Good morning. Ladies and gentlemen, thank you for standing by and welcome to the Global Payments Fourth Quarter Fiscal 2007 Earnings Conference Call. At this time, all participants are in a listen-only-mode. Later, we will open the lines for questions and answers. [Operator Instructions]. And as a reminder, today's conference will be recorded. At this time, I would like to turn the conference over to your host, Vice President of Investor Relations, Jane Elliott. Please go ahead.

Thank you. Good morning and welcome to Global Payments' fiscal 2007 fourth quarter and year-end conference call. Joining me on the call today are Paul Garcia, Chairman, President and CEO; Jim Kelly, Senior EVP and COO; and Joe Hyde, EVP and CFO. Before we begin, I would like to remind you that some of the comments made by management during the conference call contain forward-looking statements that involve a number of risks and uncertainties. For these statements, we claim the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. While these statements reflect our best current judgment, they are subject to risks and uncertainties that could cause actual results to vary, which are discussed in our public releases including our most recent 10-K. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events. In addition, some of the comments made on this call may refer to normalized results which are not in accordance with GAAP. Management believes that normalized results more clearly reflect comparative operating performance. For a full reconciliation of normalized to GAAP results in accordance with Regulation G, please see our press release filed as an exhibit to our Form 8-K dated this morning, July 26, 2007, which may be located under the Investor Relations area on our website at www.globalpaymentsinc.com. Now, I would like to introduce Paul Garcia. Paul?

Thanks Jane. Good morning everyone. The agenda for our call today is as follows. I will summarize our financial results and review recent trends and events. Then, Joe will further discuss our financial results as well as provide an update on our next generation technology platforms as promised. Next, I will discuss our fiscal '08 outlook and lastly, Jim, Joe, and I will be available for a question-and-answer period. Now, for our financial results. We delivered solid fiscal '07 results. For the fourth quarter, our revenue grew 17% to $280 million and our normalized diluted earnings per share grew 10% to $0.45. For the year, our revenue grew 17% to 1.062 billion and our normalized diluted earnings per share grew 21% to $1.87. Our growth was driven by good performance in our merchant services segment while our money transfer segment met our near-term expectations both of which I will discuss in a moment. Starting with our merchant services segment, our ISOs continue to drive growth in our domestic direct channel. We continue to have success in retaining our customers and in signing new ones, including three new ISOs signed in this quarter. Our credit and debit card transactions grew 29% for the quarter with revenue growth of 18%. For the full year, our transactions grew 25% with revenue growth of 16%. Our spread for the quarter increased in the low single digits while spread remained constant for the full year. This reflects the favorable impacts of smaller merchants added through our ISOs which generally have higher spreads than larger merchants. This favorable impact on spread was mostly offset by pricing compression related to merchants added through our direct sales force. For fiscal 2008, we are expecting low-teen to high-teen annual revenue growth for our domestic direct channel. In Canada, both…

Thank you, Paul. In our press release, we included GAAP income statements and schedules that reconcile GAAP to normalized results. In comparing fiscal '07 results to the prior year, we excluded restructuring and other charges and stock option expenses from our normalized results as shown in these schedules. In comparing fiscal '08 results to fiscal '07, however, we intend to include stock option expenses in our guidance and in our normalized actual results for both period since we have now annualized our adoption FAS 123R. For our standard practice, we will continue to exclude restructuring and other charges from our fiscal '08 guidance and from our normalized actual results. As anticipated, we expect to incur approximately $2 million in such charges during the first half of fiscal '08 in connection with the operating center consolidation plan that we announced in March 2007. Moving to our fiscal '07 and fourth quarter financial results. Our merchant services segment operating margin was 25.8% for the quarter and 27.9% for the year. These results reflect declines compared to the prior year due to several previously discussed factors, primarily the impact of high growth in our lower margin ISO channel and the impact of our lower margin Asia-Pacific acquisition. For the quarter, these two impacts were partially offset by the successful correction of a merchant card operating loss relating to a fraud situation, and we had fully reserved for during the second quarter of fiscal '07. For fiscal '08 we are expecting a merchant services operating margin up 25.5% to 25.9%. This range represents an expected decline compared to the prior year primarily due to strong expected growth in our lower margin ISO channel. Our money transfer segment operating margin was 10.2% in the current quarter and 10.9% for fiscal '07. These results reflect declines…

Thanks Joe. Based on our current market trends and our ongoing growth strategy, we are providing annual revenue guidance for fiscal 2008 of $1.168 billion to $1.220 billion or approximately 10 to 15% growth over $1.062 billion in fiscal 2007. We are also providing annual fiscal 2008 diluted earnings per share guidance of between $1.85 to $1.94, which reflects growth of 5 to 10% over fiscal 2007 normalized diluted earnings per share of $1.77. This guidance includes stock option expense but does not include any other significant acquisitions or potential restructuring and other charges. When I consider the long-term growth prospects of Global Payments particularly the emerging Asian and Central and Eastern European markets are continued to be very enthusiastic about our future. Operator, we'll now go to questions. Question And Answer

Thank you. [Operator Instructions]. Our first question comes from Kartik Mehta, FTN Midwest Research Securities Corporation. Your line is open.

Thank you. Good morning Paul and Jim. I had a question, Paul, last year you talked about improving the direct sales force and making that part of the company more productive. Maybe an update on where you stand and have you seen progress in that part of the company?

Yes Kartik, I am pleased to say we have seen progress. It's still well very much a work-in-progress. Our sales force is basically as good as it's lead sources. And we have put more effort into generating which rich lead sources for our sales force as well as addressing some management which we did a while ago, compensation issues, tracking etcetera and the sales force had a couple of product wishes that we took care of as well. Now it's all about generating rich leads for these guys to augment what they are able to generate through their own accord. And I am pleased with the progress to date.

Paul, if you look at the margin on the merchant side of the business, how much of an impact are you seeing from Asia because of the increased investments you are putting in that side of the business?

Asia clearly, we think long term is margin accretive. But for the near term it clearly will be margin dilutive because Kartik, as you can imagine when you add hundreds of new sales people over a fairly short period of time, many of whom, you not only have to train on your products, you have to train on sales techniques. They are not going to be totally productive at day one. So, that's been an expense as well as building up the infrastructure, putting in the management, opening new offices. So clearly we haven't given exact guidance on that but clearly it has hurt us.

And a question on the money transfer business. Are... you don't think [ph] in competition at least for the U.S. and Mexico quarter on the FX side. And is this a business without the easy comps that can return to maybe low double digit revenue growth?

I am going to let Jim answer the first part. I'll answer the second. We aren't hopeful. It's a challenge of the year that we are banging up against easier comps number one. And number two, Jim will share with you in the second that we are seeing some pricing stabilization which is helping. What we've seen in June, which is continuing in July is encouraging to that end too. So yes we do think this is a business that can return to those growth rates, that's our hope. Jim?

In early 06, fiscal '06 we saw a modest 2, 3% pricing decline as we talked about last or this past fiscal year '07 starting in the second quarter timeframe was a point maybe November, December timeframe. We are starting to see a more dramatic drop in the marketplace. It wasn't just around FX but clearly FX was a part of it and that lower prices remained through the balance of the year. Paul just mentioned our balance of the fiscal year and into the first couple of months of this year, we have seen a stabilization. We're not seeing the declines that we had experienced last year. The transaction growth has returned back to the mid-teens. So we are feeling good that if those trends continue then that business will clearly... we'll clearly see growth numbers in the range of a double digit. On the Europhil side, this business continues to do very well where we have seen explosive growth on the top line coupled with the doubling of the number of branches that we have in the market... in the Spanish market in particular. And we are encouraged as long as the pricing stabilizes in the U.S. that we will see DolEx continue to gain ground. Another thing I would mention is we've slowed down in terms of opening branches because there is a much better opportunity in the marketplace to acquire today than there was. Previously the smaller guys are equally affected by the events of the slowing in housing coupled with the immigration tightening.

So Jim, would it be fair to say, you're still like the branch model and that's what you focus on rather than going to an agent model?

As long as... as we've said before, as long as it's a growing business the fixed cost model, we think this is a superior model as well as for compliance and host of other reasons. So I think for the foreseeable future at least this is related to DolEx and Europhil in the branch business but if we saw opportunities to expand to other corridors or even in this quarter and that was a agent model, I think we would at least take a look at it.

Great. Thank you very much.

Welcome.

Paul Bartolai, Credit Suisse, you may ask your question.

Thanks, good morning. You guys saw a pretty nice pickup in the revenue growth and transaction growth in the domestic direct business. I just wondered if you could provide any more color there. Was that more macro driven or is it something that you guys did a little bit better in the quarter?

Paul, good question. We did see a big improvement in the quarter which was nice to see. As I mentioned in the third quarter call, we did expect to see a sequential improvement. Our pipeline now is larger than what we did see but clearly it was driven by the ISO channel, in particular we had a couple of nice signing and one particular conversion that had a positive impact. But overall, the ISOs by and large did better in the quarter.

Okay. And then looking at the spread there in the domestic direct between the transaction growth and revenue growth, I mean any sense when we could start to see that narrower or can you provide any more insight on what we should expect there?

The difference between transaction growth and revenue growth and domestic direct is largely caused by a mid-single digit decline in our average ticket which is a mixed issue due to the growth of the ISO channels which typically have lower average tickets than merchants who are getting from our direct sales channel. Our spread actually has been relatively constant for the year. We had some compression on the direct side but that's been offset by the growth of the ISO channel. Again those merchants have higher spreads than merchants who are getting from our direct business. That has generally been a wash. The rest of the difference is coming from non-transaction based revenue growth that, that are not based on credit or debit card transaction. It would include the monthly fees that we are charging, the equipment fees and our check-in and gaming business. Those areas are just not growing as fast as transactions and it's causing a natural disparity between the transaction growth and the domestic with our current [ph] growth. We have seen that, that differential occur now for several quarters and I don't see anything causing that to dramatically change in the near term.

Okay. And then looking at margins staying in the direct business here or in the merchant business, sorry, is there any possibility you could quantify how much of the margin compression you expect in '08 to be just from the mix shift versus margin compression in the base business?

It is almost all the issues of the ISO growth being a very high grower but also having a lower margin. Of the 200 to 240 or so basis point decline that we're calling for I would say 100% of that is the ISO impact.

In fact, we actually saw a little uptick in the spread in the base business. So we are... that's actually helping.

Okay, great. Then just last question Joe, you mentioned there was a recovery in the fourth quarter related to the merchant. Could you quantify that impact on the fourth quarter?

I can, it was roughly $1 million that we have talked about this on our second quarter call as a broad situation that we have totally reserved for but we said it we were still pursuing those funds. We did collect those funds in the he fourth quarter.

So I guess that $1 million benefit should have been in the merchant operating income?

Yes.

Okay, great, thank you.

Dan Perlin, Wachovia Securities, you may ask your question.

Thanks. It's clear that the domestic revenue has jumped up sequentially. I am wondering to what extent you have a number of ISOs that you may have already signed but not converted t to merchant to the portfolio or to your processing portfolio?

That's very perceptive Dan. That's exactly what happened in the process of signing additional guys. That takes a while to convert. There was one meaningful ISO last quarter that had some... had a flurry of conversion and so that is the piece of it. But it's not stagnant. I would like you to reach a conclusion that we don't think we continue to get some list and this is a positive trend that continues. We are going to continue to sign ISOs. We continually to convert those ISOs, even this large ISO still have some conversion opportunity. So we think it continues.

I was thinking more along the line of how many do you have yet to actually convert over. It was clear that it happened this quarter. I am hopeful that happens again over the course of 2008. I am just wondering as you sit here and you look at the visibility in your revenue growth of that line item, how many... if you could just quantify I guess how much incremental business that you have already signed but not converted, that's sort of a forward-looking question.

What we see are mid size, I mean the one that Paul just mentioned in particular happened to be much larger and I think you might see one or two of those a year. And that's generally a competitive takeaway for a variety of different reasons not necessarily just because of prices, largely service or some other factors. What we see a larger list of this year that we have previously or mid size and even smaller ISOs the universe of large ISOs is finite, and the ability to move them from one processing relationship to another is a long sale cycle. And there are lots of new guys interested in getting into the business. And so we are trying to service that through more than we have in previous years.

Dan once again, we know this would suggest that we have some robust growth we look forward to, our June numbers are pretty damn good in that area as well. So, yes it is.

And presumably that conversion in this quarter was also one of reasons for the margin degradation in merchant.

Yes.

Sequentially, okay. The other question I had maybe for Joe is specifically as you look at the first quarter Joe, it's is pretty kind of steep grow over that you got to go through for the margin side for merchant. I am wondering I know in the past you have talked about how and like the first quarter of 2006. I mean you had some issues and that's why the margins were so much better potentially in the first quarter of '07. But I am wondering is there any reason that the first quarter for you guys could be from a margin standpoint materially higher than were you in the full year? How do we see that?

Let me just try to talk about my perspective on the first quarter. The seasonality issues that we talked about in prior quarters relating to Canada in the first quarter I believe will still hold and Canada generally will provide a higher revenue and earnings less in that first quarter due to the June July August month of year and there is generally higher spending. It is true though that the first quarter of last year was a very good quarter, and that will likely provide a tough comp for our first quarter of fiscal '08. And we will likely have margin decline in our merchant services channel, and it may very well be the steepest decline that we see in the year on a quarterly basis. We also have the national merchant reprising that occurred in the first quarter of last year that won't have annualized yet and that will cause a drag in the first quarter that we won't see in some of the other quarters.

Okay. And then Paul I think I heard you say that Canada you expected full year, I think you said revenue growth, high single low double?

Joe?

Is that correct?

Canada is high single, low double.

What? What would drive that? I am really surprised to hear you say low, high single, low double growth in Canada kind of given the trends on an absolute basis if I look at that number, 54, 55, 54. It would imply that there is a pretty sizeable uptick.

Well, there is some... there is some favorable FX that is certainly helpful. That's a nice tailwind.

Right.

In addition you have the Canadian group still every year finds a way to grow faster than market by adding new merchants and coming up with new products and repricing appropriately. We have a very effective management team up there, and that's why that the expectation has separated us.

One of the components available to us for the next few years in Canada is replacement of the terminal base to an EMD base. There is an incentive for us to do that which is reflected in the revenues. And one of the things you saw this past year and you will see this year as well is the heavier than normal spend on capital for replacing of those terminals. These are terminals that we own and rent which is still the business model in Canada. So accelerating that process does provide a benefit plus we have seen our ISO business, number of our larger ISOs are now doing business in Canada as well. So I think there is a number of good positive fronts for them in the coming year.

Got it. Okay. Thank you guys very much. I appreciate it.

Welcome Dan.

Liz Grausam, Goldman Sachs, you may ask your question.

Thanks. Just to come back to the margins and the business mix in your merchant division. Is it worth to grow as fast as you are growing if it has this implication on your margins? And looking into '08 '09 are we going to continue to see margin degradation from this business mix? Or when do you see an inflection point or maybe the mix stabilizes from a margin standpoint?

It's a great question. I am glad you asked it. The reality is when you have an opportunity to partner with some of the leading ISOs and the business absent the accounting has wonderful margins. But the way the business has accounted for, it does hurt the overall margin of the business. But at end of the day very profitable business draws off accounting cash, and it grows like a weed, I love the business. And I am proud to be associated with the entrepreneurers who are driving it. Now, but we are not stagnant in rest of the company. It is tougher to grow our base business just in a greenfield because of the size of it, you just, you can't add enough sales people to really influence that significantly. You may get an occasional which, we got a little bit in April and June from the Visa, MasterCard increases to give a little push on that. The opportunity and I think it's going to be more to your question the inflection point will be more in '09. It is the growth of Central and Eastern Europe and Asia. That business is extremely margin accretive. And that business will be growing at... we think we'll exit the year at terrific rates. So consequently as you grow that business and that is being taken into consideration of possible acquisition which could augment that business. We are hopeful that will happen as well. So as those businesses grow organically at significantly accretive rates, it does in fact help and then also the ISOs will reach a point where the law of large numbers have to kick in a little bit, and a lot of the growth will still be dramatic. It can't be at these types of levels forever. Is that helpful?

Yes. That's great. And then kind of building on your international and European strategy, I mean it will be great to those businesses of... bigger scales, it's making to offset some of the margin pressure you may see in the U.S. What does your pipeline look like? I know you authorized a $100 million in the buyback last quarter, doesn't seem like you exercised much of it. So a view on, what are you going to do with your capital if there are some good opportunities for better margin expansion overseas?

Yes we clearly think that the best and primary use for our money is to make acquisitions. We do have a commitment to move forward on the announced buyback and we will give you an update on that next quarter. But the pipeline is decent. It is particularly in Central and Eastern Europe. It is a little over complicated in Asia just because of the... it takes a long time to establish those relationships. We have been in Central and Eastern Europe a lot longer. We have been working at a lot longer and we are hopeful you will see some things this year.

Great. Thank you.

You're welcome.

Moshe Katri, Cowen & Company. You may ask your question. Moshe Katri - Cowen & Company: Hey thanks. Can you comment on the... maybe ISO pricing environment, talk about maybe are you seeing any disruptive behavior for some of your competitors maybe specifically First Data? Thanks.

Moshe, we initially saw a flurry of activity. Our ISOs are obviously subject to offers from lots of competitors, First Data included. These guys have very aggressive rates, very competitive rates and have signed long-term agreements with us. Jim, do you want to add something?

I think it is... there were some of that maybe 18 months or so ago but I would say most recently you are going to hear the our conversation of maybe below market price for front-end processing services. But I haven't seen it, it hasn't affected our ability to sign new business this year. Moshe Katri - Cowen & Company: Okay and then moving on to DolEx I think in the past, Paul, you said that half of the branches in the U.S. are still going through an investment mode maybe the other half is matured and I guess is profitable. Can we get an update on that?

Moshe, you recall saying that exactly but clearly you have a.... it takes a while a year probably for branch to open and be profitable. So there's a couple of things we are doing. We are slowing down the greenfield opening branches. We are buying branches at very good prices when available. It's a little bit opportunistic but the prices have come down dramatically. You pay at a per transaction basis and it is a significantly less costing than it was. So a buy is much more effective way to open and expand your footprint than to build. But we do have a critical look every week literally at our branches, and we are probably if anything less, we are quicker to take action if we think our branch is not reaching profitability. And to that end we have actually closed a number of branches. We've been a little more aggressive in that area. That may be what you were referring to. Moshe Katri - Cowen & Company: Okay. And finally can we get an update on the Discover relationship?

Joe.

We just this summer, I think it was in June, did the first of our front end platforms in our data mode that we are now processing Discover transactions end to end for maybe two or three hundred merchants. And both are front end platforms which will also provide Discover although it's limited, Discover ability in Canada for card hovers there as well. We expect during second quarter to begin the migration of our entire base coupled with our ISOs who are going to participate in the program into this Discovery acquiring program. Moshe Katri - Cowen & Company: Okay, thanks. .:

Moshe.

Greg Smith, Merill Lynch, you may ask your question.

Anyway I apologize if this came up. Is there anyway to quantify the FX impact on the Canadian guidance on a year-over-year basis somehow?

We generally can talk about historical impact of FX results and we'll actually include that impact in our SEC financials. But forward-looking FX impact is very difficult to quantify. It's highly complicated to try to forecast, a lot of volatility in the FX rate over the past six months particular in Canada. So we don't intend to provide assumptions or break that out on the forward-looking numbers. We have seen a lot about volatility in IT projections out there that show a deteriorating FX rate from U.S. to Canada in the second half of the year. But the projections are just so variable that it's too difficult to pinpoint at dipping number.

But Greg, we do look back up, I mean we will tell you what kind of impact is that. It's just... just that's impossible to really with specificity and we do have our assumptions but we have to see where they go.

Yes, okay, fair enough. And then in Canada, I believe you may have been seeing some... well let me ask you accelerated pricing pressure with large... on the large merchant side maybe similar to what we saw in the U.S. a few years ago. Are you seeing any of that? And how do you think that plays out, if so?

Actually I would say several years ago we saw probably much more aggressive pricing from a couple of our competitors. Most recently not as much but I think that our large merchants are always at risk in terms of a competitive RFP process.

Okay. And then Jim maybe for you the Group Access [ph] the Queen Star, wondering if that's something you looked at and had any thoughts on the valuation?

I am sorry I didn't understand the name.

The Group Access [ph], Money Transfer, the company was bought by Queen Star yesterday, I mean I just heard the tape last night. And I was just wondering if there is something you guys have looked at?

I look at what gets up to me and I am not familiar with that one in particular. So I don't have a comment.

Okay, thanks guys.

Greg.

Andrew Jeffery, Robinson Humphrey, you may ask you question.

Good morning.

Hey Andrew.

I am little confused I guess by some of your comments regarding the merchant margin. And I know Paul you have said in the past fiscal '08 is going to be an investment year and I have taken that to mean investment in the HSBC sales force, investment in the emerging Europe sales force and infrastructure, platform consolidation etcetera. Yet I think I heard Joe say that the... essentially the entirety of the merchant segment margin decline year-over-year was going to be a function of mix which we understand to be accounting but mix nonetheless. So I am trying to reconcile that with your comments regarding investment this year with respect to EPS growth that's obviously going to trail revenue growth?

Andrew let me clarify again. The 200 and 240 basis points that has decline, the range that we gave on merchant services business. That is on... of the 100% the ISO channel. The international area the Asia-Pacific in particular we have a 100 basis point unfavorable impact on margin during fiscal 2007. That was largely a result of the acquisition. You are simply buying a company that has a lower margin than what your corporate average is. That 100 basis point impact is much less expected in fiscal '08. It probably breaks even maybe at 10 or 20 basis points at the most. But I think what Paul is saying that we could actually have positive margin impact on Asia if we weren't investing in that business. So on a mathematical perspective there is no specific impact year-over-year or maybe 10 or 20 basis points at the most. But it's a result of very high revenue growth that we are also growing extensively as well.

So, it's an opportunity cost comment.

Right. That's exactly correct.

Okay. So the implication being with respect to the law of large numbers in the ISO channel and then the potential for accelerating profit contribution from HSBC and Europe, in '09 that fiscal '08 is sort of the period during which you'd see the margin diminution be the most intense and then at some point theoretically all's being equal should begin to abate.

Absolutely. In fact, there's a comment I made earlier to the question was we hope to exit with some pretty healthy numbers that point to the at least the trends starting to kick in, I mean you should see some impact and that's our hope.

And beyond just the investments that are being made on the sale side we're also starting actually this month for the conversion of our first of ten back end conversions. And as we move up out of the bank systems on to our systems, that will also help the margin in that region just as you saw in the years past the CIBC and the National Bank.

Okay. That's helpful. And then what are you anticipating stock based comp to be in fiscal '08, could you say?

We do not and again we are... we do not break that out separately. It will likely be similar to what we've had in the past but going forward it will include the numbers in our normalized results so that it just won't be a separate number.

So you will include it in total corporate expense on the segment reporting.

That's correct. And we'll compare ourselves against fiscal '07 GAAP results excluding restructuring charges.

Okay. Great, thanks.

The next question comes from Tien-tsin Huang, JP Morgan. You may ask you question.

Hi, good morning.

Good morning.

The question on HSBC and the margins, can you give us a rough sense of why you exited the year in terms of margins there?

I am not sure how relevant the quarterly result is, that the full year margin is high single digit type of a number and we are expecting growth on that in fiscal '08 but again it may have to be development as a very positive revenue growth guidance that we gave for Asia Pacific which implies a big improvement on the organic revenue growth.

Okay, so high single digit margins for the year and probably higher incremental margins as we go forward better revenue growth.

Exactly.

Starting plans on HSBC, and as you said but where are we in terms of sales headcount in Asia? What are you expecting here over the next several quarters?

Well, we talked notionally about 300 sales people. My personal belief is that we can have significantly more than that. We still have some build-out to do with our management or infrastructure or lead generation or tracking, compensation programs, and we are still fine tuning all of that. But the countries, these territories have showed that engine to India and China and markets we're in, the other eight markets are just huge. So we could... you could have... you could pick a number basically. I believe as long as the opportunity exists, we will be foolish not to expand our sales force aggressively. On more of an update next quarter on that, and I would look for us to making real investment there.

Now I think that makes great sense. One last question on the ISOs, the three new ISOs signed this quarter. Can you give us just some perspective on the relative size of these new ISOs?

These are big ones. We announced some... when we do we'll tell you guys, it's a great question of this, we weren't incredibly clear on that. These were a reasonable size ISOs. In fact we have a new program where we are actually incubating some smaller ISOs. And so you may even see a pickup on ISO signed as we get some smaller ones in. But these are reasonable size but nothing is... that's truly going to move a needle per se.

Okay. Great, thanks for all the details.

Okay Tien.

Your next comes from Adam Frisch UBS, you may ask a question.

Thanks. Good morning guys.

Hey Adam.

How are you?

Good, how are you doing?

Good thanks. Paul I wanted to get kind of a perspective question in here. You guys have a given a lot of detail on lots of the questions that focus on that. But historically Global Payments has been more of a beat and raise company, obviously the last few quarters have been a little bit away from that. But the two big data points that were most important in my thesis were an improvement in domestic direct and '08 revenue guidance being better than where it was last quarter. So it seems to me that we are starting to trend a little better or maybe you guys are feeling a little bit better about the business or just have a better view on '08. And then I want to ask you is, what your view is in a nutshell on '08 as we move into '09?

Well I will take a shot at that, I will ask Joe and Jim to jump in, if it's for showing client [ph]. Clearly we like to beat and raise, that is a wonderful place to be. We are not saying that is the case. We believe this is guidance that we spend a lot of time and energy on. But I can tell you from the CEO perspective Adam that I am very enthusiastic about this year and particularly enthusiastic about investments we are going to make that, I think we're going to set up a fabulous '09 and '10. And I personally look forward to being actively involved in reporting our last quarters to you and all your colleagues on our results because I think we are as well positioned as we have ever been in our short life. And I couldn't be more enthusiastic about what I see in our future.

So, '08 was positioned maybe on the last call and the one before that is more of a transition year, one of investment. Seems like it's not going to be as doom and gloom as you guys kind of gave before. Is that an accurate assessment?

We are I think understandably cautions. We always want to make sure that we meet our expectations that we put out. And so just side by nature one... you will be foolish to put aggressive assumptions out there. And but what we saw some numbers preliminarily plus we were little spoofed by what we saw in the fourth quarter from the direct business. It didn't grow as nicely as it has been, that's rebounded terrifically. So, that led to that discussion. You are right. This is a more optimistic group you are talking to, so, you too.

Okay. And then in terms of guidance because I think it's so important what you do in the first half for the year whether you exceed estimates or give a brighter outlook right? Because if '09 is going to be that much better than '08, then the faster we get to people looking at this stock '09 numbers the better, if durable on the stock and obviously you guys are. But so I wanted to know on your '08 guidance what could make it prove conservative or aggressive? What are some of the bigger moving parts that if we get this in this rate, you could have some upside but here are the challenges because we are certainly not out of the woods yet but things again do look a little bit better. So, if you could just address what could move guidance higher or lower?

You are good, I would say that. We are all looking each others as you are asking that question. That's a great question. I just have...

That's good, your client told me [ph].

We are very early on in our year. We will say that we are enthusiastic about everything we've already talked about which is I don't need to repeat. But there are always some things that could hurt you. I mean if that acts those against you that's... as we said before, we are not terribly smart because you get a lift from it and you are down if you get hurt by. They are kind of is what it is. And the general economy always particularly with DolEx with constructions starts and things, those are things that concern us. Although we think that the credit and debit are not necessarily... which has improved but it doesn't have the dramatic kind of cause and effect you see in other industries but a general slowdown would definitely make us a little more pessimistic but we are kind of enthusiastic across the board.

Okay, last question. I know I think Liz asked about the buybacks if I am not mistaken. Just wanted to know you brought it up last quarter is kind of we are going to wait, your approve date, you are going to 100 million eventually, at least you are approved to do 100 million. Now it looks like M&A might be moving back higher on the priority list than it was before. Given what's going on in money transfer, would you be more apt to do an acquisition there or something that is... would augment your performance on the merchant side?

I think we would be less apt to do an acquisition on the money transfer side and more apt on the merchant side. That's where the services side is from those circle of [ph] thesis. And in terms of the buyback and I think you can do both and it is a modest amount at $100 million, and we think we can execute both.

Then what makes the... at what point do you say well, money transfer we gave a shot, it's not really working, we don't like the fundamentals too much headwinds in the next couple of years or whatever. What makes you say we are going to divest it?

I think this... we are not ready to say that clearly. It's a good team, it's a good model, it's a good product. And in an increasing, in a world with increasing complexities, the... our motto actually gives us comfort in terms of compliance. But any business and it's not just money transfer, anything that we have if it looks like the product obsolescence or if the growth is dramatically impacting us although there are negatives. I think good management looks at everything at all times. But I wouldn't want that to be anyway a message that we are dumping this business in 2010 [ph].

Okay, great. Thanks guys.

Welcome.

The next question comes from Tom McCrohan, Jenny Montgomery Scott. You may ask your question.

Hi just two small questions. Most of my questions have been answered. The rebound that you talked about in the press release on the money transfer side, is that rebound incorporated in your full year guidance?

Yes, yes.

Okay, great. And I thought on HSBC I thought the guidance for the full year going into this quarter was 56-60 million or was that on a fully annualized basis that 56-60 that you had previously?

I don't remember if it's the exact number but that was a full year annualized number.

Okay. So how does the 48 come out on annualized kind of in that range?

Yes, it came in within the guidance that we had given.

Okay and on the corporate overhead which you disclosed on your non... on your segment reporting package. Well how much of the 12 million of stock option expense, for this just year ended is included in a corporate overhead? That's it, thanks.

All of our stock option expense is included in that corporate line.

Do you have any outlook on corporate overhead ex-options next year growth rates?

Including options it will be the guidance that we gave with low single digit and mid single digit increase. We are not providing the guidance excluding options as we will be reporting it both this year or next year included in that line.

Fair enough, thank you.

Welcome.

The next question comes from Wayne Johnson, Raymond James. You may ask your question.

Hi good morning.

Good morning.

And thank you for the update on the Atlanta transaction processing platform, that's very helpful. Just on the cash flow outlook. Do you guys have a target for cash flow from operations for this year but also how should we be thinking about that over the next two to three years?

We don't have a specific cash flow from operating activities guidance number. I would expect that the amounts would track with our earnings growth. The settlement processing line is very difficult to estimate, it's more based on timing and anything else and the working capital lines are also similarly difficult to estimate. But generally, historically it has tracks with our earnings results.

Wayne, it just nothing that we're chasing to change that. I mean this is one of the great factors of our business, or basically most people in our space is that the we generate from the cash and that's going to continue.

Okay, thanks. And going back to the currency again and maybe I missed this so I apologize. But in the fourth quarter of '07, what was the currency impact in that particular quarter for the whole company, Canada, Europe, Asia?

The whole company in the fourth quarter again was roughly a percent of additional revenue growth.

Did you say, I am sorry, did you say 1%?

That's correct.

Okay,

Really no impact on the year in size.

Okay. That's great. And then going to Asia-Pacific I understand it's a large opportunity and the more sales people there the better as that business matures and becomes more visible. But just to put some numbers on it how many sales reps are there in that geography at the end of the fourth quarter '07?

We started with hundred, we thought you guys were going to double that, we did, we actually did greater than that. And we are working towards 300 as we speak.

And you are working towards 300 for the end of '08?

Actually I think it will be greater than that.

Okay, good. All right. Terrific, thanks very much.

Welcome.

The next question comes from Mark Sproule, Thomas Weisel Partners. You may your question.

Thanks, I appreciate it. A couple of quick questions I apologize if they seem somewhat competitive. If we look at the merchant volume growth obviously ISO conversions and strength there has helped us. What is it within the ISO community [ph], is lot of their growth to be there, is it new merchants signings that they are getting, incremental volumes from mix shift to credit and debit or is it conversion helping to be a big part of that and where you see [ph] your growth is?

I think it's primarily a new business, we track all those business they bring in, and the revenue those generate. That's the piece of it. Conversions is a piece of it. Sales we had a bit of spread pickup too that helps us to choose where their base business gets a little more revenue too. And it's a larger base, so even a basis point helps there. So all in all those factors pretty much in that order.

Okay. And you mentioned you are going to start incubating some of the smaller ISOs out there given the fact that those will likely be significantly higher sort of risk than your large ISO contracts, would that result in, I would assume it results in increasing reserves.

Actually the smaller ones, the way they generally are set up is, we manage the risk in ISOs. So there is... we don't set up reserves for that anyway. We recognize also their experience. But I wouldn't infer from that we'll see any additional risk if anything they are probably... we spend more time with them than having to work with the larger ones on a day-to-day basis.

Okay. And then I may have missed this because I missed some of your Europe comments. But given the fact that with the First Data acquisition, and all the cash around that, has that made a easier or cheaper to go out with acquisitions in Europe? Has it changed through the environment? Obviously that was very floppy payment period for a while for them going out for deals, has that made a little different a little for you guys?

Well when we would hope we haven't seen it yet. In fact, I think they announced the deal. I saw it today that's across wire over yesterday. They bought somebody and First Data International. That is... Mark that would be our hope. On the... when someone pays 7x revenue for a deal that is multiples higher than everyone else, that gives you a little bit of reason to pause. We are hoping that we won't see that. I don't think they are just going to go away as much as I would love them to.

Got you. And one last question on the DolEx side obviously we understand the issues within the money transfer business at large. But the platform was designed to also extend into some other financial services. Has that started to take some hold in the marketplace and is that going to help you longer term as far as kind of creating that kind of recurring customer base? Thanks.

We believe that this is an area that we talked about for several years now. We had an issue with the vendor over a year ago, so we had to restart our value card effort but the product is completed in the market and data today in Texas intend to get that into Texas and California are two big states within the next couple of quarters as check cashing, we offer long distance cards, FM type [ph] of cards and we are just starting to introduce some insurance, retail insurance, pharmacy health cards and things of that nature. So I think that was an area that when in '06 the business was growing strongly and we did, we probably should have reacted quicker but did not. I am very pleased with the progress of the teammates where they stand today. And I don't think it's going to challenge the revenue size of DolEx overall. But it will clearly be incremental and it's very high margin.

Thanks guys.

The next question comes from Robert Dodd, Morgan Keegan. You may ask your question.

Hi guys. One, just one quick question on the Discover relationship. I mean you said you expect to start enrolling or transitioning the customers over to new platform in kind of second quarter. How long do you think that's going to take?

I think the bulk of it will be done, assuming everything goes smoothly by Christmas third quarter at the end. In worse case the bulk by the end of the third quarter. Probably totally wrap up, not the till the end of fiscal year but that will be the last 5 to 10% of the portfolio. Now as we bring in new ISOs, if you take little larger ones they have to become enrolled in the program. What we are focused on initially is our base, our some of the ISOs relationship and our primary ISOs who are now signed on to the program thus far.

And what's the participation level, as the majority of ISOs want to participate in that?

So far, everybody who has been... we've had conversation with, I think we are at a 99.999%.

Robert it's a great deal. We repurchased them, resold them basically at a pass-through. We negotiated a great deal, and Discover was very fair. It was the ISOs see the wisdom of participating is truly a good deal for them.

Great. Thanks.

The next question comes from Charlie Murphy, Morgan Stanley. You may ask your question.

Thanks. Very quickly Joe you said that you would have some cost savings in '08 from vendor contracts to the G2. Is there any way to quantify that number?

Now, we don't tend to quantify those savings. Its not a material number but I think we made that comment to show that we are making progress in the G2 platform, and we are already getting some investors from it. But it is included in the guidance.

Okay, thanks.

Our last question comes from Tony Wible, Citigroup. You may ask your question.

You know most of my questions have been answered but I was hoping Paul if you could spend some time highlighting what you would see as some of the catalysts for international growth if there is anything in particular markets happening in next few quarters that you would particularly want to focus on.

Thanks Tony. That's a great question to wrap with. I will kind of work from Europe over. I think in Europe a couple of things have to happen. We have made some progress in signing financial institutions and some new Eastern and central European locations. But truly the model not unlike the U.S is you want to be a direct acquirer. You want to be able to sign business directly through your own sales force, the same model that we have in U.S, Canada and the model we have in Asia. So consequentially we are looking for an opportunity to do that, and hopefully we will have some progress to offer you on that. The next would be of course acquisition opportunities. There is a number of those but I think the more material is being control of your own destiny, growing a sales force, taking advantage of the platform and pursuing that strategy. In Asia, it is all about organic, it's going to be... it's going to be I think more difficult to make some acquisitions. And although like kind of cross over on central and eastern, we do think there are some acquisition opportunities there that are not as obvious to a lot people. In markets that probably don't have as much competition they are merging markets. I think there is... the merging markets with huge population, I think that's, we will be very interesting. Now in Asia, just because it takes long time to establish ourselves, it is going to be mostly greenfield and the catalyst there is simply feet on the street. And that's a great way of growing, so it's sustainable. So, we are absolutely going to be increasing that sales force by... in offering new better products, offering services that this market has not yet seen and becoming increasingly very sophisticated and having that expectation.

How long will it take you to migrate some of the ATM driving capabilities that you have from MUZO into the Asian market which I guess there are certain markets certainly within Asia that are more in the ATM driving mode rather the acquiring mode rate now it seems?

Well, currently the relationship is on the acquiring side with HSBC and I think it's kind of limited in that regard or I think other opportunities once we get beyond this initial couple of years could become available. And that will be one of them, that we will look at.

How long will that process take in to migrate some of the technologies from MUZO driving capabilities over to Asia?

Well, the expectations for Asia as Joe mentioned on the call is to convert on to G2 platform so it's really... it would be a functionality we need to be built into the G2 platform more than porting over on MUZOs but it's not something that's currently on the horizon. So I don't know if I can give you a definitive answer.

Great. Thank you.

Thanks Tony. Operator, does that conclude?

Yes sir.

Okay, well I want to thank you all for joining us on our call today. We appreciate your continued support on Global Payments.

Ladies and gentlemen, this conference will be available for replay starting today at 1 o'clock p.m. and ending at midnight on August 9, 2007. If you wish to listen to the replay please dial 866-385-0198 or international participants can dial 203-369-0395. This concludes our conference for today. Thank you for your participation. You may now disconnect.