. In 2009 64 banks and 7 credit unions have been subject to regulatory action, which still represents a tiny fraction of all the financial institutions in the U.S.
We expect the number of regulatory actions to increase in the back half of the year. And, as we said previously, we remain about even on wins and losses since the commencement of the regulatory actions.
Traditional de novo activity is still quite low and we are not anticipating any near-term pickup in that area. Although there is a sense that the sector outlook has started to stabilize, we do not as of yet see that headline turning into any material change in current year buying behaviors.
We believe the broad market can be summarized as follows: Sales and implementation cycles are lengthening and discretionary spending is still quite low. There is a smaller universe of available deals across all but the largest end of the opportunity landscape, where there remains increased exploration.
Last, we believe there is little incentive for financial institutions to dramatically alter the technology services buying posture they adopted earlier in the year regardless of potential market stability and therefore will remain guarded for the remainder of 2009. As we mentioned upfront, our 2009 EPS guidance remains unchanged.
We expect adjusted EPS growth of 10% to 14% or $3.61 to $3.75 per share. We still believe that any perceived over performance in the first half is best viewed as de-risking our full year earnings outlook.
We continue to expect full year free cash flow growth of 6% to 10% based on normalization of working capital in the second half of the year. We expect second half revenue growth to be positive, with a sequential improvement from the third to fourth quarter.
For the full year we project our revenue growth, including currency, to be in a range of up 1% to down 2%. And last, we now expect full year operating margin to expand by 100 to 150 basis points over the prior year.
Qualitatively we would expect to see improvements in results from the third to the fourth quarter, driven primarily by normal seasonality in software license sales in our output solutions business. As always I want to recognize the hard work of our nearly 20,000 associates around the world who remain dedicated to our clients and their success in this extraordinary and interesting time.
In just a few days we will celebrate the 25th anniversary of our founding and it's only because of the quality and commitment of our people that we've had the opportunity to serve so many clients so successfully over that long of a period of time. With that, Operator, let's open the line for questions.
Operator
(Operator Instructions) Your first question comes Bryan Keane - Credit Suisse.
Bryan Keane - Credit Suisse
I was just hoping to get an update on the license sales in professional services. What did that do in the quarter and what's the outlook there?
Obviously, that's more discretionary so I'd be interested to see how much that fell.
Tom Hirsch
In the first quarter we had, just to backup, as a percentage of total revenue it's roughly about 5% as far as the license revenue goes. The first quarter held up kind of stable and in the second quarter it fell between $5 and $10 million as far as our license revenue goes as a company.
And so that's kind of where we were in the second quarter. From a discretionary standpoint we continue to be cautious around the environment, but that was really the decrease that we experienced in the second going forward.
So it's pretty much a little bit worse than what we anticipated as we were sitting back here in the first quarter, but, again, it's not a material part of our revenue from the standpoint of our large recurring revenue component. As far as the professional services go, we didn't have significant changes there.
Again, our business model, as you know, is primarily outsource related. We do have license and services and that, on some of the deals that we announced, we do have some services with that, so we anticipate a better improvement on that in the second half given some of the deals we announced, such as the large international transaction that we mentioned.
So we kind of see that kind of stabilizing, but clearly it's not a big number from a company standpoint.
Bryan Keane - Credit Suisse
And then just looking at the adjusted organic growth on Slide 6, I think, for the total company it's zero percent and then Payments 3% and then Financial is negative 3%. Pretty soon here we're going to anniversary a lot of these headwinds, so what gets the organic growth going beyond just the headwinds to more normalized growth?
Is that just new wins or a little bit of a pickup in spending? Could you talk about that, Jeff?
Jeff Yabuki
Yes, it is. And, Bryan, you're right, we clearly have the anniversarying of some of the bigger issues and that will clearly help.
We announced several deals in our press release. You can see a lot of deals, but we highlighted a few of them.
We have been doing a pretty good job on the account processing side; our win rate is actually higher this year than it was last year, albeit on a smaller number of deals. But we're seeing good success there.
Our integrated sales, as we talked about, is up, and part of that shows up in the Financial segment and part of that shows up in the Payments segment. So it's really a combination of those items that, as well as the services - I just want to make sure I pick that up on the services side and the implementation - but it's those.
There's no single item that moves it forward; it's a conglomeration of those kinds of existing product sales as well as new.
Bryan Keane - Credit Suisse
Lastly, I was hoping you'd give us a little bit of a preview on some of the things we might tackle on the Analyst Day on September 29th.
Jeff Yabuki
I think the big item on our list is making sure that we bring more clarity to how we're going to grow revenue moving forward. Unfavorability, we've had a number of headwinds that have been impacting us, as we've talked about, which at times makes it difficult to compare us to some of the other players and vice versa, and so we want to make sure that people understand that as well as talking about where we are investing to create more market differentiation, which again leads to revenue.
And I think lastly one of the things we feel the best about and we'll expand on this is this whole notion of quality of earnings. On one hand we've lost a lot of pretty high-margin revenue - float, termination fees, license fees - those have, as you know, very high drop rates - and for us to be able to continue to grow margins really says two things.
It says that we're able to manage compression, which we think is important, and we are replacing that revenue with pretty attractive recurring revenue that the good news is that it has a nice drop-through rate on its own - obviously, nowhere near what some of the one-time revenue that we were talking about has or at least on the termination fees, but the great news is this is sustainable revenue. So we'll talk a little bit in actually a fair amount of detail on that point.
Tom Hirsch
And, Bryan, I just wanted to add, if you go to Slide 7, which has the year-to-date adjusted gross and you look at our Payments segment - which, again, is about half the company - we did have the float in the large client re-price, which is going away, as you know. The float gets much better in the second; 3% growth there.
And then we do have the Investment Service business, which I highlight on a note that came from the CheckFree acquisition. That's clearly down in the current year, but our core, when I look at core Payments growth rate on a year-to-date basis, it was about 4%.
And as Jeff highlighted, we continued to sign over 200 bill pay relationships in the first half, over 100 debit card relationships; that volume is continuing to grow. So as we're looking to the second half of '09 into '10 we're coming off this baseline, what I would say a core growth rate in Payments of 4%.
We also have in that segment, just to highlight it, is our risk business, which does have some license revenue, which is a little negative this year with the currency impact also. So when I look at the core Payments growth and the wins we had both in the small and the mid-tier and the large one that we announced on the PNC piece, that gives me good confidence as we look out longer term forward into 2010.
Regarding the Financial business, on that same Slide 7 it shows a minus 2% adjusted. Clearly, the contract termination fees and the home equity are going to get much better in the second half, but that increase going forward is largely coming through some other large deals that we announced in our core and also the fact that we continue to sign - and Jeff mentioned this earlier - more new deals from a core processing standpoint this year than we did last year.
So we're having a lot of success in the account processing space and that's going to start coming through as we get through the back half and into 2010.
Operator
Your next question comes from John Kraft - D. A.
Davidson & Co.
John Kraft - D. A. Davidson & Co.
Tom, just a couple clarifications first. Did you say that that home retention business is 30% of your home equity lending revenues?
Tom Hirsch
It's not as far as lending goes. I would say it's a little bit more than that as far as our lending revenue goes.
We don't have a lot associated with that but it is greater than 50% as a company as far as where we're at from that standpoint today, so it is a larger piece of that particular component. We don't have a lot of exposure or changes outside of our total lending business beside that particular piece of business.
John Kraft - D. A. Davidson & Co.
And then did you give a debit transaction growth number or debit EFT?
Tom Hirsch
No. We did say we continue to experience double-digit growth and we have had very good growth in our debit business mainly because of some of the adoption trends we're seeing in our particular client base, but we continue to sell well.
We had the largest amount of new sales as far as our debit card processing business goes in the quarter, so we're very pleased with that. It was 58 new clients through our efforts compared to 48 in the first quarter, so we continue to make a lot of progress there in that particular area.
John Kraft - D. A. Davidson & Co.
Can you tell us whether it grew faster than in Q1 and/or how the trends were month to month during the quarter?
Tom Hirsch
We had it a little bit quicker in Q2, but it's been growing good year, John, and we really haven't had any major fluctuations either by month - by month you can get it, as you know this business very well - but overall it's just been very consistent in both the first and the second quarter.
John Kraft - D. A. Davidson & Co.
The Michigan bank deal, that was a license deal, right?
Jeff Yabuki
Macatawa?
John Kraft - D. A. Davidson & Co.
Yes.
Jeff Yabuki
No, it wasn't; it was an outsource client.
John Kraft - D. A. Davidson & Co.
Outsourced, okay. And then the PNC, the National City stuff, as I recall Corillian did some work on the Internet banking side with them.
Is that what got you in the door there? And what about PNC?
I thought that might have been in-house, but are you doing anything with them in kind of the legacy business there?
Jeff Yabuki
Yes. So PNC was our bill pay client and you're right, they have a very good relationship with the Voyager team.
We've done a fair amount of interesting customization for them on the Internet banking side. And so when PNC acquired National City we had been in discussions on moving that business over to our platform, so that's really how that went.
PNC's a long time client, we have a very good relationship with them and we're very pleased that they decided to move the National City business from one of our competitors over to our platform.
Tom Hirsch
And they are, John, as we highlighted in the press release, one of our top five electronic bill payment clients.
John Kraft - D. A. Davidson & Co.
Jeff, you were pretty clear that Q4 should be an uptick from Q3, but what about Q3 relative to Q2?
Jeff Yabuki
We see Q3 being better than Q2, and we see Q4 being better than Q3. So we are seeing, John, because of the changing in the comparables, the ramping of new business and what we can see, what we have visibility into, we think that trend will continue throughout this year and should actually ramp into 2010 on a nice trajectory.
Tom Hirsch
And, John, as you're aware - I'll just add one other thing to that - we do have certain businesses that have seasonality, like our output solutions businesses, which are historically much stronger in the fourth quarter and first quarter, so that does have an impact as you look historically at our results.
Operator
Your next question comes from David Koning - Robert W. Baird & Co., Inc.
David Koning - Robert W. Baird & Co., Inc.
I guess first of all, on the financial margins, last year in the second half they were lower than the first half and really, if you adjust out term fees, I think they ended up actually being higher in the second half than the first half. Is that the normalized way to think of things, especially since term fees were pretty low the first half of this year, that Financial margins can be better in the second half than the first half?
Tom Hirsch
You know we don't give guidance by segment, Dave, and what I'll say is that we did expand our overall margin guidance as a company to 100 to 150 basis points. There is nothing systemic where we shouldn't continue to make progress over time.
I'm not going to give quarter-over-quarter guidance, but clearly we don’t have a lot of anomalies in the current margin numbers because most of the, for instance, contract termination fees, as you highlighted, are nonexistent. So those margins are clearly very stable and as we continue to sign new revenue we should be able to expand margins depending on our investment levels, and we'll continue to plan to do so.
But, again, going forward, as we layer on incremental revenue we have a very good product mix today and we should be able to continue to expand those notwithstanding some investments that we're going to continue to make as a company.
Jeff Yabuki
Just for a little bit more clarity, Dave, I would say there's nothing going on in the numbers that is unusual. I think you're really seeing the change in the shaping of the company that we've been doing for the last couple of years.
And I think there had been some, not concern but question kind of given the term fees - that had always been in numbers - and now I think it's very obvious what the natural margins of the company look like given that a lot of that high-margin revenue has been stripped out, at least on a temporary basis.
David Koning - Robert W. Baird & Co., Inc.
And maybe I guess as a follow up, in the second half it would require, to get to the top end of revenue guidance, probably 5% or 6% revenue growth. What's the pathway to get to that higher end?
What would need to happen? Would we need the environment to get quite a bit better?
Maybe you could just talk a little about that.
Jeff Yabuki
Sure, yes. And I think your math is generally right.
Our take would be the thing that would have to happen is we would have to be able to get a lot of our revenue from contract into implementation. One of the things that's actually hurting us a bit is because some of FIs, especially as they move up the size ladder, there's a fair amount of resource contention in these institutions because they've made adjustments to their cost structure and they are unable to even implement some of the things that may have already been sold.
So while we don't track publicly or talk publicly about a backlog number, we have had a number of projects that are sold that have been delayed really for reasons of implementation, so you'd have to see some of that open up in a way that is better than it has before. I don't see that being necessarily environmental, but you'd have to see that.
But some of the larger transactions that are in our pipeline that we've talked about, they'd have to get implemented in a way that is more normal. We don't have good visibility into that, so we're taking a little bit more of a conservative posture.
And then lastly we have to continue to see nice pacing in the sales that we've been seeing occurring over the last 90 days. So, again, it's the top end of what we're talking about right now.
You'd have to have more things go right than wrong, there's no question about that, but we think it's certainly within the realm of possibility or else we wouldn't have been talking about it.
Tom Hirsch
And I think you need some things. Obviously, Dave, we have the home equity loan processing, certain businesses like that, to what I would say stabilize more - our investment services business, from an account decline - to continue to stabilize those accounts, which helps over the long term.
So you'd need to hit on those particular cylinders to get to that type of top end of that particular [inaudible].
Jeff Yabuki
That's a good point. The FSD example alone, or the fulfillment business alone, earlier in the week there was a lot of discussion about - or in the last two weeks about the recidivism rates of these loans and so banks start saying well, we're not going to do anything, and then yesterday - I think it was yesterday or today - the administration came out and said well, we think differently and we want to see many, many more loans modified.
So the environment is moving so quickly that it's not just the new business, but it is visibility into our existing business and, again, more of those things would have to go right than wrong.
Operator
Your next question comes from David Cohen - J.P. Morgan.
David Cohen - J.P. Morgan
I think you talked about the win rate being up in the quarter. Would you give us some more information about the drivers there?
How much have you been benefiting from some distraction of your competitors? What's pricing look like on the new wins?
Jeff Yabuki
Yes, good question. I want to make sure that I'm clear in case I said it wrong.
We had a very good quarter from a win perspective, probably the best in the three and a half years I've been here in terms of deals that got closed in the quarter and the value of those deals. And then I did say that our win rate on the account processing side - which is sometimes referred to as core - although there are fewer deals, our win rate is actually higher than it's been.
So from that perspective I don't know that I can sit here and say purposefully that this is a product or a byproduct of the distraction that may be occurring across the competitive ranks. I would say it's more the value proposition that we've been dealing with is resonating with the marketplace.
We in February re-branded the company. We've been dealing with the market in a different way, and I think that's beginning to pay off.
I think the pricing levels that we are dealing with, we aren't seeing any dramatic change in the level of price compression on concession that you're seeing in new deals, and I think you would see our margins - we haven't seen any impact on our margins, which I think is again a pretty good indicator of compression. So we're really winning on the basis of, we think, higher quality technology, a better integrated value proposition, and a sales force that's willing to just kind of keep going at it and at it and at it.
David Cohen - J.P. Morgan
Would you talk a little bit about how things are going with the mobile payments area and if there are other areas that are particularly important from a growth standpoint?
Jeff Yabuki
Sure. Just in all candor I've been surprised, David, that mobile has had as much attention as it's had in this year.
I really thought mobile might be one of the things that people would talk about but they wouldn't do much on, but we are seeing a lot of interest in mobile. We're seeing a lot of discussion on mobile not just from maybe a traditional perspective but really I think there's a recognition across the financial service industry that mobile or devices that sit on the fringe are going to be very important, that sit on the perimeter of how institutions do business.
So we're seeing a lot of discussion there. Internet banking, people are looking for what's the next innovation in Internet banking and we're seeing a lot of movement there.
Bill payment, one of the things that people are looking at right now in an important way is how can I attract new retail deposits? How can I increase balances?
Bill payment is a proven - at least our technology, we have multiple case histories on why that matters and that's resonating quite well with financial institutions that are looking to increase their capital base. So those kinds of products are important.
Anything around efficiency is getting at least more than a nod; there's lots of discussion there. And I think there's also a ton of people sitting back knowing that some changes are coming in the regulatory environment, so we expect that the risk and regulatory world will drive some business in the future.
Right now there's not a lot going on; there's a lot of people waiting. And then I think the only other thing that's important right now is the whole notion of NSF and OD and how people are going to price that in the DDA world.
David Cohen - J.P. Morgan
And then with the lower revenue outlook, you touched on some of the contributing factors. I think you mentioned license and less visibility in home retention.
Can you help us sort of quantify what the different contributors are relative to the change in the guidance?
Tom Hirsch
Yes, I would just say that, again, we're talking 1% to 2%, somewhere in that particular range; not a large number given the size of our company. So from the standpoint of first to second to third, I think it's those sorts of discretionary purchases.
And there are a lot of little things as far as add-on products and sales. Clearly, our home equity particular business and just the visibility associated with where those volumes are going to be in the second half of the year is clearly one that stands out from a larger standpoint; general cautiousness just given the environment.
And, again, some of the businesses, such as our investment services business, are really experiencing or are tied into the market environment. A lot of businesses are clearly non-discretionary, but those that are tied into the market environment are being impacted and we are going to take management's view of that, which is typically to give as much visibility into that as we can as we sit here today.
So that's probably the primary factors.
David Cohen - J.P. Morgan
Then the last question: Obviously the grow-overs get easier. Can you tell us what you're assuming in the guidance for the different grow-over categories?
Tom Hirsch
Well, I mean, if you look at Page 7, which kind of has a number of the different items there, clearly our home equity business, you're aware that in the second half of the year we're clearly going to have much easier comparison in that particular business. I think in the first half of 2008 the home equity business did about $90 million of revenue compared to probably $60 million in the second half, so clearly there's a good chunk there.
The termination fees, given that guidance, we had $35 million, I think, or so in the first half of 2008; that's down to $11 million in the second half, so clearly we're not going to have a big issue there. The large client re-price and float is basically the large client re-price is gone and float by the third quarter is going to be pretty de minimis.
So that's kind of my supposition of those four or five items.
David Cohen - J.P. Morgan
Just a follow up to that. I think you said there are a bunch of small items that have also been a little bit of a headwind.
In aggregate, are those going to head up to a point or is it even less than that?
Tom Hirsch
In total there's a number of different things there, but I don't believe that when you say all the little stuff that's throughout the company - is that the question? I'm sorry.
David Cohen - J.P. Morgan
I think earlier you had talked about - maybe it was Jeff who'd talked about there were smaller items in addition to these big ones that you called out and the smaller items in aggregate.
Tom Hirsch
Yes, that adds up. When you look at whether it be an add-on product sale in one of our product lines, professional services, etc., those little things just kind of can add up to that kind of total.
Jeff Yabuki
Yes. And from a context perspective, I mean, obviously, we can't talk in depth about what that would be, but suffice it to say we're a fairly big company with a lot of different product lines, some of them bigger, some of them smaller, but it doesn't take a lot to have those things add up to be a fairly material number.
Operator
Your next question comes from Kartik Mehta - North Coast Research.
Kartik Mehta - North Coast Research
Jeff, you talked about the lengthening of the sales cycle and you also talked about having some success on the core business. I guess what I'm trying to figure out is is the sales cycle only lengthening on the software and professional services or are you seeing that also impact the core business?
Jeff Yabuki
It's really everywhere. It is in all places where decisions are being made.
People are just taking longer to make decisions that have any material magnitude. And as it relates to the account processing or core business itself, there are actually many less decisions, so to some extent that's quite good news.
Depending on your level of market share you probably prefer there to be less decisions than more and so from our perspective we're pleased that we have a higher win rate, although it's a smaller number. But they are all lengthening.
People are very concerned and cautious about taking risk. The risk of implementation is something that people are very cautious about and the resources, whether they be financial resources, i.e., the institution's own capital, or the human resources that it takes to implement something, there's just a lot of caution around that right now.
And that is in my opinion what's lengthening the sales cycle. And that's actually one of the reasons why we have confidence that that will turn, because it's not a challenge with the value proposition.
It's really as much resource-based than it is anything else.
Kartik Mehta - North Coast Research
Jeff, if you look, what are your customers' biggest needs? The reason I ask that is as we come out of this eventually what products could sell well?
Are there needs that you can meet from a technological standpoint that could really help your customers that they're saying, Jeff, I'd really like to do this but I have to wait until I see some clarity?
Jeff Yabuki
For the last probably year, year and a half, it's really been focused on three primary areas, so products that are going to help institutions gather deposits, whether that be bill payment, Internet banking, source capture, all kinds of technological advantages that allow institutions to interact with their clients in a way that allows them to gain share and/or new clients, so that's one. Two is around operational efficiency and so whether that be in some cases people who were running their entire system in-house now saying I'm willing to look at an outsource solution because I have an efficiency ratio challenge and I want to focus on that or just at the cost of being in-house and managing an entire staff is too much or whatever the case may be, so anything around efficiency.
And then third really around risk and regulatory, so you're seeing institutions where they may not have put enough focus on the different types of enterprise risk, you know, there are six or seven key categories of enterprise risk, including performance management analytics - again, being able to build capabilities that allow institutions to better personalize their communications with clients. And then on an overriding basis there's always the importance of serving the small business commercial customers and so we continue to see a very kind of dedicated - you hear clients a lot talk about back-to-basics, how we serve our best clients, and those best clients tend to be around small business.
And so that's more of a smattering of different capabilities; I'd call that more a segment approach than anything else. And so when we're making our investments - and we continue to invest; for this year we've actually increased our level of investment as opposed to decrease it because we believe that this cycle will turn and we see there are lots of opportunities for us to be better differentiated - we're making investments in areas that we think match up quite well with those four categories of opportunity.
Kartik Mehta - North Coast Research
You said de novo activity obviously has come to almost a halt. I can't imagine that's going to have any short-term impact but I'm wondering at what point, if you don't see the activity improve, could it have an impact on revenue for the company?
Jeff Yabuki
Yes, it's a good question. De novos really do two different things.
They have an opportunity to grow from nothing to something so you see account growth, so in three to five years you could see some issue there. But the other thing that de novos have really done is seeded termination fees because in many cases de novos are targets for merger and acquisition and that was one of the big funders of termination fees was basically the merger activity that's occurred over the last three to five years.
Now, I don't think termination fees are going to ever go away. Even this year we have some level of termination fees and some people have more than others, but from our perspective that is one of the areas that we see could create an issue.
We think de novos will come back. I mean, there's a lot of money on the sidelines waiting to be allocated, but it's a matter of time.
And there are some, Kartik, as I'm sure you know, some of the private equity firms and some other non-traditional entrants have come in with business plans that look a lot like how can we do a lot of rollups. So they may look a little bit different, but I think you're going to have new capital.
You're going to continue to have new capital coming in.
Operator
Your next question comes from Darrin Peller - Barclays Capital.
Darrin Peller - Barclays Capital
Just a quick question, first of all, on the expense side. I know you talked briefly on margins - or actually in detail on margins - but really if you can hone in on the actual G&A line.
It dropped off a fair amount quarter-over-quarter and I guess some of the other lines also. I really want to ask you to break out really what was CheckFree synergy related versus just other efficiencies, internal efficiencies, and also what to expect going forward on those lines.
Tom Hirsch
We don't give guidance by line, obviously, on our P&L, but to the extent of the SG&A piece, I think if you're actually comparing it, it may not be on an adjusted level but it could be on a quarter-over-quarter level, we did take a $15 million charge in the first quarter that we highlighted, so the SG&A is down probably about $15 to $20 million from that particular standpoint. And what I would say as far as SG&A goes that includes, at least on our GAAP statements, some of the acquisition-related intangible amortization.
And then we had that severance charge in the first quarter. But without that stuff we're down probably $10 million a quarter from the standpoint of when you kind of look at last year, from a standpoint of where those levels are and where we see those kind of going forward.
So, again, we've done the things we've needed to do from that standpoint, but that's really the Q2, the Q1, as far as SG&A goes. To answer your further question around where are we seeing the margin expansion, specifically in what areas, we talked a little bit about the payments.
We've clearly identified some of the operational effectiveness, which includes our CheckFree synergies. We've just really made good progress and we're hitting our targets that we had there from a cost standpoint and we've given those metrics.
The second quarter was very positive, as Jeff indicated. I think we've hit about 80% of our target already through the first half of the year as far as our operational effectiveness savings, which includes the CheckFree synergies.
And, again, the mix of businesses that we have within these segments, we've really refined that over a number of years and you're just kind of seeing that coming through in the margins, specifically when the home equity business comes down, while the revenue does go away in the Financial segment as I highlighted - you know, the revenues are down $80 million year-over-year - our operating income is up mainly because we're concentrating on growing revenue in those areas that have good incremental drop-through. So that's kind of it overall in a nutshell.
It's good leverage in our Payments businesses. You know that industry well.
From a debit and bill payment standpoint, as we grow those incremental volumes you typically have good margin expansion, and that's what we're seeing happen in areas such as debit and bill pay, notwithstanding some of the other headwinds that we had from a revenue standpoint.
Darrin Peller - Barclays Capital
All right. So we can probably use that as sort of a run rate going forward, I guess this quarter's levels?
Tom Hirsch
You know, I never look at one quarter but I do look at year-to-date. Clearly, we're comfortable with the year-to-date margins that we've had.
From our standpoint, we've not had a lot of anomalies or one-time type revenues in those numbers, so we are comfortable with those. And we'll continue to expand those going forward, but Jeff brings up, as we've indicated, we have also invested during this time in a lot of different areas.
And we'll continue to balance those margins with investment opportunities as they come up. But clearly we think we will continue to grow margins and continue to focus our product mix and I think, as you've seen the company over the last two to three years, we've done that quite well.
Darrin Peller - Barclays Capital
And then just quickly on the bank failures, I think, as you said, with 60-plus bank failures year-to-date, can you give us some examples of bank failures where you provided services to an institution and what happened to the accounts you were processing? Did you actually keep them as they moved into regulatory control as I think you've said in the past you expected to occur?
Tom Hirsch
Yes, Darrin, from that standpoint we're not going to obviously mention any names, but there have been the 64 actions and to the best of my knowledge none of the clients actually that we have been processing for have really shut their doors, so the accounts continue to get processed. To the best of my knowledge in almost all the cases we're still doing the processing.
And as kind of the new ownership works out, decisions are made. We have won some of those; we have lost some of those.
But net-net we're about even based on at least our scorecard, but there's still decisions to be made in the future.
Operator
Your next question comes from Brett Huff - Stephens, Inc.
Brett Huff - Stephens, Inc.
On the cost question that was asked last time - or just last question - I just wanted to ask about the specific decline in the cost of product expense and if there was anything particular in there? I think it went from $142 to $125 sequentially.
Is that a function of the cost reductions you've done?
Tom Hirsch
You know, what I kind of highlighted was that's in our Payments segment. I think you're aware; I've mentioned this sometimes.
We have what's called our output solutions division, so I would think you saw probably some of the product revenue also decline at the same time. So that is the business that we talked about specifically as a stronger Q1 and Q4, and I think you're seeing some of that come out of that line item along with the product revenue just because of normal seasonality.
Brett Huff - Stephens, Inc.
And then just to make sure I understand how you're thinking about free cash flow for the first half of the year, you had mentioned that there was sort of a $54 million adjustment that you could make. Is it reasonable to think that you just add that back to the first half result and it's a more normalized number or could you just give us some more thoughts on that?
Tom Hirsch
Yes, sure. I think if you look at our cash flow statement, which is on Page 8 of our press release, you'll see in the operating cash flow that the trade accounts payable and other liabilities was negative $62 million in 2009 for the first six months and in 2008 it was minus $8 million.
And what basically happened is we paid our estimated tax payments in 2009 about $60 million more in the first half, mainly due to the rules. We had some dispositions and other things in the prior year which allowed us to defer some of those payments.
So that should reverse as we get to the end of the year in the second half the timing of that particular issue. So that's really the issue that I'm talking about.
Brett Huff - Stephens, Inc.
And then you had talked a little bit about the cross sales and continued success with that; in particular, I think, EFT and debit is one that you focused on. Can you give us a sense of the type of customers you're selling to?
Is it smaller or larger or credit unions or banks or is there sort of a trend there that you see?
Jeff Yabuki
I would say that the way to think about it is those are largely our account processing clients, so they tend to bias to be community based institutions. And that includes banks, thrifts and credit unions, so across that landscape where we have nearly 6,000 account processing relationships.
And so we're continuing to go to these folks and offer them a more integrated value proposition. They look like anywhere from a very small institution up to, call it $5 billion of deposits or kind of in that range.
That's a little bit broader than how we would normally think about, but that'll give you a take of who we're talking about.
Brett Huff - Stephens, Inc.
And what's the value proposition that they're seeing? Is it more integration?
Is it better pricing? Is it functionality?
Jeff Yabuki
It's really a combination of things. It's functionality.
We have very good functionality for that size institution. We have a very strong reporting capability.
We have obviously integration relationships, the ability to begin to pull that data together so that the clients can better manage their own client relationships. We have a variety of different products that we deliver in terms of everything from fraud and risk-oriented product to service-oriented offerings where we are helping clients to move up their level of debit performance with their clients through rewards programs.
Our rewards program was recognized in this last quarter for being one of the best in the U.S. So from that perspective it's really a combination, but it tends to, again, resonate quite well with the community based institutions.
Tom Hirsch
As you know, just to add to that, our account processing market share is about 6,000 institutions and they like that integration, especially the small to middle tier institutions, as far as getting as many services from one vendor and that integration that we have in the core. And that's been our winning driver as we highlighted last year at Investor Day.
I think we're about [a third penetrated] into our account processing base and we continue to make progress on all those institutions going forward and where we have a real focus on in the company, to both get new clients and then continue to drive volume.
Brett Huff - Stephens, Inc.
When we think about internal growth going forward, I think that your longer-term goals are 4% to 6% and, you know, the grow-overs on Financial segment are going to be relatively easier, just given what we've been talking about. And I think you said the Payments, you think, a reasonable core growth rate is 4%, probably a little higher than that I would guess.
At what point do those fully normalize or [inaudible] normalize qualitatively in your mind's eye right now? Is it the second half of 2010?
Are we all the way into 2011? I'm not asking for guidance; I'm just sort of asking how are you guys thinking about those normalizations?
Jeff Yabuki
Our current long-term guidance, kind of what we would refer to, abilities in a normal environment are 6% to 9% revenue growth. And what we've said is in this environment that we would expect, how we see the environment today, that we would be able to grow in the 2% to 6% range, kind of what we would call current environment.
And, again, when we talk about guidance or outlook we talk about how we would perform in any three-year period on average. So from that perspective, I don't think I know any better than anyone else when everything's going to turn, but what I can tell you is from a planning perspective we are not planning for the economy to get materially better until the end of 2010, so that's really how we've thought about how we're planning for the company moving forward.
If it's earlier than that, that'll be great, but we really think it's best to plan using that assumption.
Brett Huff - Stephens, Inc.
I apologize for getting those numbers wrong, but that's exactly what I needed.
Operator
Your next question comes from Kevane Wong - JMP Securities.
Kevane Wong - JMP Securities
First, obviously you talked a lot about the lengthening sales cycles. A little earlier in that cycle I'm sort of curious about when you're talking with banks or looking at the 2010 plan, are you finding more discussions on products, more conversations on topics?
I understand the sales cycle's sort of lengthened, but I'm sort of curious if you're seeing a little more uptick of interest at the very beginning of that cycle?
Jeff Yabuki
Yes, the pipelines are still very strong, a lot of activity. People are actually engaging in my opinion in more discussions now than they probably were two years ago, let's say, when you might argue it was a distraction because there was so much activity going on in EFI.
So early conversations are happening with great frequency and they're happening with I think more seriousness and candor than we've seen before. That's actually one of the reasons why we feel fairly encouraged moving forward.
Kevane Wong - JMP Securities
Is that materially or, I guess, qualitatively different 2Q versus 1Q or are you comparing versus second half '08? I'm sort of curious if there's a point where it sort of changed.
Jeff Yabuki
No, I think that whether you think about October of last year or March of this year, February/March of this year there were obviously valleys in the emotional rollercoaster, but I think the conversations right now feel fairly similar on the early sale side fairly similar now as they did in Q1.
Kevane Wong - JMP Securities
And then secondly, when looking at the bill pay transactions, obviously still up. I saw the B of A stuff, which was sort of flattish.
If we're looking sequentially first quarter to second quarter, how much of that should we think of as sort of innate growth of that product, people simply using it more and you sort of have the growth in transactions versus new clients? Is there maybe a way to sort of think about that?
Jeff Yabuki
These are services that mature over time, so when a new client - who we refer to as a maker - when a maker comes onboard, they're going to come up to speed in some elongated period of time. One of the things that's going on - and Tom talked about it, as did I - is we've sold a couple of hundred new bill payment clients this year and I think in the $400 to $500 million level last year.
And even though those are kind of relatively small levels of transactions relative to a Bank of America, that will bulk up over time and that will kind of continue to offset someone like Bank of America who was, as you know, kind of flattish year-to-year. So you've got new clients coming on and kind of rolling on their transactions.
You've got new consumers coming on and they're ramping up. And then frankly you've got some of the larger institutions who are saying it might make sense for us to go out and do some marketing on these, which we feel pretty good about, there's some marketing activity going on out there as well.
So you clearly have a ramp up. I don't know if I would say we should be able to count on 8% growth quarter in and quarter out, but we feel pretty good about that number.
Operator
I show no further questions.
Jeff Yabuki
Great. Well, thanks, everyone.
We appreciate you taking some time with us this afternoon. If you have any further questions, please don't hesitate to contact our Investor Relations team.
Have a good day.
Operator
This concludes today's conference. We thank you for your participation.
At this time you may disconnect your line.