Business Context and Reporting Period
This Form 8-K is filed by Certegy Inc. (not Fidelity National Information Services, Inc.) on October 12, 2005. The report addresses a significant accounting change regarding the adoption of Statement of Financial Accounting Standards (SFAS) No. 123(R), "Share-Based Payment."
Key Financial Metrics and Accounting Changes
The filing does not provide specific revenue, profit, or cash flow figures for the current period. Instead, it details a restatement of historical financial data due to a change in accounting principles:
- Adoption Method: The Company adopted SFAS 123(R) on January 1, 2005, using the modified retrospective method.
- Stock Options: Previously, no compensation cost was recognized for stock options under APB 25. Under SFAS 123(R), compensation cost is now recognized in the income statement based on fair value.
- Cash Flow Classification: Tax benefits from stock option exercises are reclassified from operating cash flows to financing cash flows.
- Restricted Stock: Restricted stock awards are now recognized as compensation cost over the vesting period rather than as a reduction of shareholders' equity on the grant date.
Material Changes Versus Prior Period
The primary material change is the restatement of financial statements for the years ended December 31, 2004, and 2003, as well as the three-year period ended December 31, 2004. These restatements affect:
- Selected financial data.
- Management's Discussion and Analysis (MD&A).
- Audited consolidated financial statements and related notes.
The filing explicitly states that these restated items reflect the change in accounting policy and continue to speak as of the date of the original Form 10-K filed on March 11, 2005.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, outlook, or management commentary regarding future business performance. The primary risk disclosed is the impact of the accounting standard change on historical comparability, necessitating the restatement of prior periods to ensure consistency with current reporting standards.
Important Facts for Investor Verification
- Verify the specific impact of the SFAS 123(R) adoption on net income and earnings per share by reviewing the Restated Item 6 (Selected Financial Data) and Restated Item 8 (Financial Statements) included as Exhibits 99.1 and 99.3.
- Review Exhibit 99.4 for supplemental reconciliations between the restated and previously reported consolidated financial statements.
- Note that the company name in the filing is Certegy Inc., which may differ from the user's initial query regarding Fidelity National Information Services.
- Confirm that the restated data applies to the fiscal years 2003 and 2004 and is not updated for events occurring after the March 11, 2005, Form 10-K filing.