FIS-10-Q 06-30-2012
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 June 30, 2012
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) 438-6000
(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 July 31, 2012, 294,611,280 shares of the Registrant’s Common Stock were outstanding.
 
 
 
 
 
 
 
 
 
 


FORM 10-Q
QUARTERLY REPORT
Quarter Ended June 30, 2012
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)
 
June 30, 2012
 
December 31, 2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
533.8

 
$
415.5

Settlement deposits
19.5

 
43.9

Trade receivables, net of allowance for doubtful accounts of $37.2 and $33.1 as of
June 30, 2012 and December 31, 2011, respectively
892.9

 
858.5

Settlement receivables
107.7

 
78.1

Other receivables
39.8

 
40.1

Due from related parties
59.4

 
56.9

Prepaid expenses and other current assets
135.6

 
117.1

Deferred income taxes
58.1

 
72.6

Assets held for sale
310.8

 
—

Total current assets
2,157.6

 
1,682.7

Property and equipment, net
421.8

 
414.5

Goodwill
8,368.8

 
8,542.8

Intangible assets, net
1,695.2

 
1,903.3

Computer software, net
859.1

 
881.5

Deferred contract costs, net
226.8

 
232.7

Other noncurrent assets
213.7

 
190.8

Total assets
$
13,943.0

 
$
13,848.3

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
554.6

 
$
641.5

Due to Brazilian venture partner
18.7

 
36.5

Settlement payables
138.9

 
141.2

Current portion of long-term debt
127.9

 
259.2

Deferred revenues
272.2

 
276.5

Liabilities held for sale
9.0

 
—

Total current liabilities
1,121.3

 
1,354.9

Deferred revenues
46.1

 
55.9

Deferred income taxes
863.5

 
872.5

Long-term debt, excluding current portion
4,735.6

 
4,550.6

Due to Brazilian venture partner
39.5

 
50.6

Other long-term liabilities
331.9

 
312.6

Total liabilities
7,137.9

 
7,197.1

Equity:
 
 
 
FIS stockholders’ equity:
 
 
 
Preferred stock, $0.01 par value, 200 shares authorized, none issued and outstanding as of June 30, 2012 and December 31, 2011
—

 
—

Common stock, $0.01 par value, 600 shares authorized, 384.6 shares issued as of June 30, 2012 and
December 31, 2011
3.8

 
3.8

Additional paid in capital
7,205.6

 
7,224.7

Retained earnings
2,000.4

 
1,880.4

Accumulated other comprehensive earnings
20.1

 
36.3

Treasury stock, $0.01 par value, 89.3 and 91.7 shares as of June 30, 2012 and December 31, 2011, respectively, at cost
(2,567.8
)
 
(2,642.2
)
Total FIS stockholders’ equity
6,662.1

 
6,503.0

Noncontrolling interest
143.0

 
148.2

Total equity
6,805.1

 
6,651.2

Total liabilities and equity
$
13,943.0

 
$
13,848.3

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
June 30,
 
Six months ended
June 30,
 
2012
 
2011
 
2012
 
2011
Processing and services revenues (for related party activity, see note 2)
$
1,457.2

 
$
1,413.3

 
$
2,870.6

 
$
2,766.1

Cost of revenues
981.1

 
989.4

 
1,970.6

 
1,965.7

Gross profit
476.1

 
423.9

 
900.0

 
800.4

Selling, general, and administrative expenses (for related party activity, see note 2)
193.4

 
169.3

 
394.8

 
336.1

Operating income
282.7

 
254.6

 
505.2

 
464.3

Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(56.6
)
 
(65.8
)
 
(116.0
)
 
(133.8
)
Other income (expense), net
(1.8
)
 
(0.2
)
 
(22.7
)
 
3.1

Total other income (expense), net
(58.4
)
 
(66.0
)
 
(138.7
)
 
(130.7
)
Earnings from continuing operations before income taxes
224.3

 
188.6

 
366.5

 
333.6

Provision for income taxes
65.3

 
60.2

 
113.0

 
110.9

Earnings from continuing operations, net of tax
159.0

 
128.4

 
253.5

 
222.7

Earnings (loss) from discontinued operations, net of tax
(5.2
)
 
(3.1
)
 
(9.6
)
 
(3.8
)
Net earnings
153.8

 
125.3

 
243.9

 
218.9

Net (earnings) loss attributable to noncontrolling interest
(3.2
)
 
(1.8
)
 
(6.2
)
 
(2.6
)
Net earnings attributable to FIS
$
150.6

 
$
123.5

 
$
237.7

 
$
216.3

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.53

 
$
0.42

 
$
0.85

 
$
0.73

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.01
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.51

 
$
0.41

 
$
0.82

 
$
0.71

Weighted average shares outstanding — basic
292.7

 
303.6

 
291.2

 
302.6

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.52

 
$
0.41

 
$
0.83

 
$
0.71

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.01
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.50

 
$
0.40

 
$
0.80

 
$
0.70

Weighted average shares outstanding — diluted
298.3

 
310.9

 
296.8

 
309.8

Cash dividends paid per share
$
0.20

 
$
0.05

 
$
0.40

 
$
0.10

Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
155.8

 
$
126.6

 
$
247.3

 
$
220.1

Earnings (loss) from discontinued operations, net of tax
(5.2
)
 
(3.1
)
 
(9.6
)
 
(3.8
)
Net earnings attributable to FIS
$
150.6

 
$
123.5

 
$
237.7

 
$
216.3

* 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 Statements of Comprehensive Earnings
(In millions, except per share data)
(Unaudited)

 
Three months ended June 30,
 
Six months ended June 30,
 
2012
 
2011
 
2012
 
2011
Net earnings
 
 
$
153.8

 
 
 
$
125.3

 
 
 
$
243.9

 
 
 
$
218.9

Other comprehensive earnings, before tax:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on investments and derivatives
$
(6.1
)
 
 
 
$
(2.6
)
 
 
 
$
2.2

 
 
 
$
(10.8
)
 
 
Reclassification adjustment for gains included in net earnings
—

 
 
 
—

 
 
 
—

 
 
 
(3.1
)
 
 
Unrealized gain (loss) on investments and derivatives, net
(6.1
)
 
 
 
(2.6
)
 
 
 
2.2

 
 
 
(13.9
)
 
 
Foreign currency translation adjustments
(52.0
)
 
 
 
22.3

 
 
 
(27.6
)
 
 
 
49.2

 
 
Other comprehensive earnings, before tax
(58.1
)
 
 
 
19.7

 
 
 
(25.4
)
 
 
 
35.3

 
 
Provision for income tax expense (benefit) related to items of other comprehensive earnings
(4.2
)
 
 
 
(0.9
)
 
 
 
(0.4
)
 
 
 
(4.9
)
 
 
Other comprehensive earnings (loss), net of tax
$
(53.9
)
 
(53.9
)
 
$
20.6

 
20.6

 
$
(25.0
)
 
(25.0
)
 
$
40.2

 
40.2

Comprehensive earnings
 
 
99.9

 
 
 
145.9

 
 
 
218.9

 
 
 
259.1

Comprehensive (earnings) losses attributable to noncontrolling interest
 
 
7.8

 
 
 
(6.7
)
 
 
 
2.6

 
 
 
(9.9
)
Comprehensive earnings attributable to FIS
 
 
$
107.7

 
 
 
$
139.2

 
 
 
$
221.5

 
 
 
$
249.2








4
Table of Contents

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statement of Equity
Six months ended June 30, 2012
(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
 
Total
 
shares
 
shares
 
stock
 
capital
 
earnings
 
earnings
 
stock
 
interest
 
equity
Balances, December 31, 2011
384.6

 
(91.7
)
 
$
3.8

 
$
7,224.7

 
$
1,880.4

 
$
36.3

 
$
(2,642.2
)
 
$
148.2

 
$
6,651.2

Exercise of stock options and stock purchase right
—

 
7.8

 
—

 
(72.5
)
 
—

 
—

 
231.2

 
—

 
158.7

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

 
(0.2
)
 
—

 
—

 
—

 
—

 
(5.8
)
 
—

 
(5.8
)
Excess income tax benefit from exercise of stock options
—

 
—

 
—

 
10.3

 
—

 
—

 
—

 
—

 
10.3

Stock-based compensation
—

 
—

 
—

 
43.1

 
—

 
—

 
—

 
—

 
43.1

Cash dividends paid ($0.20 per share per quarter) and other distributions
—

 
—

 
—

 
—

 
(117.7
)
 
—

 
—

 
(2.6
)
 
(120.3
)
Purchases of treasury stock
—

 
(5.2
)
 
—

 
—

 
—

 
—

 
(151.0
)
 
—

 
(151.0
)
Net earnings
—

 
—

 
—

 
—

 
237.7

 
—

 
—

 
6.2

 
243.9

Other comprehensive earnings
—

 
—

 
—

 
—

 
—

 
(16.2
)
 
—

 
(8.8
)
 
(25.0
)
Balances, June 30, 2012
384.6

 
(89.3
)
 
$
3.8

 
$
7,205.6

 
$
2,000.4

 
$
20.1

 
$
(2,567.8
)
 
$
143.0

 
$
6,805.1

See accompanying notes to unaudited condensed consolidated financial statements.


5
Table of Contents

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

 
Six months ended
June 30,
 
2012
 
2011
Cash flows from operating activities:
 
 
 
Net earnings
$
243.9

 
$
218.9

Adjustment to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
317.2

 
310.0

Amortization of debt issue costs
24.6

 
7.1

Stock-based compensation
42.9

 
31.1

Deferred income taxes
5.8

 
1.9

Excess income tax benefit from exercise of stock options
(10.3
)
 
(6.9
)
Other operating activities, net
—

 
(4.5
)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
 
 
 
Trade receivables
(55.6
)
 
12.5

Settlement activity
(7.5
)
 
68.6

Prepaid expenses and other assets
(16.7
)
 
(18.3
)
Deferred contract costs
(34.9
)
 
(28.7
)
Deferred revenue
(21.0
)
 
(17.9
)
Accounts payable, accrued liabilities, and other liabilities
(25.7
)
 
(50.3
)
Net cash provided by operating activities
462.7

 
523.5

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions to property and equipment
(66.6
)
 
(50.3
)
Additions to computer software
(89.1
)
 
(89.3
)
Net proceeds from sale of assets
—

 
5.9

Acquisitions, net of cash acquired
(41.7
)
 
(12.7
)
Net cash used in investing activities
(197.4
)
 
(146.4
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Borrowings
7,483.3

 
5,160.9

Repayment of borrowings
(7,430.8
)
 
(5,500.9
)
Debt issuance costs
(47.5
)
 
—

Excess income tax benefit from exercise of stock options
10.3

 
6.9

Proceeds from exercise of stock options, net of tax withholding
152.9

 
66.4

Treasury stock purchases
(186.0
)
 
—

Dividends paid
(117.7
)
 
(32.1
)
Other financing activities, net
(4.7
)
 
1.4

Net cash used in financing activities
(140.2
)
 
(297.4
)
Effect of foreign currency exchange rate changes on cash
(6.8
)
 
9.6

Net increase (decrease) in cash and cash equivalents
118.3

 
89.3

Cash and cash equivalents, beginning of period
415.5

 
338.0

Cash and cash equivalents, end of period
$
533.8

 
$
427.3

 
 
 
 
Supplemental cash flow information:
 
 
 
Cash paid for interest
$
97.8

 
$
128.4

Cash paid for income taxes
$
87.3

 
$
96.2

See accompanying notes to unaudited condensed consolidated financial statements.


6
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, 2011. 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 2011 Condensed Consolidated Financial Statements (Unaudited) to conform to the classifications used in 2012.
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 and six months ended June 30, 2012 and 2011 is as follows (in millions):
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2012
 
2011
 
2012
 
2011
Banco Bradesco Brazilian Venture revenue
$
67.2

 
$
75.1

 
$
142.6

 
$
141.6

Banco Bradesco item processing revenue
—

 
—

 
—

 
1.2

FNF data processing services revenue
8.5

 
12.7

 
20.5

 
24.4

Ceridian data processing and services revenue
28.1

 
13.1

 
46.7

 
27.0

Total related party revenues
$
103.8

 
$
100.9

 
$
209.8

 
$
194.2


A detail of related party items included in selling, general and administrative expenses (net of expense reimbursements) for the three and six months ended June 30, 2012 and 2011 is as follows (in millions):
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2012
 
2011
 
2012
 
2011
Administrative corporate support and other services with FNF
$
1.1

 
$
1.1

 
$
2.1

 
$
2.3

Employee benefits services with Ceridian
0.3

 
0.1

 
0.5

 
0.1

Total related party expenses
$
1.4

 
$
1.2

 
$
2.6

 
$
2.4





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


Brazilian Venture

The Company operates a venture ("Brazilian Venture") with Banco Bradesco S.A. (“Banco Bradesco”) in which we own a 51% controlling interest, to provide comprehensive, fully outsourced card processing services to Brazilian card issuers, including Banco Bradesco. The Brazilian Venture currently processes approximately 50.0 million cards for clients in Brazil and provides call center, cardholder support and collection services for their card portfolios.

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 Vice 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). We also incur expenses for amounts paid by us to FNF under cost-sharing agreements to use certain corporate aircraft.

Ceridian

We provide data processing services to Ceridian Corporation (“Ceridian”) and Ceridian provides us with outsourced employee benefits services. FNF holds an approximate 33% equity interest in Ceridian.

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

(3) Unaudited Net Earnings per Share
The basic weighted average shares and common stock equivalents for the three and six months ended June 30, 2012 and 2011 are computed using the treasury stock method.
The following table summarizes the earnings per share attributable to FIS common stockholders for the three and six months ended June 30, 2012 and 2011 (in millions, except per share amounts):

8
Table of Contents
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Three months ended
June 30,
 
Six months ended
June 30,
 
2012
 
2011
 
2012
 
2011
Earnings from continuing operations attributable to FIS, net of tax
$
155.8

 
$
126.6

 
$
247.3

 
$
220.1

Earnings (loss) from discontinued operations attributable to FIS, net of tax
(5.2
)
 
(3.1
)
 
(9.6
)
 
(3.8
)
Net earnings attributable to FIS common stockholders
$
150.6

 
$
123.5

 
$
237.7

 
$
216.3

Weighted average shares outstanding — basic
292.7

 
303.6

 
291.2

 
302.6

Plus: Common stock equivalent shares
5.6

 
7.3

 
5.6

 
7.2

Weighted average shares outstanding — diluted
298.3

 
310.9

 
296.8

 
309.8

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.53

 
$
0.42

 
$
0.85

 
$
0.73

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.01
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.51

 
$
0.41

 
$
0.82

 
$
0.71

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.52

 
$
0.41

 
$
0.83

 
$
0.71

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.01
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.50

 
$
0.40

 
$
0.80

 
$
0.70

 
 
 
 
 
 
 
 
* amounts may not sum due to rounding.
 
 
 
 
 
 
 
Options to purchase approximately 0.4 million and 4.9 million shares of our common stock for the three months and 3.4 million and 5.0 million for the six months ended June 30, 2012 and 2011, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive.

(4) Discontinued Operations

 Healthcare Benefit Solutions Business

On June 25, 2012, we entered into a definitive agreement to sell our Healthcare Benefit Solutions Business ("Healthcare Business") for $335.0 million because its operations do not align with our strategic plans. The all-cash transaction is expected to close by the end of the third quarter of 2012, subject to customary closing conditions. Accordingly, we have classified the assets (consisting principally of intangible assets and software) and liabilities of the Healthcare Business as held for sale as of June 30, 2012. The results of operations of the Healthcare Business, which were previously included in the PSG segment, have been classified as discontinued operations for all periods presented. FIS anticipates that it will incur an after-tax loss of approximately $55 million, or $0.19 per share, upon completion of the sale in the third quarter, which will also be included in discontinued operations. The Healthcare Business had revenues of $31.7 million and $28.4 million during the three months and $65.2 million and $59.0 million during the six months ended June 30, 2012 and 2011, respectively. The Healthcare Business had earnings before taxes of $6.7 million and $4.3 million during the three months and $13.7 million and $8.5 million during the six months ended June 30, 2012 and 2011, respectively. The Company entered into an agreement to provide certain commercial and transitional services to the buyer and expects to continue to generate insignificant cash flows for the provision of these services subsequent to the disposition.

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”). There were no revenues for the 2012 periods and revenues of $2.0 million and $11.7 million for the three and six months ended June 30, 2011, respectively. Participacoes had losses before taxes of $14.3 million and $9.0 million during the three months and $27.3 million and $13.8 million during the six months ended June 30, 2012 and 2011, respectively. The operating results of Participacoes are classified as discontinued operations for all periods

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


presented. 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 completed in 2011, the three months and six months ended June 30, 2012 and 2011 included charges of $12.7 million and $6.6 million and $24.4 million and $16.6 million, respectively, to increase our accrual for potential labor claims. The shut-down activities involved the transfer and termination of approximately 2,600 employees. As of June 30, 2012 there are approximately 1,800 active 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, which were not transferred with other assets and liabilities in the disposal. Our accrued liability for active and unasserted labor claims is $40.2 million as of June 30, 2012. 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 June 30, 2012 and December 31, 2011 (in millions):

 
June 30, 2012
 
December 31, 2011
 
Cost
 
Accumulated
depreciation and amortization
 
Net
 
Cost
 
Accumulated
depreciation and amortization
 
Net
Property and equipment
$
932.6

 
$
510.8

 
$
421.8

 
$
882.7

 
$
468.2

 
$
414.5

Intangible assets
$
2,953.7

 
$
1,258.5

 
$
1,695.2

 
$
3,053.4

 
$
1,150.1

 
$
1,903.3

Computer software
$
1,496.4

 
$
637.3

 
$
859.1

 
$
1,517.0

 
$
635.5

 
$
881.5

       
The Company entered into capital lease obligations of $1.8 million and $31.4 million during the six months ended June 30, 2012 and 2011, respectively 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 (Unaudited) as of June 30, 2012. Periodic payments are included in repayment of borrowings on the Condensed Consolidated Statements of Cash Flows (Unaudited).

(6) Long-Term Debt
Long-term debt as of June 30, 2012 and December 31, 2011 consisted of the following (in millions):

 
June 30, 2012
 
December 31, 2011
Term Loan A-2, secured (1)
$
250.0

 
$
2,088.6

Term Loan A-3, secured, quarterly principal amortization (2)
2,073.8

 
—

New Term Loan B, secured
—

 
1,250.0

Senior Notes due 2017, unsecured, interest payable semi-annually at 7.625%
750.0

 
750.0

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

 
500.0

Senior Notes due 2022, unsecured, interest payable semi-annually at 5.000%
700.0

 
—

Revolving Loan, secured (3)
548.0

 
175.0

Other
41.7

 
46.2

 
4,863.5

 
4,809.8

Current portion
(127.9
)
 
(259.2
)
Long-term debt, excluding current portion
$
4,735.6

 
$
4,550.6

__________________________________________
(1)
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 FIS Credit Agreement. As of June 30, 2012, the weighted average interest rate on the Term Loan A-2 was 2.49%.
(2)
Interest on the Term Loan A-3 is generally payable at LIBOR plus an applicable margin of up to 2.25% based upon the Company's corporate credit ratings and the ratings on the FIS Credit Agreement. As of June 30, 2012, the weighted average interest rate on the Term Loan A-3 was 2.24%.
(3)
Interest on the Revolving Loan is generally payable at LIBOR plus an applicable margin of up to 2.25% plus an unused commitment fee of up to 0.35%, each based upon the Company's corporate credit ratings and the ratings on the FIS Credit Agreement. As of June 30, 2012, the applicable margin on the Revolving Loan, excluding facility fees and unused commitment fees, was 2.00%.

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



On March 30, 2012, FIS amended and restated its syndicated credit agreement (the “FIS Credit Agreement”). The FIS Credit Agreement, as of June 30, 2012, provides total committed capital of $3,473.8 million comprised of: (1) a revolving credit facility in an aggregate maximum principal amount of $1,150.0 million maturing on March 30, 2017 ( the “Revolving Loan”); and (2) an aggregate of $2,323.8 million of term loans consisting of $250.0 million maturing on July 18, 2014 (the “Term Loan A-2”) and $2,073.8 million maturing on March 30, 2017 (the "Term Loan A-3" and together with the Term Loan A-2 the "Term Loans"). As of June 30, 2012, the outstanding principal balance of the Revolving Loan was $548.0 million, with $601.2 million of borrowing capacity remaining thereunder (net of $0.8 million in outstanding letters of credit issued under the Revolving Loan). During the second quarter 2012, FIS repaid the remaining balance of $200.0 million term loan maturing on July 18, 2016 (the "New Term Loan B").

The obligations 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.

On December 19, 2011, FIS entered into a supplemental indenture whereby FIS issued an additional $150.0 million of our 7.625% Senior Notes due July 16, 2017 (the "Additional 2017 Notes") that have the same terms as the existing Senior Notes due in 2017 (the "2017 Notes").
   
On March 19, 2012, FIS completed an offering of $700.0 million aggregate principal amount of 5.000% Senior Notes due 2022 (the “2022 Notes” and together with the 2017 Notes, the Additional 2017 Notes and the 2020 Notes, the “Notes”). FIS issued the 2022 Notes under an indenture dated as of March 19, 2012 among FIS, FIS' domestic subsidiaries that guaranteed its amended credit facility (the “Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee.

The Additional 2017 Notes and the 2022 Notes were offered and sold in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. Pursuant to the Company's obligations under registration rights agreements entered into in connection with the issuance of the Additional 2017 Notes and the 2022 Notes, the Company commenced an exchange offer in the third quarter of 2012 to exchange them for registered notes that contain the same terms and conditions without transfer restrictions.  The Company expects that the exchange offer will be completed in August 2012.

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of the Guarantors. The Notes and the related guarantees are general senior unsecured obligations of FIS and the Guarantors and (1) rank equally in right of payment with all of FIS' and the Guarantors' existing and future senior debt, (2) are effectively junior to all of FIS' and the Guarantors' existing and future secured debt to the extent of the value of the assets securing that secured debt, (3) are effectively junior to all existing and future debt and liabilities of FIS' non-guarantor subsidiaries and (4) rank senior in right of payment to all of FIS' future debt, if any, that is by its terms expressly subordinated to the Notes.

The following table summarizes the mandatory annual principal payments pursuant to the FIS Credit Agreement and the Notes' indentures as of June 30, 2012 (in millions). There are no mandatory principal payments on the Revolving Loan and any balance outstanding on the Revolving Loan will be due and payable at its scheduled maturity date:
 
Term Loan
 
Term Loan
 
2017
 
2020
 
2022
 
 
 
A-2
 
A-3
 
Notes
 
Notes
 
Notes
 
Total
2012
$
—

 
$
52.6

 
$
—

 
$
—

 
$
—

 
$
52.6

2013
—

 
144.4

 
—

 
—

 
—

 
144.4

2014
250.0

 
196.9

 
—

 
—

 
—

 
446.9

2015
—

 
288.8

 
—

 
—

 
—

 
288.8

2016
—

 
393.8

 
—

 
—

 
—

 
393.8

Thereafter
—

 
997.3

 
750.0

 
500.0

 
700.0

 
2,947.3

Total
$
250.0

 
$
2,073.8

 
$
750.0

 
$
500.0

 
$
700.0

 
$
4,273.8


Our Notes are held by a number of institutional investors. As of June 30, 2012, $48.8 million of Notes were held by FNF.

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



We monitor the financial stability of our counterparties on an ongoing basis. The lender commitments under the undrawn portions of the Revolving Loan are comprised of a diversified set of financial institutions, both domestic and international. The combined commitments of our top 10 revolving lenders comprise about 66% of our Revolving Loan. The failure of any single lender to perform its obligations under the Revolving Loan 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 Loan), the maximum loss of available capacity on the undrawn portion of the Revolving Loan, as of June 30, 2012, would be approximately $53.6 million.

In connection with the March 2012 refinancing and bond offering, we wrote off certain previously capitalized debt issuance costs and transaction expenses totaling $18.4 million and capitalized $29.3 million of other costs. Debt issuance costs of $56.8 million, net of accumulated amortization, remain capitalized as of June 30, 2012, related to all of the above outstanding debt.

The fair value of the Company’s long-term debt is estimated to be approximately $113.7 million higher than the carrying value as of June 30, 2012. This estimate is based on quoted prices of our Notes and trades of our other debt in close proximity to June 30, 2012, 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.

As of June 30, 2012, we have entered into the following interest rate swap transactions converting a portion of the interest rate exposure on our Term Loans and Revolving Loan from variable to fixed (in millions):

Effective date
 
Termination date
 
Notional amount
 
Bank pays
variable rate of
 
FIS pays
 fixed rate of
 
November 1, 2010
 
November 1, 2012
 
$
150.0

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

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

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

 
1 Month LIBOR (1)
 
0.74
%
(2)
September 1, 2011
 
September 1, 2014
 
150.0

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

 
1 Month LIBOR (1)
 
0.72
%
(2)
July 1, 2012
 
July 1, 2015
 
300.0

 
1 Month LIBOR (1)
 
0.58
%
(2)
 
 
 
 
$
1,650.0

 
 
 
 

 
___________________________________
(1)
0.25% in effect as of June 30, 2012.
(2)
Does not include the applicable margin and facility fees paid to lenders on the Term Loans and Revolving Loan 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 as of June 30, 2012 and December 31, 2011 is as follows (in millions):

 
June 30, 2012
 
December 31, 2011
 
Balance sheet location
 
Fair
value
 
Balance sheet location
 
Fair
value
Interest rate swap contracts
Accounts payable and accrued liabilities
 
$
2.2

 
Accounts payable and accrued liabilities
 
$
3.4

Interest rate swap contracts
Other long-term liabilities
 
5.4

 
Other long-term liabilities
 
4.0

Total derivatives designated as hedging instruments
 
 
$
7.6

 
 
 
$
7.4


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



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 Statements of Equity (Unaudited) and the Condensed Consolidated Statements of 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 Loans and Revolving Loan.

A summary of the effect of derivative instruments on the Company’s Condensed Consolidated Statements of Comprehensive Earnings (Unaudited) and recognized in AOCE for the three and six months ended June 30, 2012 and 2011 is 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
 
June 30,
 
reclassified from
 
June 30,
relationships
 
2012
 
2011
 
AOCE into income
 
2012
 
2011
Interest rate swap contracts
 
$
(2.8
)
 
$
(6.8
)
 
Interest expense
 
$
(1.5
)
 
$
(4.8
)

 
 
Amount of loss recognized
in AOCE on
derivatives
 
 
 
Amount of loss reclassified
from AOCE into
income
Derivatives in cash
 
Six months ended
 
Location of loss
 
Six months ended
flow hedging
 
June 30,
 
reclassified from
 
June 30,
relationships
 
2012
 
2011
 
AOCE into income
 
2012
 
2011
Interest rate swap contracts
 
$
(4.6
)
 
$
(8.4
)
 
Interest expense
 
$
(4.1
)
 
$
(11.3
)

Approximately $3.3 million of the balance in AOCE as of June 30, 2012 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 June 30, 2012, 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 June 30, 2012 and December 31, 2011; (b) the Condensed Consolidating Statements of Earnings and Comprehensive Earnings for the three and six months ended June 30, 2012 and 2011; and (c) the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2012 and 2011.

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


 
June 30, 2012
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
16.9

 
$
192.0

 
$
324.9

 
$
—

 
$
533.8

Settlement deposits
—

 
18.9

 
0.6

 
—

 
19.5

Trade receivables, net
—

 
687.7

 
205.2

 
—

 
892.9

Investment in subsidiaries, intercompany and receivables from related parties
9,758.4

 
8,642.0

 
998.9

 
(19,339.9
)
 
59.4

Other current assets
14.2

 
572.0

 
65.8

 
—

 
652.0

Total current assets
9,789.5

 
10,112.6

 
1,595.4

 
(19,339.9
)
 
2,157.6

Property and equipment, net
3.1

 
347.0

 
71.7

 
—

 
421.8

Goodwill
—

 
7,203.7

 
1,165.1

 
—

 
8,368.8

Intangible assets, net
—

 
1,300.6

 
394.6

 
—

 
1,695.2

Computer software, net
37.9

 
655.5

 
165.7

 
—

 
859.1

Other noncurrent assets
93.6

 
239.9

 
107.0

 
—

 
440.5

Total assets
$
9,924.1

 
$
19,859.3

 
$
3,499.5

 
$
(19,339.9
)
 
$
13,943.0

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
151.0

 
$
191.0

 
$
212.6

 
$
—

 
$
554.6

Settlement payables
—

 
130.1

 
8.8

 
—

 
138.9

Current portion of long-term debt
118.1

 
9.5

 
0.3

 
—

 
127.9

Deferred revenues
—

 
188.0

 
84.2

 
—

 
272.2

Other current liabilites
—

 
9.0

 
18.7

 
—

 
27.7

Total current liabilities
269.1

 
527.6

 
324.6

 
—

 
1,121.3

Deferred income taxes
—

 
865.2

 
(1.7
)
 
—

 
863.5

Long-term debt, excluding current portion
4,725.1

 
10.3

 
0.2

 
—

 
4,735.6

Other long-term liabilities
24.5

 
103.0

 
290.0

 
—

 
417.5

Total liabilities
5,018.7

 
1,506.1

 
613.1

 
—

 
7,137.9

Total equity
4,905.4

 
18,353.2

 
2,886.4

 
(19,339.9
)
 
6,805.1

Total liabilities and equity
$
9,924.1

 
$
19,859.3

 
$
3,499.5

 
$
(19,339.9
)
 
$
13,943.0

 
December 31, 2011
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
19.4

 
$
163.3

 
$
232.8

 
$
—

 
$
415.5

Settlement deposits
—

 
43.9

 
—

 
—

 
43.9

Trade receivables, net
—

 
689.5

 
169.0

 
—

 
858.5

Investment in subsidiaries, intercompany and receivables from related parties
9,564.7

 
8,133.7

 
1,089.0

 
(18,730.5
)
 
56.9

Other current assets
11.9

 
231.7

 
64.3

 
—

 
307.9

Total current assets
9,596.0

 
9,262.1

 
1,555.1

 
(18,730.5
)
 
1,682.7

Property and equipment, net
1.4

 
347.7

 
65.4

 
—

 
414.5

Goodwill
—

 
7,398.5

 
1,144.3

 
—

 
8,542.8

Intangible assets, net
—

 
1,471.2

 
432.1

 
—

 
1,903.3

Computer software, net
32.7

 
673.9

 
174.9

 
—

 
881.5

Other noncurrent assets
77.6

 
230.5

 
115.4

 
—

 
423.5

Total assets
$
9,707.7

 
$
19,383.9

 
$
3,487.2

 
$
(18,730.5
)
 
$
13,848.3

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
152.0

 
$
256.9

 
$
232.6

 
$
—

 
$
641.5

Settlement payables
—

 
136.0

 
5.2

 
—

 
141.2

Current portion of long-term debt
248.4

 
10.5

 
0.3

 
—

 
259.2

Deferred revenues
—

 
205.8

 
70.7

 
—

 
276.5

Other current liabilites
—

 
—

 
36.5

 
—

 
36.5

Total current liabilities
400.4

 
609.2

 
345.3

 
—

 
1,354.9

Deferred income taxes
—

 
871.4

 
1.1

 
—

 
872.5

Long-term debt, excluding current portion
4,537.3

 
13.2

 
0.1

 
—

 
4,550.6

Other long-term liabilities
19.0

 
111.6

 
288.5

 
—

 
419.1

Total liabilities
4,956.7

 
1,605.4

 
635.0

 
—

 
7,197.1

Total equity
4,751.0

 
17,778.5

 
2,852.2

 
(18,730.5
)
 
6,651.2

Total liabilities and equity
$
9,707.7

 
$
19,383.9

 
$
3,487.2

 
$
(18,730.5
)
 
$
13,848.3



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


 
Three months ended June 30, 2012
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
—

 
$
1,145.5

 
$
311.7

 
$
—

 
$
1,457.2

Operating expenses
39.1

 
858.4

 
277.0

 
—

 
1,174.5

Operating income
(39.1
)
 
287.1

 
34.7

 
—

 
282.7

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(55.2
)
 
(0.5
)
 
(0.9
)
 
—

 
(56.6
)
Other income (expense)
(1.3
)
 
2.9

 
(3.4
)
 
—

 
(1.8
)
Net earnings (loss) of equity affiliates
227.7

 
—

 
—

 
(227.7
)
 
—

Total other income (expense)
171.2

 
2.4

 
(4.3
)
 
(227.7
)
 
(58.4
)
Earnings (loss) from continuing operations before income taxes
132.1

 
289.5

 
30.4

 
(227.7
)
 
224.3

Provision for income taxes
(26.9
)
 
81.5

 
10.7

 
—

 
65.3

Net earnings (loss) from continuing operations
159.0

 
208.0

 
19.7

 
(227.7
)
 
159.0

Earnings (loss) from discontinued operations, net of tax
(5.2
)
 
4.2

 
(9.4
)
 
5.2

 
(5.2
)
Net earnings (loss)
153.8

 
212.2

 
10.3

 
(222.5
)
 
153.8

Net (earnings) loss attributable to noncontrolling interest
(3.2
)
 
—

 
(3.2
)
 
3.2

 
(3.2
)
Net earnings (loss) attributable to FIS common stockholders
$
150.6

 
$
212.2

 
$
7.1

 
$
(219.3
)
 
$
150.6

Comprehensive earnings (loss) attributable to FIS
$
107.7

 
$
212.1

 
$
(27.4
)
 
$
(184.7
)
 
$
107.7



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

 
$
1,089.9

 
$
323.4

 
$
—

 
$
1,413.3

Operating expenses
35.0

 
822.7

 
301.0

 
—

 
1,158.7

Operating income
(35.0
)
 
267.2

 
22.4

 
—

 
254.6

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(60.6
)
 
(0.1
)
 
(5.1
)
 
—

 
(65.8
)
Other income (expense)
0.8

 
(0.5
)
 
(0.5
)
 
—

 
(0.2
)
Net earnings (loss) of equity affiliates
189.9

 
—

 
—

 
(189.9
)
 
—

Total other income (expense)
130.1

 
(0.6
)
 
(5.6
)
 
(189.9
)
 
(66.0
)
Earnings (loss) from continuing operations before income taxes
95.1

 
266.6

 
16.8

 
(189.9
)
 
188.6

Provision for income taxes
(33.3
)
 
93.5

 
—

 
—

 
60.2

Net earnings (loss) from continuing operations
128.4

 
173.1

 
16.8

 
(189.9
)
 
128.4

Earnings (loss) from discontinued operations, net of tax
(3.1
)
 
2.7

 
(5.8
)
 
3.1

 
(3.1
)
Net earnings (loss)
125.3

 
175.8

 
11.0

 
(186.8
)
 
125.3

Net (earnings) loss attributable to noncontrolling interest
(1.8
)
 
0.3

 
(2.1
)
 
1.8

 
(1.8
)
Net earnings (loss) attributable to FIS common stockholders
$
123.5

 
$
176.1

 
$
8.9

 
$
(185.0
)
 
$
123.5

Comprehensive earnings (loss) attributable to FIS
$
139.2

 
$
174.4

 
$
33.1

 
$
(207.5
)
 
$
139.2











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


 
Six months ended June 30, 2012
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$
—

 
$
2,266.0

 
$
604.6

 
$
—

 
$
2,870.6

Operating expenses
103.6

 
1,725.3

 
536.5

 
—

 
2,365.4

Operating income
(103.6
)
 
540.7

 
68.1

 
—

 
505.2

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(113.3
)
 
(0.5
)
 
(2.2
)
 
—

 
(116.0
)
Other income (expense)
(17.7
)
 
(1.0
)
 
(4.0
)
 
—

 
(22.7
)
Net earnings (loss) of equity affiliates
414.8

 
—

 
—

 
(414.8
)
 
—

Total other income (expense)
283.8

 
(1.5
)
 
(6.2
)
 
(414.8
)
 
(138.7
)
Earnings (loss) from continuing operations before income taxes
180.2

 
539.2

 
61.9

 
(414.8
)
 
366.5

Provision for income taxes
(73.3
)
 
164.5

 
21.8

 
—

 
113.0

Net earnings (loss) from continuing operations
253.5

 
374.7

 
40.1

 
(414.8
)
 
253.5

Earnings (loss) from discontinued operations, net of tax
(9.6
)
 
8.5

 
(18.1
)
 
9.6

 
(9.6
)
Net earnings (loss)
243.9

 
383.2

 
22.0

 
(405.2
)
 
243.9

Net (earnings) loss attributable to noncontrolling interest
(6.2
)
 
0.4

 
(6.6
)
 
6.2

 
(6.2
)
Net earnings (loss) attributable to FIS common stockholders
$
237.7

 
$
383.6

 
$
15.4

 
$
(399.0
)
 
$