UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from     to

FIDELITY NATIONAL INFORMATION SERVICES, INC.

Georgia		37-1490331
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)
601 Riverside Avenue
Jacksonville, Florida		32204
(Address of principal executive offices)		(Zip Code)

(904) 854-5000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o     No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o     No þ

     As of April 30, 2009, 191,255,135 shares of the Registrant’s Common Stock were outstanding.

 

 

FORM 10-Q QUARTERLY REPORT
Quarter Ended March 31, 2009

INDEX

		Page
Part I: FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
A. Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008			3
B. Consolidated Statements of Earnings for the three-month periods ended March 31, 2009 and 2008			4
C. Consolidated Statement of Equity for the three-month period ended March 31, 2009			5
D. Consolidated Statements of Cash Flows for the three month-periods ended March 31, 2009 and 2008			6
E. Consolidated Statements of Comprehensive Earnings for the three-month periods ended March 31, 2009 and 2008			7
F. Notes to Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosure About Market Risks			24
Item 4. Controls and Procedures			25
Part II: OTHER INFORMATION
Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 6. Exhibits			26
EX-10.1
EX-10.2
EX-10.3
EX-31.1
EX-31.2
EX-32.1
EX-32.2

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

		March 31, 2009				December 31, 2008
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	272.0			$	220.9
Settlement deposits			39.2				31.4
Trade receivables, net of allowance for doubtful accounts of $39.9 and $40.6 at March 31, 2009 and December 31, 2008, respectively			498.8				538.1
Settlement receivables			42.7				52.1
Other receivables			110.7				121.1
Receivable from related party			11.2				10.1
Prepaid expenses and other current assets			99.1				115.1
Deferred income taxes			62.3				77.4
Total current assets			1,136.0				1,166.2
Property and equipment, net of accumulated depreciation of $256.5 and $244.4 at March 31, 2009 and December 31, 2008, respectively			269.6				272.6
Goodwill			4,190.1				4,194.0
Intangible assets, net of accumulated amortization of $511.1 and $499.3 at March 31, 2009 and December 31, 2008, respectively			893.1				924.3
Computer software, net of accumulated amortization of $350.8 and $345.7 at March 31, 2009 and December 31, 2008, respectively			613.0				617.0
Deferred contract costs			237.2				241.2
Long term note receivable from FNF			5.3				5.5
Other noncurrent assets			72.1				79.6
Total assets		$	7,416.4			$	7,500.4
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	395.1			$	444.8
Settlement payables			82.4				83.3
Current portion of long-term debt			132.8				105.5
Deferred revenues			192.5				182.9
Total current liabilities			802.8				816.5
Deferred revenues			87.9				86.7
Deferred income taxes			326.6				332.7
Long-term debt, excluding current portion			2,327.7				2,409.0
Other long-term liabilities			147.5				158.5
Total liabilities			3,692.5				3,803.4
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding at March 31, 2009 and December 31, 2008			—				—
Common stock $0.01 par value; 600 shares authorized, 200.2 shares issued at March 31, 2009 and December 31, 2008			2.0				2.0
Additional paid in capital			2,961.6				2,959.8
Retained earnings			1,099.6				1,076.1
Accumulated other comprehensive earnings			(111.5	)			(102.3	)
Treasury stock, $0.01 par value, 9.0 and 9.3 shares at March 31, 2009 and December 31, 2008, respectively			(391.4	)			(402.8	)
Total FIS stockholders’ equity			3,560.3				3,532.8
Noncontrolling interest			163.6				164.2
Total equity			3,723.9				3,697.0
Total liabilities and equity		$	7,416.4			$	7,500.4

See accompanying notes to unaudited consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

		Three-month periods
		ended March 31,
		2009				2008
		(Unaudited)
Processing and services revenues (for related party activity, see note 3)		$	797.8			$	830.3
Cost of revenues (for related party activity, see note 3)			594.3				648.7
Gross profit			203.5				181.6
Selling, general and administrative expenses (for related party activity, see note 3)			99.0				111.1
Research and development costs			22.6				19.3
Operating income			81.9				51.2
Other income (expense):
Interest income			0.8				2.8
Interest expense			(32.0	)			(38.8	)
Other income (expense), net			1.2				(1.2	)
Total other income (expense)			(30.0	)			(37.2	)
Earnings from continuing operations before income taxes			51.9				14.0
Provision for income taxes			17.9				3.3
Earnings from continuing operations, net of tax			34.0				10.7
(Losses) earnings from discontinued operations, net of tax			(1.3	)			59.6
Net earnings			32.7				70.3
Net loss attributable to noncontrolling interest			0.3				0.2
Net earnings attributable to FIS		$	33.0			$	70.5
Net earnings per share — basic from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — basic from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — basic attributable to FIS common stockholders		$	0.17			$	0.36
Weighted average shares outstanding — basic			190.0				194.5
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — diluted from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — diluted attributable to FIS common stockholders		$	0.17			$	0.36
Weighted average shares outstanding — diluted			191.6				196.5
Cash dividends paid per share		$	0.05			$	0.05
Amounts attributable to FIS common stockholders
Net earnings from continuing operations, net of tax		$	34.3			$	10.9
(Loss) earnings from discontinued operations, net of tax			(1.3	)			59.6
Net earnings		$	33.0			$	70.5

See accompanying notes to unaudited consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

										Amount
										FIS Stockholders
																						Accumulated
																						Other
		Number of Shares												Additional								Comprehensive
		Common				Treasury				Common				Paid In				Retained				Earnings				Treasury				Noncontrolling				Comprehensive				Total
		Shares				Stock				Stock				Capital				Earnings				(Loss)				Stock				Interest				Earnings				Equity
Balances, December 31, 2008			200.2				(9.3	)		$	2.0			$	2,959.8			$	1,076.1			$	(102.3	)		$	(402.8	)		$	164.2			$	—			$	3,697.0
Exercise of stock options			—				0.3				—				(7.8	)			—				—				11.4				—				—				3.6
Tax benefit associated with exercise of stock options			—				—				—				0.1				—				—				—				—				—				0.1
Stock-based compensation			—				—				—				9.5				—				—				—				—				—				9.5
Cash dividends paid ($0.05 per share) and other distributions			—				—				—				—				(9.5	)			—				—				(0.5	)			—				(10.0	)
Comprehensive earnings:
Net earnings (loss)			—				—				—				—				33.0				—				—				(0.3	)			32.7				32.7
Other comprehensive earnings (loss), net of tax:
Unrealized gain on investments and derivatives, net			—				—				—				—				—				9.4				—				—				9.4				9.4
Unrealized loss on foreign currency translation			—				—				—				—				—				(18.6	)			—				0.2				(18.4	)			(18.4	)
Comprehensive earnings:			—				—				—				—				—				—				—				—			$	23.7
Balances, March 31, 2009			200.2				(9.0	)		$	2.0			$	2,961.6			$	1,099.6			$	(111.5	)		$	(391.4	)		$	163.6							$	3,723.9

See accompanying notes to unaudited consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

		Three-month periods
		ended March 31,
		2009				2008
		(Unaudited)
Cash flows from operating activities:
Net earnings attributable to FIS		$	33.0			$	70.5
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			92.0				124.1
Amortization of debt issue costs			0.9				1.4
Gain on sale of company assets			—				(4.0	)
Stock-based compensation			9.5				26.4
Deferred income taxes			1.3				6.8
Income tax benefit from exercise of stock options			(0.1	)			(0.4	)
Equity in earnings of unconsolidated entities			—				2.0
Noncontrolling interest			(0.3	)			0.1
Changes in assets and liabilities, net of effects from acquisitions:
Net decrease (increase) in trade and other receivables			68.9				(8.1	)
Net decrease (increase) in prepaid expenses and other assets			19.1				(12.0	)
Net increase in deferred contract costs			(10.9	)			(22.0	)
Net increase in deferred revenue			16.0				4.6
Net decrease in accounts payable, accrued liabilities, and other liabilities			(66.5	)			(21.2	)
Net cash provided by operating activities			162.9				168.2
Cash flows from investing activities:
Additions to property and equipment			(15.0	)			(24.3	)
Additions to capitalized software			(30.3	)			(65.3	)
Net proceeds from sale of company assets			—				6.0
Acquisitions, net of cash acquired			(3.0	)			(1.9	)
Net cash used in investing activities			(48.3	)			(85.5	)
Cash flows from financing activities:
Borrowings			541.8				1,283.6
Debt service payments			(595.9	)			(1,381.4	)
Income tax benefits from exercise of stock options			0.1				0.4
Stock options exercised			3.6				6.0
Treasury stock purchases			—				(9.9	)
Dividends paid			(9.5	)			(9.7	)
Net cash used in financing activities			(59.9	)			(111.0	)
Effect of foreign currency exchange rates on cash			(3.6	)			1.0
Net increase (decrease) in cash and cash equivalents			51.1				(27.3	)
Cash and cash equivalents, beginning of period			220.9				355.3
Cash and cash equivalents, end of period		$	272.0			$	328.0
Cash paid for interest		$	30.7			$	69.7
Cash (paid) received for taxes		$	(37.9	)		$	8.1

See accompanying notes to unaudited consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

		Three-month periods
		ended March 31,
		2009				2008
		(Unaudited)
Net earnings		$	32.7			$	70.3
Other comprehensive (loss) earnings:
Net change in interest rate swaps, net of tax (1)			9.4				(48.3	)
Unrealized gain (loss) on other investments, net of tax			—				0.1
Unrealized gain (loss) on foreign currency translation, net of tax (2)			(18.4	)			23.3
Other comprehensive losses			(9.0	)			(24.9	)
Comprehensive earnings			23.7				45.4
Comprehensive losses attributable to the noncontrolling interest			0.1				0.2
Comprehensive earnings attributable to FIS		$	23.8			$	45.6

See accompanying notes to unaudited consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Unless stated otherwise or the context otherwise requires all references to “FIS,” “we”, the “Company” or the “registrant” are to Fidelity National Information Services, Inc., a Georgia corporation.

(1) Basis of Presentation

     The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company’s Annual Report on
Form 10-K, as amended by the Annual Report on Form 10-K/A, for the year ended December 31, 2008. The preparation of these Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain reclassifications have been made in the 2008 Consolidated Financial Statements to conform to the classifications used in 2009.

     As of March 31, 2009 and December 31, 2008 our market capitalization was below our book value. Consistent with our conclusion as of December 31, 2008, we believe the overall market conditions that existed at the measurement dates and continue to exist because of the current financial crisis have led to a market capitalization well below the fair value of a controlling interest. Based on these factors we concluded that the market capitalization does not represent the fair value of the Company. We believe there is no impairment of our goodwill as of March 31, 2009.

     In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, Non-controlling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”), requiring noncontrolling interests (sometimes called minority interests) to be presented as a component of equity on the balance sheet. SFAS 160 also requires that the amount of net earnings attributable to the parent and to the non-controlling interests be clearly identified and presented on the face of the Consolidated Statement of Earnings. SFAS 160 requires expanded disclosures in the Consolidated Financial Statements that identify and distinguish between the interests of the parent’s owners and the interest of the non-controlling owners of subsidiaries. Pursuant to the transition provisions of the statement, the Company adopted SFAS 160 as of January 1, 2009. The presentation and disclosure requirements have been applied retrospectively for all periods presented. As prescribed, the other provisions of this statement, which relate principally to the accounting for changes in ownership interests, will be applied prospectively to any applicable transactions.

     We report the results of our operations in four reporting segments: 1) Financial Solutions, 2) Payment Solutions, 3) International and 4) Corporate and Other (Note 8).

(2) Discontinued Operations

     During 2008, we discontinued certain operations which are reported as discontinued operations in the Consolidated Statements of Earnings for the three-month period ended March 31, 2008, in accordance with SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). Interest is allocated to discontinued operations based on debt to be retired and debt specifically identified as related to the respective discontinued operation.

     LPS

     On July 2, 2008 (the “spin-off date”), all of the shares of the common stock, par value $0.0001 per share, of Lender Processing Services, Inc. (“LPS”) were distributed to FIS shareholders through a stock dividend (the “spin-off”). At the time of the distribution, LPS consisted of substantially all the assets, liabilities, businesses and employees related to FIS’ Lender Processing Services segment. Upon the distribution, FIS shareholders received one-half share of LPS common stock for every share of FIS common stock held as of the close of business on June 24, 2008. The results of operations of the former LPS segment of FIS are reflected as discontinued operations in the Consolidated Statements of Earnings for the three-month period ended March 31, 2008 in accordance with SFAS 144. LPS had revenues of $452.7 million and earnings before taxes of $93.7 million for the three-month period ended March 31, 2008.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

     Certegy Australia, Ltd.

     On October 13, 2008, we sold Certegy Australia, Ltd. (“Certegy Australia”) for $21.1 million in cash and other consideration, because its operations did not align with our strategic plans. Certegy Australia had revenues of $8.0 million during the three-month period ended March 31, 2008 and (loss) earnings before taxes of ($1.9) million and $4.2 million during the three-month periods ended March 31, 2009 and 2008, respectively.

Certegy Gaming Services

     On April 1, 2008, we sold Certegy Gaming Services, Inc. (“Certegy Game”) for $25.0 million, realizing a pretax loss of $4.1 million, because its operations did not align with our strategic plans. Certegy Game had revenues of $27.2 million and earnings before taxes of $0.3 million (excluding the pretax loss realized on sale) during the three-month period ended March 31, 2008.

     FIS Credit Services

     On February 29, 2008, we sold FIS Credit Services, Inc. (“Credit”) for $6.0 million, realizing a pre-tax gain of $1.4 million, because its operations did not align with our strategic plans. Credit had revenues of $1.4 million and losses before taxes of $0.2 million (excluding the realized gain) during the three-month period ended March 31, 2008.

     Homebuilders Financial Network

     During the year ended December 31, 2008, we discontinued and dissolved Homebuilders Financial Network, LLC and its related entities (“HFN”) due to the loss of a major customer. HFN had revenues of $1.1 million and losses before taxes of ($5.4) million during the three-month period ended March 31, 2008.

(3) Related Party Transactions

     We are party to certain related party agreements described below.

     Revenues and Expenses

     A detail of related party items included in revenues for the three-month periods ended March 31, 2009 and 2008 is as follows (in millions):

		2009				2008
ABN AMRO Real card and item processing revenue		$	19.8			$	14.7
Banco Bradesco card and item processing revenue			20.9				20.9
Sedgwick data processing services revenue			10.0				9.7
FNF data processing services revenue			11.8				5.6
LPS services revenue			1.7				1.9
Total revenues		$	64.2			$	52.8

     A detail of related party items included in operating expenses (net of expense reimbursements) for the three-month periods ended March 31, 2009 and 2008 is as follows (in millions):

		2009				2008
Equipment and real estate leasing with FNF and LPS		$	4.9			$	4.6
Administrative corporate support and other services with FNF and LPS			2.0				1.8
Total expenses		$	6.9			$	6.4

     ABN AMRO Real and Banco Bradesco

     In March 2006, we entered into an agreement with ABN AMRO Real (“ABN”) and Banco Bradesco S.A. (“Bradesco”) (collectively, “banks”) to form a venture to provide comprehensive, fully outsourced card processing services to Brazilian card issuers. In exchange for a 51% controlling interest in the venture, we contributed our existing Brazilian card processing business contracts and Brazilian card processing infrastructure and committed to make enhancements to our card processing system to meet the processing needs of the banks and their affiliates. The banks executed long-term contracts to process their card portfolios with the venture in exchange for an aggregate 49% interest in the venture. Additionally, we provide item processing services to Bradesco and ABN outside of the Brazilian card processing venture.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

     Sedgwick

     We provide data processing services to Sedgwick CMS, Inc. (“Sedgwick”), a company in which Fidelity National Financial, Inc., (“FNF”) holds an approximate 32% equity interest.

     FNF

     We provide data processing services to FNF consisting primarily of infrastructure support and data center management. Our agreement with FNF runs through June 30, 2013, with an option to renew for one or two additional years, subject to certain early termination provisions (including the payment of minimum monthly service and termination fees). We also have a $6.1 million note receivable from FNF, which matures in September 2012, with interest payable at a rate of LIBOR plus 0.45% (1.88% as of March 31, 2009). We recorded interest income related to this note of less than $0.1 million and $0.2 million for the three-month periods ended March 31, 2009 and 2008. Historically, FNF has provided to us, and to a lesser extent we have provided to FNF, certain administrative support services relating to general management and administration. The pricing for these services, both to and from FNF, is at cost. We also incurred expenses for amounts paid by us to FNF under leases of certain personal property and technology equipment.

     LPS

     We provide transitional services to LPS as a result of the spin-off. In addition, we have entered into certain property management and real estate lease agreements with LPS relating to our Jacksonville corporate headquarters.

     We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties. However, the amounts we earned or that were charged under these arrangements were not negotiated at arm’s-length, and may not represent the terms that we might have obtained from an unrelated third party.

(4) Unaudited Net Earnings per Share

     The basic weighted average shares and common stock equivalents for the quarters ended March 31, 2009 and 2008 are computed in accordance with SFAS No. 128, Earnings per Share, using the treasury stock method.

     The following table summarizes the earnings per share attributable to FIS common stockholders, for the three-month periods ended March 31, 2009 and 2008 (in millions, except per share amounts):

		2009				2008
Net earnings from continuing operations attributable to FIS, net of tax		$	34.3			$	10.9
Net (loss) earnings from discontinued operations attributable to FIS, net of tax			(1.3	)			59.6
Net earnings attributable to FIS, net of tax		$	33.0			$	70.5
Weighted average shares outstanding — basic			190.0				194.5
Plus: Common stock equivalent shares assumed from conversion of options			1.6				2.0
Weighted average shares outstanding — diluted			191.6				196.5
Net earnings per share — basic from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — basic from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — basic attributable to FIS common stockholders		$	0.17			$	0.36
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — diluted from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — diluted attributable to FIS common stockholders		$	0.17			$	0.36

     Options to purchase approximately 19.0 million shares and 8.6 million shares of our common stock for the three-month periods ended March 31, 2009 and 2008, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

(5) Metavante Merger

     On March 31, 2009, FIS and Metavante Technologies, Inc. (“Metavante”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which FIS will acquire Metavante. The transaction will be structured as a tax-free reorganization whereby Metavante will be merged with and into a newly formed subsidiary of FIS (the “Merger”).

     Under the terms of the Merger Agreement, Metavante shareholders will receive a fixed exchange ratio of 1.35 (the “Exchange Ratio”) shares of FIS common stock for each share of Metavante common stock they own. In addition, outstanding Metavante stock options and other stock-based awards (other than performance shares) will be converted into stock options and other stock-based awards with respect to shares of FIS common stock using the Exchange Ratio.

     Consummation of the Merger is subject to customary conditions, including, among others, the approval of the Merger by the shareholders of Metavante, the approval of the issuance of FIS common stock in connection with the Merger by the shareholders of FIS, the receipt of required governmental approvals and expiration of applicable waiting periods, the accuracy of the representations and warranties of the other party (generally subject to a material adverse effect standard), material compliance by the other party with its obligations under the Merger Agreement, the delivery of legal opinions as to the tax treatment of the Merger, and the receipt of certain tax opinions regarding the impact of the Merger on the tax treatment of certain past transactions. Upon termination of the Merger Agreement under specified circumstances (including a superior proposal), each party is required to pay the other a termination fee of $175.0 million. The Merger is expected to be completed during the third quarter of 2009.

     In connection with the Merger Agreement, FIS entered into an Investment Agreement (the “Investment Agreement”) on March 31, 2009, with certain affiliates of Thomas H. Lee Partners, L.P. (“THL”) and FNF, pursuant to which, the Company will issue and sell (a) to THL in a private placement 12.9 million shares of common stock of the Company for an aggregate purchase price of approximately $200.0 million and (b) to FNF in a private placement 3.2 million shares of common stock of the Company for an aggregate purchase price of approximately $50.0 million. Pursuant to the terms of the Investment Agreement, the Company will pay each of THL and FNF a transaction fee equal to 3% of their respective investments.

(6) Long-Term Debt

     Long-term debt as of March 31, 2009 and December 31, 2008 consisted of the following (in millions):

		March 31,				December 31,
		2009				2008
Term Loan A, secured, interest payable at LIBOR plus 0.88% (1.44% at March 31, 2009), quarterly principal amortization, maturing January 2012		$	1,968.8			$	1,995.0
Revolving Loan, secured, interest payable at LIBOR plus 0.70% (Eurocurrency Borrowings), Fed-funds plus 0.70% (Swingline Borrowings) or Prime plus 0.00% (Base Rate Borrowings) plus 0.18% facility fee (1.16%, 0.86% or 3.25% respectively at March 31, 2009), maturing January 2012. Total of $429.0 million unused as of March 31, 2009			471.0				499.4
Other promissory notes with various interest rates and maturities			20.7				20.1
			2,460.5				2,514.5
Less current portion			(132.8	)			(105.5	)
Long-term debt, excluding current portion		$	2,327.7			$	2,409.0

     As of March 31, 2009, we have entered into the following interest rate swap transactions converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to fixed (in millions):

										Bank Pays				FIS pays
Effective Date		Termination Date				Notional Amount				Variable Rate of(1)				Fixed Rate of(2)
October 11, 2007		October 11, 2009				$	1,000.0			1 Month LIBOR					4.73	%
December 11, 2007		December 11, 2009					250.0			1 Month LIBOR					3.80	%
April 11, 2007		April 11, 2010					850.0			1 Month LIBOR					4.92	%
						$	2,100.0

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

     We have designated these interest rate swaps as cash flow hedges in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. A portion of the amount included in accumulated other comprehensive earnings is reclassified into interest expense as a yield adjustment as interest payments are made on the Term and Revolving Loans. In accordance with the provisions of SFAS No. 157, Fair Value Measurements (“SFAS 157”) the inputs used to determine the estimated fair value of our interest rate swaps are Level 2-type measurements. In accordance with SFAS 157, we considered our own credit risk when determining the fair value of our interest rate swaps. During June 2008, we terminated the $750 million interest rate swap tied to the Term Loan B that was retired during July 2008, without any significant impact to our financial position or results of operations during the period as its fair value was approximately zero on the date of termination.

     A summary of the fair value of the Company’s derivative instruments is as follows (in millions):

Liability Derivatives

March 31, 2009

December 31, 2008

Fair

Fair

Balance Sheet Location

Value

Balance Sheet Location

Value

Interest rate swap contracts

Accounts payable and accrued liabilities

$

30.7

Accounts payable and accrued liabilities

$

39.6

Interest rate swap contracts

Other long-term liabilities

38.7

Other long-term liabilities

44.6

Total derivatives designated as hedging instruments under SFAS 133

$

69.4

$

84.2

     A summary of the effect of derivative instruments on the Company’s Consolidated Statements of Earnings and loss recognized in Other Comprehensive Earnings (“OCE”) are as follows (in millions):

Amount of Loss Reclassified

Amount of Gain Recognized

from Accumulated OCE into

in OCE on Derivative

Income

Three

Three

Months

Location of Loss

Months

Derivatives in SFAS 133

Three Months

Ended

Reclassified from

Ended

Three Months

Cash Flow Hedging

Ended March

March 31,

Accumulated OCE into

March 31,

Ended March

Relationships

31, 2009

2008

Income

2009

31, 2008

Interest rate swap contracts

$

6.7

$

82.0

Interest expense

$

(21.5

)

$

(5.6

)

     Our existing cash flow hedges are highly effective and there is no current impact on earnings due to hedge ineffectiveness. It is our policy to execute such instruments with credit-worthy banks at the time of execution and not to enter into derivative financial instruments for speculative purposes. As of March 31, 2009, we believe that our interest rate swap counterparties will be able to fulfill their obligations under our agreements and we believe that we will have debt outstanding through the various expiration dates of the swaps such that the future hedge cash flows remain probable of occurring.

     Principal maturities of long-term debt at March 31, 2009 are as follows (in millions):

2009 remainder		$	80.3
2010			210.0
2011			157.5
2012			2,012.7
Total		$	2,460.5

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

     Through the eFunds Corporation (“eFunds”) acquisition on September 12, 2007, we assumed $100.0 million in long-term notes payable previously issued by eFunds (the “eFunds Notes”). On February 26, 2008, we redeemed the eFunds Notes for a total of $109.3 million, which included a make-whole premium of $9.3 million.

(7) Commitments and Contingencies

Litigation

     In the ordinary course of business, the Company is involved in various pending and threatened litigation matters related to operations, some of which include claims for punitive or exemplary damages. The Company believes that no actions, other than the matters listed below, depart from customary litigation incidental to its business. As background to the disclosure below, please note the following:

	•		These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities.
	•		The Company reviews these matters on an on-going basis and follows the provisions of Statement of Financial Accounting Standards No. 5, Accounting for Contingencies (“SFAS 5”), when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, the Company bases decisions on the assessment of the ultimate outcome following all appeals. Legal fees associated with defending these matters are expensed as incurred.

     Litigation Related to the Merger

     On April 7, 2009, a putative class action complaint was filed by a purported Metavante shareholder against Metavante, its directors, certain officers, and FIS. The complaint alleges that the Metavante directors and officers breached fiduciary duties to Metavante shareholders and that Metavante and FIS aided and abetted such breaches. The complaint seeks to enjoin the proposed Merger transaction, preliminarily and permanently, and also seeks damages, attorneys’ fees, and class certification. An amended complaint was filed on April 23, 2009, adding an additional plaintiff, but it is otherwise the same as the original complaint. The case is Lisa Repinski, et al v. Michael Hayford, et al, Milwaukee County Circuit Court Case No. 09CV5325.

     On April 24, 2009, a second putative class action containing similar allegations was filed by another purported Metavante shareholder against Metavante and its directors and certain officers. This complaint also seeks to enjoin the Merger transaction, preliminarily and permanently, and also seeks damages, attorneys’ fees, and class certification. The case is Samuel Beren v. Metavante Technologies, Inc. et al., Milwaukee County Circuit Court Case No. 09CV6315.

     On April 28, 2009, a motion was filed to consolidate the Repinski and Beren actions; that motion has not yet been decided. FIS believes these actions are without merit and intends to defend vigorously against the claims.

     McCormick, April v. Certegy Payment Recovery Services, Inc., et al.

     This is a putative class action filed during the first quarter of 2006 in the U.S. District Court for the Northern District of Texas against Certegy Payment Recovery Services, Inc. The complaint seeks damages and declaratory relief for breach of contract as well as alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), Texas Debt Collections Act, and Texas Deceptive Trade Practices Act (“TDTPA”). The Plaintiff wrote a check to a retailer that was subsequently dishonored on presentment. The dishonored check was assigned to Certegy Payment Recovery Services for recovery and collection of an associated service charge. The Plaintiff alleged that there was no authority to collect the $30 service charge on her bounced check, that the collection letters were misleading and that Certegy’s actions were oppressive. Point-of-sale signage indicated that a fee of $25 or the maximum allowed by law would be owed for any dishonored check. In addition, the check was stamped at the point-of-sale with a similar statement that the plaintiff signed. The service charge statute in Texas allows a reasonable fee of up to $30 for bounced checks. The court dismissed multiple claims arising out of the FDCPA, including all claims based on alleged misrepresentations or oppressive conduct. The only FDCPA claim remaining is Plaintiff’s claim against Certegy Payment Recovery Services under Section 808 of the FDCPA, which governs unfair debt collection practices. Certegy filed a motion to dismiss the state law claims and a motion for summary judgment as to all counts, arguing that the Plaintiff expressly agreed to pay a service charge if her check bounced. The court dismissed the declaratory

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

judgment claim and found that Certegy did not make false, deceptive or misleading representations under the TDTPA; however, the court did not dismiss the remainder of the state law claims. The Plaintiff filed a motion for class certification, and in the first quarter of 2009 the court granted that motion with respect to the FDCPA claim against Certegy Payment Recovery Services, but denied it with respect to all other claims and against all other defendants. Certegy Payment Recovery Services has appealed the decision to the 5th Circuit Court of Appeals.

   Driver’s Privacy Protection Act

     This is a putative class action lawsuit styled Richard Fresco, et al. v. Automotive Directions, Inc. et al., that was filed against eFunds and seven other non-related parties in the U.S. District Court for the Southern District of Florida during the second quarter of 2003. The complaint alleged that eFunds purchased motor vehicle records that were used for marketing and other purposes that are not permitted under the Federal Driver’s Privacy Protection Act (“DPPA”). The plaintiffs sought statutory damages, plus costs, attorney’s fees and injunctive relief. eFunds and five of the other seven defendants settled the case with the plaintiffs. That settlement was approved by the court over the objection of a group of Texas drivers and motor vehicle record holders. The plaintiffs have since moved to amend the court’s order approving the settlement in order to seek a greater attorneys’ fee award and to recover supplemental costs. In the meantime, the objectors filed two class action complaints styled Sharon Taylor, et al. v. Biometric Access Company et al. and Sharon Taylor, et al. v. Acxiom et al. in the U.S. District Court for the Eastern District of Texas during the first quarter of 2007 alleging similar violations of the DPPA. The Acxiom action was filed against the Company’s ChexSystems, Inc. subsidiary, while the Biometric suit was filed against the Company’s Certegy Check Services, Inc. subsidiary. The judge recused himself in the action against Certegy because he was a potential member of the class. The lawsuit was then assigned to a new judge and Certegy filed a motion to dismiss. The court granted Certegy’s motion to dismiss with prejudice in the third quarter of 2008. ChexSystems filed a motion to dismiss or stay its action based upon the earlier settlement and the Court granted the motion to stay pending resolution of the Florida case. The court dismissed the ChexSystems’ lawsuit with prejudice against the remaining defendants in the third quarter of 2008. The plaintiffs moved the court to amend the dismissal to exclude defendants that were parties to the Florida settlement. That motion was granted. The plaintiffs then appealed the dismissal. The plaintiffs’ appeals of the dismissals in both lawsuits are pending.

     Searcy, Gladys v. eFunds Corporation

     This is a nationwide putative class action that was originally filed against eFunds Corporation and its affiliate Deposit Payment Protection Services, Inc. in the U.S. District Court for the Northern District of Illinois during the first quarter of 2008. The complaint alleges willful violation of the Fair Credit Reporting Act (“FCRA”) in connection with the operation of the Shared Check Authorization Network (“SCAN”). Plaintiff’s principal allegation is that consumers did not receive appropriate disclosures pursuant to §1681g of the FCRA because the disclosures did not include: (i) all information in the consumer’s file at the time of the request; (ii) the source of the information in the consumer’s file; and/or (iii) the names of any persons who requested information related to the consumer’s check writing history during the prior year. The Company is vigorously defending the matter.

Indemnifications and Warranties

     The Company often indemnifies its customers against damages and costs resulting from claims of patent, copyright, or trademark infringement associated with use of its software through software licensing agreements. Historically, the Company has not made any payments under such indemnifications, but continues to monitor the conditions that are subject to the indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses when they are estimable. In addition, the Company warrants to customers that its software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such no accruals for warranty costs have been made.

(8) Segment Information

     Summarized financial information for the Company’s segments is shown in the following tables.

     As of and for the three-months ended March 31, 2009 (in millions):

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

		Financial				Payment								Corporate
		Solutions				Solutions				International				and Other				Total
Processing and services revenues		$	271.3			$	364.7			$	162.3			$	(0.5	)		$	797.8
Operating expenses			197.7				280.6				152.1				85.5				715.9
Operating income		$	73.6			$	84.1			$	10.2			$	(86.0	)			81.9
Other income (expense) unallocated																			(30.0	)
Income from continuing operations																		$	51.9
Depreciation and amortization		$	28.4			$	11.1			$	13.2			$	39.3			$	92.0
Capital expenditures		$	25.9			$	7.7			$	9.3			$	2.4			$	45.3
Total assets		$	2,891.8			$	2,220.7			$	1,358.2			$	859.0			$	7,329.7
Goodwill		$	2,096.2			$	1,677.1			$	416.8			$	—			$	4,190.1

     As of and for the three-months ended March 31, 2008 (in millions):

		Financial				Payment								Corporate
		Solutions				Solutions				International				and Other				Total
Processing and services revenues		$	280.4			$	373.3			$	176.9			$	(0.3	)		$	830.3
Operating expenses			210.9				302.4				164.7				101.1				779.1
Operating income		$	69.5			$	70.9			$	12.2			$	(101.4	)			51.2
Other income (expense) unallocated																			(37.2	)
Income from continuing operations																		$	14.0
Depreciation and amortization		$	35.5			$	14.5			$	13.4			$	39.9			$	103.3
Capital expenditures		$	25.0			$	8.7			$	41.3			$	3.3			$	78.3
Total assets		$	2,875.1			$	2,597.5			$	1,107.6			$	1,104.1			$	7,684.3
Goodwill		$	2,112.8			$	1,687.0			$	426.8			$	—			$	4,226.6

     Brazil, Germany and the U.K. accounted for the majority of the sales to non-U.S. based customers.

     Total assets at March 31, 2009 and 2008, excludes $86.7 million and $2,147.9 million, respectively, related to discontinued operations. Goodwill at March 31, 2008, excludes $1,112.1 million related to discontinued operations.

     Financial Solutions

     The Financial Solutions segment focuses on serving the processing needs of financial institutions of all sizes, commercial lenders, finance companies and other businesses. The Company’s primary software applications function as the underlying infrastructure of a financial institution’s processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts. The Company also provides a number of complementary applications and services that interact directly with the core processing applications, including applications that facilitate interactions between the Company’s financial institution customers and their clients. The Company offers applications and services through a range of delivery and service models, including on-site outsourcing and remote processing arrangements, as well as on a licensed software basis for installation on customer-owned and operated systems.

     Payment Solutions

     The Payment Solutions segment focuses on serving the payment processing and risk management needs of financial institutions, retailers and other businesses. This segment includes card issuer services, which enable banks, credit unions, and others to issue VISA and MasterCard credit and debit cards, private label cards, and other electronic payment cards for use by both consumer and business accounts. In addition, this segment provides risk management services to retailers and financial institutions. The Company offers applications and services through a range of delivery and service models, including on-site outsourcing and remote processing arrangements, as well as on a licensed software basis for installation on customer-owned and operated systems.

     International

     The International segment offers both financial solutions and payment solutions to a wide array of international financial institutions. Also, this segment includes the Company’s consolidated Brazilian card processing venture (see note 3). Included in this segment are long-term assets, excluding Goodwill and other Intangible assets, located outside of the United States totaling $391.8 million and $434.6 million at March 31, 2009 and 2008, respectively. These assets are predominantly located in Germany, Brazil, the U.K. and India.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — Continued

     Corporate and Other

     The Corporate and Other segment consists of the corporate overhead costs that are not allocated to operating segments. These include costs related to human resources, finance, legal, accounting, domestic sales and marketing and amortization of acquisition-related intangibles and other costs that are not considered when management evaluates segment performance.

Unless stated otherwise or the context otherwise requires all references to “FIS,” “we”, the “Company” or the “registrant” are to Fidelity National Information Services, Inc., a Georgia corporation.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with Item 1: Consolidated Financial Statements and the Notes thereto included elsewhere in this report. The discussion below contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. The risks and uncertainties which forward-looking statements are subject to include, without limitation: changes in general economic, business and political conditions, including changes in the financial markets; the effect of governmental regulations, including the possibility that there are unexpected delays in obtaining regulatory approvals for our merger with Metavante; the failure to obtain required transaction approvals from FIS’ and Metavante’s shareholders; the effects of our substantial leverage which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries or due to financial failures suffered by firms in those industries; failures to adapt our services to changes in technology or in the marketplace; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the document. FIS assumes no obligation to update any forward-looking statement.

     Overview

     We are one of the largest global providers of processing services to financial institutions and businesses, serving customers in over 90 countries throughout the world. We are among the market leaders in core processing, card issuing services and check point-of-sale verification and guarantee. We offer a diversified service mix, and benefit from the opportunity to cross-sell multiple services across our broad customer base. We have four reporting segments: Financial Solutions, Payment Solutions, International and Corporate and Other. A description of these segments is included in Note 8 to the Notes to Consolidated Financial Statements (Unaudited). Revenues by segment and the results of operations of our segments are discussed below in Segment Results of Operations.

     Business Trends and Conditions

     A significant portion of our revenue is derived from transaction processing fees. As a result, the number of deposit and card transactions can affect our business and thus the condition of the overall economy can have an effect on our growth. In light of current economic conditions, we are seeking to manage our costs and capital expenditures prudently. We reduced both domestic headcount and capital expenditures in 2009 from 2008 levels.

     Card transactions continue to increase as a percentage of total point-of-sale payments, which fuels continuing demand for card-related services. We continue to launch new services aimed at accommodating this demand. In recent years, we have introduced a variety of stored-value card types, Internet banking, and electronic bill presentment/payment services, as well as a number of card enhancement and loyalty/reward programs. The common goal of these offerings continues to be convenience and security for the consumer coupled with value to the financial institution. At the same time, the use of checks continues to decline as a percentage of total point-of-sale payments. We have announced that we are considering strategic alternatives for our remaining check businesses, although no assurance can be given as to whether or when any disposal transaction or other change with respect to those businesses will be accomplished.

     In many of the businesses of our Financial Solutions segment, we compete for both licensing and outsourcing business, and thus are affected by the decisions of financial institutions to utilize our services under an outsourced arrangement or to process in-house under a software license and maintenance agreement. As a provider of outsourcing solutions, we benefit from multi-year recurring revenue streams, which help moderate the effects of year to year economic changes on our results of operations. Generally, demand for outsourcing solutions has increased over time as service providers such as us realize economies of scale and improve their ability to provide services that improve customer efficiencies and reduce costs.

     Consolidation within the banking industry may be beneficial or detrimental to our businesses. When consolidations occur, merger partners often operate disparate systems licensed from competing service providers. The newly formed entity generally makes a determination to migrate its core systems to a single platform. When a financial institution processing client is involved in a consolidation, we may benefit by expanding the use of our services if such services are chosen to survive the consolidation and support the newly combined entity. Conversely, we may lose market share if a customer of ours is involved in a consolidation and our services are not chosen to survive the consolidation and support the newly combined entity. While it is difficult to mitigate the risks of consolidations, we seek to do so through offering competitive services and trying to take advantage of situations on a case by case basis depending on the specific opportunities at the combined company.

     We believe that we are in the midst of one of the most difficult times that has ever existed for financial institutions, retailers and other businesses in the United States and internationally. We expect there to be a significant number of bank failures in the next few years, which may be offset to a degree by somewhat decreased bank acquisition activity. However, we believe that our potential exposure to bank failures and forced government actions that have occurred to date is less than one percent of our revenues. Additionally, this exposure does not consider any incremental revenues we may generate from potential license fees or service associated with assisting surviving institutions with integrating acquired assets resulting from financial failures. In the current economy, we believe customers may turn more to outsourcing as a means to reduce fixed costs and gain a competitive edge. However, although we have lately seen an increase in requests for outsourcing proposals, it is not yet certain how many of these requesting financial institutions will move forward with their potential projects given current economic conditions. Financial institutions may defer upgrades or other outsourcing projects until conditions improve. We believe that software sales and to a lesser degree professional services will be the most at risk as far as purchases that financial institutions may defer, because in general they tend to be more discretionary than outsourcing projects. The software sales and professional services represented approximately 14% of our revenues during the year ended December 31, 2008. We are addressing the foregoing trends and business conditions in part by managing our costs and capital expenditures, as described above, and by ensuring that the pricing and quality of our services continue to deliver value for our existing and potential customers.

     While we believe that we are well positioned to withstand the current financial crisis, there are factors outside our control that might impact our operating results that we may not be able to fully anticipate as to timing and severity, including but not limited to adverse effects if banks are nationalized, continued global economic conditions worsen, causing further slowdowns in consumer spending and lending, and the impact on our ability to access capital should any of our lenders fail.

     Critical Accounting Policies

     There have been no significant changes to our critical accounting policies since our Form 10-K was filed on February 27, 2009, as amended by our Form 10-K/A filed on March 10, 2009.

     Transactions with Related Parties

     We are a party to certain historical related party agreements, which are more particularly described in Note 3 to the Notes to Consolidated Financial Statement.

     Discontinued Operations

     During 2008, we discontinued certain operations in our former Transaction Processing Services and Lender Processing Services segments, which are reported as discontinued operations in the Consolidated Statements of Earnings for the three-month periods ended March 31, 2009 and 2008, in accordance with SFAS 144. See Note 2 to the Notes to Consolidated Financial Statements for a detailed description of discontinued operations.

     Factors Affecting Comparability

     On July 2, 2008, we completed the LPS spin-off. The results of operations of the Lender Processing Services segment through the July 2, 2008 spin-off date are reflected as discontinued operations in the Consolidated Statements of Earnings, in accordance with SFAS 144, for all periods presented.

     As a result of the above transaction, the results of operations in the periods covered by the Consolidated Financial Statements may not be directly comparable.

Comparisons of three-month periods ended March 31, 2009 and 2008

Consolidated Results of Operations (Unaudited)

		2009				2008
		(In millions, except per share
		amounts)
Processing and services revenues		$	797.8			$	830.3
Cost of revenues			594.3				648.7
Gross profit			203.5				181.6
Selling, general, and administrative expenses			99.0				111.1
Research and development costs			22.6				19.3
Operating income			81.9				51.2
Other income (expense):
Interest income			0.8				2.8
Interest expense			(32.0	)			(38.8	)
Other income (expense), net			1.2				(1.2	)
Total other income (expense)			(30.0	)			(37.2	)
Earnings from continuing operations before income taxes			51.9				14.0
Provision for income taxes			17.9				3.3
Earnings from continuing operations, net of tax			34.0				10.7
(Losses) earnings from discontinued operations, net of tax			(1.3	)			59.6
Net earnings			32.7				70.3
Net loss attributable to noncontrolling interest			0.3				0.2
Net earnings attributable to FIS		$	33.0			$	70.5
Net earnings per share — basic from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — basic from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — basic attributable to FIS common stockholders		$	0.17			$	0.36
Weighted average shares outstanding — basic			190.0				194.5
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders		$	0.18			$	0.06
Net earnings per share — diluted from discontinued operations attributable to FIS common stockholders			(0.01	)			0.30
Net earnings per share — diluted attributable to FIS common stockholders		$	0.17			$	0.36
Weighted average shares outstanding — diluted			191.6				196.5
Amounts attributable to FIS common stockholders:
Net earnings from continuing operations, net of tax		$	34.3			$	10.9
(Loss) earnings from discontinued operations, net of tax			(1.3	)			59.6
Net earnings		$	33.0			$	70.5

     Processing and Services Revenues

     Processing and services revenues totaled $797.8 million and $830.3 million for the three-month periods ended March 31, 2009 and 2008, respectively. The decrease in revenue during the 2009 period of $32.5 million, or 3.9% as compared to 2008 is primarily attributable to the impact of unfavorable foreign currency adjustments resulting from a strengthening of the U.S. dollar. Excluding the impact of unfavorable foreign currency adjustments, our International revenue growth was offset by declines in Financial Solutions and Payment Solutions segment revenues.

     Cost of Revenues

     Cost of revenues totaled $594.3 million and $648.7 million for the three-month periods ended March 31, 2009 and 2008, respectively, resulting in gross profit of $203.5 million and $181.6 million in the 2009 and 2008 periods, respectively. Gross profit as a percentage of revenues (“gross margin”) was 25.5% and 21.9% in the 2009 and 2008 periods, respectively. The decrease in cost of revenues of $54.4 million in the 2009 period as compared to the 2008 period is directly attributable to the decrease in revenue across our three operating segments. The increase in gross margin of 3.6% for 2009 over 2008 period was driven by cost reduction activities and improved operating efficiency.

     Selling, General and Administrative Expenses

     Selling, general and administrative expenses totaled $99.0 million and $111.1 million for the three-month periods ended March 31, 2009 and 2008, respectively. The decrease of $12.1 million in 2009 as compared to the 2008 period primarily related to higher stock compensation costs, and charges associated with the LPS spin-off in the 2008 period, partially offset by merger-related charges during the 2009 period. Stock-based compensation decreased from $24.9 million in 2008 to $9.5 million in 2009 mainly attributable to charges of $14.1 million for the accelerated vesting of all stock awards held by eFunds employees assumed in the eFunds acquisition. The 2009 period included $7.3 million in merger-related charges while the 2008 period included $2.9 million in charges associated with the spin-off of LPS.

     Research and Development Costs

     Research and development costs totaled $22.6 million and $19.3 million for the three-month periods ended March 31, 2009 and 2008, respectively. The increase in research and development costs for 2009 as compared to the 2008 period results from the determination of which costs are capitalized based on the nature of the projects underway in the respective periods, pursuant to SFAS No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed.

     Operating Income

     Operating income totaled $81.9 million and $51.2 million for the three-month periods ended March 31, 2009 and 2008, respectively. Operating income as a percentage of revenue (“operating margin”) was 10.3% and 6.2% for the 2009 and 2008 periods, respectively. The increase in operating margin for 2009 as compared to 2008 is attributable to the decreased stock compensation costs, restructuring and integration charges, and charges associated with the LPS spin-off noted previously and the impact of cost-containment activities, as well as improved operating efficiency.

     Interest Expense

     Interest expense totaled $32.0 million and $38.8 million for the three-month periods ended March 31, 2009 and 2008, respectively. The decrease of $6.8 million in interest expense in 2009 as compared to the 2008 period results from the favorable decrease in borrowing rates under our credit facility.

     Provision for Income Taxes

     Income tax expense from continuing operations totaled $17.9 million and $3.3 million for the three-month periods ended March 31, 2009 and 2008, respectively. This resulted in an effective tax rate on continuing operations of 34.5% and 23.6% for the three-month periods ended March 31, 2009 and 2008, respectively. The increase in tax expense for the 2009 period as compared to the 2008 period is attributable to increased operating income in the 2009 period. The increase in the 2009 overall effective tax rate is primarily related to the impact of the LPS spin-off in 2008.

     Net Earnings from Continuing Operations Attributable to FIS Common Stockholders

     Net earnings from continuing operations attributable to FIS common stockholders totaled $34.3 million and $10.9 million for the three-month periods ended March 31, 2009 and 2008, respectively, or $0.18 and $0.06 per diluted share, respectively, due to the factors described above.

     Segment Results of Operations (Unaudited)

Financial Solutions

(in millions)

		Three Months Ended
		March 31,
		2009				2008
Processing and services revenues		$	271.3			$	280.4
Operating income		$	73.6			$	69.5

     Revenues for the Financial Solutions segment totaled $271.3 million and $280.4 million for the three-month periods ended March 31, 2009 and 2008, respectively. The overall segment decrease of $9.1 million in 2009 as compared to the 2008 period resulted primarily from lower software license and professional services revenue, partially offset by increased demand in risk management and higher commercial outsourcing services revenue.

     Operating income for the Financial Solutions segment totaled $73.6 million and $69.5 million for the three-month periods ended March 31, 2009 and 2008, respectively. Operating margin was approximately 27.1% and 24.8% for the three-month periods ended March 31, 2009 and 2008, respectively. The increase in 2009 as compared to 2008 period primarily resulted from increased operating margins due to targeted cost reductions.

Payment Solutions
(in millions)

		Three Months Ended
		March 31,
		2009				2008
Processing and services revenues		$	364.7			$	373.3
Operating income		$	84.1			$	70.9

     Revenues for the Payment Solutions segment totaled $364.7 million and $373.3 million for the three-month periods ended March 31, 2009 and 2008, respectively. The overall segment decrease of $8.6 million in 2009 as compared to 2008 period resulted primarily from a $9.7 million decline in the Company’s retail check guarantee business. Excluding Check Services’ revenue from both periods, Payment Solutions revenue increased 0.4% as growth in debit processing, cardholder support and printing services was offset by declines in prepaid, merchant and item processing activity.

     Operating income for the Payment Solutions segment totaled $84.1 million and $70.9 million for the three-month periods ended March 31, 2009 and 2008, respectively. Operating margin was approximately 23% and 19% for the three-month periods ended March 31, 2009 and 2008, respectively. The increase in 2009 as compared to 2008 period primarily resulted from increased operating margins efficiencies and targeted cost reductions.

International
(in millions)

		Three Months Ended
		March 31,
		2009				2008
Processing and services revenues		$	162.3			$	176.9
Operating income		$	10.2			$	12.2

     Revenues for the International segment totaled $162.3 million and $176.9 million for the three-month periods ended March 31, 2009 and 2008, respectively. The overall segment decrease of $14.6 million in 2009 as compared to 2008 period resulted primarily from unfavorable currency effects of $34.9 million. Excluding the impact of unfavorable foreign currency, consolidated revenue increased 11.5% in constant currency driven by growth in core processing in Europe and transaction volumes in Brazil.

     Operating income for the International segment totaled $10.2 million and $12.2 million for the three-month periods ended March 31, 2009 and 2008, respectively. Operating margin was approximately 6% and 7% for the three-month periods ended March 31, 2009 and 2008, respectively. The decrease in operating income in 2009, as compared to the 2008 period primarily results from unfavorable currency impact of $1.7 million. The International margin of 6% was comparable to the prior period.

     Corporate and Other

     The Corporate and Other segment results consist of selling, general and administrative expenses and depreciation and intangible asset amortization not otherwise allocated to the reportable segments. Corporate and Other expenses were $86.0 million and $101.4 million for the three-month periods ended March 31, 2009 and 2008, respectively. The overall Corporate and Other decrease of $15.4 million for 2009 as compared to the 2008 period is attributable to a reduction in stock compensation expense, incremental restructuring and integration charges and costs associated with the LPS spin-off. Stock-based compensation decreased from $24.9 million in 2008 to $9.5 million in 2009 mainly attributable to charges of $14.1 million for the accelerated vesting of all stock awards held by eFunds employees assumed in the eFunds acquisition.

Liquidity and Capital Resources

     Cash Requirements

     Our cash requirements include cost of revenues, selling, general and administrative expenses, income taxes, debt service payments, capital expenditures, systems development expenditures, stockholder dividends, and business acquisitions. Our principal sources of funds are cash generated by operations and borrowings.

     At March 31, 2009, we had cash on hand of $272.0 million and debt of approximately $2,460.5 million, including the current portion. Of the $272.0 million cash on hand, approximately $210.7 million is held by our operations in foreign jurisdictions. We expect that cash flows from operations over the next twelve months will be sufficient to fund our operating cash requirements and pay principal and interest on our outstanding debt absent any unusual circumstances such as acquisitions or adverse changes in the business environment. The proposed Merger with Metavante is not expected to have a significant immediate impact on cash operating requirements.

     We currently pay a $0.05 dividend on a quarterly basis, and expect to continue to do so in the future. The declaration and payment of future dividends is at the discretion of the Board of Directors and depends on, among other things, our investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions. Additionally, the payment of cash dividends may be limited by covenants in certain debt agreements. A regular quarterly dividend of $0.05 per common share was paid on March 30, 2009 to shareholders of record as of the close of business on March 16, 2009.

   Cash Flows from Operations

     Cash flows from operations were $162.9 million and $168.2 million for the three-month periods ended March 31, 2009 and 2008, respectively. Cash flows from operations in 2008 include cash flows from LPS of $139.7 million. Excluding the impact of LPS in 2008, cash flows from operations increased by $134.4 million due to higher earnings and better working capital management during the three months ended March 31, 2009.

   Capital Expenditures

     Our principal capital expenditures are for computer software (purchased and internally developed) and additions to property and equipment. We spent approximately $45.3 million and $89.6 million on capital expenditures during the three-month periods ended March 31, 2009 and 2008, including approximately $11.3 million during the 2008 period related to discontinued operations including LPS prior to the spin-off. In 2009, we expect to spend approximately 5% to 7% of 2009 revenue on capital expenditures.

     Financing

     On January 18, 2007, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender, and Letter of Credit Issuer, Bank of America, N.A., as Swing Line Lender, and other financial institutions party thereto (the “Credit Agreement”). The Credit Agreement replaced our prior term loans and revolver as well as a $100 million settlement facility. The Credit Agreement, which became secured as of September 12, 2007, provides for a committed $2.1 billion five-year term facility denominated in U.S. Dollars (the “Term Loan A”) and a committed $900 million revolving credit facility (the “Revolving Loan”) with a sublimit of $250 million for letters of credit and a sublimit of $250 million for swing line loans, maturing on the fifth anniversary of the closing date, January 18, 2012 (the “Maturity Date”). The Revolving Loan is bifurcated into a $735 million multicurrency revolving credit loan (the “Multicurrency Tranche”) that can be denominated in any combination of U.S. Dollars, Euro, British Pounds Sterling and Australian Dollars, and any other foreign currency in which the relevant lenders agree to make advances and a $165 million U.S. Dollar revolving credit loan that can be denominated only in U.S. Dollars. The swingline loans and letters of credit are available as a sublimit under the Multicurrency Tranche. In addition, the Credit Agreement originally provided for an uncommitted incremental loan facility in the maximum principal amount of $600 million, which would be made available only upon receipt of further commitments from lenders under the Credit Agreement sufficient to fund the amount requested by us. On July 30, 2007, we, along with the requisite lenders, executed an amendment to the existing Credit Agreement to facilitate our acquisition of eFunds. The amendment permitted the issuance of up to $2.1 billion in additional loans, an increase from the foregoing $600 million. The amendment became effective September 12, 2007. On September 12, 2007, we entered into a joinder agreement to obtain a secured $1.6 billion tranche of term loans denominated in U.S. Dollars (the “Term Loan B”) under the Credit Agreement, utilizing $1.6 billion of the $2.1 billion uncommitted incremental loan amount. The Term Loan B proceeds were used to finance the eFunds Acquisition, and pay related fees and expenses. On July 2, 2008, we completed the spin-off of our former Lender Processing Services segment into a separate publicly traded company, Lender Processing Services, Inc., referred to as LPS. In conjunction with the LPS spin-off, we immediately retired the outstanding $1,585.0 million principal balance of the Term Loan B. Debt issuance costs of $8.2 million are capitalized as of March 31, 2009. The $12.4 million remaining balance of Term Loan B debt issuance costs were written-off during July 2008 in conjunction with the LPS spin-off and retirement of the Term Loan B.

     As of March 31, 2009, the Term Loan A balance was $1,968.8 million and a total of $471.0 million was outstanding under the Revolving Loan. The obligations under the Credit Agreement have been jointly and severally, unconditionally guaranteed by certain of our domestic subsidiaries. Additionally, we and certain subsidiary guarantors pledged certain equity interests in other entities (including certain of our direct and indirect subsidiaries) as collateral security for the obligations under the credit facility and the guarantee.

     We may borrow, repay and re-borrow amounts under the Revolving Loan from time to time until the maturity of the Revolving Loan. We must make quarterly principal payments under the Term Loan A in scheduled installments of: (a) $26.3 million per quarter from March 31, 2009 through December 31, 2009; and (b) $52.5 million per quarter from March 31, 2010 through September 30, 2011, with the remaining balance of approximately $1.5 billion payable on the Maturity Date.

     In addition to the scheduled principal payments, the Term Loan is (with certain exceptions) subject to mandatory prepayment upon the occurrence of certain events. There were no mandatory prepayments owed for the period ended March 31, 2009. Voluntary prepayment of the Loan is generally permitted at any time without fee upon proper notice and subject to a minimum dollar requirement. Commitment reductions of the Revolving Loan are also permitted at any time without fee upon proper notice. The Revolving Loan has no scheduled principal payments, but it will be due and payable in full on the Maturity Date.

     The outstanding balance on the Loans bears interest at a floating rate, which is an applicable margin plus, at our option, either (a) the Eurocurrency (LIBOR) rate or (b) either (i) the federal funds rate or (ii) the prime rate. The applicable margin is subject to adjustment based on a leverage ratio (our total indebtedness to our consolidated total EBITDA in our consolidated subsidiaries, as further defined in the Credit Agreement). Alternatively, we have the ability to request the lenders to submit competitive bids for one or more advances under the Revolving Loan.

     The Credit Agreement contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limits on the creation of liens, limits on the incurrence of indebtedness, restrictions on investments and dispositions, a prohibition on the payment of dividends and other restricted payments if an event of default has occurred and is continuing or would result therefrom, a minimum interest coverage ratio and a maximum leverage ratio. Upon an event of default, the Administrative Agent can accelerate the maturity of the Loans. Events of default include conditions customary for such an agreement, including failure to pay principal and interest in a timely manner and breach of certain covenants. These events of default include a cross-default provision that permits the lenders to declare the Credit Agreement in default if (i) we fail to make any payment after the applicable grace period under any indebtedness with a principal amount in excess of $150 million or (ii) we fail to perform any other term under any such indebtedness, as a result of which the holders thereof may cause it to become due and payable prior to its maturity. We were in compliance with all covenants related to the Credit Agreement at March 31, 2009.

     As of March 31, 2009, one financial institution that was a party to our credit facility failed, thereby reducing the amount available to us under our credit facility by an immaterial amount. No other financial institutions that were a party to our credit facility or our interest rate swap agreements have failed to date. We continue to monitor the financial stability of our counterparties on an ongoing basis. The lenders under our credit facility are a diversified set of financial institutions both domestic and international. Concentration has increased due to recent consolidation with the top 10 lenders thereunder having about 60% of the overall facility. The loss of any single participant would not adversely impact our ability to fund operations. The revolving facility is bifurcated into two tranches each with a distinct group of lenders and we retain capacity under both tranches. If the single largest lender were to default under the terms of the credit agreement, the maximum loss of liquidity on the undrawn portion of the revolver would be about $59.6 million.

     As of March 31, 2009, we have entered into interest rate swap transactions converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to fixed (see Item 3).

   Contractual Obligations

     Our contractual obligations have not changed materially from the table included in our Form 10-K as filed on February 27, 2009, as amended by our Form 10-K/A filed on March 10, 2009.

   Off-Balance Sheet Arrangements

     FIS does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

     In April 2009, the FASB issued FASB Staff Position (FSP) FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the “other-than-temporary” impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP is effective for interim and annual reporting periods ending after June 15, 2009. This FSP is not anticipated to have a material impact on the Company’s financial position or results of operations.

     In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends Accounting Principles Board (APB) Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June 15, 2009. This FSP will not impact the consolidated financial results as it is disclosure-only in nature.

     In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141(R)”), requiring an acquirer in a business combination to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their fair values at the acquisition date, with limited exceptions. The costs of the acquisition and any related restructuring costs will be recognized separately. When the fair value of assets acquired exceeds the fair value of consideration transferred plus any noncontrolling interest in the acquiree, the excess will be recognized as a gain. Under SFAS 141(R), all business combinations will be accounted for prospectively by applying the acquisition method, including combinations among mutual entities and combinations by contract alone. In April 2009, the FASB issued FSP 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This FSP amends and clarifies the initial recognition and measurement, subsequent measurement and accounting, and related disclosures arising from contingencies in a business combination under SFAS 141(R). Assets and liabilities arising from contingencies in a business combination are to be recognized at their fair value on the acquisition date if fair value can be determined during the measurement period. If fair value cannot be determined, the existing guidance for contingencies in SFAS 5, Accounting for Contingencies, and other authoritative literature should be followed. Both SFAS 141(R) and FSP 141(R)-1 are effective for periods beginning on or after December 15, 2008, and will apply to business combinations occurring after the effective date. The Company will apply their provisions to business combinations subsequent to December 31, 2008.

     In April 2009, the FASB issued FSP 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This FSP provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, and is to be applied prospectively. Management does not anticipate a material impact on the Company’s financial position or results of operations as a result of adopting this FSP.

Item 3. Quantitative and Qualitative Disclosure About Market Risks

Market Risk

     We are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates. On a limited basis, we use certain derivative financial instruments, including interest rate swaps, to manage interest rate risk. We do not use derivatives for trading purposes, to generate income or to engage in speculative activity.

Interest Rate Risk

     At the present time, our only material market risk-sensitive instruments are our debt and related interest rate swaps. We have issued debt that bears interest at floating rates. We use interest rate swaps for the purpose of controlling interest expense by managing the mix of fixed and floating rate debt. We do not seek to make a profit from changes in interest rates. We manage interest rate sensitivity by measuring potential increases in interest expense that would result from a probable change in interest rates. When the potential increase in interest expense exceeds an acceptable amount, we reduce risk through the purchase of derivatives.

     As of March 31, 2009, we are paying interest on our Revolving Loan at LIBOR plus 0.70% and on our Term Loan A at LIBOR plus 0.88%. A one percent increase in the LIBOR rate would increase our annual debt service under our Credit Agreement, after we calculate the impact of our interest rate swaps, by $3.6 million (based on principal amounts outstanding at March 31, 2009). We performed the foregoing sensitivity analysis based on the principal amount of our floating rate debt as of March 31, 2009, less the principal amount of such debt that was then subject to an interest rate swap converting such debt into fixed rate debt. This sensitivity analysis is based solely on the principal amount of such debt as of March 31, 2009 and does not take into account any changes that

occurred in the prior 12 months or that may take place in the next 12 months in the amount of our outstanding debt or in the notional amount of outstanding interest rate swaps in respect of our debt. Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year. For comparison purposes, based on principal amounts outstanding as of March 31, 2008, and calculated in the same manner as set forth above, a 1% change in the LIBOR rate would have increased our annual debt service, after we calculate the impact of our interest rate swaps, by $7.8 million.

     As of March 31, 2009, we have entered into the following interest rate swap transactions converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to fixed (in millions):

Bank Pays

FIS pays

Effective Date

Termination Date

Notional Amount

Variable Rate of(1)

Fixed Rate of(2)

October 11, 2007

October 11, 2009

$

1,000.0

1 Month LIBOR

4.73%

December 11, 2007

December 11, 2009

250.0

1 Month LIBOR

3.80%

April 11, 2007

April 11, 2010

850.0

1 Month LIBOR

4.92%

$

2,100.0

Foreign Currency Risk

     We have no material market risk sensitive instruments that are exposed to foreign currency exchange risks. Our exposure to foreign currency exchange risks arises instead from our non-U.S. operations generally, to the extent they are conducted in local currency. Changes in foreign currency exchange rates affect translations of revenues denominated in currencies other than U.S. Dollars. Our international operations generated approximately $162.3 million in revenues in the 2009 period, of which approximately $128.3 million was denominated in currencies other than the U.S. Dollar. The major currencies that we are exposed to are the Brazilian Real, the Euro and the British Pound Sterling. A 10% move in average exchange rates for these currencies (assuming a simultaneous and immediate 10% change in all of such rates for the relevant period) would have had the following effects on our reported revenues for the three months ended March 31, 2009 and the three months ended March 31, 2008 (in millions):

		Three Months Ended March 31,
		2009				2008
Currency
Real		$	5.4			$	5.4
Euro			4.6				4.5
Pound Sterling			1.3				3.1
Total Impact		$	11.3			$	13.0

     The impact on earnings of the foregoing assumed 10% change in each of the periods presented would have been negligible.

     We do not have an established policy or procedure to manage foreign exchange rate risk at this time. As our international operations grow, we will evaluate the need to implement foreign exchange rate risk management policies, and we are currently analyzing our operations and related foreign currency risk. If a policy were established to manage foreign exchange rate risk, we would consider hedging both fair value and cash flow exposures using derivatives such as foreign currency forward contracts, collars and other types of option contracts to minimize foreign exchange rate risk.

Item 4. Controls and Procedures

     As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is: (a) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms; and (b) accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

     There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II: OTHER INFORMATION

Item 1. Legal Proceedings

     See discussion of Litigation in Note 7 to the consolidated financial statements included in Item 1 of Part I of this Report, which is incorporated by reference into this Part II, Item 1.

Item 1A. Risk Factors

     There have been no material changes in the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2008, other than as described below.

We may fail to realize the anticipated cost savings and other financial benefits of the Merger with Metavante on the anticipated schedule, if at all.

     To achieve the planned financial benefits of the Merger, FIS will need to successfully integrate Metavante’s operations into its own in a timely and efficient manner and will need to execute transitional matters successfully, including integrating new members of FIS management and the retention of key Metavante personnel. Currently, each company operates as an independent public company. Achieving the anticipated cost savings and financial benefits of the Merger will depend in part upon whether FIS integrates Metavante’s businesses in an efficient and effective manner. There can be no assurance that FIS will be able to accomplish this integration process smoothly or successfully. In addition, the integration of certain operations will require the dedication of significant management resources, which will compete for management’s attention with management of the day-to-day business of the combined company. Any inability to realize the full extent of, or any of, the anticipated cost savings and financial benefits of the Merger, as well as any delays encountered in the integration process, could have an adverse effect on the business and results of operations of the combined company, which may affect the market price of FIS common stock.

The Merger is subject to the receipt of consents and approvals from government entities. Such approvals may not be obtained or may impose conditions that could have an adverse effect on the combined company following the Merger.

     Completion of the Merger is conditioned upon the receipt of certain governmental approvals, including the expiration or termination of the applicable waiting period under the HSR Act. Although FIS and Metavante have agreed in the Merger Agreement to use their reasonable best efforts to obtain the requisite governmental approvals, there can be no assurance that these approvals will be obtained. In addition, the governmental authorities from which these approvals are required may impose conditions on the completion of the Merger or require changes to the terms of the Merger. Although FIS and Metavante do not currently expect that any such conditions or changes would be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the Merger or imposing additional costs on or limiting the revenues of FIS following the Merger. In addition, under the terms of the Merger Agreement, neither party is obligated to complete the Merger if any such condition or change would reasonably be expected to have a material adverse effect (as measured on a scale relative to Metavante) on either party or the surviving company in the Merger.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the three-month period ended March 31, 2009.

Item 6. Exhibits

     (a) Exhibits:

	10.1		Contribution and Distribution Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc. (1)
	10.2		Tax Disaffiliation Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.
	10.3		Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32.2		Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 6, 2009		Fidelity National Information Services, Inc.
		By:		/s/ GEORGE P. SCANLON   George P. Scanlon
				Executive Vice President and Chief Financial Officer
				(Principal Financial Officer and Principal Accounting Officer)

FIDELITY NATIONAL INFORMATION SERVICES, INC.

FORM 10-Q

INDEX TO EXHIBITS

     The following documents are being filed with this Report:

Exhibit
No.		Description
10.1		Contribution and Distribution Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc. (1)
10.2		Tax Disaffiliation Agreement, dated as of July 2, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.
10.3		Lease Agreement, dated as of June 13, 2008, between Lender Processing Services, Inc. and Fidelity National Information Services, Inc.
31.1		Certification of Lee A. Kennedy, Chief Executive Officer of Fidelity National Information Services, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of George P. Scanlon, Chief Financial Officer of Fidelity National Information Services, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Lee A. Kennedy, Chief Executive Officer of Fidelity National Information Services, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of George P. Scanlon, Chief Financial Officer of Fidelity National Information Services, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 10.1

 

CONTRIBUTION AND DISTRIBUTION AGREEMENT

between

FIDELITY NATIONAL INFORMATION SERVICES, INC.

and

LENDER PROCESSING SERVICES, INC.

dated as of June 13, 2008

 

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		ii
SECTION 1.1. Definitions		ii
SECTION 1.2. Interpretation		vii
ARTICLE II THE ASSET CONTRIBUTION, THE DISTRIBUTION AND THE DEBT EXCHANGE		viii
SECTION 2.1. Asset Contribution, Assumption of Liabilities and Delivery of Shares and Notes		viii
SECTION 2.2. Asset Contribution Deliverables; Distribution Date Deliverables		viii
SECTION 2.3. Spin-off			x
SECTION 2.4. Debt Exchange			x
ARTICLE III NO REPRESENTATIONS AND WARRANTIES		xi
SECTION 3.1. No Representations and Warranties		xi
SECTION 3.2. No Warranty Regarding Transition License		xi
ARTICLE IV ACCESS TO INFORMATION AND RECORDS		xii
SECTION 4.1. Access to Information		xii
SECTION 4.2. Restrictions on Disclosure of Information		xiv
SECTION 4.3. Record Retention		xv
SECTION 4.4. Production of Witnesses		xvi
SECTION 4.5. Other Agreements Regarding Access to Information		xvi
ARTICLE V ADDITIONAL AGREEMENTS		xvi
SECTION 5.1. Performance		xvi

		Page
SECTION 5.2. Insurance Matters		xvi
SECTION 5.3. Reasonable Best Efforts		xviii
SECTION 5.4. Public Announcements		xviii
SECTION 5.5. Related Party Agreements		xix
SECTION 5.6. Intercompany Obligations		xix
SECTION 5.7. Tax Matters		xix
ARTICLE VI TRANSITION LICENSE OF CERTAIN INTELLECTUAL PROPERTY		xix
SECTION 6.1. Grant of Transition License for Use of Certain FIS Marks		xix
(a) Grant of License		xix
(b) License Restrictions and Limitations		xix
(c) Quality Control		xx
(d) Sublicense Limitations		xx
(e) Inconsistency with Related Party Agreements		xxi
SECTION 6.2. Alterations and Variations		xxi
SECTION 6.3. Ownership		xxi
SECTION 6.4. Enforcement; Infringement		xxi
SECTION 6.5. Termination Prior to the Transition License Expiration Date		xxi
(a) Termination as a result of Disaffiliation		xxi
(b) Termination for Insolvency		xxii
(c) Transition Upon Termination		xxii
(d) Abandonment		xxiii
(e) Transition License Survival		xxiii
SECTION 6.6. Unauthorized Use		xxiii
ARTICLE VII INDEMNIFICATION		xxiii
SECTION 7.1. Indemnification by LPS		xxiii
SECTION 7.2. Indemnification by FIS		xxiv
SECTION 7.3. Claim Procedure		xxv
(a) Claim Notice		xxv
(b) Response to Notice of Claim		xxv

		Page
(c) Contested Claims		xxv
(d) Third Party Claims		xxv
SECTION 7.4. Contribution		xxvi
SECTION 7.5. Limitations		xxvii
(a) Insurance Proceeds; Third Party Coverage		xxvii
(b) Other Agreements		xxvii
(c) Certain Damages Not Indemnified		xxviii
(d) Successors and Assigns		xxviii
(e) Payments Made on After-Tax Basis		xxviii
ARTICLE VIII GENERAL PROVISIONS		xxviii
SECTION 8.1. Governing Law		xxviii
SECTION 8.2. Jurisdiction and Venue; Waiver of Jury Trial		xxix
SECTION 8.3. Dispute Resolution		xxix
(a) Amicable Resolution		xxix
(b) Mediation		xxix
(c) Arbitration		xxx
(d) Non-Exclusive Remedy		xxx
(e) Commencement of Dispute Resolution Procedure		xxxi
SECTION 8.4. Notices		xxxi
SECTION 8.5. Binding Effect and Assignment		xxxii
SECTION 8.6. Severability		xxxii
SECTION 8.7. Entire Agreement		xxxii
SECTION 8.8. Counterparts		xxxiii
SECTION 8.9. Expenses		xxxiii
SECTION 8.10. Amendment		xxxiii
SECTION 8.11. Waiver		xxxiii
SECTION 8.12. Construction of Agreement		xxxiii
SECTION 8.13. Transition License General Terms		xxxiv
(a) Relationship of the Parties		xxxiv
(b) Title 11		xxxiv
(c) UN Convention Disclaimed		xxxiv
(d) Effectiveness		xxxiv
SECTION 8.14. Termination		xxxiv

EXHIBITS AND SCHEDULES

Exhibit A		Form of LPS Term A Notes
Exhibit B		Form of LPS Term B Notes
Exhibit C		Form of LPS Bond Indebtedness
Exhibit D		Form of Assignment and Bill of Sale
Exhibit E		Form of Assumption Agreement
Schedule I		List of Subject Companies
Schedule 2.2(a)		Transferred Employee Employment Agreements (1)
Schedule 5.5		Related Party Agreements
Schedule 5.6		Repayment of Intercompany Obligations
Schedule 7.1(a)		Liabilities Requiring Indemnification (1)

CONTRIBUTION AND DISTRIBUTION AGREEMENT

          CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as of June 13, 2008 (this “Agreement”), between Fidelity National Information Services, Inc., a Georgia corporation (“FIS”), and Lender Processing Services, Inc., a Delaware corporation (“LPS”).

          WHEREAS, the Board of Directors of FIS has determined that it is in the best interests of FIS and its stockholders to separate its lender processing services business and to distribute ownership of the lender processing services business to the stockholders of FIS as a dividend; and

          WHEREAS, FIS owns, directly or indirectly, (i) that percentage of the issued and outstanding shares of capital stock or other equity securities or ownership interests set forth on Schedule I (the “Subject Securities”) of the entities listed on Schedule I (the “Subject Companies”) and (ii) the Other Assets (as hereinafter defined), which Subject Securities and Other Assets constitute all of the material properties, assets and rights that primarily relate to, arise out of or are held in connection with the lender processing services business currently conducted by FIS and its Subsidiaries; and

          WHEREAS, FIS desires to contribute to LPS all of the Subject Securities and all of the Other Assets (collectively, the “Asset Contribution”) in exchange for (i) the issuance by LPS to FIS of the LPS Shares (as hereinafter defined) and the LPS Notes (as hereinafter defined) and (ii) the assumption by LPS of the Assumed Liabilities (as hereinafter defined); and

          WHEREAS, the board of directors of FIS has approved (i) the Asset Contribution in exchange for the LPS Shares and the LPS Notes, (ii) the distribution, following the Asset Contribution, of all of the shares of LPS Common Stock held by FIS to the holders of the outstanding shares of capital stock of FIS as of the Record Date (as defined herein) for such distribution (the “Spin-off”), and (iii) in connection with the Spin-off, the exchange by FIS of the LPS Notes for a like amount of FIS’s existing indebtedness consisting of the Tranche B Term Loans issued under the FIS 2007 Credit Agreement (as defined herein) (the “Debt Exchange”); and

          WHEREAS, the board of directors of LPS has approved the issuance of the LPS Shares and the LPS Notes, as well as assumption by LPS of the Assumed Liabilities (as hereinafter defined) and the acceptance of the Asset Contribution;

          NOW, THEREFORE, in consideration of the premises, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, FIS and LPS agree as follows:

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ARTICLE I

DEFINITIONS

          SECTION 1.1. Definitions. For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

          “Action or Proceeding” means any charge, complaint, grievance, action, suit, litigation, proceeding or arbitration, whether civil, criminal, administrative or investigative, by any Person, or any investigation by or before any Governmental Entity.

          “Adverse Consequences” means damages, penalties, fines, costs, expenses (including professional fees and expenses), amounts paid in settlement, liabilities, obligations, liens, and losses, including any such amounts arising out of or related to claims asserted against LPS or FIS by any shareholder participating in the Spin-off; provided that Adverse Consequences shall not include any indirect, special, consequential, or punitive damages.

          “Affiliate” means, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; provided, however, that, for purposes of this Agreement, no member of either Group shall be deemed to be an Affiliate of any member of the other Group. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

          “Agreement” has the meaning set forth in the Preamble.

          “Ancillary Agreement” or “Ancillary Agreements”, as the context may require, means each of the LPS Notes, the Employee Matters Agreement, the Tax Disaffiliation Agreement, each of the other Related Party Agreements, and each other agreement or instrument to be entered into in connection with the Asset Contribution or the Spin-off, including any exhibits, schedules, attachments, tables or other appendices thereto, and each other agreement and other instrument contemplated herein or in any of the foregoing, all as may be amended from time to time.

          “Arbitrator” has the meaning set forth in Section 8.3(c).

          “Asset Contribution” has the meaning set forth in the Recitals.

          “Asset Contribution Date” means the date on which the Asset Contribution is effective.

          “Assignment and Bill of Sale” means that certain Assignment and Bill of Sale to be entered by FIS to and in favor of LPS in connection with the Asset Contribution, in the form of Exhibit D, as such may be amended from time to time.

          “Assumed Liabilities” means all liabilities and obligations of any member of the FIS Group required to be paid or performed under any contract or other agreement included in

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the Other Assets or otherwise arising in connection with any of the Other Assets, whether required to be paid or performed before or after the Asset Contribution Date.

          “Assumption Agreement” means that certain Assumption Agreement to be entered by LPS to and in favor of FIS in connection with the Asset Contribution, in the form of Exhibit E, as such agreement may be amended from time to time.

          “Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions are authorized or required by law or regulation to close in Jacksonville, Florida or New York, New York.

          “Change of Control” means, with respect to any Person, an acquisition by any person (within the meaning of Section 3(a)(9) of the Exchange Act) and used in Sections 13(d) and 14(d) thereof of Beneficial Ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors; excluding, however, the following: (A) any acquisition directly from such Person, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from such Person or (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by such Person or by one or more members of such Person’s group of affiliates entities.

          “Claim Notice” has the meaning set forth in Section 7.3(a).

          “Claimed Amount” has the meaning set forth in Section 7.3(a).

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Controlling Party” has the meaning set forth in Section 7.3(d)(ii).

          “D&O Tail Policy” has the meaning set forth in Section 5.2(b)(i).

          “Damages” means all losses, claims, demands, damages, liabilities, judgments, dues, penalties, assessments, fines (civil, criminal or administrative), costs, obligations, liens, forfeitures, settlements, payments, costs, fees or expenses (including reasonable attorneys’ fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending a claim or Action or Proceeding), of any nature or kind, whether or not the same would properly be reflected on a balance sheet.

          “Debt Exchange” has the meaning set forth in the Recitals.

          “Disclosing Party” has the meaning set forth in Section 4.2(c).

          “Dispute” has the meaning set forth in Section 8.3(a).

          “Distribution Date” means the date on which the Spin-off is effective.

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          “Employee Matters Agreement” means the Employee Matters Agreement to be entered into by and between FIS and LPS, as may be amended from time to time.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

          “Existing Insurance” has the meaning set forth in Section 5.2(b)(ii).

          “Fiduciary and EP Tail Policy” has the meaning set forth in Section 5.2(b).

          “FIS” means Fidelity National Information Services, Inc., a Georgia corporation.

          “FIS 2007 Credit Agreement” means the Credit Agreement dated as of January 18, 2007, as amended, among FIS, as borrower, and JPMorgan Chase Bank, N.A., Bank of America, N.A., Wachovia Bank, National Association, and certain other parties.

          “FIS Group” means FIS, the Subsidiaries of FIS and each Person that is or becomes an Affiliate of FIS (other than LPS or any member of the LPS Group) from and after the Asset Contribution.

          “FIS Indemnified Parties” has the meaning set forth in Section 7.1.

          “FIS Marks” has the meaning set forth in Section 6.1(a).

          “FIS Policies” has the meaning set forth in Section 5.2(b)(ii).

          “FIS Public Filings” has the meaning set forth in Section 4.1(b).

          “FNF” means Fidelity National Financial, Inc., a Delaware corporation.

          “FNF Policy” has the meaning set forth in Section 5.2(a).

          “GAAP” means U.S. generally accepted accounting principles, consistently applied.

          “Governmental Entity” means any federal, state, local, foreign or international court, government, department, commission, board, bureau or agency, or any other regulatory, administrative or governmental authority, including the NYSE.

          “Group” means either the FIS Group or the LPS Group, as the context requires.