Fidelity National reports third quarter results

Source: Fidelity National Information Services

Fidelity National Information Services (NYSE: FIS), a leading global provider of technology services to financial institutions, today announced financial results for the third quarter of 2007.

Consolidated revenue increased to $1.2 billion, net earnings totaled $245.3 million and net earnings per diluted share totaled $1.25. These results include after-tax gains of $159.4 million ($0.81 per diluted share) and after-tax restructuring and other charges of $12.9 million ($0.07 per diluted share).

FIS reported revenue growth of 10.4%, adjusted EBITDA growth of 14.4% and adjusted cash earnings per diluted share of $0.63. These results include a partial month of eFunds operations, which the Company acquired on September 12, 2007. "FIS delivered another quarter of solid operating performance in a challenging market," stated FIS Executive Chairman William P. Foley, II.

"The eFunds integration is off to a good start, and we remain confident that the additional scale and product capabilities will generate meaningful growth opportunities," added FIS President and Chief Executive Officer Lee A. Kennedy. "We are also confident that we will achieve our targeted annualized run rate cost savings of $65 million by the end of 2009. Based on our preliminary assessment, we expect eFunds to contribute approximately $0.05 to $0.10 to diluted cash earnings per share in 2008."

FIS' operating results are presented on a U.S. generally accepted accounting principles ("GAAP") basis and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. The adjusted pro forma results exclude certain merger and acquisition and integration expenses, certain stock compensation charges, restructuring and other charges, and gains on the sale of Covansys Corporation common stock, Property Insight and other assets.

The Company completed the sale of Property Insight on August 31, 2007. FIS' earnings include discontinued operations of $0.01 per diluted share in the third quarter of 2007 and $0.02 per diluted share in the third quarter of 2006, as previously disclosed.

Transaction Processing Services' adjusted EBITDA, which includes a partial month of eFunds, increased 18.8% over the prior-year quarter to $186.7 million. The adjusted EBITDA margin was 25.9%, which is a 170 basis point increase compared to prior year.

Lender Processing Services' adjusted EBITDA was $150.8 million, or 6.2% above the prior year quarter. The adjusted EBITDA margin was 33.9%, compared to 32.4% in the second quarter of 2007, and 34.7% in the third quarter of 2006. The decline from the prior year quarter is the result of strong growth in lower margin appraisal volumes and reduced volumes in origination and tax services.

Corporate EBITDA, as adjusted, for the third quarter of 2007 totaled $18.3 million. The $2.0 million decrease compared to the prior year quarter is attributable to lower compensation and benefit expense. The effective tax rate was 37.0%.

Full Year 2007 Outlook

Management expects full year 2007 adjusted net earnings of approximately $1.90 per diluted share, which has been adjusted to reflect a $0.03 per share impact from the sale of Property Insight and a $0.04 per share impact for purchase amortization associated with the acquisition of eFunds. The Company anticipates cash earnings to be at the low end of its previously announced guidance of $2.44 to $2.50 per diluted share, which reflects the impact of the sale of Property Insight. eFunds is excpected to be neutral to 2007 cash earnings per diluted share.

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