FIS-2011 09.30.2011
Table of Contents

 
 
 
 
 
 
 
 
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
Form 10-Q
_______________________________________________
R
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended September 30, 2011
Or
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                      to
Commission File No. 001-16427
_______________________________________________
Fidelity National Information Services, Inc.
(Exact name of registrant as specified in its charter)
Georgia
 
37-1490331
(State or other jurisdiction
 
(I.R.S. Employer Identification No.)
of incorporation or organization)
 
 
 
 
 
601 Riverside Avenue
 
 
Jacksonville, Florida
 
32204
(Address of principal executive offices)
 
(Zip Code)
(904) 854-5000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES R NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES R NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer R
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 R
As of October 31, 2011, 299,471,164 shares of the Registrant’s Common Stock were outstanding.
 
 
 
 
 
 
 
 
 
 
FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 2011
INDEX
 
Page
 
 
 
 EX-31.1
 
 EX-31.2
 
 EX-32.1
 
 EX-32.2
 
 EX-101 INSTANCE DOCUMENT
 
 EX-101 SCHEMA DOCUMENT
 
 EX-101 CALCULATION LINKBASE DOCUMENT
 
 EX-101 DEFINITION LINKBASE DOCUMENT
 
 EX-101 LABELS LINKBASE DOCUMENT
 
 EX-101 PRESENTATION LINKBASE DOCUMENT
 


1
Table of Contents



FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
 
September 30, 2011
 
December 31,
2010
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
386.8

 
$
338.0

Settlement deposits
41.8

 
35.9

Trade receivables, net of allowance for doubtful accounts of $32.5 and $33.1 as of
September 30, 2011 and December 31, 2010, respectively
808.3

 
839.4

Settlement receivables
67.2

 
157.3

Other receivables
37.7

 
38.7

Receivable from related parties
51.8

 
50.2

Prepaid expenses and other current assets
137.1

 
138.0

Deferred income taxes
73.5

 
58.1

Assets held for sale
—

 
17.4

Total current assets
1,604.2

 
1,673.0

Property and equipment, net
410.7

 
390.0

Goodwill
8,562.2

 
8,550.0

Intangible assets, net
1,978.9

 
2,202.9

Computer software, net
893.1

 
909.0

Deferred contract costs
255.4

 
254.2

Other noncurrent assets
181.0

 
197.2

Total assets
$
13,885.5

 
$
14,176.3

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
561.8

 
$
591.8

Due to Brazilian venture partner
34.1

 
—

Settlement payables
125.1

 
140.6

Current portion of long-term debt
538.3

 
256.9

Deferred revenues
256.6

 
268.6

Liabilities held for sale
—

 
42.5

Total current liabilities
1,515.9

 
1,300.4

Deferred revenues
60.7

 
86.3

Deferred income taxes
845.4

 
859.3

Long-term debt, excluding current portion
4,327.7

 
4,935.2

Due to Brazilian venture partner
49.9

 
85.7

Other long-term liabilities
335.0

 
347.8

Total liabilities
7,134.6

 
7,614.7

Equity:
 
 
 
FIS stockholders’ equity:
 
 
 
Preferred stock, $0.01 par value, 200 shares authorized, none issued and outstanding as of September 30, 2011 and December 31, 2010
—

 
—

Common stock, $0.01 par value, 600 shares authorized, 382.7 shares issued as of
September 30, 2011 and December 31, 2010
3.8

 
3.8

Additional paid in capital
7,210.4

 
7,199.7

Retained earnings
1,778.4

 
1,471.2

Accumulated other comprehensive earnings
39.8

 
87.9

Treasury stock, $0.01 par value, 83.7 and 80.8 shares as of September 30, 2011 and December 31, 2010, respectively, at cost
(2,433.4
)
 
(2,359.4
)
Total FIS stockholders’ equity
6,599.0

 
6,403.2

Noncontrolling interest
151.9

 
158.4

Total equity
6,750.9

 
6,561.6

Total liabilities and equity
$
13,885.5

 
$
14,176.3

See accompanying notes to unaudited condensed consolidated financial statements.

2
Table of Contents

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In millions, except per share data)
(Unaudited)

 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2011
 
2010
 
2011
 
2010
Processing and services revenues (for related party activity, see note 2)
$
1,426.2

 
$
1,367.2

 
$
4,251.3

 
$
3,873.2

Cost of revenues
984.3

 
897.3

 
2,987.8

 
2,680.9

Gross profit
441.9

 
469.9

 
1,263.5

 
1,192.3

Selling, general, and administrative expenses (for related party activity, see note 2)
165.5

 
138.9

 
514.3

 
489.8

Impairment charges
—

 
154.9

 
—

 
154.9

Operating income
276.4

 
176.1

 
749.2

 
547.6

Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(60.5
)
 
(60.9
)
 
(194.3
)
 
(108.4
)
Other income (expense), net
(0.7
)
 
17.9

 
2.4

 
—

Total other income (expense)
(61.2
)
 
(43.0
)
 
(191.9
)
 
(108.4
)
Earnings from continuing operations before income taxes
215.2

 
133.1

 
557.3

 
439.2

Provision for income taxes
65.9

 
48.2

 
180.0

 
161.2

Earnings from continuing operations, net of tax
149.3

 
84.9

 
377.3

 
278.0

Earnings (loss) from discontinued operations, net of tax
(9.1
)
 
(23.9
)
 
(18.2
)
 
(32.4
)
Net earnings
140.2

 
61.0

 
359.1

 
245.6

Net (earnings) loss attributable to noncontrolling interest
(3.9
)
 
49.4

 
(6.5
)
 
48.3

Net earnings attributable to FIS
$
136.3

 
$
110.4

 
$
352.6

 
$
293.9

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.48

 
$
0.40

 
$
1.23

 
$
0.91

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.03
)
 
(0.07
)
 
(0.06
)
 
(0.09
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.45

 
$
0.33

 
$
1.17

 
$
0.82

Weighted average shares outstanding — basic
300.9

 
332.2

 
302.0

 
360.5

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.47

 
$
0.40

 
$
1.20

 
$
0.89

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.03
)
 
(0.07
)
 
(0.06
)
 
(0.09
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.44

 
$
0.33

 
$
1.14

 
$
0.80

Weighted average shares outstanding — diluted
306.8

 
339.2

 
308.8

 
367.7

Cash dividends paid per share
$
0.05

 
$
0.05

 
$
0.15

 
$
0.15

Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
145.4

 
$
134.3

 
$
370.8

 
$
326.3

Earnings (loss) from discontinued operations, net of tax
(9.1
)
 
(23.9
)
 
(18.2
)
 
(32.4
)
Net earnings attributable to FIS
$
136.3

 
$
110.4

 
$
352.6

 
$
293.9

* Amounts may not sum due to rounding.
See accompanying notes to unaudited condensed consolidated financial statements.

3
Table of Contents

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statement of Equity and Comprehensive Earnings
Nine months ended September 30, 2011
(In millions, except per share amounts)
(Unaudited)

 
 
 
 
 
Amount
 
 
 
 
 
FIS Stockholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
Number of shares
 
 
 
Additional
 
 
 
other
 
 
 
 
 
 
 
 
 
Common
 
Treasury
 
Common
 
paid in
 
Retained
 
comprehensive
 
Treasury
 
Noncontrolling
 
Comprehensive
 
Total
 
shares
 
shares
 
stock
 
capital
 
earnings
 
earnings
 
stock
 
interest
 
earnings
 
equity
Balances, December 31, 2010
382.7

 
(80.8
)
 
$
3.8

 
$
7,199.7

 
$
1,471.2

 
$
87.9

 
$
(2,359.4
)
 
$
158.4

 
$
—

 
$
6,561.6

Exercise of stock options and stock purchase right
—

 
3.9

 
—

 
(42.5
)
 
—

 
—

 
114.5

 
—

 
—

 
72.0

Excess income tax benefit from exercise of stock options
—

 
—

 
—

 
7.2

 
—

 
—

 
—

 
—

 
—

 
7.2

Stock-based compensation
—

 
—

 
—

 
46.0

 
—

 
—

 
—

 
—

 
—

 
46.0

Cash dividends paid ($0.05 per share per quarter) and other distributions
—

 
—

 
—

 
—

 
(45.4
)
 
—

 
—

 
(2.6
)
 
—

 
(48.0
)
Purchases of treasury stock
—

 
(6.6
)
 
—

 
—

 
—

 
—

 
(181.0
)
 
—

 
—

 
(181.0
)
Treasury shares held for taxes due upon exercise of stock options
—

 
(0.2
)
 
—

 
—

 
—

 
—

 
(7.5
)
 
—

 
—

 
(7.5
)
Other
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1.5

 
—

 
1.5

Comprehensive earnings, net of tax:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
—

 
—

 
—

 
—

 
352.6

 
—

 
—

 
6.5

 
359.1

 
359.1

Other comprehensive earnings, net of tax:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on investments and derivatives, net
—

 
—

 
—

 
—

 
—

 
(18.2
)
 
—

 
—

 
(18.2
)
 
(18.2
)
Unrealized gain (loss) on foreign currency translation
—

 
—

 
—

 
—

 
—

 
(29.9
)
 
—

 
(11.9
)
 
(41.8
)
 
(41.8
)
Comprehensive earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
299.1

 
 
Balances, September 30, 2011
382.7

 
(83.7
)
 
$
3.8

 
$
7,210.4

 
$
1,778.4

 
$
39.8

 
$
(2,433.4
)
 
$
151.9

 
 
 
$
6,750.9

See accompanying notes to unaudited condensed consolidated financial statements.


4
Table of Contents

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)

 
Nine months ended
September 30,
 
2011
 
2010
Cash flows from operating activities:
 
 
 
Net earnings
$
359.1

 
$
245.6

Adjustment to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
471.6

 
459.8

Amortization of debt issue costs
10.6

 
9.6

Asset impairment charges
—

 
179.9

Stock-based compensation
46.0

 
40.7

Deferred income taxes
(13.2
)
 
(107.8
)
Excess income tax benefit from exercise of stock options
(7.2
)
 
(20.8
)
Other operating activities, net
(4.5
)
 
(15.4
)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
 
 
 
Trade receivables
31.4

 
33.7

Settlement activity
68.9

 
5.4

Prepaid expenses and other assets
(5.7
)
 
(3.4
)
Deferred contract costs
(46.6
)
 
(36.7
)
Deferred revenue
(42.6
)
 
(37.3
)
Accounts payable, accrued liabilities, and other liabilities
(68.7
)
 
32.6

Net cash provided by operating activities
799.1

 
785.9

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions to property and equipment
(88.2
)
 
(89.9
)
Additions to computer software
(133.6
)
 
(137.4
)
Net proceeds from sale of assets
—

 
71.5

Acquisitions, net of cash acquired
(12.7
)
 
(66.6
)
Other investing activities, net
5.9

 
1.5

Net cash used in investing activities
(228.6
)
 
(220.9
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Borrowings
6,908.9

 
8,067.0

Repayment of borrowings
(7,266.5
)
 
(6,229.5
)
Capitalized debt issuance costs
—

 
(70.3
)
Excess income tax benefit from exercise of stock options
7.2

 
20.8

Proceeds from exercise of stock options, net of tax withholding
72.0

 
198.8

Treasury stock purchases
(188.5
)
 
(2,539.4
)
Dividends paid and other distributions
(48.0
)
 
(55.1
)
Other financing activities, net
1.5

 
3.3

Net cash used in financing activities
(513.4
)
 
(604.4
)
Effect of foreign currency exchange rate changes on cash
(8.3
)
 
(2.1
)
Net increase (decrease) in cash and cash equivalents
48.8

 
(41.5
)
Cash and cash equivalents, beginning of period
338.0

 
430.9

Cash and cash equivalents, end of period
$
386.8

 
$
389.4

 
 
 
 
Supplemental cash flow information:
 
 
 
Cash paid for interest
$
222.6

 
$
88.4

Cash paid for income taxes
$
165.9

 
$
202.9

See accompanying notes to unaudited condensed consolidated financial statements.


5
Table of Contents

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


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, and its subsidiaries; all references to “Metavante” are to Metavante Technologies, Inc., and its subsidiaries, as acquired by FIS on October 1, 2009; and all references to "Capco" are to The Capital Markets Company N.V., as acquired by FIS on December 2, 2010.

(1) Basis of Presentation
The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements (Unaudited) and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. Certain reclassifications have been made in the 2010 Condensed Consolidated Financial Statements (Unaudited) to conform to the classifications used in 2011.
We report the results of our operations in four reporting segments: 1) Financial Solutions Group (“FSG”), 2) Payment Solutions Group (“PSG”), 3) International Solutions Group (“ISG”) and 4) Corporate and Other (Note 11).

(2) Related Party Transactions
We are party to certain related party agreements described below.
Revenues and Expenses
A detail of related party items included in revenues for the three-month and nine-month periods ended September 30, 2011 and 2010 is as follows (in millions):
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2011
 
2010
 
2011
 
2010
Banco Bradesco Brazilian Venture revenue
$
80.2

 
$
39.1

 
$
221.8

 
$
105.9

Banco Santander Brazilian Venture revenue
—

 
86.4

 
—

 
107.3

Banco Bradesco item processing revenue
—

 
4.2

 
1.3

 
12.1

Banco Santander item processing revenue
—

 
4.6

 
—

 
28.2

FNF data processing services revenue
9.5

 
13.6

 
33.9

 
37.6

Ceridian data processing and services revenue
16.5

 
7.3

 
43.5

 
11.3

Sedgwick data processing services revenue
—

 
—

 
—

 
14.8

LPS services revenue
—

 
—

 
—

 
0.1

Total related party revenues
$
106.2

 
$
155.2

 
$
300.5

 
$
317.3








6
Table of Contents
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


A detail of related party items included in selling, general and administrative expenses (net of expense reimbursements) for the three-month and nine-month periods ended September 30, 2011 and 2010 is as follows (in millions):
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2011
 
2010
 
2011
 
2010
Equipment and real estate leasing with FNF and LPS
$
—

 
$
0.2

 
$
0.1

 
$
1.1

Administrative corporate support and other services with FNF and LPS
1.3

 
1.0

 
3.4

 
2.4

Total related party expenses
$
1.3

 
$
1.2

 
$
3.5

 
$
3.5


Brazilian Venture
In March 2006, we entered into an agreement with ABN AMRO Real (“ABN”) and Banco Bradesco S.A. (“Banco Bradesco”) to form a venture (the "Brazilian Venture") to provide comprehensive, fully outsourced card processing services to Brazilian card issuers. During the third quarter of 2008, Banco Santander acquired majority control of ABN. In late January 2010, Banco Santander ceased processing its card portfolio on the Brazilian Venture's systems, and in August 2010, all documents required to effect a mutually agreeable exit for Banco Santander were executed. The revenue items with Banco Santander are, therefore, summarized above as related party activity for the 2010 periods only.

FNF

We provide data processing services to Fidelity National Financial, Inc. ("FNF"), our former parent, consisting primarily of infrastructure support and data center management. The Chairman of the Board of Directors of FIS is currently the Chairman of the Board of Directors of FNF. Our agreement with FNF runs through September 30, 2013, with an option to renew for one or two additional years, subject to certain early termination provisions (including the payment of minimum monthly service and termination fees). Additionally, FNF provides certain risk management support services to us at cost. We also incurred expenses for amounts paid by us to FNF under cost sharing agreements to use certain corporate aircraft and lease certain real estate. See Note 6 for FNF holdings of our debt securities.

Ceridian

We provide data processing services to Ceridian Corporation (“Ceridian”), a company in which FNF holds an approximate 33% equity interest.

Sedgwick
We provide data processing services to Sedgwick CMS, Inc. (“Sedgwick”), a company in which FNF held an approximate 32% equity interest through May 28, 2010. The revenue items with Sedgwick are, therefore, summarized above as related party activity for the 2010 periods only.
LPS
We provided information technology services to Lender Processing Services, Inc. ("LPS") through mid 2010. In addition, we have entered into certain property management and real estate lease agreements with LPS relating to our Jacksonville corporate headquarters. LPS remained a related party through March 1, 2010, as Lee A. Kennedy served as the Executive Vice Chairman and a Director of the Board of FIS as well as the Chairman of the Board of LPS. Effective March 1, 2010, Mr. Kennedy and the Company mutually agreed that he would no longer serve as an executive officer and director of the Company and its subsidiaries. The revenue and expense items with LPS are, therefore, summarized above as related party activity through March 1, 2010.
We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties, except for certain services provided to FNF, which are at cost. However, the amounts we earned or that were charged under these arrangements were not negotiated at arm's-length, and may not represent the terms that we might have obtained from an unrelated third party.



7
Table of Contents
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


(3) Unaudited Net Earnings per Share
The basic weighted average shares and common stock equivalents for the three-month and nine-month periods ended September 30, 2011 and 2010 are computed using the treasury stock method.
The following table summarizes the earnings per share attributable to FIS common stockholders for the three-month and nine-month periods ended September 30, 2011 and 2010 (in millions, except per share amounts):
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2011
 
2010
 
2011
 
2010
Earnings from continuing operations attributable to FIS, net of tax
$
145.4

 
$
134.3

 
$
370.8

 
$
326.3

Earnings (loss) from discontinued operations attributable to FIS, net of tax
(9.1
)
 
(23.9
)
 
(18.2
)
 
(32.4
)
Net earnings attributable to FIS
$
136.3

 
$
110.4

 
$
352.6

 
$
293.9

Weighted average shares outstanding — basic
300.9

 
332.2

 
302.0

 
360.5

Plus: Common stock equivalent shares
5.9

 
7.0

 
6.8

 
7.2

Weighted average shares outstanding — diluted
306.8

 
339.2

 
308.8

 
367.7

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.48

 
$
0.40

 
$
1.23

 
$
0.91

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.03
)
 
(0.07
)
 
(0.06
)
 
(0.09
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.45

 
$
0.33

 
$
1.17

 
$
0.82

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.47

 
$
0.40

 
$
1.20

 
$
0.89

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.03
)
 
(0.07
)
 
(0.06
)
 
(0.09
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.44

 
$
0.33

 
$
1.14

 
$
0.80

 
 
 
 
 
 
 
 
* amounts may not sum due to rounding.
 
 
 
 
 
 
 
Options to purchase approximately 5.3 million and 2.7 million shares of our common stock for the three-month periods and 5.0 million and 6.8 million for the nine-month periods ended September 30, 2011 and 2010, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive.

(4) Discontinued Operations
     ClearPar
On October 30, 2009, we entered into a definitive agreement to sell ClearPar, LLC ("ClearPar") because its operations did not align with our strategic plans. The net assets were classified as held for sale as of December 31, 2009, and the transaction was closed on January 1, 2010. We received cash proceeds of $71.5 million. ClearPar had a loss before taxes of $1.8 million during the nine months ended September 30, 2010. The operating results of ClearPar for the nine months ended September 30, 2010 are recorded as discontinued operations in the Condensed Consolidated Statements of Earnings (Unaudited).
     Brazil Item Processing and Remittance Services Operations
As previously disclosed, during the third quarter 2010, the Company decided to pursue strategic alternatives for Fidelity National Participacoes Ltda. (“Participacoes”). Participacoes had revenues of $0.0 million and $14.8 million during the three-month periods ended September 30, 2011 and 2010 and $11.7 million and $44.5 million during the nine-month periods ended September 30, 2011 and 2010, respectively. Participacoes had losses before taxes of $13.8 million and $36.2 million during the three-month periods and $27.6 million and $47.3 million during the nine-month periods ended September 30, 2011 and 2010, respectively. The operating results of Participacoes are recorded as discontinued operations in the Condensed Consolidated Statements of Earnings (Unaudited). Participacoes' processing volume was transitioned to other vendors or back to its customers during the second quarter of 2011. As a result of the dismissal of employees related to the shut-down activities which have now been completed, the three-month and nine-month periods ended September 30, 2011 included charges of $12.6 million and $28.1 million, respectively, to increase our accrual for potential labor claims. Former employees have up to two years from the date of termination to file labor claims. Consequently, we expect to have continued exposure to such claims,

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


which were not transferred with other assets and liabilities in the disposal. Our accrued liability for labor claims is $29.2 million as of September 30, 2011. Any changes in the estimated liability related to these labor claims will also be recorded as discontinued operations.

(5) Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of September 30, 2011 and December 31, 2010 (in millions):

 
September 30, 2011
 
December 31, 2010
 
Cost
 
Accumulated
depreciation and amortization
 
Net
 
Cost
 
Accumulated
depreciation and amortization
 
Net
Property and equipment
$
862.7

 
$
452.0

 
$
410.7

 
$
787.6

 
$
397.6

 
$
390.0

Intangible assets
$
3,051.9

 
$
1,073.0

 
$
1,978.9

 
$
3,089.7

 
$
886.8

 
$
2,202.9

Computer software
$
1,503.2

 
$
610.1

 
$
893.1

 
$
1,421.1

 
$
512.1

 
$
909.0


During the nine-months ended September 30, 2011, the Company entered into capital lease obligations of $31.4 million for certain computer hardware and software. The assets are included in property and equipment and computer software and the remaining capital lease obligation is classified as long-term debt on our Condensed Consolidated Balance Sheet as of September 30, 2011. Periodic payments are included in Repayment of borrowings on the Condensed Consolidated Statements of Cash Flows.

The table below reconciles the $154.9 million impairment charges recorded in the nine-month period ended September 30, 2010 Condensed Consolidated Statement of Earnings (Unaudited) to the $179.9 million of impairment charges reflected in the Condensed Consolidated Statement of Cash Flows (Unaudited) (in millions):
 
 
 
Intangible assets
 
$
140.3

Computer software
 
14.6

Impairment charge on face of Condensed Consolidated Statement of Earnings (Unaudited)
 
154.9

Asset impairment classified as discontinued operations
 
25.0

Total impairment charges included on the Condensed Consolidated Statement of Cash Flows (Unaudited)
 
$
179.9


Included in accumulated other comprehensive earnings is $15.5 million related to unrealized losses on an investment recorded as available-for-sale securities.  Based on our assessment of broad market and other factors specific to this investment, we do not believe that an other-than-temporary loss has been incurred as of September 30, 2011. 

         

















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


(6) Long-Term Debt
Long-term debt as of September 30, 2011 and December 31, 2010 consisted of the following (in millions):

 
September 30,
2011
 
December 31,
2010
Term Loan A-1, secured, quarterly principal amortization (1)
$
315.0

 
$
350.0

Term Loan A-2, secured, quarterly principal amortization (2)
1,750.0

 
1,900.0

Term Loan B secured, quarterly principal amortization (3)
1,485.0

 
1,496.3

Senior Notes due 2017, unsecured, interest payable semi-annually at 7.625%
600.0

 
600.0

Senior Notes due 2020, unsecured, interest payable semi-annually at 7.875%
500.0

 
500.0

Revolving Loans, secured (4)
175.0

 
305.0

Other
41.0

 
40.8

 
4,866.0

 
5,192.1

Current portion
(538.3
)
 
(256.9
)
Long-term debt, excluding current portion
$
4,327.7

 
$
4,935.2

__________________________________________
(1)
Interest on the Term Loan A-1 is generally payable at LIBOR plus an applicable margin of up to 1.25% based upon the Company's leverage ratio, as defined in the amended and extended credit agreement. As of September 30, 2011, the weighted average interest rate on the Term Loan A-1 was 1.22%.
(2)
Interest on the Term Loan A-2 is generally payable at LIBOR plus an applicable margin of up to 2.50% based upon the Company's leverage ratio, as defined in the amended and extended credit agreement. As of September 30, 2011, the weighted average interest rate on the Term Loan A-2 was 2.48%.
(3)
Interest on the Term Loan B is generally payable at LIBOR plus an applicable margin of 3.75%, subject to a LIBOR floor of 1.50%. As of September 30, 2011, the interest rate on the Term Loan B was 5.25%.
(4)
Interest on the portion of the Revolving Loans that matures in January 2012, which consist of approximately $112.3 million of commitments, is generally payable at LIBOR plus an applicable margin of up to 1.00% plus a facility fee of up to 0.25%, each based upon the Company's leverage ratio. Interest on the portion of the Revolving Loans that matures in July 2014 is generally payable at LIBOR plus an applicable margin of up to 2.50% plus an unused commitment fee of up to 0.50%, each based upon the Company's leverage ratio. As of September 30, 2011, the applicable margins on the 2012 Revolving Loan and 2014 Revolving Loan, excluding facility fees and unused commitment fees, were 0.80% and 2.25%, respectively.

The fair value of the Company’s long-term debt is estimated to be approximately $35.4 million higher than the carrying value as of September 30, 2011. This estimate is based on quoted prices of our Senior Notes and trades of our other debt in close proximity to September 30, 2011, which are considered Level 2-type measurements. This estimate is subjective in nature and involves uncertainties and significant judgment in the interpretation of current market data. Therefore, the values presented are not necessarily indicative of amounts the Company could realize or settle currently.

Our Term Loan B and Senior Notes are held by a number of institutional investors. As of September 30, 2011, $12.9 million of Term Loan B and $21.8 million of Senior Notes were held by FNF.

The FIS Credit Agreement, as of September 30, 2011, provides total committed capital of $4,583.7 million comprised of: (1) revolving credit facilities in an aggregate maximum principal amount of $1,033.7 million, consisting of $112.3 million in revolving credit capacity maturing on January 18, 2012 (the "2012 Revolving Loan") and $921.4 million in revolving credit capacity maturing on July 18, 2014 (the "2014 Revolving Loan", together with the 2012 Revolving Loan the “Revolving Loans”); (2) an aggregate of $3,550.0 million of term notes consisting of $315.0 million maturing on January 18, 2012 (“Term Loan A-1”), $1,750.0 million maturing on July 18, 2014 (“Term Loan A-2”), and (3) $1,485.0 million maturing on July 18, 2016 ("Term Loan B"). As of September 30, 2011, the outstanding principal balance of the Revolving Loans was $175.0 million, with $857.7 million of borrowing capacity remaining thereunder (net of $1.0 million in outstanding letters of credit issued under the Revolving Loans).

In addition to scheduled principal payments, the Term Loans are (with certain exceptions) subject to mandatory

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


prepayment upon the occurrence of certain events. There were no mandatory prepayments owed for the period ended September 30, 2011.

The FIS Credit Agreement remains subject to customary affirmative, negative and financial covenants including, among other things, limits on the creation of liens, limits on incurring indebtedness, restrictions on investments and dispositions, limitations on dividends and other restricted payments, a minimum interest coverage ratio and a maximum leverage ratio. Upon an event of default under the FIS Credit Agreement, the administrative agent can accelerate the maturity of all amounts borrowed. Events of default include the failure to pay principal and interest in a timely manner and breach of certain covenants.

The obligations of FIS under the FIS Credit Agreement are guaranteed by substantially all of the domestic subsidiaries of FIS and are secured by a pledge of the equity interests issued by substantially all of the domestic subsidiaries of FIS and a pledge of 65% of the equity interests issued by certain foreign subsidiaries of FIS.
The indenture with respect to the Senior Notes due 2017 and 2020 ( the "Notes") contains covenants that, among other things, limit FIS' ability and the ability of certain of FIS' subsidiaries (a) to incur or guarantee additional indebtedness, (b) to make certain restricted payments, (c) to create or incur certain liens, (d) to create restrictions on the payment of dividends or other distributions to FIS from its restricted subsidiaries, (e) to engage in sale and leaseback transactions, (f) to transfer all or substantially all of the assets of FIS or any restricted subsidiary or enter into merger or consolidation transactions and (g) to engage in certain transactions with affiliates. These covenants are subject to a number of exceptions, limitations and qualifications in the indenture.
     
The following table summarizes the mandatory annual principal payments pursuant to the FIS Credit Agreement and the Notes as of September 30, 2011 (in millions). There are no mandatory principal payments on the Revolving Loans; any balance outstanding on the 2012 Revolving Loan at its maturity date will be transferred to the 2014 Revolving Loan, and any balance outstanding on the 2014 Revolving Loan will be due and payable at its scheduled maturity date:
 
Term Loan A-1
 
Term Loan A-2
 
Term Loan B
 
2017 Notes
 
2020 Notes
 
Total
2011
$
—

 
$
47.0

 
$
3.8

 
$
—

 
$
—

 
$
50.8

2012
315.0

 
200.4

 
15.0

 
—

 
—

 
530.4

2013
—

 
300.4

 
15.0

 
—

 
—

 
315.4

2014
—

 
1,202.2

 
15.0

 
—

 
—

 
1,217.2

2015
—

 
—

 
15.0

 
—

 
—

 
15.0

Thereafter
—

 
—

 
1,421.2

 
600.0

 
500.0

 
2,521.2

Total
$
315.0

 
$
1,750.0

 
$
1,485.0

 
$
600.0

 
$
500.0

 
$
4,650.0


We monitor the financial stability of our counterparties on an ongoing basis. The lender commitments under the undrawn portions of the Revolving Loans are comprised of a diversified set of financial institutions, both domestic and international. The combined commitments of our top 10 revolving lenders comprise about 70% of our Revolving Loans. The failure of any single lender to perform their obligations under the Revolving Loans would not adversely impact our ability to fund operations. If the single largest lender were to default under the terms of the FIS Credit Agreement (impacting the capacity of the Revolving Loans), the maximum loss of available capacity on the undrawn portion of the Revolving Loans, as of September 30, 2011, would be approximately $111.4 million.

Debt issuance costs of $56.3 million, net of accumulated amortization, remain capitalized as of September 30, 2011, related to all of the above credit facilities.










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


As of September 30, 2011, 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):

Effective date
 
Termination date
 
Notional amount
 
Bank pays
variable rate of
 
FIS pays
 fixed rate of
 
February 1, 2008
 
February 1, 2012
 
$
200.0

 
3 Month LIBOR (1)
 
3.87
%
(3)
February 1, 2008
 
February 1, 2012
 
200.0

 
3 Month LIBOR (1)
 
3.44
%
(3)
November 1, 2010
 
November 1, 2012
 
150.0

 
1 Month LIBOR (2)
 
0.50
%
(3)
February 1, 2011
 
February 1, 2013
 
200.0

 
1 Month LIBOR (2)
 
0.62
%
(3)
May 3, 2011
 
May 1, 2013
 
400.0

 
1 Month LIBOR (2)
 
0.73
%
(3)
September 1, 2011
 
September 1, 2014
 
150.0

 
3 Month LIBOR (1)
 
0.74
%
(3)
September 1, 2011
 
September 1, 2014
 
150.0

 
1 Month LIBOR (2)
 
0.74
%
(3)
September 1, 2011
 
September 1, 2014
 
300.0

 
1 Month LIBOR (2)
 
0.72
%
(3)
 
 
 
 
$
1,750.0

 
 
 
 

 
___________________________________
(1)
0.37% in effect as of September 30, 2011.
(2)
0.24% in effect as of September 30, 2011.
(3)
Does not include the applicable margin and facility fees paid to bank lenders on Term Loan A and Revolving Loans as described above.
We have designated these interest rate swaps as cash flow hedges and, as such, they are carried on the Condensed Consolidated Balance Sheets (Unaudited) at fair value with changes in fair value included in other comprehensive earnings, net of tax.

A summary of the fair value of the Company’s derivative instruments is as follows (in millions):
 
September 30, 2011
 
December 31, 2010
 
Balance sheet location
 
Fair
value
 
Balance sheet location
 
Fair
value
Interest rate swap contracts
Other noncurrent assets
 
$
—

 
Other noncurrent assets
 
$
2.6

Interest rate swap contracts
Accounts payable and accrued liabilities
 
3.9

 
Accounts payable and accrued liabilities
 
3.4

Interest rate swap contracts
Other long-term liabilities
 
5.2

 
Other long-term liabilities
 
18.3

Total derivatives designated as hedging instruments
 
 
$
9.1

 
 
 
$
19.1

In accordance with the authoritative guidance for fair value measurements, the inputs used to determine the estimated fair value of our interest rate swaps are Level 2-type measurements. We considered our own credit risk and the credit risk of the counterparties when determining the fair value of our interest rate swaps. Adjustments are made to these amounts and to accumulated other comprehensive earnings ("AOCE") within the Condensed Consolidated Statement of Equity and Comprehensive Earnings (Unaudited) as the factors that impact fair value change, including current and projected interest rates, time to maturity and required cash transfers/settlements with our counterparties. Periodic actual and estimated settlements with counterparties are recorded to interest expense as a yield adjustment to effectively fix the otherwise variable rate interest expense associated with the Term and Revolving Loans.

As part of the Metavante acquisition, the Company assumed an interest rate swap that is not designated as a hedge for accounting purposes. As of September 30, 2011, the accrued but unpaid reset payments and the fair value of the future reset payments total $42.4 million and the aggregate amount is recorded as part of accounts payable and accrued liabilities.  The interest rate swap matures in the first quarter of 2012 at which time the Company will remit to the counterparty all accrued but unpaid reset payments.




12
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FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


A summary of the effect of derivative instruments on the Company’s Condensed Consolidated Statements of Earnings (Unaudited) and recognized in AOCE for the three months and nine months ended September 30, 2011 and 2010 are as follows (in millions):

 
 
Amount of loss recognized
in AOCE on
derivatives
 
 
 
Amount of loss reclassified
from AOCE into
income
Derivatives in cash
 
Three months ended
 
Location of loss
 
Three months ended
flow hedging
 
September 30,
 
reclassified from
 
September 30,
relationships
 
2011
 
2010
 
AOCE into income
 
2011
 
2010
Interest rate swap contracts
 
$
(5.3
)
 
$
(9.8
)
 
Interest expense
 
$
(4.6
)
 
$
(7.3
)


 
 
Amount of loss recognized
in AOCE on
derivatives
 
 
 
Amount of loss reclassified
from AOCE into
income
Derivatives in cash
 
Nine months ended
 
Location of loss
 
Nine months ended
flow hedging
 
September 30,
 
reclassified from
 
September 30,
relationships
 
2011
 
2010
 
AOCE into income
 
2011
 
2010
Interest rate swap contracts
 
$
(13.8
)
 
$
(31.8
)
 
Interest expense
 
$
(15.9
)
 
$
(33.7
)

Approximately $4.1 million of the balance in AOCE as of September 30, 2011 is expected to be reclassified into income over the next twelve months.
Our existing cash flow hedges are highly effective and there was no impact on earnings due to hedge ineffectiveness. It is our practice to execute such instruments with credit-worthy banks at the time of execution and not to enter into derivative financial instruments for speculative purposes. As of September 30, 2011, we believe that our interest rate swap counterparties will be able to fulfill their obligations under our agreements and we believe we will have debt outstanding through the various expiration dates of the swaps such that the forecasted transactions remain probable of occurring.

(7) Supplemental Guarantor Financial Information

The following supplemental financial information sets forth for FIS and its guarantor and non-guarantor subsidiaries: (a) the condensed consolidating balance sheets as of September 30, 2011 and December 31, 2010; (b) the condensed consolidating statements of earnings for the three months and nine months ended September 30, 2011 and 2010; and (c) the condensed consolidating statements of cash flows for the nine months ended September 30, 2011 and 2010.


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


 
September 30, 2011
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
56.7

 
$
139.1

 
$
191.0

 
$
—

 
$
386.8

Settlement deposits
—

 
41.8

 
—

 
—

 
41.8

Trade receivables, net
—

 
650.0

 
158.3

 
—

 
808.3

Investment in subsidiaries, intercompany and receivables from related parties
9,658.3

 
7,816.4

 
1,055.4

 
(18,478.3
)
 
51.8

Other current assets
(2.2
)
 
238.1

 
79.6

 
—

 
315.5

Total current assets
9,712.8

 
8,885.4

 
1,484.3

 
(18,478.3
)
 
1,604.2

Property and equipment, net
1.5

 
341.9

 
67.3

 
—

 
410.7

Goodwill
—

 
7,413.4

 
1,148.8

 
—

 
8,562.2

Intangible assets, net
—

 
1,521.9

 
457.0

 
—

 
1,978.9

Computer software, net
32.3

 
677.2

 
183.6

 
—

 
893.1

Other noncurrent assets
85.8

 
211.7

 
138.9

 
—

 
436.4

Total assets
$
9,832.4

 
$
19,051.5

 
$
3,479.9

 
$
(18,478.3
)
 
$
13,885.5

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
122.4

 
$
231.4

 
$
208.0

 
$
—

 
$
561.8

Settlement payables
—

 
120.6

 
4.5

 
—

 
125.1

Current portion of long-term debt
527.3

 
10.8

 
0.2

 
—

 
538.3

Deferred revenues
—

 
183.7

 
72.9

 
—

 
256.6

Other current liabilites
—

 
(0.3
)
 
34.8

 
(0.4
)
 
34.1

Total current liabilities
649.7

 
546.2

 
320.4

 
(0.4
)
 
1,515.9

Deferred income taxes
—

 
832.6

 
12.8

 
—

 
845.4

Long-term debt, excluding current portion
4,311.8

 
15.8

 
0.1

 
—

 
4,327.7

Other long-term liabilities
20.0

 
113.5

 
312.1

 
—

 
445.6

Total liabilities
4,981.5

 
1,508.1

 
645.4

 
(0.4
)
 
7,134.6

Total equity
4,850.9

 
17,543.4

 
2,834.5

 
(18,477.9
)
 
6,750.9

Total liabilities and equity
$
9,832.4

 
$
19,051.5

 
$
3,479.9

 
$
(18,478.3
)
 
$
13,885.5

 
December 31, 2010
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
7.7

 
$
161.6

 
$
168.7

 
$
—

 
$
338.0

Settlement deposits
—

 
35.9

 
—

 
—

 
35.9

Trade receivables, net
—

 
648.0

 
191.4

 
—

 
839.4

Investment in subsidiaries, intercompany and receivables from related parties
9,851.1

 
7,183.6

 
1,037.7

 
(18,022.2
)
 
50.2

Other current assets
46.1

 
310.0

 
86.3

 
(32.9
)
 
409.5

Total current assets
9,904.9

 
8,339.1

 
1,484.1

 
(18,055.1
)
 
1,673.0

Property and equipment, net
1.7

 
323.8

 
64.5

 
—

 
390.0

Goodwill
—

 
7,407.0

 
1,143.0

 
—

 
8,550.0

Intangible assets, net
—

 
1,694.9

 
508.0

 
—

 
2,202.9

Computer software, net
30.4

 
667.8

 
210.8

 
—

 
909.0

Other noncurrent assets
99.4

 
173.5

 
178.5

 
—

 
451.4

Total assets
$
10,036.4

 
$
18,606.1

 
$
3,588.9

 
$
(18,055.1
)
 
$
14,176.3

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
175.4

 
$
218.4

 
$
231.7

 
$
(33.7
)
 
$
591.8

Settlement payables
—

 
136.3

 
4.3

 
—

 
140.6

Current portion of long-term debt
233.2

 
0.3

 
23.4

 
—

 
256.9

Deferred revenues
—

 
186.8

 
81.8

 
—

 
268.6

Other current liabilites
—

 
—

 
42.5

 
—

 
42.5

Total current liabilities
408.6

 
541.8

 
383.7

 
(33.7
)
 
1,300.4

Deferred income taxes
—

 
830.0

 
29.3

 
—

 
859.3

Long-term debt, excluding current portion
4,934.0

 
1.0

 
0.2

 
—

 
4,935.2

Other long-term liabilities
32.4

 
171.2

 
316.2

 
—

 
519.8

Total liabilities
5,375.0

 
1,544.0

 
729.4

 
(33.7
)
 
7,614.7

Total equity
4,661.4

 
17,062.1

 
2,859.5

 
(18,021.4
)
 
6,561.6

Total liabilities and equity
$
10,036.4

 
$
18,606.1

 
$
3,588.9

 
$
(18,055.1
)
 
$
14,176.3



14
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FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Three months ended September 30, 2011
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
—

 
$
1,117.6

 
$
308.6

 
$
—

 
$
1,426.2

Operating expenses
42.0

 
834.0

 
273.8

 
—

 
1,149.8

Operating income
(42.0
)
 
283.6

 
34.8

 
—

 
276.4

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(57.6
)
 
(0.6
)
 
(2.3
)
 
—

 
(60.5
)
Other income (expense)
(0.1
)
 
1.4

 
(2.0
)
 
—

 
(0.7
)
Net earnings (loss) of equity affiliates
217.3

 
—

 
—

 
(217.3
)
 
—

Total other income (expense)
159.6

 
0.8

 
(4.3
)
 
(217.3
)
 
(61.2
)
Earnings (loss) from continuing operations before income taxes
117.6

 
284.4

 
30.5

 
(217.3
)
 
215.2

Provision for income taxes
(31.7
)
 
90.4

 
7.2

 
—

 
65.9

Net earnings (loss) from continuing operations
149.3

 
194.0

 
23.3

 
(217.3
)
 
149.3

Earnings (loss) from discontinued operations, net of tax
(9.1
)
 
—

 
(9.1
)
 
9.1

 
(9.1
)
Net earnings (loss)
140.2

 
194.0

 
14.2

 
(208.2
)
 
140.2

Net (earnings) loss attributable to noncontrolling interest
(3.9
)
 
0.2

 
(4.1
)
 
3.9

 
(3.9
)
Net earnings (loss) attributable to FIS common stockholders
$
136.3

 
$
194.2

 
$
10.1

 
$
(204.3
)
 
$
136.3



 
Three months ended September 30, 2010
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
83.3

 
$
1,083.1

 
$
207.1

 
$
(6.3
)
 
$
1,367.2

Operating expenses
59.2

 
804.1

 
334.1

 
(6.3
)
 
1,191.1

Operating income
24.1

 
279.0

 
(127.0
)
 
—

 
176.1

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(59.7
)
 
0.2

 
(1.4
)
 
—

 
(60.9
)
Other income (expense)
19.1

 
(3.7
)
 
2.5

 
—

 
17.9

Net earnings (loss) of equity affiliates
101.6

 
—

 
—

 
(101.6
)
 
—

Total other income (expense)
61.0

 
(3.5
)
 
1.1

 
(101.6
)
 
(43.0
)
Earnings (loss) from continuing operations before income taxes
85.1

 
275.5

 
(125.9
)
 
(101.6
)
 
133.1

Provision for income taxes
0.2

 
104.2

 
(56.2
)
 
—

 
48.2

Net earnings (loss) from continuing operations
84.9

 
171.3

 
(69.7
)
 
(101.6
)
 
84.9

Earnings (loss) from discontinued operations, net of tax
(23.9
)
 
—

 
(23.9
)
 
23.9

 
(23.9
)
Net earnings (loss)
61.0

 
171.3

 
(93.6
)
 
(77.7
)
 
61.0

Net (earnings) loss attributable to noncontrolling interest
49.4

 
0.3

 
49.1

 
(49.4
)
 
49.4

Net earnings (loss) attributable to FIS common stockholders
$
110.4

 
$
171.6

 
$
(44.5
)
 
$
(127.1
)
 
$
110.4





15
Table of Contents
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Nine months ended September 30, 2011
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
—

 
$
3,319.4

 
$
931.9

 
$
—

 
$
4,251.3

Operating expenses
122.3

 
2,517.5

 
862.3

 
—

 
3,502.1

Operating income
(122.3
)
 
801.9

 
69.6

 
—

 
749.2

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(183.1
)
 
(0.7
)
 
(10.5
)
 
—

 
(194.3
)
Other income (expense)
—

 
—

 
2.4

 
—

 
2.4

Net earnings (loss) of equity affiliates
575.6

 
—

 
—

 
(575.6
)
 
—

Total other income (expense)
392.5

 
(0.7
)
 
(8.1
)
 
(575.6
)
 
(191.9
)
Earnings (loss) from continuing operations before income taxes
270.2

 
801.2

 
61.5

 
(575.6
)
 
557.3

Provision for income taxes
(107.1
)
 
275.7

 
11.4

 
—

 
180.0

Net earnings (loss) from continuing operations
377.3

 
525.5

 
50.1

 
(575.6
)
 
377.3

Earnings (loss) from discontinued operations, net of tax
(18.2
)
 
—

 
(18.2
)
 
18.2

 
(18.2
)
Net earnings (loss)
359.1

 
525.5

 
31.9

 
(557.4
)
 
359.1

Net (earnings) loss attributable to noncontrolling interest
(6.5
)
 
0.6

 
(7.1
)
 
6.5

 
(6.5
)
Net earnings (loss) attributable to FIS common stockholders
$
352.6

 
$
526.1

 
$
24.8

 
$
(550.9
)
 
$
352.6




 
Nine months ended September 30, 2010
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
83.3

 
$
3,224.1

 
$
605.9

 
$
(40.1
)
 
$
3,873.2

Operating expenses
215.2

 
2,473.0