UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

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

For the fiscal year ended December 31, 2008

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

(904) 854-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Name of each exchange on which registered:
Common Stock, par value $0.01 per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
(Title of Class)

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

     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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 (Do not check if a smaller reporting company)		Smaller reporting company o

     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 June 30, 2008, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by nonaffiliates was $6,785,962,978 based on the closing sale price of $36.91 on that date as reported by the New York Stock Exchange. For the purposes of the foregoing sentence only, all directors and executive officers of the registrant were assumed to be affiliates. The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, was 190,920,746 as of January 31, 2009.

     The information in Part III hereof is incorporated herein by reference to the registrant’s Proxy Statement on Schedule 14A for the fiscal year ended December 31, 2008, to be filed within 120 days after the close of the fiscal year that is the subject of this Report.

 

 

FIDELITY NATIONAL INFORMATION SERVICES, INC.
2008 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

		Page
PART I
Item 1. Business			3
Item 1A. Risk Factors			8
Item 1B. Unresolved Staff Comments			14
Item 2. Properties			14
Item 3. Legal Proceedings			15
Item 4. Submission of Matters to a Vote of Security Holders			15
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			15
Item 6. Selected Financial Data			17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 7A. Quantitative and Qualitative Disclosure About Market Risks			29
Item 8. Financial Statements and Supplementary Data			31
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			68
Item 9A. Controls and Procedures			68
Item 9B. Other Information			68
PART III
Item 10. Directors and Executive Officers of the Registrant			68
Item 11. Executive Compensation			68
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			68
Item 13. Certain Relationships and Related Transactions			68
Item 14. Principal Accounting Fees and Services			68
PART IV
Item 15. Exhibits, Financial Statement Schedules			68
Signatures			73
EX-10.50
EX-10.51
EX-10.57
EX-10.58
EX-10.59
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

     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 formerly known as Certegy Inc. (“Certegy”), which was the surviving legal entity in the Certegy Merger; all references to “eFunds” are to eFunds Corporation, and its subsidiaries, as acquired by FIS on September 12, 2007; all references to “Old FNF” are to Fidelity National Financial, Inc., which owned a majority of the Company’s shares through November 9, 2006; all references to “FNF” are to Fidelity National Financial, Inc. (formerly known as Fidelity National Title Group, Inc. (“FNT”)), formerly a subsidiary of Old FNF but now an independent company that remains a related entity from an accounting perspective; and all references to “LPS” are to Lender Processing Services, Inc., a former wholly owned subsidiary of FIS, which was spun-off as a separate publicly traded company on July 2, 2008.

PART I

Item 1. Business.

General Development of the Business

     Our business operations and organizational structure result from the February 1, 2006, business combination of FIS and Certegy (the “Certegy Merger”), pursuant to which FIS was merged into a wholly-owned subsidiary of Certegy. Immediately after the Certegy Merger, the stockholders of FIS, including its then-majority stockholder Old FNF, owned approximately 67.4% of the Company’s outstanding common stock. Accordingly, for accounting and financial reporting purposes, the Certegy Merger was treated as a reverse acquisition of Certegy by FIS using the purchase method of accounting pursuant to U.S. generally accepted accounting principles. Under this accounting treatment, although Certegy was the legal entity that survived the merger, FIS was viewed as the acquirer for accounting purposes, and our financial statements and other disclosures for periods prior to the Certegy Merger treat FIS as our predecessor company. Also, as a result of the Certegy Merger, the registrant’s name changed from “Certegy Inc.” to “Fidelity National Information Services, Inc.” and our New York Stock Exchange trading symbol from “CEY” to “FIS”. On November 9, 2006, Old FNF (after other transactions in which it distributed all of its assets other than its ownership in FIS) merged with and into FIS (the “FNF Merger”). Upon completion of the FNF Merger, FIS became an independent publicly traded company, and Old FNF ceased to exist as an independent publicly traded company. The assets distributed by Old FNF prior to the FNF Merger included its ownership in FNT, which following the FNF Merger renamed itself Fidelity National Financial, Inc.

     We are incorporated under the laws of the State of Georgia, where Certegy was initially incorporated on March 2, 2001. Although many of these acquisitions added important applications and services to the offerings of FIS, our long-term objectives have been driven primarily by internal growth and the following acquisitions:

	•		The financial services division of ALLTEL Information Services, Inc., a provider of core banking services;
	•		Aurum Technology, a provider of software and outsourcing solutions to community banks and credit unions;
	•		Kordoba, a provider of information technology solutions for the financial services industry with a focus on services and solutions for the German banking market;
	•		Sanchez Computer Associates, Inc., a provider of software and outsourcing solutions to banks and other financial institutions;
	•		InterCept, Inc., a provider of outsourced and in-house core banking solutions, as well as item processing and check imaging services;
	•		Certegy, a provider of card issuer services to financial institutions and check risk management services in the U.S. and internationally; and
	•		eFunds Corporation, a provider of risk management services, EFT services, prepaid/gift card processing, and global outsourcing solutions to financial services companies in the U.S. and internationally.

Financial Information About Operating Segments and Geographic Areas

     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. The results of operations of the lender processing services segment are reflected as discontinued operations in the Consolidated Statements of Earnings, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”), for all

periods presented. Subsequent to the LPS spin-off, we reviewed our reporting and management structure, and beginning with this Form 10-K, are reporting the results of our operations in four new reporting segments: 1) Financial Solutions, 2) Payment Solutions, 3) International and 4) Corporate and Other. All periods presented have been conformed to reflect the segment changes.

Narrative Description of the Business

     FIS is a leading provider of technology solutions, processing services and information-based services to the financial services industry. We offer a diversified service mix and benefit from the opportunity to cross-sell multiple services across our broad customer base. FIS is a member of Standard and Poor’s (S&P) 500 Index.

     As of December 31, 2008 we have over 14,000 customers in over 90 countries spanning all segments of the financial services industry. These customers include 40 of the top 50 world banks, including nine of the top 10, as ranked by Bankalmanac.com as of April 30, 2008, as well as mid-tier and community banks, credit unions, commercial lenders, automotive financial institutions, retailers and international customers. Additionally, we provide services to numerous retailers via our check processing services. No individual customer represents more than 10% of our revenues.

Revenues by Segment

     The table below summarizes the revenues by our reporting segments (in millions):

		2008				2007				2006
Financial Solutions		$	1,158.8			$	1,007.6			$	882.2
Payment Solutions			1,530.2				1,298.8				1,120.5
International			759.5				618.1				430.3
Corporate & Other			(2.5	)			(3.5	)			(16.5	)
Total Consolidated Revenues		$	3,446.0			$	2,921.0			$	2,416.5

     Financial Solutions

     The primary focus of our Financial Solutions segment is servicing the core and related ancillary processing needs of U.S. banks, credit unions, automotive financial companies, commercial lenders, independent community and savings institutions. Our product and service offerings in this segment include:

	•		Core Processing Applications. Our core processing software applications are designed to run critical banking processes for our financial institution clients. These critical processes include deposit and lending systems, customer systems and most other central systems that a financial institution must utilize to manage the products and services it provides to its customers.
	•		Channel Solutions. Our comprehensive suite of retail delivery applications enable financial institutions to integrate and streamline customer-facing operations and back-office processes, thereby improving customer interaction across all channels (e.g., branch offices, Internet, ATM, call centers).
	•		Decision Solutions. Our decision solutions offer a full spectrum of options that cover the account lifecycle from helping to identify qualified account applicants to managing mature customer accounts and fraud. Our applications include know your customer, new account decisioning, new account opening, account and transaction management, fraud management and collections.
	•		Syndicated Loan Applications. Our syndicated loan applications are designed to support wholesale and commercial banking requirements necessary for all aspects of syndicated commercial loan origination and management.
	•		Automotive Finance Applications. Our primary automotive finance applications include an application suite that assists automotive finance institutions in evaluating loan applications and credit risk, and allows automotive finance institutions to manage their loan and lease portfolios. We also offer dealer wholesale finance and other ancillary services to the automotive industry.

	•		Commercial Technology. Our commercial technology includes solutions designed to meet the technology challenges facing any client, large or small. Our technology solutions range in scope from consulting engagements to application development projects and from operations support for a single application to full management of information technology infrastructures.
	•		Global Solutions. Our global solutions business provides outsourcing teams, both onshore and offshore, to manage costs, improve operational efficiency, transform processes and deliver world-class customer service all around the world.
	•		Risk Management. Our risk management services utilize our proprietary risk management models and data sources to assist in detecting fraud and assessing the risk of opening a new account or accepting a check at either the point-of-sale, a physical branch location, or through the Internet. Our systems utilize a combination of advanced authentication procedures, predictive analytics, artificial intelligence modeling, neural networks and proprietary and shared databases to assess and detect fraud risk for deposit transactions for financial institutions.
	•		Ancillary Solutions. We offer a number of services that are ancillary to the primary products and services listed above including branch automation, back office support systems and compliance support.

     We employ several business models to provide our solutions to our customers. We typically deliver the highest value to our customers when we combine our software applications and deliver them in one of several types of outsourcing arrangements, such as an application service provider, facilities management processing or an application management arrangement. We are also able to deliver individual applications through a software licensing arrangement. Based upon the expertise gained through the foregoing arrangements, some clients also use us to manage their IT operations without providing any of our proprietary software.

     Payment Solutions

     Our Payment Solutions segment is focused on servicing the payment and electronic funds transfer needs of U.S. banks, credit unions, automotive financial companies, commercial lenders, independent community and savings institutions. Our product and service offerings in this segment include:

	•		Debit & Electronic Funds Transfer. Our debit and electronic funds transfer processing options include multiple authorization options, settlement and card management.
	•		Electronic Banking and Bill Payment. Our electronic banking services are utilized by more than 1,700 financial institutions to offer Internet banking and bill payment services to their customers. Our bill payment solution is designed to ease online banking by providing a robust bill payment solution including paying bills online, scheduling payments, setting up recurring payments, using various accounts, and viewing payment history.
	•		Merchant Processing. Our merchant processing provides everything a financial institution needs to manage its merchant portfolio including point-of-sale equipment, transaction authorization, draft capture, settlement, charge-back processing and reporting.
	•		Item Processing Services. Our item processing equip financial institutions with the equipment needed to capture and sort items, process exceptions through keying, balancing, archiving and the production of statements. Our item processing services are utilized by more than 1,400 financial institutions and are performed at one of our 33 item processing centers located throughout the U.S. or on-site at customer locations.
	•		Credit Card Services. Over 6,000 financial institutions utilize a combination of our technology and or/services to issue VISA, MasterCard or American Express branded credit and debit cards or other electronic payment cards for use by both consumer and business accounts, from card production and activation to an extensive range of fraud management services to value-added loyalty programs designed to increase card usage and fee-based revenues. The majority of our programs are full service, including most of the operations and support necessary for an issuer to operate a credit card program. We do not make credit decisions for our card issuing customers, nor do we fund their receivables.
	•		Prepaid Card Services. We are one of the largest and most comprehensive provider of prepaid card services, including gift cards and reloadable cards, with end-to-end solutions for development, processing and administration of stored value programs.

	•		Check Authorization. Our check authorization system utilizes artificial intelligence modeling, neural networks and other state-of-the-art technology to deliver accuracy, convenience and simplicity to retailers.
	•		Ancillary Solutions. We offer a number of services that are ancillary to the primary products and services listed above, including print and mail capabilities. Our print and mail services offer complete computer output solutions for the creation, management and delivery of print and fulfillment needs.

     International

     We provide core banking applications, item processing, card services and check risk management solutions to financial institutions, card issuers, and retailers in over 90 countries outside the United States. Our international operations leverage existing domestic applications and provide services for the specific business needs of our customers in targeted international markets. Our product and service offering includes a comprehensive range of financial and payment processing software and services. Our payment solutions services include fully outsourced card issuer services and customer support, item processing and retail point-of-sale check authorization services. Our financial solutions services include fully outsourced core bank processing arrangements, application management, software licensing and maintenance, facilities management and consulting services.

     Corporate and Other Segment

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

Sales and Marketing

     We have teams of experienced sales personnel with expertise in particular services or the needs of particular types of customers. We target the majority of our potential customers via direct and/or indirect field sales, as well as inbound and outbound telemarketing efforts. Marketing activities include direct marketing, print advertising, media relations, public relations, tradeshow and convention activities, seminars and other targeted activities. Our sales force also targets existing customers to promote the cross-selling of additional products and services to our existing client base. Our strategy is to use the most efficient delivery system available to successfully acquire clients and build awareness of our products and services.

Patents, Trademarks and Other Intellectual Property

     We rely on a combination of contractual restrictions, internal security practices, and applicable law to establish and protect our software, technology and expertise worldwide. Further, we have developed a number of brands that have accumulated substantial goodwill in the marketplace, and we rely on trademark law to protect our rights in those brands. While we intend to continue taking appropriate measures to protect our intellectual property rights, these legal protections and arrangements afford only limited protection, and there is no assurance that our competitors will not independently develop or license products, services, or capabilities that are substantially equivalent or superior to ours. In general, we own the proprietary rights necessary for the conduct of our business, although we do license certain items from third parties under arms-length agreements for varying terms.

Competition

     Our primary competitors include internal technology departments within financial institutions and retailers, data processing or software development departments of large companies or large computer manufacturers, third-party payment processors, independent computer services firms, companies that develop and deploy software applications, companies that provide customized development, implementation and support services and companies that market software for the financial services industry. Some of these competitors possess substantially greater financial, sales and marketing resources than we do. Competitive factors impacting the success of our products and services include the quality of the technology-based application or service, application features and functions, ease of delivery and integration, ability of the provider to maintain, enhance, and support the applications or services, and price. We believe that we compete favorably in each of these categories. In addition, we believe that our financial institution industry expertise, combined with our ability to offer multiple applications, services and integrated solutions to individual customers, enhances our competitiveness against companies with more limited offerings. Specific competitors for both financial and payment solutions include:

     Fiserv, Inc., Jack Henry and Associates, Inc. and Metavante Corporation. In the core processing market, we also compete with Open Solutions, Inc., International Business Machines Corporation (IBM), Accenture Ltd., and in certain non-U.S. markets, Alnova Technologies Corporation, I-Flex Solutions Limited n/k/a Oracle Financial Services Software Limited and Temenos Group AG. Our competitors in the card services market include third-party credit and debit card processors such as First Data Corporation, Total System Services, Inc., Electronic Data Systems Corporation (EDS) and Payment Systems for Credit Unions (PSCU). Competitors in the check risk management services market include First Data Corporation’s TeleCheck Services division, and Global Payments, Inc.

Research and Development

     Our research and development activities have related primarily to the design and development of processing systems and related software applications and risk management platforms. We expect to continue our practice of investing an appropriate level of resources to maintain, enhance and extend the functionality of our proprietary systems and existing software applications, to develop new and innovative software applications and systems in response to the needs of our customers, and to enhance the capabilities surrounding our outsourcing infrastructure. In addition, we intend to offer services that are compatible with new and emerging delivery channels.

     As part of our research and development process, we evaluate current and emerging technology for compatibility with our existing and future software platforms. To this end, we engage with various hardware and software vendors in evaluation of various infrastructure components. Where appropriate, we use third-party technology components in the development of our software applications and service offerings. Third-party software may be used for highly specialized business functions, which we may not be able to develop internally within time and budget constraints. Additionally, third-party software may be used for commodity type functions within a technology platform environment. In the case of nearly all of our third-party software, enterprise license agreements exist for the third-party component and either alternative suppliers exist or transfer rights exist to ensure the continuity of supply. As a result, we are not materially dependent upon any third-party technology components. We work with our customers to determine the appropriate timing and approach to introducing technology or infrastructure changes to our applications and services. In the years ended December 31, 2008, 2007 and 2006 we recorded expense of approximately $84.8 million, $70.4 million, and $70.9 million, respectively, on research and development efforts (excluding amounts capitalized).

Government Regulation

     Our products and services are subject to a broad range of complex federal, state, and foreign regulation, including federal truth-in-lending and truth-in-savings rules, Regulation AA (Unfair or Deceptive Acts or Practices), privacy laws, usury laws, the Equal Credit Opportunity Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act the Bank Secrecy Act, the USA Patriot Act, the Internal Revenue Code, the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act and the Community Reinvestment Act. The compliance of our products and services with these and other applicable laws and regulations depends on a variety of factors, including the manner in which our clients use them. Our clients are contractually responsible for determining what is required of them under applicable laws and regulations so that we can assist them in their compliance efforts. The failure of our products and services to comply with applicable laws and regulations could result in restrictions on our ability to provide them, as well as the imposition of civil fines and/or criminal penalties. The four principal areas of regulation impacting our business are:

	•		Privacy. Our financial institution clients are required to comply with privacy regulations imposed under the Gramm-Leach-Bliley Act. These regulations place restrictions on the use of non-public personal information. All financial institutions must disclose detailed privacy policies to their customers and offer them the opportunity to direct the financial institution not to share information with third parties. The new regulations, however, permit financial institutions to share information with non-affiliated parties who perform services for the financial institutions. As a provider of services to financial institutions, we are required to comply with the privacy regulations and are bound by the same limitations on disclosure of the information received from our customers as apply to the financial institutions themselves.
	•		Consumer Reporting. Our retail check authorization services (Certegy Check Services) and account opening services (ChexSystems) maintain databases of consumer information and, as a consequence, are subject to the Federal Fair Credit Reporting Act and similar state laws. Among other things, the Fair Credit Reporting Act imposes requirements on us concerning data accuracy, and provides that consumers have the right to know the contents of their files, to dispute their accuracy, and to require verification or removal of disputed information. In furtherance of our objectives of data accuracy, fair treatment of consumers, protection of consumers’ personal information, and compliance with these laws, we maintain a high level of security for our computer systems in which consumer data resides, and we maintain consumer relations call

			centers to facilitate efficient handling of consumer requests for information and handling disputes.
	•		Debt Collection. Our collection services are subject to the Federal Fair Debt Collection Practices Act and various state collection laws and licensing requirements. The Federal Trade Commission, as well as state attorneys general and other agencies, have enforcement responsibility over the collection laws, as well as the various credit reporting laws.
	•		Money Transfer. Elements of our cash access and money transmission businesses are registered as a Money Services Business and are subject to the USA Patriot Act and reporting requirements of the Bank Secrecy Act and U.S. Treasury Regulations. This business is also subject to various state, local and tribal licensing requirements. The Financial Crimes Enforcement Network, state attorneys general, and other agencies have enforcement responsibility over laws relating to money laundering, currency transmission, and licensing. In addition, most states have enacted statutes that require entities engaged in money transmission and the sale of stored value cards to register as a money transmitter with that jurisdiction’s banking department.

     As a provider of electronic data processing and back-office services to financial institutions we are also subject to regulatory oversight and examination by the Federal Financial Institutions Examination Council, an interagency body of the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the National Credit Union Administration and various state regulatory authorities. In addition, independent auditors annually review several of our operations to provide reports on internal controls for our customers’ auditors and regulators. We are also subject to review by state and foreign laws and rules that regulate many of the same activities that are described above, including electronic data processing and back-office services for financial institutions and use of consumer information.

     The foregoing list of laws and regulations to which our company is subject is not exhaustive, and the regulatory framework governing our operations changes continuously. Although we do not believe that compliance with future laws and regulations related to our businesses will have a material adverse effect on our company, enactment of new laws and regulations may increasingly affect the operations of our business, directly and indirectly, which could result in substantial regulatory compliance costs, litigation expense, adverse publicity, and/or loss of revenue.

Employees

     As of December 31, 2008, we had approximately 26,000 employees, including approximately 15,000 employees principally employed outside of the U.S. None of our U.S. workforce currently is unionized. We have not experienced any work stoppages, and we consider our relations with employees to be good.

Available Information

     Our Internet website address is www.fidelityinfoservices.com. We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and amendments to those reports, available, free of charge, on that website as soon as reasonably practicable after we file or furnish them to the Securities and Exchange Commission. Our Corporate Governance Policy and Code of Business Conduct and Ethics are also available on our website and are available in print, free of charge, to any shareholder who mails a request to the Corporate Secretary, Fidelity National Information Services, Inc., 601 Riverside Avenue, Jacksonville, FL 32204 USA. Other corporate governance-related documents can be found at our website as well. However, the information found on our website is not a part of this or any other report.

Item 1A. Risk Factors.

     In addition to the normal risks of business, we are subject to significant risks and uncertainties, including those listed below and others described elsewhere in this Annual Report on Form 10-K. Any of the risks described herein could result in a significant adverse effect on our results of operation and financial condition.

If we fail to adapt our services to changes in technology or in the marketplace, or if our ongoing efforts to upgrade our technology are not successful, we could lose customers and have difficulty attracting new customers for our services.

     The markets for our services are characterized by constant technological changes, frequent introductions of new services and evolving industry standards. Our future success will be significantly affected by our ability to enhance our current services, and develop and introduce new services that address the increasingly sophisticated needs of our customers and their clients. These

initiatives carry the risks associated with any new service development effort, including cost overruns, delays in delivery, and performance issues. There can be no assurance that we will be successful in developing, marketing and selling new services that meet these changing demands, that we will not experience difficulties that could delay or prevent the successful development, introduction, and marketing of these services, or that our new services and their enhancements will adequately meet the demands of the marketplace and achieve market acceptance.

We may experience defects, development delays, installation difficulties and system failures with respect to our technology solutions, which would harm our business and reputation and expose us to potential liability.

     Many of our services are based on sophisticated software and computing systems, and we may encounter delays when developing new technology solutions and services. Further, the technology solutions underlying our services have occasionally contained and may in the future contain undetected errors or defects when first introduced or when new versions are released. In addition, we may experience difficulties in installing or integrating our technologies on platforms used by our customers. Finally, our systems and operations could be exposed to damage or interruption from fire, natural disaster, power loss, telecommunications failure, unauthorized entry and computer viruses. Defects in our technology solutions, errors or delays in the processing of electronic transactions, or other difficulties could result in: (i) interruption of business operations; (ii) delay in market acceptance; (iii) additional development and remediation costs; (iv) diversion of technical and other resources; (v) loss of customers; and (vi) negative publicity; or exposure to liability claims.

     Any one or more of the foregoing could have a material adverse effect on our business, financial condition and results of operations. Although we attempt to limit our potential liability through disclaimers and limitation-of-liability provisions in our license and customer agreements, we cannot be certain that these measures will always be successful in limiting our liability.

We operate in a competitive business environment, and if we are unable to compete effectively our results of operations and financial condition may be adversely affected.

     The market for our services is intensely competitive. Our competitors vary in size and in the scope and breadth of the services they offer. Some of our competitors have substantial resources. We face direct competition from third parties, and since many of our larger potential customers have historically developed their key applications in-house and therefore view their system requirements from a make-versus-buy perspective, we often compete against our potential customers’ in-house capacities. In addition, we expect that the markets in which we compete will continue to attract new competitors and new technologies. There can be no assurance that we will be able to compete successfully against current or future competitors or that competitive pressures we face in the markets in which we operate will not materially adversely affect our business, financial condition, and results of operations.

Our revenues from the sale of services to members of VISA, MasterCard, American Express and other similar organizations are dependent upon our continued certification and sponsorship, and the loss or suspension of certification or sponsorship could adversely affect our business.

     In order to provide our card processing services, we must be certified by Visa, MasterCard, American Express and other similar organizations. These certifications are dependent upon our continued adherence to the standards of the issuing bodies. The member financial institutions, some of which are our competitors, set the standards with which we must comply. If we fail to comply with these standards, our certifications could be suspended or terminated. The termination of our certifications, or any changes in the rules and regulations governing VISA, MasterCard, American Express or other similar organizations could prevent our registration or otherwise limit our ability to provide services, which could result in a reduction in revenue or increased costs of operation, which in turn could have a material adverse effect on our business.

Potential customers may be reluctant to switch to a new vendor, which may adversely affect our growth, both in the U.S. and internationally.

     For banks and other potential customers of our financial information software and services, switching from one vendor of bank core processing or related software and services (or from an internally-developed system) to a new vendor is a significant undertaking. Many potential customers worry about potential disadvantages such as loss of accustomed functionality, increased costs and business disruption. As a result, potential customers, both in the U.S. and internationally, often resist change. We seek to overcome this resistance through strategies such as making investments to enhance the functionality of our software. However, there can be no assurance that our strategies for overcoming potential customers’ reluctance to change vendors will be successful, and this resistance may adversely affect our growth, both in the U.S. and internationally.

Demand for many of our services is sensitive to the level of consumer transactions generated by our customers, and accordingly, our revenues could be impacted negatively by the current recession or any other event causing a material slowing of consumer spending.

     A significant portion of our revenue is derived from transaction processing fees. Any changes in economic factors, such as the current recession, that adversely affect consumer spending and related consumer debt, or lead to a reduction in check writing or credit and debit card usage, could reduce the volume of transactions that we process, and have an adverse effect on our business, financial condition and results of operations.

We have a long sales cycle for many of our applications and if we fail to close sales after expending significant time and resources to do so, our business, financial condition, and results of operations may be adversely affected.

     The implementation of many of our applications often involves significant capital commitments by our customers, particularly those with smaller operational scale. Potential customers generally commit significant resources to an evaluation of available software and require us to expend substantial time, effort, and money educating them as to the value of our software and services. We incur substantial costs in order to obtain each new customer. We may expend significant funds and management resources during the sales cycle and ultimately fail to close the sale. Our sales cycle may be extended due to our customers’ budgetary constraints or for other reasons. If we are unsuccessful in closing sales after expending significant funds and management resources or we experience delays, it could have a material adverse effect on our business, financial condition, and results of operations.

Many of our customers are subject to a regulatory environment and to industry standards that may change in a manner that reduces the number of transactions in which our customers engage and therefore reduces our revenues.

     Our customers are subject to a number of government regulations and industry standards with which our services must comply. For example, our services are affected by VISA, MasterCard, American Express and electronic payment standards that are generally updated twice annually. In addition, action by regulatory authorities relating to credit availability, data usage, privacy, or other related regulatory developments could have an adverse effect on our customers and therefore could have a material adverse effect on our business, financial condition, and results of operations.

Security breaches or our own failure to comply with privacy regulations imposed on providers of services to financial institutions could harm our business by disrupting our delivery of services and damaging our reputation.

     As part of our business, we electronically receive, process, store and transmit sensitive business information of our customers. In addition, we collect personal consumer data, such as names and addresses, social security numbers, driver’s license numbers and payment history records. Unauthorized access to our computer systems or databases could result in the theft or publication of confidential information or the deletion or modification of records or could otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet.

     Additionally, as a provider of services to financial institutions, we are bound by the same limitations on disclosure of the information we receive from our customers as apply to the financial institutions themselves. If we fail to comply with these regulations, we could be exposed to suits for breach of contract or to governmental proceedings. In addition, if more restrictive privacy laws or rules are adopted in the future on the federal or state level, that could have an adverse impact on us. Any inability to prevent security or privacy breaches could cause our existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers and/or adversely impact our relationship with administrative agencies.

Misappropriation of our intellectual property and proprietary rights could impair our competitive position.

     Our ability to compete depends upon proprietary systems and technology. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult. We cannot make any assurances that the steps we have taken will prevent misappropriation of technology or that the agreements entered into for that purpose will be enforceable. Effective trademark, service mark, copyright, and trade secret protection may not be available in every country in which our applications and services are made available online. Misappropriation of our intellectual property or potential litigation concerning such matters could have a material adverse effect on our results of operations or financial condition.

We face liability to our merchant customers if checks that we have guaranteed are dishonored by the check writer’s bank.

     If a check that we have guaranteed is dishonored by the check writer’s bank, we must reimburse our merchant customer for the check’s face value and pursue collection of the amount from the check writer. In some cases, we recognize a liability to our merchant customers for estimated check returns and a receivable for amounts we estimate we will recover from the check writers, based on historical experience and other relevant factors. The estimated check returns and recovery amounts are subject to the risk that actual amounts returned may exceed our estimates and actual amounts recovered may be less than our estimates.

If our applications or services are found to infringe the proprietary rights of others, we may be required to change our business practices and may also become subject to significant costs and monetary penalties.

     As our information technology applications and services develop, we may become increasingly subject to infringement claims. Any claims, whether with or without merit, could: (i) be expensive and time-consuming to defend; (ii) cause us to cease making, licensing or using applications that incorporate the challenged intellectual property; (iii) require us to redesign our applications, if feasible; (iv) divert management’s attention and resources; and (v) require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies.

Our business is subject to the risks of international operations, including movements in foreign currency exchange rates.

     We derive a significant portion of our revenue and earnings from international operations. As a result, our financial condition and operating results could be significantly affected by risks associated with international activities, including economic and labor conditions, political instability, tax laws (including U.S. taxes on foreign subsidiaries), and changes in the value of the U.S. Dollar versus local currencies. In addition, we are less well-known internationally than in the United States, have less experience with local business conditions and will face challenges in successfully managing small operations located far from our headquarters, because of the greater difficulty in overseeing and guiding operations from a distance.

     As we expand our international operations, more of our customers may pay us in foreign currencies. Conducting business in currencies other than U.S. Dollars subjects us to fluctuations in currency exchange rates. Our primary exposure to movements in foreign currency exchange rates relate to foreign currencies in Brazil, Europe, Australia and parts of Asia. The U.S. Dollar value of our net investments in foreign operations, the periodic conversion of foreign-denominated earnings to the U.S. Dollar (our reporting currency), our results of operations and, in some cases, cash flows, could be adversely affected in a material manner by movements in foreign currency exchange rates. During the twelve months ended December 31, 2008, approximately 17% of our revenues were denominated in currencies other than the U.S. Dollar, including the Brazilian Real, British pound and Euro. These risks could cause a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.

Our existing levels of leverage and debt service requirements may adversely affect our financial and operational flexibility.

     As of December 31, 2008, we had total debt of approximately $2.5 billion. This level of debt could have important consequences to us, including the following: (i) the debt level may cause us to have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or other purposes and limits our ability to pursue other business opportunities and implement certain business strategies; (ii) we use a large portion of the money we earn to pay principal and interest on our senior credit facilities, which reduces the amount of money available to finance operations, acquisitions and other business activities, repay other indebtedness and pay shareholder dividends; (iii) some of our debt has a variable rate of interest, which exposes us to the risk of increased interest rates; and (iv) we have a higher level of debt than some of our competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic conditions, including increased competition.

     In addition, the terms of our senior credit facilities may restrict us from taking actions, such as making significant acquisitions or dispositions or entering into certain agreements, which we might believe to be advantageous to us.

If we are unable to successfully consummate and integrate acquisitions, our results of operations may be adversely affected.

     We have made numerous acquisitions in recent years as a part of our growth strategy. We anticipate that we will continue to seek to acquire complementary businesses and services. This strategy will depend on the ability to find suitable acquisitions and finance them

on acceptable terms. We may require additional debt or equity financing for future acquisitions, and doing so will be made more difficult by our existing debt. If we are unable to acquire suitable acquisition candidates, we may experience slower growth. Further, after successfully completing acquisitions, we face challenges in integrating acquired businesses. These challenges include eliminating redundant operations, facilities and systems, coordinating management and personnel, retaining key employees, managing different corporate cultures, and achieving cost reductions and cross-selling opportunities. There can be no assurance that we will be able to fully integrate all aspects of acquired businesses successfully or fully realize the potential benefits of bringing them together, and the process of integrating these acquisitions may disrupt our business and divert our resources.

We may be unable to achieve some or all of the benefits that we expect from the LPS spin-off.

     We may not be able to achieve the strategic and financial benefits we expected to result from the LPS spin-off or such benefits may be delayed. These outcomes may occur due to, among other things, the loss of synergies, excess costs the two companies will incur as stand-alone entities, or the obligations imposed on us to avoid certain transactions in respect of our capital stock in order to preserve the planned tax-free nature of the transactions.

If any part of the LPS spin-off is determined to be a taxable transaction, then additional taxes could be imposed on us and our shareholders.

     On June 20, 2008, we received a favorable private letter ruling from the Internal Revenue Service (“IRS”) regarding the contribution of our interest in the assets, liabilities, businesses and employees related to our lender processing services operations in exchange for the receipt by us of LPS common stock and LPS debt obligations, which we refer to as the contribution, the exchange by us of LPS debt obligations for certain outstanding FIS debt, which we refer to as the debt exchange, and the distribution of LPS common stock to our shareholders, which we refer to as the spin-off. The IRS ruling was to the effect that: (i) the contribution taking into account the spin-off will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, in which neither we nor LPS will recognize any gain or loss; (ii) no gain or loss will be recognized by us in the debt exchange, pursuant to Section 361 of the Code; and (iii) no gain or loss will be recognized by us or our shareholders on the spin-off, pursuant to Section 355 and related provisions of the Code (including Section 361(c) of the Code), except that any gain that our shareholders realize on cash received in lieu of any fractional shares of our common stock to which such shareholders may be entitled in the spin-off generally will be taxable to our shareholders.

     Notwithstanding our receipt of the IRS private letter ruling, the IRS could determine that the contribution, debt exchange and/or spin-off constitute taxable transactions if it determines that there was a misstatement or omission of any of the facts, representations, or undertakings that were included in the request for the private letter ruling, or if it disagrees with our conclusions reached regarding certain factual requirements that, consistent with the IRS’ standard ruling policy, were not covered by the IRS ruling.

     If one or more of the contribution, debt exchange or spin-off transactions ultimately were determined to be subject to tax, we would recognize gain and the amount of that gain would be up to the excess of the fair market value of the LPS stock and debt obligations we received in the contribution over our basis in the assets we contributed to LPS in the contribution. The amount of such gain could be substantial. Further, if the spin-off transaction were subject to tax, in addition to tax imposed on us, our shareholders generally would be treated as if they received a taxable distribution equal to the full fair market value of LPS stock on the distribution date. In addition, we could be subject to tax on certain of the preliminary asset transfers that were made in connection with the contribution transaction.

     Notwithstanding the favorable IRS ruling that the spin-off qualified for tax-free treatment, it would become taxable to us, pursuant to Section 355(e) of the Code, if 50% or more of the shares of either our common stock or LPS common stock were acquired, directly or indirectly, as part of a plan or series of related transactions that included the spin-off. If the IRS were to determine that acquisitions of our common stock or of LPS common stock, either before or after the spin-off, were part of a plan or series of related transactions that included the spin-off, this determination could result in the recognition of substantial gain by us under Section 355(e).

     Although the taxes resulting from the contribution, debt exchange or spin-off not qualifying for tax-free treatment for United States Federal income tax purposes generally would be imposed on us and our shareholders, under the tax disaffiliation agreement entered into by us and LPS in connection with the distribution, LPS would be required to indemnify us and our affiliates against all tax related liabilities caused by the failure of any of those transactions to qualify for tax-free treatment for United States Federal income tax purposes (including as a result of Section 355(e) of the Code) to the extent these liabilities arise as a result of any action taken by LPS or any of LPS’ affiliates following the spin-off or otherwise result from any breach of any representation, covenant or obligation of LPS or any of LPS’ affiliates under the tax disaffiliation agreement.

     There is no guaranty that LPS will have financial resources to satisfy any such indemnification obligation described above.

The executive chairman of our board of directors and other officers and directors have interests and positions that could present potential conflicts.

     We and certain of our subsidiaries are parties to a variety of related party agreements with FNF and LPS. William P. Foley, II, who is our Executive Chairman, is currently the Chairman of the board of directors of both FNF and LPS. Lee A. Kennedy, who serves as President and Chief Executive Officer of our company, is also a director of LPS. Brent B. Bickett, who is an officer of FIS, is also an officer of FNF and LPS. William P. Foley, II and Brent B. Bickett also own or hold substantial amounts of LPS and FNF stock and stock options. Thomas M. Hagerty and Richard N. Massey, who are both directors of FIS, are also directors of FNF. As a result of the foregoing, there may be circumstances where certain of our executive officers and directors may be subject to conflicts of interest with respect to, among other things: (i) our past and ongoing relationships with FNF and LPS, including related party agreements and other arrangements with respect to the administration of tax matters, employee benefits and indemnification; (ii) the quality, pricing and other terms associated with services that we provide to FNF and LPS, or that they provide to us, under related party agreements; (iii) business opportunities arising for either us, FNF or LPS, that could be pursued by either us, or by FNF or LPS; and (iv) conflicts of time with respect to matters potentially or actually involving or affecting FIS.

     We seek to manage these potential conflicts through, abstention, oversight by independent members of our board of directors and provisions in our agreements with FNF and LPS. However, there can be no assurance that such measures will be effective or that we will be able to resolve all potential conflicts with FNF and LPS, or that the resolution of any such conflicts will be no less favorable to us than if we were dealing with an unaffiliated third party.

We have substantial investments in recorded goodwill and other intangible assets as a result of prior acquisitions, and a further more severe or continued economic downturn could cause these investments to become impaired, requiring write-downs that would reduce our operating income.

     As of December 31, 2008, goodwill aggregated to approximately $4,194.0 million, 55.8% of total assets, and other indefinite lived intangible assets aggregated to approximately $152.0 million, 2.0% of total assets. Current accounting rules require goodwill and other indefinite lived intangible assets to be assessed for impairment at least annually or whenever changes in circumstances indicate potential impairment. Factors that may be considered a change in circumstance include significant underperformance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization, and negative industry or economic trends. The results of our fiscal year 2008 annual assessment of the recoverability of goodwill indicated that the fair value of the Company’s reporting units were in excess of the carrying value of those reporting units, and thus no goodwill impairment existed as of December 31, 2008. Additionally, other than with respect to our Certegy Check business, where we recorded an impairment charge of $52.0 million in the fourth quarter of 2008, the fair value of indefinite lived intangible assets was in excess of the carry value of those assets. However, if the current worldwide economic downturn continues, the carrying amount of our goodwill and other indefinite lived intangible assets may no longer be recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition. We will continue to monitor the fair value of our other indefinite lived intangible assets as well as our market capitalization and the impact of the current economic downturn on our business to determine if there is an impairment in future periods.

Consolidations and failures in the banking and financial services industry could adversely affect our business by eliminating some of our existing and potential customers and making us more dependent on a more limited number of customers.

     There has been and continues to be substantial consolidation activity in the banking and financial services industry. In addition, many financial institutions that experienced negative operating results, including some of our customers, have failed.

     The failures and consolidations reduce the number of our customers and potential customers, which could adversely affect our revenues even if the events do not reduce the aggregate activities of the consolidated entities. Further, if our customers fail and/or merge with or are acquired by other entities that are not our customers, or that use fewer of our services, they may discontinue or reduce use of our services. It is also possible that larger financial institutions resulting from consolidations would have greater leverage in negotiating terms or could decide to perform in-house some or all of the services which we currently provide or could provide. Any of these developments could have a material adverse effect on our business, results of operations and financial condition.

Losses, consolidations and failures in the financial services industry may impact our ability to borrow funds or the ability of our lenders to fulfill their obligations under our interest rate swap agreements.

     Many financial institutions are currently experiencing negative operating results. In some cases, these negative operating results have led to financial institution failures and/or consolidations, including, in some cases, lenders that are parties to our Credit Agreement and interest rate swap agreements. As a result, lenders may become insolvent or tighten lending standards, which could in turn make it more difficult or impossible for lenders to perform their obligations under our interest rate swap agreements or for us to borrow under our Credit Agreement, obtain financing on favorable terms, or obtain financing or interest rate swap agreements at all. Our financial condition and results of operations could be adversely affected if a financial institution fails to fulfill its obligations under our interest rate swap agreements or we are unable to draw funds under our Credit Agreement or obtain other cost-effective financing.

Statement Regarding Forward-Looking Information

     The statements contained in this Form 10-K or in our other documents or in oral presentations or other statements made by our management that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions, or strategies regarding the future. These statements relate to, among other things, our future financial and operating results. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these terms and other comparable terminology. Actual results could differ materially from those anticipated in these statements as a result of a number of factors, including, but not limited to:

	•		general political, economic, and business conditions, including the possibility of intensified international hostilities, acts of terrorism, and general volatility in the capital markets;
	•		failures to adapt our services to changes in technology or in the marketplace;
	•		consolidation or failures in the banking industry;
	•		consolidation or failures in the retail industry;
	•		security breaches of our systems and computer viruses affecting our software;
	•		the impact of competitive services and pricing;
	•		the ability to identify suitable acquisition candidates and the ability to finance such acquisitions, which depends upon the availability of adequate cash reserves from operations or of acceptable financing terms and the variability of our stock price;
	•		our ability to integrate any acquired business’ operations, services, clients, and personnel;
	•		the effect of our substantial leverage, which may limit the funds available to make acquisitions and invest in our business;
	•		changes in, or the failure to comply with, government regulations, including privacy regulations; and
	•		other risks detailed elsewhere in this Risk Factors section and in our other filings with the Securities and Exchange Commission.

     We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.

Item 1B. Unresolved Staff Comments.

     None.

Item 2. Properties.

     FIS’ corporate headquarters is located at 601 Riverside Avenue, Jacksonville, Florida in a facility leased from LPS. In addition, FIS owns or leases support centers, data processing facilities and other facilities at over 190 locations. We believe our facilities and equipment are generally well maintained and are in good operating condition. We believe that the computer equipment that we own and our various facilities are adequate for our present and foreseeable business needs. We maintain our own, and contract with multiple service providers to provide, processing back-up in the event of a disaster.

Item 3. Legal Proceedings.

     See discussion of Litigation in Note 17 to the Consolidated Financial Statements included in Item 8 of Part II of this Report, which is incorporated by reference into this Part I, Item 3.

Item 4. Submission of Matters to a Vote of Security Holders.

     None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

     Our common stock trades on the New York Stock Exchange under the ticker symbol “FIS.” The table set forth below provides the high and low sales prices of the common stock and the cash dividends declared per share of common stock for each quarter of 2008 and 2007. On July 2, 2008 (the “spin-off date”), all of the shares of the common stock, par value $0.0001 per share of LPS, previously a wholly-owned subsidiary of FIS, were distributed to FIS shareholders through a stock dividend (the “spin-off”). In the spin-off, FIS contributed to LPS all of FIS’ interest in the assets, liabilities, businesses and employees related to FIS’ Lender Processing Services segment in exchange for shares of LPS common stock and $1,585.0 million aggregate principal amount of LPS debt obligations, which we exchanged with the holders of our $1,585.0 Term Loan B and retired the latter debt. 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. FIS’ shareholders collectively received 100% of the LPS Common Stock, which became a separate public company trading under the symbol “LPS” on the New York Stock Exchange.

		High				Low				Dividend
2008
First Quarter		$	43.50			$	36.31			$	0.05
Second Quarter		$	42.16			$	34.90			$	0.05
Third Quarter (a)		$	37.25			$	18.09			$	0.05
Fourth Quarter (a)		$	18.18			$	12.47			$	0.05
2007
First Quarter		$	47.55			$	40.34			$	0.05
Second Quarter		$	55.09			$	47.35			$	0.05
Third Quarter		$	57.67			$	44.28			$	0.05
Fourth Quarter		$	47.86			$	41.50			$	0.05

     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 our 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 our debt agreements. A regular quarterly dividend of $0.05 per common share is payable March 30, 2009 to shareholders of record as of the close of business on March 16, 2009.

     Item 12 of Part III contains information concerning securities authorized for issuance under our equity compensation plans.

     On October 25, 2006, our Board of Directors approved a plan authorizing repurchases of up to $200.0 million worth of our common stock (the “Old Plan”). On April 17, 2008, our Board of Directors approved a plan authorizing repurchases of up to an additional

$250.0 million worth of our common stock (the “New Plan”). Under the New Plan we repurchased 5.8 million shares of our common stock for $226.2 million, at an average price of $38.97, for the year ended December 31, 2008. There were no stock repurchases during the 2008 fourth quarter. During the year ended December 31, 2008, we also repurchased an additional 0.2 million shares of our common stock for $10.0 million at an average price of $40.56 under the Old Plan. Total shares repurchased during the year ended December 31, 2008 were 6.0 million shares for $236.2 million at an average price of $39.04.

Item 6. Selected Financial Data.

     The selected financial data set forth below constitutes historical financial data of FIS and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 8, Financial Statements and Supplementary Data, included elsewhere in this report.

     On February 1, 2006, we completed the Certegy merger. For accounting and financial reporting purposes, the merger was treated as a reverse acquisition of Certegy by FIS under the purchase method of accounting pursuant to generally accepted accounting principles. Accordingly, our historical financial information for periods prior to the Certegy Merger is the historical financial information of FIS.

     On July 2, 2008, we completed the LPS spin-off. For accounting purposes the results of LPS are presented as discontinued operations. Accordingly all prior periods have been restated to present the results of FIS on a stand alone basis and include the results of LPS up to July 1, 2008 as discontinued operations.

		Year Ended December 31,
		2008(1)(2)				2007(1)(2)				2006(2)				2005				2004
		(In millions, except per share data)
Statement of Earnings Data:
Processing and services revenues		$	3,446.0			$	2,921.0			$	2,416.5			$	1,258.8			$	981.8
Cost of revenues			2,636.9				2,265.8				1,872.2				939.0				733.1
Gross profit			809.1				655.2				544.3				319.8				248.7
Selling, general and administrative expenses			389.4				302.9				279.8				179.9				186.3
Research and development costs			84.8				70.4				70.9				85.7				40.3
Operating income			334.9				281.9				193.6				54.2				22.1
Other income (expense)			(155.7	)			102.1				(188.4	)			(127.3	)			19.3
Earnings before income taxes, equity in earnings (loss) of unconsolidated entities and minority interest			179.2				384.0				5.2				(73.1	)			41.4
Provision for income taxes			57.6				136.2				(2.9	)			(36.9	)			12.7
Equity in earnings (loss) of unconsolidated entities			(0.2	)			2.8				5.8				5.0				(3.3	)
Minority interest			(4.0	)			0.1				1.7				(6.7	)			(3.7	)
Net earnings from continuing operations			117.4				250.7				15.6				(37.9	)			21.7
Earnings from discontinued operations, net of tax			97.4				310.5				243.5				238.5				167.7
Net earnings		$	214.8			$	561.2			$	259.1			$	200.6			$	189.4
Net earnings per share — basic from continuing operations(3)		$	0.61			$	1.30			$	0.08			$	(0.30	)		$	0.17
Net earnings per share — basic from discontinued operations(3)			0.51				1.61				1.31				1.86				1.31
Net earnings per share — basic(3)		$	1.12			$	2.91			$	1.39			$	1.57			$	1.48
Weighted average shares — basic			191.6				193.1				185.9				127.9				127.9
Net earnings per share — diluted from continuing operations(3)		$	0.61			$	1.28			$	0.08			$	(0.30	)		$	0.17
Net earnings per share — diluted from discontinued operations(3)			0.50				1.58				1.29				1.86				1.31
Net earnings per share — diluted(3)		$	1.11			$	2.86			$	1.37			$	1.56			$	1.48
Weighted average shares — diluted			193.5				196.5				189.2				128.4				127.9

		As of December 31,
		2008 (1)				2007				2006				2005(2)				2004
		(In millions, except per share data)
Balance Sheet Data:
Cash and cash equivalents		$	220.9			$	355.3			$	211.8			$	133.2			$	190.9
Goodwill			4,194.0				5,326.8				3,737.5				244.8				232.9
Other intangible assets			924.3				1,030.6				1,010.0				15.5				25.5
Total assets			7,514.0				9,794.6				7,630.6				4,189.0				4,002.9
Total long-term debt			2,514.5				4,275.4				3,009.5				2,564.1				431.2
Minority interest			164.2				14.2				13.0				13.1				13.6
Total stockholders’ equity			3,532.8				3,781.2				3,142.7				694.6				2,754.8
Cash dividends declared per share		$	0.20			$	0.20			$	0.20			$	—			$	—

Selected Quarterly Financial Data

     Selected unaudited quarterly financial data is as follows:

		Quarter Ended (1)
		March 31,				June 30,				September 30,				December 31,
		(In millions, except per share data)
2008
Processing and services revenues		$	830.3			$	869.7			$	884.0			$	862.0
Gross profit			181.6				195.7				222.2				209.6
Earnings before income taxes, equity in earnings (loss) of unconsolidated entities and minority interest			14.0				17.1				73.0				75.1
Net earnings			70.5				71.9				43.6				28.8
Net earnings per share — basic		$	0.36			$	0.37			$	0.23			$	0.15
Net earnings per share — diluted		$	0.36			$	0.37			$	0.23			$	0.15
2007
Processing and services revenues		$	665.0			$	695.3			$	705.4			$	855.3
Gross profit			145.8				160.7				141.8				206.9
Earnings before income taxes, equity in earnings (loss) of unconsolidated entities and minority interest			(12.6	)			122.0				200.7				73.9
Net earnings			59.5				148.0				245.3				108.4
Net earnings per share — basic		$	0.31			$	0.77			$	1.27			$	0.56
Net earnings per share — diluted		$	0.30			$	0.75			$	1.25			$	0.55

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following section discusses management’s view of the financial condition and results of operations of FIS and its consolidated subsidiaries as of December 31, 2008 and 2007 and for the years ended December 31, 2008, 2007 and 2006.

     This section should be read in conjunction with the audited Consolidated Financial Statements and related Notes of FIS included elsewhere in this Annual Report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause future results to differ materially from those reflected in this section.

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 above in Item 1. Revenues by Segment and the results of operations of our segments are discussed below in Segment Results of Operations.

Business Trends and Conditions

     Increases in deposit and card transactions can positively affect our business and thus the condition of the overall economy can have an effect on growth.

     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. 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.

     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 theme among these offerings continues to be convenience and security for the consumer coupled with value to the financial institution.

     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.

     We believe that we are facing 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 half of 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. We believe that software sales will be the most at risk as far as discretionary purchases that financial institutions may defer. However, software sales represent approximately 5% of our revenues and thus any decrease should not have a significant impact on our results of operations. 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 worsening, causing further slowdown in consumer spending and lending and the impact on our ability to access capital should any or our lenders fail.

Critical Accounting Policies

     The accounting policies described below are those we consider critical in preparing our Consolidated Financial Statements. These policies require management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures with respect to contingent liabilities and assets at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts could differ from those estimates. See Note 3 of Notes to the Consolidated Financial Statements for a more detailed description of the significant accounting policies that have been followed in preparing our Consolidated Financial Statements.

     Revenue Recognition

     The Company generates revenues from the delivery of bank processing and credit and debit card processing services, professional services, software licensing and software related services and products. Revenues are recognized when evidence of an arrangement exists, delivery has occurred, fees are fixed or determinable and collection is considered probable. Occasionally, we are party to multiple concurrent contracts with the same customer. These situations require judgment to determine whether the individual contracts should be aggregated or evaluated separately for purposes of revenue recognition. In making this determination we consider the timing of negotiating and executing the contracts, whether the different elements of the contracts are interdependent and whether any of the payment terms of the contracts are interrelated. Due to the large number, broad nature and average size of individual

contracts we are party to, the impact of judgements and assumptions that we apply in recognizing revenue for any single contract is not likely to have a material effect on our consolidated operations or financial position. However the broader accounting policy assumptions that we apply across similar arrangements or classes of customers could significantly influence the timing and amount of revenue recognized in our historical and future results of operations or financial position. Additional information about our revenue recognition policies is included in Note 3 to the Consolidated Financial Statements.

     Allowance for Doubtful Accounts

     The Company analyzes trade accounts receivable by considering historical bad debts, customer creditworthiness, current economic trends, changes in customer payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. The allowance for doubtful accounts was $40.6 million and $53.4 million at December 31, 2008 and 2007, respectively. The decrease in the allowance for doubtful accounts from 2007 is primarily related to the LPS spin-off.

     Reserves for Check Guarantee Losses

     In our check guarantee business, if a guaranteed check presented to a merchant customer is dishonored by the check writer’s bank, we reimburse our merchant customer for the check’s face value and pursue collection of the amount from the delinquent check writer. Loss reserves and anticipated recoveries are primarily determined by performing a historical analysis of our check loss and recovery experience and considering other factors that could affect that experience in the future. Such factors include the general economy, the overall industry mix of our customer volumes, statistical analysis of check fraud trends within our customer volumes, and the quality of returned checks. Once these factors are considered, we establish a rate for check losses that is calculated by dividing the expected check losses by dollar volume processed and a rate for anticipated recoveries that is calculated by dividing the anticipated recoveries by the total amount of related check losses. These rates are then applied against the dollar volume processed and check losses, respectively, each month and charged to costs of revenues. The estimated check returns and recovery amounts are subject to risk that actual amounts returned and recovered may be different than our estimates.

     Historically, such estimation processes have proven to be materially accurate; however, our projections of probable check guarantee losses and anticipated recoveries are inherently uncertain, and as a result, we cannot predict with certainty the amount of such items. Changes in economic conditions, the risk characteristics and composition of our customers, and other factors could impact our actual and projected amounts. We recorded check guarantee losses, net of anticipated recoveries excluding service fees, of $98.1 million and $113.8 million, respectively, for the years ended December 31, 2008 and 2007. A ten percent difference in our estimated gross check guarantee losses and our estimated recoveries as of December 31, 2008 could impact 2008 net earnings by approximately $2.2 million after-tax.

     Computer Software

     Computer software includes the fair value of software acquired in business combinations, purchased software and capitalized software development costs. As of December 31, 2008 and 2007, computer software, net of accumulated amortization, was $617.0 million and $775.2 million, respectively. Purchased software is recorded at cost and amortized using the straight line method over its estimated useful life and software acquired in business combinations is recorded at its fair value and amortized using straight line and accelerated methods over their estimated useful lives, ranging from 3 to 10 years. In determining useful lives, management considers historical results and technological trends which may influence the estimate. Amortization expense for computer software was $149.9 million, $177.8 million and $130.2 million in 2008, 2007 and 2006, respectively. Included in discontinued operations in the Consolidated Statement of Earnings in those years was amortization expense on computer software of $14.8 million, $32.5 million, and $30.2 million for 2008, 2007 and 2006, respectively. We also assess the recorded value of computer software for impairment on a regular basis by comparing the carrying value to the estimated future cash flows to be generated by the underlying software asset. There are inherent uncertainties in determining the expected useful life or cash flows to be generated from computer software. While we have not historically experienced significant changes in these estimates we could be subject to such changes in the future.

     Goodwill and Other Intangible Assets

     We are required to allocate the purchase price of acquired businesses to the assets acquired and liabilities assumed in the transaction at their estimated fair values. The estimates used to determine the fair value of long-lived assets, such as intangible assets, are complex and require a significant amount of management judgment. We generally engage independent valuation specialists to assist us in making fair value determinations. We are also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods. We periodically review the estimated useful lives

assigned to our definite-lived intangible assets to determine whether such estimated useful lives continue to be appropriate. Additionally we review our indefinite lived intangible assets to determine if there is any change in circumstances that may indicate the asset’s useful life is no longer indefinite.

     We review the carrying value of goodwill and indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate the carrying value may not be recoverable in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). SFAS 142 requires us to perform a two-step impairment test on goodwill. First, we compare the fair value of each reporting unit to its carrying value. We determine the fair value of our reporting units based on the present value of estimated future cash flows. If the fair value of a reporting unit exceeds the carrying value of the unit’s net assets, goodwill is not impaired and further testing is not required. If the carrying value of the reporting unit’s net assets exceeds the fair value of the unit, then we perform the second step of the impairment test to determine the implied fair value of the reporting unit’s goodwill and any impairment charge. Additionally, we estimate the fair value of acquired intangible assets with indefinite lives and compare this amount to the underlying carrying value.

     Determining the fair value of a reporting unit or acquired intangible assets with indefinite lives involves judgment and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market conditions and other assumptions. During the fourth quarter of 2008, immediately prior to our annual measurement date for impairment testing, our market capitalization declined to a point below our book value. Our annual impairment test indicated that no impairment has occurred, based on our assumptions of discounted future cash flows using our current best estimate of future performance. In December of 2008, upon the change in our reporting segments and in light of the fact that our market capitalization continued to remain below our book value, we performed new impairment tests on a segment basis and determined that no impairments existed.

     The Company has reconciled the aggregate estimated fair value of the reporting units to the market capitalization of the consolidated Company. We believe that the overall market conditions that existed at the measurement dates and continue to exist because of the 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.

     Our analysis of indefinite lived intangible assets did indicate an impairment of our check trademark. Accordingly we recorded a charge of $52.0 million to reduce the intangible asset’s carrying value to fair value (Note 11). Given the significance of our goodwill and intangible asset balances, an adverse change in fair value could result in an impairment charge, which could be material to our financial statements

     Accounting for Income Taxes

     As part of the process of preparing the Consolidated Financial Statements, we are required to determine income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax expense together with assessing temporary differences resulting from differing recognition of items for income tax and accounting purposes. These differences result in deferred income tax assets and liabilities, which are included within the Consolidated Balance Sheets. We must then assess the likelihood that deferred income tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must reflect this increase as an expense within income tax expense in the Statement of Earnings. Determination of the income tax expense requires estimates and can involve complex issues that may require an extended period to resolve. Further, changes in the geographic mix of revenues or in the estimated level of annual pre-tax income can cause the overall effective income tax rate to vary from period to period. We believe that our tax positions comply with applicable tax law and that we adequately provide for any known tax contingencies. We believe the estimates and assumptions used to support our evaluation of tax benefit realization are reasonable. However, final determination of prior-year tax liabilities, either by settlement with tax authorities or expiration of statutes of limitations, could be materially different than estimates reflected in assets and liabilities and historical income tax provisions. The outcome of these final determinations could have a material effect on our income tax provision, net income or cash flows in the period that determination is made.

Related Party Transactions

     We are a party to certain historical related party agreements with FNF, LPS and other related parties (see Note 5 to the Consolidated Financial Statements included in Item 8 of Part II of this Report).

Factors Affecting Comparability

     Our Consolidated Financial Statements included in this report that present our financial condition and operating results reflect the following significant transactions:

	•		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.
	•		On September 12, 2007, we acquired eFunds. eFunds provided risk management, EFT services, prepaid/gift card processing, and global outsourcing solutions to financial services companies in the U.S. and internationally. In connection with this acquisition, we borrowed an additional $1.6 billion under our bank credit facilities. The results of operations and financial position of eFunds are included in the Consolidated Financial Statements from and after the date of acquisition.
	•		On August 31, 2007, we completed the sale of one of our subsidiaries, Property Insight, to FNF, for $95.0 million in cash, realizing a pre-tax gain of $66.9 million ($42.1 million after-tax) which is reported as a discontinued operation in the consolidated statements of earnings in accordance with SFAS 144. Property Insight was a leading provider of title plant services to FNF, as well as to various national and regional title insurance underwriters. Property Insight primarily managed, maintained, and updated the title insurance plants that are owned by FNF.
	•		On April 25, 2007, the board of directors of Covansys entered into an agreement with Computer Sciences Corporation (“CSC”) under which CSC agreed to acquire Covansys for $34.00 per share in an all-cash transaction. The merger closed on July 3, 2007, and we exchanged our remaining 6.9 million shares of stock in Covansys for cash, and 4.0 million warrants for cash, per the terms of the merger agreement. We realized a pre-tax gain on sales of Covansys securities of $274.5 million in 2007.
	•		On February 1, 2006, we completed the Certegy Merger. The transaction resulted in a reverse acquisition with a total purchase price of approximately $2.2 billion. Certegy provided credit card, debit card, and other transaction processing and check risk management services to financial institutions and merchants in the U.S. and internationally through two segments, Card Services and Check Services.

     Although the legal entity that survived the Certegy Merger was Certegy (which has since been renamed Fidelity National Information Services, Inc.), for accounting purposes, our historical financial statements are those of FIS. Our Consolidated Financial Statements include the results of operations of Certegy from the date of the acquisition.

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

Consolidated Results of Operations
(in millions, except per share amounts)

		2008				2007				2006
		(In millions, except per share amounts)
Processing and services revenues		$	3,446.0			$	2,921.0			$	2,416.5
Cost of revenues			2,636.9				2,265.8				1,872.2
Gross profit			809.1				655.2				544.3
Selling, general, and administrative expenses			389.4				302.9				279.8
Research and development costs			84.8				70.4				70.9
Operating income			334.9				281.9				193.6
Other income (expense):
Interest income			6.3				3.0				1.3
Interest expense			(163.5	)			(190.2	)			(190.9	)
Gain on sale of investment in Covansys			—				274.5				—
Other income (expense), net			1.5				14.8				1.2
Total other income (expense)			(155.7	)			102.1				(188.4	)
Earnings before income taxes, equity in earnings of unconsolidated entities, minority interest, and discontinued operations			179.2				384.0				5.2
Provision for income taxes			57.6				136.2				(2.9	)
Earnings before equity in earnings of unconsolidated entities, minority interest, and discontinued operations			121.6				247.8				8.1
Equity in (losses) earnings of unconsolidated entities			(0.2	)			2.8				5.8
Minority interest (expense) income			(4.0	)			0.1				1.7
Net earnings from continuing operations			117.4				250.7				15.6
Earnings from discontinued operations, net of tax			97.4				310.5				243.5
Net earnings		$	214.8			$	561.2			$	259.1

		2008				2007				2006
		(In millions, except per share amounts)
Net earnings per share — basic from continuing operations		$	0.61			$	1.30			$	0.08
Net earnings per share — basic from discontinued operations			0.51				1.61				1.31
Net earnings per share — basic		$	1.12			$	2.91			$	1.39
Weighted average shares outstanding — basic			191.6				193.1				185.9
Net earnings per share — diluted from continuing operations		$	0.61			$	1.28			$	0.08
Net earnings per share — diluted from discontinued operations			0.50				1.58				1.29
Net earnings per share — diluted		$	1.11			$	2.86			$	1.37
Weighted average shares outstanding — diluted			193.5				196.5				189.2

     Processing and Services Revenues

     Processing and services revenues totaled $3,446.0 million, $2,921.0 million and $2,416.5 million in 2008, 2007 and 2006, respectively. The increase in revenue during 2008 of $525.0 million, or 18.0% as compared to 2007 is primarily attributable to the impact of the eFunds acquisition, which contributed year over year incremental revenues of $396.3 million. Additionally our Brazilian card processing venture, the “Brazilian Venture” had a year over year increase in revenue of $87.7 million. The increase in revenue in 2007 of $504.5 million as compared to 2006 is primarily attributable to revenue increases from the eFunds and Certegy acquisitions along with organic growth. The eFunds acquisition contributed revenues of $166.6 million from its September 12, 2007 completion date through December 31, 2007 and the Certegy Merger contributed one additional month of revenue in the 2007 period, or approximately $96.4 million, as compared to the full year 2006. The Brazilian Venture contributed $49.2 million to revenue growth in 2007, with other growth in international revenues comprising most of the year over year organic growth.

     Cost of Revenues and Gross Profit

     Cost of revenues totaled $2,636.9 million, $2,265.8 million and $1,872.2 million in 2008, 2007 and 2006, respectively, resulting in gross profit of $809.1 million, $655.2 million and $544.3 million in 2008, 2007 and 2006, respectively. Gross profit as a percentage of revenues (“gross margin”) was 23.5%, 22.4% and 22.5% in 2008, 2007 and 2006, respectively. The increase in cost of revenues of $371.1 million in the 2008 period as compared to the 2007 period is directly attributable to revenue growth across our three operating segments. The increase in gross margin of 1.1% for 2008 over 2007 was driven by the growth of higher product margin sales and gained efficiencies relating to the integration of eFunds. The increase in cost of revenues of $393.6 million in the 2007 period as compared to the 2006 period was attributable to growth in our three operating segments primarily driven by the eFunds acquisition. The gross margin decreased slightly due to the costs associated with the eFunds acquisition including restructuring and integration as well as increased amortization expense relating to purchased intangibles.

     Selling, General and Administrative Expenses

     Selling, general and administrative expenses totaled $389.4 million, $302.9 million and $279.8 million for 2008, 2007 and 2006, respectively. The increase of $86.5 million in 2008 as compared to 2007 primarily relates to the incremental costs from the eFunds acquisition, as well as increased stock compensation costs, additional restructuring and integration charges, and charges associated with the LPS spin-off. Stock-based compensation increased from $24.9 million in 2007 to $51.6 million in 2008. The $26.7 million increase in stock-based compensation is 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 and $2.6 million relating to the acceleration, upon termination, of certain unvested executive stock awards. The remaining increase is attributable to $21.0 million of additional restructuring and integration charges and $9.3 million in charges associated with the spin-off of LPS as compared to $6.0 million and $0.5 million respectively in 2007. The increase of $23.1 million in 2007 as compared to 2006 primarily resulted from the inclusion of $15.2 million of expenses relating to eFunds since its acquisition date, as well as one additional month of Certegy expenses.

     Research and Development Costs

     Research and development costs totaled $84.8 million, $70.4 million and $70.9 million for 2008, 2007 and 2006, respectively. The increase in research and development costs for 2008 as compared to 2007 is primarily related to the eFunds acquisition.

     Operating Income

     Operating income totaled $334.9 million, $281.9 million and $193.6 million for 2008, 2007 and 2006, respectively. Operating income as a percentage of revenue (“operating margin”) was 9.7%, 9.7% and 8.0% for 2008, 2007 and 2006, respectively. The increase in operating margin for 2007 as compared to 2006 is primarily attributable to the increased revenues and achievement of expense synergies relating to the Certegy Merger.

     Interest Expense

     Interest expense totaled $163.5 million, $190.2 million and $190.9 million for 2008, 2007 and 2006, respectively. The decrease of $26.7 million in interest expense in 2008 as compared to 2007 is the result of a reduction of $1.6 billion in debt associated with the LPS spin-off on July 2, 2008 and the inclusion of $27.2 million in write-offs of capitalized debt issuance costs relating to our prior credit facility during 2007, partially offset by the write-off of $12.4 million in capitalized debt issuance costs associated with the Term Loan B retired in conjunction with the LPS spin-off in 2008. Additionally, the impact of our interest rate swaps, which has effectively fixed $2.1 billion of our debt at a rate of approximately 4.7%, offset the favorable decrease in borrowing rates under our credit facility. The decrease in 2007 as compared to 2006 was primarily the result of lower interest rates during 2007 partially offset by the inclusion of $27.2 million in write-offs of capitalized debt issuance costs relating to our prior credit facility.

     Provision for Income Taxes

     Income tax expense (benefit) from continuing operations totaled $57.6 million, $136.2 million and ($2.9) million for 2008, 2007 and 2006, respectively. This resulted in an effective tax rate on continuing operations of 32.1%, 35.5% and (55.2%) for 2008, 2007 and 2006, respectively. The decrease in tax expense for the 2008 period as compared to the 2007 period is attributable to the 2007 period including the gain on sale of Covansys common stock and warrants, partially offset by increased operating income in the 2008 period. The decrease in the 2008 overall effective tax rate is primarily related to state tax benefits and benefits related to research and development credits. The increase in tax expense for the 2007 period as compared to a tax benefit in 2006 is attributable to the gain on sale of Covansys common stock and warrants and increased operating income in the 2007 period. The 2006 year included certain favorable permanent book/tax differences and proportionately higher foreign income taxed at overall lower rates.

     Net Earnings from Continuing Operations

     Net earnings from continuing operations totaled $117.4 million, $250.7 million and $15.6 million for 2008, 2007 and 2006, respectively, or $0.61, $1.28 and $0.08 per diluted share, respectively. The decrease in net earnings in 2008 is primarily the result of 2007 including an after tax gain of $172.9 million, or $0.88 per diluted share, from the sale of Covansys common stock and warrants, partially offset by the inclusion of eFunds for the full year 2008 as compared to the period from its acquisition date September 12, 2007 through December 31, 2007.

Segment Results of Operations

Financial Solutions
(in millions)

		2008				2007				2006
Processing and services revenues		$	1,158.8			$	1,007.6			$	882.2
Operating income		$	355.1			$	203.1			$	181.4

     Revenues for the Financial Solutions segment totaled $1,158.8 million, $1,007.6 million and $882.2 million for 2008, 2007 and 2006, respectively. The overall segment increase of $151.2 million in 2008 as compared to 2007 resulted primarily from the impact of the eFunds acquisition that occurred on September 12, 2007 and organic growth within our existing business. Incremental revenue from the eFunds acquisition contributed a year over year increase of $143.3 million. The overall segment increase of $125.4 million for 2007 as compared to 2006 was primarily attributable to organic growth of 7.9% and incremental revenue from the eFunds acquisition of $56.1 million.

     Operating income for the Financial Solutions segment totaled $355.1 million, $203.1 million and $181.4 million for 2008, 2007 and 2006, respectively. Operating margin was approximately 31%, 20% and 21% for 2008, 2007 and 2006, respectively. The increase in 2008 as compared to 2007 primarily resulted from increased operating margins due to targeted cost reductions coupled with the relatively higher margin on the additional revenues from eFunds. The increase in 2007 as compared to 2006 was primarily due to the eFunds acquisition.

Payment Solutions
(in millions)

		2008				2007				2006
Processing and services revenues		$	1,530.2			$	1,298.8			$	1,120.5
Operating income		$	347.8			$	291.8			$	253.9

     Revenues for the Payment Solutions segment totaled $1,530.2 million, $1,298.8 million and $1,120.5 million for 2008, 2007 and 2006, respectively. The overall segment increase of $231.4 million in 2008 as compared to 2007 resulted primarily from the impact of the eFunds acquisition, which contributed year over year incremental revenue of $210.5 million. The overall segment increase of $178.3 million in 2007 as compared to 2006 resulted principally from organic growth of 8.0% and year over year growth from the eFunds acquisition of $88.9 million.

     Operating income for the Payment Solutions segment totaled $347.8 million, $291.8 million and $253.9 million for 2008, 2007 and 2006, respectively. Operating margin was approximately 23% for all three years, thus the year over year increases results from the margin on the incremental revenues.

International
(in millions)

		2008				2007				2006
Processing and services revenues		$	759.5			$	618.1			$	430.3
Operating income		$	49.5			$	44.7			$	38.3

     Revenues for the International segment totaled $759.5 million, $618.1 million and $430.3 million for 2008, 2007 and 2006, respectively. The overall segment increase of $141.4 million in 2008 as compared to 2007 resulted principally from increased revenue in our Brazilian Venture and incremental revenues due to the eFunds acquisition, partially offset by unfavorable currency effects of $28.2 million. The Brazilian Venture had a year over year increase in revenues of $87.7 million and the eFunds acquisition contributed year over year incremental revenue of $41.5 million. The overall segment increase of $187.8 million in 2007 as compared to 2006 was the result of a $56.4 million increase in financial solutions revenue and a $131.4 million increase in payment solutions revenue. The majority of the $56.4 million increase in financial solutions revenue was due to organic growth, principally in Germany. Of the $131.4 million increase in payment solutions revenue, $58.3 million was due to growth in credit cards principally due to growth in the Brazilian Venture, $40.5 million was due to the addition of the BPO business in Brazil, $8.9 million was due to organic growth in other regions and $23.7 million was due to incremental revenue from the eFunds acquisition.

     Operating income for the International segment totaled $49.5 million, $44.7 million and $38.3 million for 2008, 2007 and 2006, respectively. Operating margin was 7%, 7% and 9% for 2008, 2007 and 2006, respectively. The increase in operating income in 2008, as compared to 2007, as well as 2007 as compared to 2006, primarily results from margins on the incremental revenues.

     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 $417.5 million, $257.7 million and $280.0 million in 2008, 2007 and 2006, respectively. The overall Corporate and Other increase of $159.8 million for 2008 as compared to 2007 is attributable to the effect of incremental expenses related to the eFunds acquisition, additional stock compensation expense, incremental restructuring and integration charges and costs associated with the LPS spin-off. Stock-based compensation increased from $24.9 million in 2007 to $51.6 million in 2008. The $26.7 million increase in stock-based compensation is 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 and $2.6 million relating to the acceleration, upon termination, of certain unvested executive stock awards. Intangible asset amortization increased $46.6 million as compared to 2007 primarily relating to the eFunds acquisition coupled with an impairment charge of $26.0 million related to a decline in the fair value of the retail check guarantee business. Corporate expenses also include $21.0 million of restructuring and integration charges and $9.3 million in costs associated with the LPS spin-off.

     The overall corporate and other decrease of $22.3 million for 2007 as compared to 2006 is primarily attributable to a decrease in administrative costs due to cost reduction targets related to the integration of Certegy.

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 December 31, 2008, we had cash on hand of $220.9 million and debt of approximately $2,514.5 million, including the current portion. Of the $220.9 million cash on hand, approximately $139.8 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.

     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 is payable 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 $596.4 million, $463.5 million and $494.7 million in 2008, 2007 and 2006 respectively. Included in the 2007 period cash flow from operations were payments of $106.6 million of tax liability relating to the gain on Covansys and a $47.5 million reduction in taxes payable due to stock option exercises. Included in 2006 cash flow from operations was a $26.9 million reduction in taxes payable due to stock option exercises.

Capital Expenditures

     Our principal capital expenditures are for computer software (purchased and internally developed) and additions to property and equipment. In 2008, we spent approximately $255.4 million on capital expenditures, including approximately $25.0 million related to 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. As a result of the new credit agreement, we repaid the old credit agreement and recorded a charge of $27.2 million to write-off unamortized capitalized debt issuance costs. 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 $9.1 million are capitalized as of December 31, 2008. 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 December 31, 2008, the Term Loan A balance was $1,995.0 million and a total of $499.4 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) $13.1 million per quarter from June 30, 2007 through December 31, 2008; (b) $26.3 million per quarter from March 31, 2009 through December 31, 2009; and (c) $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 issuances of debt, casualty and condemnation events, and sales of assets, as well as from a percentage of excess cash flow (as defined in the Credit Agreement) between zero and fifty percent commencing with the cash flow for the year ended December 31, 2008. No mandatory prepayments were owed for the year ended December 31, 2008. 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 December 31, 2008.

     As of December 31, 2008, 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 7A).

Contractual Obligations

     FIS’ long-term contractual obligations generally include its long-term debt and operating lease payments on certain of its property and equipment. The following table summarizes FIS’ significant contractual obligations and commitments as of December 31, 2008 (in millions):

		2009				2010				2011				2012				2013				Thereafter				Total
Long-term debt		$	105.5			$	210.0			$	157.5			$	2,041.5			$	—			$	—			$	2,514.5
Interest			133.4				100.0				87.6				4.1				—				—				325.1
Operating leases			62.9				47.4				31.4				18.6				13.2				27.1				200.6
Data processing and maintenance and purchase commitments			138.4				93.6				68.2				54.0				52.0				177.8				584.0
Total		$	440.2			$	451.0			$	344.7			$	2,118.2			$	65.2			$	204.9			$	3,624.2

     FIS believes that its existing cash balances, cash flows from operations and borrowing programs will provide adequate sources of liquidity and capital resources to meet FIS’ expected short-term liquidity needs and its long-term needs for the operations of its business, expected capital spending for the next 12 months and the foreseeable future and the satisfaction of these obligations and commitments.

Off-Balance Sheet Arrangements

     FIS does not have any material off-balance sheet arrangements other than operating leases.

Recent Accounting Pronouncements

     In June 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Emerging Issues Task Force 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, which will become effective for periods beginning on or after December 15, 2008, and will be applied retrospectively. Under the FSP, unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share (EPS) pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Adoption of FSP Emerging Issues Task Force 03-6-1 will not have a material impact on the Company’s financial position or results of its operations.

     In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. The FASB has concluded that the generally accepted accounting principles hierarchy should reside in the accounting literature established by the FASB and issued SFAS 162 to achieve that result. SFAS 162 was effective on November 15, 2008. The adoption of SFAS 162 did not have a material effect on the Company’s financial condition or results of its operations.

     In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. (“SFAS 161”). SFAS 161 expands the current disclosure requirements of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, (“SFAS 133”) such that entities must now provide enhanced disclosures on a quarterly basis regarding how and why the entity uses derivatives, how derivatives and related hedged items are accounted for under SFAS 133, and how derivatives and related hedged items affect the entity’s financial position, performance and cash flow. Pursuant to the transition provisions of the Statement, the Company will adopt SFAS 161 in fiscal year 2009 and will present the required disclosures in the prescribed format on a prospective basis. SFAS 161 will not impact the consolidated financial results as it is disclosure-only in nature.

     In December 2007, the FASB issued SFAS No. 160, Noncontrolling 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 noncontrolling interests be clearly identified and presented on the face of the Consolidated Statement of Earnings. This Statement eliminates the need to apply purchase accounting when a parent company acquires a noncontrolling ownership interest in a subsidiary and requires that, upon deconsolidation of a subsidiary, a parent company recognize a gain or loss in net earnings after which any retained noncontrolling interest will be reported at fair value. 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 noncontrolling owners of subsidiaries. SFAS 160 is effective for periods beginning on or after December 15, 2008 and will be applied prospectively except for the presentation and disclosure requirements, which will be applied retrospectively for all periods presented. Adoption of SFAS 160 will not have a material effect on the Company’s statements of operations. Upon adoption of SFAS 160 the non controlling or minority interest ($164.2 million at December 31, 2008) will be reclassified to a component of equity.

     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. Assets and liabilities arising from contingencies in a business combination are to be recognized at their fair value at the acquisition date and adjusted prospectively as new information becomes available. 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. SFAS 141(R) is effective for periods beginning on or after December 15, 2008, and will apply to business combinations occurring after the effective date. The Company will adopt SFAS 141R and apply its provisions to business combinations subsequent to December 31, 2008.

     In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements by establishing a fair value hierarchy based on the quality of inputs used to measure fair value. SFAS 157 does not require any new fair value measurements, but applies under other accounting pronouncements that require or permit fair value measurements. SFAS 157 is effective for financial statements for fiscal years beginning after November 15, 2007. The Company adopted SFAS 157 as of January 1, 2008. Items in our Consolidated Financial Statements for which SFAS 157 is already effective are discussed in the Financing section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

     In February 2008, the FASB issued FASB Staff Position SFAS No. 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS 157 with respect to nonfinancial assets and nonfinancial liabilities that are not remeasured at fair value on a recurring basis until fiscal years beginning after November 15, 2008. Accordingly, the Company has not yet applied the

disclosure requirements of SFAS 157 to certain such nonfinancial assets for which fair value measurements are determined on a non-recurring basis only when there is an indication of potential impairment.

     The fair value hierarchy established by SFAS 157 includes three levels which are based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. In accordance with SFAS 157, our financial assets and liabilities that are recorded on the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.

Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3. Financial assets and liabilities whose values are based on model inputs that are unobservable.

Item 7A. 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. In managing exposure to these fluctuations, we may engage in various hedging transactions that have been authorized according to documented policies and procedures. On a limited basis, we use certain derivative financial instruments, including interest rate swaps, to manage these risks. We do not use derivatives for trading purposes, to generate income or to engage in speculative activity. Our capital costs are directly linked to financial and business risks. We seek to manage the potential negative effects from market volatility and market risk. It is our policy to manage our debt structure in order to manage capital costs, control financial risks and maintain financial flexibility over the long term.

Interest Rate Risk

     We have issued debt in floating rate instruments. Interest rate swaps are used 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 December 31, 2008, we are paying interest on the Revolving Loan at LIBOR plus 0.70% and at LIBOR plus 0.88% on our Term Loan A. A one percent increase in the LIBOR rate would increase our annual debt service on the Credit Agreement by $3.9 million (based on principal amounts outstanding at December 31, 2008, net of interest rate swaps). The credit rating assigned to FIS by Standard & Poor’s was BB+ at December 31, 2008.

     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

     We are subject to foreign exchange risk for foreign currency-denominated transactions, such as debt issued, recognized payables and receivables and forecasted transactions. Changes in foreign currency exchange rates also affect translations of revenues denominated in currencies other than U.S. Dollars. Our international operations generated approximately $760.0 million in revenues in 2008, of which approximately $614.0 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 5% move in average exchange rates for these currencies would have had the following effect on 2008 reported revenues:

		Impact on
		Revenues in U.S.
Currency		Dollars (millions)
Real		$	13.0
Euro			10.0
Pound Sterling			4.0
Total Impact		$	27.0

     In the future, we may enter into agreements to hedge our risks against foreign currency movements, but historically we have not entered into any such agreements. However, any hedging strategies may not be successful, and any future un-hedged foreign exchange payments could be subject to market fluctuations.

Item 8. Financial Statements and Supplementary Data

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
INDEX TO FINANCIAL INFORMATION

		Page
		Number
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting			32
Report of Independent Registered Public Accounting Firm on Financial Statements			33
Consolidated Balance Sheets as of December 31, 2008 and 2007			34
Consolidated Statements of Earnings for the years ended December 31, 2008, 2007 and 2006			35
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007 and 2006			36
Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006			37
Consolidated Statements of Comprehensive Earnings for the years ended December 31, 2008, 2007 and 2006			38
Notes to Consolidated Financial Statements			39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Fidelity National Information Services, Inc.:

     We have audited Fidelity National Information Services, Inc.’s and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In our opinion, Fidelity National Information Services, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

     We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Fidelity National Information Services, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of earnings, stockholders’ equity, cash flows, and comprehensive earnings for each of the years in the three-year period ended December 31, 2008, and our report dated February 27, 2009 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

February 27, 2009
Jacksonville, Florida
Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Fidelity National Information Services, Inc.:

     We have audited the accompanying consolidated balance sheets of Fidelity National Information Services, Inc. and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of earnings, stockholders’ equity, cash flows and comprehensive earnings for each of the years in the three-year period ended December 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Fidelity National Information Services, Inc. and Subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

     We also have audited, in accordance with the standards of the Public Accounting Oversight Board (United States), Fidelity National Information Services, Inc.’s and subsidiaries’ internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2009 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

     As discussed in notes 1 and 4 to the consolidated financial statements, the Company completed a spin-off of its Lender Processing Services segment on July 2, 2008.

/s/ KPMG LLP

February 27, 2009
Jacksonville, Florida
Certified Public Accountants

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets
December 31, 2008 and 2007

		2008				2007
		(In millions, except per share
		amounts)
ASSETS
Current assets:
Cash and cash equivalents		$	220.9			$	355.3
Settlement deposits			31.4				21.2
Trade receivables, net			538.1				825.9
Settlement receivables			52.1				116.9
Other receivables			121.1				206.7
Receivable from related party			10.1				14.9
Prepaid expenses and other current assets			115.1				168.5
Deferred income taxes			91.0				120.1
Total current assets			1,179.8				1,829.5
Property and equipment, net			272.6				392.5
Goodwill			4,194.0				5,326.8
Intangible assets, net			924.3				1,030.6
Computer software, net			617.0				775.2
Deferred contract costs			241.2				256.9
Investment in unconsolidated entities			—				30.5
Long term note receivable from FNF			5.5				6.1
Other noncurrent assets			79.6				146.5
Total assets		$	7,514.0			$	9,794.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	480.5			$	606.2
Settlement payables			83.3				129.8
Current portion of long-term debt			105.5				272.0
Deferred revenues			182.9				246.2
Total current liabilities			852.2				1,254.2
Deferred revenues			86.7				111.9
Deferred income taxes			346.3				395.0
Long-term debt, excluding current portion			2,409.0				4,003.4
Other long-term liabilities			122.8				234.7
Total liabilities			3,817.0				5,999.2
Minority interest			164.2				14.2
Stockholders’ equity:
Preferred stock $0.01 par value; 200 million shares authorized, none issued and outstanding at December 31, 2008 and 2007			—				—
Common stock $0.01 par value; 600 million shares authorized, 200.2 million and 199.0 million shares issued at December 31, 2008 and 2007, respectively			2.0				2.0
Additional paid in capital			2,959.8				3,038.2
Retained earnings			1,076.1				899.5
Accumulated other comprehensive earnings			(102.3	)			53.4
Treasury stock, $0.01 par value, 9.3 million and 4.3 million shares at December 31, 2008 and 2007, respectively			(402.8	)			(211.9	)
Total stockholders’ equity			3,532.8				3,781.2
Total liabilities and stockholders’ equity		$	7,514.0			$	9,794.6

The accompanying notes are an integral part of these consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Statements of Earnings
Years ended December 31, 2008, 2007 and 2006

		2008				2007				2006
		(In millions, except per share amounts)
Processing and services revenues (note 5)		$	3,446.0			$	2,921.0			$	2,416.5
Cost of revenues (note 5)			2,636.9				2,265.8				1,872.2
Gross profit			809.1				655.2				544.3
Selling, general, and administrative expenses (note 5)			389.4				302.9				279.8
Research and development costs			84.8				70.4				70.9
Operating income			334.9				281.9				193.6
Other income (expense):
Interest income			6.3				3.0				1.3
Interest expense			(163.5	)			(190.2	)			(190.9	)
Gain on sale of investment in Covansys			—				274.5				—
Other income, net			1.5				14.8				1.2
Total other income (expense)			(155.7	)			102.1				(188.4	)
Earnings before income taxes, equity in earnings of unconsolidated entities, minority interest, and discontinued operations			179.2				384.0				5.2
Provision for income taxes			57.6				136.2				(2.9	)
Earnings before equity in earnings of unconsolidated entities, minority interest, and discontinued operations			121.6				247.8				8.1
Equity in earnings of unconsolidated entities			(0.2	)			2.8				5.8
Minority interest			(4.0	)			0.1				1.7
Net earnings from continuing operations			117.4				250.7				15.6
Earnings from discontinued operations, net of tax			97.4				310.5				243.5
Net earnings		$	214.8			$	561.2			$	259.1
Net earnings per share — basic from continuing operations		$	0.61			$	1.30			$	0.08
Net earnings per share — basic from discontinued operations			0.51				1.61				1.31
Net earnings per share — basic		$	1.12			$	2.91			$	1.39
Weighted average shares outstanding — basic			191.6				193.1				185.9
Net earnings per share — diluted from continuing operations		$	0.61			$	1.28			$	0.08
Net earnings per share — diluted from discontinued operations			0.50				1.58				1.29
Net earnings per share — diluted		$	1.11			$	2.86			$	1.37
Weighted average shares outstanding — diluted			193.5				196.5				189.2

The accompanying notes are an integral part of these consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity
Years ended December 31, 2008, 2007 and 2006

										Amount
																						Accumulated
																						Other
		Number of Shares												Additional								Comprehensive								Total
		Common				Treasury				Common				Paid In				Retained				Earnings				Treasury				Stockholders’
		Shares				Shares				Stock				Capital				Earnings				(Loss)				Stock				Equity
		(In millions)
Balances, December 31, 2005			127.9				—			$	1.3			$	545.7			$	156.1			$	(8.5	)		$	—			$	694.6
Net Earnings			—				—				—				—				259.1				—				—				259.1
Pension liability adjustment			—				—				—				—				—				11.6				—				11.6
Certegy acquisition			69.5				(6.0	)			0.7				2,173.1				—				—				—				2,173.8
Exercise of stock options			—				3.6				—				70.4				—				—				—				70.4
Tax benefit associated with exercise of stock options			—				—				—				26.9				—				—				—				26.9
Stock-based compensation			—				—				—				50.1				—				—				—				50.1
Cash dividends declared ($0.20 per share)			—				—				—				—				(38.2	)			—				—				(38.2	)
National NY contribution from FNF			—				—				—				10.7				—				—				—				10.7
FNF Capital merger			—				0.3				—				2.3				—				—				—				2.3
Purchases of treasury stock			—				(4.3	)			—				—				—				—				(160.5	)			(160.5	)
Unrealized gain on investments and derivatives, net			—				—				—				—				—				12.4				—				12.4
Unrealized gain on foreign currency translation			—				—				—				—				—				29.5				—				29.5
Balances, December 31, 2006			197.4				(6.4	)		$	2.0			$	2,879.2			$	377.0			$	45.0			$	(160.5	)		$	3,142.7
Net Earnings			—				—				—				—				561.2				—				—				561.2
Pension liability adjustment			—				—				—				—				—				(2.2	)			—				(2.2	)
Effect of fair valuing stock options assumed in the eFunds acquisition			—				—				—				37.7				—				—				—				37.7
Espiel, Inc. acquisition			0.1				—				—				6.0				—				—				—				6.0
Exercise of stock options			1.5				3.7				—				28.8				—				—				28.9				57.7
Tax benefit associated with exercise of stock options			—				—				—				47.5				—				—				—				47.5
Stock-based compensation			—				—				—				39.0				—				—				—				39.0
Cash dividends declared ($0.20 per share)			—				—				—				—				(38.7	)			—				—				(38.7	)
Purchases of treasury stock			—				(1.6	)			—				—				—				—				(80.3	)			(80.3	)
Unrealized loss on investments and derivatives, net			—				—				—				—				—				(35.3	)			—				(35.3	)
Unrealized gain on foreign currency translation			—				—				—				—				—				45.9				—				45.9
Balances, December 31, 2007			199.0				(4.3	)		$	2.0			$	3,038.2			$	899.5			$	53.4			$	(211.9	)		$	3,781.2
Net Earnings			—				—				—				—				214.8				—				—				214.8
Pension liability adjustment			—				—				—				—				—				(4.0	)			—				(4.0	)
LPS spin-off			—				—				—				(105.0	)			—				—				—				(105.0	)
Issuance of restricted stock			1.2				—				—				—				—				—				—				—
Exercise of stock options			—				1.1				—				(26.0	)			—				—				45.2				19.2
Stock-based compensation			—				—				—				60.7				—				—				—				60.7
Cash dividends declared ($0.20 per share)			—				—				—				—				(38.2	)			—				—				(38.2	)
Purchases of treasury stock			—				(6.1	)			—				—				—				—				(236.1	)			(236.1	)
Unrealized loss on investments and derivatives, net			—				—				—				—				—				(27.9	)			—				(27.9	)
Unrealized loss on foreign currency translation			—				—				—				—				—				(123.8	)			—				(123.8	)
Other			—				—				—				(8.1	)			—				—				—				(8.1	)
Balances, December 31, 2008			200.2				(9.3	)		$	2.0			$	2,959.8			$	1,076.1			$	(102.3	)		$	(402.8	)		$	3,532.8

The accompanying notes are an integral part of these consolidated financial statements.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows
Years ended December 31, 2008, 2007 and 2006

		2008				2007				2006
						(In millions)
Cash flows from operating activities:
Net earnings		$	214.8			$	561.2			$	259.1
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			465.4				496.8				433.6
Amortization of debt issue costs			16.8				30.6				5.3
Gain on sale of Covansys stock			—				(274.5	)			—
Gain on sale of Property Insight			—				(66.9	)			—
Loss (gain) on sale of other assets			33.6				(4.8	)			—
Gain on pension settlement			—				(12.1	)			—
Stock-based compensation			60.7				39.0				50.1
Deferred income taxes			35.6				17.9				11.6
Income tax benefit from exercise of stock options			—				(47.5	)			(26.9	)
Equity in earnings of unconsolidated entities			2.3				(0.9	)			(5.8	)
Minority interest			2.8				2.2				0.2
Changes in assets and liabilities, net of effects from acquisitions:
Net (increase) decrease in trade receivables			(31.0	)			(169.9	)			32.0
Net increase in prepaid expenses and other assets			(12.7	)			(70.1	)			(73.7	)
Net increase in deferred contract costs			(62.1	)			(57.9	)			(88.9	)
Net increase (decrease) in deferred revenue			9.6				(11.5	)			(13.5	)
Net (decrease) increase in accounts payable, accrued liabilities, and other liabilities			(139.4	)			31.9				(88.4	)
Net cash provided by operating activities			596.4				463.5				494.7
Cash flows from investing activities:
Additions to property and equipment			(76.7	)			(113.8	)			(122.4	)
Additions to capitalized software			(178.7	)			(229.5	)			(177.8	)
Proceeds from sale of Covansys stock			—				430.2				—
Investment in Brazilian card processing venture			(25.7	)			—				—
Proceeds from sale of company assets			32.6				96.2				—
Acquisitions, net of cash acquired			(19.9	)			(1,729.0	)			111.0
Other investing activities			(4.7	)			—				—
Net cash used in investing activities			(273.1	)			(1,545.9	)			(189.2	)
Cash flows from financing activities:
Borrowings			5,160.0				4,300.3				245.1
Debt service payments			(5,337.3	)			(3,032.7	)			(368.6	)
Capitalized debt issuance costs			—				(29.4	)			(5.1	)
Income tax benefits from exercise of stock options			—				47.5				26.9
Stock options exercised			19.2				57.7				70.4
Treasury stock purchases			(236.1	)			(80.3	)			(160.5	)
Dividends paid			(38.2	)			(38.7	)			(38.2	)
Cash transferred in LPS spin-off			(20.8	)			—				—
Minority interest contribution to Brazilian card processing venture			14.8				—				—
Net contribution by FNF			—				—				1.4
Net cash (used in) provided by financing activities			(438.4	)			1,224.4				(228.6	)
Effect of foreign currency exchange rates on cash			(19.3	)			1.5				1.7
Net (decrease) increase in cash and cash equivalents			(134.4	)			143.5				78.6
Cash and cash equivalents, beginning of year			355.3				211.8				133.2
Cash and cash equivalents, end of year		$	220.9			$	355.3			$	211.8
Noncash contributions by FNF		$	—			$	—			$	11.6
Cash paid for interest		$	197.5			$	201.3			$	185.9
Cash paid for taxes		$	57.4			$	282.6			$	80.0
Noncash distribution of net assets of LPS		$	84.2			$	—			$	—
Retirement of Term Loan B in connection with LPS spin-off		$	1,585.0			$	—			$	—