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Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
Form 10-K
________________________________________________________
x
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the fiscal year ended December 31, 2010
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
(State or other jurisdiction of incorpo ration or organization)
 
37-1490331
(I.R.S. Employer Identification No.)
601 Riverside Avenue
Jacksonville, Florida
(Address of principal executive offices)
 
32204
(Zip Code)
(904) 854-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:
 
Name of Each Exchange on Which Registered:
Common Stock, par value $0.01 per share
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Secu rities Act.  Yes x     No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No x
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 x     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 x     No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x
Indicate by check mark whether the registrant is a large accelerated file r, 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 x
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 
 
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o   No x
As of June 30, 2010, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by nonaffiliates was $10,100,270,798 based on the closing sale price of $26.82 on that date as reported by the New York Stock Exchange. For the purposes of the foregoing sentence only, all directors and executive officers of the registrant were assumed to be affiliates. The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, was 302,549,567 as of January 31, 2011.
The information in Part III hereof is incorporated herein by reference to the registrant’s Proxy Statement on Schedule 14A for the fiscal year ended December 31, 2010, to be filed within 120 days after the close of the fiscal year that is the subject of this Report.
 
FIDELITY NATIONAL INFORMATION SERVICES, INC.
2010 FORM 10-K ANNUAL REPORT
 

TABLE OF CONTENTS
 
 
 
Page
 
 
Item 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions
Item 14.
Principal Accounting Fees and Services
 
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EX-21.1
 
 
EX-23.1
 
 
EX-31.1
 
 
EX-31.2
 
 
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EX-32.2
 
 
EX-101 Instance Document
EX-101 SCHEMA DOCUMENT
 
EX-101 CALCULATION LINKBASE DOCUMENT
 
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EX-101 DEFINITION LINKBASE DOCUMENT
 
 

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Unless stated otherwise or the context otherwise requires all references to “FIS,” “we,” the “Company” or the “registrant” are to Fidelity National Information Services, Inc., a Georgia corporation formerly known as Certegy Inc. (“Certegy”), which was the surviving legal entity in the Certegy Merger; all references to "Metavante" are to Metavante Technologies, Inc., and its subsidiaries, as acquired by FIS on October 1, 2009; all references to “eFunds” are to eFunds Corporation, and its subsidiaries, as acquired by FIS on September 12, 2007; all references to "Capco" are to The Capital Markets Company NV, as acquired by FIS on December 2, 2010; all references to “Old FNF” are to Fidelity National Financial, Inc., which owned a majority of the Company’s shares through November 9, 2006; all references to “FNF” are to Fidelity National Financial, Inc. (formerly known as Fidelity National Title Group, Inc. (“FNT”)), formerly a subsidiary of Old FNF but now an independent company that remains a related entity from an accounting perspective; and all references to “LPS” are to Lender Processing Services, Inc., a former wholly owned subsidiary of FIS, which was spun-off as a separate publicly traded company on July 2, 2008.
 
PART I
 
Item 1.    Business.
 
Narrative Description of the Business
 
FIS is one of the world's largest global providers dedicated to banking and payments technologies. We offer financial institution core processing, card issuer and transaction processing services, including the NY CE Network, a leading national electronic funds transfer (EFT) network. FIS is a member of the Standard and Poor’s (S&P) 500® Index and consistently holds a leading ranking in the annual FinTech 100 rankings.
 
As of December 31, 2010, FIS has more than 300 solutions serving over 14,000 financial institutions and business customers in over 100 countries spanning most segments of the financial services industry. Th ese customers include large global as well as mid-tier and community banks, credit unions, commercial lenders, automotive financial institutions, healthcare providers and governments. Additionally, we provide services to numerous retailers via our check processing and guarantee services. No individual customer represents more than 5% of our revenues.
 
On October 1, 2009, FIS completed the acquisition of Metavante. The resulting combination of solution suites strengthened our competitive position globally, generating substantial economies of scale and providing significant cross-sell opportunities. Metavante expanded the scale of FIS' core processing and payment capabilities, and added comprehensive trust and wealth management processin g services as well as the NYCE Network, which joined the Company’s existing EFT offerings. In addition, Metavante added significant scale to our treasury and cash management offerings and provided an entry into the healthcare and government payments markets. These enhanced capabilities enable FIS to provide a selection of solutions to financial institutions across all asset sizes, and to a variety of non-financial organizations, both domestically and internationally. FIS is now well positioned in both the large and mid-tier bank segments, where the majority of IT spending occurs.
 
On December 2, 2010, FIS acquired Capco, a global business and technology consultancy dedic ated solely to the financial services industry. Capco will broaden our capabilities to provide integrated consulting, technology and complex, large-scale transformation services.
     
General Development of the Business
 
Our business operations and organizational structure result from the February 1, 2006, business combination of FIS and Certegy (the “Certegy Merger”). FIS was viewed as the acquirer for accounting purposes, and our financial stateme nts and other disclosures for periods prior to the Certegy Merger treat FIS as our predecessor company. Also, as a result of the Certegy Merger, the registrant’s name changed from “Certegy Inc.” to “Fidelity National Information Services, Inc.” and our New York Stock Exchange trading symbol from “CEY” to “FIS”. We are incorporated under the laws of the State of Georgia.
 
Our growth has been driven organically as well as through an active acquisition program, which has contributed critical applications that are complementary to or enhance existing offerings, including core banking solutions, outsourcing solutions for community banks, credit unions, and other financial institutions, item p rocessing services, card issuer services, risk management solutions, EFT services, prepaid/gift card processing as well as solutions for global organizations and for those domiciled outside of North America.  These strategic transactions have enabled us to quickly broaden our available solution offerings, scale our operations, expand our customer base and strengthen our competitive position.     
 
 

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Financial Information About Operating Segments and Geographic Areas
 
On July 2, 2008, we completed the spin-off of our former lender processing services segment into a separate publicly traded company, Lender Processing Services, Inc., referred to as LPS. The results of operations of the lender processing services segment are reflected as discontinued operations in the Consolidated Statements of Earnings for all periods preceding the spin-off. Subsequent to the LPS spin-off, we began reporting 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. All periods presented have been conformed to reflect the segment changes.
 
Competitive Strengths
 
We believe that our competitive strengths include the following:
 
•    
Leading Proprietary Technology — FIS has a significant number of high quality software applications and services that have been developed over many years with substantial input from our customers.
•    
Comprehensive, Integrated Business Solutions — FIS has the ability to use a wide range of applications and services to provide comprehensive business solutions for our customers. In addition, FIS is able to use the modular nature of our software applications and our ability to integrate many of our services with the service s of others to provide customized solutions that respond to individualized customer needs. FIS also offers a wide range of flexible service arrangements for the deployment and support of our software, from traditional license and maintenance fee approaches to managed processing arrangements, either at the customer’s site or at an FIS location.
•    
Excellent Relationship with Customers — A significant percentage of FIS’ business with our customers relates to core proces sing applications and services, and the nature of this relationship allows us to develop close partnerships with these customers. As the breadth of FIS’ service offerings expands, we have found that our access to key customer personnel is increasing, presenting greater opportunities for cross-selling.
•    
Strong Value Proposition for Customers — We understand the needs of our customers and have developed innovative services that can reduce their operating costs.
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Strategy
 
Our mission is to achieve profitable growth through providing superior solutions to our customers. Our strategy to achieve this has been and will continue to be built on the following pillars:
 
•    
Solution Integration and Innovation — Continue to invest in internally developed applications and platforms. Enhancing and extending the functionality of our proprietary systems and developing new and innovative applications in response to market needs are essential elements to achieving our growth objectives.
•    
Superior Execution — Deliver value using industry best practices more economically than customers can perform the same services internally.
•    
Enterprise Sales — Leverage opportunities for cross-selling and up-selling to existing customers. FIS has built a centr alized team of experienced sales personnel that capitalizes on these opportunities.
•    
Global Diversification — Continue to deploy resources in emerging global markets with higher revenue growth potential.
•    
Strategic Acquisitions — Focus on acquisitions that can bring new applications to existing markets we serve or provide entry into new markets. This strategy has allowed us to build a very broad solutions suite and will contribute to maintaining our competitive position going forward.
•    
Disciplined Capital Investment and Expense Management — Continue to drive operating efficiencies, thereby freeing resources for strategic innovation and global diversification efforts.
Revenues by Segment
 
The table below summarizes the revenues by our reporting segments (in millions):
 

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Financial Solutions Group
 
The focus of FSG is to provide the most comprehensive software and services for the core processing, customer channel, treasury, cash management, wealth management and capital market operations of our financial institution customers in North America. We service the core and related ancillary processing needs of North American banks, credit unions, automotive financial companies, commercial lenders, and independent community and savings i nstitutions. FIS offers a broad selection of in-house and outsourced solutions to banking customers that span the range of asset sizes. FSG customers are typically committed under multi-year contracts that provide a stable, recurring revenue base and opportunities for cross-selling additional financial and payments offerings.
 
We employ several business models to provide our solutions to our customers. We typically deliver the highest value to our customers when we combine our software applications and deliver them in one of several types of outsourcing arrangements, such as an application service provider, facilities management processing or an application management arrangement. We are also able to deliver individual applications through a software licensing arrangement. Based upon the expertise gained through the foregoing arrangements, some clients also use us to manage their IT operations without providing any of our proprietary software.
 
Our solutions in this segment include:
 
 
2010
 
2009
 
2008
FSG
$
1,890.8
 
 
$
1,260.0
 
 
$
1,135.8
 
PSG
2,478.1
 
 
1,741.9
 
 
1,526.3
 
ISG
917.0
 
 
724.3
 
 
699.9
 
Corporate & Other
(16.4
)
 
(15.1
)
 
(2.5
)
Total Consolidated Revenues
$
5,269.5
 
 
$
3,711.1
 
 
$
3,359.5
 
•    
Core Processing and Ancillary Applications.  Our core processing software applications are designed to run critical banking processes for our financial institution clients, including deposit and lending systems, customer management, and other central management systems. Our diverse selection of market-focused core systems enables FIS to effectively compete in a wide range of markets. We also offer a number of services that are ancillary to the primary applications listed above, including branch automation, back office support systems and compliance support. In addition, our wealth management services offer a set of Internet-enabled services to financial services providers that address the specific needs of the rapidly growing wealthy, affluent and emerging affluent markets, as well as commercial clients. These solutions address asset and liability aggregati on, trust and investment account management, client and regulatory reporting, and employee retirement benefit services. We also offer an application suite that assists automotive finance institutions in evaluating loan applications and credit risk, and allows automotive finance institutions to manage their loan and lease portfolios.
•    
Channel Solutions.  Our comprehensive suite of retail delivery applications enables financial institutions to integrate and streamline customer-fac ing operations and back-office processes, thereby improving customer interaction across all channels (e.g., branch offices, Internet, ATM, call centers). The FIS focus on consumer access has driven significant market innovation in this area, with multi-channel and multi-host solutions and a strategy that provides tight integration of services and a seamless customer experience. Our Consumer Electronic Banking and Business Internet Banking both provide an extensive set of cash management capabilities, enabling customers to manage banking and payments through the Internet, mobile devices, accounting software and telephone. Corporate Electronic Banking solutions provide commercial treasury capabilities including cash management services and multi-bank and collection and disbursement services that address the specialized needs of corporate customers. FIS systems provide full accounting and reconciliation for such transactions, serving as the system of record and providing full regulatory compliance, risk assess ment and fraud management tools.
•    
Decision and Risk Management Solutions.  Our decision solutions offer a full spectrum of options that cover the account lifecycle from helping to identify qualified account applicants to managing mature customer accounts and fraud. Our applications include know-your-customer, new account decisioning, new account opening, account and transaction management, fraud management and collections. Our risk management services utilize our proprietary ris k management models and data sources to assist in detecting fraud and assessing the risk of opening a new account or accepting a check at either the point-of-sale, a physical branch location, or through the Internet. Our systems utilize a combination of advanced authentication procedures, predictive analytics, artificial intelligence modeling and proprietary and shared databases to assess and detect fraud risk for deposit transactions for financial institutions.

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•    
Syndicated Loan Applications.  Our syndicated loan applications are designed to support wholesale and commercial banking requirements necessary for all aspects of syndicated commercial loan origination and management.
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Global Commercial Services.  Our global commercial services include solutions, both onshore and offshore, designed to meet the technology challenges facing principally U.S. based clients, large or small. Our technology solutions range in scope from consulting engagements to application development projects and from operations support for a single application to full management of information technology infrastructures. We also provide outsourcing teams to manage costs, improve operational efficiency, transform processes and deliver world-class customer service. There is an increased trend toward outsourcing in our customer base, thus expansion of these services represents one of FIS’ growth drivers.
•    
 
•    
Strategic Consulting Services. With the December 2010 acquisition of Capco, we have broadened our capabilities to provide integrated consulting, technology and complex, large-scale transformation services. Capco specializes in banking; capital markets; wealth and investment management; finance, risk and compliance; and technology.
 
 
Payment Solutions Group
 
PSG provides a comprehensive set of software and services for the EFT, card processing, item processing, bill payment, and government and healthcare payments processing needs of our customers in North America. PSG is focused on servicing the payment and electronic funds transfer needs of North American headquartered banks and credit unions, commercial lenders, and independent community and savings institutions. With the Metavante acquisition, we also entered the healthcare and government payments m arkets. PSG customers typically commit to multi-year contracts that provide recurring revenues based on underlying payment transaction volumes.
 
Our solutions in this segment include:
 
•    
Electronic Funds Transfer.  Our electronic funds transfer and debit card processing businesses offer settlement and card management solutions for financial institution card issuers. We provide traditional ATM- and PIN-based debit network access and emerging real-time payment alternatives through NYCE. NYCE connects millions of cards and point-of-sale locations nationwide, providing consumers with secure, real-time access to their money. Also through NYCE, clients such as financial institutions, retailers and independent ATM operators can capitalize on the efficiency, consumer convenience and security of electronic real-time payments, real-time account-to-account transfers, and strategic alliances such as surcharge-free ATM network arrangements. We are also a leading provider of prepaid card services, which is a fast growing channel in the industry. Services include gift cards and reloadable cards, with end-to-end soluti ons for development, processing and administration of stored-value programs.
•    
Item Processing and Output Services.  Our item processing services furnish financial institutions with the equipment needed to capture data from checks, transaction tickets and other items; image and sort items; process exceptions through keying; and perform balancing, archiving and the production of statements. Our item processing services are utilized by more than 1,500 financial institutions an d are performed at one of our 23 item processing centers located throughout the U.S. or on-site at customer locations. Our extensive solutions include distributed (i.e., non-centralized) data capture, check and remittance processing, fraud detection, and document and report management. Customers encompass banks and corporations of all sizes, from de novo banks to the largest financial institutions and corporations. As part of our image solutions services, our Endpoint Exchange Network enables U.S. financial institutions to clear their check-based transactions by allowing for the exchange of check images between member institutions. We offer a number of output services that are ancillary to the primary solutions we provide, including print and mail capabilities and card personalization fulfillment services. Helping clients manage their documents, our CSF® Designer document composition software is used by many clients in various industries to furnish printed or electronically produced invoices and statements for customized customer communication. Our print and mail services offer complete computer output solutions for the creation, management and delivery of print and fulfillment needs. We provide our card personalization fulfillment services for branded credit cards and branded and non-branded debit and prepaid cards.
•    
Credit Card Solutions.  More than 6,200 financial institutions utilize a combination of our technology and/or services to issue VISA®, MasterCard® or American Express® branded credit and debit cards or other electronic payment cards for use by both consumer and business accounts. Our services range from card production and activation to an extensive range of fraud management services to value-added loyalty programs designed to increase ca rd usage and fee-based revenues. The majority of our programs are full service, including most of the operations and support necessary for an issuer to operate a credit card program. We do not make credit decisions for our card issuing

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customers, nor do we fund their receivables. In addition, our merchant card processing service provides everything a financial institution needs to manage its merchant car d activities including point-of-sale equipment, transaction authorization, draft capture, settlement, charge-back processing and reporting.
•    
Government and Healthcare Payments Solutions.  FIS healthcare payments solutions facilitate the exchange of information and funds among patients, payers, providers and financial institutions. With Web-enabled tools, a Health Savings Account (HSA) platform, “multi-purse” benefit debit cards that cover multiple spending accounts with a single card and combined eligibility/payment cards, FIS enables consumers and third party benefits administrators to have integrated benefit account management of HSAs, Flexible Spending Accounts (FSA), Health Reimbursement Agreements (HRA) and dependent care and transportation accounts. We also provide comprehensive, customized electronic service applications for government agencies, including Internal Revenue Service (IRS) payment services. We also facilitate the collection of state income taxes, real estate taxes, utility bills, vehicle registration fees, driver’s license renewal fees, parking tickets, traffic citations, tuition payments, court fees and fines, hunting and fishing license fees, as well as various business licenses.
•    
ePayment Solutions.  We provide reliable and scalable bill publishing and bill consolidation technology for our customers, generating millions of monthly bills and servicing both billers and financial institution customers. Online bill payment functionality includes credit and debit card-based expedited payments. Our end-to-end presentment and payment solution provides an all-in-one solution to meet billers’ needs for the distribution and collection of bills and other customer documents. FIS also provides automated clearing house (ACH) processing.
•    
Check Authorization.  Our check authorization business provides check risk management and related services to businesses accepting or cashing checks. Our services assess the likelihood (and often provide a guarantee) that a check will clear. Our check authorization system utilizes artificial intelligence modeling and other state-of-the-art technology to deliver accuracy, convenience and simplicity to retailers.
 
International Solutions Group
 
ISG provides local services to our customers in more than 100 countries around the world. The services delivered by FIS in these locations provide many of the same financial and payments solutions we offer in North America. We provide core banking applications, channel solutions, card and merchant services, item processing and check risk management solutions to financial institutions, card issuers and retailers.
 
Our international operations leverage existing applications and provide services for the specific business needs of our customers in targeted international markets. Services are delivered from 27 operations centers around the world. Our payment solutions services include fully outsourced card-issuer services and customer support, item processing and retail point-of-sale check warranty services. Our financial solutions services include fully outsourced core bank processing arrangements, application management, software licensing and maintenance, facilities management and consulting services, including Capco's international operations.
 
ISG represented approximately 17% of total 2010 revenues, with potential for both growth in existing customer accounts and new account penetration. Management believes the greatest potential for growth is in the EMEA, Latin American, Australian and Asian markets.
 
Corporate and Other Segment
 
The Corporate and Other segment consists of the corporate overhead costs that are not allocated to operating segments. These include costs related to human resources, finance, legal, accounting, domestic sales and marketing, merger and acquisition activity and amortization of acquisition-related intangibles and other costs that are not considered when management evaluates operating segment performance.
 
Sales and Marketing
 
We have an integrated team of experienced sales personnel with expertise in particular services and the needs of particular types of customers, e.g., financial institutions, other nonbanking customers, and international institutions. This organizational structure enables us to effectively bring relevant skills and knowledge to potential customers and to identify additional solutions for our existing customers, leveraging opportunities to cross-sell and up-sell. We target the majority of our potential customers via direct and/or indirect field sales, as well as inbound and outbound lead generation and telesales efforts.
 
Our global marketing strategy is to develop and lead the execution of the various business units’ strategic plans in support

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of their revenue and profitability goals. Key components include thought leadership, consistent message development, internal and external communications, client conference content management, Web content creation and management, trade shows, demand generation campaign involvement and collateral development and management.
 
Beginning October 1, 2009, we entered into a comprehensive rebranding campaign to bring all of our software and services under one comprehensive set of trademarks, including FIS and NYCE, in support of our marketing strategy.
 
Patents, Trademarks and Other Intellectual Property
 
The Company owns intell ectual property including trademarks, trade names and patents that are important to its future success. We rely on a combination of contractual restrictions, internal security practices, patents and applicable law to establish and protect our software, technology and expertise worldwide. We rely on trademark law to protect our rights in those brands. While we intend to continue taking appropriate measures to protect our intellectual property rights, these legal protections and arrangements afford only limited protection, and there is no assurance that our competitors will not independently develop or license products, services, or capabilities that are substantially equivalent or superior to ours. In general, we own the proprietary rights necessary for the conduct of our business, although we do license certain items from third parties under arms-length agreements for varying terms.
 
Competition
 
Our primary competitors include internal technology departments within financial institutions and retailers, data processing or software development departments of large companies or large computer manufacturers, third-party payment processors, independent computer services firms, companies that develop and deploy software applications, companies that provide customized development, implementation and support services and companies that market software for the financial services industry. Some of these competitors possess substantially greater financial, sales and marketing resource s than we do. Competitive factors impacting the success of our services include the quality of the technology-based application or service, application features and functions, ease of delivery and integration, ability of the provider to maintain, enhance, and support the applications or services, and price. We believe that we compete favorably in each of these categories. In addition, we believe that our financial institution industry expertise, combined with our ability to offer multiple applications, services and integrated solutions to individual customers, enhances our competitiveness against companies with more limited offerings. Specific competitors for both financial and payment solutions include Fiserv, Inc. and Jack Henry and Associates, Inc. In the core processing market, we also compete with Open Solutions, Inc., International Business Machines Corporation (IBM), Accenture Ltd., Alliance Data Systems Corporation, DST Systems, Harland Financial Solutions, Inc., SEI Investments Company, S1Corporatio n, SunGard Data Systems, Inc. and in certain non-U.S. markets, Alnova Technologies Corporation, Oracle Financial Services Software Limited (formerly known as I-Flex Solutions Limited), Misys plc, Infosys Technologies Limited and Temenos Group AG. Our competitors in the card services market include MasterCard Incorporated, Visa Inc., and third-party credit and debit card processors, such as First Data Corporation, Total System Services, Inc., HP Enterprise Services and Payment Systems for Credit Unions (PSCU). Competitors in the check risk management services market include First Data Corporation’s TeleCheck Services division, Heartland Payments Systems, Inc., Total Systems Services, Inc. and Global Payments, Inc.
 
Research and De velopment
 
Our research and development activities have related primarily to the design and development of processing systems and related software applications and risk management platforms. We expect to continue our practice of investing an appropriate level of resources to maintain, enhance and extend the functionality of our proprietary systems and existing software applications, to develop new and innovative software applications and systems in response to the needs of our customers, and to enhance the capabilities surrounding our outsourcing infrastructure. In addition, we intend to offer services that are compatible with new and emerging delivery channels.
 
As part of our research and development process, we evaluate current and emerging technology for compatibility with our existing and future software platforms. To this end, we engage with various hardware and software vendors in evaluation of various infrastructure components. Where appropriate, we use third-party technology components in the development of our software applications and service offerings. Third-party software may be used for highly specialized business functions, which we may not be able to develop internally within time and budget constraints. Additionally, third-party software may be used for commodity type functions within a technology platform environment. In the case of nearly all of our third-party software, enterprise license agreements exist for the third-party component and either alternativ e suppliers exist or transfer rights exist to ensure the continuity of supply. As a result, we are not materially dependent upon any third-party technology components. We work with our customers to determine the appropriate timing and approach to introducing technology or infrastructure changes

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to our applications and services. In the years ended December 31, 2010, 2009 and 2008, approximately 2% to 3% of revenues were invested in research and development efforts (excluding amounts capitalized).
 
Government Regulation
 
Our services are subject to a broad range of complex federal, state, and foreign regulation, including federal truth-in-lending and truth-in-savings rules, Regulation AA (Unfair or Deceptive Acts or Practices), privacy laws, usury laws, the Equal Credit Opportunity Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Bank Secrecy Act, the USA Patriot Act, the Internal Revenue Code, the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act, the Community Reinvestment Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The compliance of our services with these and other applicable laws and regulations depends on a variety of factors, including the manner in which our clients use them. Our clients are contractually responsible for determining what is required of them under applicable laws and r egulations so that we can assist them in their compliance efforts. The failure of our services to comply with applicable laws and regulations could result in restrictions on our ability to provide them, as well as the imposition of civil fines and/or criminal penalties. The four principal areas of regulation impacting our business are:
 
•    
Privacy.  Our financial insti tution clients are required to comply with privacy regulations imposed under the Gramm-Leach-Bliley Act. These regulations place restrictions on the use of non-public personal information. All financial institutions must disclose detailed privacy policies to their customers and offer them the opportunity to direct the financial institution not to share information with third parties. The regulations, however, permit financial institutions to share information with non-affiliated parties who perform services for the financial institutions. As a provider of services to financial institutions, we are required to comply with the privacy regulations and are bound by the same limitations on disclosure of the information received from our customers as apply to the financial institutions themselves.
•    
Consumer Reporting.  Our retail check authorization services (Certegy Check Services) and account opening services (ChexSystems) maintain databases of consumer information and, as a consequence, are subject to the Federal Fair Credit Reporting Act and similar state laws. Among other things, the Fair Credit Reporting Act imposes requirements on us concerning data accuracy, and provides that consumers have the right to know the contents of their files, to dispute their accuracy, and to require verification or removal of disputed information. In furtherance of our objectives of data accuracy, fair treatment of consumers, protection of consumers’ personal information, and compliance with the se laws, we maintain a high level of security for our computer systems in which consumer data resides, and we maintain consumer relations call centers to facilitate efficient handling of consumer requests for information and handling disputes.
The Dodd-Frank Act was enacted and signed into law on July 21, 2010. Among other provisions, this legislation created the Consumer Financial Protection Bureau (the "Bureau") whose sole focus is to develop, implement and, with respect to financial institutions with more than $10 billion in assets, enforce consumer protection rules promulgated by the Bureau; for financial institutions with less than $10 billion in assets, enforcement of the rules will be carried out by such institution's primary federal regulator. Since the regulations implementing the act have not yet been finalized, we are uncertain as t o what degree the legislation may affect our business in the future.
The Housing Assistance Tax Act of 2008 requires, among other provisions, information reporting obligations on payment settlement entities for calendar years beginning after December 31, 2010.  This law requires every merchant acquiring entity and third party settlement organization to file information returns for the gross amount of reportable payment transactions for the calendar year and the reportable payment transactions for each month of the calendar year.  The reportable payment transactions are any transactions in which a payment card is accepted as payment and any third party payment network.  This law will result in significant additional Form 1099 reporting requirements in January 2011 for FIS. 
 
•    
Debt Collection.  Our collection services are subject to the Federal Fair Debt Collection Practices Act and various state collection laws and licensing requirements. The Federal Trade Commission, as well as state attorneys general and other agencies, have enforcement responsibility over the collection laws, as well as the various credit reporting laws.
•    
Money Transfer.  Elements of our cash access and money transmission businesses are registered as a Money Services Business and are subject to the USA Patriot Act and reporting requirements of the Bank Secrecy Act and U.S. Treasury Regulations. These businesses are also subject to various state, local and tribal licensing requirements. The Financial Crimes Enforcement Network, state attorneys general, and other agencies have enforcement responsib ility over laws relating to money laundering, currency transmission, and licensing. In addition, most states have enacted statutes that

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require entities engaged in money transmission and the sale of stored value cards to register as a money transmitter with that jurisdiction’s banking department.
     
Also included in the Dodd-Frank Act is a requirement that the Federal Reserve Board enact regulations governing interchange fees and network fees arising from electronic debit card and reloadable general-use gift card transactions. Under the legislation, the amount of interchange fees that issuers (with more than $10 billion in assets) may charge must be “reasonable and proportional” to the cost incurred by the issuer. Network fees are regulated to the extent that they are used to circumvent restrictions on interchange fees or compensate issuers with respect to electronic debit card transactions. The legislation also requires that the regulations to be enacted by the Federal Reserve Board prohibit issuers from restricting the processing of transactions to networks they own or are affiliated with and from “inhibiting” retailers' abilities to ro ute transactions to issuers over any debit card network. These regulations are to be promulgated by the Federal Reserve Board and are expected to take effect in the third quarter of 2011. In December 2010, the Federal Reserve Board released the proposed regulations, which set a cap on interchange fees to $0.12 per transaction on electronic debit card and reloadable general-use gift card transactions. This is a significant reduction from the current per transaction average rate. For FIS, interchange fees are primarily pass-through fees and this change would not have a direct impact to our earnings. However, it is uncertain what the indirect impact will be on FIS as our clients are faced with significant revenue reductions from the interchange rate changes. Moreover, since the regulations implementing the act have not been finalized, we are uncertain as to what degree the legislation may affect our business in the future. The proposed regulations do not appear to be intended to directly affect interchang e fees applicable to credit card transactions, but do prohibit networks from “inhibiting” retailers from setting minimum purchase amounts for use of credit cards as long as the minimum does not discriminate among issuers or networks and the minimum is not greater than $10.
 
As a provider of electronic data processing and back-office services to financial institutions we are also subject to regulatory oversight and examination by the Federal Financial Institutions Examination Council, an interagency body of the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the National Credit Union Administration and various state regu latory authorities. In addition, independent auditors annually review several of our operations to provide reports on internal controls for our customers’ auditors and regulators. We are also subject to review under state and foreign laws and rules that regulate many of the same activities that are described above, including electronic data processing and back-office services for financial institutions and use of consumer information.
 
The foregoing list of laws and regulations to which our Company is subject is not exhaustive, and the regulatory framework governing our operations changes continuously. Although we do not believe that compliance with future laws and regulations related to our businesses will have a material adverse eff ect on our company, enactment of new laws and regulations may increasingly affect the operations of our business, directly and indirectly, which could result in substantial regulatory compliance costs, litigation expense, adverse publicity, and/or loss of revenue.
 
Employees
 
As of December 31, 2010, we had approximately 33,000 employees, including approximately 19,000 employees principally employed outside of the U.S. None of our U.S. workforce currently is unionized. Approximately 11,500 of our employees, primarily in Brazil and Germany, are represented by labor unions. We consider our relations with employees to be good.
 
Available Information
 
Our Internet website address is www.fisglobal.com. We make our Annual Reports on Form 10-K, Quarterly Reports on Form 1 0-Q, and Current Reports on Form 8-K, and amendments to those reports, available, free of charge, on that website as soon as reasonably practicable after we file or furnish them to the Securities and Exchange Commission. Our Corporate Governance Policy and Code of Business Conduct and Ethics are also available on our website and are available in print, free of charge, to any shareholder who mails a request to the Corporate Secretary, Fidelity National Information Services, Inc., 601 Riverside Avenue, Jacksonville, FL 32204 USA. Other corporate governance-related documents can be found at our website as well. However, the information found on our website is not a part of this or any other report.
 
Item 1A.     Risk Factors.
 
In addition to the normal risks of business, we are subject to significant risks and uncertainties, including those listed below and others described elsewhere in this Annual Report on Form 10-K. Any of the risks described herein could result in a

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significant adverse effect on our results of operations and financial condition.
 
Risks Related to Our Markets and Industry
 
Consolidations and business failures in the banking and financial services industry could adversely affect our business by elimi nating some of our existing and potential customers and making us more dependent on a more limited number of customers.
 
There has been and continues to be substantial consolidation activity in the banking and financial services industry. In addition, many financial institutions that experienced negative operating results, including some of our customers, have failed.
 
The consolidations and failures reduce the number of our potential customers and may reduce the number of our customers, which could adversely affect our revenues even if the events do not reduce the aggregate activities of the consolidated entities. Further, if our customers fail and/or merge with or are acquired by other entities that are not our customers, or that use fewer of our services, they may discontinue or reduce use of our services. It is also possible that larger financial institutions resulting from consolidations would have greater leverage in negotiating terms or could decide to perform in-house some or all of the services which we currently provide or could provide. Any of these developments could have an adverse effect on our business, results of operations and financial condition.
If we fail to adapt our services to changes in technology or in the marketplace, or if our ongoing efforts to upgrade our technology are not successful, we could lose customers and have difficulty attracting new customers for our services.
 
The markets for our services are characterized by constant technological changes, frequent introductions of new services and evolving industry standards. Our future success will be significantly affected by our ability to enhance our current services, and develop and introduce new services that address the increasingly sophisticated needs of our customers and their clients. These initiatives carry the risks associated with any new service development effort, including cost overruns, delays in delivery, and performance issues. There can be no assurance that we will be successful in developing, marketing and selling new services that meet these changing demands, that we will not experience difficulties that could delay or prevent the successful development, introduction, and marketing of these services, or that our new services and their enhancements will adequately meet the demands of the marketplace and achieve market acceptance. Any of these developments could have an adverse impact on our future revenues and/or business prospects.
 
We operate in a competitive business environment, and if we are unable to compete effectively our results of operations and financial condition may be adversely affected.
 
The market for our services is intensely competitive. Our competitors vary in size and in the scope and breadth of the services they offer. Some of our competitors have substantial resources. We face direct competition from third parties, and since many of our larger potential customers have historically developed their key applications in-house and therefore view their system requirements from a make-versus-buy perspective, we often compete against our potential customers’ in-house capacities. In addition, we expect that the markets in which we compete will continue to attract new competitors and new technologies. There can be no assurance that we will be able to compete successfully against current or future competitors or that the competitive pressures we face in the markets in which we operate will not materially adversely affect our business, financial condition, and results of operations. See "Item I. Business. Competition."
 
Global economic, political and other conditions including business cycles and consumer confidence may adversely affect our customers or trends in consumer spending, which may adversely impact the demand for our services and our revenue and profitability.
A significant portion of our revenue is derived from transaction processing fees. The global transaction processing industries depend heavily upon the overall level of consumer, business and government spending. Any change in economic factors including a sustained deterioration in general economic conditions or consumer confidence, particularly in the United States, or inc reases in interest rates in key countries in which we operate may adversely affect consumer spending including related consumer debt, reduce check writing, change credit and debit card usage, and may adversely affect our financial performance by reducing the number or average purchase amount of transactions which we service.
Potential customers may be reluctant to switch to a new vendor, which may adversely affect our growth.
 
For banks and other potential customers of our financial information software and services, switching from one vendor of bank core processing or related software and services (or from an inte rnally-developed system) to a new vendor is a significant

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undertaking. Many potential customers perceive potential disadvantages such as loss of accustomed functionality, increased costs (including conversion costs) and business disruption. As a result, potential customers may resist change. We seek to overcome this resistance through value enhancing strategies such as a defined conversion process, system integration and making ongoing invest ments to enhance the functionality of our software. However, there can be no assurance that our strategies for overcoming potential customers’ reluctance to change vendors will be successful, and this resistance may adversely affect our growth.
 
The sales and implementation cycles for many of our software and services can be lengthy and require significant investment from both our customers and FIS. If we fail to close sales or if a customer chooses not to complete an installation after expending significant time and resources to do so, our business, financial condition, and results of operations may be adversely affected.
The sales and associated deployment of many of our software or services often involve significant capital commitments by our customers and/or FIS. Potential customers generally commit significant resources to an evaluation of available software and services and require us to expend substantial time, effort, and money educating them as to the value. Further, as part of the sale or deployment of our software and services, customers may also require FIS to perform significant related services to complete a proof of concept or custom development to meet their needs. All of the aforementioned activities may expend significant funds and management resources and ultimately the customer may determine not to close the sale or complete the implementation. If we are unsuccessful in closing sales or if the customer decides not to complete an implementation after expending significant funds and management resources or we experience d elays, it could have an adverse effect on our business, financial condition, and results of operations.
Failure to obtain new clients or renew client contracts on favorable terms could result in a lower number or loss of clients and adversely affect results of operations and financial condition.
We may face pricing pressure in obtaining and retaining our larger clients. Larger clients may be able to seek price reductions from us when they renew a contract, when a contract is extended, or when the client's business has significant volume changes. On some occasions, this pricing pressure results in lower revenue from a client than we had anticipated based on o ur previous agreement with that client. This reduction in revenue could result in an adverse effect on our business, operating results and financial condition.
Further, failure to renew client contracts on favorable terms could have an adverse effect on our business. Our contracts with customers generally run for several years and provide for early termination fees. Terms are generally renegotiated prior to the end of a contract's term. If we are not successful in achieving a high rate of contract renewals on favorable terms, our results of operations and financial condition could be adversely affected.
Risks Related to Our Business and Operations
 
Losses, consolidations and failures in the financial services industry may impact our ability to borrow funds or the ability of our lenders to fulfill their obligations under our interest rate swap agreements.
 
Many financial institutions are currently experiencing negative operating results. In some cases, these negative operating results have led to financial institution failures and/or consolidations, including, in one instance, a lender that is party to our Credit Agreement and interest rate swap agreements. As a result, lenders may become insolvent or further tighten lending standards, which could in turn make it more difficult or impossible for lenders to perform their obligations under our interest rate swap agreements or for us to borrow under our Credit Agreement, obtain financing on favorable terms, or obtain financing or interest rate swap agreements at all. Our financial condition and results of operations could be adversely affected if a financial institution fails to fulfill its obligations under our interest rate swap agreements or we are unable to draw funds under our Credit Agreement or obtain other cost-effective financing.
 
Our existing levels of leverage and debt service requirements may adversely affect our financial and operational flexibility.
 
As of December 31, 2010, we had total debt of approximately $5.2 billion. This level of debt could have adverse consequences for our business, financial condition, operating results and operational flexibility, including the following: (i) the debt level may cause us to have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or other purposes; (ii) our debt level may limit operational flexibility and our ability to p ursue business opportunities and implement certain business strategies; (iii) we use a large portion of our operating cash flow to pay principal and interest on our senior credit facilities, which reduces the amount of money available to finance operations, acquisitions and other business

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activities, repay other indebtedness, purchase our outstanding stock and pay shareholder dividends; (iv) some of our debt has a variable rate of i nterest, which exposes us to the risk of increased interest rates; and (v) we have a higher level of debt than some of our competitors or potential competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic conditions, including increased competition.
 
We may experience defects, development delays, installation difficulties, system failure, or other service disruptions with respect to our technology solutions, which would harm our business and reputation and expose us to potential liability.
 
Many of our services are based on sophisticated software and computing systems, and we may encounter delays when developing new technology solutions and services. Further, the technology solutions underlying our services have occasionally contained and may in the future contain undetected errors or defects when first introduced or when new versions are released. In addition, we may experience difficulties in installing or integrating our technologies on platforms used by our customers or our customers may cancel a project after we have expended significant effort and resources to complete an installation. Finally, our systems and operations could be exposed to damage or interruption from fire, natural disaster, power loss, telecommunications failure, unauthorized entry and computer viruses. Defects in our technology solutions, errors or delays in the processing of electronic transactions, or other difficulties could result in: (i) int erruption of business operations; (ii) delay in market acceptance; (iii) additional development and remediation costs; (iv) diversion of technical and other resources; (v) loss of customers; (vi) negative publicity; or (vii) exposure to liability claims. Any one or more of the foregoing could have an adverse effect on our business, financial condition and results of operations. Although we attempt to limit our potential liability through disclaimers and limitation-of-liability provisions in our license and customer agreements, we cannot be certain that these measures will always be successful in limiting our liability.
 
The Dodd-Frank Act may result in business changes fo r our customers that could have an adverse effect on our financial condition, revenues, results of operations, or prospects for future growth and overall business.
Our customers, and as a result our associated software and services, are required to comply with numerous regulations. The Dodd-Frank Act and associated Durbin amendment were passed and signed into law in 2010. The Dodd-Frank Act represents a comprehensive overhaul of the financial services industry within the United States, establishes the new federal Bureau of Consumer Financial Protection and will require this and other federal agencies to implement many new regulations. The Durbin amendment could alter the fees charged by card associations and debit networks.
Several new regulations and rules will be written and implemented as directed by the aforementioned legislation throughout 2011 and beyond and these new rules and regulations will require our customers or potential customers to comply with new requirements. See "Item I. Business. Government Regulation" for more information regarding certain of these new requirements. These new requirements could result in the need for FIS to make capital investments to modify our products and services to facilitate our customers and potential customers' compliance. Further, requirements of the new regulations could result in changes in our customers' business practices that may alter their delivery of services to consumers which could impact the demand for our software and services as well as alter the type or volume of transactions that we process on behalf of our customers. As a result the new legislation co uld have an adverse impact on our financial condition, revenues, results of operations, prospects for future growth and overall business.
Many of our customers are subject to a regulatory environment and to industry standards that may change in a manner that reduces the number of transactions in which our customers engage and therefore reduces our revenues.
Our customers are subject to a number of government regulations and industry standards with which our services must comply. Our customers must ensure that our services and related products work within the extensive and evolving regulatory and industry requirements applicable to them. Federal, state, fore ign or industry authorities could adopt laws, rules or regulations affecting our customers' businesses that could lead to increased operating costs and could reduce the convenience and functionality of our products and services possibly resulting in reduced market acceptance. In addition, action by regulatory authorities relating to credit availability, data usage, privacy, or other related regulatory developments could have an adverse effect on our customers and therefore could have a material adverse effect on our business, financial condition, and results of operations.
The Dodd-Frank Act and associated Durbin amendment passed in 2010 may compound this risk and have an adverse effect on our customers and/or impact the type and volume of transactions we process on their behalf and therefore could have an adverse effect on our business, financial condition and results of operations.
Our revenues from the sale of services to members of VISA, MasterCard, American Express, Discover and other similar organizations are dependent upon our continued certification and sponsorship, and the loss or suspension of certification or sponsorship could adversely affect our business.

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In order to provide our card processing services, we must be certified (including applicable sponsorship) by VISA, MasterCard, American Express, Discover and other similar organizations. These certifications are dependent upon our continued adherence to the standards of the issuing bodies and sponsoring member banks. The member financial institutions, some of which are our competitors, set the standards with which we must comply. If we fail to comply with these standards we could be fined, our certifications could be suspended, or our registration could be terminated. The suspension or termination of our certifications, or any changes in the rules and regulations governing VISA, MasterCard, American Express, Discover, or other similar organizations could prevent our registration or otherwise limit our ability to provide services, which c ould result in a reduction in revenue or increased costs of operation, which in turn could have a material adverse effect on our business.
Changes in card association and debit network fees or products could increase costs or otherwise limit our operations.
From time to time, card associations and debit networks increase the interchange fees that they charge. It is possible that competitive pressures will result in our absorption of a portion of such increases in the future, which would increase our operating costs, reduce our profit margin and adversely affect our business, financial condition, and results of operation. Furthermore, the rules and regulations of th e various card associations and networks prescribe certain capital requirements. Any increase in the capital level required would further limit our use of capital for other purposes.
Interchange fees and related practices have been receiving significant legal and regulatory scrutiny worldwide. The resulting regulatory changes that could occur from proposed regulations such as the Durbin amendment could alter the fees charged by card associations and debit networks. The impact from the proposed regulations will not be known until the rules are finalized, however resulting changes in fees could impact the card issuance or services offered by our customers which could have an adverse impact to our business or financial condition due to reductions or changes in types of transactions processed on behalf of our customers. See "Item I. Business. Government R egulation" for more information.
 
If we fail to comply with applicable regulations or to meet regulatory expectations, our business, results of operations or financial condition could be adversely impacted.
The majority of our data processing services for financial institutions are not directly subject to federal or state regulations specifically applicable to financial institutions such as banks, thrifts and credit unions. However, as a provider of services to these financial institutions, our data processing operations are examine d on a regular basis by various federal and state regulatory authorities. If we fail to comply with any applicable regulations or guidelines for operations of a data services provider, we could be subject to regulatory actions, may not meet contractual obligations, or suffer harm to our client relationships or reputation. Failure to meet the aforementioned requirements or to adapt to new requirements at the Federal, state or international level could inhibit our ability to retain existing customers or obtain new customers which could have an adverse impact on our business, results of operations and financial condition.
 
In addition to our data processing services described above, we also have business operations that st ore, process or transmit consumer information or have direct relationships with consumers that are obligated to comply with regulations including, but not limited to, the Fair Credit Reporting Act, the Debt Collection Practices Act and applicable Privacy requirements. Further, our international businesses must comply with applicable U.S. laws such as the Foreign Corrupt Practices Act. Failure to maintain compliance with or adapt to changes in any of the aforementioned requirements could result in fines, penalties or regulatory actions that could have an adverse impact on our business, results of operations and financial condition.
Security breaches or our own failure to comply with privacy regulations and industry security requirements imposed on providers of services to financial institutions and card processing ser vices could harm our business by disrupting our delivery of services and damaging our reputation.
     As part of our business, we electronically receive, process, store and transmit sensitive business information of our customers. In addition, we collect personal consumer data, such as names and addresses, social security numbers, driver's license numbers, cardholder data and payment history records to support our customers transaction processing as well as part of our check authorization and collection businesses. The uninterrupted operation of our information systems and the confidentiality of the customer/consumer information that resides on such systems are critical to our successful operation. Unauthorized access to our compute r systems or databases could result in the theft or publication of confidential information, the deletion or modification of records or could otherwise cause interruptions in our operations. These risks are increased when we transmit information over the Internet.
     As a provider of services to financial institutions and card processing services, we are bound by the same limitations on disclosure of the information we receive from our customers as apply to the customers themselves. If we fail to comply with these regulations and industry security requirements, we could be exposed to suits for breach of contract, governmental

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proceedings or the imposition of fines, or prohibitions on card processing services. In addition, if more restrictive privacy laws, rules or industry security requirements are adopted in the future on the federal or state level or by a specific industry body, they could have an adverse impact on us through increased costs or restrictions on business processes. Any inability to prevent security or privacy breaches could cause our existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers and/or adversely impact our relationship with administr ative agencies.
 
Misappropriation of our intellectual property and proprietary rights could impair our competitive position.
 
Our ability to compete depends upon proprietary systems and technology. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult. We cannot make any assurances that the steps we have taken will prevent misappropriation of technology or that the agreements entered into for that purpose will be enforceable. Effective trademark, service mark, copyright, and trade secret protection may not be available in every country in which our applications and services are made available online. Misappropriation of our intellectual property or potential litigation concerning such matters could have an adverse effect on our results of operations or financial condition.
 
If our applications or services are found to infringe the proprietary rights of others, we may be required to change our business practices and may also become subject to significant costs and monetary penalties.
 
As our information technology applications and services develop, we are increasingly subject to infringement claims. Any claims, whether with or without merit, could: (i) be expensive and time-consuming to defend; (ii) cause us to cease making, licensing or using applications that incorporate the challenged intellectual property; (iii) require us to redesign our applications, if feasible; (iv) divert management’s attention and resources; and (v) require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies.
 
We face liability to our merchant customers if checks that we have guaranteed are dishonored by the check writer’s bank.
 
If a check that we have guaranteed is dishonored by the check writer’s bank, we must reimburse our merchant customer for the check’s face value and pursue collection of the amount from the check writer. In some cases, we recognize a liability to our merchant customers for estimated check returns and a receivable for amounts we estimate we will recover from the check writers, based on historical experience and other relevant factors. The estimated check returns and recovery amounts are subject to the risk that actual amounts returned may exceed our estimates and actual amounts recovered may be less tha n our estimates.
Lack of system integrity, fraudulent payments, credit quality related to funds settlement or the availability of clearing services could result in a financial loss.
     We settle funds on behalf of financial institutions, other businesses and consumers and receive funds from clients, card issuers, payment networks and consumers on a daily basis for a variety of transaction types. Transactions facilitated by us include debit card, credit card, electronic bill payment transactions, Automated Clearing House (“ACH”) payments and check clearing that supports consumers, financial institutions and other businesses. These payment activ ities rely upon the technology infrastructure that facilitates the verification of activity with counterparties, the facilitation of the payment as well as the detection or prevention of fraudulent payments. If the continuity of operations, integrity of processing, or ability to detect or prevent fraudulent payments were compromised this could result in a financial loss to us. In addition, we rely on various financial institutions to provide ACH services in support of funds settlement for certain of our products. If we are unable to obtain such ACH services in the future, that could have a material adverse effect on our business, financial position and results of operations. In addition, we may issue credit to consumers, financial institutions or other businesses as part of the funds settlement. A default on this credit by a counterparty could result in a financial loss to us.
 
Our business is subject to the risks of international operations, including movements in foreign currency exchange rates.
 
Our international operations represent 17% of total 2010 revenues, with approximately 16% or our total revenues conducted in currencies other than the U.S. Dollar, including the Brazilian Real, British Pound and Euro. As a result, our financial condition and operating results could be significantly affected by risks associated with international activities, including economic and labor conditions, political instability, tax laws (including U.S. taxes on foreign subsidiaries), differences in business practices and changes in the value of the U.S. Dollar versus local currencies. In addition, we are less well-known internationally than in the United States, have less experience with local business conditions and may face challenges in successfully managing small operations located far from our headquarters, because of the greater difficulty in overseeing and guiding operations from a distance.

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As we expand our international operations, more of our customers may pay us in foreign currencies. Conducting business in currencies other than U.S. Dollars subjects us to fluctuations in currency exchange rates. Our primary exposure to movements in foreign currency exchange rates relate to foreign currencies in Brazil, Europe, Australia and parts of Asia. The U.S. Dollar value of our net investments in foreign operations, the periodic conversion of foreign-denominated earnings to the U.S. Dollar (our reporting currency), our results of operations and, in some cases, cash flows, could be adversely affected in a material manner by movements in foreign currency exchange rates. These risks could cause an adverse effect on our business, financial position and results of operations.
 
Failure to attract and retain skilled technical employees or senior management personnel could harm our ability to grow.
 
Our future success depends upon our ability to attract and retain highly-skilled technical personnel. Because the development of our products and services requires knowledge of computer hardware, operating system software, system management software and application software, our technical personnel must be proficient in a number of disciplines. Competition for such technical personnel is intense, and our failure to hire and retain talented personnel could have a material adverse effect on our business, operating results and financial condition.
 
Our future growth will also require sales and marketing, financial and administrative personnel to develop and support new products and services, to enhance and support current products and services and to expand operational and financial systems. There can be no assurance that we will be able to attract and retain the necessary personnel to accomplish our growth strategies and we may experience constraints that could adversely affect our ability to satisfy client demand in a timely fashion.
 
Our senior management team has significant experience in the financial services industry, either at FIS or with clients or competitors, and the loss of this leadership could have an adverse effect on our business operating results and financial condition.
 
We are the subject of various legal proceedings that could have a material adverse effect on our revenue and profitability.
 
We are routinely involved in various litigation matters, including in some cases class-action litigation, and also are involved in or the subject of governmental or regulatory agency inquiries or investigations from time to time. If we are unsuccessful in our defense in the litigation matters, or any other legal proceeding, we may be forced to pay damages or fines and/or change our business practices, any of which could have a material adverse effect on our business and results of operations.
Unfavorable resolution of tax contingencies could adversely affect our tax ex pense.
Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities. An unfavorable outcome to a tax audit could result in higher tax expense, and could negatively impact our effective tax rate, financial position, results of operations and cash flows in the current and/or future periods.
The chairman of our board of directors and other officers and directors have interests and positions that could present potential conflicts.
 
< font style="font-family:inherit;font-size:10pt;">We and certain of our subsidiaries are parties to a variety of related party agreements and relationships with FNF and LPS. William P. Foley, II, who is our Chairman, is currently the Chairman of the board of directors of FNF. Brent B. Bickett and Michael L. Gravelle, who are executive officers of FIS, are also executive officers of FNF. William P. Foley, II, Brent B. Bickett and Michael L. Gravelle also own or hold substantial amounts of FNF stock and stock options. Thomas M. Hagerty and Richard N. Massey, who are both directors of FIS, are also directors of FNF. David K. Hunt, a director of FIS, is also a director of LPS. As a result of the foregoing, there may be circumstances where certain of our executive officers and directors may be subject to conflicts of interest with respect to, among other things: (i) our ongoing relationships with FNF and LPS, including related party agreements and other arrangements with respect to the administrati on of tax matters, employee benefits and indemnification; (ii) the quality, pricing and other terms associated with services that we provide to FNF and LPS, or that they provide to us, under related party agreements; (iii) business opportunities arising for either us, FNF or LPS, that could be pursued by either us, or by FNF or LPS; and (iv) conflicts of time with respect to matters potentially or actually involving or affecting FIS.
 
We seek to manage these potential conflicts through abstention, oversight by independent members of our board of directors and provisions in our agreements with FNF and LPS. However, there can be no assurance that such measures will be

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effective or that we will be able to resolve all potential conflicts with FNF and LPS, or that the resolution of any such conflicts will be no less favorable to us than if we were dealing with an unaffiliated third party.
Our agreements with related parties may be more or less favorable than agreements negotiated at arm's-length with indepen dent parties.
We have entered into various agreements with certain related parties, including, without limitation, FNF and Ceridian Corporation, pursuant to which we will provide services to each such related party as a client. We believe the amounts earned from or charged by us under each such arrangement is fair and reasonable, and that 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 for similar services. Any inferior terms that such agreements may contain as compared to agreements negotiated with unrelated third parties may have an adverse impact on our results of operations.
 
Risks Related to Business Combinations
 
If we are unable to successfully consummate and integrate acquisitions, our results of operations may be adversely affected.
 
We have made numerous acquisitions in recent years as a part of our growth strategy. We anticipate that w e will continue to seek to acquire complementary businesses and services. This strategy will depend on the ability to find suitable acquisitions and finance them on acceptable terms. We may require additional debt or equity financing for future acquisitions, and doing so may be made more difficult by our existing debt. If we are unable to acquire suitable acquisition candidates, we may experience slower growth. Further, after successfully completing acquisitions, we face challenges in integrating acquired businesses. These challenges include eliminating redundant operations, facilities and systems, coordinating management and personnel, retaining key employees, managing different corporate cultures, and achieving cost reductions and cross-selling opportunities. There can be no assurance that we will be able to fully integrate all aspects of acquired businesses successfully or fully realize the potential benefits of bringing them together, and the process of integrating these acquisitions may disrupt our busi ness and divert our resources.
 
We have substantial investments in recorded goodwill and other intangible assets as a result of prior acquisitions, and a severe or extended economic downturn could cause these investments to become impaired, requiring write-downs that would reduce our operating income.
 
As of December 31, 2010, goodwill aggregated to $8,550.0 million, or 60.4% of total assets, and other indefinite lived intangible assets aggregated to $90.5 million, or 0.6% of total assets. Current accounting rules require goodwill and other indefinite lived intangible assets to be assessed for impairment at least annually or whenever changes in circumstances indicate potential impairment. Factors that may be considered a change in circumstance include significant underperformance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization, and negative industry or economic trends. The results of our fiscal year 2010 annual assessment of the recoverability of goodwill indicated that the fair values of the Company’s reporting units were in excess of the carrying values of those reporting units, and thus no goodwill impairment existed as of December 31, 2010. Additionally, the fair value of indefinite lived intangible assets was in excess of the carrying value of those assets. However, if worldwide or United States economic conditions decline significantly with negative impacts to bank spending and consumer behavior, or if other business or market changes impact our outlook, the carrying amount of our goodwill and other indefinite lived intangible assets may no longer be recoverable and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition. We will continue to monitor the fair value of our other indefinite lived intangible assets as well as our market capitalization and the impact of any economic downturn on our business to determine if there is an impairment in future periods.
 
Statement Regarding Forward-Looking Information
 
The statements contained in this Form 10-K or in our other documents or in oral presentations or other statements made by our management that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions, or strategies regarding the future. These statements relate to, among other things, our future financial and operating results. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these terms and other comparable terminology. Actual results could differ materially from those anticipated in these sta tements

17
Table of Contents

as a result of a number of factors, including, but not limited to:
 
•    
general political, economic, and business conditions, including the possibility of intensified international hostilities, acts of terrorism, and general volatility in the capital markets;
•    
failures to adapt our services to changes in technology or in the marketplace;
•    
consolidation or failures in the banking industry;
•    
consolidation or failures in the retail industry;
•    
security breaches of our systems and computer viruses affecting our software;
•    
the impact of competitive services and pricing;
•    
the failure to achieve some of the benefits that we expect from the acquisition of Metavante, including the possibility that our acquisition of Metavante may not be accretive to our earnings due to undisclosed liabilities, management or integration issues, loss of customers, the inability to achieve targeted cost savings, or other factors;
• & nbsp;  
the ability to identify suitable acquisition candidates and the ability to finance such acquisitions, which depends upon the availability of adequate cash reserves from operations or of acceptable financing terms and the variability of our stock price;
•    
our ability to integrate any acquired business’ operations, services, clients, and personnel;
•    
the effect of our substantial leverage, which may limit the funds available to make acquisitions and invest in our business;
•    
changes in, or the failure to comply with, government regulations, including pri vacy regulations; and
•    
other risks detailed elsewhere in this Risk Factors section and in our other filings with the Securities and Exchange Commission.
 
We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whe ther as a result of new information, future events or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.
 
Item 1B.    Unresolved Staff Comments.
 
None.
 
Item 2.    Properties.
 
FIS’ corporate headquarters is located at 601 Riverside Avenue, Jacksonville, Florida in a facility leased from LPS. In addition, FIS owns or leases support centers, data processing facilities and other facilities at over 210 locations. We believe our facilities and equipment are generally well maintained and are in good operating condition. We believe that the computer equipment that we own and our various f acilities are adequate for our present and foreseeable business needs. We maintain our own, and contract with multiple service providers to provide, processing back-up in the event of a disaster.
 
Item 3.    Legal Proceedings.
 
In the ordinary course of business, the Company is involved in various pending a nd threatened litigation matters related to operations, some of which include claims for punitive or exemplary damages. The Company believes that no actions, other than the matters listed below, depart from customary litigation incidental to its business.
Driver's Privacy Protection Act
A putative class action lawsuit styled Richard Fresco, et al. v. Automotive Directions, Inc. et al., was filed against eFunds Corporation (“eFunds”), a wholly-owned subsidiary of FIS, and seven other non-related parties in the U.S. District Court f or the Southern District of Florida during the second quarter of 2003. The complaint alleged that eFunds purchased motor vehicle records that were used for marketing and other purposes that are not permitted under the Federal Driver's Privacy Protection Act (“DPPA”). The plaintiffs sought statutory damages, plus costs, attorney's fees and injunctive relief. eFunds and five of the other seven defendants settled the case with the plaintiffs (the “Florida Settlement”). That settlement was approved by the court

18
Table of Contents

over the objection of a group of Texas drivers and motor vehicle record holders. The Florida case was dismissed without prejudice during the fourth quarter of 2009.
Two class action complaints styled Sharon Taylor, et al. v. Biometric Access Company et al. and Sharon Taylor, et al. v. Acxiom et al. were filed in the U.S. District Court for the Eastern District of Texas during the first quarter of 2007 alleging similar violations of the DPPA. The Acxiom action was filed against the Company's subsidiary, Chex Systems, Inc., while the Biometric suit was filed against the Company's subsidiary, Certegy Check Services, Inc.
In the Biometric case, the district court granted Certegy's motion to dismiss with prejudice in the third quarter of 2008. On July 14, 2010, the Fifth Circuit Court of Appeals affirmed the district court's order of dismissal with prejudice. On January 10, 2011, the U.S. Supreme Court denied certiorari.
 
In the Acxiom case, Chex Systems filed a motion to dismiss or in the alternative, stay the action against it based upon the earlier settlement, and the Texas district court granted the motion to stay pending resolution of the Florida case. The Texas court then dismissed the Chex Systems lawsuit with prejudice against the remaining defendants in the third quarter of 2008. The Acxiom plaintiffs moved the court to amend the dismissal to exclude defendants that were parties to the Florida Settlement, and that m otion was granted. In the fourth quarter of 2008, the Texas district court in the Acxiom case dismissed with prejudice all claims of the plaintiffs, who were not also plaintiffs in the Florida case, against Chex Systems and the other defendants. The plaintiffs appealed the dismissal order, but excluded Chex Systems and the other settling defendants from the appeal. In 2010, after final resolution of the Florida case, the parties in the Acxiom case stipulated to a dismissal of Chex Systems and the other defendants from this action, and the court issued its final order of dismissal without prejudice. The time for appeals in the Acxiom case has now expired.
Searcy, Gladys v. eFunds Corporation
 
This is a nationwide putative class action that was originally filed against eFunds and its affiliate Deposit Payment Protection Services, Inc. in the U.S. District Court for the Northern District of Illinois during the first quarter of 2008. The complaint seeks damages for an alleged willful violation of the Fair Credit Reporting Act (“FCRA”) in connection with the operation of the Shared Check Authorization Network. Plaintiff's principal allegation is that consumers did not receive approp riate disclosures pursuant to §1681g of the FCRA because the disclosures did not include: (i) all information in the consumer's file at the time of the request; (ii) the source of the information in the consumer's file; and/or (iii) the names of any persons who requested information related to the consumer's check writing history during the prior year. Plaintiff filed a motion for class certification which was granted with respect to two subclasses during the first quarter of 2010. The motion was denied with respect to all other subclasses. The Company filed a motion for reconsideration. The motion was granted and the two subclasses were decertified. The plaintiff also filed motions to amend her complaint to add two additional plaintiffs to the lawsuit. The court granted the motions. During the second quarter of 2010, the Company filed a motion for summary judgment as to the original plaintiff and a motion for sanctions against the plaintiff and her counsel based on plaintiff's alleged fa lse statements that were filed in support of the motion for class certification. In the third quarter of 2010, the court denied the motion for summary judgment and granted in part and denied in part the motion for sanctions. The Company filed a motion requesting the court to allow it to file an interlocutory appeal on the order denying the motion for summary judgment. The court granted the motion, however, in the first quarter of 2011, the Seventh Circuit Court of Appeals denied the Company's petition for interlocutory appeal. Discovery regarding the new plaintiffs is ongoing.
     Other Litigation Matters
In September 2010, we received a $12.1 million court ruling related to an action between Metavante and a former customer. Of this total, approximately $10.1 million was for reimbursement of previously incurred legal fees and is recorded as a reduction of selling, general and administrative expenses. On November 29, 2010, the former customer filed a petition for certiorari in the United States Supreme Court. On January 24, 2011, the Supreme Court ordered us to respond on or prior to February 23, 2011, with which we complied.
Indemnifications and Warranties
     The Company often indemnifies its customers against damages and costs resulting fr om claims of patent, copyright, or trademark infringement associated with use of its software through software licensing agreements. Historically, the Company has not made any significant payments under such indemnifications, but continues to monitor the conditions that are subject to the indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses when they are estimable. In addition, the Company warrants to customers that its software operates substantially in accordance with the software specifications. Historically, no significant costs have been incurred related to software warranties and no accruals for warranty costs have been made.

19

 
PART II
 
Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
 
Our common stock trades on the New York Stock Exchange under the ticker symbol “FIS.” The table set forth below provides the high and low closing sales prices of the common stock and the cash dividends declared per share of common stock for each quarter of 2010 and 2009.
 
On October 1, 2009, FIS completed the acquisition of Metavante. As a result of the merger, each outstanding share of Metavante common stock was converted into 1.35 shares (the “Exchange Ratio”), or approximately 163.6 million shares of FIS common stock. In addition, outstanding Metavante stock options and other stock-based awards (other than performance shares) converted into stock options and other stock-based awards with respect to shares of FIS common stock, with adjustments in the number of shares and exercise price (in the case of stock options) to reflect the Exchange Ratio. Each outstanding Metavante performance share was assumed by FIS and converted into the right to receive restricted shares of FIS common stock (with adjustments to reflect the Exchange Ratio) and an amount in cash.
 
 
High
 
Low
 
Dividend
2010
 
 
 
 
 
 
 
 
First Quarter
$
24.84
 
 
$
22.28
 
 
$
0.05
 
Second Quarter
$
29.90
 
 
$
23.69
 
 
$
0.05
 
Third Quarter (a)
$
28.79
 
 
$
25.66
 
 
$
0.05
 
Fourth Quarter (a)
$
28.82
 
 
$
26.57
 
 
$
0.05
 
2009
 
 
 
 
 
 
 
 
First Quarter
$
18.55
 
 
$
15.52
 
 
$
0.05
 
Second Quarter
$
20.49
 
 
$
16.88
 
 
$
0.05
 
Third Quarter
$
25.70
 
 
$
19.43
 
 
$
0.05
 
Fourth Quarter
$
24.85
 
 
$
21.76
 
 
$
0.05
 
_________________________
 
(a)The sales prices of our common stock for the third and fourth quarter of 2010 reflect our leveraged recapitalization resulting in the purchase of 86.2 million shares, including 6.4 million shares underlying previously unexercised stock options. As of January 31, 2011, there were approximately 19 ,356 shareholders of record of our common stock.
 
We currently pay a $0.05 dividend on a quarterly basis, and expect to continue to do so in the future. The declaration and payment of future dividends is at the discretion of our Board of Directors and depends on, among other things, our investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions. Additionally, the payment of cash dividends may be limited by covenants in our debt agreements. A regular quarterly dividend of $0.05 per common share is payable March 31, 2011 to shareholders of record as of the close of business on March&nbs p;17, 2011.
 
Item 12 of Part III contains information concerning securities authorized for issuance under our equity compensation plans.
 
On May 25, 2010, our Board of Directors authorized a leveraged recapitalization plan to repurchase up to $2.5 billion of our common stock at a price range of $29.00 - $31.00 per share of common stock through a modified "Dutch auction" tender offer (the "Tender Offer"). The Tender Offer commenced on July 6, 2010 and expired on August 3, 2010. The Tender Offer was oversubscibed at $29.00, r esulting in the purchase of 86.2 million shares, including 6.4 million shares underlying previously unexercised stock options. The repurchased shares were added to treasury stock.
 
On February 4, 2010 our Board of Directors approved a plan authorizing repurchases of up to 15.0 million shares of our common stock in the open market, at prevailing market prices or in privately negotiated transactions, through January 31, 2013. We repurchased 1.4 million shares of our common stock for $32.2 million, at an average price of $22.97 through March 31, 2010. No additional shares were repurchased under this plan during 2010. Approximately 13.6 million shares of our common stock remain available to repurchase under this plan as of December 31, 2010.

20

 
Stock Performance Graph
 
The performance graph below shows the cumulative total shareholder return on our common stock for the period starting on December 31, 2005, and ending on December 31, 2010. This is compared with the cumulative total returns over the same period of (1) the S&P 500 Index and (2) the S&P Supercap Data Processing & Outsourced Services Index (peer group). The graph assumes that on December 31, 2005, $100 was invested in our common stock and $100 was invested in the other two indices, with dividends reinvested on the date of payment without payment of any commissions. The performance shown in the graph represents past performance and should not be considered an indication of future performance.
 
 
Item 6.    Selected Financial Data.
 
The selected financial data set forth below constitutes historical financial data of FIS and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 8, Financial Statements and Supple mentary Data, included elsewhere in this report.
 
On October 1, 2009, we completed the acquisition of Metavante. The results of operations and financial position of Metavante are included in the Consolidated Financial Statements since the date of acquisition.
 
On July 2, 2008, we completed the LPS spin-off. For accounting purposes the results of LPS are presented as discontinued operations. Accordingly, all prior periods have been restated to present the results of FIS on a stand alone basis and include the results of LPS up to July 2, 2008, as discontinued operations.

21

 
On September 12, 2007, we completed the acquisition of eFunds (the “eFunds Acquisition”). The results of operations and financial position of eFunds are included in the Consolidated Financial Statements since the date of acquisition.
 
On February 1, 2006, we completed the Certegy Merger. For accounting and financial reporting purposes, the merger was treated as a reverse acquisition of Certegy by FIS under the purchase method of accounting pursuant to generally accepted accounting principles. Accordingly, our historical financial information for periods prior to the Certegy Merger is the historical financial information of FIS.
 
0.62
 
Year Ended December 31,
 
2010(1)(2)(3)
 
2009(1)(2)(3)
 
2008(2)(3)
 
2007( 2)(3)
 
2006(3)
 
 
 
(In millions, except per share data)
 
 
Statement of Earnings Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Processing and services revenues
$
5,269.5
 
 
$
3,711.1
 
 
$
3,359.5
 
 
$
2,820.5
 
 
$
2,363.9
 
Cost of revenues
3,637.7
 
 
2,741.5
 
 
2,616.1
 
 
2,237.5
 
 
1,906.6
 
Gross profit
1,631.8
 
 
969.6
 
 
743.4
 
 
583.0
 
 
457.3
 
Selling, general and administrative expenses
675.8
 
 
547.1
 
 
381.0
 
 
294.5
 
 
270.3
 
Impairment charges
154.9
 
 
136.9
& nbsp;
 
26.0
 
 
13.5
 
 
—
 
Operating income
801.1
 
 
285.6
 
 
336.4
 
 
275.0
 
 
187.0
 
Other income (expense)
(184.8
)
 
(121.9
)
 
(155.6
)
 
102.4
 
 
(188.4
)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated entities
616.3
 
 
163.7
 
 
180.8
 
 
377.4
 
 
(1.4
)
Provision for income taxes
215.3
 
 
54.7
 
 
57.6
 
 
133.0
 
 
(5.8
)
Equity in earnings (loss) of unconsolidated entities
—
 
 
—
 
 
(0.2
)
 
2.8
 
 
5.8
 
Earnings (loss) from continuing operations, net of tax
401.0
 
 
109.0
 
 
123.0
 
 
247.2
 
 
10.2
 
Earnings (loss) from discontinued operations, net of tax (4)
(43.1
)
 
(0.5
)
 
96.5
 
 
313.9
 
 
247.9
 
Net earnings
357.9
 
 
108.5
 
 
219.5
 
 
561.1
 
 
258.1
 
Net (earnings) loss attributable to noncontrolling interest
46.6
 
 
(2.6
)
 
(4.7
)
 
0.1
 
 
1.0
 
Net earnings attributable to FIS
$
404.5
 
 
$
105.9
 
 
$
214.8
 
 
$
561.2
 
 
$
259.1
 
Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
1.30
 
 
$
0.45
 
 
$
 
 
$
1.28
 
 
$
0.06
 
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders (4)
(0.12
)
 
(0.00
)
 
0.50
 
 
1.63
 
 
1.33
 
Net earnings per share — basic attributable to FIS common stockholders
$
1.17
 
 
$
0.45
 
 
$
1.12
 
 
$
2.91
 
 
$
1.39
 
Weighted average shares — basic
345.1
 
 
236.4
 
 
191.6
 
 
193.1
 
 
185.9
 
Net earnings per share — diluted from continuing operations
$
1.27
 
 
$
0.44
 
 
$
0.61
 
 
$
1.25
 
 
$
0.06
 
Net earnings (loss) per share — diluted from discontinued operations (4)
(0.12
)
 
(0.00
)
 
0.50
 
 
1.60
 < /div>
 
1.31
 
Net earnings per share — diluted
$
1.15
 
 
$
0.44
 
 
$
1.11
 
 
$
2.86
 
 
$
1.37
 
Weighted average shares — diluted
352.0
 
 
239.4
 
 
193.5
 
 
196.5
 
 
189.2
 < /font>
Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
447.6
 
 
< div style="text-align:left;font-size:8pt;">$
106.4
 
 
$
118.9
 
 
$
246.3
 
 
$
11.2
 
Earnings (loss) from discontinued operations, net of tax (4)
(43.1
)
 
(0.5
)
 
95.9
 
 
314.9
 
 
247.9
 
Net earnings
$
404.5
 
 
$
105.9
 
 
$
214.8
 
 
$
561.2
 
 
$
259.1
 
_________________________
 
(1)     
Metavante results of operations are included in earnings from October 1, 2009, the Metavante merger date.
(2)    
eFunds’ results of operations are included in earnings from September 12, 2007, the eFunds acquisition date.
(3)    
Certegy’s results of operations are included in earnings from February 1, 2006, the Certegy Merger date.
(4)    
Discontinued operations include the results of operations of Fidelity National Participacoes Ltda. ("Participacoes"),

22

ClearPar, LPS, Certegy Australia, Ltd., Certegy Gaming Services, Inc., FIS Credit Services, Inc., Homebuilders Financial Network and Property Insight through the day of their respective dispositions.
 
 
As of December 31,
 
2010 (1)
 
2009 (1)
 
2008 (1)
 
2007
 
2006
 
(In millions, except per share data)
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
338.0
 
 
$
430.9
 
 
$
220.9
 
 
$
355.3
 
 
$
211.8
 
Goodwill
8,550.0
 
 
8,232.9
 
 
4,194.0
 
 
5,326.8
 
 
3,737.5
 
Other intangible assets, net
2,202.9
 
 
2,396.8
 
 
924.3
 
 
1,030.6
 
 
1,010.0
 
Total assets
14,161.8
 
 
13,997.6
 
 
7,500.4
 
 
9,794.6
 
 
7,630.6
 
Total long-term debt
5,192.1
 
 
3,253.3
 
 
2,514.5
 
 
4,275.4
 
 
3,009.5
 
Total FIS stockholders’ equity
6,403.2
 
 
8,308.9
 
 
3,532.8
 
 
3,781.2
 
 
3,142.7
 
Noncontrolling interest
158.4
 
 
209.7
 
 
164.2
 
 
14.2
 
 
13.0
 
Total equity
6,561.6
 
 
8 ,518.6
 
 
3,697.0
 
 
3,795.4
 
 
3,155.7
 
Cash dividends declared per share
$
0.20
 
 
$
0.20
 
 
$
0.20
 
 
$
0.20
 
 
$
0.20
 
_________________________
 
(1)    
Our LPS business was spun-off as of July 2, 2008.
 
Selected Quarterly Financial Data
 
Selected unaudited quarterly financial data is as follows:
< td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;">
363.7
 
Quarter Ended (1)
 
March 31,
 
June 30,
 
September 30,
 
December 31,
 
(In millions, except per share data)
December 31, 2010
 
&n bsp;
 
 
 
 
 
 
 
 
 
Processing and services revenues
$
1,235.0
 
 
$
1,271.0
 
 
$
1,367.2
 
 
$
1,396.3
 
Gross profit
344.6
 
 
377.8
 
 
469.9
 
 
439.5
 
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated entities
153.9
 
 
152.2
 
 
133.1
 
 
177.1
 
Net earnings (loss) attributable to FIS common stockholders
93.6
&nbs p;
 
89.9
 
 
110. 4
 
 
110.6
 
Net earnings per share — basic attributable to FIS common stockh olders
$
0.25
 
 
$
0.24
 
 
$
0.33
 < /div>
 
$
0.37
 
Net earnings per share — diluted attribut able to FIS common stockholders
$
0.25
 
 
$
0.23
 
 
$
0.33
 
 
$
0.36
 
December 3 1, 2009
 
 
 
 
 
 
 
 
 
 
 
Processing and services revenues
$
783.1
 
 
$
816.3
 
 
$
828.7
 
 
$
1,283.0
 
Gross profit
176.2
 
 
206.4
 
 
223.3
 
 
 
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of unconsolidated entities
51.4
 
 
89.0
 
 
103.6
 
 
(80.3
)
Net earnings (loss) attributable to FIS common stockholders
33.0
 
 
59.2
 
 
67.6
 
 
(53.9
)
Net earnings (loss) per share — basic attributable to FIS common stockholders
$
0.17
 
 
$
0.31
 
 
$
0.35
 
 
$
(0.14
)
Net earnings (loss) per share — diluted attributable to FIS common stockholders
$
0.17
 
 
$
0.31
 
 
$
0.35
 
 
$
(0.14
)
_________________________
 
(1)    
The fourth quarter of 2009 includes a full quarter of results of operations relating to the Metavante acquisition, as well as the impairment charges and restructuring, integration and merger related charges addressed in Item 7.

23

 
  ;
Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following section discusses management’s view of the financial condition and results of operations of FIS and its consolidated subsidiaries as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008.
 
This section should be read in conjunction with the audited Consolidated Financial Statements and related Notes of FIS included elsewhere in this Annual Report. This Management’ s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause future results to differ materially from those reflected in this section.
 
Overview
 
FIS is one of the world's largest global providers dedicated to banking and payments technologies. We offer financial institution core proce ssing, card issuer and transaction processing services, including the NYCE Network. FIS is a member of Standard and Poor’s (S&P) 500® Index and consistently holds a leading ranking in the annual FinTech 100 rankings. As of December 31, 2010, FIS has more than 300 solutions serving over 14,000 financial institutions and business customers in over 100 countries spanning all segments of the financial services industry. We have four reporting segments: FSG, PSG, ISG and Corporate and Other. A description of these segments is included above in Item 1. Revenues by segment and the results of operations of our segments are discussed below in Segment Results of Operations.
 
Business Trends and Conditions
 
Approximately 85% of our revenue historically is considered recurring, which provides relative stability to our revenue stream. However, the condition of the overall economy can affect our revenue growth in a number of areas. A significant portion of our revenue is derived from transaction processing fees. As a result, lower deposit and card transactions associated with reduced consumer and commercial activity will adversely impact revenue. In addition, sales of soft ware licenses and professional services, which have represented approximately 15% of our revenue, can be regarded as discretionary spending by our customers and may contract when their capital budgets tighten. In light of the challenging revenue environment, we have been seeking to manage our costs and capital expenditures prudently.
 
We completed the Metavante Technologies, Inc. acquisition (the "Metavante Acquisition") on October 1, 2009. The combined Company is positioned to provide a comprehensive range of integrated solutions to its customers, and has greater geographic reach than any other provider in the industry, which will enhance service to the combined Company’s customers. Management expects to continue to realize incremental cost and revenue syner gies through 2011 as a result of the Metavante Acquisition. However, the impact of these synergies on year-over-year trends for 2011 vs. 2010 will be less. 
           
We acquired Capco in December 2010 to broaden our capabilities to provide strategic consulting.  While this will generate increased revenues,  the lower profit margins realized for professional services as compared to our other solutions will result in some level of profit margin compression. The addition of Capco will also reduce the relative proportion of our recurring revenue stream in 2011. 
           
As the payment market continues to evolve from paper-based to electronic, we continue to add new services responsive to this trend. Card transactions continue to increase as a percentage of total point-of-sale payments, which fuels continuing demand for card-related services. In recent years, we have added a variety of stored-value card types, Internet banking, and electronic bill presentment/payment services, as well as a number of card enhancement and loyalty/reward programs. The common goal of these offerings continues to be convenience and security for the consumer coupled with value to the financial institution. The evolution to electronic transactions also intensifies the vulnerability to fraud, increasing the demand for our risk management so lutions. At the same time, the use of checks continues to decline as a percentage of total point-of-sale payments, which negatively impacts our check warranty and item-processing businesses.
 
We compete for both licensing and outsourcing business, and thus are affected by the decisions of financial institutions to utilize our services under an outsourced arrangement or to process in-house under a software license and maintenance agreement. As a provider of outsourcing solutions, we benefit from multi-year recurring revenue streams, which help moderate the effects of year-to-year economic changes on our results of operations. One of the current trends we expect to benefit from in the financial services industry is the migration to an outsourced model to improve profitabili ty.

24

 
Consolidation within the banking industry may be beneficial or detrimental to our businesses. When consolidations occur, merger partners often operate disparate systems licensed from competing service providers. The newly formed entity generally makes a determination to migrate its core and payments systems to a single platform. When a financial institution processing client is involved in a consolidation, we may benefit by expanding the use of our services if such services are chosen to survive the consolidation and support the newly combined entity. Conversely, we may lose market share if a customer of ours is involved in a consolidation and our services are not chosen to survive the consolidation and support the newly combined entity. We seek to mitigate the risks of consolidations by offering other competitive services to take advantage of specific opportunities at the surviving company.
 
While we are cautious regarding broader economic improvement, we expect banks to continue investing in new technology and believe we are well positioned to capitalize as the over all market continues to recover. We expect bank failures to continue in the next few years, and have recently seen increased bank consolidation activity and expect this to continue in 2011. To date, bank failures and forced government actions that have occurred have not been significant to our revenues; however, continuing or escalating bank failures and forced government actions could negatively impact our business. This exposure may be mitigated by incremental revenues we may generate from license fees or services associated with assisting surviving institutions with integrating acquired assets resulting from financial failures.
 
For an update on our Brazilian outsourced card-processing venture (the "Brazilian Venture"), see Note 6 to the Consolidated Financial Statements.
 
Critical Accounting Policies
 
The accounting policies described below are those we consider critical in preparing our Consolidated Financial Statements. These policies require management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures with respect to contingent liabilities and assets at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual a mounts could differ from those estimates. See Note 2 to the Consolidated Financial Statements for a more detailed description of the significant accounting policies that have been followed in preparing our Consolidated Financial Statements.
 
Revenue Recognition
 
The Company generates revenues from the delivery of bank processing, credit and debit card processing services, other payment processing services, professional services, software licensing and software related services and products. Reven ues are recognized when evidence of an arrangement exists, delivery has occurred, fees are fixed or determinable and collection is considered probable. We are frequently a party to multiple concurrent contracts with the same customer. These situations require judgment to determine whether the individual contracts should be aggregated or evaluated separately for purposes of revenue recognition. In making this determination, we consider the timing of negotiating and executing the contracts, whether the different elements of the contracts are interdependent and whether any of the payment terms of the contracts are interrelated. Due to the large number, broad nature and average size of individual contracts we are party to, the impact of judgments and assumptions that we apply in recognizing revenue for any single contract is not likely to have a material effect on our consolidated operations or financial position. However, the broader accounting policy assumptions that we apply across similar arrangements or cla sses of customers could significantly influence the timing and amount of revenue recognized in our historical and future results of operations or financial position. Additional information about our revenue recognition policies is included in Note 2 to the Consolidated Financial Statements.
 
Allowance for Doubtful Accounts
 
The Company analyzes trade accounts receivable by considering historical bad debts, customer creditworthiness, current economic trends, changes in customer payment terms and c ollection trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. The allowance for doubtful accounts was $33.1 million and $41.8 million at December 31, 2010 and 2009, respectively.
 
Reserves for Check Guarantee Losses
 
In our check guarantee business, if a guaranteed check presented to a merchant customer is dishonored by the check writer’s bank, we reimburse our merchant customer for the check’s face value and pursue collection of the amount from the delinquent check writer. Loss reserves and anticipated recoveries are primarily determined by performing a historical analysis

25

of our check loss and recovery experience and considering other factors that could affect that experience in the future. Such factors include the general economy, the overall industry mix of our customer volumes, statistical analysis of check fraud trends within our customer volumes, and the quality of returned checks. Once these factors are considered, we establish a rate for check losses that is calculated by dividing the expected check losses by dollar volume processed and a rate for anticipated recoveries that is calculated by dividing the anticipated recoveries by the total amount of related check losses. These rates are then applied against the dollar volume processed and check losses, respectively, each month and charged to costs of revenues. The estimated check returns and recovery amounts are subject to risk that actual amounts returned and recovered may be different than our estimates.
 
Historically, such estimation processes have proved to be materially accurate; however, our projections of probable check guarantee losses and anticipated recoveries are inherently uncertain and as a result, we cannot predict with certainty the amount of such items. Changes in economic conditions, the risk characteristics and composition of our customers, and other factors could impact our actual and projected amounts. We recorded check guarantee losses, net of anticipated recoveries excluding service fees, of $69.4 million and $83.3 million, respectively, for the years ended December 31, 2010 and 2009. A ten percent difference in our estimated check guarantee loss reserve net of estimated recoveries as of December 31, 2010 would have impacted 2010 net earnings by less than $2.0 million after-tax.
 
Computer Software
 
Computer software includes the fair value of software acquired in business combinations, purchased software and capitalized software development costs. As of December 31, 2010 and 2009, computer software, net of accumulated amortization , was $909.0 million and $932.7 million, respectively. Purchased software is recorded at cost and amortized using the straight line method over its estimated useful life and software acquired in business combinations is recorded at its fair value and amortized using straight line and accelerated methods over its estimated useful life. In determining useful lives, management considers historical results and technological trends which may influence the estimate. Useful lives for all computer software range from 3 to 10 years. Amortization expense for computer software was $195.1 million, $149.8 million and $149.9 million in 2010, 2009 and 2008, respectively. Included in discontinued operations in the Consolidated Statement of Earnings was amortization expense on computer software of $3.3 million, $0.7 million and $15.3 million for 2010, 2009 and 2008, respectively. We also assess the recorded value of computer software for impairment on a regular basis by comparing the carrying value to the estimated future cash flows to be generated by the underlying software asset. There are inherent uncertainties in determining the expected useful life or cash flows to be generated from computer software. While we have not historically experienced significant changes in these estimates we could be subject to such changes in the future.
 
Goodwill and Other Intangible Assets
 
We are required to allocate the purchase price of acquired businesses to the assets acquired and liabilities assumed in the transaction at their estimated fair values. The estimates used to determine the fair value of long-lived assets, such as intangible assets, are complex and require a significant amount of management judgment. We generally engage independent valuation specialists to assist us in making fair value determinations. We are also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods. We periodically review the estimated useful lives assigned to our definite-lived intangible assets to determine whether such estimated useful lives continue to be appropriate. Additionally we review our indefinite-lived intangible assets to determine if there is any change in circumstances that may indicate the asset’s useful life is n o longer indefinite.
 
We review the carrying value of goodwill and indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate the carrying value may not be recoverable. The authoritative guidance requires us to perform a two-step impairment test on goodwill. First, we compare the fair value of each reporting unit to its carrying value. We determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach. The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach utilizes earnings multiples of similarly situated guideline public companies . If the fair value of a reporting unit exceeds the carrying value of the reporting unit’s net assets, goodwill is not impaired and further testing is not required. If the carrying value of the reporting unit’s net assets exceeds the fair value of the reporting unit, then we perform the second step of the impairment test to determine the implied fair value of the reporting unit’s goodwill and any impairment charge. Additionally, we estimate the fair value of acquired intangible assets with indefinite lives and compare this amount to the underlying carrying value.
 
Determining the fair value of a reporting unit or acquired intangible assets with indefinite lives involves judgment and the use of significant estimates and assumptions, which include assumpti ons regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market conditions

26

and other assumptions.
 
Du ring the year ended December 31, 2010, the portion of the unamortized contract intangible asset recorded at the initiation of the Brazilian Venture that was attributable to Banco Santander was deemed impaired due to the exit of Banco Santander. Accordingly, we recorded a pre-tax impairment charge of $140.3 million in the third quarter of 2010. In addition, we recorded a $5.2 million impairment of intangible assets related to the discontinued operations of Participacoes, as discussed in Notes 3 and 9 to the Consolidated Financial Statements. For the year ended December 31, 2009, our analysis of indefinite-lived intangible assets indicated an impairment of certain trademarks which were discontinued as a result of the Company’s rebranding campaign initiated on October 1, 2009, following the acquisition of Metavante. Accordingly, we recorded a pre-tax impairment charge of $124.0 million in the fourth quarter of 2009. During the year ended December 31, 2008, we recorded a pre-tax impairment charge of $52.0 million to reduce the carrying value of a trademark related to our retail check business to its estimated fair value and included approximately $26.0 million of this charge in discontinued operations. Given the significance of our goodwil l and intangible asset balances, an adverse change in fair value could result in an impairment charge, which could be material to our financial statements.
 
Accounting for Income Taxes
 
As part of the process of preparing the Consolidated Financial Statements, we are required to determine income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax expense together with assessing temporary differences resulting from differing recognition of items f or income tax and accounting purposes. These differences result in deferred income tax assets and liabilities, which are included within the Consolidated Balance Sheets. We must then assess the likelihood that deferred income tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must reflect this increase as an expense within income tax expense in the Consolidated Statements of Earnings. Determination of the income tax expense requires estimates and can involve complex issues that may require an extended period to resolve. Further, changes in the geographic mix of revenues or in the estimated level of annual pre-tax income can cause the overall effective income tax rate to vary from period to period. We believe that our tax positions comply with applicable tax law and that we adequately provide for any known tax contingencies . We believe the estimates and assumptions used to support our evaluation of tax benefit realization are reasonable. However, final determination of prior-year tax liabilities, either by settlement with tax authorities or expiration of statutes of limitations, could be materially different than estimates reflected in assets and liabilities and historical income tax provisions. The outcome of these final determinations could have a material effect on our income tax provision, net income or cash flows in the period that determination is made.
 
Related Party Transactions
 
We are a party to certain historical related party agreements with FNF, LPS and other related parties (see Note 4 to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report).
 
Factors Affecting Comparability
 
Our Consolidated Financial Statements included in this report that present our financial condition and operating results reflect the following significant transactions:
 
•    
In August 2010, we completed a leveraged recapitalization. Through a modified "Dutch Auction" tender offer, we repurchased 86.2 million shares of our common stock, including 6.4 million shares underlying previously unexercised stock options. The repurchased shares were added to treasury stock. The recapitalization was funded by incremental debt, as outlined under "Liquidity and Capital Resources - Financing".
 
•    
On October 1, 2009, we acquired Metavante in a tax-free reorganization. Each outstanding share of Metavante common stock was converted into 1.35 shares, or approximately 163.6 million total shares, of FIS common stock. Outstanding Metavante stock options and other stock-based awards were converted into FIS stock options and stock-based awards using the same exchange ratio. The result s of operations and financial position of Metavante are included in the Consolidated Financial Statements from the date of acquisition.
•    
On July 2, 2008, we completed the LPS spin-off.  The results of operations of the Lender Processing Services segment through the July 2, 2008, spin-off date are reflected as discontinued operations in the Consolidated Statements of Earnings for all periods presented.
As a result of the above transactions, the results of operations and earnings per share in the periods covered by the Consolidated Financial Statements may not be directly comparable.

27

 

28
< /a>
Consolidated Results of Operations
(in millions, except per share amounts)
 
 
2010
 
2009
 
2008
Processing and services revenues
$
5,269.5
 
 
$
3,711.1
 
 
$
3,359.5
 
Cost of revenues
3,637.7
 
 
2,741.5
 
 
2,616.1
 
Gross profit
1,631.8
 
 
969.6
 
 
743.4
 
Selling, general, an d administrative expenses
675.8
 
 
547.1
 
 
381.0
 
Impairment charges
154.9
 
 
136.9
 
 
26.0
 
Operating income
801.1
 
 
285.6
 
 
336.4
 
Other income (expense):
 
 
 
 
 
 
 
 
Interest income
6.4
 
 
3.4
 
 
6.3
 
Interest expense
(179.7
)
 
(134.0
)
 
(163.4
)
Other income (expense), net
(11.5
)
 
8.7
 
 
1.5
 
Total other income (expense)
(184.8
)
 
(121.9
)
 
(155.6
)
Earnings from continuing operations before income taxes and equity in earnings (loss) of unconsolidated entities
616.3
 
 
163.7
 
 
180.8
 
Provision for income taxes
215.3
 
 
54.7
 
 
57.6
 
Equity in earnings (loss) of unconsolidated entities
—
 
 
—
 
 
(0.2
)
Earnings from continuing operations, net of tax
401.0
 
 
109.0
 
 
123.0
 
Earnings (loss) from discontinued operations, net of tax
(43.1
)
 
(0.5
)
 
96.5
 
Net earnings
357.9
 
 
108.5
 
 
219.5
 
Net (earnings) loss attributable to noncontrolling interest
46.6
 
 
(2.6
)
 
(4.7
)
Net earnings attributable to FIS
$
404.5
 
 
$
105.9
 
 
$
214.8
 
Net earnings per share — basic from continuing operations attributable to FIS common stockholders
< /td>
$
1.30
 
 
$
0.45
 
 
$
0.62
 
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.12
)
 
(0.00
)
 
0.50
 
Net earnings per share — basic attributable to FIS common stockholders
$
1.17
 
 
$
0.45
 
 
$
1.12
 
Weighted average shares outstanding — basic
345.1
 
 
236.4
 
 
191.6
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
1.27
 
 
$
0.44
 
 
$
0.61
 
Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.12
)
 
(0.00
)
 
0.50
 
Net earnings per share — diluted attributable to FIS common stockholders
$
1.15
 
 
$
0.44
 
 
$
1.11
 
Weighted average shares outstanding — diluted
352.0
 
 
239.4
 
 
193.5
 
Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
447.6
 
 
$
106.4
 
 
$
118.9
 
Earnings (loss) from discontinued operations, net of tax
(43.1
)
 
(0.5
)
 
95.9
 
Net earnings attributable to FIS
$
404.5
 
 
$
105.9
 
 
$
214.8
 
 
Processing and Services Revenues
 
< font style="font-family:inherit;font-size:10pt;">Processing and services revenues totaled $5,269.5 million, $3,711.1 million and $3,359.5 million in 2010, 2009 and 2008, respectively. The increase in revenue during 2010 of $1,558.4 million, or 42.0%, as compared to 2009 is primarily attributable to incremental revenues from the Metavante Acquisition and to a lesser extent the recognition of an $83.3 million termination fee in connection with Banco Santander's exit from the Brazilian Venture, revenue derived from 2010 acquisit ions of $23.4 million, and a favorable foreign currency impact of $26.4 million resulting from a weaker U.S. Dollar. These increases were partially offset by declines in our paper-based retail check businesses. The increase in revenue during 2009 of $351.6 million, or 10.5%, as compared to 2008 is primarily attributable to the impact of the Metavante Acquisition, which contributed fourth quarter revenues of $404.1&nb sp;million, partially offset by $53.7 million in unfavorable foreign currency impact resulting from a

29

strengthening of the U.S. Dollar and other items referred to in the segment discussion below.
 
Cost of Revenues and Gross Profit
 
Cost of revenues totaled $3,637.7 million, $2,741.5 million and $2,616.1 million in 2010, < font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">2009 and 2008, respectively, resulting in gross profit of $1,631.8 million, $969.6 million and $743.4 million in 2010, 2009 and 2008, respectively. Gross profit as a percentage of revenues (“gross margin”) was 31.0%, 26.1% and 22.1% in 2010, 2009 and 2008, respectively. The increase in cost of revenues of $896.2 million in the 2010 period as compared to the 2009 period is directly attributable to the revenue variances addressed above. The increase in gross margin of 490 basis points for 2010 over 2009 was driven by the termination fee received in connection with Banco Santander's exit from the Brazilian Venture, as well as the continuing results from the cost synergy initiatives associated with the Metavante Acquisition. The increase in cost of revenues of $125.4 million in the 2009 period as compared to the 2008 period is directly attributable to the revenue variances addressed above. The increase in gross margin of 400 basis points for 2009 over 2008 was driven by the Company’s continued effort to reduce costs and improve operating efficiency, coupled with the initial results from the cost synergy initiatives associated with the Metavante Acquisition.
 
Selling, General and Administrative Exp enses
 
Selling, general and administrative expenses totaled $675.8 million, $547.1 million and $381.0 million for 2010, 2009 and 2008, respectively. The increase of $128.7 million in 2010 as compared to 2009 was primarily due to incremental costs associated with the Metavante operations, partially offset by a $10.1 million recovery in the 2010 third quarter of previously incurred legal costs as the result of a favorable court ruling a nd by lower integration and merger-related charges and stock-based compensation. The increase of $166.1 million in 2009 as compared to 2008 was primarily due to: (a) restructuring, integration and merger-related charges, including professional and advisory fees, severance, incentive bonuses and lease adjustments contributing $108.5 million of the year-over-year increase and (b) incremental costs associated with the Metavante Acquisition. Stock-based compensation increased from $51.6 million in 2008 to $71.0 million in 2009. Stock-based compensation in the 2009 period included vesting acceleration charges of $29.2 million due to change-in-control provisions triggered by the Metavante Acquisition and $4.5 million for new merger related grants. By comparison, the 2008 period included charges of $14.1 million for the accelerated vesting of all stock awards held by eFunds employees assumed in the eFunds Acquisition and $2.6 million relating to the acceleration, upon termination, of certain unvested executive stock awards.
 
Impairment Charges
 
Impairment charges totaled $154.9 million, $136.9 million and $26.0 million for 2010, 2009 and 2008, respectively. The 2010 charges relate to impairments resulting from the exit of Banco Santander from the Brazilian Venture, including $140.3 million representing the portion of the unamortized contract intangible asset recorded at the initiation of the Brazilian Venture that was attributable to Banco Santander, and the net unamortized balance of $14.6 million for certain capitalized software development costs incurred exclusively for use in processing Banco Santander card activity. The 2009 charges relate primarily to the introduction of a new brand identity in conjunction with the Metavante merger, giving rise to the impairment of a number of previously acquired trademarks. The 2009 period also included charges related to impairment of certain capitalized software assets totaling approximately $12.9 million. The 2008 period included charges of $26.0 million to reduce the carrying value of a trademark related to our retail check business to its estimated f air value.
 
Operating Income
 
Operating income totaled $801.1 million, $285.6 million and $336.4 million for 2010, 2009 and 2008, respectively. Operating income as a percentage of revenue (“operating margin”) was 15.2%, 7.7% and 10.0% for 2010, 2009 and 2008, respectively. The increase in operating margin for 2010 as compared to the 2009 period was driven by termination fees received in connection with Banco Santander's exit from the Brazilian Venture, synergies, cost containment initiatives, gross margin improvements and lower stock compensation charges, partially offset by higher integration and merger related charges incurred during the 2010 period. The decrease in operating margin for 2009 as compared to 2008 was driven by the impairment charges noted above and increased restructuring, integration and merger-related charges associated with the Metavante Acquisition.
 
To tal Other Income (Expense)
 
Total other income (expense) totaled $(184.8) million, $(121.9) million and $(155.6) million for 2010, 2009 and 2008, respectively. The two primary components of total other income (expense) are interest expense and, for the 2010 period, costs relating to the leveraged recapitalization. The increase of $45.7 million in interest expense in 2010 as compared to 2009 results from higher overall debt levels as a result of our recapitalization during 2010 and higher interest rates on our debt. The 2010

30

period includes $13.7 million of debt extinguishment expenses, the write-off of certain previously capitalized debt issuance costs and fees and other expenses relating to our leveraged recapitalization. The 2010 period also includes the forgiveness of $19.4 million of notes payable representing additional consideration which was to be paid to the ba nks in the Brazilian Venture upon migration of their card portfolios and an extinguishment gain of $5.7 million from the restructuring of the remaining Banco Bradesco notes in conjunction with other revisions to the Brazilian Venture agreements (see Note 6 to the Consolidated Financial Statements). The decrease of $29.4 million in interest expense in 2009 as compared to 2008 resulted from: (a) lower interest rates on our debt; (b) a $9.3 million make-whole premium in 2008 on the redemption of certain eFunds Notes; and (c) the $12.4 million write-off of debt issuance costs in 2008 associated with the term loans retired in conjunction with the LPS spin-off.
 
Provision for Income Taxes
 
Income tax expense from continuing operations totaled $215.3 million, $54.7 million and $57.6 million for 2010, 2009 and 2008, respectively. This resulted in an effective ta x rate on continuing operations of 34.9%, 33.4% and 31.9% for 2010, 2009 and 2008, respectively. The net change in the 2010 period overall effective tax rate is primarily related to a larger proportion of domestic pre-tax income versus foreign-source income due primarily to the Metavante Acquisition, partially offset by the utilization of foreign tax credits. The increase in the 2009 period overall effective tax rate as compared to the 2008 period is primarily related to the impact of the LPS spin-off in the 2008 period.
 
Earnings (Loss) from Discontinued Operations
 
During the 2010, 2009 and 2008 periods, certain operations are classified as discontinued. Reporting for discontinued operations classifies revenues and expenses as one line item, net of tax, in the Consolidated Statements of Earnings. During the third quarter of 2010, we determined that we will pursue strategic alternatives for Participacoes. In January 2010, we closed on the sale of ClearPar. In October 2008, we sold Certegy Australia, Ltd. In July 2008, we spun off LPS. The table below outlines the components of discontinued operations for the 2010, 2009 and 2008 periods, net of tax. See also Note 3 to the Consolidated Financial Statements.
 
2010
 
2009
 
2008
 
 
 
 
 
 
Impairment charges- Participacoes
$
(16.6
)
 
$
—
 
 
$
—
 
Impairment charges - Certegy Australia
—
 
 
(18.2
)
 
—
 
Participacoes operations
(25.2
)
 
(5.1
)
&nbs p;
(8.4
)
LPS operations
—
 
 
—
 
 
112.4
 
Certegy Australia operations
—
 
 
23.9
 
 
(12.3
)
Other
(1.3
)
 
(1.1
)
 
4.8
 
   Total discontinued operations
$
(43.1
)
 
$
(0.5
)
 
$
96.5
 
 
     Net (Earnings) Loss Attributable to Noncontrolling Interest
     Net (earnings) loss attributable to noncontrolling interest totaled $46.6 million, $(2.6) million and $(4.7) million for 2010, 2009 and 2008, respectively. The 2010 year included after tax charges totaling $50.1 million relating to the minority partner's proportionate share of the write-off of capitalized software development costs and of the impairment to the unamortized contract intangible asset resulting from the exit of Banco Santander from the Brazilian Venture. See Note 6 to the Consolidated Financial Stateme nts.
 
Earnings from Continuing Operations, Net of Tax, Attributable to FIS Common Stockholders
 
Earnings from continuing operations, net of tax, attributable to FIS common stockholders totaled $447.6 million, $106.4 million and $118.9 million for 2010, 2009 and 2008, respectively, or $1.27, $0.44 and $0.61 per diluted share, respectively, due to the factors described above.
 
Segment Results of Operations
 
Financial Solutions Group

31

1,260.0
 
2010
 
2009
 
2008
 
(In millions)
Processing and services revenues
$
1,890.8
 
 
$
 
 
$
1,135.8
 
Operating income
$
670.1
< font style="font-family:inherit;font-size:10pt;"> 
 
$
417.7
 
 
$
355.7
 
Operating margin
35.4
%
 
33.2
%
 
31.3
%
 
Revenues for FSG totaled $1,890.8 million, $1,260.0 million and $1,135.8 million for 2010, 2009 and 2008, respectively. The overall segment increase of $630.8 million in 2010 as compared to 2009 resulted primarily from incremental Metavante revenues and to a lesser extent increased demand for professional services and software licenses. The overall segment increase of $124.2 million in 2009 as compared to 2008 resulted primarily from incremental fourth quarter Metavante revenues of $154.2 million, partially offset by lower software license and professional services revenue.
 
Operating income for FSG totaled $670.1 million, $417.7&nbs p;million and $355.7 million for 2010, 2009 and 2008, respectively. Operating margin was approximately 35.4%, 33.2% and 31.3% for 2010, 2009 and 2008, respectively. The increase in operating income in 2010 as compared to 2009 primarily resulted from inc remental Metavante 2010 operating income and the increase in operating margin is due to continuing results from the synergy initiatives associated with the Metavante Acquisition. The increase in 2009 as compared to 2008 primarily resulted from the fourth quarter impact of the Metavante Acquisition and improved operating margins due to targeted cost reductions.
 
Payment Solutions Group
 
2010
 
2009
 
2008
 
(In millions)
Processing and services revenues
$
2,478.1
 
 
$
1,741.9
 
 
$
1,526.3
 
Operating income
$
835.0
 
 
$
475.6
 
 
$
353.8
 
Operating margin
33.7
%
 
27.3
%
 
23.2
%
 
Revenues for PSG totaled $2,478.1 million, $1,741.9 million and $1,526.3 million for 2010, 2009 and 2008, respectively. The overall segment increase of $736.2 million in 2010 as compared to 2009 resulted primarily from incremental Metavante 2010 revenues. Additionally, growth in electronic payment solutions was offset by lower item processing and retail check activity. The overall segment increase of $215.6 million in 2009 as compared to 2008 resulted primarily from incremental fourth quarter Metavante revenues of $258.1 million, partially offset by reduced termination fees and lower item processing, prepaid card and retail check activity.
 
Operating income for PSG totaled $835.0 million, $475.6 million and $353.8< /font> million for 2010, 2009 and 2008, respectively. Operating margin was approximately 33.7%, 27.3% and 23.2% for 2010, 2009 and 2008, respectively. The increase in operating income and operating margin in the 2010 period as compared to the 2009 period primarily resulted from incremental Metavante 2010 operating income and realized cost savings. T he increase in the 2009 period as compared to the 2008 period primarily resulted from increased operating efficiencies and targeted cost reductions.
 
International Solutions Group
 
2010
 
2009
 
2008
 
(In millions)
Processing and services revenues
$
917.0
 
 
$
724.3
 
 
$
699.9
 
Operating income
$
71.1
 
 
$
121.9
 
 
$
79.3
 
Operating margin
7.8
%
 
16.8
%
 
11.3
%
 
Revenues for ISG totaled $917.0 million, $724.3 million and $699.9 million for 2010, 2009 and 2008, respectively. The overall segment increase of $192.7 million in 2010 as compared to 200 9 resulted from growth driven by increased payment volumes in Brazil, growth in professional services, higher license revenue and incremental revenues from the Metavante Acquisition. The 2010 period also included an $83.3 million termination fee received as a result of Banco Santander's exit from the Brazilian Venture and a $26.4 million favorable foreign currency impact resulting from a weaker U.S. Dollar during 2010. The overall segment increase of $24.4 million in 2009 as compared to 2008 primarily resulted from an increase in core processing revenue driven by strong services revenue and volumes in the Asia Pacific and EMEA regions and payments revenue driven by organic growth across all regions, partially offset by unfavorable currency effects of $53.7 million.

32

 
Operating income for ISG totaled $71.1 million, $121.9 million and $79.3 million for 2010, 2009 and 2008, respectively. Operating margin was 7.8%, 16.8% and 11.3% for 2010, 2009 and 2008, respectively. The decrease in operating income and margin in 2010 as compared to 2009 resulted from the impairment charges of $154.9 million attributable to Banco Santander's exit from the Brazilian Venture previously addressed above under total Company Impairment Charges, partially offset by the $83.3 million termination fee received as a result of Banco Santander's exit from the Brazilian Venture. The increase in operating income and margin in 2009 as compared to 2008 primarily results from improved scale and efficiencies within operations.
 
Corporate and Other
 
The Corporate and Other segment results consist of selling, general and administrative expenses and depreciation and intangible asset amortization not otherwise allocated to the reportable segments. Corporate and Other expenses were $775.1 million, $729.6 million and $452.4 million in 2010, 2009 and 2008, respectively. The overall Corporate and Other increase of $45.5 million for 2010 as compared to 2009 is primarily due to the incremental costs associated with the Metavante operations and merger related charges, partially offset by the recovery o f previously incurred legal costs as the result of a favorable court ruling, as addressed above under total Company Selling, General and Administrative Expense. The overall Corporate and Other increase of $277.2 million for 2009 as compared to 2008 is primarily due to the restructuring, integration and merger related charges, impairment charges to trademarks and certain capitalized software assets and incremental costs associated wit h the Metavante Acquisition as addressed above under total Company Selling, General and Administrative Expenses and Impairment Charges.
 
Liquidity and Capital Resources
 
Cash Requirements
 
Our cash requirements include cost of revenues, selling, general and administrative expenses, income taxes, debt service payments, capital expenditures, systems development expenditures, stockholder dividends, and business acquisitions. Our principal sources of funds are cash generated by operations and borrowings.
 
At December 31, 2010, we had cash and cash equivalents of $338.0 million and debt of $5,192.1 million, including the current portion. Of the $338.0 million cash and cash equivalents, approximately $176.1 million is held by our foreign entities. We expect that cash flows from operations over the next twelve months will be sufficient to fund our operating cash requirements and pay principal and interest on our outstanding debt.
 
We currently pay a $0.05 per common share dividend on a quarterly basis, and expect to continue to do so in the future. The declaration and payment of future dividends is at the discretion of the Board of Directors and depends on, among other things, our investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions. Additionally, the payment of cash dividends may be limited by covenants in certain debt agreements. A regular quarterly dividend of $0.05 per common share is payable March 31, 2011 to shareholders of record as of the close of business on March 17, 2011.
 
Cash Flows from Operations
 
Cash flows from operations were $1,071.3 million, $714.1 million and $596.4 million in 2010, 2009 and 2008 respectively. Cash flows from operations increased $357.2 million in 2010 primarily due to higher earnings from operations. Cash flows from operations in 2008 include cash flows from LPS of $136.7 million. Excluding the 2008 impact of LPS, cash flows from operations increased in 2009 by $254.4 million due to higher earnings before consideration of the impairment charges, better working capital management during the 2009 period and the collection of $73.5 million of receivables retained after the sale of Certegy Australia Ltd.
 
Capital Expenditures
 
Our principal capital expenditures are for computer software (purchased and internally developed) and additions to property and equipment. We spent approximately $314.0 million, $212.5 million and $255.4 million on capital expenditures during the years ended December 31, 2010, 2009 and 2008, respectively, including approximately $25.4 million during 2008 related to discontinued operations including LPS prior to the spin-off. We expect to spend approximately 6% of 2011 revenue on capital expenditures, including integration capital for acquisitions.

33
Table of Contents

 
Financing
 
On January 18, 2007, FIS entered into a syndicated credit agreement, which was amended on July 30, 2007, and amended and restated on June 29, 2010 (the “FIS Credit Agreement”). The FIS Credit Agreement, as of December 31, 2010, provides total committed capital of $4,781.9 million comprised of: (1) revolving credit facilities in an aggregate maximum principal amount of $1,033.7 million (together, the “Revolving Loan”), consisting of $112.3 million in revolving credit capacity maturing on January 18, 2012, and $921.4 million in revolving credit capacity maturing on July 18, 2014; (2) an aggregate of $3,748.2 million of term notes consisting of $350.0 million maturing on January 18, 2012 (“Term Loan A-1”), $1,900.0 million maturing on July 18, 2014 (“Term Loan A-2”), (3) $1,496.3 million maturing on July 18, 2016 ("Term Loan B") and (4) an aggregate of $1.9 million of term notes (the “LCPI Loans”) maturing on July 18, 2014. As of December 31, 2010, the outstanding principal balance of the Revolving Loan was $305.0 million, with $713.7 million of borrowing capacity remaining thereunder (net of $15.0 million in outstanding letters of credit issued under the Revolving Loan). See Item 7A for information regarding the interest rates of the loans.
 
On November 1, 2007, Metavante entered into a credit agreement, which was amended on October 1, 2009 (as amended, the “MV Credit Agreement”). On July 16, 2010, FIS repaid in full the outstanding term loans under the MV Credit Agreement and terminated that credit facility.
 
On October 1, 2009, contemporaneous with the closing of the Metavante merger, FIS obtained $500.0 m illion of term loans (the “Term Loan C”), which have subsequently been paid in full.
 
Also on October 1, 2009, FIS entered into an agreement to sell certain of its accounts receivable (the “AR Facility”) to a wholly-owned special purpose accounts receivable and financing entity (the “SPV”), which was exclusively engaged in purchasing receivables from FIS. FIS maintained effective control over the receivables sold to the SPV. Thus, the SPV is included in our consolidated financial statements. FIS terminated the AR Facility, effective on December 17, 2010, with no further receivables being sold to the SPV as of that date.
 
On July 16, 2010, FIS entered into a Joinder Agreement (the "Joinder Agreement") under which FIS issued a new tranche of term loans under the FIS Credit Agreement in an aggregate principal amount of $1.5 billion (the "Term Loan B"). The Term Loan B is subject in all material respects to the provisions applicable to other term loans under the FIS Credit Agreement. Interest on the Term Loan B will be generally payable at LIBOR plus 3.75% per annum (with LIBOR subject to a floor of 1.50%).
 
FIS may borrow, repay and re-borrow amounts under the Revolving Loan from time to time until the applicable maturity of the tranches included in the Revolv ing Loan. FIS must make quarterly principal payments under the Term Loan A-1 of $11.3 million per quarter from March 31, 2011 through September 30, 2011, with the remaining balance payable on January 18, 2012. As of December 31, 2010, FIS had made principal prepayments under the Term Loan A-1 of $12.7 million which fully satisfied the required payment obligation of $11.3 million scheduled for March 31, 2011 and reduced the obligation payable on June 30, 2011 by $1.4 million. FIS must make quarterly principal payments under the Term Loan A-2 of $50.1 million per quarter from March 31, 2011 through December 31, 2012, and $75.1 million per quarter from March 31, 2013 through March 31, 2014, with the remaining principal balance payable on July 18, 2014. As of December 31, 2010, FIS had made principal prepayments under the Term Loan A-2 of $3.4 million, reducing the payment obligation scheduled for March 31, 2011 by the same amount. FIS must make quarterly principal payments under the Term Loan B of $3.8 million per quarter from March 31, 2011 through June 30, 2016, with the remaining principal balance payable on July 18, 2016.
 
The FIS Credit Agreement is subject to customary affirmative, negative and financial covenants, including, among other things, limits on the creation of liens, limits on the incurrence of indebtedness, restrictions on investments and dispositions, limitations on dividends and other restricted payments, a minimum interest coverage ratio and a maximum leverage ratio. We were in compliance with all covenants related to the FIS Credit Agreement at December 31, 2010.
 
On July 16, 2010, FIS completed offerings of $600.0 million aggregate principal amount of 7.625% Senior Notes due 2017 (the "2017 Notes") and $500.0 million aggregate principal amount of 7.875% Senior Notes due 2020 (the "2020 Notes" and together with the 2017 Notes, the "Notes"). FIS issued the Notes in two separate series under an indenture dated as of July 16, 2010 among FIS, FIS' domestic subsidiaries that guaranteed the FIS Credit Agreement (the "Guarantors") and The Bank of New Yor k Mellon Trust Company, N.A., as trustee. The 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. We have since completed an exchange offer under which we exchanged identical notes that were SEC registered for the Notes.

34

 
The following table summarizes the mandatory annual principal payments pursuant to the FIS Credit Agreement and the Notes as of December 31, 2010 (in millions). There are no mandatory principal payments on the Revolving Loan; any balance outstanding on the Revolving Loan will be due and payable at the applicable scheduled maturity date of the respective tranches thereof:
 
Term
Loan A-1
 
Term
Loan A-2
 
Term
Loan B
 
2017
Notes
 
2020
Notes
 
Total
2011
$
21.3
 
 
$
197.0
 
 
$
15.0
 
 
$
—
 
 
$
—
 
 
$
233.3
 
2012
328.7
 
 
200.4
 
 
15.0
 
 
—
 
 
—
 
 
544.1
 
2013
—
 
 
300.4
 
 
15.0
 
 
—
 
 
—
 
 
315.4
 
2014
—
 
 
1,202.2
 
 
15.0
 
 
—
 
 
—
 
 
1,217.2
 
2015
—
 
 
—
 
 
15.0
 
 
—
 
 
—
 
 
15.0
 
Thereafter
—
 
 
—
 
 
1,421.3
 
 
600.0
 
 
500.0
 
 
2,521.3
 
Total
$
350.0
 
 
$
1,900.0
 
 
$
1,496.3
 
 
$
600.0
 
 
$
500.0
 
 
$
4,846.3
 
 
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 lenders comprise about 69% 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 Agre ement (impacting the capacity of the Revolving Loan), the maximum loss of available capacity on the undrawn portion of the Revolving Loan, as of December 31, 2010, would be about $105.6 million.
 
As of December 31, 2010, we have entered into interest rate swap transactions converting a portion of the interest rate exposure on our term loans from variable to fixed (see Item 7A).
 
Private Placement Investment
 
On October 1, 2009, pursuant to an investment agreement with Thomas H. Lee Partners, L.P. (“THL”) and FNF dated as of March 31, 2009, FIS issued and sold (a) to THL in a private placement 12.9 million shares of FIS common stock for an aggregate purchase price of approximately $200.0 million and (b) to FNF in a private placement 3.2 million shares of FIS common stock for an aggregate purchase price of approximately $50.0 million. FIS paid each of THL and FNF a transaction fee equal to 3% of their respecti ve investments.
 
Contractual Obligations
 
FIS’ long-term contractual obligations generally include its long-term debt and operating lease payments on certain of its property and equipment. The following table summarizes FIS’ significant contractual obligations and commitments as of December 31, 2010 (in millions):
 
2011
 
2012
 
2013
 
2014
 
2015
 
Thereafter
 
Total
Long-term debt
$
256.9
 
 
$
578.7
 
 
$
315.4
 
 
$
1,504.8
 
 
$
15.0
 
 
$
2,521.3
 
 
$
5,192.1
 
Operating leases
65.1
 
 
47.6
 
 
35.7
 
 
27.8
 
 
24.3
 
 
78.1
 
 
278.6
 
Data processing and maintenance and purchase commitments
145.5
 
 
126.7
 
 
117.0
 
 
62.9
 
 
36.0
 
 
66.2
 
 
554.3
 
Total
$
467.5
 
 
$
753.0
 
 
$
468.1
 
 
$
1,595.5
 
 
$
75.3
 
 
$
2,665.6
 
 
$
6,025.0
 
 
FIS believes that its existing cash balances, cash flows from operations and borrowing programs will provide adequate sources of liquidity and capital resources to meet FIS’ expected short-term liquidity needs and its long-term needs for the operations of its business, expected capital spending for the next 12 months and the foreseeable future and the satisfaction of these obligations and commitments.
 
Off-Balance Sheet Arrangements
 

35

FIS does not have any off-balance sheet arrangements.
 
Recent Accounting Pronouncements
     In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). This new standard revised the guidance for determining whether multiple deliverables in an arrangement can be separated for revenue recognition and how the consideration should be allocated. It eliminated the use of the residual method of revenue recognition and requires the allocation of consideration to each deliverable using the relative selling price method. The selling price for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE or TPE is available . FIS early adopted the provisions of ASU 2009-13 prospectively for all new and materially modified arrangements entered into on or after January 1, 2010. See also Note 2 to the Consolidated Financial Statements.      
 
Item 7A.    Quantitative and Qualitative Disclosure About Market Risks
 
Market Risk
 
We are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates. We use certain derivative financial instruments, including interest rate swaps and foreign currency forward exchange contracts, to manage interest rate and foreign currency risk. We do not use derivatives for trading purposes, to generate income or to engage in speculative activity.
Interest Rate Risk
In addition to existing cash balances and cash provided by operating activities, we use fixed rate and variable rate debt to finance our operations. We are exposed to interest rate risk on these debt obligations and related interest rate swaps.
The Notes represent substantially all of our fixed-rate long-term debt obligations. The carrying value of the Notes was $1,100.0 million at December 31, 2010. The fair value of the Notes was approximately $1,172.3 million at December 31, 2010. The potential reduction in fair value of the Notes from a hypothetical 10 percent increase in market interest rates would not be material to the overall fair value of the debt. We currently have no plans to repurchase the Notes before their maturity and, therefore, fluctuations in market interest rates would not have an effect on our results of operations or financial condition.
 
Our floating rate long-term debt obligations principally relate to borrowings under the FIS Credit Agreement. As of December 31, 2010, we are paying interest on our Term Loan A-1 of LIBOR plus 1.00%, on our Term Loan A-2 of LIBOR plus an applicable margin of up to 2.50% based upon the Company's leverage ratio as defined in the FIS Credit Agreement, and on our Term Loan B at generally LIBOR plus 3.75% (with LIBOR subject to a 1.50% floor). Prior to the June 29, 2010 amendment and extension, interest on the Revolving Loan was payable at LIBOR plus up to 1.00% (Eurocurrency Borrowings), Fed-funds plus up to 1.00% (Swingline Bor rowings) or Prime plus 0.00% (Base Rate Borrowings) plus a facility fee of up to 0.25%. The pre-amendment pricing continues to apply for the portion of the Revolving Loan that matures in January 2012, consisting of approximately $112.3 million of commitments. Interest on the portion of the Revolving Loan that matures in July 2014 is generally payable at LIBOR plus an applicable margin of up to 2.50%, based upon the Company's leverage ratio, and is subject to an unused commitment fee of 0.50%. An increase of 100 basis points in the LIBOR rate would increase our annual debt service under these credit agreements, after we include the impact of our interest rate swaps, by $3.4 million (based on principal amounts outstanding at December 31, 2010). We performed the foregoing sensitivity analysis based on the principal amount of our float ing rate debt as of December 31, 2010, less the principal amount of such debt that was then subject to an interest rate swap converting such debt into fixed rate debt. This sensitivity analysis is based solely on the principal amount of such debt as of December 31, 2010, and does not take into account any changes that occurred in the prior 12 months or that may take place in the next 12 months in the amount of our outstanding debt or in the notional amount of outstanding interest rate swaps in respect of our debt. Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year. For comparison purposes, based on principal amounts on the Revolving Loan and Term Loan A outstanding as of December 31, 2009, and calculated in the same manner as set forth above, an increase of 100 basis points in the LIBOR rate would have increased our annual interest expense, after we calculate the impact of our interest rate swaps, by $7.0 million.
 
We use interest rate swaps for the purpose of managing our interest expense through the mix of fixed rate and floating rate debt. As of December 31, 2010, 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):
 

36

Effective Date
Termination Date
 
Notional Amount
 
 
Bank Pays
Variable Rate of
 
FIS pays
Fixed Rate of
April 12, 2010
April 11, 2011
 
$
200.0
 
 
 
1 Month Libor (2)
 
0.76% (4)
October 20, 2009
April 20, 2011
 
700.0
 
 
 
1 Month Libor (2)
 
0.99% (4)
February 1, 2010
May 1, 2011
 
250.0
 
 
 
1 Month Libor (2)
 
0.75% (4)
February 1, 2010
May 1, 2011
 
150.0
 
 
 
1 Month Libor (2)
 
0.74% (4)
December 11, 2009
June 13, 2011
 
200.0
 
 
 < /div>
1 Month Libor (2)
 
0.91% (4)
February 1, 2008
February 1, 2012
 
400.0
 
(1
)
 
3 Month Libor (3)
 
3.87% (4)
February 1, 2008
February 1, 2012
 
200.0
 
 
 
3 Month Libor (3)
 
3.44% (4)
November 1, 2010
November 1, 2012
 
< font style="font-family:inherit;font-size:10pt;">150.0
 
 
 
1 Month Libor (2)
 
0.50% (4)
February 1, 2011
February 1, 2013
 
200.0
 
 
 
1 Month Libor (2)
 
0.62% (4)
May 3, 2011
May 1, 2013
 
400.0
 
 
 
1 Month Libor (2)
 
0.73% (4)
 
 
 
$
2,850.0
 
 
 
 
 
 
_________________________
(1)    
Notional value amortizes from $400.0 million to $200.0 million on February 1, 2011.
(2)    
0.26% in effect at December 31, 2010.
(3)    
0.30% in effect at December 31, 2010.
(4)    
Does not include the applicable margin and facility fees paid to bank lenders on Term Loan A and Revolving Loan as described above.
We have designated these interest rate swaps as cash flow hedges for accounting purposes. A portion of the amount included in accumulated other comprehensive earnings is reclassified into interest expense as a yield adjustment as interest payments are made on the Term and Revolving Loans. In accordance with the 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.
 
Foreign Currency Risk
We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany loans wi th foreign subsidiaries and transactions denominated in currencies other than a location's functional currency. Our objective is to minimize our exposure to these risks through a combination of normal operating activities and the use of foreign currency forward exchange contracts. Contracts are denominated in currencies of major industrial countries.
Our exposure to foreign currency exchange risks generally arises from our non-U.S. operations, to the extent they are conducted in local currency. Changes in foreign currency exchange rates affect translations of revenues denominated in currencies other than the U.S. Dollar. Our international operations generated approximately $833.7 million in reven ues, excluding the termination fee of $83.3 million paid by Banco Santander to exit the Brazilian Venture, during the year ended December 31, 2010, of which approximately $709.2 million were denominated in currencies other than the U.S. Dollar. The major currencies to which we are exposed are the Brazilian Real, the Euro and the British Pound Sterling. A 10% move in average exchange rates for these currencies (assuming a simultaneous and immediate 10% change in all of such rates for the relevant period) would have resulted in the following increase or decrease in our reported revenues for the years ended December 31, 2010 and 2009 (in millions):
 
Currency
2010
 
2009
Real
$
32.5
 
 
$
28.2
 
Euro
18.6
 
 
19.1
 
Pound Sterling
9.0
 
 
6.4
 
Total impact
$
60.1
 
 
$
53.7
 
The impact on earnings of the foregoing assumed 10% change in each of the periods presented would not have been significant.
     Our foreign exchange risk management policy permits the use of derivative instruments, such as forward contracts and

37

options, to reduce volatility in our results of operations and/or cash flows resulting from foreign exchange rate fluctuations. Our international operations' revenues and expenses are generally denominated in local currency which limits the economic exposure to foreign exchange risk in those jurisdictions. We do not enter into foreign currency derivative instruments for trading purposes. During 2010, we entered into foreign currency forward exchange contracts to hedge foreign currency exposure to intercompany loans. At December 31, 2010, the notional amount of these derivatives was approximately $56.5 million and the fair value was nominal. Th ese derivatives are intended to hedge the foreign exchange risks related to intercompany loans but have not been designated as hedges for accounting purposes.

38

Item 8.    Financial Statements and Supplementary Data
 
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
 
INDEX TO FINANCIAL INFORMATION
 
 
Page
Number
 

39
Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors and Stockholders
Fidelity National Information Services, Inc.:
 
We have audited Fidelity National Information Services, Inc.’s and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal contr ol over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk tha t a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatemen ts. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
In our opinion, Fidelity National Information Services, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Fidelity National Information Services, Inc. and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of earnings, equity and comprehensive earnings, and cash flows for each o f the years in the three-year period ended December 31, 2010, and our report dated February 25, 2011 expressed an unqualified opinion on those consolidated financial statements.
 
 
/s/  KPMG LLP
 
February 25, 2011 
Jacksonville, Florida
Certified Public Accountants
 
 
 
 
 

40
Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors and Stockholders
Fidelity National Information Services, Inc.:
 
We have audited the accompanying consolidated balance sheets of Fidelity National Information Services, Inc. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of earnings, equity and comprehensive earnings, and cash flows for each of the years in the three-year period ended December 31, 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Fidelity National Information Services, Inc. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.
 
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Fidelity National Information Services, Inc.’s and subsidiaries’ internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 25, 2011, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
 
 
/s/  KPMG LLP
 
February 25, 2011 
Jacksonville, Florida
Certified Public Accountants
 
 

41
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets
December 31, 2010 and 2009
 
< td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-bottom:3px double #000000;">
$
 
2010
&n bsp;
2009
 
(In millions, except
per share amounts)
ASSETS
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
338.0
 
 
$
430.9
 
Settlement deposits
35.9
 
 
50.8
 
Trade receivables, net
856.1
 
 
765.4
< /td>
 
Settlement receivables
157.3
 
 
62.5
 
Other receivables
38.7
 
 
30.9
 
Receivable from related parties
33.5
 
 
32.0
 
Prepaid expenses and other current assets
138.0
 
 
141.2
 
Deferred income ta xes
58.1
 
 
80.9
 
Assets held for sale
17.4
 
 
71.5
 
Total current assets
1,673.0
 
 
1,666.1
 
Property and equipment, net
390.0
 
 
375.9
 
Goodwill
8,550.0
 
 
8,232.9
 
Intangible assets, net
2,202.9
 
 
2,396.8
 
Computer software, net
909.0
 
 
932.7
 
Deferred contract costs
254.2
 
 
261.4
 
Other noncurrent assets
182.7
 
 
131.8
 
Total assets
$
14,161.8
 
 
$
13,997.6
 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
 
Accounts payable and accrued liabilities
$
577.3
 
 
$
523.2
 
Due to Brazilian Venture partners
—
 
 
73.0
 
Settlement payables
140.6
 
 
122.3
 
Current portion of long-term debt
256.9
 
 
236.7
 
Deferred revenues
268.6
 
 
279.5
 
Liabilities held for sale
42.5
 
 
—
 
Total current liabilities
1,285.9
 
 
1,234.7
 
Deferred revenues
86.3
 
 
104.8
 
Deferred income taxes
859.3
 
 
915.9
 
Long-term debt, excluding current portion
4,935.2
 
 
3,016.6
 
Due to Brazilian Venture partner
47.9
 
 
—
 
O ther long-term liabilities
385.6
 
 
207.0
 
Total liabilities
7,600.2
 
 
5,479.0
 
Equity:
 
 
 
 
 
FIS stockholders’ equity:
 
 
 
 
 
Preferred stock $0.01 par value; 200.0 shares authorized, none issued and outstanding at December 31, 2010 and 2009< /font>
—
 
 
—
 
Common stock $0.01 par value; 600.0 shares authorized, 382.7 and 381.1 shares issued at December 31, 2010 and 2009, respectively
3.8
 
 
< font style="font-family:inherit;font-size:8pt;">3.8
 
Additional paid in capital
7,199.7
 
 
7,345.1
 
Retained earnings
1,471.2
 
 
1,134.6
 
Accumulated other comprehensive earnings (loss)
87.9
 
82.2
 
Treasury stock, $0.01 par value, 80.8 and 6.6 shares at December 31, 2010 and 2009, r espectively
(2,359.4
)
 
(256.8
)
Total FIS stockholders’ equity
6,403.2
 
 
8,308.9
 
Noncontrolling interest
158.4
 
 
209.7
 
Total equity
6,561.6
 
 
8,518.6
 
Total liabilities and equity
$
14,161.8
 
 
13,997.6
 
The accompanying notes are an integral part of these consolidated financial statements.

42
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Statements of Earnings
Years ended December 31, 2010, 2009 and 2008
 
< td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-bottom:1px solid #000000;">
8.7
 
2010
 
2009
 
2008
 
(In millions, except per share amounts)
Processing and services revenues (for related party activity see note 4)
$
5,269.5
 
 
$
3,711.1
 
 
$
3,359.5
 
Cost of revenues (for related party activity see note 4)
3,637.7
 
 
2,741.5
 
 
2,616.1
 
Gross profit
1,631.8
 
 
969.6
 
 
743.4
 
Selling, general, and administrative expenses (for related party activity see note 4)
675.8
 
 
547.1
 
 
381.0
 
Impairment charges
154.9
 
 
136.9
 
 
26.0
 
Operating income
801.1
 
 
285.6
 
 
336.4
 
Other income (expense):
 
 
 
 
 
 
 
 
Interest income
6.4
 
 
3.4
 
 
6.3
 
Interest expense
(179.7
)
 
(134.0
)
 
(163.4
)
Other income, net
(11.5
)
 
 
 
1.5
 
Total other income (expense)
(184.8
)
 
(121.9
)
 
(155.6
)
Earnings from continuing operations before income taxes and equity in losses of unconsolidated entities
616.3
 
 
163.7
 
 
180.8
 
Provision for income taxes
215.3
 
 
54.7
 
 
57.6
 
Equity in losses of unconsolidated entities
—
 
 
—
 
 
(0.2
)
Earnings from continuing operations, net of tax
401.0
 
 
109.0
 
 
123.0
 
Earnings (loss) from discontinued operations, net of tax
(43.1
)
 
(0.5
)
 
96.5
 
Net earnings
357.9
 
 
108.5
 
 
219.5
 
Net (earnings) loss attributable to noncontrolling interest
46.6
 
 
(2.6
)
 
(4.7
)
Net earnings attributable to FIS
$
404.5
 
 
$
105.9
 
< /td>
 
$
214.8
 
Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
1.30
 
 
$
0.45
 
 
$
0.62
 
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
(0.12
)
 
(0.00
)
 
< div style="text-align:right;font-size:10pt;">0.50
 
Net earnings per share — basic attributable to FIS common stockholders
$
1.17
 
 
$
0.45
 
 
$
1.12
 
Weighted average shares outstanding — basic
345.1
 
 
236.4
 
 
191.6
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
1.27
 
 
$
0.44
 
 
$
0.61
 
Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
(0.12
)
 
(0.00
)
 
0.50
 
Net earnings per share — diluted attributable to FIS common stockholders
$
1.15
 
 
$
0.44
 
 
$
1.11
 
Weighted average shares outstanding — diluted
352.0
 
 
239.4
 
 
193.5
 
Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
447.6
 
 
$
106.4
 
 
$
118.9
 
Earnings (loss) from discontinued operations, net of tax
(43.1
)
 
(0.5
)
 
95.9
 
Net earnings attributable to FIS
$
404.5
 
 
$
105.9
 
 
$
214.8
 
The accompanying notes are an integral part of these consolidated financial statements.
 

43
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES

Consolidated Statements of Equity and Comprehensive Earnings
Years ended December 31, 2010, 2009 and 2008
 
 
 
 
 
 
Amount
 
 
 
 
 
FIS Stockholders
 
 
 
 
 
 
 
Number of Shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Shares
 
Treasury Shares
 
Common Stock
 
Additional Paid In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Earnings (Loss)
 
Treasury Stock
 
Noncontroling Interest
 
Comprehensive Earnings
 
Total Equity
 
(In millions)
Balances, December 31, 2007
199.0
 
 
(4.3
)
 
$
2.0
 
 
$
3,038.2
 
 
$
899.5
 
 
$
53.4
 
 
$
(211.9
)
 
$
14.2
 
 
 
 
 
$
3,795.4
 
LPS spin-off
—
 
 
—
 
 
—
 
 
(105.0
)
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
(105.0
)
Issuance of restricted stock
1.2
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
Exercise of stock options
—
 
 
1.1
 
 
—
 
 
(26.0
)
 
—
 
 
—
 
 
45.2
 
 
—
 
 
—
 
 
19.2
 < /font>
Stock-based compensation
—
 
 
—
 
 
—
 
 
60.7
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
60.7
 
Cash dividends declared ($0.20 per share) and other
—
 
 
—
 
 
—
 
 
—
 
 
(38.2
)
 
—
 
 
—
 
 
—
 
 
—
 
 
(38.2
)
Purchases of treasury stock
—
 
 
(6.1
)
 
—
 
 
—
 
 
—
 
 
—
 
 
(236.1
)
 
—
 
 
—
 
 
(236.1
)
Brazilian Venture
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
153.3
 
 
 
 
 
153.3
 
Other
—
 
 
&md ash;
 
 
—
 
 
(8.1
)
 
—
 
 
—
 
 
—
 
 
(8.0
)
 
—
 
 
(16.1
)
Comprehensive earnings:
 
 
 
 
 
 
 
 
 
 
< /td>