Welcome to Global Payments’ fourth quarter fiscal 2008 Earnings Call. At this time all participants are in a listen only mode. Later we will open the lines for questions and answers. (Operator Instructions) As a reminder today’s conference will be recorded. At this time I’d like to turn the conference over to your host, Vice President of Investor Relations, Jane Elliott. Please go ahead.

Thank you. Good afternoon, and welcome to Global Payments’ fiscal 2008 fourth quarter conference call. Joining me on the call today are Paul Garcia, Chairman, President and CEO, Jim Kelley, Senior EVP and COO, and Joe Hyde, EVP and CFO. Before we begin, I would like to remind you that some of the comments made by management during the conference call contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to vary, which are discussed in our public releases including our most recent 10K. We caution you not put undue reliance on forward-looking statements. Forward-looking statements made during this call are only valid as of the date of this call. In addition some of the comments made on this call may refer to normalized results, which are not in accordance to GAAP. Management believes that normalized results more clearly reflects comparative operating performance. For a full reconciliation of normalized to GAAP results, in accordance with Regulation G, please see our press release filed as an exhibit to our form 8K dated today, July 25, 2008, which is located under the Investor Relations area on our website at www.GlobalPaymentsInc.com. Please also refer this website for more information on our recent HSBC UK acquisition. Now I’d like to introduce Paul Garcia. Paul?

Thank you Jane, and good afternoon, everyone. Before we get started, I would like to comment on just how pleased we are to be expanding our worldwide HSBC relationship with the newly formed merchant services joint venture in the United Kingdom. This transaction shows our ongoing commitment to expanding our international presence, which we expect will provide long-term opportunities for future growth. This transaction also demonstrates the level of trust that HSBC has in our ability to provide a value-added service to their merchants. Now for a financial results. We delivered solid financial results for fiscal 2008. For the fourth quarter our revenue grew 20% to $343.8 million, and normalized diluted earnings per share grew 21% to $0.52. For the year, our revenue grew 20% to $1.274 billion and our normalized diluted EPS grew 12% to a $1.98. Our growth was primarily driven by solid performance in our merchant service segments. In addition our money transfer segment had improved financial results in the fourth quarter, largely due to recent favorable pricing. Now, let's look at the segment details. Starting with our merchant segment, our ISOs continue to drive strong organic growth in our domestic direct channel. Our credit and data card transactions grew 21% for the quarter, with revenue growth of 18%. For the full year, our transactions grew 26%, with revenue growth of 23%. Our fourth quarter domestic direct growth, while strong, reflects the annualization of a large ISO conversion completed during last year’s quarter. We continue to successfully sign new ISOs, and I am pleased to announce that we recently renewed several ISOs for multi-year extensions. During fiscal 2009, we believe our domestic direct channel will continue to build market share and will achieve strong growth, although, and as previously discussed, we believe at a lower rate than…

Thank you, Paul. In our press release, we included GAAP income statements, and schedules that reconcile GAAP to normalized result. Our normalized results exclude restructuring charges and certain non-recurring non-cash items. As Jane mentioned, please see today's earnings press release for more information. We were pleased with the performance of our four businesses during the quarter, and for fiscal '08. Our merchant services normalized operating income grew 16% for the quarter and grew 10% for the fiscal year. These results were largely driven by the strong revenue growth that Paul discussed, and economies of scale benefits, including a normalized foreign currency benefit in the quarter that was similar to third quarter levels. For fiscal '09 in this segment we expect strong operating income growth in North America, primarily as a result of changes in the Canadian market interchange structure, continued ISO growth, and a stabilization of our check guarantee channel. This expected operating income growth is also due to our international expansion efforts, including progress achieved in our existing Europe and Asia channels, and the impact of our HSBC U.K acquisition. Moving to commodity transfer: in this segment operating income was $7.5 million for the quarter, which reflected robust growth of 116%, compared to the prior period last year. In the quarter, we benefited from favorable pricing, as well as a positive impact from closing unprofitable branches. For fiscal ‘09 we anticipate modest money transfer revenue growth, coupled with strong earnings growth, due to the leverage we have in our fixed cost model. Our corporate expenses increased 14% during the quarter and 2% for the full year. The fourth quarter increase was due primarily to timings in our equity compensation program, although these expenses significantly declined for the full year. Our corporate expenses will likely grow faster during fiscal ’09,…

Thanks, Joe. Based on current trends in our ongoing growth strategy, we are providing fiscal 2009 annual revenue guidance of $1.620 billion to $1.675 billion or approximately 27% to 31% growth over $1.274 billion achieved in fiscal 2008. We are also providing fiscal 2009 annual diluted EPS guidance of between $2.20 to $2.30, reflecting 11% to 16% growth over our fiscal 2008 normalized diluted EPS of $1.98. This guidance does not include any other significant acquisitions, potential restructuring, or other charges. I continue to be very confident about the long-term prospects of Global Payments, especially in our international markets, and then the continued to strength of our North American merchant channels. Operator, we will now take questions.

Thank you. Ladies and gentlemen we will now conduct the question-and-answer session. (Operator Instructions) Our first question of today comes from Pat Burton with Citi.

Hi congratulations on the quarter and the year. My question deals with the U.K. joint venture. Can you give us any kind of matrix around perhaps, size, revenues, transaction levels, growth rate in the margins, anything you would like to amplify on the HSBC joint venture please?

Sure. Pat, I will start and I will turn it over to Joe. They are the third largest players in the market, the leader is, the largest is Royal Bank of Scotland followed by Barclays. It's a market that over the last 20 years gone through a lot of the pebble. It was not do market, meaning these are acquirer or match for acquirer that changed and there is a big shift. Royal Bank got a commanding position because of an acquisition they made in of NatWest who is a big provider. HSBC since steady, although they are, I think, well poised to for some growth given some focus in investment and that's exactly what we intend to do. And Joe, will you add a little more color please?

Sure. We put our press release when we initially announced and closed the deal that indicated calendar 2007 annual revenue of $229 million. We are not going to specifically break out the impact for next fiscal year, but historically the business had grown, consistent with the market in kind of the single-digit range. In terms of margin and cash flow, it generates a lot of cash flow. It's a high margin business. The margins from an EBITDA perspective are actually higher than our owned margin. So, it is very comparable business for us.

Great. I'll just ask one quick follow-up on sub mail, are there any large ISO renewals coming up over the next 12 months? Thanks.

Pat, we don't foresee any in the next 12 months and there is always the possibility of ISOs that are for sale but at this stage, we feel very comfortable with our customer base.

Thank you and congratulation on the year.

Thanks Pat.

We will go next to Bob Napoli with Piper Jaffray.

Thank you. Good afternoon. Given that were two thirds of the way through your first quarter, I just want to help you give some update on what you are seeing in the US; American Express said they saw significant slowdown in spending in the month of June and that's obviously on credit card. I was wondering if you could give some color in what you are seeing in the US for both credit and debit cards, if possible?

Yes, of course. We'll try. Of course, it's a different animal. American Express has a different cardholder and they make different purchases. They have a different financial profile from many of the VISA MasterCard cardholders. And we have the advantage of getting a lot of non-discretionary expenditures and I would say, I have studied MX exactly, but I would say that they don't have as many non-discretionary opportunities as a bank cardholders does. I'd say that we have taken into consideration what we have seen to-date with our guidance. Nobody is immune from a bad economy. But what we have seen has been reflected in what we have given you guys. So we are not clearly being impacted to the degree that American Express was.

But sequentially, you are seeing more pressure on the US consumer?

It depends on the vertical. Obviously in patrolling, you are seeing huge increases primarily given by price and a lot of our vertical that are non-discretionary uses by utilities, education and healthcare have actually seen uptakes. In some restaurant vertical, for example, we are seeing a little softness. We are seeing a little softness in some retail sectors as well. We are very fortunate and that we have a lot of very vibrant sectors that are non-discretionary uses and that is absolutely helping us.

Okay, thank you. Just a quick follow-up. Thank you, Paul. On the minority interest, I'm just trying to understand that the way, I thought that that was primarily or solely for the Asian joint venture, obviously it's going to include the HSBC UK businesses well. But then it was negative this quarter. How would we try to read, is there anything unusual there or is that, I think, give just a little bit of color on that? I'd appreciate it.

Sure. The minority interest line relates to our joint venture with Comerica Bank in the U.S, the Asia-Pacific joint venture and of course next year the HSBC UK acquisition which will drive that line clearly higher. In the fourth quarter, as I mentioned in my comment, it will be more useful looking at the minority interest on a gross basis. That line has shown net of tax for certain of our joint ventures. So that's been part of the impact. The income taxes appeared a little bit higher in the quarter and minority interest appeared a little bit lower, but if you adjust for that, the numbers appear somewhat more reasonable.

Thank you.

We will go next to Bryan Keane, Credit Suisse.

Hi, thanks. With the benefit of FX and the new Canadian exchange, I would have expected a little bit higher merchant services margin, just wondering if there was anything in there one-time and maybe you can give us the check losses in the quarter?

No, there wasn't any in particular one-time item that we included in our normalized results. We were happy with the amounts in the quarter. The check business, as we said -- as we expected had definitely stabilized versus some of the losses of that, the business had in the third quarter. The third quarter losses were $7 million and then in the fourth quarter they were $5.9 million. And they variant, versus in prior year was actually half of what was in the third quarter. So, that impact of the issues we had in check guarantee channel has become significantly less so for us this year this quarter.

Okay, then sequentially the Canada revenues increased quiet a bit. Can we think about that being good number going forward on at least the year-over-year basis? So how do we think about that? And secondly, the change and interchange did that drop straight to the bottom-line to profit?

We can take the first thing that the overall, with Canada, the macro statement is that, you cannot exactly looking at the fourth quarter and extrapolate. We have got a nice currency list in the fourth quarter. We are actually forecasting that although against this just through year. So, I think that will actually work against us. In terms of the interchange pricing. The interchange reduction is, excuse me, interchange changes are in large measure passed on to merchants. We are - because of there are so many different interchanges, we are able to more appropriately price these transactions and then in many cases the merchants are actually paying less, depending on that card transaction. So it clearly doesn’t all just drop, it stop isn’t that straightforward. Assets have actually gone up for that period, a time also we reported them out.

Okay and then finally Joe, I didn’t hear any segment and revenue guidance. Is there any reason for that change?

Segment and revenue guidance for…

I guess, going forward for fiscal ‘09 by different divisions?

We are giving total company revenue and EPS guidance for next year and we try to give some general color at the segment level and for some of the other P&L line items, but our intent is to manage to those lines in total next year.

Bryan and also with our first quarter call we will be dealing with some segment discussions at that point as well.

Okay. Congratulation on the quarter.

Thank you.

We go next to Andrew Jeffrey from SunTrust

Hi good afternoon. Just to Joe, down a little bit on the guidance and your talking about HSBC contributing at a higher incremental EBITDA margin. I am just trying to reconcile that with your total guidance. Is there anything else moving around from a profit standpoint within - you said money transfer is going to be good. Is there anything else in merchant for a mixed standpoint that might be driving down the non-HSBC margin, the U.S. margin.

Let me first clarify, on the HSBC deal the purchase price that is over $400 million, we will have to book a purchase price amortization associated with that deal, which will be material for us. Our amortization extent will likely more than double next year.

Okay

So, I think that, that may help some of your question and….

That’s right.

And Andrew, you, of course, understand that its actually accelerated in how we deal with that too soon and so we had a larger whack on that for this fiscal period.

Right. And to be clear though, you were talking about consolidated EBITDA margin that is up in fiscal '09 versus fiscal '08?

Yes that's correct.

Okay. And then what - so, I guess the allocation of the purchase price is going predominantly to amortized intangibles as opposed to goodwill is that the P&L..?

No, it probably more to goodwill, but that is a meaningful amount, I think it's in the neighborhood of 30% or so. We will have some more detail in the 10-K, but its still - when you have a purchase price - when the business is as large as it is and you have such a hard cash flow business, it will have a higher amortization expense.

And it’s accelerated as you mentioned in fiscal '09. Okay and then with regard to just generally, the domestic direct business. You mentioned some sort of broad-based head wins, economically. Any change dramatic there, I mean you clearly outperformed and taken a lot of share and I realize your anniversarying some pretty good growth in terms of ISO Ads. Just from a overall cyclical standpoint or structural standpoint, do you think you'd continue to take share? Any changes in the market as a result, for example of the Chase, First Data joint venture being broken apart?

Andrew, we don’t see other than just broad based economic impact. We don’t see anything in particular. Now obviously the Chase, payment check at First Data break-up, we will be watching that very carefully. I’m sure this going to be some breakage there, but these are these are both pretty smart focused groups. So they are going to do their best to keep that in the minimum, but that could end up being a net positive for anybody but it's not for Chase or for First Data. But I don’t see anything dramatic, we haven't in the numbers to date, what we have has been is baked in. So stay tuned.

Okay. Thanks.

Welcome.

We good next to Adam Frisch with UBS

Thanks guys, good afternoon.

Yes.

A key tenet of this story is obviously Merchant Services operating margins rewritten pretty extensively about that, and the fact that margins will be expanding from the mid-25% range or so generated in '08. Can you provide some color on what you're expecting there on the profitability of the segment and where it might be coming from?

Yeah, well. Let me start with reemphasizing what Joe said about the EBIDTA margins. Because of the significant amortization, depreciation, we think that especially in our new environment, we think that's a pretty measure. And we thought those who were paying careful attention to that metric in particular would be delightedly to here say that we're expecting to see an expansion in EBIDTA margins from fiscal '08 to fiscal '09. So that's a big deal. We obviously are focused on growing our top line, we're focused on growing our bottom line. If you do that successfully, you will drive margins. We believe that every margin measure that we can meaningfully expand that over time taking advantage of the leverage in the business and all the things we talked to before the systems enhancements, the increased profitability in Asia, European expansion, all the things we discussed. And based on that, we clearly have an expectation of margin expansion. We are not prepared to give specific guidance, however, about those. Is there any else you want to add Joe to that? So, now of course that and in every quarter, we will delve into actual results and as much details as we think is reasonable, but we are just not prepared right now, other than trying to give a broad-based statement and I think it's a big statement for us that we are in fact understand EBIDTA margins.

Okay. That's definitely helpful. Although, I think people will be watching Merchant pretty carefully through the course of the year.

We understand.

As I'm sure you expect it too.

We do. We understand our job is to make that as profitable as we can.

Yes. Understood. Okay. So just getting back to the guidance for a sec. Just wanted to know what was included in terms of your assumptions on the micro economy as such. You started out the first quarter of last year with guidance in, I think it was 13 or 17 or so and then you came up into the 18%, 19% range a couple quarters later. So starting with the bitable number and then raising it throughout the year. Are you incorporating the same kind of strategy at this point in time? Or will the micro uncertainty out there impact that at all?

Adam, you are asking us say, or we give bit and raise guidance, we can't comment on that. We obviously are forced on doing of the best job we can and we will be very happy as the management team to do what you just suggested. But our expectation is that this is real guidance and we hope to build up to it.

Okay. That's what you done in the past, so we wanted to know, I think it's a worthwhile question.

I know. I understand.

The final question I have is, is there anything you can do to accelerate the cost reductions in '09 if raise or little later then expected or all of the initiatives like data center consolidation and platform consolidation, all pretty much locked into at this point.

I think that probably some of our caution comes from, the answer to that question is no. The reality is this business leveraged the extremely well. It doesn't deal particularly well. So if volumes soften significantly, it's very difficult to get rid of enough cost to make up for that. In the high fixed cost, low variable cost business, it's just a kind of reality of it, so. But once again I want to give some all comfort that our guidance has taken into considerations what we have seen in the numbers and believe me we are watching the American Express results very closely.

Okay. This is really my final one. The UK deal, what would revenue guidance have been for the year. Do we take the 229 from last year, single-digit growth could be anywhere from 0 to 9%, so that's a pretty wide range there. What would be back out from the UK deal in terms of what we are assuming in growth?

Again, we are not going to give a specific number, I think you can get generally close based on the 229 and the single-digit number, but we are not going to break it out at this time.

I will say that we are, these guns are on our payroll, again the July we are heading over there for a major kick off this weekend literally. And by next quarter, we will have a couple of months under our belts and I think we can probably give a little better guidance.

Okay, thanks.

Welcome.

We will go to Greg Smith with Merrill Lynch.

Hi, guys.

Hi, Greg.

Just following on the guidance question. If we do take out HSBC and in addition to that, you are obviously getting this huge benefit up in Canada which endures through the year, I understand there may be some negative currency. But it still seems to imply that the rest of the business flows quite a bit, I mean is that the take away we should have or should we view it as conservative or am I missing something here?

Again the domestic direct channel, we are saying that the revenues were probably slow versus the 23% growth that we had in fiscal 2008, it just not likely to stay up at that level especially given the current environment. We have known factor, which is the major ISO conversation that had essentially annualized. But that being said, we still expect strong growth, above market growth in the US, but not the level that we've seen in 2008. Now obviously got a bigger impact on revenue than it does on earnings. I think that that's probably the biggest when you take out FX. I still believe that we have a solid revenue growth even when you back out the HSBC deal.

Okay. And then can you give us what the FX benefit in cent per share, the FX benefit and the Canadian interchange, both of those for the quarter?

I can get the FX benefit which has been though relatively consistent. The EPS has been in the $0.04 to $0.05 range over the past couple of quarters. The revenue I believe was approximately $12 million for FX benefit. On the interchange benefit we intend to break that out separately.

And the vast majority of that $0.45 is Canadian right? Canadian dollar?

Yes it is.

Okay. Great and then just with the U.K. joint venture, how quickly can you guys move in into other European countries? Is that years off, many years off or can you do something all the more shorter term in the next 12 to 18 months?

I think it is the real opportunity in that to expand that partnership and there is a couple of ways to that. We can expand within the U.K. organically, which is our intent to a acquisition opportunities which is our intent. And clearly there are opportunities to work with HSBC and potentially other partners to expand to other European domains. The U.K. is the largest within the EU. That's a place to be and that’s exactly what our strategy is Greg. So I would look for some near- term opportunities for us to grow this business. Acquisitions are a lot trickier and those can take a lot of time, but that's certainly our intent.

And then last question. Just on DolEx obviously had a very nice quarter there. Has this resurgence sort of changed your view on the future of this business and how you view it as whether not it’s going to be part of the portfolio long-term.

I think it's fair to say we are pleased with the DolEx results. It's also fair to say it still comprises a very small part of our overall company. Our company is, particularly with this acquisition of HSBC is now becoming a primarily processor of bank card transactions not a money transmitter. So, I would say that question still is being evaluated.

Great, thank you.

Welcome.

We'll go to Charlie Murphy with Morgan Stanley.

Thanks very much. Paul and Joe, now that the U.K. acquisition has been completed, how would you describe your M&A appetite in fiscal '09?

I'd say its strong Charlie. We have the capacity and we certainly have the appetite and in fact, I'll go so far as say, we have an expectation of announcing some more transactions. And I think that's a probably near-term expectation. So, what we're interested in doing is expanding our footprint internationally and I would look for some more announcements that support that.

Okay. Then shifting to the money transfer segment, could you elaborate a bit on what type of EBIT growth you may expect? It's very rare to hear price increases in the money transfer business, what gives you confidence in the EBIT growth for '09?

That’s simply a function of the current pricing that we have already versus the average pricing that we've had during the course of fiscal 2008. We don’t need to raise pricing during fiscal '09 to hit those numbers, I think that’s an important point. Pricing needs to stay generally stable, even could come down some and we still will likely achieve, we expect to see strong growth. It's also a function of this lower branch count, where we closed a significant amount of unprofitable branches and that will aid us in fiscal '09 as well.

Okay, thanks.

We got a David Koning with Robert W. Baird.

Yeah, hey, guys. First of all Joe, I think you mentioned that amortization expense might double or maybe a little more than that with the U.K. acquisition. That would imply something like that $0.25 delta between GAAP, EPS in the way that several of your, I guess loose kind of financial Tech comps report their cash EPS. Is that something you would ever consider, given I guess guidance to look closer to the 250 plus maybe range under that scenario?

Well, first let me, say that the additional amortization expense, remember this is a joint-venture and we will only be booking 51% of the earnings. So that the - so now all of that necessarily close to the bottom-line. In terms of cash EPS, its something that we can consider, we have not in the past, because our amortization has been relatively small. But we will evaluate that for our next fiscal year.

Okay, good, and then secondly, I guess I am still not perfectly clear on the tax rate versus the minority interest line, should we think of the tax rate now being in the high 30s in the minority interest line, I guess actually U.K. being a little lower of a drag in expense?

I'm sorry, can you - I'm not sure I understand your question. Can you…

Yes I can. Sure. I guess, first of all should we expect the tax rate now to stay somewhere in the high 30s and then conversely the minority interest drag being a little lower?

Our average effective tax rate after minority interests for the year is within the mid 30% range, I believe it was 35.5%. If you again, adjusting for the taxes that are embedded in minority interest line, we are having concerns about adjusting for that. We have a schedule in our 10-K and Jane Elliott can also help you to recalculate that. The 35% is kind of the baseline number. And for next year, we'll likely get a benefit from the UK acquisition because tax rates are somewhat lower in that market.

And then just finally, if we just look at the Canadian currency today, I mean take that going forward, you would have a slight benefit again this year relative to last year. But are you just trying to be I guess a little conservative in guidance by assuming a little bit of drag?

The foreign currency in Canada ran up so much during the course of this year, and we looked at foreign currency forecast on either Bloomberg or other sources, and most forecast are assuming that that rate is just not sustainable to stay up at high it is which is basically paired with the U.S. dollar. And with the expectation for higher interest rates in the U.S. during the later part of the year or even the mid part of our fiscal year, there is an expectation that the FX rate will come down some to more of a mid-90 level. And we don't know what FX rates are going to be, while obviously continue to break out the FX impact for us. But I think it's prudent to not assume that that will continue for fiscal '09.

Yeah. Sounds good. Thank you.

We will go next to Dan Perlin of Wachovia.

Thanks. During the past when you guys have done acquisition, I think, I lift myself, I've over modeled on the revenue growth expectations and it seems like you always were going to pruning some part of the business or adjusting it to your liking and then always cause the initial revenue number to be a little bit lower. Are you going to have to do with the HSBC, you made it sound like they run it on their own and you were just kind of going to add some firepower to it but I'd like to get your thoughts on that?

Well, Dan, typically some of these deals they've had credits for customers that we thought were not reasonable credits and we've kind of pruned this portfolios. So it's in pretty good shape. This has not been growing, the big growing is about where the market was growing, so they were kind of keep in share and not necessarily gaining or losing and we believe we can grow at much more significantly. So if anything, we're hopeful that we'll accelerate this and you shouldn't see it deep downward, you should see some growth. But once again, we have (inaudible). So this isn't something you do in a week or month or quarter. It's going to take time (inaudible) all the things that we have plans for this business and have those been approved.

Okay. But when you say you put some lower credits, does that imply that you gave account year of seven number of 220 including those credits that number may be a little bit lower and you can grow faster than the single digit, are we still going to, again I was still in the financial revenue basis had over model that. So, I just want to make sure I am clear on it and I will start this one around?

That's great question. Let me be clear. We'll be growing off the 229 number.

Okay. That number includes. And then as you thought about your budget into 2009 before for this acquisition particular, how should we think about the EBITDA expansion, is it heavily weighted to the back half of the year, is this going to queue up gradually throughout the year? Can you use comment about the progression there?

We're not starting any significant fluctuations. I mean there is always fund level of seasonality. The growth may be somewhat higher toward the end of the year but really not seen, not expecting a major difference among the quarters.

And there is no abnormality to seasonality in UK for this current portfolio?

I thought that we haven't even known the business for a month. I am sure there is some level of seasonality and the summer months tend to be of higher than they were going amongst excluding the impact of holidays. But I really don't have a good sense for what to expect and the seasonality until we own the business for a few quarters and really have a deep dive understanding of the financial drivers.

And did you say, I think, I missed this. But in the merchant services EBIT this quarter, there wasn't sort of tax benefit included in that, was there? The class for the 7 million benefit, was that one in this quarter?

No, there wasn't.

No, there wasn't, right. So 38% tax rate this quarter was a function of you calculating it differently on the minority interest line or what made it this drive up so high sequentially and even year-over-year?

Again, if you look at it on a before minority interest, it looks like it went up 600 basis points compared to last year of 33%.

But it only went up 200 basis points when we adjust for that roughly.

That's right.

So what drove that I guess is my question?

In last year's fourth quarter, we had about 200 basis points worth of favorable impact from income tax statue expirations and other tax planning items. Our Czech generic operating tax rate excluding any kind of one-time items was 35% this year, it was 35% last year.

Yeah, you said that, I'm sorry I missed that. And then lastly, if you are thinking about allocating capital to the various business segments, I mean, I think it's pretty clear the domestic money transfer is not going to get a bunch. You did make some acquisitions in European piece. But how would you describe allocating to call it your Asia-Pacific joint venture versus UK versus the traditional Central and Eastern Europe footprint, where you are going to throttle up mostly?

Yes. I think that - those are all our favorite children you just named. So we will try to give as much love as we can do to all of them. In east and central Europe we do have some big plans there. We are - obviously Asia pacific we are excited with the revenue growth and we have a lot of high expectations of expansions in that market. Obviously what we are doing an HSBC is all about investment and focus and execution. So those are all - and in domestically similar. I mean we are still getting some great growth from particularly some for strong ISO partners and we tend to add some more. In fact the one exception is the we are putting some money into the money transfer business but its not getting the lions share.

And then a one quick, two quick questions. Reprising on the ISO’s that the [EU?] resigned, can you just give us some sense of price concession they you had give single, low single digits?

I would say modest.

Modest.

Frankly, these guys are pretty big, and they are already are benefiting from some pretty good pricing. But there is always something different for each one and we are not could be specific, but everybody want something that's important to them, a different product, access to something and you know your customer. So I'm not suggesting that we don’t offer same set of our incentives but they are not necessarily pricing oriented.

Right. Got it. Okay, and let that be my last one. Thank you.

Thanks.

Thanks Dan.

We go next to Robert Dodd, Morgan Keegan.

Hi guys. If you go back to the currency issues and given the sensitivity on to the Canadian exchange rate, I mean can you give us bit more of a quantitative answer that what you putting in for Forex for this year and ‘09. And if we look at this last quarter, you said about $0.05 exchange rate change about $0.10 year-over-year. On an annual basis the penny on the exchange rates seems to be about $0.02 on earnings. That's pretty frankly, probably more significantly HSBC JV, if you don’t give us more color on what that number is, what number is baked into the guidance statements.

For fiscal ’09, there is not a significant impact that we are forecasting. If the exchange rate stay where are today, we'll get less to $0.10 in the first quarter and in that profit [will be there]. There are forecasts out there that show that, that range would may, modestly decline kind of radically through the end of fiscal ’09. we are talking major changes but it may be a bit of a drag maybe of a 1% or 2% on earnings per share. But again we said historically we not going specifically quantify the FX rate that we are assuming, but its not - we are not assuming a major shift.

So Robert, that's a very fair point. However, I mean it's in fact you see FX improvements to our benefits and that would an offside. If you - so it can go down significantly and you knew we baked in some decline, but we didn’t bake in a significant decline, that would be a negative and we'll give as much color on that per quarter as we can.

Okay, thank you. Another one on Canada, actually if we look in Q4, just for the currency change over here. Its looks like the business was up in the low 20% range in local currency with only 3% transaction growth. I mean that seems to indicate very high benefit on pricing. Are you planning on giving any of that back, as we go forward or can we carry a pretty healthy price increase to divest as well, at least through three quarters of '09.

Its a little more complicated than that because it is not actually a pricing increase. There is nothing really to give back, but how you calculate the changes and interchange of the associations put in, there could be some tweaking that could result in us enjoying less going forward and so we have baked that in as well. So our forecast, our annual guidance does consider less than it could from Canada going forward from that aspect as well.

Okay, thank you.

Welcome.

We got next Tien-tsin Huang with JPMorgan.

Hi, thanks.

Hi Tien-tsin.

Thanks. Couple of follow-up questions I guess on the ISO side. Any change in the contribution margin from the ISO channel in the fourth quarter, I think you mentioned that the pricing on the renew are so modest. I guess this year we should assume any change in contribution margin in 09 from the ISO channel?

Hi. In the fourth quarter a there wasn't a significant change from were we were during the first nine months of the year.

Okay and then same with 09, I guess sounds like with no major renewals coming up, a modest impact there, feels like things are relatively stable.

Yes, I mean it’s always going to be a competitive market, but we are not looking. We are not baking in any kind of major shifts in margin up or down.

Okay and then just to be clear on the U.K side, should we not assume any incremental investments on the front end as you bring this business in to Global?

Part of the CapEx that Joe outlined are the spend for the coming year is going to include the work to converge of the back ended of HSBC U.K, together with the work that’s being done in Asia. Now Asia is much more complex, because there is a lot more units to have to convert whereas the U.K is a single site, but is rough on merchants. So, you'll see spending but that’s already been factored into the guidance in capital.

Okay. And then Joe, can you remind us again, I am sorry, how you're funding the UK deal in your debt levels now post the deal?

We used $214 million of excess cash. We used $200 in term loan which is a five-year deal and we used $25 in borrowings under our existing credit facility. So, those amounts may fluctuate somewhat but at least as of the day of closing, we had $225 million of debt.

Got it. And then, Paul, maybe just very quickly, how big rolled it the step of play in your consideration to acquire the business on the UK side?

I have to say not neutral, I think it's a major upside, but (inaudible) didn't exist. We would still jumped into this thing. This is just a very sweet deal. It's good for HSBC. It's good for us. It's just a sweet deal. (inaudible) is kind of icing on the cake.

Okay, good to know. Then lastly just a clarification and I'll jump off. Asia-Pac, I think you mentioned that you're expecting growth to moderate, do you mean moderations to the pro forma growth rate, that's I think in the high-20s?

Yeah, I think what we were saying is that, yeah, basically, I mean, we are saying that this business is not going to sustain that level of growth as it gets bigger and bigger and bigger and that's all what we are just cautioning not to model that, I think everyone kind of got that.

Got it. Thank you.

You're welcome.

We will go to Franco Turrinelli with William Blair & Company. Franco Turrinelli - William Blair & Company: Hi, Paul. Hi, Joe.

Hi, Franco Franco Turrinelli - William Blair & Company: Two real quick ones. I think most of my questions have been asked. Joe, what's the amortization piece of depreciation, amortization?

How much is it? Franco Turrinelli - William Blair & Company: Yeah,

In the quarter? I don't have that in front of me. I believe that's roughly $15 million or so per year but let me look for that then I can. Franco Turrinelli - William Blair & Company: I think that's again Paul mentioned or if you mentioned that the amortization would approximately double, that's what I was trying to get a handle on.

The amortization in the quarter was $4 million and for the full year, was $15 million and assets were approximately double, it's not a precise number. I think actually will be higher than that. My only point was that that line is going to significantly grow and I think that the question was on the EBITDA margin, what else were you missing. But there is dead piece between EBITDA and operating income which is the amortization. Franco Turrinelli - William Blair & Company: Right, no, exactly. And I think this is important to kind a pull out the amortization plus the depreciation. Thanks. I don't mean to be dump here, but you've had HSBC or we should model it as of the end of June, kind of July, two months in the first quarter of the fiscal '09 year?

Two months in the first quarter. That's correct. Franco Turrinelli - William Blair & Company: Great.

Well, 11 months during fiscal '09. Franco Turrinelli - William Blair & Company: Okay, great. Thank you very much. Congratulation.

Thanks Franco.

We will go to Wayne Johnson, Raymond James.

Hi, good afternoon.

Hey, Wayne.

To go back to the G2 platform, the conversion rate there, is that a little bit faster than you told us about a couple of quarter ago, did I here correctly. I guess this is my question that everything in Asia should be converted by, did you say by fiscal 2010 or did you say, what did you say on that? I apologize.

I think in the script that I believe Joe read, he was talking about the conversions -- back end conversions being done by 2010. The Asia funding conversions which would be G2 and we still have some dependencies but the current thinking is early to mid fall that we will begin front end conversions we've already started factoring for, that efforts will also begin for the UK operations.

Okay.

So I think the way the longest short it is, is on scheduled if we didn't done. If we did you sense that was taken longer than that, it's not, it's on that schedule and we are on scheduled.

Well, then that's good new and I so I guess my follow-up question is what impact on margin does that have?

Will it have at that point? We haven't given that fiscal 10 guidance, that's a good try, but way it will be material, so, stay tuned.

Okay, terrific. Thank you very much.

Welcome.

We will go to James Friedman with Susquehanna.

Hi, thank you. Most of my questions have been answered but just for modeling purposes, Joe, if you could help us with some more precision about what we should be anticipating for interest expense for 2009?

Well, again we are not going to break out specific amount, but we actually had $25 million of incremental debt that we did not have this past year. We have most of that under the term loan. Our expected interest rate should be in low-to-mid single digit range and that should help in your modeling.

And James to further complicate that we are hopeful that we will do some deals too, so that number is going to be moving around.

Understood. And then with regard to the amortization, what is the assumed useful life in the amortization of the goodwill?

We will have all of that detail in the 10-K, I have to read it, I believe its 12 or 13 years but again please see our year 10-K.

Okay. Then the last thing is should there be a material change, I am sorry if I missed this really, but should there be a material change in the minority interest line item, which was $10.9 million relative to the acquisition?

Relative to the U.K, acquisition?

Yes.

Not in the fourth quarter of this year, but for fiscal 2009 that minority interest lines will grow significantly.

Okay, maybe we can discuss that off-line?

Okay, absolutely.

We go to Bob Napoli, Piper Jaffray.

Thank you. If a few follow-ups. Canada was the pricing change done at the - what was the date or was it for the full quarter?

No it wasn't. I think it was the April, show the record. So it was April, May so only two months of the Q4, Bob.

Okay. Thank you and the, I mean have you haven’t really said how accretive, I mean you said that the HSBC deal will be accretive in the first year. Can you quantify that and does that include the amortization expense?

Yes, it is accretive with the amortization expense. We haven’t quantified, because we are not certain at this point, the extent of growth, the extent of investment and there is a lot moving pieces here, other than that we are sure of accretion.

Okay, You mean to say less than a dime probably in the first year or something like that?

I am not going to guess.

All right. And then just on the acquisition market and strategy with, I mean, I just wanted to be given a update on what kind of opportunities you are seeing and I know international is most attractive to your eyes, even though some of the distress you are seeing in the market and obviously here in the U.S., we have a number of banks that are maybe spinning off some assets here and there. But it doesn't sound like those are of interest to you, at this point. And is I would think that you are interested in primarily, directly in merchant acquiring or is there anything else broadly strategically that’s of interest to you?

We are almost primarily and exclusively interested in merchant acquiring. We will say exclusively interested in merchant acquiring, but we are interested in - in all the countries we operate in, including the States and financial institutions are making decisions and that's of interest to us. Obviously, we are very focused in Europe and Asia as well.

Okay and then in the U.S. credit/ debit the kind of growth trends. Have you seen a divergence in the trajectory of growth between the two. Obviously debit is growing a lot faster than credit is. But I just wondered if you saw a divergence, if debit was relatively steady and you are seeing a fall off in credit?

We look at all those statistics that the associations report. Our portfolio is slightly different. It's not as debit centric as the universe of business. So we don't track exactly. But we think the trends that generally you are seeing, we are seeing as well.

Okay. And then just last question. I don't know if you can give this number. The transaction growth in the - for money transfer in the U.S. in the May quarter.

Is about 1% for the quarter.

1%. Thank you.

You are welcome.

We go to Ed Antoian with Chartwell.

Hi guys, if you could make this quick. I have to go eat dinner.

Ed, we won't hold you from your repast.

Thank you. But if you could just give us the, maybe just a minute on where are the margin opportunities in Asia-Pac and what do you have to do to get there, other than just transferring to the integrated system?

I think that is a big one. So you don't want to underestimate that. But and we have also made huge investments in sales people. We have 300 sales people in Asia and they are not entirely paying for themselves particularly in areas like China. So, you have to build critical mass in that business. So its about its about growing revenues more aggressively. Its about having the systems to appropriately appraise your merchants. In some cases we are disadvantaged because the associations are changing, assessments and the interchanges and our system can't necessarily keep up with them on until such time as we can make conversion on that. And that’s at a disadvantage. So it is all those factors and its going to take some time. I mean this is definitely a building year. In this fiscal year end, we are going to see margin improvements in Asia and this would build. I think long-term these would be accretive margins to our overall merchant margins.

Only because you guys have told us to expect growth rates to slow down, organic growth rate to slow down in fiscal ‘09 and I assume going forward, what does it take then to increase productivity of the sales people and is that not almost conflicting with your statement that organic growth will slow?

I think I commented, that we have in script it was that it was at 40% something per forma and we are saying, that’s a long number. I mean that's big number. What I said is we believe this business can growth at a 30% sustainable rate and sustain accretive margin and we are standing by that. That’s not going to happened right away. The business was barely growing here when we took it. So it is de-growing, but its - we are cautious with our guidance going forward, other then generally bullish on the business.

Let me just to clarify if I can ask someone that question and correct me if I'm wrong, but you said pro forma revenues in Asia-Pac were up how much in the quarter.

41 I think.

The reported number was 41% and…

But the pro forma growth was?

The pro forma growth was 27% for the fiscal year.

Okay. And I thought that was the growth rate that you were referring to that couldn't be sustained?

Yeah. No, I think reflect in my comment, I think didn't say that. And what I was focusing more on was not being pinned down for a precise growth rate until we get a little bit more, a little more information behind us number one. And number two. I was referring to the higher number clearly that something that we couldn't sustain.

Okay. Fair enough. It's a good clarification. Thank you.

We will go to Tom McCrohan with Janney Montgomery Scott.

Just two quick questions. One, the clarification actually, the guidance that you provided in the past on the revenue details guidance, we didn't provide it today. Did you say when once when asked previously that we can expect you to start giving that granular guidance going forward next quarter or is that not going to happen?

Our approach is to give guidance for total revenue and for total EPS and to discuss the actual results in a reasonable level that our detail kind of consistent with how we've done and explained variances and give color for where we think the amounts will go but now to put a specific quantified amount out by channel for fiscal '09.

Okay. Sorry than been so numb on this. So in the past you would say like domestic direct high teens, the low 20% growth that kind of color, that you are not going to do anymore, correct?

That's correct.

Great, okay. And for the Canada -- sorry the UK alliance now with HSBC, there is that 229 number that you kind of gave on the revenue side for calendar '07, is there anything in addition to the revenue like margins that you can discuss with us, if not specific, just on the relative basis like what are the margins higher or lower relative to kind of domestic business?

The color we gave on the margin was that the EBITDA margin is higher than our total company EBITDA margin in today. This is very profitable high cash flow business. As Paul said we've only had the business for a month. We like that commence for at least a few more quarters and before we really give the more quantifying expectations for what we have.

Okay, fair enough. Thank you.

Thanks.

We will go to Adam Frisch with UBS.

Hey, guys, a follow-up, sorry for being kind of thinking ahead on this but chosen from some of the e-mails I've got for final, I think I am alone here. Talk to us a little bit about the HSBC acquisition, our margins for the company going up in '09 versus '08 and how much of that is due to things that are with the core business like merchant service things that are kind of in your control and not having anything to do with FX and stuff like that. I think we don't get that point clarify, there's going to be some confusion out there tomorrow.

Well, Adam, I think we are trying to do is not give specific margin guidance. But if you look at the actual results for fourth quarter as a company, our margin actually increased fourth quarter this year versus fourth quarter last year. There wasn't margin increase. We understand it's our job to increase our margins across the board. We do feel comfortable giving EBITDA guidance and the HSBC is absolutely piece of that, but I don’t know fair to give the granularity that you are asking for in that question.

Can I ask you this way, the amortization according to your 10-K is in your COGS, correct?

Yes, that's correct.

Okay. So what you're saying is your EBIDTA margin is going up despite the fact that your cost in your COGS line, the amortization is going to go from 15 to something like 30 plus and despite that increased cost, you're still increasing your margin. Is that the message we should take away from this?

Yes, on the EBIDTA level for the total company that's our expectation.

Okay. So additionally I had a problem, the fact that weren't giving granular guidance on business segment level. I thought that was the step away and I think that raised some concerns. But what you are saying is the company x even though you are including amortization cost in your COGS, will still be more profitable in '09 than it is in '08?

You're asking if the EBIDTA margin is going to go up in fiscal '09? Yes. We expect it will including the impact of HSBC.

Okay. That mitigates somewhat the fact that you are giving granular guidance on each segment. I'm glad, I cleared that up. The only other question I had was the tax rate in '09. Joe, did you say that's going to be 35%?

I said that 35% is kind of the baseline for this year and it will likely come down just from a mix perspective because the UK deal will be a large part of our business and the [UK tax rate] are in the high 20%, low 30% range. So we will likely come down from the 35%.

To what number?

Again, we are not going to give the specific amount for that guidance. We will give revenue and EPS guidance and we will explain our tax rate on an actual basis by quarter without giving a finite expectation for next year.

Okay, don’t want to believe in the plan and I know its getting pretty late in the hour and my last question is why the change in guidance strategy. I think some people will probably want to know why you guys are changing it a little bit?

Adam that’s a fair question. How we manage our company, I mean we manage our top-line growth, we manage our EPS growth. And this is becoming a big company with a multinational footprint and there is a lot of moving pieces, but that's primarily what we focus on and I think EBITDA is a reasonable measures as well. So we said okay, what we focused on as a management team, what do we feel comfortable giving a guidance on and that's what we are doing. And now of course on actuals we will drill as much as reasonable, but so that's we feel comfortable with and I hope you do as well.

Okay, thank you.

We will take our last question from Glenn Greene with Oppenheimer. Afterwards, Mr Garcia will give his closing statement.

Thank you, good afternoon and thanks for including me in the last queue here. I don’t want to believe this, but I dot want to go back to what I think is probably the major thing in the quarter and I an not sure I got an answer upto the last hour actually. The Merchant Services is just being down about 150 bps year-over-year, with the strong benefits from Canada pricing and the FX. I am just trying to reconcile, why the margins were down so much with that significant incremental benefit in Canada are there are couple of things that sort of call out, were there incremental investments in the quarter you will find in next year? I am just trying to understand that?

The margin decline in the quarter was a function of our ISO growth, which is contributing our operating income dollars and we are growing market share in that channel, but it’s a lower margin channel compared to the rest of our revenue and as a result its has a reported unfavorable impact on the margins, other than that there really was no other item that would have driven that unfavorable….

So it's really the same dynamics that have been going for the last 6,7,8 quarters?

Yes, yeah.

And which is probably sustainable going forward all else equal into '09.

Well, we think with the exception of a big margin accretive acquisition into the ranks that will have an impact on the impact that the ISOs has. So that's the kind of message. You know, Glenn I'm delighted we had a chance to take one more crack at this because we look at this as - we're thrilled with 11% to 16% EPS guidance and will all the moving parts and with an economy that has some storm clouds on the horizon, we're pretty proud of ourselves with that. And we also believe that we clearly understand it's our job to drive our margins but giving a granular forecast and having that kind of leisure like discussion on those margins that kind of fluctuate monthly for us, we just think it was necessarily helpful for the investors and we'd like to kind of move the focus to what's our earnings growth and so that's one of the motivations here.

Are you going to still be reporting a merchant and money transfer margins going forward?

Yes we will.

Yeah, now what, this is how, Glenn, as we point, this is not about what we report. This is about guiding for a full year.

Okay, okay I'll leave it at that. Thanks

Thank you. Okay operator I think that concludes all of the calls in queue. So I want to thank you for joining us on our call today. We appreciate as always your support of Global Payments and we hope to see all of you at the New York stock exchange on October 15th for our annual investor conference. Thank you so much.

Ladies and gentleman, this conference will be available for replay starting today at 9:00 pm and ending at 9:00 pm on August 7, 2008. If you wish to listen to the replay, please dial 888-203-1112 or international participants can dial 719-457-0820. This concludes our conference for today. Thank you for your participation and you may disconnect at this time.