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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

OR

For the Quarter Ended March 31, 2003

Commission File Number 0-20312

FIDELITY NATIONAL INFORMATION SOLUTIONS, INC.

(805) 696-7000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x    No o

     As of April 30, 2003, 39,749,883 shares of the Registrant’s Common Stock ($.001 par value) were outstanding.

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FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q
Quarter Ended March 31, 2003

INDEX

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PART I: FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS

FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

See Notes to Consolidated Financial Statements

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FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)

See Notes to Consolidated Financial Statements

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FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)

See Notes to Consolidated Financial Statements

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FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

See Notes to Consolidated Financial Statements

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FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Business

     Fidelity National Information Solutions, Inc. (“FNIS” or the “Company”) provides data and valuation, technology solutions and services needed by lenders and real estate professionals. FNIS is a national provider whose offerings span the entire home purchase and ownership life cycle, from contact through closing, refinancing and resale. The Company’s products and services enable its customers to use information to improve their business decision-making processes and to effectively manage existing and prospective customer relationships. These product and service offerings include a full spectrum of technology solutions, electronic partner networks, loan origination systems, real estate data and tax services, credit reporting services, flood compliance services, and automated valuation and appraisal services. The Company is also a data and service provider to the Multiple Listing Service (“MLS”) systems industry. Its data, web services, MLS systems, and production and management software serve more than 50% of the nation’s Realtors®. The Company’s common stock is traded on the NASDAQ National Market under the symbol “FNIS”.

     The Company is a majority-owned subsidiary of Fidelity National Financial, Inc. (NYSE: FNF — “Fidelity”). As of March 31, 2003, Fidelity owned approximately 66% of the Company’s outstanding common stock.

2. Basis of Presentation

     The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the instructions for Form 10-Q and Article 10 of Regulation S-X issued by Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the management, the unaudited interim Consolidated Financial Statements reflect all adjustments, consisting of normal recurring items, necessary to fairly present the results of operations, financial position and cash flows for the periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2002.

     As described in Note 5, the Company acquired Micro General Corporation (“MGEN”) on July 9, 2002, including a 51.6% majority ownership acquired from its parent company, Fidelity. The acquisition of Fidelity’s majority interest in MGEN was accounted for in a manner similar to a pooling-of-interests because the Company and MGEN were entities under common control of Fidelity. As required by GAAP, the accompanying Consolidated Financial Statements have been prepared to give retroactive effect to the merger and accordingly, all amounts contained herein have been prepared as if the transaction took place on the first day of the periods presented.

     Certain reclassifications have been made in the 2002 Consolidated Financial Statements to conform to the classifications used in 2003. These include those adjustments and reclassifications necessary to reflect the merger of MGEN in a manner similar to a pooling-of-interests.

3. Recent Accounting Pronouncements

     In November 2002, the Financial Accounting Standards Board (“FASB”) EITF issued EITF 00-21 “Revenue Arrangements with Multiple Deliverables.” EITF 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. Specifically, EITF 00-21 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. In applying EITF 00-21, separate contracts with the same entity or related parties that are entered into at or near the same time are presumed to have been negotiated as a package and should, therefore, be evaluated as a single arrangement in considering whether there are one or more units of accounting. That presumption may be overcome if there is sufficient evidence to the contrary. EITF 00-21 also addresses how arrangement consideration should be measured and allocated to the separate units of accounting in the arrangement. The guidance in this issue is effective for revenue arrangements entered into in fiscal periods beginning after June

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15, 2003. Alternatively, companies may elect to report the change in accounting as a cumulative-effect adjustment. Early application of this consensus is permitted. The Company has not yet adopted EITF 00-21 and is currently analyzing its impact on the Company’s financial position, results of operations and cash flows.

     In December 2002, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of SFAS 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. Certain of the disclosure modifications are required for fiscal years ending after December 15, 2002 and are included in the Notes to these Consolidated Financial Statements. The Company has implemented SFAS No. 148 effective January 1, 2003 regarding disclosure requirements for condensed financial statements for interim periods. The Company’s management has not yet determined whether they will voluntarily change to the fair value based method of accounting for stock-based employee compensation.

4. Recent Developments

     On April 15, 2003, the Company acquired Ousley, Inc., DBA Appraisal Enhancement Services (“AES”), a provider of valuation quality control products and services, for approximately $13.6 million in cash, of which $0.8 million is payable upon attainment of certain requirements under the agreement. The goodwill in connection with the transaction is approximately $8.8 million.

     On May 9, 2003, the Company acquired DPN Inc., a provider of broker back office and accounting systems to the real estate industry, for approximately $5.3 million in cash, of which $1.0 million is payable upon attainment of certain requirements under the agreement. The goodwill in connection with the acquisition is approximately $1.0 million.

     In May 2003, the Company received notice from Fidelity of its intent to transfer to its newly acquired FIS Technology Center, hosting services for systems FNIS is currently providing to Fidelity from the Company’s Chicago Data Center. Under the terms of the Master Service Agreement between FNIS and Fidelity such notice is effective 90 days from its date and provides for transition assistance by FNIS to Fidelity, if requested, for a subsequent period of up to six months on a fee basis. The transfer of hosting services will begin in the second half of the current year. The Company expects that the transfer will be completed by the end of 2003 and estimates that its current hosting services revenue will be reduced by $0.8 million to $1.0 million monthly upon completion. See note 10 — Related Party Transactions.

5. Acquisitions and Dispositions

     Micro General Corporation Acquisition. On April 29, 2002, the Company announced a tender offer for all of the outstanding shares of MGEN, a majority-owned subsidiary of Fidelity whereby each share of MGEN common stock would be exchanged for shares of the Company’s common stock. The Company closed this tender offer on July 9, 2002 and received over 90% of the outstanding MGEN shares in response to this offer. Also on July 9, 2002, the Company acquired the remaining outstanding stock of MGEN through a short-form merger. As a result of the tender offer and subsequent short-form merger, MGEN became a wholly-owned subsidiary of the Company. The tender offer and merger were based on a fixed exchange ratio of .696 shares of the Company’s common stock for each share of MGEN common stock. As a result, the Company issued 12,895,721 new shares of its common stock to acquire MGEN.

     Prior to the merger, Fidelity held a controlling interest in both MGEN and the Company. The acquisition of the non-controlling equity interest of MGEN (48.4%) was accounted for under the purchase method of accounting. The total number of shares issued in acquiring the minority interests in MGEN was 6,243,223, valued at $149.3 million, based upon the Company’s average closing price of $23.91 per share on the NASDAQ National Market for the five day period beginning two days prior through two days subsequent to April 29, 2002, the last trading day before the public announcement of this offer. The total purchase price was $153.2 million, including warrants with a fair value of $3.3 million and transaction costs, and the Company recorded goodwill of $128.0 million.

     The acquisition of Fidelity’s interest in MGEN (51.6%) is not considered a business combination because the Company and MGEN were entities under common control of Fidelity. As required by GAAP, the Company, therefore, recorded this transaction in a manner similar to the pooling-of-interests method of accounting. Accordingly, all amounts contained herein

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have been prepared as if the transaction took place on the first day of the periods presented. Below is a reconciliation of income statement data previously reported by the Company to the combined amounts currently presented in the accompanying Consolidated Financial Statements for the three months ended March 31, 2002 (dollars in thousands):