Fidelity National Information Services, Inc. (FIS) Q1 2014 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the FIS first quarter earnings call. [Operator Instructions] And as a reminder, today's conference call is being recorded. I would now like to turn the conference over to Nancy Murphy. Please go ahead.

Thank you, Cynthia. Good morning, everyone, and welcome to our first quarter 2014 earnings conference call. Frank Martire, Chairman and Chief Executive Officer, will begin with a summary of our financial performance. Gary Norcross, President and Chief Operating Officer, will follow with the operations report. Woody Woodall, Chief Financial Officer, will continue with the detailed financial review. Today's news release and the supplemental slide presentation are available on our website at fisglobal.com. Let me remind you that today's remarks will contain forward-looking statements. These statements are subject to risks and uncertainties, as described in the press release and other filings with the SEC. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to the Safe Harbor language on Slide 3 of the presentation. Today's remarks will also include references to non-GAAP financial measures in order to provide more meaningful comparisons between the periods presented. These non-GAAP measures are outlined on Slide 4. Reconciliations between the GAAP and non-GAAP results are provided in the attachments to the press release. With that, I'll turn the call over to Frank to discuss the financial highlights on Slide 6. Frank?

Thanks, Nancy. Good morning, everyone, and thank you for joining us on today's call. I am pleased to open the morning call by reporting that the first quarter proved to be another strong quarter for FIS. We delivered profitable growth and invest in our solutions, people and innovation, enabling our clients to succeed. Our performance is in line with our expectations, reinforcing our confidence in our 2014 outlook. Looking at details of the quarter. Our first quarter top line growth was driven by positive results across all business segments. Revenue increased 4% organically, year-over-year, to $1.5 billion. Adjusted earnings per share rose 10%, year-over-year, to $0.68. Finally, we returned a record $245 million to our shareholders in dividends and share repurchases. By all accounts, this is a healthy start to the year and a strong foundation for achieving our 2014 goals. The year-over-year and long-term results we have driven highlights the strength of our operating model and continued steady execution. I'll now turn the call over to Gary for our business strategy and operating highlights. Gary?

Thanks, Frank, and thanks again to everyone for joining us this morning. As Frank discussed, we are off to a strong start for the year. Our continued solid sales execution, client focus and emphasis on operational efficiency translate to consistent, profitable growth for FIS. In the quarter, we had strong sales with good deal flow and key competitive wins. We further strengthened our pipeline across all segments and markets, providing strong line of sight on the full year. We affirmed our investment strategy to aggressively pursue the global financial institution market with early indications that this focus is driving traction in the space. We recognized key wins in each of our target markets, reflecting a steady trend to outsource more technology, development and front- and back-office functions to providers like FIS who demonstrate results and offer scalable solutions. In North America, we are proud of several competitive core take-away wins this quarter. Of these competitive wins, we would like to highlight Umpqua Bank, a $22 billion bank undergoing significant transformation. Umpqua is nationally recognized for its progressive management, innovative use of technology, and high level of customer service, making it an honor to be selected as their partner. In this new relationship, Umpqua will move from a competitor's in-house solution to an outsourced FIS solution, where we will implement a full range of capabilities, including our core processing, payment and many of our ancillary solutions. Umpqua's implementation to FIS solutions is scheduled in the first quarter of 2015. This significant win highlights the value FIS delivers to growing financial institutions who are in need of best-in-class solutions, leading domain expertise and the efficiency of a single-source provider. Additionally, we're pleased to add to our client base a national financial institution located in Kansas, looking to extend services to their underbanked customers and prospects. This financial institution chose FIS' newly launched GenNOW solution, a turnkey, brandable solution that combines the strength of our digital and reloadable prepaid card capabilities targeted for young and mobile customers. This solution provides clients with new sources of revenue by attracting and retaining customers who are increasingly turning to alternative financial services providers for their financial needs. In addition, FIS will provide all back-office processing and marketing support to help them promote the solution nationally to customers. FIS GenNOW was officially launched in April this year. Earlier this month, we wrapped up our largest North American user conference for the year, with over 2,000 people in attendance. Based on many of the one-on-one conversations I had, the overall tone of the conference was much more bullish than in recent years. And many of our clients are focused on driving the solution expansion and growing market share. In our international market, operational performance remained strong. We marked new sales wins at Thailand's fiscal bank, pagos móviles and others in the quarter. We continue to gain good momentum for project deployments, and to extend established customer relationships through add-on business. Turning to existing international projects. I was in London recently, and the Sainsbury's project is progressing nicely. Additionally, the India ATM project is on target with their multiyear deployment program. As for future growth, for the first time in decades, we are seeing an increase in the issuance of the number of new banking license creating new opportunities to support start-up banks in EMEA and APAC, where we have a very strong presence. Our pipeline remains full and our full year outlook in our international market remains strong and on target. As I mentioned earlier, we are pleased with the progress we are making in the global financial institution market. The early favorable results affirm our decision to invest in go-to-market talent in order to aggressively pursue these large, complex and transformational deals. In the quarter, we saw strong traction in new sales and solid pipeline development. Our go-to-market model is working. We have hired strong expertise with impressive industry domain experience and deep consultative capability at the suite level. Through their collective talent, they are developing a robust pipeline. As an example, we have seen significant expansion of the strategic outsourcing engagement with a global financial advisory firm first announced in early 2013, which is now more than doubled in size through our expanded relationship efforts. Additionally, since the quarter closed, we have finalized another large strategic outsourcing engagement, adding to our growing credentials as transformational experts. By any measure for FIS, this new engagement is a large strategic win. In all markets, financial institutions are looking to the future with renewed energy and a focus on rekindling growth, while meeting greater efficiency, risk and compliance requirements. Overall, we are winning more large transformational deals across our markets. During the last 2 years, we more than doubled the number of large deals closed and more than tripled the annual contract value for large deals, compared to the prior 2-year period in 2010 and 2011. We define large deals as greater than $25 million in contract value. Our strategy is working. These wins reflect FIS' commitment to deeply understand and respond to our client-strategic requirements and substantiate the investments we are making. In summary, before I turn it over to Woody, we are very pleased with our healthy start to the year. We have a strong selling quarter underscored by competitive wins in new and expanded client implementations that are transformational in nature. We have a solid pipeline, giving us confidence in our ability to deliver on our growth objectives. We continue to strategically invest in key markets and innovative solutions to drive profitable growth. Now I'll turn it over to Woody for the financial report.

Thanks, Gary. I'll begin on Slide 11 with a summary of our consolidated results for the quarter. Consolidated revenue increased to $1.5 billion, up 4% on an organic basis, after normalizing for currency and acquisitions, driven by continued growth in all segments. Adjusted EBITDA increased 4% to $445 million. And the EBITDA margin expanded 10 basis points from the prior year quarter, to 29.1%. Adjusted net earnings from continuing operations increased to $197 million from $182 million. And adjusted earnings per share increased 10%, to $0.68, from $0.62 in the 2013 quarter. Implementation of deals previously sold, combined with continued strength in international markets, consulting and services contributed to the positive performance. These results are consistent with our expectations and outlook for the year. We're particularly pleased to have delivered solid growth over difficult comparisons from 2013. As we discussed in prior quarters, termination fees in 2013, related to the BMO M&I merger, resulted in a revenue headwind in Q1 2014 of approximately 100 basis points. We anticipate a similar headwind in the second quarter. Now I will continue on Slide 12 with a review of segment results. Financial Solutions revenue was $587 million, an increase of 2% on an organic basis, reflecting growth in eBanking solutions, including Mobile and Consulting Services. Financial Solutions EBITDA was $227 million, while EBITDA margin was 38.7%, compared to 39.6% in the prior year. The margin decrease primarily reflects lower termination fees and license fees, compared to the first quarter of 2013, revenue mix and investment in the global financial institution market. Turning to Slide 13. Payment Solutions revenue increased 3% to $629 million on an organic basis, reflecting growth in image and output and card solutions. Payment Solutions adjusted EBITDA increased 2% to $264 million in the quarter. EBITDA margin, of 42.1%, was about flat with the first quarter of 2013. Moving to Slide 14. International revenue was $314 million and grew 10% organically in the quarter. Organic growth across all major regions, including continued strong demand for consulting and services in Europe, contributed to the increase. International EBITDA was $59 million, in line with the prior year. EBITDA margin was 18.8%, compared to 20.3% in the prior year quarter, reflecting incremental investment in the global financial institution market we discussed last quarter and lower license revenue. As Gary mentioned, we are pleased with the early results in the global financial institutions market. We're on track with our incremental investment of approximately $30 million in 2014 to capitalize on this opportunity. The first quarter results include $8 million related to this investment. Corporate expense was $105 million, down $12 million from the prior year period. The improvement was driven by lower administrative expenses, lower legal costs and reduced consulting costs, compared to the first quarter of 2013. We expect corporate expenses to average approximately $110 million per quarter for the remainder of the year. Moving on to a reconciliation of GAAP to non-GAAP EPS on Slide 15. GAAP earnings totaled $0.53 per share, compared to $0.50 per diluted share in the first quarter of 2013. GAAP results are adjusted to exclude $0.13 per share in acquisition-related purchase amortization, and include $0.02 per share related to a contract settlement. This 2014 cash settlement of $9 million extinguishes certain minimums under our contract with a reseller. Moving onto cash flow on Slide 16. Adjusted cash flow from operations totaled $248 million, up from $221 million in the first quarter 2013. Capital expenditures of $90 million were in line with our expectation of investing 5.5% to 6% of revenue in 2014. Free cash flow increased to $158 million, compared to $148 million in the first quarter of 2013. Turning to Slide 17. We continue to execute on our capital allocation priorities of investing for growth, maintaining a strong balance sheet and returning cash to shareholders. In the first quarter, we returned $245 million to shareholders, including $70 million in dividends and $175 million to repurchase 3.2 million shares in the open market. The share repurchase program reduced our weighted average diluted shares to 291.9 million in the first quarter, from 295.5 million last year. At the end of the quarter, basic and diluted shares outstanding were 286.8 million and 290.5 million, respectively. Consistent with recent practice, we expect to repurchase shares throughout the course of 2014. Debt outstanding totaled $4.8 billion as of March 31, with a weighted average interest rate of 3.6% at quarter end. Our leverage ratio was 2.6x. This sequential increase in leverage is related to the timing for cash flow, and is in line with our 2014 plan. We continue to target our leverage ratio at or slightly below 2.5x debt-to-EBITDA. Moving on to Slide 18. We are reaffirming our outlook for 2014, including: organic revenue growth of 4.5% to 6.5%; adjusted EBITDA growth in line with organic revenue growth; adjusted earnings per share in the range of $3.05 to $3.16, reflecting growth of 8% to 12%; and free cash flow approximating adjusted net earnings. In summary, we're very pleased with our positive start to the year. Implementation of significant new contract signings from 2013, a strong sales pipeline and opportunistic bank-client relationships in the global markets we serve reinforce our confidence in our growth efforts. That concludes our prepared remarks. Operator, we can now open the line for questions.

[Operator Instructions] And our first question will come from the line of David Togut with Evercore.

Just to dig into that a little bit, Gary, you mentioned that India ATM was ramping nicely. Can you give us a little detail as to what the revenue ramp looks like on India ATM? That's a large contract and, clearly, pretty material to revenue.

Yes, well, David, we talked about -- once we get fully ramped on that business, it's going to drive $100 million a year in revenue for us. I can tell you that India right now is the fastest-growing area within the region, right, from a revenue standpoint. It's got great organic growth. The team's done a great job. In fact, I'm due to be over there next week with some of the team, just getting another update on the deployment. We're also seeing opportunities, even outside of our circles, to expand our existing business. So India is going to be a great story for us, for not only today, but the coming years. I mean, it's just going to be a great growth story.

David, and thinking about that, we also have the women's bank there. We're starting to see some revenue come on from that. If you look at the overall double-digit growth, international aggregated, I would tell you that India is a tailwind to that. It's growing faster than our overall international revenue growth.

Absolutely.

I see. That helps. And just shifting over to Brazil. Can you update us on the growth in accounts you saw on the joint venture with Banco Bradesco?

Yes, if you look at Latin America in the aggregate, it grew still right at double-digit growth. We put some headwind in our plan, related to sort of overall economic and GDP growth in Brazil. However, we continue to see accounting card growth in Brazil and are pleased with its execution this year.

Yes, given what's going on in Brazil from the economy, it's actually performing well and consistent with our plan. And we saw good growth in the card base.

Great. And Gary, you referenced in your remarks the signing of a large strategic outsourcing agreement right after the close of the quarter. Can you flesh that out a little bit in terms of how large it might be?

Yes. It's -- as I've said, I kind of gauged some highlights. We viewed large deals of anything north of $25 million in contract value, and this one will be substantially north of that. It's a nice contract for us. We'll be bringing out more information as we work with the client on announcement, but we're excited about that opportunity. And frankly, Dave, we're seeing that all across all of our markets. We're just seeing -- even if you look at Umpqua Bank, you're looking at very, very large deals where banks are outsourcing these things to FIS. And it's a full range of not only software in that example, but back-office services. And then the one that we forecasted there, that one's much more of a transformational services engagement. But great traction, and reaffirms our bullishness on the whole GFI market. We also saw the pipeline increase significantly as well. So all of those things are good indicators that our investments are paying off.

Yes, what's very nice about that, David, is, it's not an isolated 1 or 2. We have a very strong pipeline consistent with the deals that we're signing, and that we feel really optimistic about.

That's very encouraging. Just a quick final question for me. Gary, you referenced consulting strength in Europe, I believe. Can you just elaborate on just Capco on a global basis, what you're seeing growth-wise in the U.S. and international?

Yes, I think that was my comment, David. But -- so I'll follow up on it. We saw good growth in Europe. We continue to see sort of Western Europe improve as they come out of their economic challenges from the past. And the demand for consulting has been very strong. Additionally, we've also seen very good growth and continue to see good growth in Capco in the U.S. So definitely would not say one is better than the other, both are seeing very good double-digit growth.

Yes, David, when we look at it and we've looked at Capco, what we currently hear, is both on the international front and on the domestic front that we've seen this growth. So that makes us feel, obviously, really good about it.

Our next question comes from the line of Brett Huff with Stephens Inc.

A couple quick questions. One, can you tell us a little bit about the deal stats again, Gary? You ran through some -- you have doubled the amount, tripled the amount than you used to have, and I think you're talking about the $25 million-plus deals. Can you just go over those again? I thought that was an important point and I'm...

Yes. Yes, Brett. We've just started looking at it. The size of the deals -- we kind of talked about this on a number of calls. But the size and the complexity of the deals that we're now signing continues to increase, which is really exciting for us. And we're seeing it across all markets. And so, several years ago, if we were to sign a contract that was greater than $25 million, that was a really large deal, and still is a really large deal by any definition. But what we saw when we looked at the last 2 years' comparison to the prior 2 years, we're seeing that the number of deals have more than doubled, in what we signed in the last 2 years over the prior 2 years. And then the contract values more than tripled. There's a lot of things driving that. Frankly, we keep pointing to the strength towards outsourcing. Go back to Umpqua, that was in-house today and fully moving to outsourcing. The contract value on that engagement is significantly incremental over what an in-house engagement would be. But for the bank, they're saving money because they're able to go deploy that and leverage our scale and ability. So huge win. When you look at some of the transformational stuff we're doing in the GFI space, we are now the largest financial institution of the world. We're looking to wholesale outsource significant areas of back-office and services. So we're very excited about what we're seeing around these large contracts. And if you just go over the last couple of quarters on just the ones we've announced, because we haven't come close to announcing them all, but if you think about Umpqua, if you think about Sainsbury, if you think about Guaranty, if you think about MCX, the India ATM, that Umpqua, yes, these things just keep going. So it's an exciting -- it's exciting to see what's going on in our sales channel.

That's helpful. And then the second question was, I think you guys announced a debit Switch win. I think it was Saudi Arabia or Middle East somewhere. Can you give us any details on that?

Yes, we did win one over in Saudi Arabia, relatively small in nature, but this continues to show demand and the exposure that we're having outside the U.S.. And we're becoming more of a household name in the financial technology more outside the U.S. as well.

Yes, we talked about, Brett, in past quarters. It's interesting when you go around the various regions of the world what we're really known for, and in a number of regions of the world we're really starting to be known as the payments provider in the switching and fraud side of the payments. And so, we signed a number of those deals over the last several years. And so we continue to gain traction around those products.

Last question for me on MCX, can you give us an update on that?

Well, we continue to progress nicely in working with MCX. They've been a great partner. We continue to roll out the capabilities they contracted with us for and continue to drive revenue on that front. We're -- obviously, we're looking forward to when MCX launches, because we'll see a nice ramp if it's successful in our revenue stream. And so, once again, we continue to wait for MCX to disclose when they are going forward in the market, but we continue to build out the capabilities they're looking for.

We'll next go to the line of Bryan Keane with Deutsche Bank.

This is Ashish Sabadra calling on behalf of Bryan Keane. Just a quick question, just a follow-up on the international question that was asked earlier. It looks like you have pretty solid momentum, but the growth slowed down a bit from the fourth quarter. So as you look through the year, should we see things ramp up? Considering all the great initiatives going around the world, I was just wondering if you could provide some more color on how should we think about international through the rest of the year and the growth drivers.

Yes, so first, on the sequential quarter question, keep in mind, while we continue to see a strong trend towards outsourcing, as we've talked in the past, our international business is lagging a little bit in the U.S. So it's still -- from an outsourcing standpoint. So it still does quite a bit of a license business. And Q4 is always a big license month, in general, for us. So if you look back historically, it's not uncommon for us to see our growth rate sequentially drop from Q4 to Q1. So this was exactly what we planned and exactly what we expected. But to your latter point about all of the deals we have in queue and the implementing of those deals, we're very excited about the accelerated growth in the back half of the year. And so, once again, you see that very consistently with that international segment over the prior year. So we've got very high visibility into that and very comfortable that we're going to have a good year in international.

If you look at it, our results are very much in line with our expectations. But the enthusiasm and the optimism is based on a very, very strong sales pipeline. And so we look at it and we say, "We should do very well."

That's great. That's great. Just a quick one on the investments, thanks for providing that color. But just wondering if you could provide some more color on the resource ramp-up? How do you expect the resources to ramp up through the rest of the year? And if you also could comment on the productivity of those resources, how do -- when do you expect those resources to be more productive? It looks like you have a pretty solid pipeline, so if you could just provide more color on the resources side that you're ramping up.

Yes, I think we've talked about $8 million of investment we spent in the first quarter. I would tell you that the majority of the lead partners on the engagements have been identified. We continue to build out the operating teams below them, the go-to-market teams below them. That will continue to ramp throughout 2014. Gary talked about 2 items that were proof points. One, it was a doubling of the existing size of the contract with an existing outsourcing agreement, where we're seeing traction and ability to go in and upsell into those larger accounts. The second was the contract signing we just had after quarter end. That was another significant outsourcing deal. So we've got a couple of proof points. We also got good pipeline visibility. So we're encouraged with the early traction of the investment we have made.

Yes. And just to build on that, one of the things we've looked for as we've built out these go-to-market teams is we've looked for people that have experience in these specific accounts. So what we want to do is make sure that as these teams are hired and put together, that the ramp is very, very short. And bringing that experience about the account and then pulling FIS into the opportunities is what we're looking for. And as Woody just highlighted, those 2 indicators are very good indicators of early traction. The pipeline that we referenced at the call is a third very good indicator of traction with that investment.

Okay, that's great. And one final question for me. The Umpqua deal that you announced today, that's very interesting. So I was just wondering, if you look at other similar large banks, do you see opportunities for them to move from in-house to outsourced solution? And what's really driving it, is it more of the regulations? Cost efficiency? Or all of the above? And so any additional color that you can provide on this trend towards more outsourcing, which we continue to see.

Yes. No, it's a great question, and the answer is yes. We do see a lot of financial institutions in that size in that top 100 that are looking to outsource bigger and bigger components. We've signed a number of them in the last 12 months. And we've talked about those on our earlier calls, and Umpqua is just a continued example of that. What's driving it? You hit the nail on the head. One, with the regulatory compliance, the security compliance around cyber, the increased demands in digital, when you're -- and the engagement back to the consumer. All of that, we're seeing substantial increased costs for financial institutions. And so they're looking to companies like FIS, and primarily FIS, to leverage our scale, our balance sheet, to be able to lower their costs and be able to deliver the necessary services that they need to deliver to compete in the market.

So when these banks are looking at it, including the top-tier banks, they're saying, "You know what, we need to focus on our banking business and the challenges and opportunities we have there, and leave it to somebody who has the skill set and the scale and the size that could optimize our environment, while we focus on building relationships."

Our next question comes from the line of Glenn Greene with Oppenheimer. Glenn Greene - Oppenheimer & Co. Inc., Research Division: I apologize if some of these questions have been asked or talked about, I think a lot of us are juggling calls. But basically, the pace and the tone of the sales activity in the quarter, how would you sort of contrast it with 3 to 6 months ago? Has it picked up, and especially for the larger deals as well?

Yes. No, going back, I don't think that question has been asked. Two things we're seeing. One, let's go back to the pipeline. The increase in the pipeline is definitely growing over where it was 6 months ago or to 1 year ago. I would also tell you that certainly in our global financial institution market, in our North America market, we saw very strong sales signings and growth year-over-year as well. International is a little more lumpy. We had some really big sales success 1 year ago for the quarter, but international's got some very, very strong signings lined up for the rest of the year in the pipeline. So I would tell you, across the board, everything's green from a standpoint of what we're seeing with regards to our sales engine across all of our markets. I also highlighted in the call, you might not been able to listen in, but we're in our busy time of the year for conferences around our user conferences, and we just wrapped up our largest North American conference. We run multiple conferences for a company this size. And there's about 2,000 people in attendance and a little over, in fact. And frankly, I had a lot of one-on-ones during that conference. And just the whole mood is, I would say, much more bullish than what we saw this time last year. And so I think that's one of the reasons that we're seeing an elevated pipeline, we're seeing our customers look and trying to push projects and make broader investment. And I think we're also -- and we contribute that to our sales success. We came out of that conference with a lot of very strong sales leads. And so, that's always great indication as well. So those would really be the proof points. Sales up year-over-year, pipeline up year-over-year, sales leads out of our first conference up year-over-year. So we feel good about it. Glenn Greene - Oppenheimer & Co. Inc., Research Division: You actually sound very bullish.

Well, one -- and the reason is we have -- we've had a very strong pipeline. We've talked to that, right, for the last few quarters. But when you start seeing the impact and the real results in some of the deals that Gary just talked about, you gain more optimism. Glenn Greene - Oppenheimer & Co. Inc., Research Division: Okay. And just the inference here would be your confidence into your ramp into fiscal '15? Obviously, you've got an EPS acceleration sort of implicit to get to your full year CAGR, are you feeling better about that?

Glenn, we're not going to give you '15 guidance after Q1 of '14. Glenn Greene - Oppenheimer & Co. Inc., Research Division: You did last quarter.

Yes, yes. But looking pretty good. Happy with the start. We'll see acceleration throughout this year and we'll continue to update you as sales success continues.

We like the way we're tracking. The proof is in the results.

Yes. Glenn Greene - Oppenheimer & Co. Inc., Research Division: And anything on the corporate cost being down 10% year-over-year, on the EBITDA?

Yes. We've talked a little bit about -- really, we've got some administrative costs, some lower project costs that we had in 2013 that aren't going to recur, lower legal cost this year. But we think corporate costs will be in the $110 million per quarter range. So slightly up from Q1, but overall, relatively flat to last year.

Our next question comes from the line of Tim Willi with Wells Fargo.

A couple of questions. First was on -- just a housekeeping item. Could you go back through the $9 million contractual? I guess, extinguishment and payments. Just want to make sure I understand that.

Yes, we had a contract with a reseller and ultimately negotiated a settlement of certain minimums on that contract. The cash we received extinguished some of those minimums. And basically, it's consistent with how we've presented the cash EPS over the period. The GAAP requirement under this is unique in that the cost of the relationship with the reseller, you've got to amortize it. But we've received the cash and have no obligation on performance.

Okay. And then just a few questions about the business. One on -- you mentioned card issuance, I think, in the financial institutions commentary. We've heard a couple of other companies talk about reissuance that they contribute maybe to the target breach, et cetera. We've seen some headlines about EMV and chip contracts being established. How do you guys think about that as an impact in that -- whether it's in FI or payments, I can't remember exactly where it falls. But is that something that you think we might be hearing more about from you guys in the next 12 to 24 months about card issuance revenues around security and shipment then?

Yes, Tim. One, that would fall under our payment segments. We do a tremendous amount of card issuance every year. We got past almost 200 million cards. We've seen a slow and steady kind of increase of EMV. We've got -- so we do think that you'll see EMV roll out across North America over the next several years. But are we seeing any very large just reissuance by our bank chip today? Not yet. We're talking to our customers about it. We're fully EMV-ready. We have no problem handling chip cards, in not only our software, but our card production locations. So -- but right now, it looks like it's going to be slow and steady. Some people are taking advantage of some of the breaches, and coming back with some chip and PIN reissuance. Some are just coming back to normal plastic. But the business has continued to -- we have seen, like we always do when there are big breaches, we've seen -- we have seen a small spike or increase in card reissuance, which is pretty typical of any large breach.

Great. And then just the last one. Woody, on the international EBITDA. Can you -- I didn't see it in the press release, unless I missed it. Can you frame what FX did to the EBITDA growth? I know you had -- give some color on the pipeline. Just what were the impact to the EBITDA from FX?

If you kind of think about it and you kind of look at the margin and do some back-of-the-envelope calculations around the impact of the revenue down to the margin, when you flow it all the way down, it was under $0.01 for the quarter in terms of EPS impact on EBITDA -- or sorry, on FX.

Next, we'll go to the line of Tien-tsin Huang with JPMorgan. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: First, I had a big question that I've been -- should ask you, if you don't mind here. Just there's a lot of talk about this Russia development of a national payment switch, and it made me think about FIS with the building out and the Switch for Australia. Do you see that as an opportunity or a good case study that maybe you can be behind some of those national payment systems to the extent that it becomes a bigger theme, especially given some of the success you've had with building out things even in the U.S.

Yes -- no, we do. They're actually been some several examples of national payment switches. We've talked about eftpos that we're doing in Australia. You might remember a couple of years ago in Thailand, we built out ITMX, which was their international switch. So we've got a lot of proof points of that and capabilities. And so, definitely, as those -- as countries go through those processes, we certainly participate in it. And frankly, have won a number of them. So those are always good opportunities for us. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: Understood. And then just -- I know with EMV and the certifications with all the different debit switches. Do you think that there's an opportunity for branded wins here over the next 12 to 18 months that we should watch on the NYSE front? Do you think it will have an impact on pricing? Again, I will follow on to that, if you don't mind.

As far as we think there's an opportunity for branded wins, the answer is yes. I think we do have an opportunity, and we're still continuing to -- our NYSE business continues to perform very well. And we think there's further opportunities for that. We've talked about EMV a lot. And certainly, in the card personal area, you're going to see an increase. If a lot of national banks start reissuing EMV, I think we can see an acceleration of that. That can drive an acceleration. We're not seeing it yet. We've actually talked to some clients about a large-scale reissue. But when I think of -- if some of the very large financial institutions start doing that, you can see an increase around that front. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: Okay, it's helpful. And sorry if I missed it. I was jumping on and off, I think I caught some of this commentary. But just on the debit front, I think you guys mentioned a little bit of winter and Easter, and perhaps -- but structurally, have you seen -- did you guys see any increase in decline rates and maybe consumer reluctance to use their NYCE cards and -- or debit cards because of the Target breach? Any evidence of that?

None whatsoever. We haven't seen that. We certainly haven't seen that, no.

Our next question will come from the line of Peter Heckmann with Avondale Partners.

Most of my questions have been answered, but I did want to follow up on this acquisition of CMSI. Looks like it's pretty small, but can you talk about how we might splice that into our model, and some of the background rationale for it?

Yes, I think you're right. It is pretty small. As we've talked about some of the tuck-ins that we have done to try to improve product capabilities, this is more of a front-end, consumer-lending-type product, which would give us sort of the full end-to-end on the consumer lending platform.

Yes, Pete, as we go through our whiteboarding exercises, and look at where our product road map and the needs of our clients and what we think the opportunity to take some type of capability and roll through our go-to-market engine. We've talked about -- we've got more than 600 sales resources in North America. Clearly, this was a component in the overall, end-to-end loan origination stream that we felt like we were missing. You're evaluating these situations, can you build it or can you buy it, and then the speed to market. And this is just a small tuck-in. And the team will do a nice job of integrating it into our other loan origination capabilities, docking it, perhaps we'll throw them on board into our core banking systems. And so, we'll get some very nice cross-sales with this product. It'll be a nice little tuck-in acquisition for us.

Okay. And generally, that's what we're seeing, as we've communicated several years ago, and that's what we've seen from FIS for the last couple of years. I mean, are there opportunities out there to make midsize acquisitions, or should we expect that flows going forward are going into tuck-ins?

Well, yes, we continue to look in the marketplace. We don't want ever to miss an opportunity to find something that would help us grow profitability faster or get good returns to our shareholders. However, we haven't seen anything in the past several years that really fit that bill. But we're always taking a look. Our default has always been to buy back shares in terms of taking that cash flow generation and trying to give returns to shareholders. But yes, could there be something in the future? Sure, there could be.

Our next question will come from the line of Georgios Mihalos with Crédit Suisse. Georgios Mihalos - Crédit Suisse AG, Research Division: Wanted to start off, if you can remind us, just size your non-FI business for us? And maybe talk a little bit about the growth trends or the potential that you see there, sort of where the bucket, where the retailers in MCX are, for example?

If memory serves, I think that was about a 12%, 14% kind of area for us, primarily, and sort of infrastructure outsourcing, leveraging our technology capabilities. So that's kind of the size. So what is the second part of your question again?

He talks about the MCX and whether -- that really doesn't fall in under our merchant business for us. That's falling under our payments business, because we're doing all of the back -- we're doing all of the network plumbing for that environment. Really on a merchant acquiring side, we're a very small player. The business is growing well. I mean, yes. The other question was how is non-FI growing. We're getting nice growth in that business. We've seen some expansion in and around some of our check capabilities on the gaming side. We've also seen some nice pickups of the business. Our team that runs that business for us is doing a very nice job. Georgios Mihalos - Crédit Suisse AG, Research Division: Okay. Is the growth in line with the overall company? Ahead? Just trying to get a sense of what you're seeing in that 12% to 14% bucket?

Yes, I would say probably in line with the overall company, would be a fair way to look at it.

Yes. Right.

And we have time for one final question. That will be from the line of Ramsey El-Assal with Jefferies.

Do you have any material Russia exposure?

No. No.

No, we don't.

Okay. A follow-up then. On -- I read that there was a CO-OP Financial Services that was going to be using PayNet for a real-time funds movement, I think between customers and banks across their network. Aside from MCX, which must be your highest profile implementation, can you give us an idea of some of the use cases for PayNet that you're exploring or focused on, whether it's bill pay or money transfer, or tying in with ACH. It seems like there's a ton of possibilities. Where do you see -- maybe x MCX, where do you see -- which markets do you see developing?

We're seeing a lot of applicability on a number of those things, Ramsey. The CO-OP'S been a great partner of us over the years. And that's just another great example of a good add-on sale to a long-term customer. We do a lot for them around their network and debit capabilities. But turning back to PayNet, we're really seeing a lot of use cases. We're seeing it at the point of sale from a check standpoint. We're seeing use cases in P2P. We're seeing some interesting use cases in some real-time ACH. So there's a lot of opportunities for us with that network. We continue to have good traction in the sales cycle and bringing on customers, and CO-OP's a great example of it.

But there's no one other particular bucket that is sort of starting to kind of dominate the mix a little bit, it's really sort of early days to see...

Yes, at this time, it's early days. And as we've talked about in the past on that, you've got to build out the users of the network. And then as the users of the network are built out, you're going to see -- I do think you'll see more traction around one or more channel, but I think it's still a little early to start talking about that yet.

And with that, speakers, I'd like to turn it over to you for any closing comments.

Sure. Thank you. First of all, thank you for your questions and interest in FIS. As you've heard, we are pleased with our first quarter results and the execution of our growth strategy, our consistently strong performance reflects demand for our solutions and services, and acknowledges our investment and innovation, which enables our clients to reach their efficiency and growth requirements. We are very confident in our 2014 outlook and long-term growth prospects. And we remain focused on driving superior returns for our shareholders. Finally, I would like to thank our employees who are dedicated to the success of our clients, and each of you for joining us on today's call. Thank you.

Thank you. And ladies and gentlemen, today's conference call will be available for replay after 10:30 a.m. today, until midnight, May 15. You may access the AT&T Teleconference Replay System by dialing (800) 475-6701, and entering the access code of 324136. International participants may dial (320) 365-3844. That does conclude your conference call for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.