Nancy Murphy – Senior Vice President of Investor Relations Frank R. Martire – Chairman, Chief Executive Officer and Member of Executive Committee Gary A. Norcross – President, Chief Operating Officer and Director James W. Woodall – Chief Financial Officer and Corporate Executive Vice President.

Glenn Greene – Oppenheimer Brett Huff – Stephens Inc. Darrin Peller – Barclays Bryan Keane – Deutsche Bank Ashwin Shirvaikar – Citi Investment Research David Togut – Evercore Partners Inc. Daniel R. Perlin – RBC Capital Markets Tien-Tsin T. Huang – JP Morgan David J. Koning – Robert W. Baird & Co.

Peter Heckmann – Avondale Partners Georgios Mihalos – Crédit Suisse.

Ladies and gentlemen thank you for standing by, and welcome to the FIS Second Quarter Earnings Conference Call. (Operator instructions) And as a reminder, today's teleconference call is being recorded. At this time I would turn the conference call over to your host, Ms. Nancy Murphy. Please go ahead..

Thank you, Tony. Good morning, everyone, and welcome to our second 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, and 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’s call by reporting that the second quarter proved to be another strong quarter for FIS. Once again we delivered profitable organic growth, continuing our record of consistent performance in line with expectations.

We continue to execute our global growth strategy with a focus on optimizing our business and delivering strategic value to our clients. We remain confident in our 2014 outlook and focus on driving superior returns for our shareholders.

Looking at details of the quarter revenue increased by 6% in total to $1.6 billion, and year-to-date to $3.1 billion. This marks our 18th consecutive quarter of organic revenue growth. Adjusted earnings per share rose 6% to $0.75.

Strong cash flow and disciplined capital allocation enabled us to return a record $463 million to our shareholders in dividends and share repurchases in the first six months of the year, and finally we achieved strong sales execution in the quarter and are entering the second half of the year with a robust pipeline.

We are excited about the growth opportunities for our business as the global financial service landscape evolves. Our results reflect our unmatched combination of technology, services and consulting solutions, which drive transformational change for our clients.

We continue to align our investments with market opportunities and client needs to drive profitable growth. Our first half results and consistent performance reinforce our confidence in achieving our 2014 goals.

It also highlights the strength of our operating model and continuous steady execution, which is consistent with our growth strategy to deliver value and profitable results to our clients and shareholders. 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. Turning to Slide 8, as Frank discussed, the second quarter was another strong quarter for FIS.

Our market focused approach and investment and innovation in service related offerings have delivered strong business results and our emphasis on overall operational efficiency continues to translate to consistent, profitable growth for FIS. In the quarter, we reported strong sales with good deal flow and key strategic wins across all markets.

We further strengthened our pipeline across all segments and the markets they serve. We continue to expand our solution footprint through investing in our platforms and targeted acquisitions.

This includes our recent acquisition of Reliance Financial, which I will discuss in a few minutes, and we continue to reaffirm our investment strategy to better penetrate the global financial institution market with strong indications this focus is driving increased traction, which we expect will translate into higher revenue and profit growth for the company, but will create some near-term margin constraints.

All of this allows us to remain well positioned to capitalize on the increasing industry demand for scalable outsourced solutions and services. We identified this trend early and began positioning FIS to deliver these capabilities on a global scale.

Today our unique business model encompassing financial technology, outsourced solutions and consulting services is driving transformational change for our clients. We have captured a steady stream of new wins and expanded business by meeting pressing industry needs for efficiency, growth, security and improved customer experience.

This represents a re-occurring theme for today’s conversation. Turning to the markets, in North America we had a very strong sales quarter with several large strategic wins reflecting renewed market demand and continued confidence in our depth and breath of solutions, delivery excellence and transformational capabilities.

First I would like to highlight a significant competitive win involving one of the industry’s highly respected and innovative banking brands, a win that we believe represents one of the largest EMV contracts to date in the US.

Starting in October, FIS will replace 10 million magnetic stripe cards with new Chip-and-PIN technology over a 24 month period. This relationship with a client known for its industry first underscores FIS’ ability to lead the industry and bring transformational technology to the markets we serve.

Our experience, best in class platform, delivery capabilities and commitment to security resulted in this win against a strong competitive landscape. We are very pleased to have been selected and are excited with our leadership role in this space.

Next I would like to highlight Bank Leumi USA, who selected FIS to deliver a unified core banking and wealth management platform to provide a universal view of its customers’ portfolios.

This common platform and single point of access for customer accounts provides consolidated data for tracking analytics in a simpler interface for risk monitoring and response. This sophisticated and transformational solution also supports our specific risk and regulatory requirements.

The solution will be fully outsourced to FIS and will include a suite of front-end e-banking and e-payment solutions designed to simplify customer interactions across accounts and improve customer services.

Lastly, we are pleased to highlight our recent acquisition of Reliance Financial, which expands our solution capabilities in the growing wealth management market.

Combining our current wealth-based solution technology with Reliance’s services capabilities and seasoned leadership team creates an end-to-end outsourced solution, and it expands the strategic value and services we bring to our client base, enabling us to efficiently serve this growing market.

This business serves more than 200 clients today, and is expected to double in size over the next five years. We believe this will be a powerful addition to FIS.

Switching to our international segment, we achieved 12% organic revenue growth, while continuing to drive strong demand for our solutions across all regions with a number of significant new deals closing during the quarter.

Starting with Asia, this market delivered significant opportunities with organizations looking to serve the underbanked and emerging payment sectors. For example, you will recall our success last year in launching Mahila Bank, India’s first bank, aimed at the financial empowerment of the country’s women.

This has been followed this quarter by Shivalik, an Indian co-operative bank, who has selected FIS to deliver a completely outsourced banking solution. This trend towards banking utility models is also visible in other countries as banks are looking to FIS to help drive efficiency and best practices.

Meanwhile, our ATM outsourcing growth in India continues with new business wins with Bank of India, Karnataka Bank, [Muthoot Finance] joining a long list of major players relying on FIS to install, operate and maintain their payments infrastructure.

We also continued to find success for our core banking technology with banks wishing to keep their processing in-house. As an example, Philippine National Bank has selected to deployed FIS core banking platform after its merger with Allied Banking Corporation.

This core replacement now takes us to four out of the top 10 banks running our core systems in the Philippines. I’m also pleased to report that CIMB Thai has signed with FIS for credit card processing, positioning us in Thailand’s growing card processing market.

In addition, the Bank of Philippine Islands, BPI, has joined the growing list of financial institutions migrating onto FIS switching products and represents one of three switching deals we concluded in Asia-Pacific this quarter. In Europe, we are continuing to make good progress on our major projects with Sainsbury Bank and ING.

The Sainsbury migration took a major step forward this quarter, with the first technology deliverables that form the base for the banks infrastructure. Meanwhile at ING, the bank is continuing to make good progress on its transformation project based on FIS’ core banking platform.

Moving to Latin America, our business continues to perform well and grow despite a slower macroeconomic environment. In Brazil, where we are the largest third-party card processor through our joint venture with Bradesco we saw another quarter of growth in cards and transaction volumes.

We continue to believe this market provides a long growth runway driven by the secular shift from cash to card-based digital payments. In addition to these highlighted projects, we continue to generate positive momentum with existing deployments and expand business with established client relationships.

Record attendance at our annual international client conference hosted in June enhanced our robust pipeline and our full-year outlook in the international market, which remained strong and on target. Next we continue to make good progress in our growth of the global financial institutions market and remain pleased with our early results.

Our strategic investments in this market show early signs of progress. Our pipeline is growing and we are continuing to close large strategic transformational deals.

As we referenced on our last earnings call, early in the second quarter, global investment banking firm Jefferies selected FIS as its long-term strategic technology partner to deliver IT transformational services worldwide.

As a single source provider, FIS brings needed expertise in change management and outsourcing, financial technology and capital market consulting capabilities, enabling Jefferies to manage cost and maximize gains for greater efficiencies. This is a value proposition that is unique in our industry and unmatched by our competitors.

Additionally at the end of last year, we told you about our innovation strategy to incubate early stage exploratory consulting services focused on disruptive technologies that are changing the industry and defining new customer interaction models.

We are pleased to announce that we have closed our first engagement with a very large and prominent retail bank that first experiences exploratory consulting approach through one of our innovation centers.

Using this approach, we have defined a unique solution that is centered on the modern lifestyle and combines digital technology in a physical environment. This innovative new solution will deliver an entirely new way for this bank to interact with and add value to its customers.

These early results and our increasing pipeline continue to fuel our confidence for investing in this market. Turning to Slide 9, and before I turn it over to Woody, let me take a minute to recap a few key points. We had a strong second quarter and we are proud of the results and our performance in the first half of the year.

Our strong quarter reflects a combination of new wins, implementations and expanded client relationships. We remain committed to optimizing our business and delivering strategic value to our clients, which is central to our global growth strategy. We will continue to invest in the markets and solutions that are central to driving 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 6% on a reported basis and 5% on an organic basis to $1.6 billion driven by growth in all markets.

Adjusted EBITDA increased 3% to $466 million, while the EBITDA margin was 29.2%, a decrease of 60 basis points from the prior year quarter reflecting a change in revenue mix, including higher growth in international markets, consulting and services as well as increased investment in the global financial institutions market.

Adjusted net earnings from continuing operations increased to $217 million from $210 million, and adjusted earnings per share increased 6%, to $0.75 per share, from $0.71 per share in the prior year quarter. For the first half of 2014, adjusted revenue increased 5% on a reported basis and 4% organically to $3.1 billion.

Adjusted EBITDA increased 4% to $914 million and the EBITDA margin was 29.2% compared to 29.4% in the prior year period. Adjusted net earnings from continuing operations increased 6% to $417 million and adjusted earnings per share increased 8% to $1.43 per share.

As we discussed in prior quarters, termination fees in 2013 related to the BMO M&I merger, resulted in a revenue headwind of about 100 basis points in the second quarter 2014. This headwind was partially offset by contractual fees related to Umpqua Bank’s acquisition of Sterling Bank.

These fees contributed approximately 80 basis points to Q2 2014 revenue growth and are non-recurring in nature. As we discussed last quarter, this important win of the outsourced processing of the combined banks significantly increases the long-term value of this relationship.

We are pleased with these results, which are consistent with our outlook for the year. Now I will continue on Slide 12 with a review of segment results. Financial Solutions revenue was $629 million, an increase of 6% on an organic basis, reflecting growth in consulting, professional services and digital banking.

Results also include the contractual fees related to the Umpqua Sterling win I referenced. Financial Solutions EBITDA increased 8% to $249 million, while EBITDA margin expanded 20 basis points year-over-year to 39.6%.

Turning to Slide 13, Payment Solutions revenue was $624 million, about flat with the prior year quarter, reflecting growth in network solutions, bill payment services and image and output solutions offset by lower termination fees.

Payment Solutions EBITDA was $253 million and the EBITDA margin was 40.6%, down from 42.2% in the second quarter of 2013, primarily reflecting lower termination fees and revenue mix.

As a reminder, looking forward to the third quarter the Payment segment has difficult year-over-year comparisons due to elevated license sales and termination fees in the third quarter 2013.

Also this segment has a seasonal trend of lower sequential revenue in the third quarter due to the increased volumes for processing tax payments in the second quarter. Moving to Slide 14, International revenue was $347 million and grew 12% organically in the quarter.

We continue to see organic growth across all major regions, including strong double-digit growth in Europe and Asia and continuing growth in Latin America. International EBITDA increased 11% to $73 million, EBITDA margin was 21.1%, down 70 basis points primarily reflecting increased investment in the global financial institutions market.

As Gary discussed, we are pleased with our early progress in the global financial institutions market. Consistent with our plan in the first half we have invested an incremental $15 million primarily to expand our dedicated client teams and are on track with the $30 million for the full year.

We expect revenue growth in this market to gain traction late in 2014 and into 2015. Corporate expense was $109 million, unchanged from the prior year, reflecting diligent cost management. We expect corporate expenses to remain at a similar level for the remainder of the year.

Moving on to a reconciliation of GAAP to non-GAAP EPS on Slide 15, GAAP earnings increased to $0.62 per share. Second quarter 2014 GAAP results are adjusted to exclude $0.13 per share in acquisition-related purchase amortization. The effective tax rate was 30% in the second quarter of 2014 and in the prior year quarter.

Both periods reflect favorable resolution of certain tax matters of about $0.04 per share. We continue to expect an effective tax rate of 33% to 34% for the full year 2014. Moving onto cash flow on Slide 16, adjusted cash flow from operations totaled $245 million, up from $199 million in the second quarter 2013.

Capital expenditures were $97 million consistent with our target of 5.5% to 6% of revenue through the first half of 2014. Free cash flow increased to $149 million from $115 million in the second quarter 2013.

As a reminder, free cash flow conversion in the second half of the year is historically higher than the first half due to timing of payments, including taxes and incentives.

Turning to Slide 17, we returned approximately $219 million to shareholders in the second quarter, including $68 million in dividends [Indiscernible] to repurchase 2.8 million shares in the open market. Repurchase activity reduced our weighted average diluted shares to 289.2 million in the second quarter, from 294.3 million last year.

At the end of the quarter, basic and diluted shares outstandings were 284.6 million and 288.4 million, respectively. Approximately 1.7 billion remains under our repurchase authorization and we expect to repurchase shares throughout the second half of 2014. Moving on to the balance sheet, debt totaled $4.9 billion.

In June we issued 1 billion in new senior notes to refinance existing debt at lower rates and to extend the duration of our capital structure. In July we completed the redemption of 500 million 7.875% notes and expect to record a third-quarter charge for costs related to the refinancing activities of approximately $0.08 per share.

The refinancing results in a reduction in our weighted average interest rate to 3.2%, which was anticipated, and our leverage ratio was 2.6x, and we continue to target a ratio at or slightly below 2.5x debt-to-EBITDA.

As Gary mentioned, we are pleased to have completed the acquisition of Reliance Financial in mid-July, which provide long-term growth opportunities in the wealth management space. In 2014, we expect the acquisition to be neutral to EPS and provide a slight revenue tailwind as we build our sales pipeline.

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 of 4.5% to 6.5%; adjusted earnings per share in a range of $3.05 to $3.16 per share, reflecting growth of 8% to 12%; and free cash flow approximating adjusted net earnings.

To add further color to Q3, we continue to see line of sight through accelerated revenue growth towards the higher end of our guidance range. As we have previously described, this growth includes international consulting and services which come on at lower margins.

Additionally we have difficult comparisons due to elevated termination fees and license sales noted in the third quarter last year. As a result, we expect pressure on year-over-year EBITDA margin comparisons in Q3. In summary, we're pleased with our first half financial performance and our outlook for the full year 2014.

We remain focused on executing our growth strategy, generating strong profitability and cash flows and deploying capital in value enhancing ways. That concludes our prepared remarks. Operator, please open the line for questions..

Operator, can you open up the line for questions please..

(Operator instructions) The first question in queue will come from Glenn Greene with Oppenheimer. Please go ahead..

Yes, thank you. Good morning..

Good morning..

I guess – I guess a few questions, first I guess I will just sort of start on the Woody’s last comment at the end there, maybe just give us a little bit of color around the visibility towards the higher end of the organic revenue growth and sort of – frame sort of the margin pressures sort of the same dynamic that you have been talking about of – lower revenue – the revenue mix sort of causing that impact on the margins perhaps faster consulting and international growth?.

Yes, as we described – as we laid out guidance for the first half of the year, we anticipated growth to grow in the second half of the year compared to the first half of the year. We have seen that. We saw 4% organic in Q1, 5% organic in Q2, which was a little bit of a tailwind.

We were excited about that growth, but we anticipate continuing to see accelerated growth in the back half of the year. In conjunction with that growth, those will be more in the international revenue growth. It will be more in the consulting and services area. Again those don’t come on at the same margins as traditional processing revenue.

If you combine that with some of the large license sales and termination fees that we noted in last year’s Q3, it is going to put some pressure on EBITDA margin, but again seeing that accelerated revenue growth that we anticipated..

And then maybe for Gary there was a lot of commentary, a lot of deal activity, it sounded like a bunch of new wins, maybe you could just sort of frame sort of the sales environment relative to what it has been, three, six, nine months ago as to – is your commentary, does it imply that you are seeing a pickup in activity, does this give you more confidence about accelerating growth not only in the back half of ’14, but into ’15?.

Yes, Glenn, no, it is a great question. We are very confident, what we are seeing in the sales and excited about the results. The sales team is operating very well across North America, the international group and in the global financial group. Our pipeline continues to go up in all markets. We are seeing great deal flow, which is – which is exciting.

So we are seeing stuff run through the pipeline on a faster basis and our sales success is up significantly over last year. So we do feel confident about the back half of the year, and we do feel good about next year.

To Woody’s point, I’m actually pleased to see the growth in the services business, in the processing business and less licensing fee and less term fee. It gives you a much more stable revenue growth curve that allows you to run the business in a much more effective way.

So we’re pretty bullish on where things are headed and the opportunity that exists in front of us..

All right, I have got some more questions, but I will jump back in the queue. Thanks..

Thank you. Our next question will come from Brett Huff with Stephens. Please go ahead..

Good morning everybody..

Good morning Brett..

Good morning Brett..

Few questions, first of all, just to follow up on the trends from additional deals Gary that you mentioned, can you give us a sense of sort of what you see out there? I think there are sort of two at least that I think of are two buckets, one is sort of the more traditional core deals that you all had one in a legacy way and then the new sort of IT infrastructure deals, I know that the global effort is sort of barking up both of those trees, but can you give us a sense for more specifically how those pipelines are developing, is there a region where you are feeling like there is going to be some activity soon.

Can you give us a little more color on that?.

Yes. No, I mean I think it is – it is interesting what we are seeing across all markets. Just the classic deals that we traditionally sold, where it was a product, a single product and an implementation, even a single product on an outsourcing basis.

While we are continuing to see that in the international market, frankly across [EFI] and even across North America we are seeing deals that are much more transformational in nature. Not only will they have intellectual property and capital, but really a long term services component, where we are taking a huge piece of that infrastructure.

I think that transformational opportunity that you are probably referencing is the Jefferies deal that we just announced.

But what we are seeing is even in that market right you have got very large institutions, needing to reduce their cost in a very material way to take a whole bunch of disparate applications and pull them together and wrap best practices around it, streamline the overall operations, reduce application complexity and deliver it over a long-term value proposition so they can not only control their cost, but drive efficiencies as they grow their business.

And we are seeing these kind of engagements, where frankly it puts FIS in a very unique position.

They are just not where we can really think of any competitor I think bring the capabilities around product, bring the capabilities around service and then bring the capabilities around consulting expertise to drive all that together to truly drive that long-term result.

So we see it with the signing of Jefferies, we’re seeing it in our pipeline execution. Frankly even backup of some of the large deals that we announced where we look at what we’re doing with Sainsbury when you look at – what we are doing, things we are doing with the Umpqua, these are deals that all have, all of those components.

So it's not just product lead it's a comprehensive product suite, it's wrapped around with those types of services and IT infrastructure. And when we look at our pipeline Brat, we have got more and more those types of deals coming into the queue..

So, Brett these are now one-off opportunities when you look at Jefferies and some others, we have a very strong pipeline that supports that they will continue and thus many those that will come..

That’s helpful and then second question on margins, I know there is in taking some of these larger deals on with more of a mixed component not just product driven that it has a little bit of a degradation impact on margins, as you guys think forward over the next year or two years on medium term, do we still feel like that we are going to grow margins by 50 basis points for give or take overtime even with that mixed shift?.

Yes, I think as we talked about before. It depends on where the revenues come from. If they continue to come at a faster pace internationally and at a faster pace in these deals that have a lower overall margin profile, it will be difficult to continue to expand margins every year on that basis.

However, we will also think at that same time, we would accelerate top line growth higher than that 5% of what we have seen over the last few years..

Yes, we have been real clear about that Brett. We fundamentally will give up a little bit of margin to accelerate the top end of the growth curve and we are seeing those results.

Do we think there is margin expansion in the business? Absolutely, you continue to see us hold our corporate numbers flat, you continue to see us execute very well where appropriate cost need to be taken out but obviously we are pushing the company to a higher growth curve and would expect those results..

And to add a little more color, just to be clear, we would expect profit growth to accelerate and we would trade margin expansion to trying to accelerate that profit growth faster than we have today..

On a dollar basis you mean?.

On a dollar basis. That's correct..

Okay, that’s all I needed. Thanks guys..

You are welcome..

Thank you. Our next question in queue will come from Darrin Peller with Barclays. Please go ahead..

Thanks guys.

Look I just want to start off first with understanding sort of one-time items mainly around the term fees again only because just talking to margins, obviously margins, if we back out the $14 million from last year in our estimate your margin would have actually expanded about 40 basis points year-over-year during the quarter, are there any other moving parts? I think there was a benefit in the financial segment, right? That maybe would be impacting margins this quarter, just we get a sense of what was normalized growth and margin expansion after backing all the one-time non-operating items?.

Yes, we had a contractual fees related to Umpqua Sterling Banks transaction that was about an 80 basis points tailwind this quarter. So if we are looking at just to give you some color around sort of one-times or non-recurring items in the quarter.

Additionally, we continue to invest in the global financial institution market this year which has an incremental $30 million headwind year-over-year. That was about $7 million or $8 million in the quarter. So that's about 40 basis points or so of headwind in the quarter.

So there are some moving parts but we are just trying to give you there some color around where those parts are as we flow through the year..

That helps, thanks.

And then just I guess I was going to ask about the $30 million anyway so following up on that point, can you give us a little sense as to what the effectiveness has been, I mean again I think your goal is to really focus on a top 30 clients try to harvest more business out of them by moving some of your experts from the consulting side of the business over and back filling.

How is that being going? Any traction, any new (inaudible)?.

Yes, I think Darren it's going very well. We are very pleased on it, try to provide some color in the script. When you look at the Jefferies win, it's direct result of that investment. We have announced another large win prior around unfortunately some of these global institutions don't allow you to expose their name in our earlier call.

We are seeing great momentum in the pipeline to where these points we are right on track with our investment, you are exactly right. What we did was we hired really sales team if you want to think about it, client relationships teams dedicated to these top financial institutions. So they are a team and they are built around the global client partner.

Their expectation, our expectation of that engagement is to drag all the things I discussed, not only in consulting and services but also product and processing and we are seeing strong results around that and seeing the strong pipeline as it grows to what these points mix is all different but the deals are long term in nature.

Our pipeline actually has grown more in GFI than it has in the other markets but it's grown across all the markets which would indicate that this level investment there was some pin up demand in those markets and we are executing against it. So we feel good about the investment today..

And Darren, it's not just the number of wins but it’s the size of the win. They are large deals for us and a lot of recurring revenue associated with it..

Yes that's great. I mean chilling obviously in the financial segment of the international segment and certainly help you get to the strong guidance results high end in the guidance and trajectory next year.

One last question though on the payment side, that's the one area where it didn't look as strong just based on I guess flattish growth than if you back out the term fee maybe just couple of per say growth, can you give us a little more granularity as to what the moving parts are and what's really driving sort of the upside versus the holding it back right now and if that should change and--.

Yes, now it's a great question. If you really peel back through PSG we have some business lines that actually really did perform very well. We saw some strong growth in money movement and our network business etcetera.

But your point out is exactly right, we did have the brawn of the large term fee from M&I hit back particular segment just so happens as the way they fell last year and while we grew through it on the revenue line as those term fees come on at a 100% margins roughly as well software license as then you sell through that is not going to be able to fill that profit on the same manner.

Frankly when we look, payment is just an interesting situation about Q2 and Q3 of this year. We’ve got some very difficult task for that particular segment, lot of license fees flowed, lot of term fees flowed through that segment last year.

And one of the things we continue to see is our software licenses just continue to stare a step down which is positive for us long term, back at Frank’s point about long reoccurring revenue streams and it makes it much more predictable and makes frankly much more confident in what the future holds.

But, those things do provide little lumpiness in the bottom line for us..

Okay guys, thanks very much..

You’re welcome..

Thank you. Our next question in queue will come from Bryan Keane with Deutsche Bank, please go ahead..

Hi guys, good morning.

Just wanted to ask about – just on the term fees, how much were in the quarter just versus last year, just wanted to make sure the right numbers?.

The term fees that really called out last year were mostly around BMO M&I, we talked about that being a $40 million number, we talked about 70% of that being in the first half of the year ratably between first quarter, second quarter and again between financial and payments about 70% again within payments versus financial.

So, kind of sketch that math out that lot one, the specifics of those term fees are in the quarter last year..

And there is really none this year?.

Well, not necessarily term fees, we always have some level of term fees in the year typically we churn out to call those analysts that are truly significant for you guys and we didn’t have anything that was really significant in terms of term fees..

Okay.

And then, with some of the margin headwinds and obviously ramp up strong of the organic growth in the mix of business just trying to get a sense for EBITDA margins for the full year, does that mean and/or can you just quantify that what that means for this year, for the EBITDA margins on a year-over-year basis?.

As we talked and we guidance, we expected EBITDA margins to be in line with revenue growth or EBITDA growth to be in line with revenue growth.

We added some color to say, if we see revenue growth towards the higher end of that range and if it comes in more of the international space and consulting and services space, you may see EBITDA margin at the lower end of that growth profile.

So it will put some pressure on margins this year, how we ultimately pan out for the year will depend on where the actual revenue flows but it will put some pressure on overall margin expansion for the year..

Okay.

And then, just finally on the third quarter in particular, there is I think a high level license fees last year, just trying to get a sense of how big that was, how big that hurls that is to jump over?.

I think we called out in a combination of the script and or the margin expansion last year, I’ve to go back and double check.

But, I know we saw, I think about 170 basis points of margin expansion in FSG and about a 175 of expansion in PSG, a lot of that was driven off of term fees as well as license fees last year, I think we called out the specifics around that..

Okay. Actually, I’m just going to sneak in one last one.

On the payment segment, I understand the comp gets tough and there is still tough in the third quarter and then does it start to expand then in the fourth quarter or is that also difficult comp for the payment segment?.

I think a lot less in terms of difficult comps for the segment, second and third quarter just had sort of heavy one times in it, we’ve tried the highlight for you, but it’s an easier comp in the four..

Okay, great, congrats on the good quarter..

Thanks Bryan..

And our next question in queue will come Ashwin Shirvaikar with Citi, please go ahead..

Thank you, good guys..

Good morning Ashwin..

My congratulations, good quarter here.

My first question is, you guys have had some pretty strong signings here not just this quarter but the last many quarters, and I think it would help investors if you give us some idea of the conversion of these signings into revenues, I know these tend to be longer term, it can be often 12, 18, 24 month type conversions, but what are we looking at in terms of a potential acceleration of top line?.

Yes, Ashwin we’re trying to give some color on that and more trying to continue to work and give you more insight over the cause.

But, if you look, I talked about the deal flow through that pipeline not only are we building pipeline, we’re seeing good churn on the pipeline meaning we’re seeing decisions, obviously you don’t win every decision in the market.

We would tell you, if we did, but what we’re seeing is, is great deal flow through the pipeline and we’re continuing to see growth in the pipeline.

So, not only are we seeing good deal churn we’re actually replacing that pipeline and the pipeline is growing and our sale success has been growing consistently quarter-over-quarter and in Q2 it was a very big quarter.

To your point, how we’re on-boarding some these larger deals, some of these deals depends on the type of engagement we have, I highlighted Sainsbury Bank major milestone this quarter getting their IT infrastructure established.

We’re seeing great, so that project is big and complex as it is, which I know a lot of the times these things around the industry will drag out. We hear stories about people’s project getting elongated beyond the original pro forma.

This one is right on schedule and so we feel very good about executing, we got other milestones in Q3 and Q4 and you will see that probably on-boarded by Q1 of next year, so feel good about that.

ING is another one, very complex, very large transpiration project worldwide once again that project continues hit every milestone, we’re seeing revenue associated with both of those deals come on in the manner that we thought.

The ATM deals are great examples as well, we announced a very, very large contract and it’s going to ramp up to $100 million revenue, actually that ATM deployment is right on schedule and in couple other regions. In India, we’re actually a little ahead of our deployment schedule and we’re seeing a transaction volumes come up within pro forma.

So all of these things, the deal flow is important and we’re seeing in, frankly as I answered on another question, we’re seeing an acceleration of deal flow.

We’re seeing, decisions are starting to be made on a shorter time period, some of these large complex deals still take 12 plus months to go through sales cycle because they’re larger, they’re more complex, but we’re seeing deal flow accelerate.

We’re seeing pipeline accelerate and we’re seeing our sales success and signings accelerate, so all of that makes us pretty confident about the second half of the year, makes us confident about 2015 and we think the strategy is working very well at this point..

And Ashwin, where this commentary is coming, we continue to see – accelerate revenue growth towards the high end of our guidance range. So, actually we’re trying to see some of that result right now..

And then, just to clarify that particular comment, you meant on a full year basis or second half, when you said high end?.

That was specific to the third quarter color standpoint, but to give you guys we anticipate this first half to be slower, second half to be faster and we’re seeing good line of side..

Got it.

One other questions, obviously completely support the focus on operating profit as opposed to a margin number and operating profit increasing at a faster phase, now having said that when I look at some of these factors that have been pressuring margins international for example, and consulting growth, at what point, given that consulting is pretty much, I think the consulting headcount is kind of tripled in a couple of years here and international may go into country like the Philippines for example, three banks becomes four banks, five banks, your revenue gets spread over the cost.

Shouldn’t that ease some of the margin pressure?.

Absolutely, I mean, as we normalize our mix, I think the way you’re saying and as you see expansion in countries, yes, management expects, they start saying obviously some margin tailwinds around some of these businesses and frankly we’re seeing some evidence of that.

The consulting business you reference has continued to perform very well and obviously we want to keep that growth going and our consulting business is coming on at very traditional margins of what other large consulting groups are doing.

There is a lot of opportunity around the globe to continue to sell out products, but now we absolutely believe that there is margin expansion in the business long term.

I do think you will see some lumpiness from quarter-to-quarter but we not only think we will get operating profit growth, but we do think long term will get some margin expansion and we’ll continue to see that..

Got it, thank you guys..

Thank you..

Thank you. Our next question in queue will come from David Togut with Evercore, please go ahead..

Thank you, good morning everybody..

Good morning, David..

Gary, on the last call you indicated that there was an opportunity to expand the India ATM contract to add a few new circles I believe, can you update us there on potential expansion opportunities?.

Yes, we’re starting to actually see that but in a circle concept, it’s a good question David.

We haven’t seen entire circles come back around, what we’re starting to see in our reference some of them in the call with Muthoot Financial and Bank of India and others, we’re starting to see ATM expansion right, not only in public sector banks but non-public sector banks.

But, we’re starting to see some of the large public sector banks that are struggling and circles come to companies like FIS and allowing us to deploy, even in circles we didn’t win and we’re starting to see more and more of that because they do have their numbers, they’ve got to get out, they’ve got to grow their business.

So, we’ve seen a complete circle comeback around, no, I’m not saying that it won’t happen, but it still remains. They’re certain circles that are struggling throughout India and we continue to take market share based on our results and the team has just done a phenomenal job in India.

We got a great leadership team over there and they are really shining against the competition in deployment of these environments..

Thank you. Our next question in queue will come from Dan Perlin with RBC, please go ahead..

Thanks.

So I guess kind of a longer term picture, I am just wondering and not the hamper on the margin so much but as you think about kind of your pipeline and you obviously have a very good line of site into what’s going to look like and the business kind of contextually is changing quite a bit, I am just wondering when you think about the ability for the business to actually produce margin expansion, not absolute dollar growth but actual margin expansion into ’15 and beyond just longer term, is the cost structure appropriate today or you thinking that you are just kind of get to that point via leverage because my sense of what I am hearing is that it's not going to take longer than ’15 even if we exclude the $30 million..

Well, I think you might think about in terms of markets. If you look at our North American market which is more of our traditional business, you will continue to see margin expansion as sales in that leveraged environment come on at higher margins than the average corporate margins.

If you look at the global financial institution market, a lot of that is around consulting and services and it's a pull through of product but there are always services in that sales process, those we don't expect to come on at the same level of margin as our traditional business.

And then the international group, we anticipate continuing to expand margins with those overall margins will be less than the corporate margin as they are today. They will expand and move towards that corporate margin but they will be lower than the overall margin in the short term but expanding.

So you have to kind of map out where the math is or where you anticipate the math to be in those different markets to add them together to see what the margin profile looks like over the next three to five years..

And as we said on the GFI space specially that's an area that as we continue to see the success we are seeing and as we continue to see it accelerate the top line, don't expect, we might come back and talk about further investment in that market frankly it accelerated even further.

So we talked about that when we announced the original 30 million, this is something that we fundamentally believe there is lot of opportunity there and as the team executes but the Woody’s points, even in GFI those services businesses, the margins ramp overtime because it's long term they deploy those services and as the services reach scale you are going to see even margin expansion there.

So that's goes back to the earlier question that I think Ashwin talked about which is we’ll see margin expansion across the businesses but it's going to come in different ways across those markets and the type of mix we are deploying there..

Thank you. Our next question in queue will come from Tien-Tsin T. Huang with JP Morgan. Please go ahead..

Thanks. Good morning. I wanted to ask about the EMV win, just curious to learn a little bit more about it.

Is this a traditional VISA, MasterCard branded debit card win, is it just issuer deposit thing or would you also secure the branded business as well?.

Yes, it's a great question. Right now it is VISA and MasterCard and it's really the card reissue inside of EMV, we think it's very significant. We got actually a pretty full pipeline around that side of our business and so we think it's a good opportunity and good testaments.

Frankly I think it's the largest EMV deal done so far around cards but not sure that's one I said one of the largest, I mean it's definitely up there. And when we look at our pipeline Tien, generally there is a lot of opportunity around this particular space.

So we are starting to see, we have been seeing some EMV activity but it has been more partial reissues, high network, individuals, people traveling outside the states et cetera, et cetera. This is the first that at least in our environment where we have seen someone convert their entire card portfolio..

Thank you. Our next question in queue will come from Dave Koning with Baird. Please go ahead..

Hey, guys Great job..

Hey Dave. Thanks..

Yes and so I guess about the revenue acceleration now you kind of went over this little bit but I am just wondering when you said towards the high end of the range, did you mean for the full year that you think it gets higher in the range or you mean kind of through the second half and kind of existing the year it will be towards that higher end of the 4.5% to 6.5% range?.

If you go back to how you laid out the guidance in the year, again we anticipated lower growth in the front half of the year, higher growth in the back half of the year. My comment was specific to Q3 where we really anticipating towards the higher end of the range for Q3 specifically.

We still think that 4.5% to 6.5% is the right number for year but we do anticipate more growth in the back half of the year than we did in the front half of the year. We are sure..

Thank you. Our next question in queue will come from Peter Heckmann with Avondale Partners. Please go ahead..

Good morning. Most of my questions have been answered but I did want to just see if you can give us additional, little additional detail on the Reliance acquisition in terms of how we should be building that into our model.

So would that approximate about $16 million in annual revenue?.

Yes, we haven’t given specific dollars around it but we anticipate I mean a little bit of a tailwind in revenue in the back half of 2014, obviously we closed in mid July.

We don't anticipate any EPS accretion in 2014 from the deal that EPS accretion will come in 2015, in terms of thinking about it I mean when you look at $110 million purchase price at the end of the day it's not that significant of the deal when you think about what the accretion might look like.

But it will be a bit of a tailwind in the back half of 2014 and then further into 2015..

Yes, we are excited about it though when you think about especially the community banking market, one of the things all financial institutions are clamoring for is how to drive additional fee income and how to make more money and how to penetrate further their customer race with the broader products suite.

One of the things we are seeing is we had a great product solution around wealth management but frankly a lot of the community institution just don't have the expertise to deploy full on back office trust services.

Reliance Financial allows us now to take the subject matter expertise and intellectual capital and best practices around running a trust organizational, wealth management organization coupled with our product capability and the combined event is going to put us in a very good position to deploy that offer now to more than 600 sales resources around the U.S.

So we think it's a great opportunity. I even said in my notes we would be disappointed if it didn’t double in size in the next five years and to Woody’s point it’s going to contribute accretively in 2015 and beyond with that growth..

And it's a great opportunity cross-sale opportunity and added value for our clients..

Thank you. Our next question in queue will come from Georgios Mihalos with Crédit Suisse. Please go ahead..

Great. Thanks for taking my question guys.

Just wanted to dig in on the international side little bit more very strong growth there, is there a way to sort of parse out the growth that you are seeing from the consulting side, the Capco side versus say the processing side of the business?.

Yes, I mean if you start thinking about in terms of regions, we saw extreme double-digit growth, high double-digit growth in Asia-Pacific. We saw very good double-digit growth in Europe and EMEA both in our traditional business as well as our Capco business. And then Latin America, we showed sort of mid single-digit growth.

We anticipated seeing some headwinds in terms of overall growth because of sort of the macro economics going on in Brazil. But we are still seeing good growth there and then outside Brazil, again still seeing right at double-digit growth. So I hope that add a little color for you..

Yes, just to be real clear, it's not all consulting growing there..

That’s right..

That’s for sure I mean we are seeing great ramp-up in Sainsbury we are seeing great results in ING. We are seeing some other significant wins in Europe. Frank and we talked about other calls that Europe has been a headwind for us with several years because it turn slower from the macro economic issues.

We are now seeing that accelerate for us with several large deals to double-digit growth as Woody just talked about. We are seeing Brazil slow and it's been a major tailwind for us.

Although we are still seeing good growth in Brazil and very bullish on our opportunities down there and then Asia-Pacific is growing very well and very, very strong in fact and all of that's is non-consulting. Now the consulting business, don't get me wrong, doing very well.

So you are seeing the combination of all those things continue to push our international segment at double-digit rate..

Thank you. Our next question will come from Ramsey El-Assal with Jefferies. Please go ahead..

Hi guys. I wanted to ask about your international margins. It sounds like some growth acceleration in Asia and Europe is kind of more than offset, some macro-driven softness in Latin America.

I was wondering if given the differing product and services mix in these different geographies Europe versus Asia versus Latin America, does this shift have any impact on how we should think about your international margins over the time? I guess it's another way of saying, are your margins significantly different in these different geographies?.

That's a good question.

I think there are some differences in the characteristics in the areas international that we have more of a consulting services, we are seeing a little bit of lower margins and the areas that you are in more leveraged environments like Brazil for example and some of the southeast Asia stuff, Australia specifically you got some higher margin area.

So there is a blend across the board. The other thing you saw in the quarter and we will see this year, this is part of our GFI investment, it’s growing into the international market, so you have got that specific investment flowing into the international markets as well..

Yes, just to build on that Ramsey, it's a good question.

Keep in mind over the last year now we talked about how we’ve seen a very quick shift from product licensing to outsourcing and so what Woody’s point is exactly that as our outsourcing builds in various markets, you are going to see that margin accelerate but given the infancy in some of the markets of our outsourcing, you have got to sign more customers to get that scale.

But once again, we are very pleased with that transition. It will normalize our growth streams and allow us to give us confidence in our projections in a much more effective way and also overtime, will produce much more predictable margin expansion..

And Ramsey, it’s like any place more size and scale we are able to leverage more and drive down cost..

Thank you. We have time for one final question; it will come from Tim Willi with Wells Fargo. Please go ahead..

Thank you and good morning. I have a quick modeling question and then one about the business.

First, on modeling did you call out what the revenue decline was around the check processing and the payments business, I know you typically give that out?.

We did not, Tim I think we have talked about it in the last few quarters, we have seen that not as a headwind anymore and as it continue to be a less significant component of the business, we are trying to get away from talking about it.

I would tell you to give you some color this quarter, it wasn’t much of a headwind, slight headwind this quarter but not much one..

Thank you. I will now turn the conference back over to our presenters for any closing comments..

Okay. Thank you for your questions, for your continue interest in FIS. Our strategy is working. We are driving profitable results. Clients are reacting favorably to our business models and are driving demands for our solutions and services as we enable our clients to reach their own efficiency and growth requirements.

Our solution innovation is helping our clients transform themselves into financial service landscape. We are very confident about our 2014 outlook and long-term growth prospects and we remain focused on driving superior returns for our shareholders.

Thank you to each of you for joining us on today's call and to our FIS employees who are dedicated to the success of our clients each and every day. Thank you..

Thank you. And ladies and gentlemen, this conference call will be available for replay after 10:30 a.m. Eastern time today, running through August 12 at midnight. You may access the AT&T executive playback service at anytime by dialing (800) 475-6701, and entering the access code of 331212. International participants may dial (320) 365-3844.

Once again those phone numbers are (800) 475-6701 and (320) 365-3844 using the access code of 331212. That does conclude your conference call for today. We do thank you for your participation and for using AT&T Executive TeleConference. You may now disconnect..