Welcome to the Fiserv Third Quarter 2013 Earnings Conference Call. [Operator Instructions] Today's call is being broadcast live over the Internet at fiserv.com, and is being recorded for future reference. In addition, there are supplemental materials for today's call available at the company's website. To access those materials, go to the company's website and click on the link in the Events section of its home page. The call is expected to last about an hour, and you may disconnect from the call at any time. Now I will turn the call over to Stephanie Gregor, Vice President of Investor Relations at Fiserv.

Thank you, and welcome to our earnings call for the third quarter. With me today are Jeff Yabuki, our Chief Executive Officer; Tom Hirsch, our CFO; and Mark Ernst, our Chief Operating Officer. Our remarks today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We will make forward-looking statements about, among other matters, adjusted revenue growth, adjusted internal revenue growth, adjusted operating margin, adjusted earnings per share, free cash flow, free cash flow per share, revenue and cost synergies, sales pipelines, acquisitions and our strategic initiatives. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. Please refer to our earnings release, which can be found on our website at fiserv.com, for a discussion of these risk factors. You should also refer to our earnings release and the supplemental materials for today's call for an explanation of the non-GAAP financial measures discussed in this conference call, and for a reconciliation of those measures to the nearest applicable GAAP measures. These non-GAAP measures are indicators that management uses to provide additional meaningful comparisons between current results and prior-reported results, and as a basis for planning and forecasting for future periods. Also, as we mentioned last quarter, invitations will go out shortly for our Annual Investor Day in Boston on December 10. Please contact our Investor Relations team if you need any additional information. With that, let me turn the call over to Jeff.

Thanks, Stephanie, and welcome on your inaugural call. Good afternoon, everyone, on the phone. Results for the quarter were solid, building off our very strong second quarter and in line with our full year expectations. Momentum continued to build as new recurring revenue came online, sales were strong and pipelines expanded measurably. We're pleased with our results for the quarter. Adjusted revenue increased 10% in the quarter and is up 9% year-to-date. Adjusted internal revenue growth was 3% in the quarter, led by 5% growth in the Payments segment and consistent with our expectations given the prior year compare and the strength of Q2. Adjusted operating margin expanded 60 basis points in the quarter and is up 50 basis points for the year. The strong performance was driven primarily by high-quality recurring revenue growth, Operational Effectiveness savings and Open Solutions cost synergy attainment. Adjusted earnings per share in the quarter, which benefited from higher operating earnings and a lower tax rate, increased 24% to $1.56. And for the first 9 months, is up 18% to $4.39. Free cash flow was exceptional in the quarter and through September 30, is up 25% to $4.47 per share. Comparable sales in the quarter, which exclude Open Solutions, were rock solid at 105% of quota. Actual sales in the quarter were up 13% versus the prior year, and our wins were heavily weighted to recurring revenue. At the start of each year, we share our enterprise priorities to help you gauge our overall progress. Our 3 priorities are: First, to continue to build high-quality revenue growth and meet our earnings commitments; next, to extend market momentum into deeper client relationships with a larger share of our strategic solutions; and last, to deliver innovation and integration that enhances results for our clients with an important focus on Open Solutions. We've made measurable progress against our first priority during the quarter. Internal revenue grew in the places we expected, including the bill payment business, which at 10% transaction growth was the highest quarter since 2008. Along with continuing solid performance in debit, mobile and our scale account processing businesses. Our strong reported transaction growth in both debit and bill payment was somewhat muted by the consumer spending slowdowns seen by industry participants in September, which had the effect of lowering our revenue and transaction growth in the quarter. We have not seen this persist meaningfully into the fourth quarter. Adjusted operating income grew 12% in the quarter and is up 11% year-to-date on the strength of high-quality revenue growth, operational efficiencies and the Open Solutions acquisition. These results have translated to excellent EPS and free cash flow to date, and we are well positioned for a strong finish to the year. Our second priority is to deepen client relationships with a larger share of our strategic solutions. We signed 136 new Mobiliti clients in the quarter and have added 324 year-to-date. The majority of our more than 1,700 Mobiliti clients are utilizing our ASP service, where the subscribers have increased by nearly 1 million through the third quarter and increased 21% sequentially. We were excited to introduce our tablet ASP offering in the second quarter. Demand is growing rapidly and through September 30, we have signed 175 clients, which we expect to go live over the next several months. More and more financial institutions are looking to offer unique, mobile-based banking experiences to better serve their customers, and we are very well positioned to capitalize on this secular trend. We're seeing meaningful acceleration in our win rate for core account processing solutions in the mid-tier bank market. In fact, the majority of the buying decisions over the last 18 months have been awarded to Fiserv. We also believe that DNA, to us through the Open acquisition, could further accelerate our opportunity to take share in this attractive market segment. Importantly, these institutions prefer to bundle significant content into these transactions, which benefits our suite of market-leading add-on solutions and boosts overall revenue growth. We'll share more about this important shift at Investor Day. Our third priority is to deliver innovation and integration for our clients with an important focus on Open Solutions. We remain steadfast in our belief that the realtime movement of non-point of sale transactions is a unique opportunity for our financial institutions to deliver new value to their customers and increase their payments revenue. As such, we signed over 100 institutions for Popmoney Instant Payment in the third quarter alone and anticipate these clients will go live over the next couple of quarters. We're also enabling realtime in other areas, such as electronic bill payment. Same-day expedited bill payments are up more than 270% year-over-year. This will grow much more rapidly as we expand availability across our more than 1 billion annual bill payments, providing value to the end-user and extending the financial institution relationships with their customers. The integration of Open Solutions continued at a rapid pace. We closed another 11 DNA wins in the quarter, the most in any quarter in more than 6 years. A number of the sales are larger, multiproduct license and outsource transactions, meaning these implementations will occur in 2014 and 2015, and as such, a substantial portion of this revenue is deferred into those periods. Continuing strong demand for DNA is also evidenced in our late-stage pipeline, which is more than 5x larger than when we acquired the business. This growth shows the value of Open's DNA platform when combined with the leading integrated solutions and a strong delivery capability. Client and prospect feedback remains very positive on Open Solutions. We continue to expect to exceed our original synergy goals, which are evidenced in our strong Operational Effectiveness and integrated sales results. We'll provide revised revenue and cost synergy estimates at our upcoming Investor Day. Now let me turn the call over to Tom to provide additional detail for the quarter.

Thanks, Jeff, and good afternoon, everyone. Adjusted revenue increased 10% in the third quarter to $1.1 billion, and increased 9% in the first 9 months to $3.4 billion, both compared to the prior year periods. Adjusted internal revenue growth of 3% in the third quarter was within our expectations, given the difficult prior year's growth comparison and also the timing of license revenue, which benefited the second quarter's growth rate by approximately 1% and negatively impacted the third quarter growth rate by about 50 basis points. At the same time, we had meaningful growth in high-quality recurring revenue in the quarter as absolute internal revenue grew by about 1% sequentially over the second quarter's level. Adjusted earnings per share for the quarter increased 24% to $1.56 on the strength of higher operating earnings and a lower tax rate. And is up 18% through September 30, to $4.39. Adjusted operating margin increased 60 basis points in the quarter to 30.5% and is up 50 basis points for the year. We are very pleased with our margin performance, which is especially strong given the headwinds identified coming into the year. Overall margin expansion was driven by excellent Operational Effectiveness results, Open synergies and high-quality revenue growth. Now on to the segment results. Adjusted internal revenue growth in the Payments segment was 5% in the quarter and 4% year-to-date, as compared to 2% in both last year's quarter and year-to-date. Strong payment volume, notwithstanding the September industry-wide slowdown, in our recurring revenue payments businesses such as card services and bill payment, primarily drove the increase. The internal revenue growth was negatively impacted by about 1% from lower license and services revenue, primarily related to large, international online banking implementations. Bill payment transaction growth boosted by the ramp of prior year wins accelerated to 10% in the quarter and was up 3 percentage points sequentially. For those keeping score on our large bill payment wins, Regions Bank went live in the quarter. E-bill transactions were up 5% for the third consecutive quarter. Debit transaction growth in the quarter of 16% was well above market. For the year-to-date, issuer transactions are up 14% compared to the prior year, and we have also added 101 new debit clients. We continue to make progress with Popmoney. Transactions for the year, albeit on relatively small transaction volume, are up more than 80% versus the prior year. And we have also added over 200 new institutions to the network. We, and the more than 2,000 institutions who offer Popmoney today, remain bullish on the potential to electronify the billions of non-POS transactions that move in the person-to-person and small business ecosystem each year. Payments segment operating income was up 4% in the quarter to $173 million and year-to-date operating income increased 8% to $518 million, all of which is organic. Adjusted operating margin in the segment was down 10 basis points in the quarter to 30.8%, largely from a 60 basis point negative impact in our investment services business, primarily from a client settlement. Still, segment operating margin for the year was up 100 basis points to 31.1%, driven by increased operating leverage in our scale businesses, including card services, bill payment and digital channels, partially offset by the revenue impact of the Bank of America bill payment renewal. Adjusted revenue in the Financial segment increased 14% to $585 million and $1.7 billion for the quarter and year-to-date, respectively, primarily due to the acquisition of Open Solutions. Adjusted internal revenue growth in the Financial segment was 1% in the quarter and is flat year-to-date. Solid revenue growth in our account processing businesses this year has been offset by a couple of percentage point drag from the unusual de-conversion of a large account processing client, which will anniversary late in the fourth quarter. In addition, currency changes and lower onetime revenue had a 1 percentage point negative impact on segment growth in the quarter. As Jeff mentioned, sales of the DNA platform have been stellar and a number of those clients have selected outsource delivery. These transactions, which include a variety of products in addition to DNA, represent an important shift in the business model, which is being retooled to drive more high-value solutions to the client, but will also result in deferring more revenue than it has historically. That move towards recurring revenue, combined with the business losing fewer clients and, therefore, having lower termination fees, is a strong positive sign for the business, but is leading to less 2013 revenue in the business than originally anticipated. We expect to exit the year with a large backlog of DNA business, much of which will go live in 2014. In addition, the revenue synergy opportunity is significant, with add-on total contract value or TCV in the qualified pipeline now approaching $300 million in TCV. Adjusted operating income in the Financial segment was up 19% in the quarter to $197 million. Adjusted operating margin increased by 160 basis points to 33.7% compared to the prior year, primarily related to scale efficiencies and Operational Effectiveness savings, including Open synergies. Year-to-date adjusted operating income in the segment was up 15% to $553 million and adjusted operating margin increased 40 basis points to 32%. The adjusted operating loss in the Corporate segment for the third quarter was $23 million, increasing by $1 million over the prior year and consistent with the first 2 quarters. The adjusted effective tax rate for the quarter was 33.5%, which is 150 basis points lower than our anticipated full year adjusted tax rate and down approximately 3 percentage points compared to the adjusted prior year period due to several discrete tax benefits. This provided a benefit in the quarter of approximately $0.03 per share compared to our anticipated 2013 full year rate and $0.07 per share compared to last year's third quarter. Through September 30, our adjusted effective tax rate is down about 80 basis points to 34.4%. We expect the rate in the fourth quarter to be approximately 36.5% and the full year rate to approximate 35%, which is at the lower end of our full year expectations. We continue to make solid progress in lowering our overall annual effective tax rate. Free cash flow per share continues to be strong, growing 25% to $4.47 through September 30, primarily as a result of increased earnings and lower tax payments compared to the prior year. Total debt at September 30 was just under $4 billion or 2.5x trailing 12-month adjusted EBITDA. In late October, we raised $900 million in a new 5-year term loan with a similar interest rate as our existing $2 billion revolving credit facility. The proceeds were used to repay outstanding borrowings under our revolver, which is almost all related to the debt assumed in the Open Solutions transaction. We repurchased 2 million shares of stock in the quarter for $192 million. Through September 30, we have allocated $463 million repurchasing 5.2 million shares at an average cost of $89.73 per share. There were 129.3 million shares outstanding at the end of the quarter and 10.4 million shares remaining authorized for repurchase. With that, I will turn the call back over to Jeff.

Thanks, Tom. As I mentioned upfront, sales, excluding Open Solutions, in the quarter were strong attaining 105% of quota and is 98% for the year. Sales in the quarter were led by strong performance in account processing, card services and output solutions. Sales performance through September 30 was up 11% versus last year's excellent performance, which included several very large bill payment wins. Our pipeline continues to grow, and we're optimistic that we will achieve our full year sales target. Integrated sales were $64 million in the quarter and are $165 million through September 30, versus our $210 million annual target. Sales were strong across a broad range of our market-leading solutions, and as Tom mentioned earlier, our integrated sales pipeline related to the Open Solutions acquisition is expanding at a very rapid pace. We're on track to achieve our integrated sales objective for the year. Our Operational Effectiveness goal for 2013 is $60 million, which includes the anticipated Open Solutions cost synergies. Through September 30, we've achieved $55 million of savings or 92% of our annual target, on the strength of Open cost synergy attainment and great execution of our Operational Effectiveness objectives. The market environment has remained generally consistent with the prior quarters, with the exception of the market uncertainty emanating out of Washington. Regulatory actions continue to be modest, with 10 in the third quarter and down to 35 year-to-date, a reduction of 33% compared to the same period last year and clearly, in the right direction. We continue to see targeted M&A activity in the banking market as well. Our view of the technology spending landscape remains the same, with financial institutions focused on innovative solutions that can help them generate revenue, deal with an increasingly noisy and complex regulatory environment, and with a continuing focus on operational efficiency. As I mentioned upfront, our results to date are in line with our expectations, and we're on track to achieve results within our full year targets. We've narrowed our adjusted EPS growth guidance to 17% to 19% or $5.94 to $6.02 per share, which biases our results for the year towards the upper end of our original EPS range. We expect adjusted revenue to increase by approximately 10% and adjusted internal revenue to increase by approximately 3% for the year. We expect fourth quarter adjusted internal revenue growth to be in a range of 4% to 5%, led by stronger growth in the Payments segment. We now expect adjusted operating margin to expand between 30 and 50 basis points for the full year. We expect the fourth quarter adjusted operating margin to be negatively impacted by about 50 basis points due to lower corporate expenses in last year's Q4. And finally, we still expect free cash flow to increase by at least 18% for the year or greater than $6.55 per share. In summary, we feel good about our performance and are focused on a strong finish to the year. We've made significant progress improving our growth profile through adding high-value recurring revenue, expanding our account processing footprint and driving very strong sales execution. The progress with Open Solutions, combined with good visibility into 2014, fuels our conviction that we will increase our internal revenue growth rate again next year. Lastly, we recognize that our success is attributable to the dedication of our thousands of associates who work together to deliver the best products, services and experience to our clients each and every day. With that, Jenny, let's open the line for questions.

[Operator Instructions] And we do have some questions in queue. Our first is from Mr. David Togut, Evercore.

Could you update us on unit pricing trends in the community bank and credit union market? And related to that, have you seen any change in competitive win rate?

Yes. David, this is Mark Ernst. Let me take that. What I think I would say is that, we're seeing relative stability in pricing, which is competitive, certainly. But we've not seen sort of degradation or greater kind of pricing pressure in either the bank market or the credit union market. More often than not, what we're seeing is that, we and all of our competitors are kind of in much of in the same range around pricing, and it really ends up turning on feature function, the kind of state-of-the-art of the technology and very importantly, the surround solutions that each of us is bringing to the market is the final kind of thing that determines the success or failure of any one -- in any one particular case. We have -- as was noted in the comments, we've seen good momentum in the bank market, particularly in the mid-market bank market, and we're going to talk more about that at Investor Day. But we're pretty pleased with the way in which our various solutions are mixing together and kind of the momentum that we are experiencing in the market. On the credit union side, that is clearly a market that's very much in transition. The DNA product and how we are now bringing that to market has very much changed the dynamic of the overall market and the win rates that we're experiencing. So I think it's a little bit unsettled at the moment, but we're very pleased with the kind of progress that we're seeing in competitive situations out in the credit union space.

Just related to that, Mark, what has been the messaging to your clients about the conversion to DNA and the large credit union market in terms of timeline?

Well, so it depends on the kind of the point at which we've been in those discussions. But generally speaking, we are looking at a 12- to 18-month implementation period at this point, which for most of our large credit union prospects and clients, that's consistent with both what they will have to do internally and their ability to do that conversion. The DNA product, unlike some other products in the market, the DNA product is actually, fairly efficient to take into a new situation because of its flexibility. So we've -- and clearly, we have beefed up our conversion capacity in that platform to address the demand. So we're feeling pretty good about both, not just what's going on in the pipeline, as Jeff and Tom both referred to, but also our ability to convert that business as it comes on.

Yes, David, I mean, just to punctuate that point, we have, really, since very early in the process looked to leverage some of the existing credit union expertise that we had across our system as a way to buttress the demand that we knew we would see. And frankly, the demand for the product has been even greater than we anticipated. However, it's very important to us to make sure that we have the right number of resources so that we can serve the market. We have slots available. We are not concerned about capacity because we've built ahead of that, and we're continuing to do that both on the -- frankly, on the credit union side, as well as on the bank side.

So embedded in your expectations for improving organic growth next year, how much of that pickup is coming from financial versus just an ongoing acceleration in the payments business?

Yes, I mean, I would say right now it is premature to be giving guidance and certainly premature to be giving guidance down to those levels. I mean, we'll share at Investor Day kind of our views of the market and where we see these things lining up. But on balance, we would expect to see improvement in both segments next year.

Quick final question for me, it looks like you're about to exceed your Operational Effectiveness target for the year. Since you're at 92% through the first 9 months, what do you expect cost savings to actually be when we reach the end of 2013? And then related to that, what's your cost takeout target for '14?

David, this is Tom. We'll be going over that clearly on Investor Day in December. We continue to make really good progress there and a combination of both of what we're doing internally and also with the Open synergy. So we continue to make progress. We're ahead of schedule from that standpoint in the current year. You can see that drop through in some of the Financial segment margins, et cetera. But we'll update you more on Investor Day, but we'll continue to have a good fourth quarter from that standpoint. I'm not going to give you an estimate for the year, but we'll continue to make good progress and then we'll give you an update on the Investor Day.

Our next question over the phone comes from Mr. Tien-tsin Huang. Tien-Tsin Huang: I guess I just want to ask on -- just in general, in terms of backlog. It sounds like it's been building up, but any change in conversion rates and things like that? I heard the Regions piece came on board and Wells is still on track for next year. Any surprises in general?

So on -- are you talking about -- is that a more general question? Or is that... Tien-Tsin Huang: General question, but I guess thinking more a little about some of the larger implementations that you've been talking about.

Yes, absolutely. So as we mentioned, Regions came online. We did see a push in a couple of the larger deals that we had anticipated would go live in the fourth quarter have now gone into 2014. And then we're still on track for Wells to go live at the beginning of the year. So there is a little bit of a move between '13 and '14, where we would have -- we were anticipating a couple of clients to go in Q4. On the rest of the backlog, for the rest of the company, we aren't seeing -- we aren't seeing any pushes. And then frankly, those other 2 pushes have more to do with how these institutions are designing their new experiences as opposed to anything else. So we're actually hopeful that as those experiences come online and they're more differentiated given some of the trend toward Mobiliti that, in fact, that will actually be a plus to transaction volume. Tien-Tsin Huang: Understood. Okay, that's great to know. That's comforting to know. And then, I guess, I heard a little bit more about deferred revenue than usual here. I guess that maybe it's a revenue rec thing with DNA, but should be watching that deferred revenue line a little bit more? I thought it was up, what, 5.5%. Is that becoming more important?

Yes, I think one of the things -- and Jeff and I kind of hit on it, regarding the deals that we're signing in that space, with DNA that used to be kind of a standalone-type license product with a lot of kind of resale from other third-party vendors. Now what's happening is, it's clearly getting bundled with our integrated solution set of card, bill payment, online banking and everything else. So there is revenue that gets recognized over a much longer extended period of time because those implementations are clearly farther out. So that's really the kind of the change that we're kind of seeing from what maybe Open had previously versus what we're experiencing today because that revenue now gets deferred. It's larger from an outsourcing standpoint. And so it's just really a higher backlog as we kind of go into '14 and into '15.

Yes, and Tien-tsin, I would say that it is less -- we don't anticipate changes in our model that will end up having more and more revenue deferred. This is really a change from kind of Open historical to Open as part of Fiserv, which should cleanse itself as we move -- as we kind of anniversary the transaction at the end of January next year. You'll have a little bit of an edge on growth, but it's really much more around the conversion to our practices and our model. Tien-Tsin Huang: Very, clear. Very clear. I misunderstood before. I apologize. Just last one, just to Open synergies, just any change in thinking there around the revenue expense synergy? I know, Jeff, you've been pretty upbeat about that, any change?

Yes, the only thing -- I'll start with that and then turn it over to Jeff -- is that I think we highlighted that the pipeline on the add-on revenue for Open has built to approximately $300 million in total contract value, and that's just from the add-on products. So we're very pleased with the buildup of that particular pipeline, and very -- I'll go into more depth on that on Investor Day -- also just a number of different products that we built there. We're very satisfied, obviously, with the wins in DNA from that standpoint. And regarding the expense side, we continue to be ahead of where we anticipated to be. You can kind of see that in our Operational Effectiveness savings that continue to drive good cost synergies from that standpoint.

I would say that one of the unique characteristics of this acquisition was, we didn't have the benefit of the normal pre-close integration planning period. And so, some of what we've learned during this time, we would have learned in that preplanning period. And literally, I would say that, even in this quarter, I became and I think we became more bullish on the revenue synergy opportunities as we're now starting to understand not just what can we do with our normal add-on products, but Open did not have a very sophisticated product management methodology. We've got a number of other products that we believe we can add on that are really more componentized around the core solution, not just things like debit and bill pay, Mobiliti, Corillian, and those kind of things that we're, obviously, proud of, but even some of these fundamental aspects of their business model that we're going to be able to hopefully deliver to their more than 800 core clients that sit on things like DNA alone. So we're quite excited about that.

Our next question over the phone comes from Mr. Darrin Peller, Barclays.

Let me just start off, lower license fees, I think you mentioned in service revenue from a -- I think it was an online banking client led to 1 point of pressure on year-over-year growth for payments. But when you look at last quarter's 7% growth rate and seeing even better trends in bill pay now from your metrics, and I think debit also and then Regions coming on for bill pay, I'm just wondering what led to the deceleration in the segment, the Payments segment from the 7% growth range last quarter? And then just, can you give us a little sense of adding back 1 point, should we expect to get back to that 7% again?

That's a great question, Darrin. And what I would say is, our Payments segment growth rate, as you know, was 5% in the quarter, and we came off a very strong second quarter. And as I think you know, a 1% change on a quarterly basis is roughly about $5 million of rev. And as you know, right, we have a number of different businesses in this particular segment. Bill pay and card make up a chunk of revenue in here, but we have a number of different businesses. And so we saw very strong growth in our recurring revenue businesses, bill pay and card services as we talked about. We did have a 1% negative impact. We have a large online banking business in this particular segment. And we did see some declines in services revenue that impacted the third quarter rate by about 1%. It did positively impact the second quarter rate by a couple of million dollars, but that sort of swing can kind of move the number around on a quarterly basis. But we're in very good shape from a standpoint of a go-forward standpoint. The bill payment metrics are solid and our card services metrics are solid. So while the rate might move around slightly from quarter-to-quarter, those recurring revenues are positioned very nice as we go into the fourth quarter and, obviously, into 2014.

All right. So I mean, when you think about the -- and when you combine that with just another question on the headwinds on the financial side, just remind the timing around those and how much they equate there? I think, if I remember correctly, that was on -- I know that had an impact on the margin profile of the year, but when do we anniversary? And what can that mean for margins?

Yes, I think the -- I think what you're talking about is when we entered the year, I think we said we had about $50 million of headwind, a combination of the Bank of America renewal pricing, which hits our Payments segment on a quarterly basis and a combination of this unusual de-conversion of a large core account processing client. So those anniversary at the end of December. And so as we head into 2014, clearly, that's going to positively impact us from a Financial segment standpoint and also somewhat in the Payments segment.

Right, because we also have, Darrin, as you know, right, we're still moving past the revenue impact from the Bank of America...

Pricing change.

Yes, which is combined for those 2.

Sure. All right. Just one last kind of high-level question, maybe Jeff, maybe you can help me with this. We received some questions around your Popmoney initiative. It sounds like you're actually signing a lot more institutions there, but, obviously, with some more emerging payments players announcing different initiatives around cash remittance for free in the U.S. What are your thoughts there? I mean, is that a business that is going to be too competitive? Or is that really still a very big opportunity longer term?

Yes, I mean, there have been a number of announcements over the last -- certainly, over the last several months. A good share of them have to do with kind of the war at point-of-sale and then there are several that also are picking up on the fringes of moving money around, kind of the non-POS side, which is where we see Popmoney. The challenge that those providers have is they're not part of a bank-centric or a financial institution-centric network. And I just have a hard time believing that a non-financial institution-centric network is the winning solution. Popmoney, obviously, has the largest footprint in the U.S. By adding on the realtime, kind of what we call Popmoney Instant Payments right now, but that realtime edge really is, I believe, the game changing piece, both in terms of consumer to consumer, but also consumer to small business, small business to small business, in terms of -- really, the smaller businesses, right, the 24 million or so very small businesses in the U.S. So I do believe that, that ecosystem ends up being financial institution-centric. I think Popmoney has a very good possibility of being the primary way in which that happens. And we're quite bullish on that. And as instant, even I think in this -- in today, we talked about 80% growth year-over-year. And so we're seeing good growth. The numbers are small. And the bill payment numbers were small at some point as well. And I do believe that the opportunities to move money are multiples of what they were on the bill payment side. So we're still bullish on this. I still think there's a lot to figure out. But we built the network, and we're now spending our time on how can we actually get the money to move and move adoption.

The one thing that I would add to that is, we clearly in all of our research, and I think all the indications of the market continue to see that consumers respond best when this is done through their financial institution. The confidence they have of dealing with their own financial institution is a key enabler that allows people to have the confidence to use this kind of a service.

Our next question comes from Mr. David Koning, Baird.

And so I guess my first question, just the financial margin, I think was the highest it's ever been, which is really encouraging given you just integrated Open Solutions recently. And I think you mentioned that license revenue hurt, I think, the total company by about 50 bps year-over-year in terms of revenue. So I'm just wondering, given license maybe wasn't quite as strong as some other quarters, maybe why financial margins were so strong and is this level sustainable going forward?

Yes, I think, Dave, the biggest thing that we have in that particular segment going on is clearly our Operational Effectiveness initiative. I think we're way ahead from a standpoint of what we've generated in that particular initiative in the company, and we've made really good progress. That's a combination both of Open synergies and also the other Operational Effectiveness. And that's been really the big driver. And a lot of that is sustainability as we kind of go forward. So while we're always going to have different things that mix in, we definitely had a good quarter there. And to your point, from a company standpoint, our license revenue was actually down 50 basis points and our termination fees were flat. So we didn't get any benefit from that either in the quarter. And so good there. And then I would also say that, as you know, in our account processing business, we have good scale there. Our check processing business, we continue to maximize the margin profile of that business. And so we've really worked hard in that segment to continue to drive through and -- so we have some things that move around the quarter, but we've made really good progress there.

Great. And I guess just one follow-up question, I think your acquired revenue, you gave a metric on that, I think it was $69 million or somewhere around there. The last couple of quarters, it had been closer to maybe high-70s, around $80 million. And maybe what, I guess sequentially was there something at Open that fell off a little bit or maybe you could just walk through that?

Yes, David, I'll grab that and let Tom add on. As we were actually mentioning with Tien-tsin a bit, we have had some of these. As we move Open into the Fiserv family, we've got 3 or 4 areas in which we're seeing some changes. The business model item that we were talking about as we have larger transactions, more outsourced transactions and actually, the size of the transactions that we've been doing with DNA so far are -- as we got to the end of September, we were 4x larger than their -- on a total contract value basis, 4x larger for DNA than their entire year last year. So these are larger transactions. They take larger to implement. The revenue as you know well because you know the business so well. The revenue that they were recognizing or seeing in the first couple of quarters of the year had everything to do with what was sold last year, right? So those came in. So that's one of the items. The second item, frankly, is that we're actually seeing lower termination fees. We expect to actually have lower termination fees. The good news on that is, we're losing a lot less clients. Open lost roughly 80 clients in 2011, 30 clients in '12, and we estimate only about 10 this year. And so that's good news on one hand because we're keeping those clients. On the other hand, termination revenue, we actually expect to be down $8 million to $10 million in the second half of the year. So again, it's kind of a little bit of a short-term hit, but not -- great for us over the longer haul. The other big point I want to mention is really around reseller revenue. And that is, as you know, DNA had reseller relationships all over the place, both in terms of selling DNA, but also selling other products, such as EFT and the like. And so on the reseller, the core reseller bases with DNA, we actually terminated almost all of those relationships. We don't need any help selling the product. We're doing a great job so far. But there is a hit as that was -- a lot of the units came from resellers. We're seeing less coming in because ourselves cycles are longer because the sales are much larger sales. And then on the other side, we've exited several of the third-party add-on products in favor of our own products. And as Tom mentioned, there was about $300 million in total contract value in the pipe right now. But Open took that all in as revenue, and that revenue is now coming on at the same level that it was in the first half of the year. So those are really the big items that I would say are impacting the change in revenue quarter-to-quarter -- or sequentially quarter-to-quarter.

And our next question comes from Mr. Brett Huff, Stephens, Inc.

Can you talk a little bit more about the competitive dynamic, specifically on the big credit union space. I know that's a pretty competitive space and the number of offerings there is kind of continuing to shrink. And you talked a little bit about it, but what is the driver of the win rates? Why are people choosing one product over another? Can you -- you mentioned that they were a little unsettled, but wanted to get a little bit more color on that.

Yes, I mean I -- let me give it a shot and perhaps Mark will add on to this. I mean, the larger end of the credit union space is -- there are only a couple of real alternatives in that space. And frankly, we have today the majority of the share as it relates to any single competitor. We actually have more share than any other competitors -- or any of our competitors spread across multiple different platforms. And a couple of years ago, we made a decision that we would have -- that a couple of our platforms would end up being sunset. And as you well know, when you do that, you put clients up for bid. At that same time, we also made a determination that we would bring Acumen to market. We had a lot of success with Acumen in a short period of time, and then we bought Open Solution. So I would say that on one hand, we've had a little bit of turmoil in our own credit union base. That's now been quieted down by DNA for when people make a choice between DNA and the other competitors, I mean, DNA is really by far the most technologically advanced solution in the market. They were disadvantaged over time because of their financial condition and the lack of surround solutions. That's gone away. We're having a lot of success there. But frankly, we compete with some good competitors, and we haven't won all the deals. We'd like to have won them all, but we have not. And as we've gotten more entrenched in with DNA, and we've made it very, very clear within our base that the solutions that we are operating today are go-forward solutions, we've been able to shut that back door down. So I'm actually quite confident that over the next 6, 12, 18 months, that we will see a very dynamic shift in the market. And that, frankly, we will see DNA and some of our other solutions end up gaining share in this market.

That's helpful. Just one follow-up, I think you also referred to maybe the new -- it sounds like you're selling more of these on a -- not a perpetual license, but I don't want to call it SaaS, but an ongoing license. Is that part of the change as well in terms of how you're bringing this to market?

You're talking about DNA, Brett?

Yes.

Yes, I mean, DNA, let me be -- we should use something other than perpetual license. But DNA is really kind of -- was built by a series of software engineers. So the core culture of that business was really around being a software shop. And so they provided outsourced services more as an accommodation. That changed over the last several years. So they built up some outsource capability. We, in Fiserv, right, that is the very essence of what we do, so we're putting a lot more energy into that. And so the shift from kind of traditional, "Let's sell a license. Give it to the folks and let them install it, and then we'll collect our maintenance every year." That's a very different model than we're interested in. I mean, we're happy to do license deals, and we've done actually a number of license deals this year. But it's a different culture, a different velocity, more add-on products and frankly, a different kind of relationship. So that is creating the timing thing that we were talking about earlier. We expect that as we anniversary the transaction that, that will change. But for now, it really is one of the reasons why we're not seeing the benefit of the sales, where traditionally they would have been recognizing or we -- the former Open organization would have been recognizing more license revenue that we are at this point.

And just to be clear also, the market prefers the outsource model. That's not to say that there aren't license sale opportunities, but we are biasing toward where the market wants to be, and outsourced is a -- very much a preferred part of it.

That's a great point, Mark. I mean, typically on a year in and year out basis, 70% of the decisions are on an outsourced basis.

And our next question over the phone comes from Mr. Chris Shutler, William Blair & Company.

So on the $300 million of CV that you mentioned and given the other comments in the Q&A on the 12- to 18-month implementation timeline for Open or for DNA, I just wanted to clarify that we should interpret that as meaning that by kind of early-to-mid '15, we should see the vast majority of that CV actually beginning to hit the P&L?

I think we've got to distinguish, those are 2 different things. We have a pipeline of transactions that are in process now that are being taken to implementation. The $300 million backlog, if you will, or pipeline, is really a late stage sales pipeline that is not yet sold. So I would say that those are 2 distinctly different things.

Okay, got you.

And Chris, as you know, a lot of that is our add-on propriety products, right? So you take a debit deal, right, that deal could start up, implement in a year, it could implement in 2 years and then it be debit, that processing contract will be for 5 years. So there's a variety of things that are in that add-on pipeline. But I think our point is, and what Mark referred to is that, we're surprised at how fast that total pipeline has built up because those are sales just into the existing Open client base, with those proprietary add-on products. And it's a number of those, probably about 15 different ones that we have inside of Fiserv.

And that $300 million is in addition to the sales success that we're reporting already with DNA.

Okay, great. And just the other one, Jeff, just wanted to get your latest thoughts on the whole bank versus biller debate in the bill pay business. I've seen some comments recently which would indicate that younger generations are increasingly gravitating towards the biller channel, not the bank channel. Just wanted to get your latest thoughts there.

Yes, Chris. I mean, I do -- we see this and do believe that the biller experience, right, on a one-off, I want to quickly pay a bill because they have the content there, right, if I need to go to a biller site, they'll tell me how much I have to pay. I mean, there's certainly a move there. And I think it's around -- and it's about a 50-50 split today between aggregator or bank and biller. And in fact, one of the things that we'll talk about at Investor Day are some changes that we are looking at and implementing to bring more content to bear and an enhanced experience for attracting these folks that maybe occasionally go to biller direct, as well as we see a large amount of the population who is not paying bills at the level we would like. And so we'd see, of the 24 million or 25 million, 26 million bill pay makers, users that we have today, we see a lot of opportunity to expand that base as well. The other piece that we cannot overlook in the value proposition, the biggest differentiation in the value proposition between biller and bank over time has been the ability to post payments same day. And one of the reasons why I mentioned that our same-day payments are up 270%, more than 270% year-over-year is we're building this non-POS realtime network to bring those capabilities against the 1 billion or so payments that we have today. But frankly, there is an equal or equivalent number of payments that aren't making it into our system. And we think that increases the value proposition very importantly. And again, we'll talk more about that at Investor Day.

Our next question comes from Mr. Peter Heckmann, Avondale.

My questions have been answered, but I want to follow up in case I missed it, did you comment on how the new term loan will affect your weighted average cost of debt?

It won't change a lot because the interest rate is very similar to our revolver. I think the thing that does, Pete, is it just frees up -- it extends the maturity out 5 years on that. And then also, it just frees up the capacity on our credit facility.

Okay. And then one thing I've been meaning to ask about and maybe you'll talk about it at the Investor Day, but the investment services business, can you remind us roughly how big that business is and if it's generating revenue on a per account basis or as a percentage of assets under administration?

Yes, it is about $150 million business for us, but it generates it on a per account basis.

Okay, per account. So you haven't seen a real benefit from the market action to date?

There's certainly a correlation because, as -- as the markets build, we are seeing more and more consumers moving towards the kinds of products that we support in that business. And the -- so we have seen some tailwind, but it's more muted than just sort of the run-up in assets.

Our next question comes from Mr. Kartik Mehta, Northcoast Research.

I wanted to ask you, Jeff, a little bit about Popmoney. You were seeing, as you've mentioned throughout the call, some additional companies trying to get into the P2P business, more advertising, when do you think this business gets scale? I'm assuming you think there's going to be some type of an event that gives it a hockey stick kind of growth. As you look at the business and kind of analyze it, when do you think that happens?

Yes, I mean it would be overly assertive for me to give the timeframe, plus I suspect that there's little probability that I'll get it right enough for this kind of a dialogue. What I will say is, we spend a lot of time looking at the bill payment model and what happened -- if you think about what happened in the old CheckFree business, right, that business had to gain momentum by kind of some internal points, as well as some external points. And the big-ticket item there was Bank of America's willingness to go out into the market not to charge fees, and it created a lot of momentum, right, so it kind of call it a tipping point. And then lots and lots of institutions wanted to sign up. The position that we've taken is, let's build the size of the network. Let's plant as many flags as we can. We have over 2,000 institutions in the network and then build the capabilities beyond the 1 to 2-day kind of movement capability. So bring in realtime and those kinds of things. I believe the tipping point will be created by the utilization of 2 things, by the utilization of realtime, so the ability to move money kind of on an instantaneous, right now basis. And number two, I think the role of request is quite important in that. So kind of having that network capability, sending and receiving different messages. I believe those are 2 of the factors that will make it happen. And I would tell you that I continue to believe that this business should be very, very significant in the -- kind of in the scope of the number of transactions and, therefore, the impact on Fiserv. So again, we'll talk about that at Investor Day, but believe it's a very big opportunity, not just for us, but actually bigger for financial institutions who really need to look to create new streams of revenue, of which the ability to move money on an instantaneous basis is, I think, a critical important opportunity for them.

The only other thing I'm going to add to that is, you asked about this relative to startups because we've all seen a couple of different names that are out there of firms trying to essentially kind of get into this business. The key thing that they will struggle with is consumer enrollment. And that's why the financial institution-centric model that we have that allows the customer in many cases to be known at the enrollment stage is an important differentiator relative to a lot of these startups.

And then just on the other side, Jeff -- your customers, the banks, are under cost pressure, they're under revenue pressure, is that in anyway slowing down the adoption of some of this technology whether it's P2P or mobile? Any concerns by your customers to say, we need to slow that down?

No. I mean, I'll tell you, there are concerns by our customers and, in fact, I don't want to limit it our customers. I mean, there's a concern in the industry overall that the cost pressures, right, of deploying new technology are causing people to have to make choices around what technology to deploy, how to deploy it, but also that's coupled really with the revenue pressure that's out there. So the discussions are there, but I haven't run into a single institution of any size who doesn't understand that this is just the price of admission currently and, therefore, these kinds of technologies have to be there. And again, my confidence remains high because I can see every month institutions signing up for Popmoney. I can see institutions going mobile. And we've increased the number of Mobiliti ASP users by nearly 1 million so -- in this year alone. So that's out there. That's not going to stop. But we have to look for how can we drive more value for the financial institutions and, therefore, more value for the end customer.

Our next question comes from Mr. Ashwin Shirvaikar, Citigroup Investment Research.

So my question is with regards to the gap between sales growth and revenue growth, which seems to sort of stay reasonably static at a fairly high level. And while that's going on, you do seem to indicate a reasonable year-over-year acceleration in the internal growth rate. So I'm trying to understand, why does that -- over time, you guys have double-digit sales growth, but it doesn't probably flow through to anything but very slow acceleration in internal growth rate of revenue?

Yes, that's a great question. And believe me, we talk about that on a very regular basis. It is -- the big factors in that are, we're selling larger deals that take larger -- they longer time to implement. They are more complicated. And so -- and these transactions, which are on the basis of total contract value, are multiple years of contract value. And frankly, there are times when things, as we talked about in the call earlier today, a couple of implementations will slip from year-to-year. You've got those risks. So you have long implementation horizons and then things can slip. There's too much regulatory, so we're going to push this. We can't implement it. So you've got things like that going on. But probably the biggest factor is, and this has been interesting for me and my time here to learn is that, as much as we would like to have it differently, high-quality recurring revenue moves on your books slowly. And it builds slowly. And it comes off slowly, unless you have some kind of an exogenous event. So as difficult as it can be at times for us to understand why we have to have -- or I'm sorry, why our sales growth is so high and it does lead to acceleration in recurring revenue, but probably not at the pace we would certainly like it to be is, that is one of the costs of having a business that has high-quality revenue, high-quality margins and frankly, very, very strong client relationships. So that is something that we are dealing with in terms of, frankly, increasing our expectations. Each year, when we talk about sales quota, that quota goes up every year. And so we are asking our sales forces to sell more. But again, you need this multiple years of strong sales to turn into that escalating growth. One of the reasons, frankly, why we can say -- we can make a statement like we have a high degree of confidence that we'll be able to see acceleration once again in our internal revenue growth is, we see the pipeline. We see what is pending implementation or pending go live, and therefore, because of how that revenue comes on, we have comfort that we would expect to see that happening again in '14.

Okay. I think I got it, but we could potentially pursue that further when we meet. My other question is just clarification on software license. Are you -- am I to understand you guys are deemphasizing that broadly or what are your comments on software license, are sales limited to the accounting-related impact of Open, DNA and all the others?

Thank you for asking that question. For clarity, we are in no way deemphasizing license revenue. We have some businesses that, that's really all of their revenues. So we are not doing that at all. We were really talking specifically about the Open Solutions business and the shift in their model, right, because it was very much a license-centric model. So that was the first part of it. And then second thing that Mark alluded to is that the market in many cases prefers an outsource solution over a license solution. And our job is, of course, to deliver what the market needs. But we are not deemphasizing that in any way. And in fact, it will continue to be an important part of our business over time.

Absolutely. The only thing I'd add to that, Ashwin, is that license revenue, right, is about 4% to 5% of our total revenues. And it can move around quarter-to-quarter. And what I said is that, in the second quarter, our growth rate, as you know, was 4%. It was 3% in the third quarter. And we had a benefit of license fees due to timing about 1% in the second quarter and then we had about 0.5% degradation in the third quarter on a year-over-year basis. So the reason we bring that up is to let you know that, that's why that internal growth rate can move around quarter-to-quarter, over time it evens out. But again, it's 4% to 5% of our revenues. And as Jeff indicated, a very important part of our revenue stream. Even though we do see customers, as Mark indicated earlier, continuing to like the outsource model in many cases, but that is still an important part of our revenue stream.

And our last and final question comes from Mr. Ramsey El-Assal, Jefferies. Ramsey El-Assal: I wanted to clarify something you said earlier, and I may have misunderstood your comments, but I wanted to -- you mentioned that bill pay transactions grew 10% in the quarter, debit and mobile transaction growth was also up, at the same time consumer spending slowed down, sort of muted overall results. I wanted to kind of reconcile these 2 items to kind of get a better idea of how a consumer slowdown kind of impacts you guys. In other words, if it doesn't manifest itself in lower transaction counts, is it lower tickets or is it just that I missed that there were lower transaction counts in other segments that offset the gains in the ones you mentioned?

Yes, that's a great question. The point we were making was, is that even though we had 10% growth in bill pay, for example, we could see payments -- the payment patterns changing during the month of September. And therefore, that 10% was actually impacted by what we saw happening at the end of the quarter. And so -- but for that, and I think we used the term somewhat muted, but for that we would've actually seen higher levels of bill payment and higher levels of debit card usage. Ramsey El-Assal: Okay. And then you mentioned that you're not -- that, that was a kind of a fleeting softness that you saw and now that sort of corrected itself going to this quarter?

That is what we said. I would just caution, we're very watchful of that because of all the kind of noise that's going on in the economy. And sort of the consumer information. That September experience caught us a little bit by surprise. We didn't anticipate that, that was happening. And as Jeff said, in the comments, we didn't see that continue into October. But we're watchful of whether there's something unusual going on in the market, consumer side of the market that would affect some of these businesses.

Yes, I mean our uninformed, uneducated guess because we've seen this happen before is, there is some corollary to the amount of dysfunction that is occurring in Washington. And it has a real impact on how consumers pay bills and how they spend. Again, we had very strong transaction growth. We've done the analysis. We know it would have been -- it would've been better, and that -- we did not see that in the month of October. So that's the key. Fantastic. Thanks, everyone, for joining us. We know we went a little bit long. But if you have additional questions, please don't hesitate to call our Investor Relations group. Have a great day.

That concludes today's conference call. Thank you for participating. You may disconnect at this time.