809398--3/16/2006--FIDELITY_NATIONAL_FINANCIAL_INC

related topics

{regulation, government, change}

{acquisition, growth, future}

{system, service, information}

{product, market, service}

{customer, product, revenue}

{competitive, industry, competition}

{debt, indebtedness, cash}

{capital, credit, financial}

{financial, litigation, operation}

{regulation, change, law}

{condition, economic, financial}

{cost, contract, operation}

{stock, price, operating}

{property, intellectual, protect}

Our rate of growth could be adversely affected if we are unable to acquire suitable acquisition candidates. Our management has articulated an ongoing strategy to seek growth through acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus or geographic areas. This expansion of our business subjects us to associated risks, such as the diversion of management s attention and lack of experience in operating such businesses, and may affect our credit and ability to repay the notes. We may encounter difficulties managing our growth and successfully integrating new businesses, including the businesses of Certegy following the merger, which could adversely affect our results of operations. A failure of new FIS to achieve expected synergies or to successfully cross-sell its products and services could result in the benefits of the merger not being attained. We are a holding company and depend on distributions from our subsidiaries for cash. We could have conflicts with our subsidiaries, and our chief executive officer and chairman of our board of directors is also the chairman of the board of directors of both FNT and FIS. Some of our executive officers and directors own substantial amounts of stock or options of FNT or FIS. 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 us and FNT or FIS. The markets in which our principal operating subsidiaries operate are highly competitive. Some of our competitors have greater resources than us, and we may face competition from new entrants with alternative products or services. Risks Relating to our Insurance Business Our insurance subsidiaries must comply with extensive regulations. These regulations may increase our costs or impede, or impose burdensome conditions on, actions that we might seek to take to increase the revenues of those subsidiaries. State regulation of the rates we charge for title insurance could adversely affect our results of operations. Regulatory investigations of the insurance industry may lead to fines, settlements, new regulation or legal uncertainty, which could negatively affect our results of operations. If the rating agencies further downgrade our title insurance subsidiaries our results of operations and competitive position in the title insurance industry may suffer. FIS s substantial leverage and debt service requirements may adversely affect its financial and operational flexibility. Consolidation in the banking and financial services industries could reduce our financial institution software and services and lender outsourcing solutions related revenues by eliminating some of our existing and potential customers and could make us overly dependent on a limited number of customers. If FIS fails to adapt its services to changes in technology or in the marketplace, or if FIS s ongoing efforts to upgrade its technology are not successful, it could lose customers and have difficulty attracting new customers for two of its most important applications. Security breaches, computer viruses, software defects and system failures could harm our business by disrupting our delivery of services, compromising our databases and damaging our reputation. Misappropriation of our intellectual property and proprietary rights could impair our competitive position. If our applications or services are found to infringe the proprietary rights of others, we may be required to change our business practices and may also become subject to significant costs and monetary penalties. If we fail to comply with privacy regulations imposed on providers of services to financial institutions, our business could be harmed. FIS has a long sales cycle for its applications and if it fails to close sales after expending significant time and resources to do so, its business, financial condition and results of operations may be adversely affected. FIS s outsourcing of key development functions overseas may lead to quality control issues that affect FIS s business operations. FIS may not succeed with its current and future expansion of its international operations and such failure may adversely affect its growth and results of operations. A significant portion of FIS s card processing business is derived from two key strategic relationships, and a loss of either of those relationships could adversely affect its profits. FIS s revenues from the sale of services to VISA and MasterCard organizations are dependent upon its continued VISA and MasterCard certification and financial institution sponsorship, and the loss or suspension of this certification or sponsorship could adversely affect its business. Potential customers of FIS s software and services businesses may be reluctant to switch to a new vendor, which may adversely affect our growth, both in the U.S. and internationally. FIS faces liability to its merchant customers if checks that it has guaranteed are dishonored by the check writer s bank. A continued decline in check writing could adversely impact FIS s profits from its check services business. FIS s customers are subject to a regulatory environment and to industry standards that may change in a manner that reduces the number of transactions in which its customers engage and therefore reduces its revenues.

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809398--3/16/2006--FIDELITY_NATIONAL_FINANCIAL_INC_/DE/