CKFR Checkfree Corp (MM)

ATLANTA, Aug. 3 /PRNewswire-FirstCall/ -- CheckFree Corporation (NASDAQ:CKFR) today announced fourth quarter underlying revenue of $289.0 million, representing a 28 percent increase over the same period last year, and GAAP (Generally Accepted Accounting Principles) revenue of $276.7 million, representing a 23 percent increase from the fourth quarter last year. The Company's GAAP net income for the quarter was $27.9 million, or $0.31 per share, and underlying net income was $48.1 million, or $0.53 per share. CheckFree reported GAAP consolidated revenue for fiscal 2007 of $972.6 million, reflecting 11 percent growth over fiscal 2006, and underlying revenue of $996.0 million for fiscal 2007, reflecting 13 percent growth over the previous fiscal year. For the year, the Company's GAAP net income was $124.4 million, or $1.37 per share, and underlying net income was $172.3 million, or $1.90 per share. Free cash flow was $41.3 million for the fourth quarter, and $183.9 million for the year as outlined in Attachment A. "Solid execution and good product strength provided CheckFree with results just ahead of our expectations for the fourth quarter and the year," said Pete Kight, CheckFree Chairman and Chief Executive Officer. "The performance of our core business, and the integration of our newly acquired operations, all ended the year on track or slightly ahead." GAAP Results: Net income for the fourth quarter was $27.9 million, compared to net income of $29.5 million for the same quarter last year. Earnings per share were $0.31 for the fourth quarter of fiscal 2007, compared to earnings per share of $0.31 for the fourth quarter of last year. For fiscal 2007, net income was $124.4 million, or $1.37 per share, compared to net income of $127.3 million, or $1.36 per share for fiscal 2006. Net cash provided by operating activities was $67.5 million for the fourth quarter of fiscal 2007, compared to $40.8 million for the same period last year. Net cash provided by operating activities was $238.7 million for fiscal 2007, compared to $213.6 million for fiscal 2006. Underlying Results: Underlying net income for the fourth quarter was $48.1 million, compared to $36.6 million for the same quarter of last year. Underlying earnings per share were $0.53 for the fourth quarter of fiscal 2007, compared to $0.39 for the fourth quarter of last year. For fiscal 2007, underlying net income was $172.3 million, or $1.90 per share, compared to underlying net income of $160.9 million, or $1.72 per share, for fiscal 2006. Underlying revenue for fiscal 2007 excludes an $11.0 million charge for the value of one million performance-based warrants earned by a customer and a $12.4 million deferred revenue adjustment related to acquisitions. Underlying net income and earnings per share for the fourth quarter exclude the above- described deferred revenue adjustment, the amortization of acquisition-related intangible assets, acquisition-related integration costs, the SFAS 123(R) impact of stock options issued prior to July 1, 2004, and the related combined tax benefits. In addition to the above-described items, underlying net income and earnings per share for the full year of fiscal 2007 excludes the charge for the value of the one million performance-based warrants earned by a customer in the third quarter of fiscal 2007, net of related income tax benefits. Underlying net income and earnings per share for the fourth quarter and full year of fiscal 2006 exclude the amortization of acquisition-related intangible assets, the SFAS 123( R ) impact of options issued prior to July 1, 2004, and the related combined tax benefits. In addition, underlying net income and earnings per share for the full year of fiscal 2006 exclude the historical effect of discontinued operations on revenue and expense, resulting from a divestiture in the third quarter of fiscal 2006, net of related income tax benefits. A reconciliation of CheckFree's quarterly and annual underlying results to its GAAP results is included in Attachment A. Fourth Quarter and Fiscal Year 2007 Highlights During the fourth quarter of fiscal 2007, CheckFree closed three acquisitions. On April 2, CheckFree acquired Carreker Corporation, a financial services software provider that is being integrated into CheckFree's Software and Electronic Commerce businesses; and on May 15, CheckFree completed the acquisition of Corillian Corporation, a leading provider of electronic banking solutions that is being integrated into the Company's Electronic Commerce business. On May 31, CheckFree acquired Upstream Technologies, a provider of investment management solutions that is being integrated into CheckFree Investment Services. On a combined basis, our three acquisitions exceeded expectations, helping fuel our over performance for the quarter. For the fourth quarter, the Company reported that the Electronic Commerce Division processed 343.6 million transactions, a 1 percent sequential increase over the third quarter of fiscal 2007. For fiscal 2007, 1.3 billion transactions were processed, compared to 1.1 billion transactions processed in the previous fiscal year, representing 16 percent annual growth. The Company delivered 60.5 million electronic bills during the fourth quarter, which reflects a 3 percent sequential quarterly increase. For fiscal 2007, CheckFree reported 225.8 million electronic bills, a 22 percent year-over-year increase. CheckFree Investment Services reported nearly 2.7 million portfolios under management, compared to nearly 2.3 million at the end of fiscal 2006, representing a 17 percent increase over the previous fiscal year. Refer to Attachment B for details on the financial performance of CheckFree's divisions in the fourth quarter of fiscal 2007, and Attachment C for electronic billing and payment metrics. Financial Outlook for Fiscal 2008 and the First Quarter of Fiscal 2008 Given the merger with Fiserv, the Company announced that it will not provide forward-looking financial expectations and will not be hosting an earnings conference call. About CheckFree (http://www.checkfreecorp.com/) Founded in 1981, CheckFree Corporation (NASDAQ:CKFR) provides financial electronic commerce services and products to organizations around the world. CheckFree Electronic Commerce solutions enable financial services providers to offer the convenience of online banking, and along with billers, to offer the convenience of receiving and paying household bills online, via phone or in person through retail outlets. CheckFree Investment Services provides a broad range of investment management solutions and outsourced services to hundreds of financial services organizations, which manage about $1.8 trillion in assets. CheckFree Software develops, markets and supports software applications that are used by financial institutions to process more than two- thirds of the nearly 14 billion Automated Clearing House transactions in the United States. The division also provides financial institutions and other organizations with payment processing and consulting, reconciliation and exception management, fraud and risk management, cash and logistics management, and compliance software and services. Certain of the Company's statements in this press release are not purely historical, and as such are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding management's intentions, plans, beliefs, expectations or projections of the future, and include statements regarding forecasts and expectations of ability to extend market share in each business category. Forward-looking statements involve risks and uncertainties, including without limitation, the various risks inherent in the Company's business, and other risks and uncertainties detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended June 30, 2006 (filed September 8, 2006); Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (filed November 8, 2006); Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 (filed February 8, 2007); and Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (filed May 10, 2007). One or more of these factors have affected, and could in the future affect the Company's business and financial results in future periods, and could cause actual results to differ materially from plans and projections. There can be no assurance that the forward-looking statements made in this press release will prove to be accurate, and issuance of such forward-looking statements should not be regarded as a representation by the Company, or any other person, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to management, and the Company assumes no obligation to update any forward-looking statements. CHECKFREE CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended Year Ended June 30, June 30, 2007 2006 2007 2006 Revenues: Processing and servicing $214,246 $190,933 $809,814 $754,076 License fees 15,738 10,337 46,209 35,196 Maintenance fees 19,906 11,511 55,217 42,218 Professional fees 26,767 12,157 61,404 47,912 ` Total revenues 276,657 224,938 972,644 879,402 Expenses: Cost of processing, servicing and support 116,220 89,509 401,176 342,535 Research and development 33,146 28,989 112,077 101,854 Sales and marketing 31,829 26,146 98,459 87,418 General and administrative 24,899 13,171 79,057 61,948 Depreciation and amortization 26,308 21,781 90,937 99,530 Total expenses 232,402 179,596 781,706 693,285 Income from continuing operations 44,255 45,342 190,938 186,117 Equity in net income (loss) of joint venture 108 (653) (1,078) (3,100) Interest income, net 366 4,072 9,594 12,455 Income from continuing operations before income taxes 44,729 48,761 199,454 195,472 Income tax expense 16,805 19,275 75,016 74,455 Income from continuing operations 27,924 29,486 124,438 121,017 Income from discontinued operations before income taxes - - - 14,310 Income tax expense on discontinued operations - - - 8,064 Income from discontinued operations - - - 6,246 Net income $27,924 $29,486 $124,438 $127,263 Basic income per share: Income per share from continuing operations $0.32 $0.32 $1.41 $1.33 Income per share from discontinued operations $- $- $- $0.07 Total basic income per share $0.32 $0.32 $1.41 $1.40 Weighted average number of shares 87,855 91,287 88,313 90,984 Diluted income per share: Income per share from continuing operations $0.31 $0.31 $1.37 $1.29 Income per share from discontinued operations $- $- $- $0.07 Total diluted income per share $0.31 $0.31 $1.37 $1.36 Weighted average number of shares 90,481 94,232 90,896 93,708 CHECKFREE CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited) (In thousands) June 30, June 30, 2007 2006 Current assets: Cash, cash equivalents and investments $195,127 $317,613 Settlement assets 127,661 107,128 Accounts receivable, net 221,320 146,605 Prepaid expenses and other assets 42,759 39,810 Deferred income taxes 10,189 7,311 Total current assets 597,056 618,467 Property and equipment, net 156,113 100,217 Capitalized software and intangible assets, net 1,253,047 906,767 Investments 47,390 78,559 Other noncurrent assets 11,426 8,779 Deferred income taxes 66,246 45,240 Total assets $2,131,278 $1,758,029 Current liabilities: Accounts payable, accrued liabilities and other $136,812 $91,333 Settlement obligations 123,302 103,732 Current portion of long-term obligations 206,022 767 Deferred revenue 79,391 40,301 Total current liabilities 545,527 236,133 Accrued rent and other 4,663 3,844 Deferred income taxes 2,284 2,964 Deferred revenue 3,281 3,021 Capital leases and long-term obligations, less current portion 68,021 28,432 Total stockholders' equity 1,507,502 1,483,635 Total liabilities and stockholders' equity $2,131,278 $1,758,029 Attachment A Calculation of Free Cash Flow (Unaudited) (In thousands) Three Months Ended Year Ended June 30, June 30, 2007 2006 2007 2006 Net cash provided by operating activities $67,547 $40,801 238,737 $213,602 Excluding: Net change in settlement accounts (2) 1,236 963 3,430 Less: Capital expenditures (35,257) (14,279) (76,140) (48,096) Impact of operating account conversion (9,443) - (9,443) - Plus: Data center reimbursements 18,444 2,046 29,739 2,046 Free cash flow $41,289 $29,804 $183,856 $170,982 Additional Information: Cash (used in)/provided by investing activities $(463,762) $(50,589) $(451,658) $(138,076) Cash (used in)/provided by financing activities $225,886 $(21,562) $95,184 $(3,971) Use of Non-GAAP Financial Information We supplement our reporting of cash flow information determined in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") by using "free cash flow" in this earnings release as a measure to evaluate our liquidity. We define free cash flow as net cash provided by operating activities, exclusive of the net change in settlement accounts and less capital expenditures, plus data center reimbursements. We believe free cash flow provides useful information to management and investors in understanding our financial results and assessing our prospects for future performance. We also use free cash flow as a factor in determining long-term incentive compensation for senior management. We exclude the net change in settlement accounts from free cash flow because we believe this facilitates management's and investors' ability to analyze operating cash flow trends. In connection with our walk-in payment business, our consolidated balance sheet reflects settlement assets and settlement obligations. The settlement assets represent payment receipts in transit to us from agents, and the settlement obligations represent scheduled but unpaid payments due to billers. Balances in settlement accounts fluctuate daily based on deposit timing and payment transaction volume. These timing differences are not reflective of our liquidity, and thus, we exclude the net change in settlement accounts from free cash flow. As a technology company, we make significant capital expenditures in order to update our technology and to remain competitive. Our free cash flow reflects the amount of cash we generated that remains, after we have met those operational needs, for the evaluation and execution of strategic initiatives such as acquisitions, stock and/or debt repurchases and other investing and financing activities, including servicing additional debt obligations. During the fourth quarter of fiscal 2006, we entered into a credit facility to finance the construction of data centers. Amounts we spend to construct these data centers are included in our capital expenditures, but will be fully reimbursed by the credit facility. The reimbursements from the credit facility are added to our free cash flow measure because these expenditures do not impact our overall liquidity. The data center reimbursements line represents a change to our definition of free cash flow as of the quarter ended June 30, 2006. We deducted the impact of an ongoing conversion of an operating bank account because we do not believe it should be included in the determination of free cash flow for the periods presented. This adjustment represents outstanding checks against the account that we are in the process of closing. We are funding these checks as they clear from other sources of operating cash. We expect these outstanding checks to clear the account over the next 90 to 180 days at which time the account will be closed. Free cash flow does not solely represent residual cash flow available for discretionary expenditures, as certain of our non-discretionary obligations are also funded out of free cash flow. These consist primarily of payments on capital leases and other long-term commitments, if any, as reflected in the table entitled "Contractual Obligations" in the "Liquidity and Capital Resources" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2006, which we filed with the Securities and Exchange Commission on September 8, 2006. The Company's free cash flow should be considered in addition to, and not as a substitute for, net cash provided by operating activities or any other amount determined in accordance with GAAP. Further, CheckFree's measure of free cash flow may not be comparable to similarly titled measures reported by other companies. Attachment A (continued) Reconciliation of GAAP Net Income to Underlying Net Income and Earnings Per Share (Unaudited) (In thousands, except per share data) Three Months Ended Year Ended June 30, June 30, 2007 2006 2007 2006 Total revenues per GAAP $276,657 $224,938 $972,644 $879,402 Impact of warrants issued to a customer (1) - - 10,950 - Deferred revenue adjustment(2) 12,387 - 12,387 - Impact of discontinued operations (3) - - - 4,957 Total underlying revenues $289,044 $224,938 $995,981 $884,359 Net income per GAAP $27,924 $29,486 $124,438 $127,263 Impact of discontinued operations (3) - - - (6,246) Net income from continuing operations per GAAP 27,924 29,486 124,438 121,017 Amortization of acquisition- related intangible assets 13,435 10,586 44,691 57,037 SFAS 123(R) - Stock options issued before July 1, 2004 277 758 1,619 4,133 Impact of warrants issued to a customer (1) - - 10,950 - Deferred revenue adjustment(2) 12,387 - 12,387 - Integration costs associated with acquisitions 5,179 - 6,116 - Income from discontinued operations - - - 1,490 Tax benefit of underlying adjustments (11,123) (4,250) (27,914) (22,795) Underlying net income $48,079 $36,580 $172,287 $160,882 GAAP and underlying basic weighted average shares outstanding 87,855 91,287 88,313 90,984 GAAP and underlying impact of dilutive options and warrants 2,626 2,945 2,583 2,724 GAAP and underlying diluted weighted average shares outstanding 90,481 94,232 90,896 93,708 GAAP basic earnings per share $0.32 $0.32 $1.41 $1.40 GAAP diluted earnings per share $0.31 $0.31 $1.37 $1.36 Underlying basic earnings per share $0.55 $0.40 $1.95 $1.77 Underlying diluted earnings per share $0.53 $0.39 $1.90 $1.72 Use of Non-GAAP Financial Information We supplement our reporting of total revenues, income from operations, net income and earnings per share information determined in accordance with GAAP by using "underlying revenue," "underlying income from operations," "underlying net income " and "underlying earnings per share" in this earnings release. Management believes that certain non-cash adjustments to revenues or expenses enhance our evaluation of our performance, and are not pertinent to day-to-day operational decision making in the business. Therefore, we exclude these items from GAAP revenue, income from operations, net income and earnings per share in calculating underlying revenue, underlying income from operations, underlying net income and underlying earnings per share. Examples of such non-cash charges may include, but not be limited to, intangible asset amortization expense and in-process research and development costs associated with acquisitions, integration costs associated with acquisitions, charges associated with the impairment of intangible assets, the impact of discontinued operations, charges resulting from warrants issued to third parties, and charges associated with reorganization activities, all offset by the cumulative tax impact of these charges. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations, and our management uses underlying results to evaluate the impact of operational business decisions. We regularly report underlying results to our Chairman and Chief Executive Officer, our chief operating decision maker, who uses this information in allocating resources to our various business units. Additionally, as we reward our management for their decisions that increase revenues underlying revenues, underlying net income and underlying earnings per share as factors in determining long-term incentive compensation for management. Because we utilize underlying financial results in the management of our business and to determine incentive compensation for management, we believe this supplemental information is useful to investors for their independent evaluation and understanding of the performance of our management and our core business performance. Our underlying revenues, underlying income from operations, underlying net income and underlying earnings per share should be considered in addition to, and not as a substitute for, revenues, income from operations, net income or earnings per share or any other amount determined in accordance with GAAP. Our measures of underlying revenues, underlying income from operations, underlying net income and underlying earnings per share reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. (1) See Page 10, footnote 4. (2) See Page 10, footnote 2. (3) See Page 10, footnote 3. Attachment A (continued) CHECKFREE CORPORATION AND SUBSIDIARIES Supplemental Underlying Consolidated Condensed Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended Year Ended June 30, June 30, 2007 2006 2007 2006 Revenues: Processing and servicing $214,246 $190,933 $820,764 $758,796 License fees 17,822 10,337 48,293 35,196 Maintenance fees 24,797 11,511 60,108 42,244 Other 32,179 12,157 66,816 48,123 Total revenues 289,044 224,938 995,981 884,359 Expenses: Cost of processing, servicing and support 115,318 89,325 399,947 341,713 Research and development 31,842 28,766 110,378 102,002 Sales and marketing 30,407 26,016 96,806 87,177 General and administrative 23,071 12,950 75,903 61,708 Depreciation and amortization 12,873 11,195 46,246 42,982 Total expenses 213,511 168,252 729,280 635,582 Income from operations 75,533 56,686 266,701 248,777 Equity in net loss of joint venture 108 (653) (1,078) (3,100) Interest income, net 366 4,071 9,594 12,455 Income before income taxes 76,007 60,104 275,217 258,132 Income tax expense 27,928 23,524 102,930 97,250 Net income $48,079 $36,580 $172,287 $160,882 Basic income per share: Net income $0.55 $0.40 $1.95 $1.77 Weighted average number of shares 87,855 91,287 88,313 90,984 Diluted income per share: Net income $0.53 $0.39 $1.90 $1.72 Weighted average number of shares 90,481 94,232 90,896 93,708 Attachment B Reconciliation of GAAP Results to Underlying Results by Segment (Unaudited) (In thousands) Three Months Ended Year Ended June 30, June 30, 2007 2006 2007 2006 Electronic Commerce: Total revenues - GAAP $201,929 $166,541 $723,131 $662,728 Deferred revenue adjustment(2) 2,664 - $2,664 - Impact of warrants to a customer (4) - - 10,950 - Total revenues - underlying $204,593 $166,541 $736,745 $662,728 Operating income - GAAP $55,651 $46,051 $203,447 $195,847 Amortization of acquisition- related intangible assets 10,467 9,035 37,826 49,072 Impact of warrants to a customer (4) - - 10,950 - Deferred revenue adjustment(2) 2,664 - 2,664 - Integration costs related to acquisitions 2,522 - 2,557 - SFAS 123(R) - Stock options issued before July 1, 2004 (1) 201 550 1,177 2,999 Underlying operating income $71,505 $55,636 $258,621 $247,918 Investment Services: Total revenues - GAAP $34,027 $28,746 $124,029 $107,288 Impact of discontinued operations (3) - - - 4,957 Total revenues - underlying $34,027 $28,746 $124,029 $112,245 Operating income - GAAP $5,198 $3,652 $21,589 $13,939 Amortization of acquisition- related intangible assets 484 484 1,936 1,992 SFAS 123(R) - Stock options issued before July 1, 2004 (1) 29 78 167 425 Integration costs related to acquisitions 954 - 954 - Impact of discontinued operations (3) - - - 1,490 Underlying operating income $6,665 $4,214 $24,646 $17,846 Software: Total revenues - GAAP and underlying $40,701 $29,651 $125,484 $109,386 Deferred revenue adjustment(2) 9,723 - 9,723 - Total revenues - underlying $50,424 $29,651 $135,207 $109,386 Operating income - GAAP $(6,293) $3,788 $7,543 $14,701 Amortization of acquisition- related intangible assets 2,484 1,067 4,929 5,973 Deferred revenue adjustment(2) 9,723 - 9,723 - Integration costs related to acquisitions 1,703 - 2,605 - SFAS 123(R) - Stock options issued before July 1, 2004 (1) 12 34 71 184 Underlying operating income $7,629 $4,889 $24,871 $20,858 Corporate: Operating loss - GAAP $(10,301) $(8,146) $(41,641) $(38,370) SFAS 123(R) - Stock options issued before July 1, 2004 (1) 35 96 204 525 Underlying operating loss $(10,266) $(8,050) $(41,437) $(37,845) (1) At the beginning of fiscal 2005, we implemented a new long-term incentive compensation philosophy, which significantly reduced overall participation and focused on restricted stock with limited stock options. As a result, we recorded the cost of restricted stock throughout fiscal 2005 in both underlying and GAAP results. In fiscal 2006, we have adopted SFAS 123(R), and are consequently recording all long-term incentive grants, both restricted stock and options, as an expense to both underlying and GAAP results. The adjustment from GAAP to underlying operating results in the table above reflects the SFAS 123(R) charge associated with options granted prior to July 1, 2004 under our previous compensation philosophy, which were originally accounted for utilizing APB 25. (2) In connection with our preliminary purchase price allocations, we estimated the fair value of certain deferred revenue from license fees, support obligations and other customer payments assumed in connection with business acquisitions made during the three months ended June 30, 2007. Software licenses, license updates and product support revenue related to installations and support contracts assumed in business acquisitions in the amount of $12,387, that would have been otherwise recorded by the acquired entities, was not recognized as revenue by CheckFree during the three months ended June 30, 2007. As customers renew support contracts over the next year, we will recognize revenue for the full contract value over the support period. (3) In the third quarter ended March 31, 2006, the divestiture of our M- Solutions business, a component of our Investment Services segment, created a unique situation for our presentation of underlying results versus GAAP results. SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," requires us to report the results of operations from the disposed business, including any gain or loss on the sale, as an income statement item separately captioned "earnings from discontinued operations" on our GAAP basis unaudited condensed Statements of Operations. This treatment is required for all periods presented, not just the period in which the sale took place. In contrast, for purposes of our underlying results, we have excluded the gain on disposition in the current periods, and included the results of the M-Solutions business for the periods of time that we owned the business and for all of the prior periods presented. (4) In the third quarter ended March 31, 2007, a bank customer vested in 1,000,000 warrants as a result of achieving certain milestones. These warrants provide the customer the opportunity to purchase shares of CheckFree Corporation at an exercise price of $32.50, and were valued at $10.95 per warrant based on a Black-Scholes valuation. Attachment C Electronic Billing and Payment Metrics (in millions, except revenue/transaction and percentages) Quarter Ended 06/30/2007 03/31/2007 12/31/2006 09/30/2006 06/30/2006 Transactions CSP: Revenue(1) $123.8 $122.5 $116.8 $114.2 $111.8 Revenue / Transaction $0.45 $0.45 $0.46 $0.48 $0.49 Transactions 275.3 269.6 251.5 235.7 227.5 Sequential Quarterly Growth 2% 7% 7% 4% 5% Non-CSP: Revenue $38.6 $39.6 $38.3 $36.2 $34.4 Revenue / Transaction $0.57 $0.56 $0.54 $0.48 $0.46 Transactions 68.3 71.2 70.5 76.0 74.7 Sequential Quarterly Growth -4% 1% -7% 2% -2% Total: Revenue $162.4 $162.1 $155.1 $150.4 $146.2 Transactions 343.6 340.9 322.0 311.7 302.2 Sequential Quarterly Growth 1% 6% 3% 3% 3% e-Bill Delivery Revenue $10.4 $9.8 $8.7 $8.5 $8.0 Revenue / e-Bill $0.17 $0.17 $0.16 $0.16 $0.16 e-Bills Delivered 60.5 58.6 54.9 51.8 50.0 Sequential Quarterly Growth 3% 7% 6% 3% 7% Other EC Revenue(2) $ 31.8 $ 12.8 $12.6 $12.1 $12.3 Other Performance Metrics Active Full Service Subscribers(3) 12.0 11.6 11.1 10.5 10.0 (1) CSP Revenue excludes the impact of warrants issued to a customer. (2) Other revenue includes Health and Fitness, Professional Services, Stored Value Products and Electronic Banking Software and Professional Services, excluding any purchase accounting deferred revenue adjustments. (3) "Active" refers to subscribers who have viewed or paid a bill in the last 90 days at a Consumer Service Provider that outsources essentially all of its electronic billing and payment (EBP) functions to CheckFree. DATASOURCE: CheckFree Corporation CONTACT: Media relations, Judy DeRango Wicks, +1-678-375-1595, , or Investor relations, Tina Moore, +1-678-375-1278, , both of CheckFree Corporation Web site: http://www.checkfreecorp.com/

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