As filed with the Securities and Exchange Commission on August 30, 2004

Registration Number 333-115870

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2 to

Form S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Fidelity National Information Services, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	7374	37-1490331
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

601 Riverside Avenue

Jacksonville, Florida 32204

(904) 854-8100

(Address, Including Zip Code, and Telephone Number, Including Area Code, of

Registrant’s Principal Executive Offices)

William P. Foley, II

Chief Executive Officer

Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, Florida 32204

(904) 854-8100

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,

of Agent for Service)

Copies to:


Robert S. Rachofsky LeBoeuf, Lamb, Greene & MacRae, L.L.P. 125 West 55th Street New York, NY 10019-5389 (212) 424-8000		Jeffrey Small Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 (212) 450-4000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued , 2004

Shares

[FIS Logo]

COMMON STOCK

Fidelity National Information Services, Inc. is offering shares of its common stock. This is our initial public offering and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $ and $ per share. We are currently a wholly owned subsidiary of Fidelity National Financial, Inc., or FNF. We expect that upon the completion of this offering, FNF will beneficially own % of our common stock.

We have applied for the listing of our common stock on the New York Stock Exchange under the symbol “FIS.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 8.

PRICE $ A SHARE


		Underwriting	Proceeds to
	Price to	Discounts and	Fidelity National
	Public	Commissions	Information Services, Inc.

Per Share	$	$	$
Total	$	$	$

We have granted the underwriters the right to purchase up to an additional shares to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on , 2004.


MORGAN STANLEY	BEAR, STEARNS & CO. INC.


STEPHENS INC.	WACHOVIA SECURITIES


BANC OF AMERICA SECURITIES LLC	KEEFE, BRUYETTE & WOODS


ROBERT W. BAIRD & CO.	JMP SECURITIES	SUNTRUST ROBINSON HUMPHREY

, 2004

TABLE OF CONTENTS


	Page

Prospectus Summary		1
The Offering		5
Summary Historical and Pro Forma Financial Information		6
Risk Factors		8
Forward-Looking Statements		18
Use of Proceeds		18
Dividend Policy		18
Capitalization		19
Dilution		20
Selected Historical Financial Information		21
Unaudited Pro Forma Financial Information		23
Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Business		50
Management		69
Our Arrangements with FNF		83
Certain Relationships and Related Transactions		95
Ownership of Common Stock		97
Description of Capital Stock		97
Shares Eligible for Future Sale		101
Certain U.S. Federal Tax Considerations for Non-U.S. Holders		103
Underwriters		106
Legal Matters		109
Experts		109
Additional Information		109
Index to Financial Statements		F-1
EXHIBIT 3.1
EXHIBIT 3.2
EXHIBIT 4.1
EXHIBIT 5.1
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 10.6
EXHIBIT 10.7
EXHIBIT 10.8
EXHIBIT 10.9
EXHIBIT 10.10
EXHIBIT 10.11
EXHIBIT 10.12
EXHIBIT 10.13
EXHIBIT 10.14
EXHIBIT 10.16
EXHIBIT 10.17
EXHIBIT 10.23
EXHIBIT 10.24
EXHIBIT 10.25
EXHIBIT 10.26
EXHIBIT 10.27
EXHIBIT 10.28
EXHIBIT 21.1
EXHIBIT 23.1
EXHIBIT 23.2
EXHIBIT 23.3

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.

Through and including , 2004 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

PROSPECTUS SUMMARY

This summary highlights some of the information about FIS contained elsewhere in this prospectus and may not contain all of the information that may be important to you. In this prospectus, “FIS,” “we,” and “our” refer to Fidelity National Information Services, Inc. and its subsidiaries, unless the context suggests otherwise. References in this prospectus to “dollars” or “$” are to the lawful currency of the United States of America, unless the context otherwise requires. You should read the following summary together with the entire prospectus, including the more detailed information in our combined financial statements and related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in “Risk Factors.”

Overview

We are a leading provider of technology solutions, processing services, and information services to the financial services and real estate industries. Over 2,400 financial institutions use our services, including 45 of the 50 largest banks in the U.S. Our applications process nearly 50% of all U.S. residential mortgage loans by dollar volume, and over 235 million deposit accounts and non-mortgage consumer loans and leases are processed on our core bank processing platform. We also provide customized business process outsourcing related to aspects of the origination and management of mortgage loans to national lenders and loan servicers. Our information services, including our property data and real estate-related services, are used by mortgage lenders, mortgage investors and real estate professionals to complete residential real estate transactions throughout the U.S. We provide information services that span the entire home purchase and ownership life cycle, from contact through closing, refinancing and resale. We operate in four primary business segments: Financial Institution Software and Services, Lender Services, Default Management Services and Information Services.

We are currently a wholly owned subsidiary of FNF. After the completion of this offering, FNF will beneficially own shares of our common stock, representing % of our outstanding common stock, assuming the over-allotment option is not exercised. FNF has informed us that following this offering it plans to make a distribution to its stockholders of its remaining shares of our common stock, which we refer to as the distribution.

Competitive Strengths

We believe that our competitive strengths include the following:

Leading proprietary technology. We have a significant number of high quality software applications and services that have been developed over many years with substantial input from our customers. We have made, and continue to make, substantial investments in our applications and services to ensure that they remain competitive in the marketplace.

Comprehensive, integrated business solutions. We offer our customers a wider range of flexible service arrangements than are typically offered by our competitors 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. We believe that by providing customized, flexible solutions, we are able to significantly improve the effectiveness of our services and our customer retention.

Excellent relationships with our customers. Over 2,400 financial institutions use our services, including 45 of the 50 largest U.S. banks. As the breadth of our service offerings expands, we have found that our access to key personnel at financial institutions is increasing. In order to more effectively manage the strategic opportunities presented by our increased access across business lines to our financial institution customers, we actively coordinate these significant relationships on an executive and operational level. As we have grown, we have gained the size and capability that lead institutions to trust us with the management and outsourcing of their critical applications.

Strong value proposition for our customers. We provide our customers with services and applications that enhance their competitive position and provide them with additional revenue opportunities. We also understand the needs of our customers and have successfully created innovative services that can reduce our customers’ operating costs. We believe that our high quality services and our innovative approach to meeting the needs of our customers allows us to provide a compelling value proposition to our customers.

Strategy

Our strategies for achieving profitable growth include the following:

Take advantage of our cross-selling opportunities. We coordinate our sales efforts to our top-tier financial institution customers through a part of our organization called our Office of the Enterprise to take advantage of information we obtain about the needs of these customers in order to cross-sell our services. We have begun to take advantage of the significant customer relationships of our recently acquired businesses to cross-sell our other services to those customers.

Expand our leadership position in information services. We are one of the leading providers of information services to the real estate industry. We believe that our technological capabilities and market leadership have provided us with a competitive advantage in terms of our service offerings and our ability to meet the needs of our customers. We intend to maintain and expand this market position, allowing us to continue to strengthen our relationships with our existing customers and expand our customer base. We also intend to continue integrating our real estate-related information services into our other businesses.

Broaden our portfolio of services and market opportunities through acquisitions. While we will continue to invest in developing and enhancing our existing business solutions, we also intend to continue to acquire technologies and capabilities that will allow us to further broaden our service offerings and continue to enhance the functionality of our business solutions. We may also consider acquisitions that would expand our existing customer base for a service, or acquiring businesses that have capabilities or a customer base in markets in which we do not currently compete, particularly if these acquisitions would allow us to obtain revenue growth through leveraging our existing capabilities or scale. We will continue to utilize our ability to integrate newly acquired businesses and we will continue to be disciplined and strategic in making acquisitions.

Grow our international business. We believe that we are well positioned to leverage our financial institution software and services into international markets. With the international customers and presence we obtained through our recent acquisition of Sanchez Computer Associates, Inc., or Sanchez, and our proposed acquisition of a controlling interest in KORDOBA Gesellschaft für Bankensoftware mbH & Co. KG, Munich, a provider of core bank processing software and solutions in the German bank market, we believe we are approaching a size and market presence in several international markets that will allow us to effectively compete in what we believe will be a growing market for our services. Our international strategy will include focusing on those services and customers that will allow us to leverage our existing scale and expertise.

Company History

The growth of these complementary businesses accelerated in 2001. Since January 2001, FNF has completed over 25 acquisitions in our business lines. Although many of these acquisitions added important applications and services to our offerings, the most significant steps in our recent growth were the acquisitions of the financial services division of ALLTEL Information Services, Inc., which we renamed Fidelity Information Services, Inc., or FI, and which forms the core of our Financial Institution Software and Services segment; VISTA Information Solutions, Inc., which we renamed Fidelity National Information Solutions, Inc., or FNIS, and which provides information applications and services; Sanchez, which provides software and outsourcing solutions to banks and other financial institutions; and Aurum Technology, Inc., or Aurum, which provides outsourced and in-house information technology solutions to banks and other financial institutions. Our businesses have historically been conducted as wholly owned subsidiaries of FNF, or as divisions of wholly owned subsidiaries of FNF, and the relevant companies, assets and liabilities will be contributed to us prior to the completion of this offering.

This offering is an initial step by FNF to separate its title and other insurance businesses from our complementary businesses, which separation will be complete upon FNF’s consummation of the distribution.

The Distribution

The distribution will provide us with several key benefits. First, it will facilitate our ability to grow through acquisitions, which has been an important part of our strategy. Subject to certain limits imposed under the tax disaffiliation agreement we will enter into with FNF, following the distribution we will be better able to use our common stock to pay for any future acquisitions and for other business purposes. Prior to the distribution, we will be limited in the amount of common stock we can issue as a result of the requirement that FNF maintain ownership of at least 80% of our common stock, which ownership level FNF must retain in order to be able to make the distribution on a tax-free basis. In addition to having an increased ability to issue shares directly to sellers of businesses we may seek to acquire, the distribution will give us increased access to the equity markets to raise funds to grow our business. Further, we believe that the shares of public companies in which a substantial majority of the stock is held by one owner which plans to retain ownership of its shares tend to trade at somewhat lower levels than comparable companies that are more widely held. As a stand-alone company, we may attract broader analyst coverage than we would as a majority-owned subsidiary of the larger FNF. As a result of the foregoing, the distribution should promote a more beneficial equity valuation for our common stock than if the distribution did not occur. Accordingly, we should be able to raise funds for investment in our business with less dilution to our stockholders than if the distribution and offering did not occur. In addition, as an independent company with our own board of directors, we expect to be able to grow our business more efficiently, with more focused decision making. Finally, we will be able to offer our management and employees incentives more directly linked to our performance, which may help us attract and retain skilled personnel.

Our separation from FNF also involves certain risks and raises certain conflicts. For example, our future success depends on the continued contributions of members of our senior management team including our chief executive officer and chairman of the board, William P. Foley, II. Mr. Foley will continue as chief executive officer and chairman of the board of FNF until the distribution has occurred, and chairman of the board of FNF after the distribution. As a result, Mr. Foley will be required to divide his time between us and FNF. Conflicts may arise due to Mr. Foley’s holding these senior positions at both companies, as he may have duties with respect to each company that may at times conflict with each other. In addition, since some of our directors and officers own substantial amounts of FNF stock and options because of their prior relationships with FNF, potential conflicts of interest could be created or could appear to be created if these individuals are faced with decisions that could have different implications for each company. For further discussion of these and other risks, see “Risk Factors.”

FNF has announced its intention to complete the distribution by mid-2005. The distribution is subject to various conditions and we cannot assure you that the conditions to the distribution will be satisfied or that FNF will consummate the distribution. In any event, FNF has no obligation to consummate the distribution, whether or not these conditions are satisfied.

Our principal executive offices are located at 601 Riverside Avenue, Jacksonville, Florida 32204, and our telephone number is (904) 854-8100.

THE OFFERING


Issuer		Fidelity National Information Services, Inc.

Common stock offered		shares

Common stock to be outstanding immediately after this offering		shares

Common stock to be held by FNF immediately after this offering		shares

Over-allotment option		shares to be offered by us if the underwriters exercise their over-allotment option in full.


Use of proceeds		We estimate that our net proceeds from this offering (at an assumed offering price of $ per share of common stock, the midpoint of the range set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and our estimated offering expenses) will be approximately $ million. We estimate that our net proceeds will be approximately $ million if the underwriters exercise their over- allotment option in full. We intend to use approximately $250 million of net proceeds to fund a dividend payment to FNF, which will be declared prior to the completion of this offering, and the remaining net proceeds for general corporate purposes, primarily for working capital and acquisitions, including the use of up to $121 million to fund our acquisition of a minority interest in Covansys Corporation and up to an amount equal to €100 million to fund our acquisition of a controlling interest in KORDOBA Gesellschaft für Bankensoftware mbH & Co. KG, Munich. See “Use of Proceeds.”


Dividend policy		We do not intend to pay dividends on our common stock. Instead, we currently intend to retain any future earnings for use in the operation and expansion of our business.


Proposed New York Stock Exchange symbol		We have applied to list the common stock on the New York Stock Exchange under the symbol “FIS.”

The number of shares of our common stock identified above as outstanding after this offering does not include options that we will grant to our employees and directors in connection with this offering or grants of our restricted common stock or options to purchase our common stock that we will grant in exchange for certain FNF restricted stock or options held by our employees and directors at the time of the distribution. In connection with this offering, we will grant employees and directors options to purchase an aggregate of approximately shares of our common stock at an exercise price equal to the initial public offering price. See “Management — Omnibus Incentive Plan” and “— Treatment of FNF Stock Options and Restricted Shares.”

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following table sets forth our summary historical financial information. The summary historical financial information for each of the years in the three-year period ended December 31, 2003 has been derived from our combined financial statements and related notes, which have been audited by KPMG LLP, an independent registered public accounting firm. The audited combined financial statements as of December 31, 2003 and 2002 and for each of the years in the three-year period ended December 31, 2003 are included elsewhere in this prospectus. The summary historical financial information as of June 30, 2004 and for the six months ended June 30, 2004 and 2003 has been derived from our unaudited condensed combined financial statements, which are included elsewhere in this prospectus. You should read this financial information in conjunction with the audited and unaudited combined financial statements included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical combined financial information has been prepared from the historical results of operations and bases of the assets and liabilities of the operations transferred to us and gives effect to allocations of certain corporate expenses from FNF. Our historical combined financial information may not be indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented. Further, as a result of our acquisitions, the results in the periods shown below may not be directly comparable. Our results of interim periods are not necessarily indicative of results for the entire year.



	Six Months ended June 30,				Year ended December 31,

	2004(2)		2003(2)		2003(2)		2002		2001(1)

	(unaudited)		(unaudited)		(in thousands)
STATEMENT OF EARNINGS DATA
Processing and services revenues	$	1,141,996	$	772,321	$	1,910,589	$	632,793	$	405,392
Cost of revenues		726,940		469,245		1,150,725		387,431		256,111

Gross profit		415,056		303,076		759,864		245,362		149,281

Selling, general and administrative costs		236,513		160,222		392,130		148,407		94,370

Operating income		178,543		142,854		367,734		96,955		54,911

Earnings before income taxes and minority interest		177,946		142,002		361,982		106,119		53,798
Income tax expense		69,433		54,516		140,449		39,582		22,003
Minority interest expense		1,017		8,810		14,518		8,359		778

Net earnings	$	107,496	$	78,676	$	207,015	$	58,178	$	31,017



	As of June 30, 2004

			As
	Actual		Adjusted(3)

	(unaudited)		(unaudited)
BALANCE SHEET DATA (at end of period)
Cash and cash equivalents	$	110,773
Total assets		3,063,946
Total long-term debt		47,912
Minority interest		9,556
Total equity		2,535,700



(1)	Effective January 1, 2002, we adopted Statement of Financial Accounting Standards, or SFAS, No. 142 “Goodwill and Other Intangible Assets” and, as a result, have ceased to amortize goodwill. Goodwill amortization in 2001 was $5,973.



(2)	Effective January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock Based Compensation,” using the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”, and as a result recorded stock compensation expense of $3,804 for the year ended December 31, 2003 and $7,484 and $637 for the six months ended June 30, 2004 and 2003, respectively.



(3)	The as adjusted column reflects our sale of shares in this offering at an assumed offering price of $ per share of common stock, the midpoint of the range set forth on the cover page of this prospectus and after deducting underwriting discounts and commissions and our estimated offering expenses, and the payment of $ million as a dividend to FNF, as described under “Use of Proceeds.”

The following unaudited summary pro forma financial information gives effect to our acquisitions of FI (which was acquired by FNF on April 1, 2003), WebTone Technologies, Inc., or WebTone (which was acquired by FNF on September 2, 2003), FNIS (the outstanding minority interest of which was acquired by FNF on September 30, 2003), Aurum (which was acquired by FNF on March 11, 2004) and Sanchez (which was acquired by FNF on April 14, 2004). The unaudited summary pro forma combined statements of earnings for the six months ended June 30, 2004 give effect to the acquisitions of Aurum and Sanchez as if they had been completed on January 1, 2003. The unaudited summary pro forma combined statements of earnings for the year ended December 31, 2003 give effect to the acquisitions of FI, WebTone, FNIS, Aurum and Sanchez as if they had been completed on January 1, 2003. The unaudited summary pro forma financial information should not be construed to be indicative of our financial position or results of operations had these transactions been consummated on the dates assumed, and does not in any way represent a projection or forecast of our financial position or results of operations for any future period or date. See “Unaudited Pro Forma Financial Information.”


	Six Months ended		Year ended
	June 30, 2004		December 31, 2003
	Pro Forma		Pro Forma


	(unaudited)

	(in thousands except per share amounts)
PRO FORMA STATEMENT OF EARNINGS DATA
Processing and services revenues	$	1,200,825	$	2,428,605
Earnings before income taxes and minority interest		164,896		338,071
Net earnings	$	97,971	$	197,352

Basic earnings per share	$		$

Weighted average shares outstanding

RISK FACTORS

An investment in our common stock involves a number of risks. You should carefully consider the following information about these risks, together with the other information contained in this prospectus, before investing in our common stock. These risks could materially affect our business, results of operations or financial condition and cause the trading price of our common stock to decline. You could lose part or all of your investment.

Risks Relating to Our Business

Our historical financial information may not be representative of our results as a consolidated, stand-alone company and may not be a reliable indicator of our future results.

Our historical financial statements may not be indicative of our future performance as a consolidated, stand-alone company. We have made numerous and large acquisitions in recent years, the largest of which was our acquisition of FI in 2003. These acquired businesses are not included in our historical financial statements prior to their acquisition and, once included, make comparisons of different periods in our historical financial statements difficult. For example, the FI acquisition makes our 2003 historical results of operations in many respects not comparable to prior periods.

Further, our historical financial statements do not reflect our operations as a separate stand-alone entity for the historical periods presented. Because our businesses were either wholly owned subsidiaries of FNF, or were operated as divisions of wholly owned subsidiaries of FNF, our historical financial statements include assets, liabilities, revenues and expenses directly attributable to our operations and allocations to us of certain corporate expenses of FNF. These expenses for corporate services, which include expenses for general management, accounting, finance, legal, payroll, human resources, internal audit and mergers and acquisitions, have been allocated to us on the basis that management considers to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by businesses comprising our company. However, our historical financial statements do not necessarily reflect what our financial position and results of operations would have been if we had been operated as a stand-alone public entity during the periods covered, and may not be indicative of future results of operations or financial position.

Our historical financial statements presented in this prospectus do not reflect the debt or interest expense we might have incurred if we had been a stand-alone entity. Our historical financial statements also do not include 100% of the historical compensation and benefits of certain individuals who will be our officers; as described above, our financial information instead reflects an allocation based on the historical division of their time between our operations and other operations of FNF. At such time as these individuals become sole employees of ours, the related compensation and benefits expenses to us will increase from the amounts historically allocated. The other corporate expenses allocated to us may be different from the amounts of expenses we would have incurred if we had been a stand-alone company and had performed those services ourselves or procured them from third parties or from FNF under the services agreements we will enter into with FNF in connection with this offering. Some of the costs of FNF allocated to us may incorporate more advantageous pricing available to an entity with the scale and purchasing power of FNF than would be available to us as a stand-alone entity. We may incur rebranding costs, although we do not expect these costs to be significant. In addition, we will incur other expenses, not reflected in our historical financial statements, as a result of being a separate publicly traded company.

Our historical financial statements should be read in conjunction with the historical financial statements of acquired businesses included in this prospectus, our Unaudited Pro Forma Financial Information and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

If we fail to adapt our services to changes in technology or in the marketplace, we could lose existing customers and be unable to attract business.

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 to develop and introduce new services that address the increasingly sophisticated needs of our customers and their clients. There can be no assurance that we will be successful in developing, marketing and selling new services that meet these changing demands, that we will not experience difficulties that could delay or prevent the successful development, introduction and marketing of these services, or that our new services and their enhancements will adequately meet the demands of the marketplace and achieve market acceptance.

We are currently engaged in significant efforts to upgrade two of our most important applications: our core bank processing software and our mortgage processing software. These applications were acquired upon our acquisition of FI in 2003. We have recently begun development work to implement changes necessary for these applications to keep pace with the marketplace and the requirements of our customers. We expect to spend approximately $95 million on the development of our core bank processing software and $50 million on the development of our mortgage servicing platform. We expect the development work on the core bank processing software and our mortgage servicing platform to take two to three years to complete. If we are unsuccessful in completing or gaining market acceptance of these and other upgrade efforts, it would likely have a material adverse effect on our ability to retain existing customers or attract new ones.

Decreased lending and real estate activity may reduce demand for certain of our services and adversely affect our results of operations.

Revenues from our Information Services and our Lender Services segments are closely related to the level of real estate transactions, such as real estate sales and mortgage refinancings. Real estate sales are affected by a number of factors, including mortgage interest rates, the availability of funds to finance purchases and general economic conditions. Prevailing mortgage interest rates have declined to record lows in recent years, and the volume of real estate transactions has experienced record highs. We do not expect these trends to continue, and the volume of refinancing transactions in particular has begun to decline and is likely to continue to decline from 2003 and early 2004 levels. These declines are likely to result in reduction of revenues in some of our businesses. Some of our services and related applications, including our automated title agent process that accounted for substantial revenues in our Lender Services segment in 2003, are currently used exclusively for refinancing transactions. Our revenues in future periods will continue to be subject to these and other factors which are beyond our control and, as a result, are likely to fluctuate.

If we were to lose any of our largest customers, our results of operations could be significantly affected.

A small number of customers has accounted for a significant portion of our revenues, and we expect that a limited number of customers will continue to represent a significant portion of our revenues for the foreseeable future. In 2003, Wells Fargo accounted for approximately 16.6% of our total revenues and 57.3% of the revenues of our Lender Services segment, due primarily to its use of our automated process for performing title agency services in a period of particularly high refinancing activity. For the six months ended June 30, 2004, Wells Fargo accounted for 7.8% of our total revenues and 32.9% of the revenues in our Lender Services segment. In 2003, our next largest customer represented 4.0% of our total revenues. Our relationships with these and other large customers are important to our future operating results, and deterioration in any of those relationships could significantly reduce our revenues.

We may be unsuccessful in identifying suitable acquisition candidates or in financing acquisitions, which could adversely affect our growth.

Our growth strategy is built upon organic growth and on taking advantage of opportunities to acquire complementary businesses and services. This strategy depends on the availability of acquisition candidates with businesses that can be successfully integrated into our existing business and that will provide us with the ability to realize synergies. We may be unable to identify targets that will be suitable for acquisition. In addition, if we identify a suitable acquisition candidate, our ability to successfully implement the acquisition would depend on a variety of factors, including our ability to use our stock in making the acquisition and our ability to finance the acquisition. Prior to the distribution, our ability to use our stock will be limited, because in order for the distribution to be tax-free to FNF and its stockholders, FNF must own at least 80% of our

voting power at the time of the distribution. Also, our ability to issue our stock in making acquisitions will be restricted through the period ending two years following the distribution in the absence of an opinion from a nationally recognized law firm or accounting firm, or a ruling from the Internal Revenue Service, that such issuance will not cause the distribution to be taxable to FNF. Our ability to finance our acquisitions is subject to a number of factors, including the availability of adequate cash from operations or of acceptable financing terms and the terms of our debt instruments. Each of these factors may inhibit our ability to pursue attractive acquisition targets. If we are unable to identify suitable acquisition candidates or unable to finance acquisitions we may experience a lower rate of growth.

Integrating the companies and businesses that we have acquired or will acquire in the future may be costly and time-consuming, and may not lead to expected benefits.

Our company consists primarily of businesses acquired by FNF in recent years, including the acquisition of FI in 2003. In addition, we acquired Aurum in March 2004 and Sanchez in April 2004. Most of our other businesses have also been acquired by FNF within the last few years. These businesses have little operating history as a combined company and until recently were either independent businesses or divisions of other large corporations. There are many challenges to their integration in our company, including 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. While aspects of these businesses have been successfully integrated, there can be no assurances that we will be able to fully integrate all aspects of these businesses successfully or fully realize the potential benefits of bringing them together, and the process of integrating these acquisitions may disrupt our business and divert our resources. In addition, acquisitions will continue to be part of our growth strategy. As a result, we will continue to face challenges integrating newly acquired companies and businesses.

Businesses we have acquired may not perform as expected or may have undisclosed liabilities which could adversely affect our results of operations and our financial condition.

We may be adversely affected if businesses we have recently acquired or acquire in the future do not perform as expected. Acquired businesses may perform below expectations after the acquisition for various reasons, including legislative or regulatory changes that affect the areas in which a business specializes, the loss of key customers after the acquisition has closed, general economic factors that affect a business in a direct way and the cultural incompatibility of an acquired management team with us. Further, acquired businesses may have liabilities that were not disclosed to us, which adversely affect the value expected to be obtained through the acquisition. Any of these factors could result in losses or impairment charges that would adversely affect our results of operations.

Consolidation in the banking and financial services industry could reduce our revenues by eliminating some of our existing and potential customers and could make us overly dependent on a limited number of customers.

There has been and continues to be substantial merger, acquisition and consolidation activity in the banking and financial services industry. Mergers or consolidations of banks and financial institutions in the future could reduce the number of our customers and potential customers, which could adversely affect our revenues even if these events do not reduce the aggregate number of customers and banking and other activities of the consolidated entities. Customers of ours who merge with or are acquired by other entities that are not our customers, or that use fewer of our services, may discontinue or reduce their use of our services. In addition, it is possible that the larger banks or financial institutions resulting from mergers or consolidations could decide to perform for themselves some or all of the services which we currently provide or could provide. Any of these developments could have a material adverse effect on our business and results of operations.

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. Since many of our larger potential customers have historically developed their key applications in-house and therefore view their system requirements from a make-versus-buy perspective, we often compete against our potential customers’ in-house capacities. In addition, we expect that the markets in which we compete will continue to attract new competitors and new technologies. There can be no assurance that we will be able to compete successfully against current or future competitors or that competitive pressures faced by us will not materially adversely affect our business, financial condition and results of operations.

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

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

We may experience software defects, development delays and installation difficulties, which would harm our business and reputation and expose us to potential liability.

Our services are based on sophisticated software and computing systems and we may encounter delays when developing new applications and services. Further, the software underlying our services has 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. Defects in our software, errors or delays in the processing of electronic transactions or other difficulties could result in:


	•	interruption of business operations;

	•	delay in market acceptance;

	•	additional development and remediation costs;

	•	diversion of technical and other resources;

	•	loss of customers;

	•	negative publicity; or

	•	exposure to liability claims.

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 be successful in limiting our liability.

If we lose the service of our senior management and key personnel, we may not be able to execute our business strategy, manage our growth and compete effectively.

Our future success depends significantly on the continued contributions of members of our senior management team. In particular, our chief executive officer, William P. Foley, II, and our chief financial

officer, Alan L. Stinson, are critical to the overall management of our company as well as our strategic direction and our growth. In addition, we have assembled a group of key personnel through acquisitions in recent years. Loss of the services of these employees could significantly delay or prevent the achievement of our development and strategic objectives and our capability to compete effectively. In addition, Mr. Foley will be required to continue to devote substantial time to the affairs of FNF in his capacity as chairman of the board and chief executive officer of FNF for so long as he serves in such capacities. Under Mr. Foley’s employment agreements with FNF and with us, he will be required to devote to each company the amount of time necessary for him to fulfill his duties at each company, and must devote a reasonable amount of time to FIS. Following the distribution, we expect that Mr. Foley will continue to be actively involved at FNF as chairman of the board. We believe that Mr. Foley intends to devote at least a majority of his time to FIS prior to the distribution, and an even greater portion of his time following the distribution, due to the fact that the FNF business is more mature and requires less management of integration and cross-selling strategies. However, Mr. Foley’s employment contract as described above will give him discretion in allocating his time.

Security breaches or computer viruses could harm our business.

As part of our transaction processing business, we electronically receive, process, store and transmit sensitive business information of our customers. Unauthorized access to our computer systems could result in the theft or publication of confidential information or in the deletion or modification of records or otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet. Computer viruses have also been distributed and have rapidly spread over the Internet. Computer viruses could infiltrate our systems, disrupting our delivery of services and making our applications unavailable. Any inability to prevent security breaches or computer viruses could also cause existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers.

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 could have a material adverse effect on our results of operations or financial condition.

We may be found to infringe the proprietary rights of others, which may require us to change our business practices and may also subject us to significant costs and monetary penalties.

As our information technology applications and services develop, we may become increasingly subject to infringement claims. Any claims, whether with or without merit, could:



	•	be expensive and time-consuming to defend;


	•	cause us to cease making, licensing or using applications that incorporate the challenged intellectual property;

	•	require us to redesign our applications, if feasible;

	•	divert management’s attention and resources; and

	•	require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies.

There can be no assurance that third parties will not assert infringement claims against us in the future with respect to our current or future applications and services.

If we fail to comply with privacy regulations imposed on providers of services to financial institutions, our business could be harmed.

As a provider of services to financial institutions, we are bound by the same limitations on disclosure of the information we receive from our customers as apply to the financial institutions themselves. If we fail to comply with these regulations, we could be exposed to suits for breach of contract or to governmental proceedings, damage our customer relationships, harm our reputation and inhibit our ability to obtain new customers. In addition, if more restrictive privacy laws or rules are adopted in the future on the Federal or State level, or, with respect to our international operations, by authorities in foreign jurisdictions on the national, provincial, state or other level, then it could have an adverse impact on us.

We may not succeed with our current and future expansion of our international operations and such failure may adversely affect our growth and results of operations.

In 2003, our sales outside of the U.S. represented approximately 3.2% of our revenues. We recently acquired Sanchez, in part in order to expand our international operations, particularly in our Financial Institution Software and Services segment. Sanchez generated revenues from international operations of $45.8 million in 2003, the fiscal year immediately prior to our acquisition. In addition, we recently entered into an agreement to acquire a controlling interest in KORDOBA Gesellschaft für Bankensoftware mbH & Co. KG, Munich, a provider of core bank processing software and solutions in the German bank market. Although our international operations at present are relatively small, we believe there may be opportunities to expand our international operations. Our dedicated mergers and acquisitions group is actively looking for potential opportunities to expand internationally. However, we are less well-known internationally than in the United States and have less experience with local business conditions. In addition, we 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. There can be no assurance that we will be able to compete successfully against current or future international competitors or that our relative inexperience with international operations will not limit or hinder our success.

If we are delayed in obtaining or are unable to obtain the requisite licenses and approvals for certain operations in our Lender Services segment, it could adversely affect our ability to provide certain title agency and related lender services.

Our Lender Services segment consists, in part, of legal entities and assets and liabilities of divisions that will be transferred prior to completion of this offering from legal entities that remain with FNF. Some of these transfers require us to apply for additional licenses and other approvals from state insurance and banking regulators in a number of states in order for us to provide certain title agency and related lender services after the transfer. Any delay in obtaining or inability to obtain the required licenses and other approvals from such regulators could have an adverse effect on our ability to provide these services and retain income related to these services after the transfer.

Risks Relating to Our Separation from FNF

We would not expect to realize the full potential benefits of our separation from FNF and our stock price may decline if FNF does not complete the distribution.

If FNF does not complete the distribution, FNF will continue to control us and we would not expect to realize the full potential benefits of the distribution. FNF has the sole discretion to determine the timing and terms of any distribution and is not obligated to effect the distribution. In particular, FNF will not complete the distribution unless it receives a favorable legal opinion which, together with the tax ruling previously received from the Internal Revenue Service, concludes that the distribution would be tax-free to FNF and its stockholders for federal income tax purposes. We cannot make any assurances that the distribution will occur.

In addition, if the distribution is not completed, the liquidity of our shares in the market may be limited unless and until FNF elects to sell some of its significant ownership.

We will be controlled by FNF as long as it owns a majority of our common stock, and our other stockholders will be unable to affect the outcome of stockholder voting during this time.

As long as FNF continues to hold a majority of our outstanding stock, FNF will be able to elect all of our directors and determine the outcome of all corporate actions requiring stockholder approval. After the completion of this offering, FNF will own approximately % of our outstanding common stock.

While it controls us, FNF will control decisions with respect to:


	•	our business direction and policies, including the election and removal of our directors;

	•	mergers or other business combinations involving us;

	•	the acquisition or disposition of assets by us;

	•	our financing; and

	•	amendments to our certificate of incorporation and bylaws.

We could have conflicts with FNF, and our CEO will also be CEO and chairman of the board of directors of FNF.

Conflicts may arise between FNF and us as a result of our on-going agreements and the nature of our respective businesses. We will seek to manage any potential conflicts through our agreements with FNF and through oversight by independent members of our board of directors. However, there can be no assurances that such measures will be effective or that we will be able to resolve all potential conflicts with FNF, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third party.

Some of our executive officers own substantial amounts of FNF stock and options because of their relationships with FNF prior to this offering. Such ownership could create or appear to create potential conflicts of interest when directors and officers are faced with decisions that could have different implications for our company and FNF.

Mr. Foley is our chief executive officer and the chairman of our board of directors and will continue to be the chief executive officer and chairman of the board of directors of FNF following this offering. It is expected that Mr. Foley will resign as chief executive officer of FNF at the time of the distribution, although he will remain chairman of the board of FNF. As an officer and director of both companies, he will have obligations to us as well as FNF and may have conflicts of interest with respect to matters potentially or actually involving or affecting us. Matters that could give rise to conflicts include among other things:


	•	our past and ongoing relationships with FNF, including tax matters, employee benefits, indemnification, data sharing, and other matters arising from our planned separation from FNF;

	•	the quality and pricing of services that we have agreed to provide to FNF or that FNF has agreed to provide to us;

	•	the nature, quality and pricing of transitional services that FNF has agreed to provide to us or that we have agreed to provide to FNF; and

	•	sales or distributions by FNF of all or part of its ownership interest in us.

In addition, Mr. Foley will be required to continue to devote substantial time to the affairs of FNF in his capacity as chairman of the board and chief executive officer of FNF for so long as he serves in such capacities. Further, Mr. Stinson will devote time to the affairs of FNF in his role as a Senior Vice President with responsibilities for providing oversight and support on a transitional basis with respect to financial and accounting matters prior to the distribution.

If FNF engages in the same type of business we conduct, our ability to successfully operate and expand our business may be limited.

FNF is under no obligation not to compete with us, either before or after the distribution. FNF will have no obligation to refrain from:


	•	engaging in the same or similar business activities or lines of business as us;

	•	doing business with any of our customers or vendors; or

	•	doing business with our competitors.

Due to the significant resources of FNF, including financial resources, FNF could have a significant competitive advantage over us should it decide to engage in the type of business we conduct, which could have an adverse effect on our financial condition and results of operations. Further, although a substantial business of our Lender Services segment is acting as a title agent for FNF, FNF is under no obligation to deal exclusively with us, and it could deal with other agents that compete with us for the title agency business we operate.

Provisions of our certificate of incorporation may prevent us from receiving the benefit of certain corporate opportunities.

Because FNF may engage in the same activities in which we engage, there is a risk that we may be in direct competition with FNF over business activities and corporate opportunities. To address these potential conflicts, we have adopted a corporate opportunity policy that has been incorporated into our certificate of incorporation. These provisions may limit the corporate opportunities of which we are made aware or which are offered to us. See “Description of Capital Stock — Provisions of our Certificate of Incorporation and Resolutions Relating to Corporate Opportunities.” Moreover, our ability to take advantage of certain corporate opportunities may be limited by FNF’s voting control over us.

We could incur substantial obligations with respect to income taxes if the distribution of our stock by FNF to holders of FNF stock were to fail to be tax free.

We could incur substantial obligations for U.S. federal income taxes if the distribution of our stock by FNF to holders of FNF’s stock failed to be tax free to FNF under Section 355 of the Internal Revenue Code and the regulations thereunder. FNF may recognize a taxable gain on the distribution if the distribution is considered to be part of a plan pursuant to which one or more persons acquire a 50% or greater interest in FNF’s stock or in our stock. If such an acquisition caused the distribution to be taxable to FNF, U.S. federal income tax would be payable by the FNF consolidated group based upon the difference between the fair market value of our common stock and the adjusted basis of our common stock FNF holds at the date of distribution. We and FNF would be severally liable pursuant to the Internal Revenue Code and regulations thereunder for any U.S. federal income taxes FNF incurs as a consequence of the distribution. It is expected that we will enter into a tax disaffiliation agreement with FNF pursuant to which we will be required to indemnify FNF with respect to any transaction involving our stock, and FNF will be required to indemnify us with respect to any transaction involving its stock, that results in the imposition of U.S. federal income tax on FNF in connection with the distribution.

Further, the tax disaffiliation agreement will provide that through the period ending two years after the distribution, an acquisition, issuance, or other transaction involving our stock will be restricted in the absence of an opinion from a nationally recognized law firm or accounting firm or a ruling from the Internal Revenue Service that such transaction will not cause the distribution to be taxable to FNF. Such a restriction could inhibit our ability to issue stock in connection with acquisitions and otherwise restrict our actions through the period ending two years after the distribution. If the distribution occurs and if it fails to be tax-free to FNF under Section 355 of the Internal Revenue Code and the regulations thereunder, the resulting U.S. federal income tax liability could have a material adverse effect on our financial condition, results of operation, and cash flows.

Risks Relating to this Offering

Our common stock has no prior public market and no assurances can be made that an active trading market will develop.

Prior to this offering, there has not been a market for our common stock. Although we have applied to list our common stock on the New York Stock Exchange, an active trading market in our common stock might not develop or continue. An investor purchasing shares of common stock in this offering will pay a price that was not established in a competitive market, but instead was determined by negotiations with the representatives of the underwriters based upon an assessment of the valuation of our common stock. The public market may not agree with or accept this valuation, in which case an investor may not be able to sell shares of our stock at or above the initial offering price.

The price of our common stock may be volatile and may be affected by market conditions beyond our control.

Our share price is likely to fluctuate in the future because of the volatility of the stock market in general and a variety of factors, many of which are beyond our control, including:


	•	quarterly variations in actual or anticipated results of our operations;

	•	changes in financial estimates by securities analysts;

	•	actions or announcements by our competitors;

	•	regulatory actions;

	•	changes in the market outlook for the lending and real estate industries;

	•	technology changes in our business segments;

	•	departure of our key personnel; and

	•	future sales of our common stock, including any sales of our common stock by FNF prior to the distribution.

The market prices of securities of information technology and services providers have experienced fluctuations that often have been unrelated or disproportionate to the operating results of these companies. These market fluctuations could result in extreme volatility in the price of our shares of common stock, which could cause a decline in the value of your investment. You should also be aware that price volatility may be greater if the public float and trading volume of our shares of common stock is low.

Most of our common stock will be owned by FNF until the distribution, which may adversely limit our flexibility to operate our business, may impede our ability to enter into certain transactions and may adversely affect the value of our stock.

Upon completion of this offering, approximately % of our outstanding common stock will be owned by FNF. This could make it more difficult for us to raise capital by selling stock or use our stock as currency in acquisitions. This concentrated ownership also might delay or prevent a change in control and may impede or prevent transactions in which stockholders might otherwise receive a premium for their shares. In addition, we will enter into a registration rights agreement with FNF requiring us, under certain circumstances, to register our shares beneficially owned by FNF following this offering. See “Our Arrangements with FNF — Registration Rights Agreement.” If FNF exercises these registration rights because it is unable to or for any reason does not complete the distribution, the market price of our common stock would likely be adversely affected.

Provisions in our charter documents and customer agreements, and Delaware and New York laws and tax considerations related to the distribution, may delay or prevent a change in control and may therefore prevent stockholders from receiving the benefit of potential control transactions.

Our certificate of incorporation, bylaws and the laws of Delaware contain provisions that may delay, deter or prevent a takeover attempt that stockholders might consider in their best interests. For example, our organizational documents provide for a classified board of directors with staggered terms, prevent stockholders from taking action by written consent, prevent stockholders from calling a special meeting of stockholders, provide for supermajority voting requirements to amend our certificate of incorporation and certain provisions of our bylaws and provide for the filling of vacancies on our board of directors by the majority of the directors then in office. These provisions will render the removal of the incumbent board of directors or management more difficult. In addition, these provisions may prevent stockholders from receiving the benefit of any premium over the market price of our common stock offered by a bidder in a potential takeover. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future.

Section 203 of the General Corporation Law of Delaware, the jurisdiction in which our company is organized, imposes some restrictions on the ability of an “interested stockholder” to engage in certain business combinations including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an interested stockholder. An interested stockholder is generally defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of the corporation, although FNF will not be considered an interested stockholder following the offering.

In addition, because one of our subsidiaries is a title company domiciled in New York, any person seeking to acquire, control or hold with the power to vote 10% or more of our outstanding securities could face regulatory obstacles under the New York insurance law that could delay, deter or prevent an acquisition that stockholders might consider in their best interests. See “Business — Regulation.”

We expect that our tax disaffiliation agreement with FNF will also provide that we will indemnify FNF for any taxes FNF incurs if the distribution fails to qualify as tax-free because of transactions involving our stock. An acquisition of us by a third party could have such an effect.

You will experience immediate and substantial dilution in net tangible book value per share as a result of this offering.

If you purchase common stock in this offering, you will experience an immediate and substantial dilution in the net tangible book value of your shares. Our net tangible book value at June 30, 2004, without giving effect to this offering was approximately $ million, or $ per share, reflecting shares of common stock issued and outstanding. Net tangible book value per share represents total assets, less intangible assets, reduced by our total liabilities and divided by the number of shares of common stock outstanding. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of our common stock in this offering and the net tangible book value per share immediately following this offering. After giving effect to the offering, and after deducting the underwriting discounts and commissions and estimated offering expenses and giving effect to the intended dividend to FNF, our pro forma net tangible book value as of June 30, 2004 would have been approximately $ million, or $ per share. This represents an immediate dilution of $ per share to new investors purchasing shares in this offering.

FORWARD-LOOKING STATEMENTS

Some of the statements under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus include forward-looking statements which reflect our current views with respect to future events and financial performance. These statements include forward-looking statements both with respect to us specifically and the businesses in which we are engaged generally. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, those described under “Risk Factors.”

The factors described under “Risk Factors” should not be considered as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

USE OF PROCEEDS

We estimate that our net proceeds from this offering (at an assumed offering price of $ per share of common stock, the midpoint of the range set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and our estimated offering expenses) will be approximately $ million. We estimate that our net proceeds will be approximately $ million if the underwriters exercise their over-allotment option in full. We intend to use approximately $250 million of net proceeds to fund a dividend payment to FNF, which will be declared prior to the completion of this offering, and the remaining net proceeds for general corporate purposes, primarily working capital and acquisitions.

We have entered into an agreement to acquire 11 million shares of Covansys Corporation, representing approximately 29% of its outstanding common stock, for a purchase price of $121 million. We have also entered into an agreement to acquire a 74.9% interest in KORDOBA Gesellschaft für Bankensoftware mbH & Co. KG, Munich, or Kordoba, for a purchase price of €100 million, subject to certain adjustments (which is equal to approximately U.S. $120.9 million, based on the Federal Reserve Bank of New York exchange rate on August 25, 2004 of 1.209 U.S. dollars per Euro, before any such adjustments). If this offering is completed prior to the closing of these acquisitions, we will pay for these acquisitions using a portion of the proceeds from this offering, borrowings under our new credit facility or a combination of these sources. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments.”

DIVIDEND POLICY

We do not intend to pay dividends on our common stock. Instead, we currently intend to retain any future earnings for use in the operation and expansion of our business. Our board of directors will make any future determination regarding the payment of dividends based upon various factors then existing, including:


	•	our financial condition, operating results and current and anticipated cash needs;

	•	general economic and business conditions;

	•	our strategic plans and business prospects;

	•	legal, contractual and regulatory restrictions on our ability to pay dividends; and

	•	other factors that our board of directors may consider to be relevant.

CAPITALIZATION

The following table describes our cash and cash equivalents and capitalization as of June 30, 2004 on an actual basis, and on an as adjusted basis to give effect to the sale of shares of common stock in this offering at an assumed offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and our estimated offering expenses, and our payment of a dividend of $250 million to FNF, as described under “Use of Proceeds.” The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements and the related notes included elsewhere in this prospectus.



			Unaudited


			As of June 30, 2004

			Actual		As Adjusted


			(in thousands)
Cash and cash equivalents			$	110,773	$	—


Total long-term debt				47,912
Stockholders’ equity
	Common stock, $0.0001 par value			—
	Additional paid-in capital			—
	Owner’s net investment			2,535,700

		Total		2,535,700

Total capitalization			$	2,583,612	$

The actual and as adjusted information set forth in the table:


	•	excludes shares of common stock issuable upon the exercise of stock options to be granted under our omnibus incentive plan as of completion of this offering, at an exercise price equal to the initial public offering price; and

	•	excludes shares of common stock available for future issuance under our omnibus incentive plan, and assumes no exercise of the over-allotment option granted to the underwriters. For a description of our stock option plan and of the proposed treatment of certain outstanding FNF stock options and restricted stock following the distribution, see “Management — Treatment of FNF Stock Options and Restricted Shares” and “— Omnibus Incentive Plan.”

DILUTION

Our net tangible book value per common share represents the amount of our total tangible assets minus our total liabilities, divided by the number of common shares outstanding. After giving effect to the issuance of of our common shares (at an assumed offering price of $ per common share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and our estimated offering expenses and assuming that the underwriters’ over-allotment option is not exercised) and payment of the dividend to FNF, our net tangible book value as of June 30, 2004, would have been $ million, or $ per common share. This amount represents an immediate increase of $ per common share to the existing stockholders and an immediate dilution of $ per common share issued to the new investors purchasing shares offered hereby at the assumed offering price. The following table illustrates this per share dilution:


Assumed offering price per share		$

Net tangible book value per common share before the offering

Increase attributable to the offering

Dividend payment to FNF

Net tangible book value per common share after the offering and dividend

Dilution in net tangible book value per common share to new investors		$

SELECTED HISTORICAL FINANCIAL INFORMATION

The following table sets forth our selected historical financial information. The selected historical financial information as of December 31, 2003 and 2002 and for each of the years in the three-year period ended December 31, 2003 has been derived from our combined financial statements and related notes, which have been audited by KPMG LLP, an independent registered public accounting firm. The audited combined financial statements as of December 31, 2003 and 2002 and for each of the years in the three-year period ended December 31, 2003 are included elsewhere in this prospectus. The selected historical financial information as of June 30, 2003 and as of and for the years ended December 31, 2000 and 1999 has been derived from our unaudited combined financial statements not appearing herein. The selected historical financial information as of June 30, 2004 and for the six months ended June 30, 2004 and 2003 has been derived from our unaudited condensed combined financial statements, which are included elsewhere in this prospectus. You should read this financial information in conjunction with the audited and unaudited combined financial statements included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our selected historical financial information has been prepared from the historical results of operations and bases of the assets and liabilities of the operations transferred to us and gives effect to allocations of certain corporate expenses from FNF. Our selected historical financial information may not be indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented. Further, as a result of our acquisitions, the results in the periods shown below may not be directly comparable. Our results of interim periods are not necessarily indicative of results for the entire year.



			Six Months ended
			June 30,						Year ended December 31,

			2004(2)			2003(2)			2003(2)			2002			2001(1)			2000(1)			1999(1)

			(unaudited)			(unaudited)												(unaudited)			(unaudited)

			(in thousands)
STATEMENT OF EARNINGS DATA
Processing and services revenues			$	1,141,996		$	772,321		$	1,910,589		$	632,793		$	405,392		$	224,259		$	94,422
Cost of revenues				726,940			469,245			1,150,725			387,431			256,111			143,594			63,063

Gross profit				415,056			303,076			759,864			245,362			149,281			80,665			31,359

Selling, general and administrative costs				236,513			160,222			392,130			148,407			94,370			53,099			25,243

Operating income				178,543			142,854			367,734			96,955			54,911			27,566			6,116

Other income (expense):
	Interest income			417			412			704			377			189			188			47
	Interest expense			(1,014	)		(1,403	)		(2,831	)		(2,322	)		(1,333	)		(594	)		(21	)
	Gain (loss) on sale or issuance of subsidiary stock			—			139			(3,625	)		11,109			31			—			—

		Total other income (expense)		(597	)		(852	)		(5,752	)		9,164			(1,113	)		(406	)		26

Earnings before income taxes and minority interest				177,946			142,002			361,982			106,119			53,798			27,160			6,142
Income tax expense				69,433			54,516			140,449			39,582			22,003			10,973			2,967
Minority interest expense				1,017			8,810			14,518			8,359			778			—			—

Net earnings			$	107,496		$	78,676		$	207,015		$	58,178		$	31,017		$	16,187		$	3,175



(1)	Effective January 1, 2002, we adopted SFAS No. 142 “Goodwill and Other Intangible Assets” and as a result, have ceased to amortize goodwill. Goodwill amortization in 2001, 2000 and 1999 was $5,973, $2,496 and $683, respectively.



(2)	Effective January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, using the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”, and as a result recorded stock compensation expense of $3,804 for the year ended December 31, 2003 and $7,484 and $637 for the six months ended June 30, 2004 and 2003, respectively.



	As of June 30,				As of December 31,

	2004		2003		2003		2002		2001		2000		1999

	(unaudited)		(unaudited)								(unaudited)		(unaudited)

	(in thousands)
BALANCE SHEET DATA (at end of period)
Cash and cash equivalents	$	110,773	$	141,094	$	100,466	$	56,472	$	21,245	$	11,109	$	6,830
Total assets		3,063,946		2,027,348		2,371,108		556,269		427,660		198,323		48,597
Total long-term debt		47,912		44,430		41,126		33,471		41,040		11,869		—
Minority interest		9,556		11,658		12,130		63,272		34,384		1,102		1,103
Total equity		2,535,700		2,027,348		1,904,368		295,232		180,774		88,725		21,394

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information gives effect to our acquisitions of FI (which was acquired by FNF on April 1, 2003), WebTone (which was acquired by FNF on September 2, 2003), FNIS (the outstanding minority interest of which was acquired by FNF on September 30, 2003), Aurum (which was acquired by FNF on March 11, 2004) and Sanchez (which was acquired by FNF on April 14, 2004). The unaudited pro forma combined statement of earnings for the six months ended June 30, 2004 gives effect to the acquisitions of Aurum and Sanchez as if they had been completed on January 1, 2003. The unaudited pro forma combined statement of earnings for the year ended December 31, 2003 give effect to the acquisitions of FI, WebTone, FNIS, Aurum and Sanchez as if they had been completed on January 1, 2003. In addition to these five acquisitions, we have completed several other acquisitions since January 1, 2003, the pro forma effects of which are not presented because they are insignificant both individually and in the aggregate. In addition, we recently announced our agreement to acquire a controlling interest in Kordoba. We have not included the pro forma effects of this proposed acquisition because U.S. GAAP financial statements for the periods covered by our pro forma financial statements are not available. For its fiscal year ended September 30, 2003, Kordoba generated revenue of €85.7 million and earnings before income and taxes of €23.8 million, in each case as determined under German GAAP.

Prior to September 30, 2003, FNF and its subsidiaries owned approximately 66% of FNIS’ outstanding common stock. Accordingly, FNF had a controlling financial interest in FNIS, and the results of operations and financial condition of FNIS are included in our historical combined financial statements, with the minority interest in the earnings of FNIS reflected as minority interest expense in the combined statements of earnings.

The acquisitions of FI, WebTone, Aurum and Sanchez and of the noncontrolling equity interest (34%) in FNIS have been accounted for using the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” or SFAS No. 141. Under the purchase method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair values. Goodwill is created to the extent that the purchase price, including certain acquisition and closing costs, exceeds the fair value of the net identifiable assets acquired. The allocation of each purchase price to assets and liabilities of the acquired businesses was based on studies and valuations performed by independent companies. The unaudited pro forma financial information presented below includes pro forma adjustments made based on these allocations. There may be further adjustments to the purchase price allocations of WebTone, FNIS, Aurum and Sanchez upon finalization of these studies and valuations.

We have prepared the unaudited pro forma financial information based on available information, using assumptions that our management believes are reasonable. The unaudited pro forma financial information is being provided for information purposes only. It does not purport to represent our actual financial position or results of operations had the acquisitions occurred on the dates specified nor does it project our results of operations or financial position for any future period or date.

The unaudited pro forma financial information does not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the acquisitions.

In accordance with Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” unearned compensation cost arising in connection with certain acquisitions with respect to the unearned portion of the fair value of the unvested options of the target that were exchanged for unvested FNF options will be charged to us over the remaining vesting period as compensation expense. The fair value of the total unearned compensation cost after tax that will be charged to the combined financial statements subsequent to the completion of these acquisitions is estimated to be $2.4 million with respect to the Sanchez acquisition and $4.6 million with respect to the FNIS minority interest acquisition.

The unaudited pro forma financial information should be read in conjunction with our audited and unaudited historical combined financial statements and related notes, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus.

Unaudited Pro Forma Condensed Combined Statements of Earnings

Year ended December 31, 2003


					FI			WebTone
					Historical			Historical
		FIS			(through			(through			Aurum			Sanchez						Pro Forma
		Historical			March 31)			September 1)			Historical			Historical			Combined			Adjustments			Pro Forma


		(in thousands, except per share amounts)
Processing and services revenues		$	1,910,589		$	210,342		$	21,269		$	190,001		$	96,404		$	2,428,605		$	—		$	2,428,605
Cost of revenues			1,150,725			142,221			11,817			165,750			71,771			1,542,284			8,016	(1)		1,588,896
																					38,596	(2)

Gross profit			759,864			68,121			9,452			24,251			24,633			886,321			(46,612	)		839,709
Selling, general and administrative expenses			392,130			27,631			18,164			21,741			24,741			484,407			—			484,407
	Restructuring charges		—			—			—			—			11,144			11,144			—			11,144
	Royalty expense to parent		—			6,548			—			—			—			6,548			(6,548	)(3)		—

Operating income (loss)			367,734			33,942			(8,712	)		2,510			(11,252	)		384,222			(40,064	)		344,158
Interest (expense) income and other, net			(2,127	)		(8	)		—			(4,257	)		280			(6,112	)		3,650	(4)		(2,462	)
Loss on sale or issuance of subsidiary stock			(3,625	)		—			—			—			—			(3,625	)		—			(3,625	)

Earnings (loss) before income taxes and minority interest			361,982			33,934			(8,712	)		(1,747	)		(10,972	)		374,485			(36,414	)		338,071
Income tax expense (benefit)			140,449			14,311			(3,389	)		—			(736	)		150,635			(14,129	)(5)		136,506
Minority interest expense			14,518			—			—			—			—			14,518			(10,305	)(6)		4,213

Net earnings (loss)		$	207,015		$	19,623		$	(5,323	)	$	(1,747	)	$	(10,236	)	$	209,332		$	(11,980	)	$	197,352

Per share amounts:
Basic earnings per share																							$

Weighted average shares outstanding(7)

Unaudited Pro Forma Condensed Combined Statements of Earnings

Six Months ended June 30, 2004


					Aurum			Sanchez
					Historical			Historical
		FIS			(through			(through						Pro Forma
		Historical			March 10)			April 13)			Combined			Adjustments			Pro Forma


		(in thousands, except per share amounts)
Processing and services revenues		$	1,141,996		$	33,560		$	25,269		$	1,200,825		$	—		$	1,200,825
Cost of revenues			726,940			29,710			22,479			779,129			994	(1)		783,074
															2,951	(2)

Gross profit			415,056			3,850			2,790			421,696			(3,945	)		417,751
Selling, general and administrative expenses			236,513			6,222			4,098			246,833			—			246,833
	Restructuring charges		—			—			5,325			5,325			—			5,325

Operating income (loss)			178,543			(2,372	)		(6,633	)		169,538			(3,945	)		165,593
Interest (expense) income and other, net			(597	)		(743	)		52			(1,288	)		591	(4)		(697	)

Earnings (loss) before income taxes and minority interest			177,946			(3,115	)		(6,581	)		168,250			(3,354	)		164,896
Income tax expense (benefit)			69,433			52			(2,269	)		67,216			(1,308	)(5)		65,908
Minority interest expense			1,017			—			—			1,017			—			1,017

Net earnings (loss)		$	107,496		$	(3,167	)	$	(4,312	)	$	100,017		$	(2,046	)	$	97,971

Per share amounts:
	Basic earnings per share																$

	Weighted average shares outstanding(7)

Notes to Unaudited Pro Forma Financial Information

(in thousands)

1. In accordance with SFAS No. 123, unearned compensation cost was measured upon consummation of the FNIS and Sanchez acquisitions for the unearned portion of the fair value of the unvested FNIS and Sanchez options that were exchanged for unvested FNF options. The amortization of the unearned compensation cost over the remaining vesting periods results in compensation expense, which is charged to our combined statements of earnings, of $8,016 for the year ended December 31, 2003 ($5,524 relating to unvested FNIS options and $2,492 relating to unvested Sanchez options) and $994 for the six months ended June 30, 2004 (relating to unvested Sanchez options).

2. Reflects the increase in amortization expense as a result of allocating the purchase price of each acquisition to intangible assets, namely customer relationship intangibles and acquired software, and amortizing such intangibles over their estimated useful lives commencing as of the assumed acquisition date. The increase in amortization expense is $38,596 for the year ended December 31, 2003 (FI — $9,118; WebTone — $2,304; FNIS — $15,019; Aurum — $6,388; and Sanchez — $5,767) and $2,951 for the six months ended June 30, 2004 (Aurum — $1,288 and Sanchez — $1,663).

3. Reflects the elimination of royalty expense of $6,548 recorded by FI relating to an agreement between FI and its former parent, ALLTEL, for the year ended December 31, 2003, which charges would not have been incurred had the acquisition occurred on January 1, 2003.

4. Reflects the elimination of Aurum’s interest expense for the year ended December 31, 2003 and for the six months ended June 30, 2004 of $3,650 and $591, respectively, as a result of the repayment of long-term debt in connection with the purchase of Aurum by FNF.

5. Reflects the tax benefit of the pro forma adjustments at the FIS estimated tax rate of 38.8% and 39.0% for the year ended December 31, 2003 and for the six months ended June 30, 2004, respectively.

6. Reflects the elimination of the minority stockholders’ interest in net earnings of FNIS of $10,305 for the year ended December 31, 2003.

7. Unaudited pro forma basic earnings per share for the year ended December 31, 2003 and the six months ended June 30, 2004 have been calculated by dividing unaudited pro forma net earnings by the weighted average shares outstanding as calculated in accordance with Securities and Exchange Commission rules for initial public offerings. These rules require that the weighted average share calculation give retroactive effect to any changes in our capital structure as well as the number of shares to be issued in the offering whose proceeds will be used to pay any dividend as reflected in the pro forma adjustments. It is anticipated that $250 million of the net proceeds from the initial public offering will be paid to FNF as a dividend. Therefore, pro forma weighted average shares for the year ended December 31, 2003 and the six months ended June 30, 2004 are comprised of shares of common stock outstanding prior to the offering and shares of common stock included in this offering, assuming all such shares are outstanding as of the beginning of each period, computed at an assumed offering price of $ per share of common stock, the midpoint of the range set forth on the cover page of this prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Combined Financial Statements and the Notes thereto and selected historical and pro forma financial information included elsewhere in this prospectus. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Our actual results may differ materially from these expectations due to changes in global, political, economic, business, competitive and market factors, many of which are beyond our control. See “Forward-Looking Statements.”

Overview

We are a leading provider of technology solutions, processing services, and information-based services to the financial services and real estate industries. We have four operating business segments, Financial Institution Software and Services, Lender Services, Default Management Services and Information Services, which produced 37.6%, 22.7%, 10.0% and 29.6%, respectively, of our revenues in 2003.


	•	*Financial Institution Software and Services.* This segment focuses on two primary markets, financial institution processing and mortgage loan processing. Our primary software applications function as the underlying infrastructure of a financial institution’s processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts, and core mortgage processing software, which banks use to process and service mortgage loans. We also provide a number of complementary applications and services that interact directly with the core processing applications, including applications that facilitate interactions between our financial institution customers and their clients. We offer our applications and services through a range of delivery and service models, including on-site outsourcing and remote processing arrangements, as well as on a licensed software basis for installation on customer-owned and operated systems.


	•	*Lender Services.* This segment offers customized outsourced business process and information solutions primarily to national lenders and loan servicers. These loan facilitation services consist primarily of centralized, customized title agency and closing services offered to first mortgage, refinance, home equity and sub-prime lenders.



	•	*Default Management Services.* This segment provides default management services to national lenders and loan servicers. These services allow our customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan through the default and foreclosure process.


	•	*Information Services.* This segment offers property data and real estate-related services. Included in the services we provide are appraisal and valuation services, property records information, real estate tax services, borrower credit and flood zone information and multiple listing software and services.

We also have a corporate segment that consists of allocated costs relating to corporate overhead and revenues and expenses of a small technology equipment leasing operation.

Factors Affecting Comparability

Our Combined Financial Statements included in this prospectus present the financial condition and operating results of the businesses that comprise our company. The growth of these businesses has increased significantly through various acquisitions completed during the periods covered by our Combined Financial Statements, including over 25 acquisitions that were completed since January 2001. Although many of these acquisitions added important services to our offerings, the most significant to our historical financial statements through June 30, 2004 were the acquisitions of:


	•	Fidelity Information Services, Inc., or FI, which was originally a division of ALLTEL Information Services, Inc., or ALLTEL, when FNF acquired it on April 1, 2003. This company forms the core of


		our bank processing and mortgage processing applications and service businesses. The purchase price for FI was approximately $1.1 billion. FI (including several smaller acquisitions FI made subsequent to our acquisition of it) generated revenues of $678.2 million in 2003 for our Financial Institution Software and Services segment.


	•	Lender’s Service, Inc., or LSI, which was acquired on February 10, 2003, for approximately $75.0 million in cash. LSI is a leading provider of appraisal, title and closing services to residential mortgage originators. The LSI acquisition contributed significantly to the increases in revenues of our Lender Services segment and Information Services segment in 2003 compared to 2002.

Our Combined Financial Statements present the results of operations of each of these acquired businesses, and all of our other acquired businesses, in each case effective as of the date of the acquisition. As a result of these acquisitions, the results of operations in the periods covered by our Combined Financial Statements may not be directly comparable. We have also recently acquired Sanchez and Aurum, which will further affect comparisons of our 2004 results with prior period results commencing in the second quarter of 2004.

Our Historical Financial Information

We were incorporated in Delaware on May 20, 2004 in preparation for our corporate reorganization. Prior to the completion of this offering, FNF will make a contribution to us of assets and liabilities relating to our business and operations as described in this prospectus.

Our historical financial statements include assets, liabilities, revenues and expenses directly attributable to our operations and allocations to us of certain corporate expenses of FNF. These amounts have been allocated to us on the basis that is considered by management to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by the businesses comprising our company. The amounts of corporate expenses allocated to us in our historical financial statements are detailed under “— Related Party Transactions” below. However, our historical financial statements do not necessarily reflect what our financial position or results of operations would have been if we had been operated as a stand-alone public entity during the periods covered, and may not be indicative of our future results of operations or financial position.

Our historical financial statements do not reflect the debt or interest expense we might have incurred if we had been a stand-alone entity. Our historical financial statements also do not include 100% of the historical compensation and benefits of certain individuals who will be our officers; as described above, our financial statements instead reflect an allocation based on an estimate of the historical division of these individuals’ time between our operations and other operations of FNF. At such time as these individuals become sole employees of ours, the related compensation and benefits expenses to us will increase from the amounts historically allocated. The other corporate expenses allocated to us may be different from the amounts of expenses we would have incurred if we had been a stand-alone company and had performed those services ourselves or procured them from third parties or from FNF under the services agreements we will enter into with FNF in connection with this offering. Some of the costs of FNF allocated to us may incorporate more advantageous pricing available to an entity with the scale and purchasing power of FNF than would be available to us as a stand-alone entity. We may incur rebranding costs, although we do not expect these costs to be significant. In addition, we will incur other expenses, not reflected in our historical financial statements, as a result of being a separate publicly traded company.

Further, effective upon the distribution, we intend to issue stock options to our officers, directors and employees who are no longer directors or officers of FNF in replacement for unvested FNF options they hold at such time. This issuance may cause us to record compensation expense.

Related Party Transactions

Our historical financial statements reflect transactions with other businesses and operations of FNF not being transferred to us. Included in the Financial Institution Software and Services segment for the six

months ended June 30, 2004 and 2003, and the years ended December 31, 2003 and 2002, was $32.1 million, $0.6 million, $17.4 million and $1.3 million, respectively, of revenue from FNF relating to the provision of IT infrastructure support, data center management and software sales. The increase of $31.5 million in the six months of 2004 over the 2003 period and the increase of $16.1 million in the year ended December 31, 2003 over 2002 are due to FNF’s acquisition of FI which began providing FNF’s IT infrastructure support and data center management in September of 2003.

Our Lender Services segment includes revenue generated from loan facilitation transactions with large national lenders. A significant part of those transactions involves title agency functions resulting in the issuance of title insurance policies by a title insurance underwriter owned by FNF. Our operations also perform similar functions in connection with certain trustee sale guarantees, a form of title insurance, that FNF issues as part of the foreclosure process on a defaulted loan. These operations recorded revenues from third parties of $250.9 million, $46.7 million and $34.0 million in 2003, 2002 and 2001, respectively, and $67.3 million and $96.9 million in the six months ended June 30, 2004 and 2003, respectively, representing commissions on title insurance policies written by title insurance subsidiaries of FNF. These commissions are equal to 88% of the total title premium from title policies that we place with FNF. The increase in net revenues of $204.2 million in 2003 was primarily due to $188.7 million in revenues related to our introduction in 2003 of a new automated process for performing title agency services in connection with loan refinancings for borrowers who meet specific criteria. Sales of other title related services to FNF generated revenues of $3.9 million, $3.8 million and $3.5 million during 2003, 2002 and 2001, respectively and $1.1 million and $3.0 million in the six months ended June 30, 2004 and 2003, respectively.

We manage FNF’s title plant assets in certain parts of the country. The underlying title plant information is owned by FNF title underwriters; we manage and update the information in return for the right to sell it to title insurers, including FNF underwriters and other customers. We earn all revenue generated by those assets from third party customers as well as amounts from FNF, and are also responsible for the costs related to keeping the title plant assets current and functioning on a daily basis. This business requires, among other things, that we gather updated property information, organize it, input it into one of several systems we use, maintain or obtain the use of necessary software and hardware to store, access and deliver the data, sell and deliver the data to customers and provide various forms of customer support. Our costs include personnel costs, charges of third parties such as government offices for title information, technology costs and other operating expenses. FNF in turn benefits from having its title plant assets continually updated and accessible. Included in the Information Services segment in 2003 are revenues of $28.2 million from FNF related to this arrangement. The revenue amounts in 2002 and 2001 for similar transactions were $24.3 million and $18.8 million, respectively. For the six month periods ended June 30, 2004 and 2003 these revenues were $19.9 million and $21.7 million, respectively. Also included in this segment are sales to FNF of certain real estate-related services of $6.6 million in 2003, and no similar sales in 2002 or 2001.

A subsidiary of FNF provided technology services to our Information Services segment through year-end 2003. Amounts paid to this subsidiary were $5.4 million, $5.8 million and $4.9 million in 2003, 2002 and 2001, respectively, and are included in cost of revenues.

FNF provides certain corporate services to us relating to general management, accounting, finance, legal, payroll, human resources, internal audit and mergers and acquisitions. The cost of these services has been allocated to us based upon reasonable allocation bases including revenue, head count, specific identification and others. Total costs allocated for 2003, 2002 and 2001 were $39.5 million, $21.6 million and $15.2 million, respectively. Total costs allocated for the six month periods ended June 30, 2004 and 2003 were $32.5 million and $17.7 million, respectively. The increase in these costs is primarily the result of the growth of these businesses and the time and costs that management of FNF has incurred on behalf of these businesses. These allocations are reflected in our Corporate and Other segment.

We owed FNF $5.7 million at June 30, 2004 related to the financing of certain lease receivables and $0.2 million from a previous default services acquisition. Our lease receivables arrangement utilizes a line of credit established by FNF in favor of our subsidiary.

On September 24, 2001, one of our subsidiaries entered into a revolving credit facility with FNF, which provided for a maximum credit line of $25.0 million and carried an interest rate of prime plus 2%. In connection with entering into a new credit agreement with unrelated third-party lenders in December 2001, the credit facility with FNF was subordinated and converted into an unsecured obligation. The aggregate principal amount of this obligation at December 31, 2002 was $5.8 million and it subsequently was retired in full in 2003.

On July 2, 2004, we entered into a promissory note in favor of a subsidiary of FNF in an aggregate principal amount of $40 million. The proceeds of the borrowing were used to fund our acquisition of Geotrac, Inc., a flood zone certification business. The aggregate principal amount of the note is due on July 1, 2005. We expect that the note will be repaid either with borrowings under our new credit facility or from working capital or a combination of these sources.

We believe the amounts earned by us or charged to us under each of the foregoing arrangements are fair and reasonable. Although the 88% commission rate on our title agency business was set without negotiation, we believe it is consistent with the blended rate that would be available to a third party title agent given the amount and the geographic distribution of the business produced and the low risk of loss profile of the business placed. In connection with title plant management, our operation charges FNF title insurers for title information at approximately the same rates it and other similar vendors charge unaffiliated title insurers. Our IT infrastructure support and data center management services provided to FNF, from which we earned $14.8 million in 2003, is priced within the range of prices we offer to third parties for the same types of services. We believe that the borrowing rates on the lines of credit and the note referred to above are approximately the same rates that we would have been able to obtain in a third party transaction. However, the amounts we earned or 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.

In connection with this offering, we will enter into agreements with FNF under which for specified periods following the offering we will continue to provide title agency services, title plant maintenance, and the IT services for which we earned revenues from FNF companies in 2003, in each case, at pricing which is expected to be consistent with that charged in 2003.

We will also enter into transition service agreements with FNF under which FNF will provide corporate services to us of the type described above for a transitional period, at cost plus a reasonable profit margin. When FNF ceases to provide services to us, our costs of performing these services ourselves or of procuring them from third parties may increase. For a description of these and other agreements to be entered into in connection with this offering, see “Our Arrangements with FNF.”

Recent Developments


	Covansys

In April 2004, we entered into an agreement to acquire 11 million shares of Covansys Corporation (NASDAQ: CVNS), or Covansys, a U.S.-based provider of application management and offshore outsourcing services with India-based operations. The transaction is expected to close in the third quarter of 2004. The purchase price for the shares is $121 million in cash. Following the closing of the transaction, we will own approximately 29% of the common stock of Covansys, and will have warrants to purchase additional shares. A total of four warrants were issued to us, each covering 1,000,000 shares of Covansys common stock, with exercise prices of $15.00, $17.50, $20.50 and $24.00, respectively. We anticipate accounting for this investment using the equity method of accounting.

In addition to acquiring Covansys’ common stock, we have also entered into a five-year master services agreement with Covansys pursuant to which we have agreed, subject to certain termination rights, to provide $150 million of revenues to Covansys over the term of the master services agreement from either our own utilization of Covansys’ services or from the utilization of Covansys’ services by our existing customers seeking to outsource information technology services.

The master services agreement provides methods for us to ensure that our quality standards are met with respect to the services provided by Covansys. Specifically, the master services agreement requires Covansys to

provide services in accordance with the standards and specifications set forth in the work orders relating to the applicable service. To ensure standards and specifications are met, we have the right to detail procedures for Covansys to follow in providing the services, and we can require Covansys to report to us with respect to any problems arising in connection with its following of the procedures. To allow us to further monitor and manage the quality of services provided under the agreement, we have the right to designate employees of Covansys who will be the senior personnel responsible for the provision of the services, and these persons may not be replaced without our consent. Also, we will set standards and procedures for software development activities and services that we will monitor through review and on-site inspection. In the event that disputes arise under the master services agreement regarding services or otherwise, each of Covansys and us will designate persons to negotiate a resolution to the dispute, or to produce a joint recommendation for actions to be taken if the dispute cannot be resolved through negotiation.

We can terminate the master services agreement on thirty days’ notice at any time after December 31, 2006, in which case we would be required to pay Covansys a fee based on the percentage of the $150 million of revenue not provided to Covansys by that point in time, subject to a maximum termination fee of $10.0 million. We may also terminate the master services agreement, without payment of any termination fee, if we do not close the acquisition of the Covansys shares, in the event of a change of control of Covansys or if an act of God or similar event prevents Covansys from performing under the agreement. Either party to the master services agreement may also terminate the agreement if the other party breaches the agreement, files for bankruptcy or becomes insolvent, or undertakes other similar actions.

We intend to utilize our relationship with Covansys to lower our internal development costs over time by outsourcing certain programming, development and maintenance functions. We also intend to utilize our relationship with Covansys in an effort to generate additional revenue by offering our existing customer base Covansys’ project management and technology services in conjunction with our own services. While we intend to take advantage of our relationship with Covansys to seek cross-selling opportunities, such cross-selling efforts may face potential challenges for various reasons, such as difficulties in managing cross-border arrangements and maintaining optimal quality control, managing existing customers’ potential resistance to outsourcing functions to a vendor with significant offshore operations, legal regulations and other matters.


	Geotrac

On July 2, 2004, we acquired 100% of Geotrac, Inc., or Geotrac, a flood zone monitoring services provider. The purchase price was $40 million in cash and was funded with cash we borrowed from a subsidiary of FNF under a promissory note.


	Kordoba

On August 24, 2004, we announced that we had signed a definitive agreement to acquire a 74.9% interest in KORDOBA Gesellschaft für Bankensoftware mbH & Co. KG, Munich, or Kordoba, a provider of core processing software and outsourcing solutions to the German banking market, from Siemens Business Services GmbH & Co. OHG. For its fiscal year ended September 30, 2003, Kordoba generated revenue of €85.7 million and earnings before income and taxes of €23.8 million, in each case as determined under German GAAP. Siemens Business Services will retain a 25.1% ownership interest in Kordoba. The purchase price is €100 million, subject to certain adjustments. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close by September 30, 2004.

Critical Accounting Policies

The accounting policies described below are those we consider critical in preparing our Combined Financial Statements. Certain of these policies require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Combined Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. See Note A of Notes to the Combined Financial Statements for a more detailed description of the significant accounting policies that have been followed in preparing our Combined Financial Statements.


	Revenue Recognition

The following describes our primary types of revenues and our revenue recognition policies as they pertain to each of our operating segments. We provide some services to customers as part of an integrated offering through multiple segments. The revenues for services provided under these multiple element arrangements are recognized in accordance with EITF Issue No. 00-21, “Revenue Arrangements and Multiple Deliverables.”

Financial Institution Software and Services. In this segment, we recognize revenues relating to bank processing services and mortgage processing services along with software licensing and services. Several of our contracts include a software license and one or more of the following services: data processing, development, implementation, conversion, programming, maintenance and application management. In some cases, these services are offered in combination with one another and in other cases we offer them individually. Revenues from bank and mortgage processing services are typically volume-based depending on factors such as the estimated number of accounts, transactions processed and computer resources utilized.

The substantial majority of our revenues in this segment are from outsourced data processing and application management arrangements. Revenues from these arrangements are recognized as services are performed. Revenue and incremental direct costs related to implementation, conversion and programming services associated with our data processing and application management agreements are deferred during the implementation phase and subsequently recognized over the term of the related agreement. At each reporting period, each contract with related deferred costs is evaluated for impairment, and if impairment is evident, deferred costs are adjusted accordingly.

In other revenue producing transactions, we use several different accounting policies related to revenue recognition, depending on the type of transaction. We recognize software license and maintenance fees as well as associated development, implementation, conversion and programming fees, in accordance with the American Institute of Certified Public Accountants’ Statement of Position 97-2, or SOP 97-2, entitled “Software Revenue Recognition,” and SOP 98-9, entitled “Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions.” Initial license fees are recognized when a contract exists, the fee is fixed or determinable, software delivery has occurred and collection of the receivable is deemed probable, provided that vendor-specific objective evidence, or VSOE, has been established for each element or for the undelivered elements. We determine the fair value of each element or the undelivered elements in multi-element software arrangements based on VSOE. If the arrangement is subject to accounting under SOP 97-2, VSOE for each element is based on either the price charged when the same element is sold separately or in the case of maintenance, using a substantive renewal rate. If evidence of fair value of all undelivered elements exists but evidence does not exist for one or more delivered elements, then revenue is recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. If evidence of fair value does not exist for one or more undelivered elements of a contract, then all revenue is deferred until all elements are delivered or fair value is determined for all remaining undelivered elements. Revenue from maintenance and support is recognized ratably over the term of the agreement. We record deferred revenue for maintenance amounts invoiced prior to revenue recognition.

With respect to a small percentage of our revenues, we use contract accounting, as required by SOP 97-2, when the arrangement with the customer includes significant customization, modification, or production of software. For elements accounted for under contract accounting, revenue is recognized in accordance with SOP 81-1, “Accounting for Performance of Construction Type and Certain Production-Type Contracts,” using the percentage-of-completion method since reasonably dependable estimates of revenues and contract hours applicable to various elements of a contract can be made. Revenue in excess of billings on these agreements is recorded as unbilled receivables and is included in accounts receivable. Billings in excess of revenue recognized on these agreements are recorded as deferred revenue until revenue recognition criteria are met. Changes in estimates for revenues, costs and profits are recognized in the period in which they are determinable. When our estimates indicate that the entire contract will be performed at a loss, a provision for the entire loss is recorded in that accounting period.

Lender Services. In this segment, we recognize revenues from loan facilitation services. Loan facilitation services include centralized title agency and closing services for various types of lenders. Revenues relating to centralized title agency and closing services are recognized at the time of closing of the related real estate transaction. Ancillary service fees are recognized when the service is provided.

Default Management Services. In this segment, we recognize revenue on services provided to assist customers through the default and foreclosure process, including property preservation and maintenance services (such as lock changes, window replacement, debris removal and lawn service), posting and publication of foreclosure and auction notices, title searches, document preparation and recording services, and referrals for legal and property brokerage services. Revenues from default management services are recognized upon completion of the underlying service.

Information Services. In this segment, we record revenue from providing data or data-related services. These services principally include appraisal and valuation services, property records information, real estate tax services, borrower credit and flood zone information and multiple listing software and services.

Our flood and tax units provide various services including life-of-loan monitoring services. Revenue for life-of-loan services is deferred and recognized ratably over the estimated average life of the loan service period, which is determined based on our historical experience. We evaluate our historical experience on a quarterly basis, and adjust the estimated life of the loan service period prospectively. Revenue derived from software and service arrangements is recognized in accordance with SOP 97-2 as further described above. Revenues from other services in this segment are recognized as the services are performed.


	*Computer Software*

Computer software includes software acquired in business acquisitions, purchased software and internally developed capitalized software. Purchased software is recorded at cost and amortized using the straight-line method over its estimated useful life (generally 3 years) and software acquired in a business acquisition is recorded at its fair value upon acquisition and amortized using straight-line and accelerated methods over its estimated useful life, generally 5 to 7 years. Computer software development costs are accounted for in accordance with either SFAS No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,” or with SOP No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” After the technological feasibility of the software has been established (for SFAS No. 86 software) or at the beginning of application development (for SOP No. 98-1 software), software development costs, including salaries and related payroll costs and costs of independent contractors incurred during development, are capitalized. Research and development costs incurred prior to the establishment of technological feasibility (for SFAS No. 86 software) or prior to application development (for SOP No. 98-1 software) of a product are expensed as incurred and are not significant. The cost of capitalized software is amortized on a project-by-project basis commencing on the date of general release of the project. The capitalized cost of internal use software (SOP No. 98-1 software) is amortized using the straight-line method over its estimated useful life, generally five years. Software development costs (SFAS No. 86 software) are amortized using the greater of (1) the straight-line method over its estimated useful life, which ranges from three to ten years or (2) the ratio of current revenues to total anticipated revenue over its useful life.


	*Goodwill and Other Intangible Assets*

We have significant intangible assets that were acquired through business acquisitions. These assets consist of purchased customer relationships, contracts, and the excess of purchase price over the fair value of identifiable net assets acquired (goodwill). The determination of estimated useful lives and the allocation of the purchase price to the fair values of the intangible assets requires significant judgment and may affect the amount of future amortization on the intangible assets other than goodwill.

We have made acquisitions in the past that have resulted in a significant amount of goodwill. As of June 30, 2004, December 31, 2003 and December 31, 2002, goodwill was $1,435.7 million, $966.0 million and $176.8 million, respectively. The majority of our goodwill as of June 30, 2004 relates to goodwill recorded in connection with the acquisition of FI in April 2003, the acquisition of the minority interest of FNIS in

September 2003, the acquisition of Aurum in March 2004 and the acquisition of Sanchez in April 2004. The process of determining whether or not an asset, such as goodwill, is impaired or recoverable relies on projections of future cash flows, operating results and market conditions. Such projections are inherently uncertain and, accordingly, actual future cash flows may differ materially from projected cash flows. In evaluating the recoverability of goodwill, we perform an annual goodwill impairment test on our reporting units based on an analysis of the discounted future net cash flows generated by the reporting units’ underlying assets. We have completed our annual goodwill impairment test on our reporting units as of December 31, 2003 and have determined that each of our reporting units has a fair value in excess of its carrying value. Accordingly, no goodwill impairment has been recorded. Such analyses are particularly sensitive to changes in estimates of future net cash flows and discount rates. Changes to these estimates might result in material changes in the fair value of the reporting units and determination of the recoverability of goodwill which may result in charges against earnings and a reduction in the carrying value of our goodwill.

In connection with our acquisitions, we have also recognized identifiable intangible assets purchased, which typically consist of software, purchased customer relationships and contracts. The valuation of these assets involves significant estimates and assumptions concerning matters such as customer retention, future cash flows and discount rates. If any of these assumptions change, it could affect the carrying value of these assets. Purchased customer relationships are amortized over their estimated useful lives using an accelerated method which takes into consideration expected customer attrition rates over a ten-year period. Contractual relationships are generally amortized using the straight-line method over their contractual life.


	*Long-Lived Assets*

We review long-lived assets, primarily computer software, property and equipment and other intangibles, such as customer relationships and contracts, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment are present, we estimate the future net cash flows expected to be generated from the use of those assets and their eventual disposal. We would recognize an impairment loss if the aggregate future net cash flows were less than the carrying amount. As a result, the carrying values of these assets could be significantly affected by the accuracy of our estimates of future net cash flows, which are not capable of being made with certainty. In 2003, we determined that the carrying value of certain of our computer software costs may not be recoverable and recorded a pre-tax expense of $5.9 million relating to the write-off of these assets. The $5.9 million charge consisted of capitalized software costs related to applications that were replaced either by technology acquired in acquisitions or by newly developed applications. We acquired a small real estate-related services company in May 2003 and used the software acquired to replace existing software applications. Also, certain other software applications were replaced by newly developed applications and fully written off. The amount of capitalized software written off for these applications was $3.2 million. Both of these charges related to businesses within the Information Services segment. An additional purchased software application was fully written off upon the acquisition of a company with a more robust software application alternative in the amount of $2.7 million. This charge related to the Default Management Services segment. These impairments were recorded as depreciation and amortization which are included in cost of revenues in our 2003 combined statement of earnings.

Accounting for Income Taxes

Our operating results have been included in FNF’s consolidated U.S. Federal and certain consolidated and/or combined State income tax returns. The provision for income taxes in our combined statements of earnings is made at rates consistent with what we would have provided as a stand-alone taxable entity. As part of the process of preparing our combined financial statements, we are required to determine our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax expense together with assessing temporary differences resulting from differing recognition of items for income tax and accounting purposes. These differences result in deferred income tax assets and liabilities, which are included within our combined balance sheet. We must then assess the likelihood that our deferred income tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we

must 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 combined statement of earnings. Determination of our 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 our revenues or in the estimated level of annual pre-tax income can cause our overall effective income tax rate to vary from period to period.

Business Trends and Conditions


	*Financial Institution Software and Services*

In our financial institution processing business, increases in deposit and lending transactions can positively affect our business and thus the condition of the overall economy can have an effect on our growth. While this segment generally is not significantly affected by the cyclicality of real estate transactions, our ability to expand our mortgage loan processing business is correlated to the total number of mortgage loans outstanding.

In our financial institution processing business, we compete for both licensing and outsourcing business, and thus we are affected by the decisions of financial institutions to outsource the services we provide instead of simply licensing our applications. As a provider of outsourcing solutions, we benefit from the greater revenues that result from a financial institution’s decision to outsource its processing to us. Generally, financial institutions of all sizes will consider outsourcing information technology and business process services to varying degrees, although smaller financial institutions are more likely to outsource all information technology functions to companies such as ours since they generally do not have the staff, budget or competencies to implement and operate highly complex technical environments. Larger financial institutions have historically chosen to limit outsourcing to specific application functions or services in connection with a particular product or operation such as mortgage processing. Generally, demand for outsourcing solutions has increased over time as providers such as ourselves realize economies of scale and improve our ability to provide services that improve customer efficiencies and reduce costs.

We may be affected by the industry consolidation trend in the banking industry. This trend may be beneficial or detrimental to our Financial Institution Software and Services businesses. When consolidations occur, merger partners often operate disparate systems licensed from competing service providers. The newly formed entity generally makes a determination to migrate its core systems to a single platform. When a financial institution processing client is involved in a consolidation, we may benefit by expanding the use of our services if they 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.


	*Lender Services*

The level of residential real estate activity, which depends in part on the level of interest rates, affects the level of revenues from our Lender Services segment. Revenues from loan facilitation services increase as the amount of mortgage originations, from both home purchases and mortgage refinancings, increases. During the second half of 2000, mortgage interest rates began to decline, causing an increase in refinance activity. This trend continued through the first six months of 2003. The increasing refinance activity, coupled with record levels of residential resale and new home sales, resulted in an exceptionally strong business climate for our loan facilitation services in 2003. According to the Mortgage Bankers Association, U.S. mortgage originations (including refinancings) were approximately $3.8 trillion, $2.9 trillion and $2.2 trillion in 2003, 2002 and 2001, respectively.

While prevailing mortgage interest rates have declined to record lows in recent years and the volume of real estate transactions has experienced record highs, we do not expect these trends to continue. Although originations in 2003 surpassed the record levels set in 2002, interest rates began to rise during the fourth quarter of the 2003. Mortgage originations declined in the first half of 2004, as the interest rate environment slowed the pace of refinancings. Most economists expect a relatively stable to marginally increasing mortgage

interest rate environment in the second half of 2004 and the current Mortgage Bankers Association forecast is for $2.6 trillion of mortgage originations in 2004. Relatively higher interest rates are also likely to result in seasonal effects having more influence on real estate activity. Traditionally, the greatest volume of real estate activity, particularly residential resale transactions, has occurred in the spring and summer months.


	*Default Management Services*

In contrast to our Lender Services segment, we believe that a higher interest rate environment may increase the volume of consumer defaults and thus favorably affect our Default Management Services business, which provides services relating to residential mortgage loans in default. The overall strength of the economy also affects default revenues.


	*Information Services*

The level of residential real estate activity, such as the number of residential resales, new home sales and mortgage originations, also affects revenues derived from many of the services we provide in our Information Services segment. We experienced increased residential loan refinancing activity coupled with record levels of residential resale and new home sales during 2000 through 2003. While refinancing activity declined, residential sales remained strong in the first half of 2004. We expect that current interest rate levels and any future increase in interest rates will most likely result in lower levels of mortgage originations in 2004 than in the 2003 period.

Comparisons of Years ended December 31, 2003, 2002 and 2001


	*Combined Results of Operations*



			Year ended December 31,

			2003			2002			2001


			(in thousands)
Processing and services revenues			$	1,910,589		$	632,793		$	405,392
Cost of revenues				1,150,725			387,431			256,111

	Gross profit			759,864			245,362			149,281

Selling, general and administrative costs				392,130			148,407			94,370
	Operating income			367,734			96,955			54,911
Other income (expense):
	Interest income			704			377			189
	Interest expense			(2,831	)		(2,322	)		(1,333	)
	Gain (loss) on sale or issuance of subsidiary stock			(3,625	)		11,109			31

		Total other income (expense)		(5,752	)		9,164			(1,113	)

Earnings before income taxes and minority interest				361,982			106,119			53,798
Income tax expense				140,449			39,582			22,003
Minority interest expense				14,518			8,359			778

		Net earnings	$	207,015		$	58,178		$	31,017


	Revenues

Total revenues in 2003 were $1,910.6 million, an increase of $1,277.8 million, or 201.9%, as compared to total revenues of $632.8 million in 2002, due primarily to acquisitions made in 2003. Revenues from our Financial Institution Software and Services segment increased $704.0 million, primarily from $678.2 million that was contributed by our April 1, 2003 acquisition of FI and other smaller acquisitions. Revenues from our Lender Services segment increased $341.3 million with a majority of the increase resulting primarily from revenues attributable to our launch in 2003 of a new automated process for performing title agency services in connection with loan refinancings for borrowers meeting specific criteria, which contributed $188.7 million in revenue in 2003. Revenues from our Default Management Services segment increased $59.8 million primarily due to growth in this line of business due to increased market share in 2003 in part because of new customer

relationships that were developed with customers of our Financial Institution Software and Services segment. Revenues from our Information Services segment increased $172.9 million in 2003, primarily resulting from acquisitions made in 2003 and 2002, which contributed $121.3 million to the increase, and growth in the other businesses included in this segment which contributed $51.6 million to the increase.

Total revenues in 2002 were $632.8 million, an increase of $227.4 million, or 56.1%, as compared to total revenues of $405.4 million in 2001. Revenues from our Financial Institution Software and Services segment increased $11.3 million in 2002 as compared to 2001. Revenues from our Lender Services segment increased $43.2 million, or 86.8%, to $92.9 million in 2002 as compared to $49.8 million in 2001. This increase was a result of a more favorable interest rate environment in 2002 as compared to 2001. Revenues from our Default Management Services segment increased $47.7 million to $130.3 million in 2002 compared to $82.6 million in 2001, primarily from growth in market share. Revenues from our Information Services segment increased $124.7 million, or 46.6%, to $392.2 million in 2002 as compared to $267.5 million in 2001. This segment’s 2002 revenues included the impact of owning FNIS for the entire year, because it was acquired in August 2001 and combined with other operating businesses owned previously.


	Cost of Revenues

Cost of revenues includes all direct costs associated with or costs allocated by our operating units to the specific services performed. These include data processing costs, professional fees, certain payroll costs for operating personnel and amortization of other intangible assets such as customer relationships and contracts and computer software along with other operating expenses.

Cost of revenues was $1,150.7 million, $387.4 million and $256.1 million in 2003, 2002 and 2001, respectively. The increase of $763.3 million in 2003 was due to an increase of $460.2 million in the Financial Institution Software and Services segment primarily as a result of the FI acquisition on April 1, 2003, an increase of $153.9 million in the Lender Services segment as a result of the launch in 2003 of a new automated process for performing title agency services, an increase of $44.9 million in the Default Management Services segment resulting primarily from the corresponding growth in revenues, and an increase of $104.3 million in Information Services resulting from increased revenues. Included in total cost of revenues for 2003, 2002 and 2001 were depreciation and amortization costs of $120.5 million, $15.1 million and $7.2 million, respectively.


	Gross Profit

Gross profit was $759.9 million, $245.4 million and $149.3 million in 2003, 2002 and 2001, respectively. As a percentage of revenue, gross profit was 39.8%, 38.8% and 36.8% in 2003, 2002 and 2001, respectively. High revenue growth and higher gross profit margins in the Lender Services segment in 2003 and 2002 were a factor in the increase in the combined gross profit percentage for the company over these periods.


	Selling, General and Administrative Costs

Selling, general and administrative costs were $392.1 million, $148.4 million and $94.4 million in 2003, 2002 and 2001, respectively. The majority of the increase in 2003 of $243.7 million as compared to 2002 was related to the acquisition of FI in 2003. As a result, the Financial Institution Software and Services segment experienced an increase in selling, general and administrative costs of $132.8 million. Also, selling, general and administrative costs increased $38.3 million, $9.1 million and $46.0 million in the Lender Services, Default Management Services, and Information Services segments, respectively, in 2003 as compared to 2002. As a percentage of revenue, these expenses were 20.5%, 23.5% and 23.3% in 2003, 2002 and 2001, respectively. The decrease in 2003 was primarily due to the FI acquisition, a business in which selling, general and administrative costs were 19.2% of revenues. Included in total selling, general and administrative costs for 2003, 2002 and 2001 were depreciation and amortization costs of $23.7 million, $3.6 million and $2.2 million, respectively.


	Operating Income

Operating income totaled $367.7 million, $97.0 million and $54.9 million in 2003, 2002 and 2001, respectively. Operating income was 19.3%, 15.3% and 13.6% of total revenues in 2003, 2002 and 2001, respectively.


	Other Income (Expense)

Other income (expense) consists of interest income and expense and gains and losses related to sales or issuances of subsidiary stock. Other income (expense) consisted of a loss of $5.8 million in 2003, a gain of $9.2 million in 2002 and a loss of $1.1 million in 2001. Gain (loss) on sales or issuances of subsidiary stock represents the accounting for stock issuances by less than wholly owned consolidated entities. Our accounting policy is to recognize the incremental increase or decrease in our ownership interest in the underlying equity of our consolidated subsidiaries as gains or losses in the combined statements of earnings in accordance with Staff Accounting Bulletin Topic 5.H. These stock issuances consisted of transactions where shares were issued by Fidelity National Information Solutions, Inc., a publicly-traded company which was majority owned by FNF until September 30, 2003, related to acquisitions and stock option exercises. These transactions resulted in our recording a loss of $3.6 million, a gain of $11.1 million and a loss of less than $0.1 million in 2003, 2002 and 2001, respectively. The loss in 2003 was primarily the result of option exercises which lowered our ownership percentage. The gain of $11.1 million in 2002 was primarily the result of an acquisition in which shares were issued at a value in excess of the average book value of shares we owned. Since FNF acquired the minority interest in FNIS it did not already own on September 30, 2003, there will be no future gains or losses relating to this investment.

We do not currently allocate interest expense to our segments, but in the future if interest expense is significant, we may allocate interest expense to segments so that interest expense will be evaluated in segment performance.


	Income Tax Expense

We recorded $140.4 million, $39.6 million and $22.0 million in income tax expense for 2003, 2002 and 2001, respectively. This resulted in an effective income tax rate in our historical financial results of 38.8%, 37.3% and 40.9% for 2003, 2002 and 2001, respectively. The provision for income taxes is calculated as though we were a stand-alone taxpaying entity during the periods presented.


	Minority Interest Expense

Minority interest expense relates to non-wholly owned entities, the results of operations of which are consolidated with our own results. Minority interest expense was $14.5 million, $8.4 million and $0.8 million in 2003, 2002, and 2001, respectively, and principally related to FNIS. In September 2003, FNF acquired the outstanding minority interest in FNIS it did not already own.


	*Segment Results of Operations*

We measure the performance of our operating segments based on contribution to combined operating income. Operating income includes only those revenues and expenses directly attributable to the operating segments.


	Financial Institution Software and Services



	Financial Institution
	Software and Services


	Year ended December 31,

	2003		2002		2001


	(in thousands)
Processing and services revenues	$	717,816	$	13,763	$	2,432

Cost of revenues		464,643		4,395		904

Gross profit		253,173		9,368		1,528

Selling, general and administrative costs		137,675		4,895		1,214

Operating income	$	115,498	$	4,473	$	314

Revenues from our Financial Institution Software and Services segment in 2003 were $717.8 million and were primarily attributable to revenues from our acquisitions, primarily the acquisition of FI on April 1, 2003. Our acquisitions collectively generated revenues of $678.2 million in this segment from April 1, 2003 to December 31, 2003. Revenues in 2003 from our Financial Institution Software and Services segment also included $39.6 million from the results of two software businesses acquired in 2002 and 2001, Empower and Softpro. These businesses generated revenues of $13.8 million in 2002 and $2.4 million in 2001.

Cost of revenues relating to our Financial Institution Software and Services segment in 2003 was $464.7 million. The increase of $460.3 million over the 2002 amount was primarily attributable to the 2003 acquisitions. Major categories in cost of revenues within this segment are salaries, data processing costs and amortization of intangible assets such as customer lists and acquired contracts. Salaries are more significant in this business segment as compared to our other business segments primarily due to the fact that these businesses provide outsourcing, facilities management and software implementations and support, which require a highly skilled, high tech work force. Cost of revenues was $4.4 million and $0.9 million in 2002 and 2001, respectively. Gross profit was $253.2 million in 2003 or 35.3% of revenues.

Selling, general and administrative costs were $137.7 million, $4.9 million and $1.2 million in 2003, 2002 and 2001, respectively. The significant increase in 2003 was due to the acquisition of FI on April 1, 2003.

Operating income from our Financial Institution Software and Services segment was $115.5 million in 2003 and was approximately 16.1% of total segment revenues.


	Lender Services



	Lender Services


	Year ended December 31,

	2003		2002		2001


	(in thousands)
Processing and services revenues	$	434,193	$	92,949	$	49,762

Cost of revenues		201,366		47,438		30,026

Gross profit		232,827		45,511		19,736

Selling, general and administrative costs		48,223		9,853		4,218

Operating income	$	184,604	$	35,658	$	15,518

Revenues from our Lender Services segment in 2003, 2002 and 2001 were $434.2 million, $92.9 million and $49.8 million, respectively. The increase in 2003 of $341.2 million compared to 2002 was primarily attributable to our successful launch of a new automated process for performing title agency services in connection with loan refinancings for borrowers who meet specified criteria. We earned $188.7 million in revenues from this automated process in 2003, benefitting from the favorable interest rate environment that contributed to a large volume of refinance activity. The increase was also attributable to our acquisition of LSI and other acquisitions in 2003. The increase in revenues in loan facilitation services in 2002 from 2001

primarily resulted from growth in existing businesses we operated in the prior year (which growth we commonly refer to as organic growth), generated in significant part by favorable mortgage rates.

Cost of revenues for our Lender Services segment was $201.4, $47.4 million and $30.0 million in 2003, 2002 and 2001, respectively. The increase in 2003 was primarily correlated with the increase in revenues during that period. Gross profit as a percentage of revenues was 53.6%, 49.0% and 39.7% in 2003, 2002 and 2001, respectively. The increase in 2003 as compared to 2002 was due to the higher margins from the introduction of our automated process for title agency services due to the high level of refinancings during 2003. The increase in 2002 as compared to 2001 was also due to an increase in the level of activity in the refinancing markets in 2002 versus 2001.

Selling, general and administrative costs in the Lender Services segment were $48.2 million, $9.9 million and $4.2 million in 2003, 2002 and 2001, respectively. The increase in 2003 relates to the increase in size of this segment, partially through the acquisition of LSI in 2003.

Operating income for our Lender Services segment was $184.6 million, $35.7 million and $15.5 million in 2003, 2002 and 2001, respectively. Operating income was 42.5%, 38.4% and 31.2% of total segment revenues in 2003, 2002 and 2001, respectively. The increase in 2003 as compared to 2002 was due to the higher margins from the introduction of our automated process for title agency services due to the high level of refinancings during 2003. The increase in 2002 as compared to 2001 was also due to an increase in the level of activity in the refinancing markets in 2002 versus 2001.


	Default Management Services



	Default Management Services


	Year ended December 31,

	2003		2002		2001


	(in thousands)
Processing and services revenues	$	190,107	$	130,250	$	82,545

Cost of revenues		137,634		92,816		61,011

Gross profit		52,473		37,434		21,534

Selling, general and administrative costs		28,575		19,504		15,003

Operating income	$	23,898	$	17,930	$	6,531

Revenues from the Default Management Services segment were $190.1 million, $130.3 million and $82.5 million in 2003, 2002 and 2001, respectively. Increases in revenue from Default Management Services in 2003 and 2002 resulted from organic growth of these lines of business in part due to increased market share and new customer relationships developed with customers of our Financial Institution Software and Services segment. Our revenues increased in 2003 notwithstanding that overall national levels of defaults declined slightly in 2003 as compared to 2002, according to the Mortgage Bankers Association.

Cost of revenues for our Default Management Services segment was $137.6 million, $92.8 million and $61.0 million in 2003, 2002 and 2001, respectively. The increase in 2003 was primarily correlated with the increase in revenues during that period. Gross profit as a percentage of revenues was 27.6%, 28.7% and 26.1% in 2003, 2002 and 2001, respectively.

Selling, general and administrative costs in the Default Management Services segment were $28.6 million, $19.5 million and $15.0 million in 2003, 2002 and 2001, respectively. These year over year increases relate to an increase in the level of support services these businesses needed as they grew in size.

Operating income for this segment was $23.9 million, $17.9 million and $6.5 million in 2003, 2002 and 2001, respectively. Operating income was 12.6%, 13.8% and 7.9% of total segment revenues in 2003, 2002 and 2001, respectively. The increase from 2001 to 2002 was primarily the result of the fixed costs of these businesses becoming more stable as their business volume grew.


	Information Services



	Information Services


	Year ended December 31,


	(in thousands)
	2003		2002		2001

Processing and services revenues	$	565,160	$	392,234	$	267,485

Cost of revenues		346,183		242,001		163,408

Gross profit		218,977		150,233		104,077

Selling, general and administrative costs		137,412		91,398		56,825

Operating income	$	81,565	$	58,835	$	47,252

Revenues from our Information Services segment in 2003, 2002 and 2001 were $565.2 million, $392.2 million and $267.5 million, respectively. Revenues from our Information Services segment generally trend closely with the level of real estate activity in the marketplace, which is influenced among other things by interest rates. Revenues from this segment have benefited from the increased levels of real estate activity over the past few years due partially to the favorable interest rate environment. The 2003 increase in revenues of $172.9 million resulted primarily from acquisitions made in 2003 and 2002, which contributed $121.3 million to the increase, and growth in the other businesses included in this segment which contributed $51.6 million to the increase. The increases in revenues from 2002 to 2001 were primarily from our acquisition of FNIS in August 2001 and acquisitions of other businesses and from organic growth from the favorable interest rate environment.

Cost of revenues for our Information Services segment was $346.2, $242.0 million and $163.4 million in 2003, 2002 and 2001, respectively. The increase in 2003 was primarily correlated with the increase in revenues resulting from acquisitions and the increased levels of real estate activities as mentioned above. Gross profit as a percentage of revenues was 38.8%, 38.3% and 38.9% in 2003, 2002 and 2001, respectively.

Selling, general and administrative costs in the Information Services segment were $137.4 million, $91.4 million and $56.8 million in 2003, 2002 and 2001, respectively. These increases are indicative of the overall support services that need to be provided to these businesses as they grew substantially from 2001 to 2003.

Operating income for our Information Services segment was $81.6 million, $58.8 million and $47.3 million in 2003, 2002 and 2001, respectively. Operating income was 14.4%, 15.0% and 17.7% of total segment revenues in 2003, 2002 and 2001, respectively.


	Corporate and Other

We also have a Corporate and Other segment that consists of our technology equipment leasing operations and FNF expenses allocated on a historical basis to our operations. Revenues from this segment are comprised solely of revenues from our leasing operations and were $3.3 million, $3.6 million and $3.2 million in 2003, 2002 and 2001, respectively. Cost of revenues was $0.9 million, $0.7 million and $0.8 million in 2003, 2002 and 2001, respectively. Selling, general and administrative costs from our Corporate and Other segment consist of the costs of our leasing operations and FNF costs that have been allocated to us from FNF. Selling, general and administrative costs were $40.2 million, $22.8 million and $17.1 million in 2003, 2002 and 2001, respectively. The increase in our selling, general and administrative costs in 2003 and 2002 was primarily attributable to the growth of our businesses both organically and through acquisition and the amount of time and costs that management of FNF has incurred on behalf of these businesses allocated to us on the basis that is considered by management to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by these businesses. However, the financial information included herein does not necessarily reflect what these costs would have been had we operated as a stand-alone public entity during the periods covered, and may not be indicative of our future results of operations or financial position.

Comparisons of Six Months ended June 30, 2004 and 2003

Combined Results of Operations



			Six Months ended
			June 30,

			2004			2003


			(Unaudited)
			(in thousands)
Processing and services revenues			$	1,141,996		$	772,321

Cost of revenues				726,940			469,245

Gross profit				415,056			303,076

Selling, general and administrative costs				236,513			160,222

Operating income				178,543			142,854

Other income (expense):
	Interest income			417			412
	Interest expense			(1,014	)		(1,403	)
	Gain (loss) on sale or issuance of subsidiary stock			—			139

		Total other income (expense)		(597	)		(852	)

Earnings before income taxes and minority interest				177,946			142,002
Income tax expense				69,433			54,516
Minority interest expense				1,017			8,810

		Net earnings	$	107,496		$	78,676


	Revenues

Total revenues for the six months ended June 30, 2004 were $1,142.0 million, an increase of $369.7 million, or 47.9%, as compared to total revenues of $772.3 million in the six months ended June 30, 2003, due primarily to the acquisitions made during 2003. The Financial Institution Software and Services segment contributed $349.6 million of the increase in revenues in the 2004 period. Our Lender Services segment revenues decreased $43.0 million in the six months ended June 30, 2004 as compared to the six months ended June 30, 2003. Revenues from Default Management Services increased $31.7 million in the six months ended June 30, 2004 as compared to the six months ended June 30, 2003, primarily from increased market share. Revenues from our Information Services segment increased $31.8 million in the 2004 period as compared to 2003, in part due to acquisitions made in 2003.


	Cost of Revenues

Cost of revenues was $726.9 million and $469.2 million for the six months ended June 30, 2004 and 2003, respectively. The increase of $257.7 million is primarily the result of the acquisitions in the Financial Institution Software and Services Segment during 2003 and in the first six months of 2004 as cost of revenues in this segment increased $250.9 million as compared to the prior year period. A decrease in cost of revenues in the Lender Services segment of $29.5 million, which corresponds with the decrease in revenues in that segment, was offset by an increase of $31.2 million in the Default Management Services segment which had a corresponding increase in revenues. Included in total cost of revenues for the six months ended June 30, 2004 and 2003 were depreciation and amortization costs of $82.9 million and $40.5 million, respectively.


	Gross Profit

Gross profit as a percentage of revenues was 36.3% and 39.2% for the six months ended June 30, 2004 and 2003, respectively. The decrease in profit margin is the result of lower revenues from the higher margin automated title agency services business within the Lender Services segment.


	Selling, General and Administrative Costs

Selling, general and administrative costs were $236.5 million and $160.2 million for the six months ended June 30, 2004 and 2003, respectively. The majority of the increase of $76.3 million is related to the acquisitions in the Financial Institution Software and Services Segment during 2003 and the first six months of 2004 as selling, general and administrative costs in this segment increased $49.2 million in the 2004 period as compared to the prior year period. Increases in the Default Management Services segment and Information Services segment of $4.8 million and $10.8 million, respectively, were partially offset by a decrease of $1.9 million in the Lender Services segment. Included in selling, general and administrative costs for the six months ended June 30, 2004 and 2003 were depreciation and amortization costs of $20.3 million and $6.9 million, respectively.


	Operating Income

Operating income totaled $178.5 million and $142.9 million for the six months ended June 30, 2004 and 2003, respectively. Operating income was 15.6% and 18.5% of total revenue in the 2004 and 2003 periods, respectively.


	Other Income (Expense)

Other income (expense) was $(0.6) million and $(0.9) million for the six months ended June 30, 2004 and 2003, respectively.


	Income Tax Expense

We recorded income tax expense of $69.4 million and $54.5 million for the six months ended June 30, 2004 and 2003, respectively. This resulted in an effective tax rate in our historical financial results of 39.0% and 38.4% for the 2004 and 2003 periods, respectively.


	Minority Interest Expense

Minority interest expense was $1.0 million and $8.8 million for the six months ended June 30, 2004 and 2003, respectively. Minority interest expense decreased as a result of FNF’s acquisition in September 2003 of the outstanding minority interest in FNIS it did not already own.

Segment Results of Operations


	Financial Institution Software and Services



	Financial Institution
	Software and Services


	Six Months ended
	June 30,

	2004		2003


	(unaudited)

	(in thousands)
Processing and services revenues	$	577,901	$	228,319

Cost of revenues		397,035		146,180

Gross profit		180,866		82,139

Selling, general and administrative costs		96,294		47,085

Operating income	$	84,572	$	35,054

Revenues from our Financial Institution Software and Services segment for the six months ended June 30, 2004 and 2003 were $577.9 million and $228.3 million, respectively. The increase of $349.6 in the six months ended June 30, 2004 as compared to the six months ended June 30, 2003 was primarily attributable the acquisition of FI on April 1, 2003. The 2004 period includes $458.3 million of revenue from FI while the

six months ended June 30, 2003 only included $209.4 million, the results of FI from its acquisition date through June 30, 2003. The acquisitions of Webtone in September of 2003, Aurum in March of 2004 and Sanchez in April of 2004 contributed $21.5 million, $52.7 million and $14.5 million of the increase, respectively. Other acquisitions made in 2004 and 2003 contributed $9.1 million of the increase in the 2004 period. Finally, organic growth in revenues relating to software products owned in both the entire 2004 and 2003 periods contributed an additional $2.9 million to the increase.

Cost of revenues relating to our Financial Institution Software and Services segment for the six months ended June 30, 2004 and 2003 was $397.0 million and $146.2 million, respectively. The increase in the 2004 period is also primarily attributable to the inclusion of a full six months of costs relating to FI and subsequent acquisitions as compared to the 2003 period which only includes three months of results from FI. Primary components of cost of revenue for this segment include personnel costs, data processing costs and amortization costs relating to customer intangibles, contracts and computer software acquired in the various acquisitions. Gross profit as a percentage of revenues was 31.3% and 36.0% for the six month periods ending June 30, 2004 and 2003. The decrease in 2004 is largely due to additional costs relating to businesses acquired during 2003 and the first half of 2004.

Selling, general and administrative costs in our Financial Institution Software and Services segment for the six months ended June 30, 2004 and 2003 were $96.3 million and $47.1 million, respectively. The increase in the 2004 period is also primarily attributable to the inclusion of a full six months of costs relating to FI and subsequent acquisitions as compared to the 2003 period which only includes three months of results from FI.

Operating income from our Financial Institution Software and Services segment was $84.6 million and $35.1 million in the six months ended June 30, 2004 and 2003, respectively, and was approximately 14.6% of total revenues in the 2004 period and 15.4% in the 2003 period.


	Lender Services



	Lender Services


	Six Months ended
	June 30,

	2004		2003


	(unaudited)
	(in thousands)
Processing and services revenues	$	139,191	$	182,167

Cost of revenues		66,709		96,222

Gross profit		72,482		85,945

Selling, general and administrative costs		17,516		19,399

Operating income	$	54,966	$	66,546

Revenues from our Lender Services segment in the six months ended June 30, 2004 and 2003 were $139.2 million and $182.2 million, respectively. The decrease in revenues in the 2004 period is primarily due to the strong performance in the second quarter of 2003 of our automated process for providing title agency services when mortgage rates were low and refinancing activity was high. As a result of increases in mortgage interest rates since that period, revenues from those products are lower in 2004. We expect this decline in refinancing activity to continue through 2004.

Cost of revenues for our Lender Services segment in the six months ended June 30, 2004 and 2003 was $66.7 million and $96.2 million, respectively. The decrease corresponds with the lower refinance activity experienced in the 2004 period and resulting lower revenue levels. Gross profit as a percentage of revenues was 52.1% and 47.2% for the six months ended June 30, 2004 and 2003.

Selling, general and administrative costs relating to the Lender Services segment for the six months ended June 30, 2004 and 2003 were $17.5 million and $19.4 million, respectively.

Operating income for Lender Services was $55.0 million and $66.5 million for the six months ended June 30, 2004 and 2003, respectively. Operating income was 39.5% and 36.5% of revenues for the 2004 and 2003 periods, respectively.


	Default Management Services



	Default
	Management
	Services


	Six Months ended
	June 30,

	2004		2003


	(unaudited)
	(in thousands)
Processing and services revenues	$	116,083	$	84,344

Cost of revenues		90,426		59,173

Gross profit		25,657		25,171

Selling, general and administrative costs		17,013		12,165

Operating income	$	8,644	$	13,006

Revenues from Default Management Services were $116.1 million and $84.3 million for the six months ended June 30, 2004 and 2003, respectively. The increase in Default Management Services revenue in 2004 of $31.7 million as compared to 2003 was primarily attributable to organic growth and increased market share in our default businesses.

Cost of revenues for our Default Management Services in the six months ended June 30, 2004 and 2003 was $90.4 million and $59.2 million, respectively. Gross profit as a percentage of revenues was 22.1% and 29.8% for the six months ended June 30, 2004 and 2003. The decrease in gross profit margin was due to a significant increase in volume and revenue relating to lines of business with lower margins.

Selling, general and administrative costs relating to the Default Management Services segment for the six months ended June 30, 2004 and 2003 were $17.0 million and $12.2 million, respectively.

Operating income for Default Management Services was $8.6 million and $13.0 million for the six months ended June 30, 2004 and 2003, respectively. Operating income was 7.5% and 15.4% of revenues for the 2004 and 2003 periods, respectively. Similar to gross profit percentages, this ratio was affected by the higher volume of low margin revenue added in 2004.


	Information Services



	Information Services


	Six Months ended
	June 30,

	2004		2003


	(unaudited)
	(in thousands)
Processing and services revenues	$	307,048	$	275,205

Cost of revenues		172,198		167,266

Gross profit		134,850		107,939

Selling, general and administrative costs		73,256		62,491

Operating income	$	61,594	$	45,448

Revenues from our Information Services segment in the first six months of 2004 and 2003 were $307.0 million and $275.2 million, respectively. The increase of 11.6% in revenues in 2004 was primarily from increases in sales of our valuation services, in part resulting from acquisitions in 2003, and increases in sales of

our real estate tax services. Although refinancing activity in the first half of 2004 declined, residential sales remained relatively strong.

Cost of revenues relating to our Information Services segment in the first six months of 2004 and 2003 was $172.2 million and $167.3 million, respectively, an increase of $4.9 million or 2.9%. Gross profit as a percentage of revenues was 43.9% and 39.2% for the six months ended June 30, 2004 and 2003, respectively.

Selling, general and administrative costs relating to our Information Services segment in the first six months of 2004 and 2003 was $73.3 million and $62.5 million, respectively.

Operating income for the Information Services segment was $61.6 million and $45.4 million in the six months ended June 30, 2004 and 2003, respectively. Operating income was 20.1% and 16.5% of revenues in the 2004 and 2003 periods, respectively.


	Corporate and Other

Revenues from our Corporate and Other segment are comprised solely of revenues from our technology equipment leasing operations and were $1.8 million and $2.3 million in the 2004 and 2003 periods, respectively. Cost of revenues was $0.6 million and $0.4 million for the six months ended June 30, 2004 and 2003. Selling, general and administrative costs from our Corporate and Other segment consist of the costs of our leasing operations and corporate overhead costs that have been allocated to us. Selling, general and administrative costs were $32.4 million and $19.1 million in the 2004 and 2003 periods, respectively. The increase in our selling, general and administrative costs in the 2004 period was primarily attributable to the growth of our businesses both organically and through acquisitions and thus the time and costs management of FNF has incurred on behalf of those businesses.

Selected Quarterly Financial Data



	Three Months ended

	March 31,		June 30,		September 30,		December 31,


	(unaudited)
	(in thousands)
2004
Processing and services revenues	$	530,539	$	611,457
Earnings before income taxes and minority interests		78,187		99,759
Net earnings		47,292		60,204
2003⁽¹⁾
Processing and services revenues	$	228,321	$	544,000	$	598,112	$	540,156
Earnings before income taxes and minority interests		37,576		104,426		120,434		99,546
Net earnings		18,529		60,147		68,876		59,463
2002
Processing and services revenues	$	136,669	$	139,233	$	165,917	$	190,974
Earnings before income taxes and minority interest		25,488		24,391		16,119		40,121
Net earnings		14,886		13,582		7,330		22,380


(1)	Our financial results for the year ended December 31, 2003 include the results of FI for the period from the date of the FI acquisition, April 1, 2003, through December 31, 2003.

Liquidity and Capital Resources


	Cash Requirements

Our cash requirements include cost of revenues, selling, general and administrative costs, income taxes, debt service payments, capital expenditures and business acquisitions. We believe that all anticipated cash requirements for current operations will be met from internally generated funds and from the proceeds of this offering.


	Capital Expenditures

Our principal capital expenditures are for computer software and additions to property and equipment. We have recently begun the development work to implement changes to our core bank processing and mortgage processing software required to keep pace with the marketplace and the requirements of our customers. We expect to spend approximately $95 million on the development of our core bank processing software and $50 million on the development of our mortgage servicing platform. We expect to capitalize a portion of those expenditures. We anticipate that this development work will take two to three years to complete.


	Financing

As of June 30, 2004, our long-term debt consisted of lease-backed notes, totaling $21.5 million, secured by security interests in certain leases and underlying equipment with interest due monthly at various fixed rates. We also had other promissory notes, totaling $26.4 million, with various interest rates and maturities.

On July 2, 2004, we entered into a promissory note in favor of a subsidiary of FNF in an aggregate principal amount of $40 million. The proceeds of the borrowing were used to fund our acquisition of Geotrac. The aggregate principal amount of the note is due on July 1, 2005. We expect that the note will be repaid either with borrowings under our new credit facility or from working capital or a combination of these sources.

We intend to enter into a credit facility prior to the completion of this offering to provide us with an additional source of funds for general corporate purposes, including working capital and acquisitions.

We expect that our financing needs following this offering will include the need to finance future acquisitions that we may make as part of our growth strategy. We may use a variety of sources of funds to finance our acquisitions, including cash from operations, borrowings under our new facility or other debt, and issuances of equity. Our ability to finance our acquisitions is subject to a number of risks, including adequate cash reserves from operations, acceptable financing terms and variability in our stock price. Each of these factors may inhibit our ability to pursue attractive acquisition targets. If we are unable to acquire suitable acquisition candidates, we may experience slower growth.

We expect that this offering and the distribution will enable us to more effectively use our common stock to pay for future acquisitions. However, there can be no assurance that the conditions to the distribution will be satisfied or that FNF will consummate the distribution. Further, there are limits on the amount of our stock that we may issue in certain circumstances to finance future acquisitions. See “Risk Factors—We may be unsuccessful in identifying suitable acquisition candidates or in financing acquisitions, which could adversely affect our growth.”

Contractual Obligations

Our long-term contractual obligations generally include our long-term debt and operating lease payments on certain of our property and equipment. As of December 31, 2003, our required payments relating to our long-term contractual obligations are as follows:


		2004		2005		2006		2007		2008		Thereafter		Total


		(in thousands)
Long-term debt		$	30,634	$	6,003	$	3,075	$	1,117	$	297	$	—	$	41,126
Operating lease payments			29,693		23,156		19,441		15,028		9,106		10,109		106,533

	Total contractual obligations	$	60,327	$	29,159	$	22,516	$	16,145	$	9,403	$	10,109	$	147,659

In addition to the obligations above, we entered into a five-year master service agreement with Covansys in 2004 pursuant to which we have agreed, subject to certain termination rights, to provide $150 million of revenues to Covansys over the term of the master services agreement from either our own utilization of Covansys’ services or from the utilization of Covansys’ services by our existing customers seeking to outsource information technology services. See “—Recent Developments—Covansys.” We believe that the master services agreement will have no material impact on our liquidity or capital resources, since we expect that

either the $150 million revenue requirement will be met by our customers who will utilize Covansys’ services or, to the extent that our customers do not fully meet the requirement, we will meet the requirement by purchasing from Covansys services in connection with our own development activities that we would have otherwise procured from third parties or performed ourselves. In addition, we have termination rights described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments.”

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.

Recent Accounting Pronouncements

In March 2004, the Financial Accounting Standards Board, or FASB, issued a proposed Statement, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The proposed Statement would eliminate the ability to account for share-based compensation transactions using Accounting Principles Board, or APB, Opinion No. 25, Accounting for Stock Issued to Employees, and generally would require instead that such transactions be accounted for using a fair-value-based method. The proposed statement would be effective for awards granted, modified, or settled in fiscal years beginning after December 15, 2004, for public entities that used the fair-value based method of accounting under the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation for recognition or pro forma disclosure purposes. We are currently evaluating the impact the proposed statement may have on our combined financial position, cash flows and results of operations.

In May 2003, the FASB issued Statement of Financial Accounting Standards, or SFAS, No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement establishes how a company classifies and measures certain financial instruments with characteristics of both liabilities and equity, including redeemable preferred stock. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise effective at the beginning of the interim period commencing July 1, 2003, except for mandatory redeemable financial instruments of nonpublic companies, which is effective for fiscal periods beginning after December 31, 2004. We do not expect the adoption of this statement to have a material impact on our combined financial statements.

In November 2002, the FASB issued FASB Interpretation, or FIN, No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN No. 45 requires that a liability be recorded in the guarantor’s balance sheet upon issuance of a guarantee. In addition, FIN No. 45 requires disclosures about the guarantees that an entity has issued, including a reconciliation of changes in the entity’s product warranty liabilities. The initial recognition and initial measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements of FIN No. 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. Our adoption of FIN No. 45 did not have a material effect on our combined financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation— Transition and Disclosure— an Amendment of Statement of Financial Accounting Standards No. 123. This statement provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. This statement also amends the disclosure requirements of SFAS No. 123 and APB Opinion No. 28, Interim Financial Reporting, to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. In the third quarter of 2003, we voluntarily adopted the fair value recognition provisions of SFAS No. 123, under the prospective method of transition as permitted by SFAS No. 148. During 2002, the FASB Emerging Issues Task Force, or EITF, reached a consensus on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. EITF 00-21 provides an accounting model for an approach to determine whether a vendor should divide an arrangement

with multiple deliverables into separate units of accounting. EITF 00-21 requires an analysis of whether a delivered item has stand-alone value to the customer, whether there is objective and reliable evidence of fair value for the undelivered items, and whether delivery of the undelivered items is probable and substantially in control of the vendor if the arrangement includes a general right of return relative to the delivered item. Companies are required to adopt EITF 00-21 for fiscal periods beginning after June 15, 2003. Companies may apply EITF 00-21 prospectively to new arrangements initiated after the date of adoption or as a cumulative-effect adjustment. The prospective adoption of EITF 00-21 did not have a material effect on our combined financial statements.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest Entities, an Interpretation of APB No. 51, which addresses consolidation by business enterprises of variable interest entities, or VIEs, either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. In December 2003, the FASB completed deliberations of proposed modifications to FIN 46 or Revised Interpretations, resulting in multiple effective dates based on the nature as well as the creation date of the VIE. The adoption of FIN 46 did not have a material effect on our combined financial statements. The consolidation and disclosure requirements apply immediately to VIEs created after January 31, 2003. For all VIEs created prior to February 1, 2003, the Revised Interpretations are effective for all periods ending after March 15, 2004, except for entities that are considered special purpose entities, to which the provisions apply as of December 31, 2003. We are not the primary beneficiary of any VIEs created after February 1, 2003 and do not expect the adoption of this statement to have a material impact on our combined financial position or results of operations.

Market Risks

Market risk refers to the risk that a change in the level of one or more market factors, such as interest rates, will result in losses for financial instruments that we hold or arrangements to which we are a party.

With respect to interest rate risks, we do not have a material amount of investments or borrowings that are subject to changes in interest rates. We do not have a material amount of foreign currency risk, since our contracts and arrangements related to our international operations generally require the counterparty to pay us in U.S. dollars. In the event that our purchase of the Covansys common stock closes as expected, our only significant equity price risk will be limited to our holdings of Covansys common stock as we do not hold any other significant investments in equity securities at this time.

As discussed in this prospectus, the revenues of several of our lines of business are subject to fluctuations based on the movement in mortgage interest rates.

BUSINESS

Overview

We are a leading provider of technology solutions, processing services, and information-based services to the financial services and real estate industries. Over 2,400 financial institutions use our services, including 45 of the 50 largest banks in the U.S. Our applications process nearly 50% of all U.S. residential mortgage loans by dollar volume, and over 235 million deposit accounts and non-mortgage consumer loans and leases are processed on our core bank processing platforms. We also provide customized business process outsourcing related to aspects of the origination and management of mortgage loans to national lenders and loan servicers. Our information services, including our property data and real estate-related services, are used by mortgage lenders, mortgage investors and real estate professionals to complete residential real estate transactions throughout the U.S. We operate in four primary business segments: Financial Institution Software and Services, Lender Services, Default Management Services and Information Services, which produced 37.6%, 22.7%, 10.0% and 29.6%, respectively, of our revenues in 2003.

In each of our businesses, we have a portfolio of high quality services which have been developed to meet the needs of our customers. We believe that our services and our innovative approaches to meeting customer needs allow us to offer business solutions that represent a strong value proposition to our customers. We believe this strong value proposition is one of the reasons that we have a history of successful relationships with some of the world’s leading financial institutions.

Our goal is to achieve profitable growth through expanding the leadership position of our existing services and through acquiring and developing additional services that will further our ability to offer comprehensive business solutions. We also believe that we will have opportunities to increase our revenue base and profitability through cross-selling additional services to our customers.

History

The predecessors to our parent company, FNF, were primarily title insurance companies. During the 1990s, FNF acquired and developed complementary real estate-related information services and loan default management businesses as an adjunct to its title insurance business. These new businesses were a natural fit with FNF’s title business, because they all related to real estate sales and mortgage loans. The growth of these businesses was in part a result of efforts by our senior management to be responsive to customers’ needs and to accommodate an ever-evolving relationship with their customer base.

In 2003, our senior management saw an opportunity to significantly enhance our relationships with the financial institutions that are the most significant customers of our real estate-related businesses. In April 2003, FNF acquired ALLTEL’s information services business, which provides bank core processing software and services, including mortgage processing. We subsequently renamed this business Fidelity Information Systems, Inc. or FI. As a result of the acquisition, FI became our largest business and the customer relationships of the FI management team we acquired became an important addition to our customer base. While entering the core processing business provided us with access to an increased number of financial institution customers, in many cases we also gained access to more senior decisionmakers at these financial institutions because of the importance to them of our core processing applications. This broadened customer base and increased access improved our ability to cross-sell other services to our customers. The FI acquisition also diversified our revenues, reducing our dependence on real estate-related revenue sources, some of which are cyclical. Since the FI acquisition, we have made several additional acquisitions to improve our competitive position in core bank processing, including the Sanchez and Aurum acquisitions in 2004.

A significant aspect of our growth strategy has been, and continues to be, our commitment to making and successfully integrating strategic acquisitions. FNF has made over 25 acquisitions since the beginning of 2001 in our business lines, which have broadened and improved our service portfolio and have allowed us to acquire customers and to enter new markets. These transactions both expanded our market position and facilitated our

strategy of cross-selling our services to our customer base to increase our internal growth. See “—Acquisition History.” Although we anticipate further growth through acquisitions, we believe we have a service set and customer relationships that provide a competitive advantage over smaller or niche participants in our markets.

Unless the context otherwise indicates, references to “we,” “us,” “our” and related terms in historical statements in this “Business” section include the financial institution software and services business that we acquired from ALLTEL in 2003, as well as the businesses acquired in our other completed acquisitions.

Industry Background


	*History*

While the banking industry today is highly dependent on technology, the process of automating bank business processes has been evolutionary in nature, beginning with back-office record-keeping and moving to other areas such as service delivery channels and customer relationship management.

While banks have experienced benefits from the advancements in automation, the iterative approach to automation has created highly complex operating environments as banks and third party vendors have had to integrate various business applications across disparate hardware and software platforms. Customization of business applications by banks in an attempt to differentiate their products and services from competitors compounded this complexity.

Further, in recent years the financial services industry in the U.S. has experienced significant consolidation. In most cases, bank mergers are followed by a shift of one bank’s processing onto the platform used by the other. These migrations have heightened the sensitivity of financial institutions to the risks of such projects, particularly where a key technology vendor lacks expertise, services or financial stability. In some cases, the merged institution has continued to run multiple systems, leading to further inefficiencies.

Among financial institutions’ key business processes, the mortgage origination, sale and servicing process has historically been particularly slow to embrace automation. Despite all the changes that have occurred in the single-family mortgage industry in recent years, the lending process remains complex, encompassing many steps that are still paper intensive. These steps include analyzing credit reports, evaluating tax status, obtaining necessary flood insurance, appraisals and title insurance, and generating disclosures required by the substantial regulation of the mortgage-lending industry. These steps, and similar steps in the mortgage sale, servicing and default areas, are likely to be subject to further systems and process automation in order to reduce costs and improve speed, accuracy and customer experience.

The technology vendor market for the banking industry historically has been highly fragmented. Over time, a significant number of smaller competitors have brought to the market niche software or processing solutions, which in turn have increased integration difficulties. More recently, many smaller technology vendors have experienced challenges in providing the breadth of services, applications and solutions required by their customers and in convincing their customers of their long-term financial stability and survival in the marketplace. This, in part, has led to consolidation in the financial institution technology vendor market.


	*Trends and Opportunities*

Financial institutions today face significant challenges resulting from intensified competition among traditional players and new entrants, technological innovation and evolving customer preferences and behavior. As a result of these challenges, we believe that the financial information services industry is experiencing the following significant trends.


	•	Financial institutions are seeking ways to more effectively use the information they have about their existing customers in order to facilitate sales of innovative products and improve customer retention. As a result, financial institutions are coming to view information technology as a strategic tool rather than merely as a nonstrategic back-office function.


	•	Financial institutions remain subject to consolidation within the industry. This creates the potential for an increased demand for system migration services and outsourcing.

	•	Financial institutions are increasingly outsourcing their core processing needs to third parties to enhance their competitive position in the marketplace by achieving lower costs (as compared to in-house solutions) without a loss of functionality.

	•	Financial institutions are seeking to increase revenue by improving the quality of the experience of their customers. As financial institution customers have become more sophisticated, banks have sought increasingly convenient, customer-friendly ways to interact with their customers. Accordingly, these institutions have begun searching for and implementing information technology solutions that simplify and improve the customer service process.

	•	Financial institutions are increasingly outsourcing their key business processes, such as default management, to third parties to reduce costs and handle an increased volume of transactions. Business process outsourcing among financial institutions should continue to grow as both the range of outsourced services and the number of financial institutions deploying outsourcing increases.

	•	Financial institutions are gradually moving toward fully automated processes, commonly referred to as straight-through processing, where the initial contact with the customer through to the institution’s back-office processing is fully automated. Straight-through processing is viewed by financial institutions as a means of eliminating redundant and manual steps that can lead to errors, cause unnecessary delays and increase operating expenses.

	•	Financial institutions are evaluating moving to real-time processing. Core processing systems that operate on a real-time basis, as opposed to the traditional model of collecting data and later processing it in batches, will become increasingly important as financial institutions compete to improve the quality of the customer’s experience.

	•	Financial institutions in markets outside the U.S., particularly the rapidly evolving markets in Asia, Eastern Europe and South America, are encountering the same challenges and trends as U.S. financial institutions. These international financial institutions will provide opportunities for software, services and solutions providers to expand into the international marketplace.

As financial institutions attempt to improve customer experience and manage costs efficiently, we expect them to continue to adopt better technology solutions and outsource their technology needs. Technology providers with significant domestic market penetration, a well-integrated suite of services and financial stability will have the best opportunity to benefit from such outsourcing.

Competitive Strengths

We believe that our competitive strengths include the following:

Comprehensive, integrated business solutions. We have the ability to utilize a wide range of applications and services to provide comprehensive business solutions for our customers. In addition, we are able to utilize the modular nature of our software applications and our ability to integrate many of our services with the services of others to provide customized solutions that respond to the individualized needs of our customers. We also offer our customers a wider range of flexible service arrangements than are typically offered by our competitors 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. We

believe that by providing customized, flexible solutions, we are able to significantly improve the effectiveness of our services and our customer retention.

Excellent relationships with our customers. Over 2,400 financial institutions use our services, including 45 of the largest 50 U.S. banks. A significant percentage of our business with these customers relates to core processing applications and services, and the nature of this relationship allows us to develop close partnerships with these customers. As the breadth of our service offerings expands, we have found that our access to key personnel at financial institutions is increasing. In order to more effectively manage the strategic opportunities presented by our increased access across business lines to our financial institution customers, we actively coordinate these significant relationships on an executive and operational level. As we have grown, we have gained the size and capability that lead institutions to trust us with the management and outsourcing of their critical applications.

Strong value proposition for our customers. We provide our customers with services and applications that enhance their competitive position and provide them with additional revenue opportunities. For example, our TouchPoint suite of customer interaction solutions helps financial institutions increase sales and retain customers through their retail delivery channels, including branches, call centers, relationship managers and the Internet. We also understand the needs of our customers and have successfully created innovative services that can reduce our customers’ operating costs. For example, recently we assisted Citizens Bank in identifying over $8 million of cost savings through an analysis conducted by our Office of the Enterprise which identified enhanced process efficiencies and the availability of more competitive applications and services from two of our segments. We believe that our high quality services and our innovative approach to meeting the needs of our customers allows us to provide a compelling value proposition to our customers.

Proven management team. Our CEO has a history of entrepreneurial accomplishments and has successfully led FNF through a significant period of sustained growth. The managers of our operating businesses are proven innovators and pioneers in the industry, as well as individuals who have nurtured successful businesses throughout numerous business cycles and significant periods of industry change. Our senior executives and managers are committed to creating a culture and organization that builds on our parent company’s reputation for understanding and fulfilling customers’ needs and providing the highest quality service to customers.

Strategy

Our strategies for achieving profitable growth include the following:

Expand our technology leadership. We intend to continue to build on the reputation, reliability and functionality of our software applications. To accomplish this, our strategies are to maintain high-quality functionality for our software applications, in part through developing software applications that feature enhanced capabilities such as straight-through processing and real-time processing; to provide superior application and technology migration support; and to ensure that our software applications are able to integrate with existing and new add-on applications used by our customers. Because of our scale, we are uniquely positioned to efficiently accomplish these objectives by spreading the capital and resource commitment required to maintain and improve our applications over a larger revenue base as compared to the revenue base of our competitors with less market share.

Take advantage of our cross-selling opportunities. We coordinate our sales efforts to our top-tier financial institution customers through a part of our organization called our Office of the Enterprise to take advantage of information we obtain about the needs of these customers in order to cross-sell our services. We have begun to take advantage of the significant customer relationships of our recently acquired businesses to cross-sell our other services to those customers.

meet the needs of our customers. We intend to maintain and expand this market position, allowing us to continue to strengthen our relationships with our existing customers and expand our customer base. We also intend to continue integrating our real estate-related information services into our other businesses.

Broaden our portfolio of services and market opportunities through acquisitions. While we will continue to invest in developing and enhancing our existing business solutions, we also intend to continue to acquire technologies and capabilities that will allow us to further broaden our service offerings and continue to enhance the functionality of our business solutions. We may also consider acquisitions that would expand our existing customer base for a service, or acquiring businesses that have a capability or customer base in markets in which we do not currently compete, particularly if these acquisitions would allow us to obtain revenue growth through leveraging our existing capabilities or scale. We will continue to utilize our ability to integrate newly acquired businesses and we will continue to be disciplined and strategic in making acquisitions.

Grow our international business. We believe that we are well positioned to leverage our financial institution software and services into international markets. In the past, we have provided services to international customers when such opportunities presented themselves through our existing customer relationships. With the international customers and presence we obtained through our recent acquisition of Sanchez and our proposed acquisition of a controlling interest in Kordoba, we believe we are approaching a size and market presence in several international markets that will allow us to effectively compete in what we believe will be a growing market for our services. Our international strategy will include focusing on those services and customers that will allow us to leverage our existing scale and expertise.

Applications and Customers

Our Financial Institution Software and Services segment principally offers mission-critical software applications to commercial banks of all sizes, thrifts, credit unions, mortgage lenders and other financial institutions, together with related support and services. Our key applications include core bank processing software, “front-end” retail delivery applications that facilitate banks’ interactions with their customers and our mortgage servicing software. We deliver support and services for these applications under a range of approaches, from full off-site and on-site outsourcing arrangements covering substantially all of an institution’s processing needs, which provide us with substantial recurring revenue, to more traditional license models. Our revenues for this segment in 2003 were $717.8 million, or 37.6%, of our combined revenues.

Our Lender Services segment primarily offers customized outsourced business process and information solutions to national lenders. The services of this segment consist primarily of title agency and closing services provided through centralized facilities in accordance with a lender’s specific requirements, regardless of the geographic location of the borrower. For 2003, this segment produced $434.2 million, or 22.7%, of our combined revenues.

Our Default Management Services segment provides default management services to national lenders and loan servicers. These services allow our customers to outsource some or all of the business processes necessary to take a loan and the underlying property through the default and foreclosure process. For 2003, this segment produced $190.1 million, or 10.0%, of our combined revenues.

Our Information Services segment provides property data and real estate-related information services that are used by mortgage lenders and real estate professionals to complete residential real estate transactions throughout the U.S. The principal services we offer include property valuation services, real property records data, real estate services, flood zone certifications and borrower credit information. For 2003, revenues for this segment were $565.2 million, or 29.6%, of our combined revenues.

In 2003, Wells Fargo accounted for 16.6% of our total revenues and 57.3% of the revenues in our Lender Services segment, due primarily to its use of our automated process for performing title agency services in a period of particularly high refinancing activity. For the six months ended June 30, 2004, Wells Fargo accounted for 7.8% of our total revenues and 32.9% of the revenues in our Lender Services segment.

Almost all of our revenues to date have been from sources within the U.S. In 2003, approximately 3.2% of our revenues were from sales outside of the U.S. Included in our Financial Institution Software and Services segment were $62.3 million in sales to non-U.S. based customers in 2003. There were no sales to non-U.S. based customers in 2002 and 2001.

The customers that we cite by name in the following discussion of our business segments were selected so as to provide a representative cross-section of our customers based on size, geographic location, type of institution and the services that they use.

Financial Institution Software and Services

The applications and services in our Financial Institution Software and Services segment focus on two primary markets, financial institution processing and mortgage loan processing. Our revenues for the year ended December 31, 2003 for these operations were as follows:



		Year ended
		December 31, 2003

Financial Institution Software and Services		$		%

		(in millions)
Financial Institution Processing		$	483.6		67.4	%
Mortgage Loan Processing			234.2		32.6	%

	Processing and services revenues	$	717.8		100.0	%

Revenues from our Financial Institution Software and Services segment in the table above do not include any revenues from the operations of Sanchez and Aurum, two businesses we acquired in 2004, which had revenues of $96.4 million and $190.0 million, respectively, for the year ended December 31, 2003. Revenues from our Financial Institution Software and Services segment above also do not reflect $210.3 million of revenues earned by FI prior to April 1, 2003, the date we acquired FI.

Our primary applications are software applications that function as the underlying infrastructure of a financial institution’s processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts, and core mortgage processing software, which banks use to process and service mortgage loans. We also provide a number of complementary applications and services that interact directly with the core processing applications, including applications that facilitate interactions between our financial institution customers and their clients.

While many of our customers obtain all or a majority of their key applications from us, the modular design of many of our applications allows our customers to start with one application, such as a lending application, and gradually add applications or services as needed. We provide our customers with additional flexibility by offering our applications through a range of delivery and service models, including on-site outsourcing and remote processing arrangements, as well as on a stand-alone, in-house, licensed software basis for installation on customer-owned systems. Because of our ability to integrate and customize the applications and services we provide to our customers, we often refer to our applications and services as business solutions.


	*Financial Institution Processing*

Customers. Over 2,400 financial institutions use our applications and services, including banks, credit unions, savings banks and auto finance companies. The processing needs of our customers in the financial institution processing market vary significantly across the size and type of institutions we serve. These institutions include:


	•	Large Banks. We define the large bank market as banks and other financial institutions in North America with assets in excess of $5 billion. Of the 100 largest U.S. banks, our customers include 32 banks that use our deposit-related core processing applications, 34 banks that use our lending-related core processing applications and 20 banks that use our various retail delivery applications. Our customers in this market include Harris Bank/Bank of Montreal, Citizens Bank, and Bank of the


		West. Our solutions and services sold to banks in the large bank market accounted for approximately $259.2 million of revenues in 2003.

	•	Small to Mid-tier Banks. We provide our applications and services in the small to mid-tier banking market to more than 1,700 customers consisting primarily of U.S. community banks, credit unions and savings banks. Our customers in this market typically seek a fully integrated and broad suite of applications. As a result, our core processing applications sold to this market have various add-on modules or applications that integrate into our core processing applications, providing a broad processing solution. Our customers in this market include Hudson City Savings Bank, Sterling Bank and VyStar Credit Union.

	•	International Banks. We offer applications and services to financial institutions located outside of North America. Our international business utilizes existing bank processing applications and services and customizes them for the specific business needs of our customers in targeted international markets. Our customers include CitiBank Asia Pacific and CEEMEA, ING Group and China Construction Bank. Revenues from our international business were derived principally from 48 customers in the Asia-Pacific market, 38 customers in the European-Middle East-Africa market and 17 customers in the Mexico-Latin American market.

	•	Automotive Finance Institutions. In our automotive finance processing business, we offer loan and lease servicing solutions for the automotive finance industry. In 2003, over 20 million automotive loans and leases were processed on our automotive finance processing applications. Ten of the top 20 U.S. automotive finance companies utilize our applications and services, including the finance companies of Honda, Ford and DaimlerChrysler.

	•	Commercial Lenders. We also provide business solutions that allow clients to automate and manage their entire commercial lending and loan trading businesses. Our customers include more than 70 financial institutions, including 8 of the top 10 and 25 of the top 50 as ranked by capital. Our customers include Bank of America, JPMorgan Chase, Barclays Capital, Bank of Scotland and Rabobank.

Applications and Services. Our primary applications and services include the following:


	•	Core Processing Applications. Our core processing software applications are designed to run critical banking processes of our financial institution customers. These critical banking processes include deposit and lending systems and most other core banking systems that a bank must utilize to manage the products it provides to its customers.

	•	Retail Delivery Applications. While our core processing applications support all aspects of a bank’s internal recordkeeping and reconciliations, our retail delivery applications facilitate direct interactions between a bank and its customers through applications that allow for the delivery of services to these customers. Our retail delivery applications include TouchPoint, an application suite that supports call centers, branch and teller environments, and retail and commercial Internet channels.

	•	Integration Applications. Our integration applications access data on our own and third-party core processing systems and transport information to our customers’ retail delivery channels. Our integration applications provide transaction routing and settlement. These applications facilitate tightly integrated systems and efficient software delivery that reduces technology costs for our customers.

	•	Syndicated Loan Applications. Our syndicated loan applications are designed to support wholesale and commercial banking requirements necessary for all aspects of syndicated commercial loan origination and management.

	•	Automotive Finance Applications. Our primary applications include an application suite that assists automotive finance institutions in evaluating loan applications and credit risk, and allows automotive finance institutions to manage their loan and lease portfolios.

	•	Item Processing and Imaging Services. Our item processing and imaging services provide our customers with a complete range of outsourcing services relating to the imaging and processing of


		checks, statements and other transaction records. These services are performed at one of our 29 processing centers located throughout the U.S.

	•	Electronic Payments Services. We provide electronic payments solutions, which include ATM infrastructure support, electronic funds transfer, or EFT, services provided through our EFT network called the DASH network, telephone banking services and various card support services, such as card production and fraud prevention.

Delivery of Applications. We have developed several models of providing our customers with applications and services. While 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, we also are able to deliver individual applications through a software licensing arrangement. The examples below represent the typical delivery models that we utilize in providing our applications:


	•	Software Licensing. In this traditional license and maintenance model, our customers purchase a license and maintenance contract for our software. We may also provide these customers with professional support services on either a time and materials or fixed-price basis to assist them with the implementation of, or conversion to, the licensed software, or with other IT projects.

	•	Application Management. In this service deployment model, we provide applications that are run by the customer at its processing facility, with a dedicated staff of our application programmers and business analysts assisting the customer in managing day-to-day technology-related activities. Our support staff may be located on-site at the customer’s facility, off-site at one of our facilities, or at a combination of both sites. In many cases, our staff supports the customer’s third-party applications, as well as our own software applications.

	•	Application Service Provider or ASP. In this service model, we utilize one of our off-site technology facilities to provide the user of ASP services with computing and application management facilities and support. Our support personnel are generally located off-site in one of our technology facilities, which communicates through online data transmission connections with remote devices on-site at the customer’s location. The ASP customer generally uses a suite of our applications and services in its business. Our customers may arrange to utilize our facilities infrastructure in a shared capacity with other customers, or they may contract with us to have dedicated computing capacity available solely for the operation of their applications, sometimes referred to as remote outsourcing.

	•	Facilities Management Processing or FM. In the FM service model, we provide our customers with a computing and application management function similar to that provided under ASP services. However, in the case of FM services, our personnel are located on-site at the location of the customer and act as the customer’s on-site IT staff in connection with FM services, generally also supporting the customer’s third-party software applications. When we enter into one of these arrangements, we generally hire the customer’s IT staff, which we supplement with our own employees.

We also have developed an additional service business, which we refer to as managed operations, in which we use our off-site technology and processing infrastructure to offer computing facilities to customers, without providing any of our software applications. Unlike our other service customers, our managed operations customers often include customers that are not financial institutions. We are able to profitably leverage our computing capacity and technical expertise to compete in this type of outsourcing business.


	*Mortgage Loan Processing*

Customers. Our mortgage loan processing customers include 7 of the top 10 and 24 of the top 50 mortgage loan originators in the U.S., 21 of the top 30 loan servicers in the U.S., and 11 of the top 20 sub-prime loan servicers in the U.S. Our mortgage loan processing customers include Bank of America, National City Mortgage and U.S. Bank Home Mortgage. Our customer relationships are typically long-term relationships that generally provide relatively consistent annual revenues based on the dollar volume of mortgages processed on our applications. Our mortgage loan servicing platforms, including MSP, are used to

process nearly 50% of all residential mortgages by dollar volume in the U.S., representing balances exceeding $3.6 trillion.

Applications and Services. We sell the most widely used mortgage loan servicing system in the U.S. Our primary applications and services include:


	•	MSP. Our Mortgage Servicing Platform, or MSP, is an application that automates all areas of loan servicing, including loan setup and ongoing processing, customer service, accounting and reporting to the secondary mortgage market, and federal regulatory reporting. MSP processes a wide range of loan products, including fixed-rate mortgages, adjustable-rate mortgages, construction loans, equity lines of credit and daily simple interest loans. Our revenues for 2003 from MSP were $211.2 million.

	•	Empower! Empower! is a mortgage loan origination software system used by banks, savings & loans, mortgage bankers and sub-prime lenders. This application fully automates every phase of making loans, providing seamless credit bureau access and interfacing with automated underwriting systems used by Freddie Mac and Fannie Mae, as well as with vendors providing servicing, flood certifications, appraisals and title insurance.

Delivery of Applications and Services. While our mortgage servicing applications can be purchased on a stand-alone, licensed basis, the substantial majority of our MSP customers by both number of customers and loan volume choose to use us as their processing partner and engage us to perform all data processing functions in our technology center in Jacksonville, Florida. Customers determine whether to process their loan portfolio data under an ASP arrangement in which multiple clients share the same computing and personnel resources or to have their own dedicated resources within our facility.

Lender Services

Our revenues for the year ended December 31, 2003 for our Lender Services segment were $434.2 million.

Our Lender Services segment offers customized outsourced business process and information solutions. Our primary services allow our customers to outsource their title and closing requirements in accordance with pre-selected criteria, regardless of the geographic location of the borrower or property. Depending on customer requirements, we perform these services both in the traditional manner involving many manual steps, and through more automated processes which significantly reduce the time required to complete the task. We utilize our own resources and networks we have established with independent contractors to provide our outsourcing solutions. We frequently offer our outsourcing solutions to lenders in combination with services of our Information Services segment.

We work with our customers to set specific parameters regarding the type and quality of services they require and provide a single point of contact with us for these services no matter where the property is located. As a result, our customers are able to utilize our outsourcing services in a manner that we believe provides a greater level of consistency in service, pricing and quality than if these customers were to contract separately for similar services.

In addition to our title agency and closing services, this segment also offers loan facilitation services to homebuilders as described below.

Customers. The customers of our title agency and closing services are financial institutions involved in the first mortgage, refinance, home equity and sub-prime lending markets. Customers of our title agency and closing services delivered under traditional outsourcing arrangements are typically large, national institutions, and include Wells Fargo, Washington Mutual, and Bank of America. Our automated title process and ancillary services are targeted at the top 20 U.S. mortgage lenders, although we believe that the benefits provided by our automated services may be attractive to other national lenders, as well as regional lenders with significant lending operations. Customers of our homebuilders’ services are U.S. homebuilders, including Beazer Homes, Inland Homes and Cambridge Homes.

Services. Our primary services include the following:


	•	Title Agency Services. Our centralized financial institution title agency services include arranging for the issuance of a title insurance policy by a title insurer, by conducting title searches and preparing an abstract of title, reviewing the status of title in a title commitment, resolving any title exceptions, verifying the payment of existing loans secured by a subject property and verifying the amount of prorated expenses. We perform these services on a national basis, both in the traditional manner and through our centralized production facilities that incorporate automated processes, as described more fully below. Additionally, we typically prepare checks, deeds and affidavits and record appropriate documents in connection with the closing. Total revenues in 2003 from our title agent activities were $334.4 million. In 2003, all title insurance policies issued as a result of our agency services were issued by title insurance companies owned by FNF. Following the offering, we will continue to act as an agent for these title insurers, which we eventually expect to be the issuers of all the title policies resulting from our services, except as described below.

	•	Closing Services. Our closing management services are currently available in 43 states and the District of Columbia. We maintain a network of independent closing agents who are trained to close loans in accordance with the lender’s instructions. Our closing management services cover a variety of types of closings, including purchases and refinancings, and provide a variety of types of services.

	•	Homebuilders’ Services. We offer mortgage loan fulfillment and processing services to U.S. homebuilders. We enter into partnership and management arrangements with homebuilders to establish and manage captive mortgage finance businesses that originate, underwrite, process and place first mortgages with unaffiliated wholesale lenders that make loans on newly constructed homes.

In addition, the title and closing services described above can be combined and customized with many of our offerings in our Information Services segment to meet the specific requirements of our customers. We have a common sales force for the services described above and our Information Services segment.

Automated Process. The work of title agents has traditionally been very labor-intensive and has required significant manual intervention and individual decision-making. Although a portion of our title agency business is performed in the standard manner, we have also developed an automated process for quickly determining whether a title policy should be issued on a particular property. This process combines an automated title plant with an application that contains a customizable set of decision rules. Although this process largely automates the work of a traditional title agency, we still perform a manual review of title in cases where adequate records are not available online, where certain types of borrowers or properties are involved or where certain exceptions to good title exist. Our automated process permits us to deliver our services in a substantially shorter period of time compared to the delivery of traditional services in the industry.

We began entering into these automated outsourcing arrangements in 2003 with a limited number of our lending customers. Current customers of our automated process are utilizing the services to more efficiently and uniformly outsource the underwriting and settlement of loan refinancings with their existing borrowers that meet certain criteria. We are in the process of adding automated title services that are capable of supporting lenders’ requirements with respect to home equity lines of credit. We also plan to expand the range of services available through automated service delivery. We have recently introduced credit reporting as an additional service that can be delivered with the automated title services we provide, and we are planning to introduce additional integrated services in the future, including flood certifications.

In 2003, our automated title process and ancillary services generated revenues of $188.7 million, with Wells Fargo accounting for substantially all of these revenues. The substantial majority of our revenues from this automated process was derived from title agent commissions credited to a division of one of FNF’s title insurers. As a title agent, these commissions have historically been earned by us at a rate of 88% of the total title premium from title policies that we place with FNF. In connection with this offering, we will enter into new agency agreements with FNF, at pricing which in the aggregate is expected to be consistent with the rate earned in 2003. Included in the costs of providing our automated services are charges that we pay to our other

businesses in connection with some of the title and real estate data and other services that we use in providing our services.

The title agency services we provide require us to be licensed as a title agent by various states. We are currently pursuing the licenses that our subsidiaries will need to conduct this business following this offering. We expect to have substantially all the licenses we need prior to the fourth quarter of 2004. In order to continue this business on an interim basis while we work on obtaining the remaining agent licenses, FNF will transfer to us as part of the pre-offering restructuring a small title insurer subsidiary of FNF. We will be able to use this subsidiary to continue the issuance in certain states of title policies arising out of the Lender Services business without the need for agent licenses. This subsidiary will also be used to issue policies in certain other situations in which regulatory requirements or business needs require us to issue title insurance policies directly. We will receive 100% of any premiums payable in connection with policies issued by our subsidiary as an insurer, although we may pay a portion of these amounts to reinsurers, and will be responsible for any losses resulting from these policies, subject to any reinsurance we may purchase. Other than in these situations, all title policies are expected to be issued by affiliates of FNF. The total amount of title insurance issued by this subsidiary is not expected to be a significant portion of the revenues of our Lender Services segment for 2004.


	Default Management Services

Our revenues for the year ended December 31, 2003 for our Default Management Services segment were $190.1 million.

Our Default Management Services segment allows our customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan through the default and foreclosure process. We utilize our own resources and networks we have established with independent contractors to provide default management outsourcing solutions.

Similar to our Lender Services segment, in our Default Management Services segment we work with our customers to identify specific parameters regarding the type and quality of services they require and provide a single point of contact for these services. As a result, our customers are able to utilize our outsourcing services in a manner that we believe provides a greater level of consistency in service, pricing and quality than if these customers were to contract separately for similar services.

Customers. We primarily provide our default management services to national mortgage lenders and loan servicers, many of which performed default management services in-house prior to entering into outsourcing arrangements with us. Our customers include each of the top 25 residential mortgage servicers, 23 of the top 25 subprime servicers, and 21 of the top 25 subservicers. Our major customers include Washington Mutual and Bank of America.

Services. Based in part on the range and quality of default management services we offer and our focus on customer service, our default management business has grown significantly and we are now one of the two largest default management outsourced service providers in the U.S. We offer a full spectrum of outsourcing services relating to the management of defaulted loans, from initial property inspection to recording the final release of a mortgage lien.


	•	At the onset of a loan default, our services are designed to assess and preserve the value of the property securing the loan. For example, through a nationwide network of independent inspectors, we provide inspection services nationwide, including daily reports on vacant properties, occupancy inspections and disaster and insurance inspections. Through a national network of independent contractors, we perform property preservation and maintenance services, such as lock changes, window replacement, lawn service and debris removal.

	•	As our lender and servicing customers proceed toward the foreclosure of properties securing defaulted loans, our services facilitate completing the foreclosure process. For example, we offer comprehensive posting and publication of foreclosure and auction notices and conduct mandatory title searches, in each case as necessary to meet state statutory requirements for foreclosure. We provide document


		preparation and recording services, including mortgage assignment and release preparation, and due diligence and research services. We also provide various other title services in connection with the foreclosure process.

	•	After a property has been foreclosed, we provide services that aid our customers in managing their real estate owned, or REO, properties. We offer property preservation field services that assist the lender in managing its REO properties. We offer a variety of title services relating to the lender’s ownership and eventual sale of REO properties. We also offer nationwide advisory and management services to facilitate a lender’s REO sales.

Delivery of Services. Based on a customer’s needs, our services can be provided individually or, more commonly, as part of a business process outsourcing solution that includes some or all of those services. We can also offer default management services as part of a package with MSP, which may lead to additional cost savings for our customers.

We provide electronic access for all our default management customers that allows them to monitor the status of our services over the Internet. We can also create an automated interface between MSP and the information systems we use in providing default management services. This interface allows default services pre-selected by our customers to automatically begin at a pre-determined stage in the default of any loan which is serviced by our MSP application.

Information Services

In our Information Services segment, we operate a property data and real estate-related services business. Our revenues for the year ended December 31, 2003 for our primary businesses in the segment were as follows:



		Year ended
		December 31, 2003

Information Services		$		%

		(in millions)
Property Data		$	234.3		41.5	%
Real Estate-Related Services			330.9		58.5	%

	Processing and services revenues	$	565.2		100.0	%

Our property data and real estate-related information services are utilized by mortgage lenders, investors and real estate professionals to complete residential real estate transactions throughout the U.S. We offer a comprehensive suite of services spanning the entire home purchase and ownership life cycle, from purchase through closing, refinancing, and resale. Our Lender Services and Default Management Services segments utilize several of the services provided by our Information Services segment and we have a significant number of common customers in these segments.


	*Property Data*

Customers. Customers of our property data business include loan servicers, banks and consumers, as well as other participants in the real estate, lending and title insurance industries. Our customers include ABN Amro, Bank of America, Freddie Mac, New Century Mortgage and Washington Mutual.

Services. Our primary service lines are as follows:


	•	Property Information. We provide property information and document and map images to title insurers and agents through a regional network of offices engaged in data collection, research and electronic data delivery. Our services help our customers quickly locate, assemble and analyze information needed to assure the safe transfer and financing of real property. These services include providing automated title plant indexes describing the chain of ownership, images of recorded land records, real estate tax assessment information, real property parcel map images, and images and


		electronic abstracts of court judgments. The underlying title plant information is owned by FNF title underwriters; we manage and update the information in return for the right to sell it to title insurers.

	•	Real Estate Tax Services. We offer lenders a monitoring service that will notify them of any change in tax status during the life of a loan. We also provide complete outsourcing of tax escrow services, including the establishment of a tax escrow account that is integrated with the lender’s mortgage servicing system and the processing of tax payments to taxing authorities.

	•	Flood Zone Certifications. We offer flood zone certifications through a proprietary automated system that accesses and interprets Federal Emergency Management Agency, or FEMA, flood maps and certifies whether a property is in a federally designated flood zone. Additionally, we offer lenders a life-of-loan flood zone determination service that monitors previously issued certificates for any changes, such as FEMA flood map revisions, for as long as that loan is outstanding.

	•	Credit Reporting. We provide credit information reports and related services to meet the needs of the mortgage industry and help commercial banks, mortgage companies and consumer lenders make loan decisions. Our services include providing a merged credit report that contains credit history data on individual or joint credit applicants acquired from the combined databases of three credit bureaus (Experian, Trans Union and Equifax) for national coverage. We consolidate and organize information from these credit bureaus and deliver a concise report to our customers.

Delivery of Services. Many of the property data services discussed above can be combined together to meet the specific needs of our customers.


	*Real Estate-Related Services*

Customers. Customers of our real estate-related services include loan servicers, banks and consumers as well as other participants in the real estate, lending and title insurance industries. Our customers include Bank of America, U.S. Bancorp and Washington Mutual.

Services. Our primary real estate-related services include the following:



	•	Valuation and Appraisal Services. We have developed a broad suite of valuation applications, which include automated valuation models, traditional appraisals, broker price opinions, collateral scores and appraisal reviews utilized by participants in the secondary mortgage markets. We have developed innovative new hybrid valuation offerings such as collateral valuation insurance, which combine a traditional valuation with an insurance policy issued by an unaffiliated third party that guarantees the accuracy of a valuation within certain parameters. We have also developed processes and technologies that allow our lender customers to outsource their valuation management functions to us. When our customers outsource these functions to us, we utilize various technologies to allow our lenders to automatically select a valuation service from our suite of offerings that delivers the best service/cost solution for each individual situation. Revenues from our valuation and appraisal services for 2003 were $212.8 million.


	•	Multiple Listing Services. We provide services that are used to operate multiple listing services in the U.S. serving over 300,000 real estate brokers and agents. We have acquired and developed reliable data base management tools and provide central hosting of MLS systems in our data centers for local MLS organizations, enabling realtors to search for available homes using a potential buyer’s criteria.

	•	1031 Exchange Intermediary Services. We act as a qualified exchange intermediary for those customers who seek to engage in qualified exchanges under Section 1031 of the Internal Revenue Code, which allows capital gains tax deferral on the sale of certain investment assets. Through our nationwide network of regional offices, we provide our customers with direct access to a full-time staff of exchange professionals, one-third of whom are attorneys specializing in tax deferred exchange solutions.

Sales and Marketing


	*Sales Force*

Our sales and marketing efforts are primarily organized around our lines of business. In our Financial Institution Software and Services segment, we have a sales force that markets our services to our large national bank customers. A separate sales group focuses on credit unions and thrifts, to which we primarily sell different services than we sell to commercial banks. MSP and related services are sold by a third sales force to all the foregoing types of customers, as well as to mortgage companies and specialized servicing companies.

In our Lender Services, Default Management Services and Information Services segments, we utilize three distinct sales teams. The first sales team is dedicated to the sales and marketing of the services provided by the Default Management Services segment. The other two teams are responsible for the services in the Lender Services and Information Services segments. One of these two teams targets the largest 125 U.S. lenders while the other targets mid-tier lenders not among the largest 125.

A significant portion of our potential customers in each of our business lines is targeted via direct and/or indirect field sales, as well as inbound and outbound telemarketing efforts. Marketing activities include direct marketing, print advertising, media relations, public relations, tradeshow and convention activities, seminars and other targeted activities. As of June 30, 2004, we employed approximately employees worldwide in our sales and marketing units.


	*Office of the Enterprise*

In addition to our traditional sales force, we have established a core team of senior managers to lead account management and cross-selling of the full range of our services to existing and potential top-tier financial institution customers. The individuals who participate in this effort, which we coordinate through our Office of the Enterprise, spend a significant amount of their time on sales and marketing efforts.

The broad range of services we offer provides us with the opportunity to expand our sales to our existing customer base through cross-selling efforts. The importance of our core processing applications to our financial institution customers gives us access to management at a more senior level than we had with our real estate information and default management services alone. We believe that this access, combined with the greater leverage our range of services provides us, has increased sales of certain of our default management and information-related real estate services. For example, we recently renewed a mortgage servicing platform contract with Bank of America that converts Bank of America from a software-licensing customer to an outsourced application service provider customer. During the renewal, we were also able to cross-sell to Bank of America outsourced default management services, flood services and a portion of our tax services.

In addition to providing our customers with a broad range of service offerings, through the Office of the Enterprise we are able to assist customers in improving process efficiencies and productivity. For example, Citizens Bank recently renewed its core processing contract with our financial institution processing operations. As of part of this process, the Office of the Enterprise conducted an analysis of Citizens’ first mortgage and home equity lending operations. The analysis identified over $8 million in cost savings available to Citizens Bank through a combination of enhanced internal process efficiencies and the availability of more competitive services from our Lender Services and Information Services segments.

Technology

To meet the changing business and technology needs of our customers, we continually invest in our applications and services. This investment includes maintenance and enhancement of existing software applications, the development of new and innovative software applications, and the ongoing enhancement of capabilities surrounding our outsourcing infrastructure.

Our strategy and development group maintains a dialogue with our extensive and diverse customer base and is highly attuned to ongoing shifts in industry requirements and preferences. This active customer and market participation is translated into multi-year, iterative development plans that map the primary areas of investment in our application set. This group is ultimately responsible for designing, developing and enhancing applications

targeted at the diverse requirements of the various local, regional, national and international environments of our numerous customers. We provide updated versions of our various applications or application suites on an iterative basis as dictated by market requirements. Our software applications include many application features and functions and will accommodate customized requirements specific to each institution.

As part of our research and development process, we evaluate current and emerging technology for applicability to 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 utilize third-party technology components in the development of our software applications and service offerings. Third-party software may be used for highly specialized business functions, which we may not be able to develop internally within time and budget constraints. Additionally, third-party software may be used for commodity type functions within a technology platform environment. In the case of nearly all of our third party software, enterprise license agreements exist for the third-party component and either alternative suppliers exist or transfer rights exist to ensure the continuity of supply. As a result, we are not materially dependent upon any third-party technology components. We work with our customers to determine the appropriate timing and approach to introducing technology or infrastructure changes to our applications and services.

With respect to our outsourcing of software development, we intend to actively transfer costs from our U.S. and Western European-based development centers to Covansys and other lower cost off-shore facilities. We intend to utilize our relationship with Covansys and with other facilities to lower our internal development costs over time by outsourcing certain programming, development and maintenance functions.

We are currently engaged in significant efforts to upgrade our core bank processing software and our mortgage processing software. These applications were acquired upon our acquisition of FI from ALLTEL in 2003. We spent the period immediately following the FI acquisition discussing with our key customers the changes that they would like to see made in those applications. We have recently begun the development work to implement changes required to keep pace with the marketplace and the requirements of our customers. We expect to spend approximately $95 million with respect to this development of our core bank processing software and $50 million on this development of our mortgage servicing platform. We expect to capitalize a portion of the foregoing amounts. The development work on the core bank processing software and the mortgage servicing platform are estimated to take two to three years to complete. We believe that our acquisition of the Profile core bank processing system, which we acquired when we bought Sanchez, will shorten the development period, since we believe we can apply technological capabilities utilized in Profile to the development of our core bank processing software. Our efforts to upgrade our mortgage processing and core bank processing software systems have not materially affected our operations or materially impaired our ability to provide our customers with services. We expect these software upgrades to improve the overall processing efficiency of our outsourcing solutions in the future, resulting in fewer manual operations and reconciliation processes for both us and our customers.

Intellectual Property

We rely on copyright and trade secret law to protect our technology. Further, we have developed a number of brands that have accumulated substantial goodwill in the marketplace, and we rely on trademark law to protect our rights in that area. We intend to continue our policy of taking all measures we deem necessary to protect our copyright, trade secret and trademark rights. We regard our software as proprietary and utilize a combination of copyright, trade secret laws, internal security practices and employee non-disclosure agreements for intellectual property protection. We believe that we hold all proprietary rights necessary for the conduct of our business.

Competition

The market for financial institution software and services is highly competitive. The market is very mature and there are a number of existing providers with a high level of experience in the market and significant market share. Additionally, given the attractive market characteristics in financial services, there are from time to time new market entrants which seek to leverage shifts in technology or product innovation to attract customers. Our primary

competitors include internal technology departments within banks, data processing or software development departments of large companies or large computer manufacturers, independent computer services firms, companies that develop and deploy software applications, and companies that provide customized development, implementation and support services. Some of these competitors possess substantially greater financial, sales and marketing resources than we do. Competitive factors for applications and services include the quality of the technology-based application or service, application features and functions, ease of delivery and integration, ability of the provider to maintain, enhance, and support the applications or services, and price. We believe that we compete favorably in each of these categories. In addition, we believe that our ability to offer multiple applications and services to individual customers enhances our competitiveness against competitors with more limited application offerings. We compete with vendors that offer similar applications and services to financial institutions, including The Bisys Group, Inc., Computer Services Corporation, Fiserv, Inc., Jack Henry and Associates, Inc., and Metavante Corporation. In certain non-U.S. markets, we compete with regional providers including Alnova, I-Flex and Temenos.

The principal competitors for our lender services and default management services are title companies such as First American and LandAmerica and in-house services provided directly by our customers.

The markets for information services like those we offer are also highly competitive. Key competitive factors include quality of the service, convenience, speed of delivery, customer service and price. We do not believe that there is a competitor currently offering the same level of breadth and scope in services and market coverage that we provide in our Information Services segment. However, there are a number of competitors in specific lines, some of which have substantial resources. In addition, First American is a significant competitor in a majority of this segment’s businesses.

Acquisition History

A significant aspect of our growth strategy has been our commitment to making strategic acquisitions. We have made over 25 acquisitions since the beginning of 2001, the most significant of which are listed in the table below. We have a dedicated mergers and acquisitions group that facilitates the identification of potential targets whose technologies and other assets will integrate with or complement our services. We have substantial experience in integrating newly acquired businesses.


Date of Acquisition	Acquired Entity	Application/Service Offerings

April 14, 2004	Sanchez Computer Associates Inc.	Software, outsourcing and wealth management solutions to financial institutions
March 11, 2004	Aurum Technology, Inc.	Outsourced and in-house technology solutions to community banks and credit unions
September 30, 2003	34% interest in FNIS (66% already owned)	Data and technology solutions to lenders and real estate professionals
September 2, 2003	WebTone Technologies, Inc.	Customer interaction and management solutions for financial institutions
April 1, 2003	Financial Services Division of ALLTEL Information Services, Inc.	Information based technology solutions and processing services to the mortgage and financial services industries
February 10, 2003	Lender’s Service, Inc.	Vendor management services to the residential mortgage lending industry

Employees

As of May 15, 2004, we had approximately 12,100 employees. We believe our employee relations are satisfactory. None of our employees are subject to collective bargaining agreements.

Infrastructure and Facilities

We maintain six data centers, in Little Rock, Arkansas, Chicago, Illinois, Jacksonville, Florida, Los Angeles, California, Charlotte, North Carolina and Albany, New York. We have preventive maintenance and disaster recovery plans, which include periodic equipment, software and disaster recovery testing, data monitoring and maintaining records of system errors. We have 24-hour monitoring and engineering support and emergency communication lines. In the event of an emergency, we have a contingency plan to provide services through a nationally recognized emergency service provider.

The majority of our offices are leased from third parties. We own the remaining offices. As of December 31, 2003, we leased office space as follows:


	Number of
	Locations⁽¹⁾

California		41
International		18
Texas		16
Maryland		10
Illinois and Pennsylvania		9
Georgia		7
Florida, Arizona and New York		6
Minnesota, Missouri, North Carolina and Ohio		4
Tennessee and Oklahoma		3
Colorado, Indiana, Massachusetts, New Jersey and Virginia		2
Alabama, Connecticut, Delaware, Hawaii, Iowa, Kansas, Michigan, Nevada, Oregon, South Carolina, Utah and West Virginia		1


(1)	Represents the number of locations in each state or country listed.

We believe our properties are adequate for our business as presently conducted.

Legal Proceedings

We are subject to legal and regulatory actions in the ordinary course of our businesses, including class actions, some of which include claims for punitive or exemplary damages. We believe that no actions, other than those listed below, depart from customary litigation incidental to our business and that the ultimate resolution of all litigation will not have a material adverse effect on our results of operations, financial position or liquidity.

On January 3, 2000, a class action styled Barry D. Kaufman v. ACS Systems, Inc. was filed in the Superior Court of the State of California in the County of Los Angeles (case number BC 222588) in which the plaintiff alleged violations of the Telephone Consumer Protections Act of 1999, or TCPA, by ACS Systems, Inc., or ACS. The plaintiff alleged that ACS violated the TCPA by sending unsolicited advertising via facsimile that did not contain a notification legend required by the TCPA. Plaintiff alleges that the damages to the class are approximately $7 million if the violations of the TCPA were unintentional and approximately $21 million if the violations of the TCPA were intentional. After the complaint was filed, Micro General Corporation, a subsidiary of FNF, acquired ACS in a merger. In early April of 2004, the court granted plaintiff’s motion to certify a class and the plaintiff class representative subsequently amended its complaint to add one of our subsidiaries, FNIS, as a co-defendant. Currently, the complaint contains no allegations against FNIS.

We are the subject of three separate claims alleging erroneous flood zone determinations by NRC Insurance Services, Inc., or NRC, an entity that we acquired in August of 2001.

The first claim was filed by the Pennsylvania Manufacturers Association Indemnity Company, d/b/a PMA Group, or PMA, against NRC in the U.S. District Court for the District of New Jersey on May 10, 2001. PMA is seeking approximately $1.4 million in damages, which is the amount that it paid to its insured, based on an allegedly erroneous flood zone determination issued by NRC. The insured subsequently initiated suit in Pennsylvania state court seeking approximately $2.3 million in additional damages from PMA, alleging lost business income. The Pennsylvania state court ruled in favor of the insured and PMA has appealed that decision. In the event that PMA’s insured prevails in its claim against PMA, we believe that PMA will seek such additional damages from us. We have filed a motion for summary judgment seeking to limit the damages potentially recoverable against us to $1 million based on a provision in the contract between PMA and NRC limiting the amount PMA may recover to the amount that it could recover if flood insurance had been obtained. Pursuant to the National Flood Insurance Program, the coverage limits for this type of property would not exceed $500,000 for the structure and a like amount for the contents. PMA’s claim against us and our motion for summary judgment have been stayed pending the outcome of PMA’s insured’s claim against PMA.

The second claim was filed by Travelers Indemnity Co., or Travelers, against NRC in the U.S. District Court for the Eastern District of Missouri on May 29, 2002. Travelers is seeking approximately $4.1 million in damages, based on an allegedly erroneous flood zone determination issued by NRC. Travelers subsequently amended its complaint to add FNIS as an additional defendant. Travelers has recently filed a motion to amend its complaint to seek exemplary damages in excess of $25 million resulting from alleged fraudulent misrepresentations, although the court has not ruled on that motion. We are involved in pre-trial discovery and the case is set for trial in November 2004.

The third claim was filed by St. Paul Fire & Marine against FNIS in the U.S. District Court for the Eastern District of Missouri on November 6, 2002. St. Paul Fire & Marine is seeking approximately $12 million in damages, based on an allegedly erroneous flood zone determination issued by NRC in 1998. We are involved in pre-trial discovery and the case is set for trial in December 2004.

Regulation

Our financial institution processing and outsourcing services subsidiaries 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, FI is examined on a regular basis by the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the National Credit Union Administration and various state regulatory authorities. In addition, independent auditors annually review several of our operations to provide reports on internal controls for our customers’ auditors and regulators.

Beginning July 1, 2001, financial institutions were required to comply with privacy regulations imposed under the Gramm-Leach-Bliley Act. These regulations place restrictions on financial institutions’ use of non-public personal information. All financial institutions must disclose detailed privacy policies to their customers and offer them the opportunity to direct the financial institution not to share information with third parties. The new regulations, however, permit financial institutions to share information with non-affiliated parties who perform services for the financial institutions. As a provider of services to financial institutions, we are required to comply with the privacy regulations and are bound by the same limitations on disclosure of the information received from our customers as apply to the financial institutions themselves.

The Real Estate Settlement Procedures Act, or RESPA, and related regulations generally prohibit the payment or receipt of fees or any other item of value for the referral of a real estate-secured loan to a loan broker or lender and fee shares or splits or unearned fees in connection with the provision of residential real estate settlement services, such as mortgage brokerage and real estate brokerage. Notwithstanding these prohibitions, RESPA permits payments for goods furnished or for services actually performed, so long as those payments bear a reasonable relationship to the market value of the goods or services provided. RESPA and

related regulations may to some extent restrict our real estate-related businesses from entering into certain preferred alliance arrangements. The U.S. Department of Housing and Urban Development is responsible for enforcing RESPA.

Real estate appraisers are subject to regulation in most states, and some state appraisal boards have sought to prohibit our automated valuation applications. Courts have limited such prohibitions, in part on the ground of preemption by the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989, but we cannot assure you that our valuation and appraisal services business will not be subject to regulation.

The title agency and related services we will be providing will be conducted through a title insurance company, an underwritten title company, title agencies and individual escrow officers. The title insurance company is regulated as an insurance company in its state of domicile and the states where it is licensed. The insurance regulatory authorities in these states have broad administrative powers relating to issuing and revoking licenses to transact insurance business, regulating trade practices, licensing agents, regulating accounting and financial practices, establishing reserve and capital and surplus requirements and defining suitable investments. Some states require title insurers to own or lease title plants. The title insurance company is also subject to the insurance holding company act in its state of domicile, which regulates, among other matters, the ability to pay dividends and to engage in transactions with affiliates. The underwritten title company operates only in California. The regulation of underwritten title companies in California is generally limited to requirements to maintain specified levels of net worth and working capital, and to obtain and maintain a license in each of the counties in California in which it operates. The title agencies and individual escrow officers are also subject to regulation by the insurance or banking regulators in many of the jurisdictions in which they operate. These regulators generally require, among other items, that agents and individuals obtain and maintain a license and be appointed by a title insurer.

The New York insurance law requires that the Superintendent of Insurance of the State of New York approve any change in control of an insurance company that is domiciled in New York. Our title insurance company, National Title Insurance of New York Inc., is domiciled in New York. The New York insurance law presumes that control exists where any person, directly or indirectly, owns, controls or holds with the power to vote 10% or more of our voting securities. Even persons who do not acquire beneficial ownership of 10% or more of our voting securities may be deemed to have acquired such control if the Superintendent of Insurance of the State of New York determines that such control exists in fact. Any purchaser of 10% or more of our voting securities will be presumed to have acquired control of our New York title insurance subsidiary, unless following application by that purchaser, the Superintendent determines that the purchaser does not control us or will not control us upon the taking of some proposed action. These requirements may deter, delay or prevent transactions affecting the control of or ownership of our common stock, including transactions that could be advantageous to our stockholders.

MANAGEMENT

Directors and Executive Officers

Set forth below is certain information concerning our directors and executive officers. All ages are as of April 30, 2004.


Name	Age	Position

William P. Foley, II	59	Chairman of the Board and Chief Executive Officer
Alan L. Stinson	58	Executive Vice President and Chief Financial Officer
Ernest D. Smith	53	Executive Vice President and President of FI
Brent B. Bickett	40	Executive Vice President, Corporate Finance
Hugh R. Harris	53
Philip G. Heasley	54	Nominee for Director
Cary H. Thompson	47	Nominee for Director
Terry N. Christensen	63	Nominee for Director
John R. Willis	55	Nominee for Director

The following sets forth certain biographical information with respect to our executive officers and directors listed above.

William P. Foley, II is our Chief Executive Officer and the Chairman of our board of directors. He is also the Chief Executive Officer and Chairman of the board of directors of FNF, and has served in those capacities since FNF’s formation in 1984. It is expected that Mr. Foley will cease serving as Chief Executive Officer of FNF upon the completion of the distribution. He also served as President of FNF from 1984 until December 31, 1994. Mr. Foley also is currently serving as Chairman of the board of directors of CKE Restaurants, Inc.

Alan L. Stinson is our Executive Vice President and Chief Financial Officer. Mr. Stinson is also Executive Vice President and Chief Financial Officer of FNF, and has served in those capacities since 1999. He will remain as Executive Vice President and Chief Financial Officer of FNF until a new Chief Financial Officer is appointed by FNF, which is expected to occur on or around the completion of the offering. Following the appointment of such new Chief Financial Officer, Mr. Stinson will become Senior Vice President of FNF with responsibility for providing oversight and support on a transitional basis with respect to financial and accounting matters prior to the distribution. Prior to his employment with FNF, Mr. Stinson was Executive Vice President and Chief Financial Officer of Alamo Title Holding Company. From 1968 to 1994, Mr. Stinson was employed by Deloitte & Touche, LLP where he was a partner from 1980 to 1994.

Ernest D. Smith is our Executive Vice President and President of FI. Mr. Smith has served as an Executive Vice President of FNF since 1995. He has also served as the President of FI since April 2003. He will cease serving in his positions with FNF as of the completion of this offering. Prior to being named the President of FI, Mr. Smith served as the Co-Chief Operating Officer of FNF from January 2002 to April 2003. He joined Fidelity National Title Insurance Company in 1987 as President of its San Francisco Division.

Brent B. Bickett is our Executive Vice President, Corporate Finance. Mr. Bickett has served as an Executive Vice President, Corporate Finance, of FNF since 2002. He will cease serving as Executive Vice President of FNF as of the completion of this offering. He previously served as Senior Vice President, Corporate Finance, of FNF from January 1999 until 2002. From August 1990 until January 1999, Mr. Bickett was a member of the Investment Banking Division of Bear, Stearns & Co. Inc., where he served as a Managing Director of the firm’s real estate, gaming, lodging and leisure group from 1997 until 1999.

Philip G. Heasley has been nominated to serve as one of our directors effective upon the completion of this offering. Mr. Heasley currently serves as a member of the board of directors of FNF but will resign from his position upon the completion of this offering. He has been Chairman and Chief Executive Officer of

Paypower LLC since 2003. From 2000 to 2003, he was Chairman and Chief Executive Officer of First USA Bank, the credit card subsidiary of Bank One. Prior to joining First USA, Mr. Heasley spent 13 years in executive positions at U.S. Bancorp, including six years as Vice Chairman and the last two years as President and Chief Operating Officer. Before joining U.S. Bancorp, Mr. Heasley spent 13 years at Citicorp, including three years as President and Chief Operating Officer of Diners Club, Inc. Mr. Heasley currently serves as Chairman of the board of directors of Visa USA and as a director of Visa International, Fair Isaac Corporation and Ohio Casualty Corporation.

Cary H. Thompson has been nominated to serve as one of our directors effective upon the completion of this offering. Mr. Thompson currently serves as a member of the board of directors of FNF but will resign from his position upon the completion of this offering. He has been a Senior Managing Director with Bear, Stearns & Co. Inc. since 1999. From 1996 to 1999, Mr. Thompson was a director and Chief Executive Officer of Aames Financial Corporation. Prior to joining Aames Financial Corporation, Mr. Thompson served as a managing director of NatWest Markets from May 1994 to June 1996 and as a Managing Director and as manager of the West Coast Financial Institutions Group for Oppenheimer and Co., Inc. Mr. Thompson also serves on the board of directors of SonicWall Corporation.

Terry N. Christensen has been nominated to serve as one of our directors effective upon the completion of this offering. Mr. Christensen currently serves as a member of the board of directors of FNF but will resign from his position upon the completion of this offering. He has been the managing partner of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP since 1988. Prior to forming the law firm, Mr. Christensen was a consultant to and subsequently the President of Tracinda Corporation. Mr. Christensen currently serves as a director of MGM Grand, Inc., Checkers Drive-In Restaurants, Inc. and Giant Group, Ltd.

John R. Willis has been nominated to serve as one of our directors effective upon the completion of this offering. Mr. Willis is the co-founder and managing partner of Willis Stein & Partners LLC, a Chicago-based private equity firm founded in 1995, and certain of its affiliates. From 1989 through 1994, Mr. Willis was President and a director of Continental Illinois Venture Corporation. In 1988, he founded the Continental Mezzanine Investment Group and was its manager through 1990. Mr. Willis serves on the board of directors of many of the Willis Stein portfolio investments, including Aavid Thermal Technologies, Inc., Baker & Taylor Corporation, Merit Health Systems, LLC, National Veterinary Associates, Inc., Roundy’s Inc. and Ziff Davis Media Inc.

Composition of the Board of Directors

Our directors will be divided into three classes of approximately equal size and serve for staggered three-year terms. At each annual meeting of stockholders, directors will be elected to succeed the class of directors whose term has expired. Class I’s term will expire at the 2005 annual meeting, Class II’s term will expire at the 2006 annual meeting and Class III’s term will expire at the 2007 annual meeting. Our director nominees will be allocated to classes upon their election to the board.

For a description of requirements of our bylaws with respect to stockholder proposals and director nominations by stockholders, see “Description of Capital Stock—Certain Provisions of our Certificate and Bylaws and of Delaware Law—Advance Notice Requirements for Stockholder Proposals and Director Nominees.”

Committees of the Board of Directors

Upon completion of this offering, the standing committees of our board of directors will include the audit committee, the nominating and corporate governance committee, and the compensation committee. These committees are described below. Our board of directors may also establish various other committees to assist it in its responsibilities.

Audit committee. This committee will be primarily concerned with the accuracy and effectiveness of the audits of our financial statements by our internal audit staff and by our independent auditors. This committee is responsible for assisting the board’s oversight of:


	•	the quality and integrity of our financial statements and related disclosure;


	•	our compliance with legal and regulatory requirements;

	•	the independent auditor’s qualifications and independence; and

	•	the performance of our internal audit function and independent auditor.

The rules of the New York Stock Exchange require that each issuer have an audit committee of at least three members, and that one independent director (as defined in those rules) be appointed to the audit committee at the time of listing, one within 90 days after listing and the third within one year after listing. We expect to appoint at least one independent director to our audit committee effective as of our listing. We intend to appoint additional independent directors to serve on our board and the audit committee as soon as practicable, but in any event within the time periods prescribed by the listing rules.

Nominating and corporate governance committee. This committee’s responsibilities will include the selection of potential candidates for our board of directors and the development and annual review of our governance principles.

Compensation committee. This committee will have two primary responsibilities:


	•	to monitor our management resources, structure, succession planning, development and selection process as well as the performance of key executives; and

	•	to review and approve executive compensation and broad-based and incentive compensation plans.

The initial members of the compensation committee or, if required, a subcommittee thereof will satisfy the independence requirements of Section 162(m) of the Internal Revenue Code of 1986. Further, the rules of the New York Stock Exchange will require our compensation and nominating and corporate governance committees to consist of at least three independent directors following the date that FNF no longer owns more than 50% of our common stock. We intend to appoint additional independent directors (as defined in the applicable rules) to serve on the compensation committee and the nominating and corporate governance committee as soon as practicable, but in any event within the time period prescribed by the listing rules.

Director Compensation

Directors who also are our officers do not receive any compensation for acting as directors, except for reimbursement of reasonable expenses, if any, incurred in attending board meetings. Directors who are not our employees receive:


	•	An annual retainer of $30,000;

	•	A per meeting fee of $2,500 for each board meeting attended;

	•	An annual retainer of $5,000 for service on any board committee (except audit) or a $7,500 annual retainer if chair of any committee (except audit);

	•	An annual retainer of $7,500 for service on the audit committee or a $15,000 annual retainer if chair of the audit committee;

	•	A per meeting fee of $1,500 for each committee meeting attended (except audit which has a per meeting fee of $3,000); and

	•	Expenses of attending board and committee meetings.

In addition, each non-employee director will acquire options concurrent with the completion of this offering to purchase shares of our common stock, at an exercise price equal to the initial public offering price.

Executive Compensation

The following table sets forth the compensation paid or awarded to our chief executive officer and our other executive officers who, based on salary and bonus compensation from FNF and its subsidiaries, were the most highly compensated for the year ended December 31, 2003. All information set forth in this table reflects compensation earned by these individuals for services with FNF and its subsidiaries for the three years ended December 31, 2003. Our historical financial statements do not include 100% of the compensation and benefits set forth below for our named executive officers, since those persons historically divided their time between our operations and other operations of FNF. Our historical financial statements in this prospectus include allocations of these costs to us based on available information and assumptions considered fair and reasonable by our management.

Summary Compensation Table



										Long-term Compensation
				Annual Compensation
												Securities
								Other Annual		Restricted Stock		Underlying		All Other
		Fiscal		Salary(1)		Bonus(2)		Compensation(3)		Units(4)		Options(5)		Compensation(6)
Name and Title		Year		($)		($)		($)		($)		(#)		($)

William P. Foley, II			2003		950,016		3,600,000		2,338,507		8,257,500		8,250		169,250
	Chairman of the Board		2002		950,016		2,850,000		104,071		—		440,825		146,643
	and Chief Executive		2001		950,016		2,850,000		98,023		—		1,492,218		83,982
	Officer
Ernest D. Smith			2003		572,599		1,547,917		237,508		825,750		8,250		38,502
	Executive Vice President		2002		418,764		837,500		6,000		—		96,443		37,616
	and President of FI		2001		400,008		800,000		6,000		—		159,169		35,797
Alan L. Stinson			2003		425,000		1,122,947		314,358		1,156,050		—		9,070
	Executive Vice President		2002		366,674		733,333		—		—		101,008		8,519
	and Chief Financial		2001		350,016		700,000		—		—		115,327		7,396
	Officer
Brent B. Bickett			2003		375,000		969,234		335,485		1,156,050		8,250		29,047
	Executive Vice President,		2002		316,667		633,333		—		—		101,007		23,320
	Corporate Finance		2001		287,500		450,000		—		—		150,709		16,350
Hugh R. Harris			2003		303,189		1,143,000		—		150,136		13,750		—
	Executive Vice President		2002		—		—		—		—		—		—
			2001		—		—		—		—		—		—


(1)	Amounts shown for the indicated fiscal year include amounts deferred at the election of the named executive officer pursuant to FNF’s 401(k) plan.


(2)	Bonuses were awarded during the year following the year to which the bonuses relate, based on an evaluation by the Compensation Committee of the Board of Directors of FNF. Amounts shown for the 2002 and 2001 fiscal year include cash bonus amounts earned in the indicated fiscal year and deferred at the election of the named executive officer and utilized to reduce the exercise price of stock options granted to such officer during the subsequent fiscal year pursuant to the 1991 and 2001 Stock Option Plans of FNF. Bonus amounts applied to reduce the exercise price of stock option grants awarded and included in this column for 2002 and 2001, the most recent years for which the options were granted, are as follows: (i) Mr. Foley: $75,000—2002 bonus and $75,000—2001 bonus; (ii) Mr. Smith: $75,000—2002 bonus and $75,000—2001 bonus; (iii) Mr. Stinson: no bonus deferred in 2002 or 2001; and (iv) Mr. Bickett: $75,000—2002 bonus. In addition, during 2003, 2002 and 2001 bonus amounts were deferred at the election of the named executive officer and applied to FNF’s Executive Compensation Program in the following amounts: (i) Mr. Foley: $0—2003, $500,000—2002, and $555,000—2001; (ii) Mr. Smith: $0—2003, $146,500—2002, and $140,200—2001; (iii) Mr. Stinson: $170,000—2003, $146,667—2002, and $124,400—2001; and (iv) Mr. Bickett: no bonus deferred in 2003, $138,833—2002, and $93,125—2001; and (v) Mr. Harris: no deferred bonus in 2003.


(3)	Amounts shown for Mr. Foley included the cost of (i) an FNF provided automobile of $9,750 in 2003 and $9,000 in 2002 and 2001; (ii) tax and financial planning advice provided by third parties to Mr. Foley and Folco Development Corporation—$58,078 in 2003, $57,542 in 2002, and $61,539 in 2001; and (iii) personal use of FNF assets by Mr. Foley and Folco Development Corporation—$25,268 in 2003, $37,529 in 2002, and $27,484 in 2001. Amounts shown for Mr. Smith included the cost of (i) an FNF provided automobile of $6,000 in 2003, 2002 and 2001, and (ii) relocation expenses of $6,967 in 2003. Amounts shown for Mr. Bickett include relocation expenses of $21,127 in 2003. Amounts for 2003 also include amounts reimbursed during the fiscal year for the payment of taxes in connection with the restricted stock grant: Mr. Foley—$2,245,411; Mr. Smith—$224,541; Mr. Stinson—$314,358; and Mr. Bickett—$314,358.

(4)	Pursuant to the 2001 Plan, FNF granted rights to Messrs Foley, Smith, Stinson and Bickett to purchase shares of restricted common stock on November 18, 2003. The restricted shares granted vest over a four year period, of which one-fifth vested immediately on the


	date of grant. Dividends are paid by FNF on the restricted stock granted. The following are the number and aggregate value (as of December 31, 2003) of restricted stock granted: (i) Mr. Foley: 275,000 shares; $9,694,988; (ii) Mr. Smith: 27,500 shares; $969,499; (iii) Mr. Stinson: 38,500 shares; $1,357,298; (iv) Mr. Bickett: 38,500 shares; $1,357,298; and (v) Mr. Harris: 5,500 shares; $193,900.


(5)	The number of securities underlying options has been adjusted to reflect all dividends and stock splits.

(6)	Amounts shown for fiscal 2003 consist of the following: (i) Mr. Foley: FNF contribution to 401(k) Plan—$6,000, FNF paid life insurance premiums — $91,999 and FNF contribution to Employee Stock Purchase Program— $71,251; (ii) Mr. Smith: FNF contribution to 401(k) Plan—$6,000, FNF paid life insurance premiums—$1,642 and FNF contribution to Employee Stock Purchase Program—$30,860; (iii) Mr. Stinson: FNF contribution to 401(k) Plan—$6,000, FNF paid life insurance premiums—$3,070 and no FNF contribution to Employee Stock Purchase Program; and (v) Mr. Bickett: FNF contribution to 401(k) Plan—$6,000, no FNF paid life insurance premiums and FNF contribution to Employee Stock Purchase Program—$23,047.

Stock Ownership Guidelines

In order to help demonstrate the alignment of the personal interests of our officers and directors with the interests of our stockholders, we have established the following stock ownership guidelines, as multiples of the officer’s base salary or the director’s annual retainer, that must be held by our officers or directors:


Position		Multiple

Chief Executive Officer		5x Base Salary
Other Officers (direct reports to the CEO or Section 16 Reporting Persons)		2x Base Salary
Non-employee directors		5x Annual Retainer

The number of shares of our stock that must be held is determined by multiplying the officer’s annual base salary (or in the case of a non-employee director, such director’s annual retainer) by the applicable multiple shown above, and dividing the result by the highest closing price of our stock during the immediately preceding 24 months. Compliance will be monitored by the compensation committee of our board of directors once a year and not on a running basis. In order to meet this stock ownership requirement, an officer or director may count all shares of our stock beneficially owned by such officer or director, including stock held in our 401(k) plan, our employee stock purchase plan, stock units held in any deferral plan, any restricted shares, restricted stock units and vested options including any restricted shares issued to such officer or director upon conversion of FNF restricted shares in connection with the distribution. Each officer or director must attain ownership of the required stock ownership level within five years after first becoming subject to these guidelines, provided, that if an individual becomes subject to a greater ownership requirement due to a promotion or increase in base salary, such individual is expected to meet the higher ownership requirement within three years.

Stock Ownership of Directors and Executive Officers

All of our common stock is currently owned by FNF, and thus none of our present or future officers or directors currently owns any shares of our common stock. Our officers and directors may purchase shares in the offering, including in the directed share offering. See “Underwriters.” Further, in the event of the distribution, those officers and directors who own shares of FNF common stock will be treated on the same terms as any other holders of FNF common stock and will receive shares of our common stock in the distribution in respect of any shares of FNF common stock that they hold on the record date of the distribution. FNF stock options and restricted stock held by our employees and directors will also be affected in connection with the distribution. See “—Treatment of FNF Stock Options and Restricted Shares.”

The following table sets forth the number of shares of FNF common stock beneficially owned on , 2004 by each of our directors, each of the executive officers named in the summary compensation table below, and all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities. The number of shares of common stock outstanding used in calculating the percentage for each listed person includes the shares of common stock underlying options held by that

person that are exercisable within 60 days of , 2004 but excludes shares of common stock underlying options held by any other person.

Shares of FNF Common Stock


Name	Beneficially Owned (1)	Percent of Class

William P. Foley, II			%
Alan L. Stinson
Ernest D. Smith
Brent B. Bickett
Hugh R. Harris
Philip G. Heasley
Cary H. Thompson
Terry N. Christensen
John R. Willis
All directors and executive officers as a group ( persons)


	*	Indicates less than 1% of FNF outstanding common stock.


(1)	Shares “beneficially owned” include: (a) shares of FNF common stock owned by the individual, (b) FNF restricted stock granted to the individual and (c) FNF options that are exercisable within 60 days.

Option Grants

The following table provides information as to options to acquire our common stock to be granted to the named executive officers on the date of this offering pursuant to the 2004 Omnibus Incentive Plan. See “—Omnibus Incentive Plan.”

FIS Option Grants at the Offering



								Potential Realizable
	Individual Grants							Value at Assumed
								Annual Rates of
	Number of							Stock Price
	Securities	Percentage of						Appreciation for
	Underlying	Total Options						Option Term (2)
	Options	Granted to		Exercise or
	Granted	Employees in		Base Price			Expiration	5%	10%
Name	(#)	Fiscal Year		($/share)			Date	($)	($)

William P. Foley, II			%	$	(1	)		$	$
Ernest D. Smith			%	$	(1	)		$	$
Alan L. Stinson			%	$	(1	)		$	$
Brent B. Bickett			%	$	(1	)		$	$
Hugh R. Harris			%	$	(1	)		$	$


(1)	The options granted under the 2004 Omnibus Incentive Plan were granted to our key employees at an exercise price of $ , the offering price of our common stock on the date of the offering.

(2)	These are assumed rates of appreciation and are not intended to forecast future appreciation of our common stock.

The following table provides information as to options to acquire FNF common stock granted to the named executive officers during 2003 pursuant to FNF’s Amended and Restated 2001 Stock Incentive Plan.

FNF Option Grants in Last Fiscal Year



											Potential Realizable
	Individual Grants										Value at Assumed
											Annual Rates of
	Number of										Stock Price
	Securities		Percentage of								Appreciation for
	Underlying		Total Options								Option Term (2)
	Options		Granted to			Exercise or
	Granted		Employees in			Base Price			Expiration		5%		10%
Name	(#)		Fiscal Year			($/share)			Date		($)		($)

William P. Foley II		8,250		1.3	%	$	15.36	(1)		03/24/13	$	201,861	$	396,490
Ernest D. Smith		8,250		1.3	%	$	15.36	(1)		03/24/13	$	201,861	$	396,490
Alan L. Stinson		—		—			—			—		—		—
Brent B. Bickett		8,250		1.3	%	$	15.36	(1)		03/24/13	$	201,861	$	396,490
Hugh R. Harris		13,750		2.2	%	$	25.24			04/04/13	$	218,227	$	553,029


(1)	The options granted under the 2001 Stock Incentive Plan were granted to key employees of FNF at an exercise price of $24.45, the fair market value of FNF’s common stock on the date of grant. The executive officer applied his deferred bonus amount to reduce the exercise price to $15.36 per share. (See note (2) of Summary Compensation Table).

(2)	These are assumed rates of appreciation, and are not intended to forecast future appreciation of FNF’s common stock.

The following table summarizes information regarding exercises of FNF stock options by the named executive officers during 2003 and unexercised FNF options held by them as of December 31, 2003.

Aggregated FNF Option Exercises in Last Fiscal Year

and Fiscal Year-End Option Values

Number of

Securities Underlying

Value of Unexercised

Shares

Unexercised Options

In-the-Money Options

Acquired on

Value

at December 31,

Exercise

Realized

2003(1)(#)

2003(1)($)

Name

(#)

($)

Exercisable/Unexercisable

William P. Foley II

169,622

6,709,160

3,591,350/188,121

90,234,410/$2,878,146

Ernest D. Smith

54,034

714,511

36,794/ 69,482

722,443/$1,220,109

Alan L. Stinson

—

279,609/ 58,243

5,854,209/$ 945,852

Brent B. Bickett

—

258,740/ 52,697

5,687,248/$ 828,177

Hugh R. Harris

—

—/ 13,750

—/$ 137,749


(1)	Options at December 31, 2003 include FNIS and ANFI options which were converted into FNF options as a result of the acquisition of the minority interest of FNIS on September 30, 2003 and the majority interest of ANFI on March 26, 2003.

In accordance with the rules of the Securities and Exchange Commission, values are calculated by subtracting the exercise price from the fair market value of the underlying common stock. For purposes of this table, the fair market value is deemed to be $35.25, the closing price of the common stock of FNF reported by the New York Stock Exchange on December 31, 2003.

The following table summarizes information regarding exercises of FNIS stock options by the named executive officers during 2003 and unexercised FNIS options held by them as of December 31, 2003.

Aggregated FNIS Option Exercises In Last Fiscal Year

and Fiscal Year-End Option Values

Number of

Securities Underlying

Value of Unexercised

Shares

Unexercised Options at

In-the-Money Options

Acquired on

Value

December 31, 2003(1)

at December 31, 2003(1)

Exercise

Realized

(#)

($)

Name

(#)

($)

Exercisable/Unexercisable

William P. Foley II

913,000

16,505,679

n/a

Ernest D. Smith

28,710

430,361

n/a

Alan L. Stinson

16,434

300,599

n/a

Brent B. Bickett

41,081

740,996

n/a

Hugh R. Harris

—

n/a


(1)	In connection with FNF’s acquisition of the minority interest of FNIS on September 30, 2003, all FNIS options outstanding were converted into FNF options.

The following table summarizes information regarding exercises of American National Financial, Inc., or ANFI, stock options by the named executive officers during 2003 and unexercised ANFI options held by them as of December 31, 2003.

Aggregated ANFI Option Exercises in Last Fiscal Year

and Fiscal Year-End Option Values

Number of

Securities Underlying

Value of Unexercised

Shares

Unexercised Options

In-the-Money Options at

Acquired on

Value

at December 31, 2003(1)

December 31, 2003(1)

Exercise

Realized

(#)

($)

Name

(#)

($)

Exercisable/Unexercisable

William P. Foley II

106,817

2,121,735

n/a

Ernest D. Smith

—

n/a

Alan L. Stinson

—

n/a

Brent B. Bickett

—

n/a

Hugh R. Harris

—

n/a


(1)	In connection with FNF’s acquisition of the majority interest of ANFI on March 26, 2003, all ANFI options outstanding were converted into FNF options. Mr. Foley received these options in his capacity as chairman of the board of directors of ANFI prior to FNF’s acquisition of ANFI.

Treatment of FNF Stock Options and Restricted Shares

It is anticipated that, at the time of the distribution, FNF stock options and restricted stock held by our employees and directors will be affected as follows:



	•	vested stock options: FNF stock options will be adjusted to reflect the impact of the distribution (FNF stockholder approval of amendments to certain of FNF’s incentive plans will be required to provide for such adjustment to the options issued under those plans). Employees and directors who will not continue to be employees or directors of FNF will be deemed to have terminated employment or service, as the case may be, as of the date of the distribution and their stock options, if not exercised, will expire in accordance with their terms upon or following such termination. FNF has advised us that Mr. Foley’s service as chairman of the board of directors of FNF after the distribution is currently expected to be an employment position. Accordingly, he would not be treated as having terminated employment at the time of the distribution for purposes of his FNF stock options.


	•	unvested stock options: unvested stock options will be replaced with unvested FIS stock options granted under the omnibus plan, with the same terms and conditions as the FNF options but with



		equitable adjustments made to the exercise prices and number of shares to reflect the difference in value of FNF and FIS common stock at the time of the distribution.



	•	restricted stock: restricted stock holders will receive FIS shares in the distribution in the same proportion as other FNF stockholders, with such shares subject to the same transfer restrictions and forfeiture conditions as the restricted stock. In addition, the FNF restricted stock will be replaced with FIS restricted stock granted under the omnibus plan. The replacement FIS restricted stock will have the same terms and conditions as the FNF restricted stock, with equitable adjustments made to the number of shares to reflect the difference in value of FNF and FIS common stock at the time of the distribution.

As of June 30, 2004, our director nominees, executive officers and employees held an aggregate of unvested FNF options at a weighted average exercise price of $ and shares of restricted stock. We may hire additional FNF employees after this offering, particularly in areas in which FNF has agreed to provide us administrative and corporate services on a transitional basis. See “Our Arrangements with FNF — Transition Services Agreements.” Any unvested FNF options or restricted stock held by such persons as of the distribution would be treated as set forth above. It is not possible to specify at this time how many shares of our common stock will ultimately be subject to substitute awards in connection with the distribution because we do not know at this time either how many FNF stock options or shares of restricted stock granted to our directors and employees will be outstanding at the date of the distribution or at what ratio the FNF options and restricted stock will be replaced with our options and restricted stock. Our stockholders are likely, however, to experience some dilutive impact from these adjustments.

Omnibus Incentive Plan

In connection with this offering, we intend to establish a 2004 Omnibus Incentive Plan, or omnibus plan. The omnibus plan will permit us to grant the following types of awards:


	•	nonqualified stock options;

	•	“incentive stock options” within the meaning of section 422 of the Internal Revenue Code;

	•	stock appreciation rights;

	•	restricted stock;

	•	restricted stock units;

	•	performance shares;

	•	performance units; and

	•	other stock-based awards.

Recipients of awards under the omnibus plan may also be awarded dividends and dividend equivalents in connection with their awards.

The following is a description of the omnibus plan and the awards to be made in connection with and after this offering and the distribution.

Effective date and term. If approved by our board of directors, the omnibus plan will become effective on , and will authorize the granting of awards for up to 10 years.

Administration. The omnibus plan may be administered by our compensation committee or another committee selected by our board of directors, any of which we refer to as the committee. The committee will be able to select the individuals who will receive awards; determine the size and types of awards; determine the terms and conditions of awards; construe and interpret the omnibus plan and any award agreement or other instrument entered into under the omnibus plan; establish, amend and waive rules and regulations for the administration of the omnibus plan; and amend awards. The committee’s determinations and interpretations

under the omnibus plan will be binding on all interested parties. The committee will be empowered to delegate its administrative duties and powers as it may deem advisable, to the extent permitted by law.

Eligibility. Incentive stock options may be granted only to our employees and employees of our subsidiaries. Other awards may be granted to employees, directors, consultants and advisors of ours and our subsidiaries.

Number of shares available for issuance. Subject to adjustment as described below, shares of our common stock may be issued in connection with awards granted under the omnibus plan. The maximum number of shares that may be issued under the omnibus plan in connection with “full-value awards” (awards other than (1) options, (2) stock appreciation rights or (3) other awards for which the participant pays the grant date intrinsic value) is shares. If settlement of a full-value award results in the delivery of shares in excess of the above limit, the aggregate number of shares available for awards other than full-value awards will be reduced by shares for each excess share delivered.

The FNF stock options and restricted stock replaced with our stock options and restricted stock in connection with the completion of the distribution will be treated as granted under the omnibus plan. In addition, we may grant replacement awards in connection with mergers, acquisitions or other business transactions in which we engage in the future. These replacement awards will also be treated as granted under the omnibus plan.

If an award under the omnibus plan is canceled, forfeited, terminates or is settled in cash, the shares related to that award will not be treated as having been delivered under the omnibus plan. In addition, subject to limitations intended to comply with the New York Stock Exchange listing standards, shares that we hold back or that are tendered or returned by an award holder to cover the exercise price of an option or the tax withholding obligations relating to an award shall be considered shares not issued in connection with an award.

Annual award limits. The omnibus plan also contains annual award limitations. These provisions are designed so that compensation resulting from awards can qualify as tax deductible performance-based compensation under section 162(m) of the Internal Revenue Code. These limitations only apply to awards or related dividends or dividend equivalents intended to qualify as performance-based compensation. The maximum number of our shares with respect to which stock options or stock appreciation rights may be granted to any participant in any fiscal year is shares. The maximum number of our shares of restricted stock that may be granted to any participant in any fiscal year is shares. The maximum number of our shares with respect to which restricted stock units may be granted to any participant in any fiscal year is shares. The maximum number of our shares with respect to which performance shares may be granted to any participant in any fiscal year is shares. The maximum amount of compensation that may be paid with respect to performance units awarded to any participant in any fiscal year is $ or a number of shares having a fair market value not in excess of that amount. The maximum number of our shares with respect to which other stock-based awards may be granted to any participant in any fiscal year is shares. The maximum dividend or dividend equivalent that may be paid to any one participant in any one fiscal year is $ .

Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, liquidation, stock dividend, split-up, spin-off, stock split, reverse stock split, share combination, share exchange, extraordinary dividend, or any change in the corporate structure affecting our common stock, such adjustment will be made to the number and kind of shares that may be delivered under the omnibus plan, the annual award limits, the number and kind of shares subject to outstanding awards, the exercise price, grant price or other price of shares subject to outstanding awards, any performance conditions relating to our common stock, the market price of our common stock, or per-share results, and other terms and conditions of outstanding awards, as may be determined to be appropriate and equitable by the committee to prevent dilution or enlargement of rights.

Awards. Following is a general description of the types of awards that may be delivered under the omnibus plan. Terms and conditions of awards will be determined on a grant-by-grant basis by the committee, subject to limitations contained in the omnibus plan.

Stock options. A participant granted a stock option will be entitled to purchase a specified number of shares of our common stock during a specified term at a fixed price. Except for replacement options and options that are adjusted by the committee in connection with adjustments, as described above, the per share purchase price of shares subject to options granted under the omnibus plan may not be less than 100% of the fair market value of our common stock on the date the option is granted. No option granted under the omnibus plan may have a term of more than 10 years. The committee may also award dividend equivalent payments in connection with such awards.

Stock appreciation rights. A participant granted a stock appreciation right will be entitled to receive the excess of the fair market value (calculated as of the exercise date) of a share of our common stock over the grant price of the stock appreciation right in cash, our shares of common stock or a combination of cash and shares. Except for replacement stock appreciation rights and stock appreciation rights adjusted by the committee in connection with adjustments, as described above, the grant price of a stock appreciation right granted under the omnibus plan may not be less than 100% of the fair market value of our common stock on the date the option is granted, and no stock appreciation right granted under the omnibus plan may have a term of more than 10 years. The committee may also award dividend equivalent payments in connection with such awards.

Restricted stock. Restricted stock is an award that is non-transferable and subject to a substantial risk of forfeiture until vesting conditions, which can be related to continued service or other conditions established by the committee, are satisfied. Prior to vesting, holders of restricted stock may receive dividends and voting rights. If the vesting condition is not satisfied, the participant forfeits the shares. The committee may also award dividend equivalent payments in connection with such awards.

Restricted stock units and performance shares. Restricted stock units and performance shares represent a right to receive a share of common stock, an equivalent amount of cash, or a combination of shares and cash, as the committee may determine, if vesting conditions are satisfied. Except for replacement restricted stock units and performance shares and restricted stock units and performance shares adjusted by the committee in connection with adjustments, as described above, the initial value of a restricted stock unit or performance share granted under the omnibus plan may not be less than 100% of the fair market value of our common stock on the date the award is granted. The committee may also award dividend equivalent payments in connection with such awards. Restricted stock units may contain vesting conditions based on continued service or other conditions established by the committee. Performance shares will contain vesting conditions based on attainment of performance goals established by the committee in addition to service conditions.

Performance units. Performance units are awards that entitle a participant to receive shares of common stock, cash or a combination of shares and cash if certain performance conditions are satisfied. The amount received depends upon the value of the performance units and the number of performance units earned, each of which is determined by the committee. The committee may also award dividend equivalent payments in connection with such awards.

Other stock-based awards. Other stock-based awards are awards other than those described above, the terms and conditions of which are determined by the committee. These awards may include, without limitation, the grant of shares of our common stock based on attainment of performance goals established by the committee, the payment of shares as a bonus or in lieu of cash based on attainment of performance goals established by the committee, and the payment of shares in lieu of cash under an incentive or bonus program. Payment under or settlement of any such awards shall be made in such manner and at such times as the committee may determine.

Dividend equivalents. Dividend equivalents granted to participants will represent a right to receive payments equivalent to dividends or interest with respect to a specified number of shares.

Performance-based compensation. The committee may specify that the attainment of the general performance measures set forth below may determine the degree of granting, vesting and/or payout with respect to awards (including any related dividends or dividend equivalents) that the committee intends will qualify as performance-based compensation under section 162(m) of the Internal Revenue Code. The

performance goals to be used for such awards must be chosen from among the following performance measure(s): earnings per share, economic value created, market share (actual or targeted growth), net income (before or after taxes), operating income, adjusted net income after capital charge, return on assets (actual or targeted growth), return on capital (actual or targeted growth), return on equity (actual or targeted growth), return on investment (actual or targeted growth), revenue (actual or targeted growth), cash flow, operating margin, share price, share price growth, total stockholder return, and strategic business criteria, consisting of one or more objectives based on meeting specified market penetration goals, productivity measures, geographic business expansion goals, cost targets, customer satisfaction or employee satisfaction goals, goals relating to merger synergies, management of employment practices and employee benefits, or supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures. The targeted level or levels of performance with respect to such performance measures may be established at such levels and on such terms as the committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies. Awards (including any related dividends or dividend equivalents) that are not intended to qualify as performance-based compensation may be based on these or such other performance measures as the committee may determine.

Change in control. The omnibus plan will provide that, except as otherwise provided in a participant’s award agreement, upon the occurrence of a change in control, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, any and all outstanding options and stock appreciation rights granted under the omnibus plan will become immediately exercisable, any restriction imposed on restricted stock, restricted stock units and other awards granted under the omnibus plan will lapse, and any and all performance shares, performance units and other awards granted under the omnibus plan with performance conditions will be deemed earned at the target level, or, if no target level is specified, the maximum level.

For purposes of the omnibus plan, the term “change in control” is defined as the occurrence of any of the following events:



	•	an acquisition immediately after which any person, group or entity possesses direct or indirect beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 25% or more of either our outstanding common stock or our outstanding voting securities, provided that, after the acquisition, the acquirer’s beneficial ownership percentage exceeds FNF’s, and excluding any acquisition directly from us, by us, by FNF or by any of our employee benefit plans and certain other acquisitions;



	•	during any period of two consecutive years, the individuals who, as of the beginning of such period, constitute our board, or incumbent board, cease to constitute at least a majority of the board, provided that any individual who becomes a member of our board subsequent to the beginning of such period and whose election or nomination was approved by at least two thirds of the members of the incumbent board will be considered as though he or she were a member of the incumbent board;



	•	the consummation of a reorganization, merger, share exchange or consolidation or sale or other disposition of all or substantially all of our assets unless (a) our stockholders immediately before the transaction continue to have beneficial ownership of 50% or more of the outstanding shares of our common stock and the combined voting power of our then outstanding voting securities resulting from the transaction in substantially the same proportions as their ownership immediately prior to the transaction of our common stock and outstanding voting securities; (b) no person (other than us, our parent organization (or the parent organization of the resulting corporation), an employee benefit plan sponsored by us or the resulting corporation, or any entity controlled by us or the resulting corporation) has beneficial ownership of 25% or more of the outstanding common stock of the resulting corporation or the combined voting power of the resulting corporation’s outstanding voting securities; and (c) individuals who were members of the


		incumbent board continue to constitute a majority of the members of the board of directors of the resulting corporation; or

	•	our stockholders approve a plan or proposal for the complete liquidation or dissolution of our company.

Notwithstanding the foregoing requirements, neither this offering nor the distribution shall constitute a change in control for purposes of the omnibus plan.

In addition, as long as FNF owns more than 50% of our common stock or voting securities, a change in control of FNF will also be considered a change in control for purposes of the omnibus plan. For this purpose, whether a change in control of FNF has occurred is determined in the same manner as described above, except that if the change in control is the result of an acquisition of FNF’s outstanding common stock or outstanding voting securities, more than 50% of FNF’s common stock or voting securities must be acquired before a change in control will be deemed to have occurred.

Deferrals. The committee may permit the deferral of vesting or settlement of an award and may authorize crediting of dividends or interest or their equivalents in connection with any such deferral. Any such deferral and crediting will be subject to the terms and conditions established by the committee and any terms and conditions of the plan or arrangement under which the deferral is made.

Transferability. Awards generally will be non-transferable except upon the death of a participant, although the committee may permit a participant to transfer awards (for example, to family members or trusts for family members) subject to such conditions as the committee may establish.

Amendment and termination. The omnibus plan may be amended or terminated by our board of directors at any time, subject to certain limitations, and the awards granted under the plan may be amended or terminated by the committee at any time, provided that no such action may, without a participant’s written consent, adversely affect in any material way any previously granted award. No amendment that would require stockholder approval under applicable law may become effective without stockholder approval.

Tax withholding. We may deduct or withhold, or require a participant to remit, an amount sufficient to satisfy federal, state, local, domestic or foreign taxes required by law or regulation to be withheld with respect to any taxable event arising as a result of the omnibus plan. The committee may require or permit participants to elect that the withholding requirement be satisfied, in whole or in part, by having us withhold, or by tendering to us, shares of our common stock having a fair market value equal to the withholding obligation.

Certain limitations on deductibility of executive compensation. With some exceptions, section 162(m) of the Internal Revenue Code limits a publicly held company’s ability to deduct compensation paid to its chief executive officer and the next four most highly compensated officers to the extent such compensation exceeds $1 million per executive per taxable year. Compensation paid to employees will not be subject to that deduction limit if it is considered “qualified performance-based compensation” within the meaning of section 162(m) of the Internal Revenue Code. Compensation to be paid to employees under the omnibus plan is generally intended to be qualified performance-based compensation; however, the company reserves the right to grant awards that do not qualify as performance-based compensation when it determines that such compliance is not desirable. Awards granted under the omnibus plan after the first regularly scheduled stockholders’ meeting that occurs more than 12 months after our initial public offering will qualify as performance-based compensation only if granted after stockholder approval.

Awards in connection with our initial public offering. On the date of our initial public offering, we anticipate granting to our executive officers, employees and directors nonqualified stock options to purchase an aggregate of million shares of our common stock, with Messrs. Foley, Smith, Stinson and Bickett being granted options to purchase , , , and shares, respectively. The exercise price of these options will be equal to the initial public offering price. These options will vest in % annual increments commencing on the anniversary of the date of grant.


	*Employee Stock Purchase Plan*

On or before the completion of this offering, we will establish an Employee Stock Purchase Plan, or ESPP. Participation in the ESPP will begin at the time of the distribution. The ESPP will provide an incentive for employees to work toward and invest in our growth and will assist us in attracting and retaining quality personnel.

Eligibility. All of our regular employees may participate in the ESPP provided such employees average at least twenty hours per week and have been employed continuously during the last ninety days.

Description. Pursuant to the ESPP, eligible employees and directors may voluntarily purchase, at current market prices, shares of our common stock through payroll deductions and through matching contributions, if any, on their behalf. Employees may contribute an amount between 3% and 15% of their base salary towards the purchase of our common stock under the ESPP. At the end of each calendar quarter, we will make a matching contribution to the account of each participant who has been continuously employed by us for the last four calendar quarters. For most employees, matching contributions are equal to one-third of the amount contributed during the quarter that is one year earlier than the quarter in which the matching contribution is made; for officers, directors and certain senior employees, the matching contribution is one-half of such amount. We will pay the brokerage commissions attributable to the purchase of our common stock under the ESPP.

Number of shares available for issuance. The aggregate number of shares of common stock that may be issued under the ESPP will not exceed (subject to adjustment in the event of a stock split, stock dividend, spin-off, recapitalization, reorganization, or similar transaction).

The Distribution. Our employees who are participants in FNF’s ESPP will become participants in our ESPP on the date of the distribution. If the distribution occurs other than on the first day of a payroll period, any amounts contributed by these employees to FNF’s ESPP for the payroll period will be credited to the employees’ accounts under our ESPP. Additionally, if the distribution occurs other than on the last day of a calendar quarter, these employees’ accounts will be credited with an amount equal to the matching contribution they would have been entitled to under FNF’s ESPP for the calendar quarter in which the distribution occurs.


	Employment Agreements

We intend to enter into employment agreements with Messrs. Foley, Stinson, Smith, Harris and Bickett prior to the completion of the offering.

OUR ARRANGEMENTS WITH FNF

Historically, FNF has provided a variety of services to us, and we have provided various services to FNF. These arrangements are described below under “Certain Relationships and Related Transactions—Historical Related-Party Transactions with FNF.”

Prior to the completion of this offering, we will enter into a master agreement and a number of other agreements with FNF to accomplish our separation from FNF and the transfer of the businesses described in this prospectus to us. The master agreement and these other agreements will set forth our agreement on various matters relating to our on-going relationship with FNF while it remains a significant stockholder in our company after this offering.

Below is a summary description of the master agreement between FNF and us and the other key agreements, including the transition services agreement, that relate to our separation from FNF. This description summarizes the material terms of these agreements, but is not complete. You should review the full text of these agreements, which will be filed with the Securities and Exchange Commission as exhibits to the registration statement of which this prospectus is a part. References in this section to FNF include its affiliates and subsidiaries (other than us) and references to our company include our subsidiaries.


	*Overview*

The master agreement will set forth the key provisions related to our separation from FNF in connection with this offering and the distribution of our shares to FNF’s common stockholders. It will also set forth certain agreements governing our relationship after the separation from FNF. The other agreements referenced in the master agreement govern various interim and ongoing relationships between FNF and us following the closing date of this offering. These agreements include:


	•	the transition services agreements;

	•	the tax disaffiliation agreement;

	•	the employee matters agreement;

	•	the registration rights agreement;


	•	software license agreements;



	•	the intellectual property cross license agreement;



	•	the joint ownership and development agreements;


	•	the agency agreements;


	•	the FNF starter repository access agreement;


	•	the title plant maintenance agreements;


	•	the title plant access agreement; and



	•	the master services agreement.


	*Master Agreement*

We will enter into a master agreement with FNF prior to the completion of this offering. The master agreement will set forth our agreements with FNF regarding the principal transactions to effect the transfer of assets and the assumption of liabilities to be undertaken to separate our company from FNF’s other businesses. It will also identify the assets to be contributed and transferred to us by FNF and the liabilities to be assumed by us from FNF. We refer to these contributions and transfers in this agreement as the “contribution.” The master agreement will also describe when and how the contribution will occur as well as certain other agreements governing our relationship with FNF after the separation.

The Separation. To effect the separation, FNF will, and will cause its affiliates to, transfer to us the assets related to our business as described in this prospectus. We or our subsidiaries will assume and agree to perform, discharge and fulfill the liabilities related to our business in accordance with their terms. The terms of these transfers of assets and assumptions of liabilities will be set forth in the master agreement.

The Distribution. The master agreement also governs the rights and obligations of FNF and our company regarding this offering and the proposed distribution by FNF to its common stockholders of the shares of our common stock held by FNF. Although FNF has announced that it intends to complete the distribution by mid-2005, there are various conditions to the completion of the distribution. In any event, FNF has no obligation to consummate the distribution, whether or not these conditions are satisfied. Consequently, we cannot assure you as to whether or when the distribution will occur.

Conditions to the Distribution. The master agreement will provide that the distribution is subject to several conditions that must be satisfied, or waived by FNF in its sole discretion, including:


	•	receipt by FNF of a ruling by the Internal Revenue Service and an opinion from its tax counsel collectively to the effect that the distribution will qualify as a reorganization pursuant to which no gain or loss will be recognized by FNF or its stockholders for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) and related provisions of the IRC;


	•	receipt of any government approvals and material consents necessary to consummate the distribution;



	•	lack of any order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the distribution;



	•	the actions and filings necessary or appropriate under applicable securities laws in connection with the distribution have been taken or made, and, where applicable, have become effective or been accepted;



	•	our common stock to be distributed in the distribution will have been accepted for listing on the NYSE, subject to official notice of issuance; and



	•	FNF has determined that the terms of the distribution, including the timing and all other material matters in connection with the distribution, are acceptable to FNF.

If FNF’s board of directors decides not to complete the distribution or waives a material condition to the distribution after the date of this prospectus, we intend to issue a press release disclosing this decision or waiver or file a report on Form 8-K with the Securities and Exchange Commission.

No Representations and Warranties. Except as expressly set forth in the master agreement or in any other transaction document, neither we nor FNF will make any representation or warranty as to the condition or quality of any assets or businesses to be transferred to us, the liabilities to be assumed by us, or any other matters relating to our businesses. We will receive all assets in connection with the contribution on an “as is, where is” basis, and we will have no recourse against FNF if the transfer of any asset to us is defective in any manner. We will agree to bear the economic and legal risks that any conveyance was insufficient to vest in us good title, free and clear of any security interest, and that any necessary consents or approvals are not obtained or that any requirements of laws or judgments are not complied with.

Further Assurances. The master agreement provides that FNF will cooperate with us to effect any transfers or contributions of assets and liabilities that are not completed by the closing date of this offering as promptly following that date as is practicable. Until these transfers can be completed, FNF will act as a custodian and trustee on our behalf with respect to those assets or liabilities. In order to put FNF and us in the same economic position as, insofar as reasonably possible, each of us would have been had the contribution occurred, the master agreement will provide that, to the extent possible, FNF will pass on to us the benefits derived or expenses incurred by it from those assets or liabilities as if the transfers had occurred as contemplated.

Access to Financial and Other Information. Under the master agreement, following the contribution, we and FNF will be obligated to provide each other access to certain information, subject to confidentiality obligations and other restrictions. So long as FNF is required to consolidate our results of operations and

financial position or to account for its investment in our company on the equity method of accounting, we will provide to FNF and its independent auditors, at no charge, all financial information and other data that FNF requires in order to timely prepare its financial statements and reports or filings with governmental authorities or to issue its earnings releases, including copies of all quarterly and annual historical financial information and other reports and documents we intend to file with the Securities and Exchange Commission prior to these filings (as well as final copies upon filing), and copies of our budgets and financial projections as well as access to the responsible company personnel so that FNF and its independent auditors may conduct their audits relating to our financial statements. We will also agree that, so long as FNF is required to consolidate our results of operations and financial position or account for its investment in our company on the equity method of accounting, we will use our reasonable efforts to enable our independent auditors to complete their audit of our financial statements in a timely manner so as to permit the timely filing of FNF’s financial statements. In addition, we and FNF will use reasonable efforts to make available to each other our respective past and present directors, officers, other employees and agents as witnesses in any legal, administrative or other proceedings in which the other party may become involved. We and FNF will each retain all proprietary information within each company’s respective possession relating to our respective businesses for an agreed period of time and, prior to destroying the information, each of us must give the other notice and an opportunity to take possession of the information, if necessary or appropriate to the conduct of the respective businesses. We and FNF will each agree to hold in strict confidence all information concerning or belonging to the other for an agreed period of time.

Exchange of Other Information. The master agreement will also provide for other arrangements with respect to the mutual sharing of information between us and FNF in order to comply with requirements imposed on the requesting party by any governmental authority, including any reporting, filing, audit, accounting, tax or similar requirements, for use in judicial proceedings, and in order to comply with our respective obligations following the completion of this offering. We will also agree to provide mutual access to historical records relating to businesses that may be in our possession.

Releases and Indemnification. Except for each party’s obligations under the master agreement, the other transaction documents and certain other specified liabilities, we and FNF will release and discharge each other and each of our affiliates from all liabilities existing or arising between us on or before the separation, including in connection with the separation and this offering. The release will not extend to obligations or liabilities under any agreements between us and FNF that remain in effect following the separation.

We will indemnify, hold harmless and defend FNF, each of its affiliates and each of their respective directors, officers and employees, on an after-tax basis, from and against all liabilities relating to, arising out of or resulting from:


	•	the failure by us or any of our affiliates or any other person or entity to pay, perform or otherwise promptly discharge any liabilities or contractual obligations associated with our business, whether arising before or after the separation;

	•	the operations, liabilities and obligations of our businesses;

	•	any guarantee, indemnification obligation, surety bond or other credit support arrangement by FNF or any of its affiliates for our benefit;


	•	any breach by us or any of our affiliates of the master agreement, certain of the other transaction documents, any agreement to which we or our affiliates are a party, our certificate of incorporation or by-laws or any law or regulation;


	•	any untrue statement of, or omission to state, a material fact in FNF’s public filings to the extent it was as a result of information that we furnished to FNF or which FNF incorporated by reference from our public filings, if that statement or omission was made or occurred after the separation;

	•	any untrue statement of, or omission to state, a material fact in any registration statement or prospectus related to this offering, except to the extent the statement was made or omitted in reliance upon information provided to us by FNF expressly for use in any registration statement or prospectus


		or information relating to and provided by any underwriter expressly for use in any registration statement or prospectus; and


	•	any actions or liability imposed by governmental authorities on our businesses.

FNF will indemnify, hold harmless and defend us, each of our affiliates and each of our and their respective directors, officers and employees, on an after-tax basis, from and against all liabilities relating to, arising out of or resulting from:


	•	the failure of FNF or any affiliate of FNF or any other person or entity to pay, perform or otherwise promptly discharge any liabilities of FNF or its affiliates other than liabilities associated with our businesses, whether arising before or after the separation;

	•	the operations, liabilities, and obligations of FNF and its affiliates’ businesses other than liabilities associated with our businesses;


	•	any guarantee, indemnification obligation, surety bond or other credit support arrangement by us or any of our affiliates for the benefit of FNF;



	•	any breach by FNF or any of its affiliates of the master agreement or certain of the other transaction documents, any agreement to which FNF or its affiliates are a party, FNF’s certificate of incorporation or bylaws, or any law or regulation;



	•	any untrue statement of, or omission to state, a material fact in our public filings to the extent it was as a result of information that FNF furnished to us or which we incorporated by reference from FNF’s public filings (other than any registration statement or prospectus related to this offering);


	•	any untrue statement of, or omission to state, a material fact contained in any registration statement or prospectus related to this offering, but only to the extent the untrue statement or omission was made or omitted in reliance upon information provided by FNF expressly for use in any registration statement or prospectus;


	•	any actions or liability imposed by governmental authorities on FNF’s business; and



	•	any action or liability arising as a result of the distribution.

The master agreement will also specify procedures with respect to claims subject to indemnification and related matters and provide for contribution in the event that indemnification is not available to an indemnified party. All indemnification amounts will be reduced by any insurance proceeds and other offsetting amounts recovered by the party entitled to indemnification.

Covenants and Other Provisions. The master agreement also will contain covenants between us and FNF with respect to various matters, including mutual confidentiality of our and FNF’s information, and litigation and settlement cooperation between us and FNF on pending or future litigation matters. In addition, we will agree that, so long as FNF beneficially owns or controls 50% or more of our outstanding common stock, we will not, without FNF’s prior consent:


	•	take any action or enter into any agreement that would cause FNF to violate any law, agreement or judgment;


	•	take any action that limits FNF’s ability to freely sell, transfer, pledge or otherwise dispose of our stock;



	•	issue any shares of our capital stock or any rights, warrants or options to acquire our capital stock, if after giving effect to the issuances and considering all of the shares of our capital stock which may be acquired under the rights, warrants and options outstanding on the date of the issuance, FNF would own less than 50% of our outstanding capital stock which is entitled to vote generally in the election of directors; or


	•	enter into any agreement that binds or purports to bind FNF.

The master agreement will also provide that any proposed intercompany transactions, including material amendments to the master agreement and the other ancillary agreements related to the contribution and the distribution and our separation from FNF, must be approved by a majority of our disinterested directors.

Expenses of the Separation and this Offering. In general, each of FNF and our company will each be responsible for our own costs (including all associated third-party costs) incurred in connection with the transactions contemplated by the master agreement. However, we have agreed to pay all costs and expenses relating to this offering, including the underwriting discounts and commissions and FNF’s financial, legal, accounting, printing and other expenses, and FNF has agreed to pay all costs (including all associated third-party costs) and expenses relating to the distribution.

Dispute Resolution Procedures. The master agreement will provide that neither party will commence any court action to resolve any dispute or claim arising out of or relating to the master agreement. Instead, any dispute that is not resolved in the normal course of business will be submitted to senior executives of each business entity involved in the dispute for resolution. If the dispute is not resolved by negotiation within 30 days, either party may submit the dispute to mediation. If the dispute is not resolved by mediation within 30 days of the selection of a mediator, either party may submit the dispute to binding arbitration before an arbitrator. The arbitrator will determine the dispute in accordance with New York law. Most of the other agreements between us and FNF, other than the transition services agreements, will have similar dispute resolution provisions.

These dispute resolution procedures will not apply to any dispute or claim related to FNF’s rights as a holder of our common stock and both parties will submit to the exclusive jurisdiction of the Delaware courts for resolution of these disputes. In addition, both parties will be permitted to seek injunctive or interim relief in the event of any actual or threatened breach of the provisions of the master agreement relating to confidentiality. If an arbitral tribunal has not been appointed, both parties may seek injunctive or interim relief from any court with jurisdiction over the matter.

Termination. Either we or FNF or may terminate the master agreement at any time prior to the effectiveness of this prospectus. After the offering, the master agreement can be terminated only by the mutual consent of both parties.


	*Transition Services Agreements*

We intend to enter into a transition services agreement with FNF under which FNF will provide corporate and other support services to us. Similarly, we in turn will enter into a transition services agreement with FNF under which we will provide similar corporate and other services to FNF. The transition services agreements will govern the provision by FNF to us and by us to FNF of these corporate support services, which may include:


	•	treasury, cash management, and other financially related services;

	•	accounting, billing and financial transaction support;


	•	tax services (supervision);


	•	corporate, legal and related services;

	•	risk management and corporate insurance;

	•	payroll and human resources and employee benefits administration;

	•	information technology, network systems, data processing and related services;

	•	purchasing and procurement;


	•	travel; and



	•	other general administrative and management functions.

We also will provide each other, on a transitional basis, additional services that we and FNF may identify during the term of the agreements.

Under the transition services agreements, we and FNF will each have the right to purchase goods or services, use intellectual property licensed from third parties and realize other benefits and rights under the other party’s agreements with third-party vendors to the extent allowed by those vendor agreements, during the term of the agreement.

Terms of Provision and Allocation of Costs. Under the terms of the transition services agreements, each party will render these services under the oversight, supervision, and approval of the other, acting through its respective board of directors and officers. The charges for the transitional services generally are intended to allow the providing company to fully recover the allocated direct costs of providing the services, plus all out-of-pocket costs and expenses, and include a reasonable arm’s length profit.

Duration and Effect of Termination. We expect that the transition services agreements between FNF and us will terminate at various times specified in the agreement (generally ranging from 3 months to 24 months after the completion of this offering) with respect to specific services, but in any event will be terminable by either party on 90 days’ notice, other than with respect to certain IT infrastructure and data processing services, for which the notice of termination will be up to 180 days. Further, in the event of the completion of the distribution or if FNF should otherwise no longer own a majority of our common stock, it is likely that these agreements would terminate after some interim transitional period. When the agreements are terminated, we and FNF would arrange for alternate suppliers or hire additional employees for all the services important to our respective businesses. However, if we have to replicate facilities, services, or employees that we are not using full time, our costs could increase. We cannot predict the specific areas where our costs would increase, as that depends upon the growth and needs of our business at the time the agreements are terminated.

Liability and Indemnification. The transition services agreements will provide that the provider of services will not be liable to the receiving party for or in connection with any services rendered or for any actions or inactions taken by a provider in connection with the provision of services, except to the extent of liabilities resulting from the provider’s gross negligence, willful misconduct, improper use or disclosure of customer information or violations of law and except for liabilities that arise out of intellectual property infringement. Additionally, the receiving party will indemnify the provider of services for any losses arising from the provision of services, except to the extent the liabilities are caused by the provider’s negligence or breach of the agreement, and except to the extent that the provider has indemnified the receiving party for the liabilities under the terms of the agreement.

Dispute Resolution Procedures. The transition services agreements will provide dispute resolution procedures that are generally similar to those applicable to the master agreement and the other agreements between us and FNF, except on a more expedited basis. In addition, the transition services agreements will provide that disputes relating to matters other than a failure to provide the services as contemplated (such as matters relating to intellectual property infringement) need not be submitted to the business entity’s senior executives for negotiation or mediation, but rather may be dealt with immediately through the pursuit of appropriate legal remedies.

Tax Disaffiliation Agreement

In connection with this offering, we and FNF will enter into a tax disaffiliation agreement, which will govern the respective rights, responsibilities, and obligations of FNF and us after this offering with respect to tax liabilities and refunds, tax attributes, tax contests and other matters regarding income taxes, taxes other than income taxes and related tax returns.

Allocation of Tax Liability. The tax disaffiliation agreement will provide for the allocation and payment of taxes for periods during which we and FNF are included in the same consolidated group for federal income tax purposes or the same consolidated, combined or unitary returns for state tax purposes, the allocation of responsibility for the filing of tax returns, the conduct of tax audits and the handling of tax controversies, and various related matters. Under the tax disaffiliation agreement, FNF will be primarily responsible for preparing and filing any tax return with respect to the FNF affiliated group for U.S. federal income tax purposes and with respect to any consolidated, combined or unitary group of which FNF or any of its subsidiaries is the

filing parent for U.S. state or local income tax purposes. We generally will be responsible for preparing and filing any federal tax returns that include only us and our subsidiaries and any U.S. state and local tax returns for which we or any of our subsidiaries is the filing parent. For periods during which we are included in FNF’s consolidated federal income tax returns or state consolidated, combined, or unitary tax returns, we generally will be required to pay an amount of income tax equal to the amount we would have paid had we filed tax returns as a separate entity. We will be responsible for our own separate tax liabilities that are not determined on a consolidated or combined basis. We will also be responsible in the future for any increases of consolidated tax liability of FNF that is attributable to us and will be entitled to refunds for reductions of tax liabilities attributable to us for prior periods. We will be included in FNF’s consolidated group for federal income tax purposes so long as FNF beneficially owns at least 80% of the total voting power and value of our outstanding common stock. Each corporation that is a member of a consolidated group during any portion of the group’s tax year is severally liable for the federal income tax liability of the group for that year. While the tax disaffiliation agreement will allocate tax liabilities between FNF and us, we could be liable in the event federal tax liability allocated to FNF is incurred but not paid by FNF or any other member of FNF’s consolidated group for FNF’s tax years that include these periods. In this event, we would be entitled to indemnification by FNF under the tax disaffiliation agreement.

Restrictions on Transactions Involving Our Stock. We and FNF intend the distribution to qualify as a reorganization pursuant to which no gain or loss is recognized by FNF or its stockholders for federal income tax purposes under Sections 355, 368(a)(1)(D) and related provisions of the Internal Revenue Code. FNF has obtained a private letter ruling from the Internal Revenue Service, subject to certain conditions, and will seek to obtain an opinion from its outside tax advisor which, together with the private letter ruling, are collectively to that effect. In addition, it is expected that the tax disaffiliation agreement will restrict our actions to help assure that the distribution is not taxable to FNF. In general, we expect that through the period ending two years after the distribution, any direct or indirect acquisition, issuance, or other transaction involving a 10% or greater interest in our stock, individually or when cumulated with all other direct or indirect transactions involving our stock during such period, will be restricted in the absence of an opinion from a nationally recognized law firm or accounting firm or a ruling from the Internal Revenue Service that the transaction will not cause the distribution to be taxable to FNF. The tax disaffiliation agreement will provide that we will be required to indemnify FNF with respect to any transaction by us involving our stock, and FNF will be required to indemnify us with respect to any transaction by it involving its stock, that results in the imposition of U.S. federal income tax on FNF in connection with the distribution.

Tax Disputes and Contests. Generally, for periods in which we are included in FNF’s consolidated federal income tax return, or state consolidated, combined, or unitary tax returns, we will control tax contests to the extent the underlying tax liabilities would be allocated to us under the tax disaffiliation agreement, and FNF will control all tax contests to the extent the underlying tax liabilities would be allocated to FNF under the tax disaffiliation agreement. We generally have authority to control tax contests with respect to tax returns that include only us and our subsidiaries. Disputes arising between us and FNF related to matters covered by the tax disaffiliation agreement are subject to resolution though specific dispute resolutions provisions described in the tax disaffiliation agreement.

Employee Matters Agreement

In addition to corporate and similar services described above under “—Transition Services Agreement,” we will enter into the employee matters agreement with FNF to allocate responsibility and liability for certain employee-related matters. Under the employee matters agreement, we will assume and agree to pay, perform, fulfill, and discharge employee benefit obligations in accordance with their respective terms relating to individuals who will be employed by us on or prior to the distribution. The employee matters agreement generally provides for the following:

Employee Transfers and Liabilities. We will hire or employ employees of FNF and its affiliates, as identified in the employee matters agreement, all of whom are currently involved in our business. Other than services provided under the transition services agreement, effective as of the date of the distribution, we will

assume all employment, compensation and employee benefit liabilities relating to our employees that arise before, on or after that date.

Stock and Incentive Compensation. Any FNF restricted stock and stock options held by our employees immediately prior to the distribution will be treated in the manner described in “Management—Treatment of FNF Stock Options and Restricted Stock.”

U.S. Employee Benefits. During the period between closing of this offering and the date of the distribution, our U.S. employees will continue to participate in FNF’s U.S. employee benefit plans, and we will contribute to those plans (or reimburse FNF) the portions of the employer contributions and other employer-paid costs under those plans that are attributable to our employees. On or prior to the date of the distribution, we will establish our own employee benefit plans for our U.S. employees, and our U.S. employees will cease to participate in the FNF U.S. plans. The accrued benefits of our U.S. employees in FNF’s U.S. pension plan will be retained in the plan on and after the date of the distribution, subject to that plan’s distribution provisions. The accrued benefits of our U.S. employees in FNF’s U.S. 401(k) plan will be transferred to our 401(k) plan as soon as possible after these U.S. employees become eligible to participate in our 401(k) plan.

Non-U.S. Employee Benefits. On or before the date of the distribution, we generally will establish our own employee benefit plans for our non-U.S. employees, and our non-U.S. employees will in that event cease to participate in the FNF non-U.S. plans.


	*Registration Rights Agreement*

In the event the distribution is not completed and FNF does not divest itself of all of its shares of our common stock, FNF would not be able to freely sell our shares without registration under the Securities Act or a valid exemption therefrom. Accordingly, we will enter into a registration rights agreement with FNF requiring us, under certain circumstances, to register our shares beneficially owned by FNF following this offering. These registration rights will generally become effective at the time as FNF informs us that it no longer intends to complete the distribution.

Demand Registration Rights. Under the registration rights agreement, FNF will have the right to require us to register for offer and sale all or a portion of our shares beneficially owned by FNF, which we refer to as a demand registration. The maximum number of demand registrations that we are required to effect is two per year and the number of shares to be registered in each demand registration must have an aggregate expected offering price of at least $25 million.

Piggy-Back Registration Rights. In addition, FNF will have the right, subject to certain conditions, which it may exercise at any time, to include its shares in any registration of common stock that we may make in the future, commonly referred to as a piggy-back registration right, if our registration would permit the inclusion.

Terms of Offering. FNF will have the right to designate the terms of each offering effected pursuant to a demand registration, which may take any form, including a shelf registration, a convertible registration or an exchange registration. We will agree to cooperate fully in connection with any registration for FNF’s benefit and with any offering FNF makes under the registration rights agreement. We will also agree to pay for the costs and expenses related to shares sold by FNF in connection with any registration covered by the agreement, except that FNF will be responsible for any applicable underwriting discounts and commissions as well as any registration or filing fees with respect to the shares being sold by FNF. The registration rights of FNF will be transferable by FNF and will be for an indefinite term. In addition, the registration rights agreement will contain indemnification and contribution provisions with respect to information included in any registration statement, prospectus or related documents.

Timing of Demand Registrations. We will not be required to undertake a demand registration within 90 days of the effective date of a previous demand registration, other than a demand registration that was effected as a shelf registration. In addition, we will generally have the right (which may be exercised once in any 12-month period) to postpone the filing or effectiveness of any demand registration for up to 90 days, if we determine that the registration would be reasonably expected to have a material adverse effect on any then-

active proposals to engage in certain material transactions or would otherwise disadvantage us through premature disclosure of pending developments.

Duration. The registration rights under the registration rights agreement will remain in effect with respect to our shares until (i) the shares have been sold pursuant to an effective registration statement under the Securities Act; (ii) the shares have been sold to the public pursuant to Rule 144 under the Securities Act (or any successor provision); (iii) the shares have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer have been delivered by us, and subsequent public distribution of the shares does not require registration or qualification under the Securities Act or any similar state law; (iv) the shares have ceased to be outstanding; or (v) in the case of shares held by a transferee of FNF, when the shares become eligible for sale pursuant to Rule 144(k) under the Securities Act (or any successor provision).


	*Software License Agreements*

Certain FNF subsidiaries will license proprietary software and provide maintenance services to certain of our subsidiaries for annual fees under individual license agreements. Similarly, certain of our subsidiaries will license proprietary software and provide maintenance services to FNF and certain of its subsidiaries for annual fees under individual license agreements.

Joint Ownership and Development Agreements

One of our subsidiaries will enter a joint development agreement with one of FNF’s subsidiaries whereby our subsidiary will provide development services in connection with proprietary software to be used in connection with title plants. Upon delivery by our subsidiary of software that meets acceptance criteria, both parties will jointly own the developed software.

One of our subsidiaries will enter a joint ownership agreement with one of FNF’s subsidiaries whereby the parties will convey their respective interests in certain proprietary software such that both parties will be joint owners of the software. The parties will further agree to negotiate a development agreement to further develop the jointly owned software.

Intellectual Property Cross License Agreement

The intellectual property license agreement governs the respective rights, responsibilities, and obligations of FNF and us after this offering with respect to certain intellectual property. Pursuant to the terms of the intellectual property license agreement, we have entered into an intellectual property cross-license with FNF. Under the intellectual property license agreement, we agree to license to FNF certain intellectual property owned by us. Likewise, FNF agrees to license to us certain intellectual property owned by FNF. The intellectual property licensed by FNF to us includes the use of the name “Fidelity National.”

Agency Agreements

In connection with our Lender Services business, four of our subsidiaries have entered into issuing agency contracts with Chicago Title Insurance Company, or CTI, an indirect subsidiary of FNF and a Missouri-domiciled title insurer, and with Fidelity National Title Insurance Company, or FNTIC, a subsidiary of FNF and a California-domiciled title insurer. We refer to these four subsidiaries as the LSI agency subsidiaries. Under these issuing agency contracts, the LSI agency subsidiaries will act as title agents for CTI or FNTIC in various jurisdictions in connection with our Lender Services business. The nature of the services we provide as part of our Lender Services segment requires that we have licensed title agents for certain portions of this business.

Terms and Provisions. Under the issuing agency contracts, the title agency appointments of the LSI agency subsidiaries are not exclusive and CTI and FNTIC each retain the ability to appoint other title agents and to issue title insurance directly. In addition, the issuance of all title insurance for which the LSI agency subsidiaries are the agents is subject to the terms set forth in the issuing agency contracts. We believe that rates, duties, liability and indemnification provisions comport with the terms and conditions generally applicable in similar arrangements between non-affiliated parties in the title agency industry.

Duration and Termination. The issuing agency contracts will be effective for a ten-year period following receipt of approval from insurance regulators, and will remain in effect until terminated by either party. Any issuing agency contract can be terminated by either party upon five years advance written notice at any time after the fifth anniversary of the contract.

Starter Agreement

We will enter into an agreement with FNF whereby certain of our subsidiaries will be able to access and use certain title records owned by FNF. The agreement will have an initial term of one year, with automatically renewable one-year terms, unless terminated earlier on 30-days’ prior written notice. Our subsidiaries that are covered by the agreement will be granted access to the database of previously issued title policies, which we refer to as the starter repository, and will be permitted to use the retrieved information solely in connection with the issuance of title insurance products. Our subsidiaries that are covered by the agreement may create proprietary means of technical access to the starter repository. FNF retains ownership of the starter repository and related programs, databases, and materials. We will pay FNF fees for the access to the starter repository and will reimburse FNF for payment of certain taxes and government charges. We will indemnify FNF for third party claims arising from any errors or omissions in the starter repository or the provision of access under the agreement. In addition, we are responsible for costs incurred as a result of unauthorized access to the data base. With regard to dispute resolution, if either we or FNF institutes an action against the other party for breach, such other party has the option, within 30 days of the notice of such action, to institute an arbitration proceeding and stay the other action.

Title Plant Maintenance Agreements

Our subsidiary, Property Insight, LLC, or Property Insight, will enter into maintenance agreements with certain of the title insurance subsidiaries of FNF prior to the completion of this offering. Pursuant to the title plant maintenance agreements, we will manage certain title plant assets of certain of FNF’s title insurance subsidiaries. These management services will include keeping the title plant assets current and functioning on a daily basis. Property Insight’s management services will also include updating, compiling, extracting, manipulating, purging, storing and processing title plant data so that the title plant database will be current, accurate and accessible, through an efficient and organized access system. In performing these functions, Property Insight will make use of the software systems licensed to it from the FNF title insurance subsidiaries, but it may also utilize proprietary systems, software, technologies and methodologies that have been developed, or will be developed, by Property Insight. The FNF title insurance subsidiaries will have no ownership or other right or title to these proprietary systems and methodologies (except in certain limited circumstance in the event of a termination of a title plant maintenance agreement, as a result of a default by, or termination by, Property Insight). Property Insight may also use these proprietary systems and methodologies in the title plant management services it may provide to other third party customers. In exchange for its management services, Property Insight will have perpetual, irrevocable, transferable and nonexclusive worldwide licensed access to the title plants and certain software relating thereto, and it will be able to sell this title plant access to third party customers and earn all revenue generated from the use of those assets by third party customers. In addition, Property Insight will earn fees from providing access to updated and organized title plant databases to the FNF title insurance subsidiaries through the title plant access agreement described below. In consideration for the licensed access to the title plants and related software, Property Insight will pay a royalty to the FNF title insurance subsidiaries that own the title plants.

Limitation of Liability. Under the title plant maintenance agreements, Property Insight will have no liability to the FNF title insurance subsidiaries for any error in the information provided in the performance of its services, except in the event of Property Insight’s gross negligence or willful misconduct.

Duration and Termination. Each of the title plant maintenance agreements will be effective for a ten year period beginning on the completion of this offering, with automatic renewal, and may be terminated by mutual agreement of the parties or upon five years’ prior written notice, except in the case of a default in performance, in which case the agreement may be terminated immediately if the default is not cured within 30 days after notice (with provisions that permit an extension of the 30-day cure period under certain circumstances). In addition, the

title plant maintenance agreement may be terminated in the event of a change of control of either Property Insight or the applicable title insurer. So long as Property Insight does not cause the termination of a title plant maintenance agreement (either through notice of termination or by defaulting on its obligations or otherwise), Property Insight will retain a copy of the title plant database and related software as well as the right to use the software and sell access to the title plant database to third party customers.

Title Plant Access Agreement

Property Insight will also enter into a title plant access agreement with Rocky Mountain Support Services, Inc., an Arizona corporation and a subsidiary of FNF, prior to the completion of this offering. Pursuant to the title plant access agreement, Rocky Mountain will pay fees to Property Insight for the right to access updated databases containing various title plant assets, including title plant assets owned by title insurance subsidiaries of FNF, that Property Insight maintains and manages. The pricing of the fees to be charged by Property Insight to Rocky Mountain will be consistent with arm’s-length fees charged to unaffiliated title insurers.

Software Development. The title plant access agreement will also set forth the parties’ agreement with respect to the development of advanced software systems and methodologies that can be used to compile, manipulate, extract and process the title plant data owned by title insurance subsidiaries of FNF, which data Property Insight will have access to through the title plant maintenance agreements. Pursuant to the title plant access agreement, Property Insight will undertake to develop the software and methodologies, and any advanced systems and/or and methodologies that are developed by Property Insight will remain, as between the parties, the sole property of Property Insight, except to the extent that the cost of development is paid by Rocky Mountain.

Duration and Termination. The title plant access agreement will be effective at the completion of the offering and will continue for a period of ten years. The termination provisions in the title plant access agreement are similar to those in the title plant maintenance agreements.

Lease Agreement

Prior to the completion of this offering, we will enter into a lease agreement pursuant to which FNF (or other affiliates of FNF) will lease from us certain portions of our Jacksonville, Florida headquarters building which we own. This lease arrangement will be effective at the completion of this offering and will continue for a term of years. Lease terms will be commensurate with those found in the local real estate market and the pricing for this lease arrangement will be consistent with arm’s-length fees charged by unrelated parties.

Master Services Agreement

We will enter into a master services agreement with FNF prior to the completion of this offering. Pursuant to the master services agreement, we will provide various services to FNF and its affiliates, most of which services are similar in nature to the services that we have historically provided to FNF, such as IT infrastructure support, data center management and software sales. Moreover, under the master services agreement, FNF has designated certain services as high priority critical services required for its business. These include: managed operations, network, email/messaging, network routing, technology center infrastructure, active directory and domains, systems perimeter security, data security, disaster recovery and business continuity. We agree that we will use our reasonable best efforts to provide these core services without interruption throughout the term of the master services agreement, except for scheduled maintenance.

Terms of Provision. The master services agreement sets forth the specific services to be provided under the master services agreement and provides for statements of work and amendment as necessary. We will provide the services ourselves or through one or more subcontractors that are approved by FNF, but we shall be fully responsible for compliance by each subcontractor with the terms of the master services agreement. Moreover, FNF is liable only to us for its performance under the master services agreement and we shall be

the sole point of contact regardless of which of our affiliates or subcontractors may be performing any particular service.

The master services agreement includes, as part of the agreement, various base services agreements, each of which includes a specific description of the service to be performed as well as the terms, conditions, responsibilities and delivery schedules that apply to a particular service. Any new terms, conditions, responsibilities and delivery schedules that may be agreed to by the parties during the term of the agreement will be added as part of one of the base services agreements or the master services agreement itself. FNF can also request services that are not specified in the agreement. These additional services will be provided on terms that we propose to FNF and, if we can agree on the terms, a new statement of work or amendment will be executed. In addition, if requested by FNF, we will continue to provide, for an appropriate fee, services to FNF that are not specifically included in the master services agreement if those services were provided to FNF by us or our subcontractors in the past.

The master services agreement provides for specified levels of service for each of the enumerated services to be provided, including any additional services that we agree to perform pursuant to amendments to the agreement or additional statements of work. If we fail to provide service in accordance with the applicable service levels, then we are required to correct our failure(s) as promptly as possible (and in any event, within five days of the failure recognition) at no cost to FNF. We are also required to use reasonable efforts to continuously improve the quality and efficiency of our performance. If either we or FNF find that the level of service for any particular service is inappropriate, ineffective or irrelevant, then the parties may review the service level and, upon agreement, adjust the level of service accordingly. FNF is permitted to audit our operations, procedures, policies and service levels as they apply to our services under the master services agreement. In addition, at least every year during the term of the master services agreement, we will conduct a customer satisfaction survey.

We may provide the services under the master services agreement from one or more of our technology centers or other data centers that we designate within the United States. We must also maintain and enforce safety and security procedures that are at least equal to industry standards and are as rigorous as those in effect on the effective date of the agreement. The master services agreement contains provisions regarding privacy and confidentiality and requires each of the parties to use at least the same standard of care in the protection of confidential information of the other party as it uses in the protection of its own confidential or proprietary information.

Duration and Effect of Termination. The master services agreement will be effective for a term of five years unless earlier terminated in accordance with its terms. FNF will have the right to renew the master services agreement for a single one-year period or a single two-year period, by providing a written notice of its intent to renew at least six months prior to the expiration date. Upon receipt of a renewal notice, the parties will begin discussions regarding the terms and conditions that will apply for the renewal period, and if the parties have not reached agreement on the terms by the time the renewal period commences, then the agreement will be renewed for only one year on the terms as in effect at the expiration of the initial term.

FNF may also terminate the master services agreement or any particular statement of work or base services agreement on six months’ prior written notice. In addition, if either party fails to perform its obligations under the master services agreement, the other party may terminated after the expiration of certain cure periods. FNF may also terminate the master services agreement if there is a change in our ownership or control, as more fully defined by the terms of the master services agreement.

Dispute Resolution Procedures. Disputes, controversies and claims under the master services agreement will be referred to a management committee that includes representatives from both parties. If the management committee is unable to resolve the issue, the master services agreement sets forth a procedure by which the issue is referred to and reviewed by increasingly senior members of our management and FNF’s management. If our senior management cannot resolve the issues with FNF’s senior management, then the dispute is referred to an independent arbitrator for resolution. However, we are required to continue to provide services during the period of any dispute or dispute resolution process.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Historical Related-Party Transactions with FNF

FNF has historically operated the business groups that it will transfer to us prior to the consummation of this offering as internal divisions or separate subsidiaries. Accordingly, the transactions described below, which historically were inter-company arrangements among FNF divisions and subsidiaries, are described as if those divisions and subsidiaries were our operating businesses during 2003, 2002 and 2001. As described in “Our Arrangements with FNF,” we will enter into new agreements with respect to certain matters described below for varying periods following this offering.

We generate significant revenue from the loan facilitation services that we provide to large national lenders. A significant part of these transactions involves title agency functions that result in the issuance of a title insurance policy by a title insurance underwriter owned by FNF. We also perform similar title agency functions in connection with certain trustee sale guarantees, which is a form of title insurance that is issued by an FNF title insurance underwriter as part of the foreclosure process on a defaulted loan. In 2003, we earned net revenues of $250.9 million from such title agency functions performed in connection with title insurance policies issued by underwriters owned by FNF, representing commissions earned on those policies. In 2002 and 2001, we earned net revenues of $46.7 million and $34.0 million, respectively, from providing these title agency functions to FNF. We received an additional $3.9 million, $3.8 million and $3.5 million from sales of other title related services to FNF in 2003, 2002 and 2001, respectively.

We manage title plant assets located in various parts of the country for certain title insurance underwriters owned by FNF. These management activities include keeping the title plant assets current and functioning on a daily basis, for which we bear all of the costs. In exchange for providing these services, we receive all of the revenue generated from the use of those assets by third-party customers, as well as amounts from FNF. In 2003, 2002 and 2001, the revenue that we received from FNF relating to this arrangement was $28.2 million, $24.3 million and $18.8 million, respectively.

FNF historically has provided certain corporate services to us relating to general management, accounting, finance, legal, payroll, human resources, internal audit and mergers and acquisitions. In 2003, 2002 and 2001, we paid FNF $39.5 million, $21.6 million and $15.2 million, respectively, for these services.

On July 2, 2004, we entered into a promissory note in favor of a subsidiary of FNF in an aggregate principal amount of $40 million. The proceeds of the borrowing were used to fund our acquisition of Geotrac. The aggregate principal amount of the note is due on July 1, 2005. We expect that the note will be repaid either with borrowings under our new credit facility or from working capital or a combination of these sources.

In 2003, we provided IT infrastructure support to FNF, including data center management and software sales. Our revenues from the provision of these services in 2003 was $17.4 million. Under this arrangement in 2002, we sold FNF certain software applications but did not provide any additional services, for which we received revenue of $1.3 million. A subsidiary of FNF historically provided technology support to us. Amounts paid to this subsidiary were $5.4 million, $5.8 million, and $4.9 million in 2003, 2002, and 2001.

Other

Cary H. Thompson has been nominated to serve as one of our directors upon the consummation of this offering. Mr. Thompson is a Senior Managing Director with Bear, Stearns & Co. Inc., which is a joint lead manager of this offering. During 2003, we engaged Bear, Stearns & Co. Inc. to provide us with certain investment advisory and brokerage services, for which they received fees in the amount of approximately $1.7 million. During 2002, Bear, Stearns & Co. Inc. provided investment advisory and brokerage services to us, including acting as our investment advisor during our acquisition of Eastern Financial Systems, Inc., for which they received fees in the amount of approximately $750,000.

OWNERSHIP OF COMMON STOCK

Prior to the completion of this offering, all shares of our common stock were owned by FNF. Upon the completion of this offering, FNF will beneficially own approximately % of our outstanding common stock, assuming the underwriters’ over-allotment option is not exercised, and approximately % of our outstanding common stock, if the over-allotment option is exercised in full.

Except for FNF, no person will beneficially own any of our outstanding common stock prior to completion of this offering, and we are not aware of any person other than FNF who will beneficially own 5% or more of our common stock upon completion of this offering. Our directors and officers do not currently own any of our common stock, although they may purchase shares in the offering, including in the directed share offering, and will receive options to purchase shares upon the closing of the offering. See “Stock Ownership of Directors and Executive Officers — FIS Option Grants at the Offering” and, for a description of the directed share offering, “Underwriters.” Further, in the event of the distribution those who own shares of FNF common stock will be treated on the same terms as any other holders of FNF common stock. See “Management — Stock Ownership of Directors and Executive Officers” for information about the ownership of FNF common stock by our directors and executive officers.

DESCRIPTION OF CAPITAL STOCK

The following description of select provisions of our certificate of incorporation, our bylaws, and of the Delaware General Corporation Law is necessarily general and does not purport to be complete. This summary is qualified in its entirety by reference in each case to the applicable provisions of our certificate of incorporation and bylaws, which are filed as exhibits to our registration statement of which this prospectus forms a part, and to the provisions of Delaware law.

General

Our authorized capital stock will consist of 750 million shares of common stock and 100 million shares of preferred stock. Immediately after the completion of this offering, shares of common stock will be outstanding, assuming the over-allotment option is not exercised.

Common Stock

Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors out of funds legally available therefore. See “Dividend Policy.” Holders of our common stock are entitled to one vote per share on all matters on which the holders of common stock are entitled to vote and do not have any cumulative voting rights. In the event of our liquidation or dissolution, holders of our common stock would be entitled to share equally and ratably in our assets, if any, remaining after the payment of all liabilities and the liquidation preference of any outstanding class or series of preferred stock. The shares of common stock issued by us in the initial public offering will be fully paid and nonassessable. The rights and privileges of holders of our common stock are subject to the rights and preferences of the holders of any series of preferred stock that we may issue in the future, as described below. For a discussion of certain registration rights held by FNF, please see “Shares Eligible For Future Sale.”

Authorized Preferred Stock

Subject to the approval by holders of shares of any class or series of preferred stock, to the extent such approval is required, our board of directors will have the authority following the closing of the offering to issue preferred stock in one or more series and to fix the number of shares constituting any such series and the designations, powers, preferences, limitations and relative rights, including dividend rights, dividend rate, voting rights, terms of redemption, redemption price or prices, conversion rights and liquidation preferences of the shares constituting any series, without any further vote or action by stockholders.

Certain Provisions of our Certificate and Bylaws and of Delaware Law

A number of provisions of our certificate of incorporation and our bylaws deal with matters of corporate governance and the rights of stockholders. The following discussion is a general summary of select provisions of our certificate of incorporation, our bylaws and certain Delaware laws that might be deemed to have a potential “anti-takeover” effect. These provisions may have the effect of discouraging a future takeover attempt which is not approved by our board of directors but which individual stockholders may deem to be in their best interest or in which stockholders may be offered a substantial premium for their shares over then current market prices. As a result, stockholders who might desire to participate in such a transaction may not have an opportunity to do so. Such provisions will also render the removal of the incumbent board of directors or management more difficult.

Common Stock. Our unissued shares of authorized common stock will be available for future issuance without additional stockholder approval. While the authorized but unissued shares are not designed to deter or prevent a change of control, under some circumstances we could use the authorized but unissued shares to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control by, for example, issuing those shares in private placements to purchasers who might side with our board of directors in opposing a hostile takeover bid.

Preferred Stock. The existence of authorized but unissued preferred stock could reduce our attractiveness as a target for an unsolicited takeover bid since we could, for example, issue shares of the preferred stock to parties that might oppose such a takeover bid or issue shares of the preferred stock containing terms the potential acquiror may find unattractive. This ability may have the effect of delaying or preventing a change of control, may discourage bids for our common stock at a premium over the market price of our common stock, and may adversely affect the market price of, and the voting and the other rights of the holders of, our common stock.

Classified Board of Directors and Related Provisions. Our certificate of incorporation provides that our board of directors must be divided into three classes of directors (each class containing approximately one-third of the total number of directors) serving staggered three-year terms. As a result, approximately one-third of our board of directors will be elected each year. This classified board provision will prevent a third party who acquires control of a majority of our outstanding voting stock from obtaining control of our board of directors until the second annual stockholders meeting following the date the acquiror obtains the controlling interest. The number of directors constituting our board of directors is determined from time to time by our board of directors. Our certificate of incorporation also provides that directors may be removed only for “cause” by the affirmative vote of the holders of a majority of all outstanding voting stock entitled to vote. This provision, in conjunction with the provisions of our certificate of incorporation authorizing our board of directors to fill vacancies on the board, will prevent stockholders from removing incumbent directors without cause and filling the resulting vacancies with their own nominees.

No Stockholder Action by Written Consent; Special Meetings. Our certificate of incorporation permits our stockholders to act by written consent without a meeting as long as FNF owns more than 50% of our voting stock. Once FNF ceases to own that percentage of our voting stock, our certificate of incorporation provides that stockholder action can be taken only at an annual or special meeting of stockholders and cannot be taken by written consent in lieu of a meeting. Our certificate of incorporation also provides that, except as otherwise required by law, special meetings of the stockholders can only be called by a majority of our entire board of directors or our president. Stockholders may not call a special meeting or require that our board of directors call a special meeting of stockholders.

Advance Notice Requirements for Stockholder Proposals and Director Nominees. Our bylaws provide that, if one of our stockholders desires to submit a proposal or nominate persons for election as directors at an annual stockholders’ meeting, the stockholder’s written notice must be received by us not less than 120 days prior to the anniversary date of the date of the proxy statement for the immediately preceding annual meeting of stockholders. However, if the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by a stockholder must be received by us not later than the close of business on the 10th day following the day on which public disclosure of the date of the annual meeting was made. The notice must describe the proposal or nomination and set forth the name and address of, and stock held of

record and beneficially by, the stockholder. Notices of stockholder proposals or nominations must set forth the reasons for the proposal or nomination and any material interest of the stockholder in the proposal or nomination and a representation that the stockholder intends to appear in person or by proxy at the annual meeting. Director nomination notices must set forth the name and address of the nominee, arrangements between the stockholder and the nominee and other information required under Regulation 14A of the Exchange Act. The presiding officer of the meeting may refuse to acknowledge a proposal or nomination not made in compliance with the procedures contained in our bylaws. The advance notice requirements regulating stockholder nominations and proposals may have the effect of precluding a contest for the election of directors or the introduction of a stockholder proposal if the requisite procedures are not followed and may discourage or deter a third-party from conducting a solicitation of proxies to elect its own slate of directors or to introduce a proposal.

Voting Requirements on Amending our Certificate of Incorporation or Bylaws. Our certificate of incorporation and our bylaws provide that amendments to certain provisions of our bylaws, including those related to stockholder proposals and calling special meetings of stockholders, must be approved by both our board of directors and by the vote, at a regular or special stockholders’ meeting, of the holders of at least two-thirds of the votes entitled to be cast by the holders of all our capital stock then entitled to vote. All other amendments to our bylaws require either: (i) approval by a majority of our entire board of directors (without stockholder consent) or (ii) the vote, at a regular or special stockholders’ meeting, of the holders of at least two-thirds of the votes entitled to be cast by the holders of all our capital stock then entitled to vote. In addition, our certificate of incorporation provides that amendments to certain provisions of our certificate of incorporation, including those relating to the classified board, removal of directors, calling special meetings and no stockholder action by written consent, must be approved by the vote, at a regular or special stockholders’ meeting, of the holders of at least two-thirds of the votes entitled to be cast by the holders of all of our capital stock then entitled to vote (in addition to the approval of our board of directors).

Business Combination Statute. Following the offering, we will be subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder, unless the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Because we were not subject to Section 203 prior to the offering, following the offering FNF would not be considered an interested stockholder.

Provisions of our Certificate of Incorporation and Resolutions Relating to Corporate Opportunities

Certificate of Incorporation. In order to address potential conflicts of interest between us and FNF, our certificate of incorporation contains provisions regulating and defining the conduct of our affairs as they may involve FNF and its officers and directors. Our certificate of incorporation provides that, subject to any written agreement to the contrary, FNF will have no duty to refrain from engaging in the same or similar activities or lines of business as us, and, except as set forth in our certificate of incorporation, neither FNF nor its officers or directors will be liable to us or our stockholders for any breach of any fiduciary duty due to any such activities of FNF. In the event that FNF acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both FNF and us, FNF, to the fullest extent permitted by law, will have no duty to communicate or offer the corporate opportunity to us and will, to the fullest extent permitted by law, not be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that FNF pursues or acquires that corporate opportunity for itself, directs it to another person or does not communicate information regarding it to us.

Our certificate of incorporation further provides that if one of our directors or officers who is also a director or officer of FNF acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both FNF and us, the director or officer will have satisfied his or her fiduciary duty to us and

our stockholders with respect to that corporate opportunity if he or she acts in a manner consistent with the following policy:


	•	a corporate opportunity offered to any person who is an officer of ours and who is also a director but not an officer of FNF, will belong to us unless the opportunity is expressly offered to that person in a capacity other than such person’s capacity as one of our officers, in which case it will not belong to us;

	•	a corporate opportunity offered to any person who is a director but not an officer of ours, and who is also a director or officer of FNF, will belong to us only if that opportunity is expressly offered to that person in that person’s capacity as one of our directors; and

	•	a corporate opportunity offered to any person who is an officer of both FNF and us will belong to us only if that opportunity is expressly offered to that person in that person’s capacity as one of our officers.

Our certificate of incorporation provides that if a director of either company is also chairman of the board of directors of that company, then that person will be deemed to also be an officer of that company. Notwithstanding these provisions, our certificate of incorporation does not prohibit us from pursuing any corporate opportunity of which we become aware.

These provisions in our certificate of incorporation will no longer be effective on the date that (i) FNF ceases to beneficially own our common stock representing at least 20% of the total voting power of all classes of our outstanding capital stock entitled to vote generally in the election of directors and (ii) none of our directors or officers are also directors or officers of FNF.

Resolutions. As noted above under “Management,” Mr. Willis is the co-founder and managing partner of Willis Stein, a private equity investment firm. In his relationship with Willis Stein and certain of its affiliates, Mr. Willis may be presented with investment and other business opportunities from time to time in which we could be construed to have an interest or expectancy as a result of service by Mr. Willis on our board of directors. In connection with the nomination of Mr. Willis to serve as a director, we will adopt resolutions, as permitted by Delaware law, to renounce any interest that we may have in any business opportunities presented to Mr. Willis, unless that opportunity is expressly offered to Mr. Willis in his capacity as one of our directors, in which case the opportunity will belong to us.

Limitations on Director Liability

Under the Delaware General Corporation Law, we may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he or she is or was our director, officer, employee or agent, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In addition, Section 102(b)(7) of the Delaware General Corporation Law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (relating to liability for unauthorized acquisitions or redemptions of, or dividends on, capital stock), or (iv) for any transaction from which the director derived an improper personal benefit. Our certificate of incorporation contains the provisions permitted by Section 102(b)(7) of the Delaware General Corporation Law.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.

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SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market after the offering or the perception that such sales could occur could cause the market price of our common stock to fall and could affect our ability to raise equity capital in the future on terms favorable to us. We can make no prediction as to the effect, if any, that market sales of shares of common stock or the availability of shares of common stock for sale will have on the market price prevailing from time to time.

Upon completion of this offering, we will have outstanding shares of common stock assuming the underwriters’ over-allotment option is not exercised. All the shares of common stock sold in the offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by or owned by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 described below. As defined in Rule 144, an affiliate of an issuer is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the issuer. Shares held by affiliates may not be resold in the absence of registration under the Securities Act or pursuant to an exemption from registration, including, among others, the exemption provided by Rule 144 under the Securities Act.

Upon completion of this offering, FNF will beneficially own approximately % of our outstanding common stock, assuming the underwriters’ over-allotment option is not exercised. The shares of our common stock held by FNF prior to the distribution are deemed “restricted securities” as defined in Rule 144 under the Securities Act, and may not be sold other than through registration under the Securities Act or under an exemption from registration, such as the one provided by Rule 144 described below. See “Our Arrangements with FNF— Registration Rights Agreement.”

All shares distributed to FNF stockholders in the distribution will be freely tradable without restriction or further registration under the Securities Act, except that any shares received in the distribution by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 described below.

Rule 144

In general, under Rule 144 as currently in effect, an affiliate would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:


	•	1% of the number of shares of common stock then outstanding or approximately shares of common stock immediately after this offering; or

	•	the average weekly trading volume of the common stock on the New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Lock-up Agreements

We, all of our directors and executive officers and FNF have agreed with the underwriters pursuant to lock-up agreements that, subject to limited exceptions described in “Underwriters,” for a period of 180 days after the date of this prospectus, we and they will not directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract to purchase or otherwise dispose of any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock, or in any manner transfer all or a portion of the economic consequences associated with the ownership of shares of common stock, or cause a registration statement covering any shares of common stock to be filed, without the prior written consent of Morgan Stanley & Co. Incorporated. After the expiration of the lock-up agreements, these shares will be freely eligible for sale in the public market as described above. The underwriters do not have any intention or arrangement at the present time to release any of the shares of common stock subject to lock-up agreements prior to the expiration of the lock-up period.

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Registration Rights

As described in “Our Arrangements with FNF — Registration Rights Agreement,” we have entered into a registration rights agreement with FNF. We do not have any other contractual obligations to register our common stock.

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CERTAIN U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

The following is a general discussion of the principal U.S. federal income and estate tax consequences of the ownership and disposition of our common stock by a non-U.S. holder. As used in this discussion, the term “non-U.S. holder” means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:


	•	an individual who is a citizen or resident of the U.S.;

	•	a corporation (or an entity taxed as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any political subdivision of the U.S.;

	•	an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

	•	a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust.

An individual may be treated as a resident of the U.S. in any calendar year for U.S. federal income tax purposes, instead of a nonresident, by among other ways, being present in the United States on at least 31 days in that calendar year and for an aggregate of at least 183 days during the current calendar year and the two immediately preceding calendar years. For purposes of this calculation, you would count all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year.

If a partnership holds common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Special rules may apply if a non-U.S. holder is a “controlled foreign corporation,” “passive foreign investment company,” or “foreign personal holding company,” as defined under the Internal Revenue Code and to certain expatriates or former long-term residents of the United States. If you fall within any of the foregoing categories, you should consult your own tax advisor to determine the U.S. federal, state, local, and foreign tax consequences that may be relevant to you.

This summary does not describe all of the U.S. federal income tax consequences that may be relevant to the purchase, ownership, and disposition of our common stock by a prospective non-U.S. holder in light of that investor’s particular circumstances. In addition, this discussion does not consider:


	•	U.S. alternative minimum taxes, state and local or non-U.S. tax consequences;

	•	the tax consequences for the stockholders, partners or beneficiaries of a non-U.S. holder;

	•	special tax rules that may apply to particular non-U.S. holders, such as financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, broker-dealers and traders in securities; or

	•	special tax rules that may apply to a non-U.S. holder that holds our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment.

The following discussion is based on provisions of the Internal Revenue Code, applicable U.S. Treasury regulations and administrative and judicial interpretations, all as in effect on the date of this prospectus, and all of which are subject to change, retroactively or prospectively. The following discussion also assumes that a non-U.S. holder holds our common stock as a capital asset. EACH NON-U.S. HOLDER SHOULD CONSULT ITS TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF SHARES OF OUR COMMON STOCK.

Dividends

In the event that we pay dividends on our common stock, we will have to withhold U.S. federal withholding tax at a rate of 30%, or at a lower rate if provided by an applicable income tax treaty and we have

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received proper certification of the application of such income tax treaty, from the gross amount of the dividends paid to a non-U.S. holder.

Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under an applicable income tax treaty and the manner of claiming the benefits of such treaty. A non-U.S. holder that is eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the IRS.

Dividends that are effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States or, if provided in an applicable income tax treaty, dividends that are attributable to a permanent establishment in the United States are not subject to the U.S. federal withholding tax, but are instead taxed in the manner applicable to U.S. persons. In that case, we will not have to withhold U.S. federal withholding tax if the non-U.S. holder complies with applicable certification and disclosure requirements. In addition, dividends received by a foreign corporation that are effectively connected with the conduct of a trade or business in the United States may, under specific circumstances, be subject to a branch profits tax at a 30% rate, or at a lower rate if provided by an applicable income tax treaty.

Gain on Disposal of Common Stock

A non-U.S. holder generally will not be taxed on gain recognized on a disposition of our common stock unless:


	•	the non-U.S. holder is an individual who holds our common stock as a capital asset, is present in the United States for 183 days or more during the taxable year of the disposition and meets certain other conditions;

	•	the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States or, in some instances if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or

	•	we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock.

We have determined that we are not and have never been, and we believe we will not become, a U.S. real property holding corporation.

Individual non-U.S. holders who are subject to U.S. tax because the holder was present in the United States for 183 days or more during the year of disposition are taxed on their gains (including gains from sale of our common stock and net of applicable U.S. losses from sale or exchanges of other capital assets incurred during the year) at a flat rate of 30%. Other non-U.S. holders who may be subject to U.S. federal income tax on the disposition of our common stock will be taxed on such disposition in the same manner in which citizens or residents of the United States would be taxed.

Federal Estate Tax

Common stock owned or treated as owned by an individual who is a non-U.S. holder (as specifically defined for estate tax purposes) at the time of death will be included in the individual’s gross estate for U.S. federal estate tax purposes and may be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise. U.S. federal legislation enacted in the spring of 2001 provides for reductions in the U.S. federal estate tax through 2009 and the elimination of the tax entirely in 2010. Under the legislation, the U.S. federal estate tax would be fully reinstated, as in effect prior to the reductions, in 2011.

Information Reporting and Backup Withholding

In general, backup withholding will not apply to dividends on our common stock made by us or our paying agents, in their capacities as such, to a non-U.S. holder if the holder has provided the required certification that it is a non-U.S. holder and neither we nor our paying agents have actual knowledge that the

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holder is a U.S. holder. Generally, we must report to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. These information reporting requirements apply even if no tax was required to be withheld. A similar report is sent to the recipient of the dividend.

In general, backup withholding and information reporting will not apply to proceeds from the disposition of common stock paid to a non-U.S. holder if the holder has provided the required certification that it is a non-U.S. holder and neither we nor our paying agents have actual knowledge that the holder is a U.S. holder.

Any amounts over withheld under the backup withholding rules from a payment to a non-U.S. holder will be refunded, or credited against the holder’s U.S. federal income tax liability, if any, provided that certain required information is furnished to the IRS.

THE PRECEDING DISCUSSION OF CERTAIN MATERIAL U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES IS GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH NON-U.S. HOLDER SHOULD CONSULT THAT NON-U.S. HOLDER’S OWN TAX ADVISER AS TO THE PARTICULAR TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING, OR DISPOSING OF OUR COMMON STOCK, INCLUDING THE APPLICABILITY OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, AND OF ANY CHANGES OR PROPOSED CHANGES IN APPLICABLE LAW.

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UNDERWRITERS

Under the terms and subject to the conditions contained in the underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. Incorporated is acting as representative, have severally agreed to purchase, and we have agreed to sell to them the number of shares indicated below:


		Number of
Name		Shares

Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Stephens Inc.
Wachovia Capital Markets, LLC
Banc of America Securities LLC
Keefe, Bruyette & Woods, Inc.
Robert W. Baird & Co. Incorporated
JMP Securities LLC
SunTrust Capital Markets, Inc.

	Total:

The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ over-allotment option described below.

The underwriters propose initially to offer part of the shares of common stock directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $ per share under the public offering price.

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of additional shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase approximately the same percentage of the additional shares of common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table. If the underwriters’ option is exercised in full, the total price to the public would be $ , the total underwriters’ discounts and commissions would be $ and the total proceeds to us would be $ million.

The underwriters have informed us that they do not intend sales to discretionary accounts to exceed five percent of the total number of shares of common stock offered by them.

We, all of our directors and executive officers and FNF have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus:


	•	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of

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		directly or indirectly, any of our shares of common stock or any securities convertible into or exercisable or exchangeable for our common stock; or

	•	enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock;

whether any such transaction described above is to be settled by delivery of our common stock or other securities, in cash or otherwise. The restrictions described in this paragraph do not apply to:


	•	the sale of shares to the underwriters;

	•	the issuance by us of shares of common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of and reflected in this prospectus of which the underwriters have been advised in writing;

	•	the issuance by us of shares of common stock as consideration in acquisitions of businesses or assets, provided that, subject to certain exceptions, the recipients of such common stock agree in writing to be bound by the restrictions described in this paragraph for the remainder of such 180 day period;

	•	the issuance by us of stock options, restricted stock or other awards pursuant to our existing benefit plans as described in this prospectus, provided that (i) such options, restricted stock or awards do not become exercisable or vest during such 180 day period or (ii) shares of common stock issued upon exercise of options, such restricted stock or shares of common stock issued pursuant to such other awards are subject to the restrictions described in this paragraph for the remainder of such 180 day period;

	•	transfers by any person other than us of shares of common stock to immediate family members or any trust, so long as the recipient of such common stock agrees in writing to be bound by the restrictions described in this paragraph for the remainder of such 180 day period;

	•	transactions by any person other than us relating to shares of common stock or other securities acquired in open market transactions after the completion of this offering; or

	•	the distribution by FNF of its remaining shares of our common stock to its stockholders.

The 180 day restricted period above is subject to extension such that, in the event that either (1) during the last 17 days of the 180 day restricted period, we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of the 180 day restricted period, we announce that we will release earnings results during the 16 day period beginning on the last day of the 180 day period, the “lock up” restrictions described above, subject to limited exceptions, will continue to apply until the expiration of the 18 day period beginning on the earnings release or the occurrence of the material news or material event.

The estimated offering expenses payable by us, in addition to the underwriting discounts and commissions, are approximately $ , which includes legal, accounting and printing costs and various other fees associated with registering and listing the common stock.

The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares of our common stock.



	Paid by FIS

	No Exercise	Full Exercise

Per share	$	$
Total	$	$

In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the over-allotment option. The underwriters can close out a covered short sale by

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exercising the over-allotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the over-allotment option. The underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. In addition, to stabilize the price of the common stock, the underwriters may bid for, and purchase, shares of common stock in the open market. Finally, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the common stock in this offering, if the syndicate repurchases previously distributed common stock to cover syndicate short positions or to stabilize the price of the common stock. Any of these activities may stabilize or maintain the market price of the common stock above independent market levels. The underwriters are not required to engage in these activities, and may end any of these activities at any time.

From time to time, certain of the underwriters have provided, and continue to provide, investment banking and other services to us for which they receive customary fees and commissions. One of our director nominees, Cary H. Thompson, is a Senior Managing Director with Bear, Stearns & Co. Inc. During 2003, we engaged Bear, Stearns & Co. Inc. to provide us with certain investment advisory and brokerage services, for which they received fees in the amount of approximately $1.7 million. During 2002, Bear, Stearns & Co. Inc. provided investment advisory and brokerage services to us, including acting as our investment advisor during our acquisition of Eastern Financial Systems, Inc., for which they received fees in the amount of approximately $750,000.

We have applied for the listing of our common stock on the New York Stock Exchange under the symbol “FIS.”

We and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

In order to meet one of the requirements for listing our common stock on the New York Stock Exchange, the underwriters have undertaken to sell lots of 100 or more shares of common stock to a minimum of 2,000 beneficial holders.

Directed Share Program

At our request, the underwriters have reserved percent of the shares of common stock to be offered by this prospectus for sale, at the initial public offering price, to directors, officers, employees, business associates and related persons of FIS. The number of shares of common stock available for sale to the general public will be reduced to the extent these individuals purchase such reserved shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus.

Pricing of the Offering

Prior to this offering, there has been no public market for the common stock. The offering price will be determined by negotiations between us and the underwriters. Among the factors to be considered in determining the offering price will be our future prospects and those of our industry in general; our sales, earnings and certain other financial and operating information in recent periods; and the price-earnings ratios, price-sales ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to ours. The estimated offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors.

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LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed upon for us by LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership including professional corporations, and for the underwriters by Davis Polk & Wardwell, New York, New York.

EXPERTS

The combined financial statements and schedule of Fidelity National Information Services, Inc. and subsidiaries, as of December 31, 2003, and 2002, and for each of the years in the three-year period ended December 31, 2003, have been included herein and in the registration statement in reliance upon the reports of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The audit report on the combined financial statements refers to the adoption effective January 1, 2002 of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” related to a change to the method of accounting for goodwill and the adoption effective January 1, 2003 of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” related to stock-based employee compensation.

The consolidated statements of operations and comprehensive income, parent company investment, and cash flows of Financial Services Division of ALLTEL Information Services, Inc. for the three month period ended March 31, 2003, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent auditors, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The audit report contains explanatory paragraphs related to the basis of presentation and the acquisition of Financial Services Division of ALLTEL Information Services, Inc. by Fidelity National Financial, Inc. on April 1, 2003.

The consolidated financial statements of the Financial Services Division of ALLTEL Information Services, Inc. as of December 31, 2002 and 2001, and for the years then ended, included in this prospectus have been so included in reliance on the report (which contains explanatory paragraphs relating to the Financial Services Division of ALLTEL Information Services, Inc., being a fully integrated business of ALLTEL Information Services, Inc.) of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the common stock we offer under this prospectus. This prospectus does not contain all of the information included in the registration statement and the exhibits and schedules to the registration statement. For further information with respect to us and our common stock, please refer to the registration statement, including its exhibits and schedules, which you may inspect and obtain copies of at prescribed rates at the public reference facilities of the Securities and Exchange Commission at the addresses provided below.

Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, and, under that Act, we will file reports, proxy statements and other information with the Securities and Exchange Commission. You may inspect those reports, proxy statements and other information and the registration statement and its exhibits and schedules, without charge, and you may make copies of them at prescribed rates at the public reference facilities of the Securities and Exchange Commission’s principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Securities and Exchange Commission’s public reference facilities by calling the Securities and Exchange Commission in the United States at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a Web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission.

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INDEX TO FINANCIAL STATEMENTS


		Page
		Number

Fidelity National Information Services, Inc.
	Report of Independent Registered Public Accounting Firm		F-2
	Combined Balance Sheets as of December 31, 2003 and 2002		F-3
	Combined Statements of Earnings for the years ended December 31, 2003, 2002 and 2001		F-4
	Combined Statements of Equity and Comprehensive Earnings for the years ended December 31, 2003, 2002 and 2001		F-5
	Combined Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001		F-6
	Notes to Combined Financial Statements		F-7
	Unaudited Condensed Combined Balance Sheets as of June 30, 2004 and December 31, 2003		F-29
	Unaudited Condensed Combined Statements of Earnings for the six months ended June 30, 2004 and 2003		F-30
	Unaudited Condensed Combined Statements of Cash Flows for the six months ended June 30, 2004 and 2003		F-31
	Notes to Unaudited Condensed Combined Financial Statements		F-32
Financial Services Division of ALLTEL Information Services, Inc.
	Independent Auditors’ Report (KPMG LLP)		F-42
	Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP)		F-43
	Consolidated Balance Sheets as of December 31, 2002 and 2001		F-44
	Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2002 and 2001 and the Three Months Ended March 31, 2003		F-46
	Consolidated Statements of Parent Company Investment for the years ended December 31, 2002 and 2001 and the Three Months Ended March 31, 2003		F-47
	Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001 and the Three Months Ended March 31, 2003		F-48
	Notes to Consolidated Financial Statements		F-49

F-1

WHEN THE TRANSACTIONS REFERRED TO IN NOTE A OF THE NOTES TO COMBINED FINANCIAL STATEMENTS HAVE BEEN CONSUMMATED, WE WILL BE IN A POSITION TO RENDER THE FOLLOWING REPORT.


	/s/ KPMG LLP

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Fidelity National Information Services, Inc.:

We have audited the accompanying Combined Balance Sheets of Fidelity National Information Services, Inc. and subsidiaries as of December 31, 2003 and 2002 and the related Combined Statements of Earnings, Equity and Comprehensive Earnings and Cash Flows for each of the years in the three-year period ended December 31, 2003. These Combined Financial Statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these Combined 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 Combined 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, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003 in conformity with U.S. generally accepted accounting principles.

As discussed in Note A to the Combined Financial Statements, effective January 1, 2002, Fidelity National Information Services, Inc. fully adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which resulted in a change to the method of accounting for goodwill after it has been initially recognized in the financial statements.

The Combined Financial Statements for 2002 and 2001 were prepared using Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” to record stock-based employee compensation. As discussed in Note J to the Combined Financial Statements, effective January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, to record stock-based employee compensation, applying the prospective method of adoption in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure.”

Jacksonville, Florida

May 23, 2004, except for

Note A which is as

of , 2004

F-2

Fidelity National Information Services, Inc.

COMBINED BALANCE SHEETS



			December 31,

			2003		2002


			(In thousands)
Assets
Current assets:
	Cash and cash equivalents		$	100,466	$	56,472
	Trade receivables, net of allowance of $19,491 and $10,103 in 2003 and 2002, respectively			301,476		102,898
	Prepaid expenses and other assets			81,462		87,279
	Deferred income taxes			19,859		13,001

		Total current assets		503,263		259,650
Property and equipment, net				153,575		17,797
Other assets:
	Goodwill			966,013		176,815
	Other intangibles, net of amortization			451,010		41,917
	Computer software, net of amortization			202,448		35,086
	Other non-current assets			94,799		25,004

		Total assets	$	2,371,108	$	556,269

Liabilities and Equity
Current liabilities:
	Accounts payable and accrued liabilities		$	204,412	$	108,406
	Deferred revenues			134,463		44,943
	Current portion of long-term debt, includes $5,731 and $5,775 of related party notes in 2003 and 2002, respectively			30,634		14,574

		Total current liabilities		369,509		167,923
Deferred revenues				30,231		6,471
Deferred income taxes				18,727		—
Long-term debt, excluding current portion				10,492		18,897
Other long-term liabilities				25,651		4,474

		Total liabilities		454,610		197,765
Minority interest				12,130		63,272
Total equity				1,904,368		295,232

		Total liabilities and equity	$	2,371,108	$	556,269

See Notes to Combined Financial Statements

F-3

Fidelity National Information Services Inc.

COMBINED STATEMENTS OF EARNINGS



			Year Ended December 31,

			2003			2002			2001


			(in thousands)
Processing and services revenues, includes $56,150, $29,458 and $22,329 of related party revenues for the years ended December 31, 2003, 2002 and 2001, respectively			$	1,910,589		$	632,793		$	405,392
Cost of revenues, includes depreciation and amortization costs of $120,531, $15,065 and $7,232 and related party costs of $5,447, $5,839 and $4,884 for the years ended December 31, 2003, 2002 and 2001, respectively				1,150,725			387,431			256,111

Gross profit				759,864			245,362			149,281

Selling, general and administrative costs, includes depreciation and amortization costs of $23,692, $3,572 and $2,218 and related party costs of $39,454, $21,591 and $15,225 for the years ended December 31, 2003, 2002 and 2001, respectively				392,130			148,407			94,370

Operating income				367,734			96,955			54,911

Other income (expense):
	Interest income			704			377			189
	Interest expense			(2,831	)		(2,322	)		(1,333	)
	Gain (loss) on sale or issuance of subsidiary stock			(3,625	)		11,109			31

		Total other income (expense)		(5,752	)		9,164			(1,113	)

Earnings before income taxes and minority interest expense				361,982			106,119			53,798
Income tax expense				140,449			39,582			22,003
Minority interest expense				14,518			8,359			778

		Net earnings	$	207,015		$	58,178		$	31,017

See Notes to Combined Financial Statements

F-4

Fidelity National Information Services, Inc.

COMBINED STATEMENTS OF EQUITY AND COMPREHENSIVE EARNINGS

Years Ended December 31, 2003, 2002, and 2001


				Accumulated Other
		Net Investment		Comprehensive						Comprehensive
		by FNF		Earnings (Loss)			Total Equity			Earnings (Loss)


		(in thousands)
Balance, December 31, 2000		$	88,725	$	—		$	88,725		$	—
	Other comprehensive earnings— net of tax		—		171			171			171
	Net contribution of capital		60,861		—			60,861
	Net earnings		31,017		—			31,017			31,017

Balance, December 31, 2001			180,603		171			180,774		$	31,188

	Other comprehensive loss— net of tax		—		(2,146	)		(2,146	)		(2,146	)
	Net contribution of capital		58,426		—			58,426
	Net earnings		58,178		—			58,178			58,178

Balance, December 31, 2002			297,207		(1,975	)		295,232		$	56,032

	Other comprehensive earnings— net of tax		—		3,500			3,500			3,500
	Net contribution of capital		1,398,621		—			1,398,621
	Net earnings		207,015		—			207,015			207,015

Balance, December 31, 2003		$	1,902,843	$	1,525		$	1,904,368		$	210,515

See Notes to Combined Financial Statements

F-5

Fidelity National Information Services, Inc.

COMBINED STATEMENTS OF CASH FLOWS



			Year Ended December 31,

			2003			2002			2001


			(in thousands)
Cash Flows From Operating Activities:
	Net earnings		$	207,015		$	58,178		$	31,017
	Adjustment to reconcile net earnings to net cash provided by operating activities:
	Depreciation and amortization			144,223			18,637			9,450
	Stock-based compensation cost			3,804			—			—
	Deferred income taxes			(1,170	)		282			4,981
	Minority interest expense			14,518			8,359			778
	Changes in assets and liabilities, net of effects from acquisitions:
	Net increase in trade receivables			(48,663	)		(15,226	)		(22,779	)
	Net (increase) decrease in prepaid expenses and other assets			(26,340	)		32,720			(44,603	)
	Net increase (decrease) in accounts payable, accrued expenses and other			70,988			(27,458	)		40,046

		Net cash provided by operating activities		364,375			75,492			18,890

Cash Flows From Investing Activities:
	Additions to property and equipment			(57,288	)		(3,349	)		(497	)
	Additions to computer software			(48,212	)		(19,363	)		(3,332	)
	Acquisition of businesses, net of cash acquired			(114,952	)		(21,071	)		—
	Other investing activities			(2,660	)		472			(2,202	)

		Net cash used in investing activities		(223,112	)		(43,311	)		(6,031	)

Cash Flows From Financing Activities:
	Borrowings			12,545			4,500			21,796
	Debt service payments			(16,920	)		(3,503	)		(12,759	)
	Net contribution from (distribution to) parent			(92,894	)		2,049			(11,760	)

		Net cash (used in) provided by financing activities		(97,269	)		3,046			(2,723	)

	Net increase in cash and cash equivalents			43,994			35,227			10,136
	Cash and cash equivalents, beginning of year			56,472			21,245			11,109

	Cash and cash equivalents, end of year		$	100,466		$	56,472		$	21,245

See Notes to Combined Financial Statements

F-6

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS

A. Summary of Significant Accounting Policies

The following describes the significant accounting policies of Fidelity National Information Services, Inc. (collectively, the “Company” or “FIS”), which have been followed in preparing the accompanying Combined Financial Statements.


	*Description of Business*

Fidelity National Financial, Inc. (“FNF”) expects to initiate a plan for an initial public offering of less than 20% of the common stock of its wholly owned technology solutions, processing services and information-based real estate services businesses. FNF has informed the Company that following the offering, it plans to make a distribution to its stockholders of its remaining shares of Company stock (“the Distribution”).

The Company is a leading provider of technology solutions, processing services, and information-based services to the financial services and real estate industries. The Company operates in four primary business segments: Financial Institution Software and Services, Lender Services, Default Management Services and Information Services.

The Financial Institution Software and Services segment focuses on two primary markets, financial institution processing and mortgage loan processing. The primary services provided are the provision of software applications that function as the underlying infrastructure of a financial institution’s processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts, and core mortgage processing software, which banks use to process and service mortgage loans. This segment also provides a number of complementary applications and services that interact directly with the core processing applications, including applications that facilitate interactions between the segment’s financial institution customers and their clients.

The Lender Services segment offers customized outsourced business process and information solutions to national lenders and loan servicers. This business provides loan facilitation services, which allow customers to outsource their title and closing requirements in accordance with pre-selected criteria, regardless of the geographic location of the borrower or property. Depending on customer requirements, the Company performs these services both in the traditional manner involving many manual steps, and through more automated processes, which significantly reduce the time required to complete the task.

The Default Management Services segment allows customers to outsource the business processes necessary to take a loan and the underlying real estate securing the loan through the default and foreclosure process. The Company utilizes its own resources and networks established with independent contractors to provide outsourcing solutions.

In the Information Services segment, the Company operates a property data business and a real estate-related services business. The Company’s property data and real estate-related information services are utilized by mortgage lenders, investors and real estate professionals to complete residential real estate transactions throughout the U.S. The Company offers a comprehensive suite of services spanning the entire home purchase and ownership life cycle, from purchase through closing, refinancing, and resale.


	*Principles of Combination and Basis of Presentation*

The accompanying Combined Financial Statements include those assets, liabilities, revenues and expenses directly attributable to FIS’s operations and allocations of certain FNF corporate assets, liabilities and expenses to FIS. These amounts have been allocated to FIS on the basis that is considered by management to reflect most fairly or reasonably the utilization of the services provided to or the benefit obtained by the Company. Management believes the methods used to allocate these amounts are reasonable. All intercompany profits, transactions and balances have been eliminated. The financial information included

F-7

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

herein does not necessarily reflect what the financial position and results of operations of the Company would have been had it operated as a stand-alone public entity during the periods covered, and may not be indicative of future operations or financial position. The Company’s investments in non-majority-owned partnerships and affiliates are accounted for on the equity method until such time that they became wholly or majority owned.

On occasion, a non-wholly owned company may issue its shares to third parties at amounts per share in excess of or less than the Company’s average per share carrying value. With respect to such transactions, the resulting gains or losses arising from a change in equity interest are recorded in net earnings for the period in which the change in equity interest transaction occurs. These stock issuances consisted of transactions in which shares were issued by Fidelity National Information Solutions, Inc. (“FNIS”), a publicly-traded company which was majority owned by FNF until September 30, 2003, related to acquisitions and stock option exercises. These transactions resulted in the Company recording a loss of $3.6 million, a gain of $11.1 million and an immaterial loss in 2003, 2003 and 2001, respectively. The loss in 2003 was primarily the result of option exercises which lowered the Company’s ownership percentage. The gain of $11.1 million in 2002 was primarily the result of an acquisition in which shares were issued. Since the minority interest of FNIS was purchased by the Company on September 30, 2003, there will be no future gains or losses relating to this investment.

All dollars presented in the accompanying Combined Financial Statements are in thousands unless indicated otherwise.


	*Transactions with Related Parties*

The Company has historically conducted business with FNF and intends to continue these business arrangements in the future.

Included in the Financial Institution Software and Services segment in 2003 is $17.4 million in revenue from FNF relating to the provision of IT infrastructure support, data center management and software. Revenue in 2002 was $1.3 million and reflects software only. There was no revenue from FNF in this segment during 2001.

The Lender Services segment includes revenue generated from loan facilitation transactions with large national lenders. A significant part of those transactions involves title agency functions resulting from the issuance of title insurance policies by a title insurance underwriter owned by FNF. The Company also performs similar functions in connection with trustee sale guarantees, a form of title insurance, that FNF issues as part of the foreclosure process on a defaulted loan. These operations recorded revenues from third parties of $250.9 million, $46.7 million and $34.0 million, in 2003, 2002 and 2001, respectively, representing commissions on title insurance policies written by title insurance subsidiaries of FNF. These commissions are equal to 88% of the total title premium from title policies that the Company places with FNF. Sales of other title related services to FNF generated revenues of $3.9 million, $3.8 million and $3.5 million during 2003, 2002 and 2001, respectively.

The Company’s property information division within the Information Services segment manages FNF’s title plant assets in certain parts of the country. The underlying title plant information is owned by FNF title underwriters; the Company manages and updates the information in return for the right to sell it to title insurers, including FNF underwriters and other customers. As part of that management agreement, the Company earns all revenue generated by those assets, both from third party customers and from FNF, and is also responsible for the costs related to keeping the title plant assets current and functioning on a daily basis. This business requires, among other things, that the Company gather updated property information, organize it, input it into one of several systems, maintain or obtain the use of necessary software and hardware to store, access and deliver the data, sell and deliver the data to customers and provide various forms of customer support. The Company’s costs include personnel costs, charges of third parties such as government offices for

F-8

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

title information, technology costs and other operating expenses. FNF in turn benefits from having its title plant assets continually updated and accessible. Included in the Information Services segment in 2003 is revenue of $28.2 million related to the sale of property information to FNF. The revenue amounts in 2002 and 2001 for similar transactions were $24.3 million and $18.8 million, respectively. Also included in this segment are sales of certain real estate related services of $6.6 million in 2003, and no similar sales in 2002 or 2001. A subsidiary of FNF has historically provided technology services to this segment. Amounts paid to this subsidiary were $5.4 million, $5.8 million and $4.9 million, in 2003, 2002 and 2001, respectively and are included in cost of revenues.

FNF provides certain corporate services to the Company relating to general management, accounting, finance, legal, payroll, human resources, internal audit and mergers and acquisitions. The cost of these services has been allocated to the Company from FNF based upon reasonable allocation bases including revenue, head count, specific identification and others. Total costs allocated for 2003, 2002 and 2001 were $39.5 million, $21.6 million and $15.2 million, respectively. These allocations are reflected in the Company’s Corporate and Other segment.

The Company owed FNF $5.7 million at December 31, 2003 related to the financing of certain lease receivables and other related party notes payable. At December 31, 2002 the Company owed FNF $5.8 million related to certain financing arrangements between the two parties. These amounts are included in current portion of long-term debt.

The Company believes the amounts credited to or charged to the Company under each of the foregoing arrangements are fair and reasonable. Although the 88% commission rate on the Company’s title agency business was set without negotiation, the Company believes it is consistent with the blended rate that would be available to a third party title agent given the amount and the geographic distribution of the business produced and the low risk of loss profile of the business placed. In connection with title plant management, the Company charges FNF title insurers for title information at approximately the same rates it and other similar vendors charge unaffiliated title insurers. The Company’s IT infrastructure support and data center management services to FNF, from which the Company earned $14.8 million in 2003, is priced within the range of prices the Company offers to third parties for the same types of services.

In connection with this offering, the Company will enter into agreements with FNF under which, following the offering, the Company will continue to provide title agency services, title plant management, and the IT services for which the Company earned revenues from FNF companies in 2003, in each case, at pricing which is expected to be consistent with that charged in 2003. These agreements may not be subsequently renewed, or their pricing or terms may change.

Further, the Company will enter into transition service agreements with FNF under which FNF will provide corporate services to the Company of the type described above for a transitional period, at cost plus a reasonable profit margin. When FNF ceases to provide services to the Company, the costs of performing these services itself or of procuring them from third parties may increase.


	*Cash and Cash Equivalents*

For purposes of reporting cash flows, highly liquid instruments purchased with maturities of three months or less are considered cash equivalents. The carrying amounts reported in the Combined Balance Sheets for these instruments approximate their fair value. At December 31, 2003 and 2002, the Company held pledged cash of $8.6 million and $2.8 million for various reasons.


	*Fair Value of Financial Instruments*

The fair values of financial instruments, which include trade receivables and long-term debt, approximate their carrying values. These estimates are subjective in nature and involve uncertainties and significant

F-9

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

judgment in the interpretation of current market data. Therefore, the values presented are not necessarily indicative of amounts the Company could realize or settle currently. The Company does not necessarily intend to dispose of or liquidate such instruments prior to maturity.


	*Trade Receivables*

The carrying values reported in the Combined Balance Sheets for trade receivables approximate their fair value. A detail of trade receivables is as follows (in thousands):



	December 31

	2003		2002

Trade receivables—billed		$259,367		$113,001
Trade receivables—unbilled		61,600		—

Total trade receivables		320,967		113,001

Allowance for doubtful accounts		(19,491)		(10,103)

Total trade receivables, net		$301,476		$102,898


	*Goodwill*

Goodwill represents the excess of cost over fair value of identifiable net assets acquired in a business combination. The Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Intangible Assets” (“SFAS No. 142”) on January 1, 2002. SFAS No. 142 requires that intangible assets with estimable lives be amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). The statement also provides that goodwill and other intangible assets with indefinite useful lives should not be amortized, but shall be tested for impairment annually, or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. The Company was not required to record a charge upon adoption and measures for impairment on an annual basis.

As required by SFAS No. 142, the Company has completed its annual goodwill impairment test in the fourth quarter of 2003 on its reporting units and has determined that each of its reporting units has a fair value in excess of its carrying value. Accordingly, no goodwill impairment has been recorded.

Prior to 2002, the Company amortized goodwill on a straight line basis.

Beginning on January 1, 2002, the Company ceased recording goodwill amortization in accordance with SFAS No. 142. The following table reconciles reported net earnings to adjusted net earnings:



	Year Ended December 31,

	2003		2002		2001


	(in thousands)
Reported net earnings	$	207,015	$	58,178	$	31,017
Add back: Goodwill amortization		—		—		5,973
Less: Tax effect of goodwill amortization		—		—		(1,283	)

Adjusted net earnings	$	207,015	$	58,178	$	35,707


	*Valuation of Long-lived Assets*

SFAS No. 144 which the Company adopted on January 1, 2002, requires that long-lived assets and intangible assets with definite useful lives be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

F-10

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

During 2003, in accordance with SFAS No. 144 and SFAS No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,” (“SFAS No. 86”) the Company determined that the carrying value of certain of its computer software assets may not be recoverable and recorded a pre-tax expense of $5.9 million relating to the write-off of these assets. The $5.9 million charge consisted of capitalized software costs related to applications that were replaced by technology acquired in acquisitions or were replaced by newly developed applications. The Company acquired a small real estate-related services company in May 2003 and used the software acquired to replace existing software applications. Also, certain other software applications were replaced by newly developed applications and fully written off. The amount of software written off was $3.2 million. Both of these charges related to businesses within the Information Services segment. An additional purchased software application was fully written off upon the acquisition of a company with a more robust software application alternative in the amount of $2.7 million. This charge related to the Default Management Services segment. These impairments were recorded as depreciation and amortization which are included in cost of revenues in the Company’s Combined Statements of Earnings.

Prior to the adoption of SFAS No. 144, the Company accounted for long-lived assets in accordance with SFAS No. 121.


	*Intangible Assets*

The Company has intangible assets which consist of customer relationships and contractual relationships, which are generally recorded upon acquisition at their fair value. Customer relationships are amortized over their estimated useful lives using an accelerated method which takes into consideration expected customer attrition rates over a ten-year period. Contractual relationships are generally amortized over their contractual life.

The Company also has intangible assets with indefinite lives, which approximate $8,586 and $5,206 in 2003 and 2002, respectively and are principally comprised of trademarks.


	*Computer Software*

Computer software includes software acquired in business acquisitions, purchased software and internally developed capitalized software. Purchased software is recorded at cost and amortized using the straight-line method over a 3 year period and software acquired in a business acquisition is recorded at its fair value upon acquisition and amortized using straight-line and accelerated methods over its estimated useful life, generally 5 to 7 years. Capitalized computer software development costs are accounted for in accordance with either SFAS No. 86, or with SOP No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” After the technological feasibility of the software has been established (for SFAS No. 86 software) or at the beginning of application development (for SOP No. 98-1 software), software development costs, which include salaries and related payroll costs and costs of independent contractors incurred during development, are capitalized. Research and development costs incurred prior to the establishment of technological feasibility (for SFAS No. 86 software) or prior to application development (for SOP No. 98-1 software) of a product are expensed as incurred and are not significant. The cost of capitalized computer software is amortized on a product-by-product basis commencing on the date of general release of the products for internally developed software and the date of purchase for purchased software. The capitalized cost of internally developed capitalized software (for SOP No. 98-1 software) is amortized on a straight-line basis over its estimated useful life, generally five years. Software development costs (for SFAS No. 86 software) are amortized using the greater of (1) the straight-line method over its estimated useful life,

F-11

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

which ranges from three to seven years or (2) the ratio of current revenues to total anticipated revenue over its useful life.



	December 31,

	2003			2002


	(in thousands)
Software from business acquisitions	$	181,063		$	26,294
Internally developed/purchased software		64,795			46,102
Accumulated amortization		(43,410	)		(37,310	)

Computer software, net of amortization	$	202,448		$	35,086


	*Property and Equipment*

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed primarily using the straight-line method based on the estimated useful lives of the related assets: thirty years for buildings and five to seven years for furniture, fixtures and equipment. Leasehold improvements are amortized on a straight-line basis over the lesser of the term of the applicable lease or the estimated useful lives of such assets.


	*Income Taxes*

The Company’s operating results have been included in FNF’s Consolidated U.S. Federal and State income tax returns. The provision for income taxes in the Combined Statements of Earnings is made at rates consistent with what the Company would have paid as a stand-alone taxable entity. The Company recognizes deferred income tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred income taxes of changes in tax rates and laws, if any, are reflected in the financial statements in the period enacted.

Revenue Recognition

The following describes the Company’s primary types of revenues and its revenue recognition policies as they pertain to each of its operating segments. The Company sells some services to customers as part of an integrated offering through multiple segments. The revenues for services provided under these multiple element arrangements are recognized in accordance with EITF Issue No. 00-21, “Revenue Arrangements and Multiple Deliverables.”

Financial Institution Software and Services. In this segment, the Company recognize revenues relating to bank processing services and mortgage processing services along with software licensing and services. Several of the Company’s contracts include a software license and one or more of the following services: data processing, development, implementation, conversion, programming, maintenance and application management. In some cases, these services are offered in combination with one another and in other cases the Company offers them individually. Revenues from bank and mortgage processing services are typically volume-based depending on factors such as the estimated number of accounts, transactions processed and computer resources utilized.

The substantial majority of the revenues in this segment are from outsourced data processing and application management arrangements. Revenues from these arrangements are recognized as services are performed. Revenue and incremental direct costs related to implementation, conversion and programming services associated with the Company’s data processing and application management agreements are deferred

F-12

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

during the implementation phase and subsequently recognized over the term of the related agreement. At each reporting period, each contract with related deferred costs is evaluated for impairment.

In other revenue producing transactions, the Company uses several different accounting policies related to revenue recognition, depending on the type of transaction. The Company recognizes software license and maintenance fees as well as associated development, implementation, conversion and programming fees in accordance with the American Institute of Certified Public Accountants’ Statement of Position 97-2, or SOP 97-2, entitled “Software Revenue Recognition,” and SOP 98-9, entitled “Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions.” Initial license fees are recognized when a contract exists, the fee is fixed or determinable, software delivery has occurred and collection of the receivable is deemed probable, provided that vendor-specific objective evidence, or VSOE, has been established for each element or for the undelivered elements. The Company determines the fair value of each element or the undelivered elements in multi-element software arrangements based on VSOE. If the arrangement is subject to accounting under SOP 97-2, VSOE for each element is based on either the price charged when the same element is sold separately or in the case of maintenance, using a substantive renewal rate. If evidence of fair value of all undelivered elements exists but evidence does not exist for one or more delivered elements, then revenue is recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. If evidence of fair value does not exist for one or more undelivered elements of a contract, then all revenue is deferred until all elements are delivered or fair value is determined for all remaining undelivered elements. Revenue from maintenance and support is recognized ratably over the term of the agreement. The Company records deferred revenue for maintenance amounts invoiced prior to revenue recognition.

With respect to a small percentage of revenues, the Company uses contract accounting, as required by SOP 97-2, when the arrangement with the customer includes significant customization, modification, or production of software. For elements accounted for under contract accounting, revenue is recognized in accordance with SOP 81-1, “Accounting for Performance of Construction Type and Certain Production-Type Contracts,” using the percentage-of-completion method since reasonably dependable estimates of revenues and contract hours applicable to various elements of a contract can be made. Revenue in excess of billings on these agreements is recorded as unbilled receivables and is included in accounts receivable. Billings in excess of revenue recognized on these agreements are recorded as deferred revenue until revenue recognition criteria are met. Changes in estimates for revenues, costs and profits are recognized in the period in which they are determinable. When the Company’s estimate indicates that the entire contract will be performed at a loss, a provision for the entire loss is recorded in that accounting period.

Lender Services. In this segment, the Company recognizes revenues from loan facilitation services which primarily consist of centralized title agency and closing services for various types of lenders. Revenues relating to centralized title agency and closing services are recognized at the time of closing of the related real estate transaction. Ancillary service fees are recognized when the service is provided.

Default Management Services. In this segment, the Company recognizes revenues on services provided to assist customers through the default and foreclosure process, including property preservation and maintenance services (such as lock changes, window replacement, debris removal and lawn service), posting and publication of foreclosure and auction notices, title searches, document preparation and recording services, and referrals for legal and property brokerage services. Revenues from default management services are recognized upon completion of the underlying service.

Information Services. In this segment, the Company records revenue from providing data or data-related services. These services principally include appraisal and valuation services, property records information, real estate tax services, borrower credit and flood zone information and multiple listing software and services.

F-13

Fidelity National Information Services, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

The Company’s flood and tax units provide various services including life-of-loan monitoring services. Revenue for life-of-loan services is deferred and recognized ratably over the estimated average life of the loan service period, which is determined based on the Company’s historical experience. The Company evaluates its historical experience on a quarterly basis, and adjusts the estimated life of the loan service period prospectively. Revenue derived from software and service arrangements is recognized in accordance with SOP 97-2 as further described above. Revenues from other services in this segment are recognized as the services are performed.


	*Stock-Based Compensation Plans*

Certain FIS employees are participants in FNF’s stock-based compensation plans, which provide for the granting of incentive and nonqualified stock options, restricted stock and other stock-based incentive awards for officers and key employees. Prior to the third quarter of 2003, the Company, consistent with FNF, accounted for its stock option plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. All options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant; therefore no stock-based compensation cost had been reflected in net earnings.

During the third quarter of 2003, the Company, consistent with FNF, adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), for stock-based employee compensation, effective as of the beginning of 2003. Under the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period. The Company has elected to use the prospective method of transition, as permitted by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” (“SFAS No. 148”). Under this method, stock-based employee compensation cost is recognized from the beginning of 2003 as if the fair value method of accounting had been used to account for all employee awards granted, modified, or settled in years beginning after December 31, 2002. Prior year financial statements were not restated. The Company was allocated stock compensation expense of $3.8 million for the year ended December 31, 2003, which is included in salaries, commissions and other payroll-related costs in the 2003 Combined Statement of Earnings, as a result of the adoption of SFAS No. 123.

For purposes of pro forma disclosures shown below, the Company’s management has allocated stock compensation expense to the Company. Management believes that the assumptions made for purposes of determining the pro forma net earnings are reasonable. The following table illustrates the effect on net earnings if the Company had applied the fair value recognition provisions of SFAS No. 123 to all awards in each period held by FIS employees who are plan participants (see Note J):

Fidelity National Information Services, Inc. S-1/A