##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For
the transition period from

to
 Commission File Number 1-31951
 eFunds Corporation
  Delaware
    
    39-1506286(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)Gainey Center II8501 N. Scottsdale Road, Suite 300Scottsdale, Arizona
    
    85253(Address of principal executive offices)
    
    (Zip Code)
  þ o
 þ o
 o þ




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESIndex to ExhibitsExhibit 10.1Exhibit 10.2Exhibit 10-4Exhibit 10.5Exhibit 10.6Exhibit 31.1Exhibit 31.2Exhibit 32.1    Table of Contents  
 PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 EFUNDS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)September 30,
    
    
    December 31,(dollars in thousands)
    
    2005
    
    
    2004Current assets:Cash and cash equivalents
    
    $
    92,307
    
    
    $
    274,477Short-term investments
    
    
    
    
    
    
    88,140Restricted cash
    
    
    39,226
    
    
    
    2,392Accounts receivable  net
    
    
    94,562
    
    
    
    73,505Deferred income taxes
    
    
    12,215
    
    
    
    14,340Prepaid expenses and other current assets
    
    
    18,573
    
    
    
    15,710Total current assets
    
    
    256,883
    
    
    
    468,564Property and equipment  net
    
    
    64,516
    
    
    
    50,320Intangible assets  net
    
    
    396,138
    
    
    
    103,672Long-term deferred income taxes
    
    
    9,168
    
    
    
    13,964Other non-current assets
    
    
    14,966
    
    
    
    6,441Total non-current assets
    
    
    484,788
    
    
    
    174,397Total assets
    
    $
    741,671
    
    
    $
    642,961Current liabilities:Accounts payable
    
    $
    23,343
    
    
    $
    21,984Accrued liabilities
    
    
    78,701
    
    
    
    44,142Accrued income taxes
    
    
    12,129
    
    
    
    40,879Deferred revenue and gains
    
    
    26,640
    
    
    
    16,445Long-term debt due within one year
    
    
    5,102
    
    
    
    1,955Total current liabilities
    
    
    145,915
    
    
    
    125,405Long-term deferred gains
    
    
    29,767
    
    
    
    37,539Long-term debt
    
    
    127,861
    
    
    
    3,569Other long-term liabilities
    
    
    7,921
    
    
    
    2,244Total liabilities
    
    
    311,464
    
    
    
    168,757Commitments and contingencies (Notes 3 & 12)Stockholders equity:Preferred stock $.01 par value; 100,000,000 shares authorized; no shares
issued and outstanding
    
    
    
    
    
    
    Common stock $.01 par value (250,000,000 shares authorized; 50,272,937
shares issued and 45,681,694 shares outstanding at September 30, 2005
and 49,305,446 shares issued and outstanding at December 31, 2004)
    
    
    503
    
    
    
    493Additional paid-in capital
    
    
    461,067
    
    
    
    446,825Treasury stock at cost (4,591,243 shares at September 30, 2005)
    
    
    (100,000
    )
    
    
    Retained earnings
    
    
    66,315
    
    
    
    23,231Accumulated other comprehensive income
    
    
    2,322
    
    
    
    3,655Stockholders equity
    
    
    430,207
    
    
    
    474,204Total liabilities and stockholders equity
    
    $
    741,671
    
    
    $
    642,961
  1




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EFUNDS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net revenue
    
    $
    133,150
    
    
    $
    140,054
    
    
    $
    363,682
    
    
    $
    421,652Operating expenses:Processing, communication and service costs
    
    
    32,133
    
    
    
    57,634
    
    
    
    88,648
    
    
    
    172,965Employee costs
    
    
    54,753
    
    
    
    46,261
    
    
    
    152,031
    
    
    
    142,990Depreciation and amortization
    
    
    11,817
    
    
    
    9,722
    
    
    
    28,041
    
    
    
    27,678Other operating costs
    
    
    16,547
    
    
    
    11,230
    
    
    
    39,929
    
    
    
    34,661Restructuring and provision for contract loss charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,253Total operating expenses
    
    
    115,250
    
    
    
    124,847
    
    
    
    308,649
    
    
    
    379,547Income from operations
    
    
    17,900
    
    
    
    15,207
    
    
    
    55,033
    
    
    
    42,105Interest expense
    
    
    (2,089
    )
    
    
    (114
    )
    
    
    (2,340
    )
    
    
    (217
    )Other income  net
    
    
    974
    
    
    
    177
    
    
    
    3,786
    
    
    
    241Income before income taxes
    
    
    16,785
    
    
    
    15,270
    
    
    
    56,479
    
    
    
    42,129Provision for income taxes
    
    
    (1,007
    )
    
    
    (4,581
    )
    
    
    (13,395
    )
    
    
    (12,638
    )Net income
    
    $
    15,778
    
    
    $
    10,689
    
    
    $
    43,084
    
    
    $
    29,491Weighted average shares outstanding
    
    
    45,471
    
    
    
    48,258
    
    
    
    46,761
    
    
    
    47,944Weighted average shares and potential dilutive shares outstanding
    
    
    46,741
    
    
    
    49,424
    
    
    
    48,111
    
    
    
    49,151Net income per share  basic
    
    $
    0.35
    
    
    $
    0.22
    
    
    $
    0.92
    
    
    $
    0.62Net income per share  diluted
    
    $
    0.34
    
    
    $
    0.22
    
    
    $
    0.90
    
    
    $
    0.60
  2




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EFUNDS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months EndedSeptember 30,(in thousands)
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    43,084
    
    
    $
    29,491Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    11,710
    
    
    
    10,848Amortization
    
    
    16,331
    
    
    
    16,830Deferred income taxes
    
    
    3,807
    
    
    
    (1,224
    )Other  net
    
    
    (274
    )
    
    
    1,258Changes in assets and liabilities, net of
effects from acquisitions and dispositions:Restricted cash
    
    
    830
    
    
    
    1,236Accounts receivable
    
    
    (7,019
    )
    
    
    (7,027
    )Accounts payable
    
    
    (10,887
    )
    
    
    (1,442
    )Deferred revenue and gains
    
    
    (4,526
    )
    
    
    1,332Income taxes receivable/payable
    
    
    (26,416
    )
    
    
    7,292Other assets and liabilities
    
    
    (11,396
    )
    
    
    1,004Net cash provided by operating activities
    
    
    15,244
    
    
    
    59,598Cash flows from investing activities:Capital expenditures
    
    
    (19,325
    )
    
    
    (20,569
    )Acquisitions,
net of cash acquired
    
    
    (286,883
    )
    
    
    (6,079
    )Purchase of short-term investments
    
    
    (98,925
    )
    
    
    (84,335
    )Proceeds from sale of short-term investments
    
    
    187,065
    
    
    
    55,185Other  net
    
    
    (2,875
    )
    
    
    (682
    )Net cash used in investing activities
    
    
    (220,943
    )
    
    
    (56,480
    )Cash flows from financing activities:Purchase of common stock
    
    
    (100,000
    )
    
    
    Issuance of common stock
    
    
    11,619
    
    
    
    17,513Proceed from long-term debt
    
    
    235,000
    
    
    
    Payments on long-term debt
    
    
    (122,742
    )
    
    
    (5,752
    )Other
    
    
    (348
    )
    
    
    Net cash provided by financing activities
    
    
    23,529
    
    
    
    11,761Net (decrease) increase in cash and cash equivalents
    
    
    (182,170
    )
    
    
    14,879Cash and cash equivalents at beginning of period
    
    
    274,477
    
    
    
    104,456Cash and cash equivalents at end of period
    
    $
    92,307
    
    
    $
    119,335Supplemental disclosures:Cash paid for income taxes
    
    $
    34,222
    
    
    $
    6,334Cash paid for interest
    
    $
    2,161
    
    
    $
    331Noncash investing and financing activities:Purchase of assets under capital lease obligations
    
    $
    6,294
    
    
    $
    4,682
  3




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EFUNDS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
        Recent Pronouncements
  4




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Employee stock-based compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income, as reported
    
    $
    15,778
    
    
    $
    10,689
    
    
    $
    43,084
    
    
    $
    29,491Total stock-based employee compensation
expense determined under fair value
based method for all awards, net of tax
    
    
    (1,548
    )
    
    
    (911
    )
    
    
    (4,032
    )
    
    
    (2,771
    )Pro forma net income
    
    $
    14,230
    
    
    $
    9,778
    
    
    $
    39,052
    
    
    $
    26,720Earnings per share:Basic-as reported
    
    $
    0.35
    
    
    $
    0.22
    
    
    $
    0.92
    
    
    $
    0.62Basic-pro forma
    
    $
    0.31
    
    
    $
    0.20
    
    
    $
    0.84
    
    
    $
    0.56Diluted-as reported
    
    $
    0.34
    
    
    $
    0.22
    
    
    $
    0.90
    
    
    $
    0.60Diluted-pro forma
    
    $
    0.30
    
    
    $
    0.20
    
    
    $
    0.81
    
    
    $
    0.54
 5




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Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Expected volatility
    
    
    38.6
    %
    
    
    38.5
    %
    
    
    35.5
    %
    
    
    39.0
    %Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Risk-free interest rate
    
    
    3.9
    %
    
    
    3.5
    %
    
    
    3.9
    %
    
    
    3.4
    %Expected life1
    
    5 years
    
    5 years
    
    5 years
    
    5 years
 
 1
    
    The expected life assumption used in the valuation of the options
represents the life of the options from the vest date of those options. During each
of the periods presented above, the 5 year expected life assumption would translate to
a 7 year expected term from date of option grants.  Settlement Assets and Obligations
  Derivative Instruments
    6




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Debt Issue Costs
  Income Taxes
       7




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##### Table of Contents



Wtd. Avg.(dollars in thousands)
    
    Amount
    
    
    Useful LivesCurrent assets
    
    $
    2,919Non-current assets
    
    
    9,014Intangible assets:Customer relationships
    
    
    12,402
    
    
    9 yearsDeveloped technology
    
    
    4,740
    
    
    4 yearsDatabase
    
    
    2,600
    
    
    10 yearsOther
    
    
    1,247
    
    
    3 yearsGoodwill
    
    
    32,753Total assets acquired
    
    
    65,675Current liabilities
    
    
    10,965Long-term liabilities
    
    
    112Net assets acquired
    
    $
    54,598
     8




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Wtd. Avg.(dollars in thousands)
    
    Amount
    
    
    Useful LivesCurrent assets
    
    $
    27,627Non-current assets
    
    
    13,992Intangible assets:Customer relationships
    
    
    51,450
    
    
    10 yearsInternally developed software
    
    
    7,105
    
    
    3 yearsDeveloped technology
    
    
    7,100
    
    
    5 yearsGoodwill
    
    
    172,793Total assets acquired
    
    
    280,067Current liabilities
    
    
    26,808Long-term liabilities
    
    
    18,004Net assets acquired
    
    $
    235,255
  (unaudited)Three Months Ended
    
    Nine Months Ended September 30,(in thousands, except per share amounts)
    
    September 30, 2004
    
    2005
    
    2004Net revenue
    
    $
    153,529
    
    
    $
    395,965
    
    
    $
    460,163Net income
    
    
    7,356
    
    
    
    34,883
    
    
    
    20,207Net income per share:Basic
    
    $
    0.15
    
    
    $
    0.75
    
    
    $
    0.42Diluted
    
    $
    0.15
    
    
    $
    0.73
    
    
    $
    0.41
    9




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Wtd. Avg.Amort.
    
    
    September 30, 2005
    
    
    December 31, 2004Period
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    
    
    
    
    Gross Carrying
    
    
    Accumulated(dollars in thousands)
    
    In Years
    
    
    Amounts
    
    
    Amortization
    
    
    Net
    
    
    Amounts
    
    
    Amortization
    
    
    NetSoftware-internal use
    
    4
    
    
    $
    110,011
    
    
    $
    (73,501
    )
    
    $
    36,510
    
    
    $
    94,272
    
    
    $
    (69,388
    )
    
    $
    24,884Software-licensing
and resale
    
    5
    
    
    
    61,106
    
    
    
    (36,676
    )
    
    
    24,430
    
    
    
    54,996
    
    
    
    (40,522
    )
    
    
    14,474Acquired contracts
and other
    
    8
    
    
    
    102,929
    
    
    
    (32,938
    )
    
    
    69,991
    
    
    
    28,755
    
    
    
    (23,703
    )
    
    
    5,052$
    274,046
    
    
    $
    (143,115
    )
    
    $
    130,931
    
    
    $
    178,023
    
    
    $
    (133,613
    )
    
    $
    44,410
   Electronic
    
    
    Risk
    
    
    Global(in thousands)
    
    Payments
    
    
    Management
    
    
    Outsourcing
    
    
    Other
    
    
    TotalBalance as of December 31, 2004
    
    $
    15,388
    
    
    $
    11,176
    
    
    $
    22,748
    
    
    $
    9,950
    
    
    $
    59,262Goodwill acquired
    
    
    172,661
    
    
    
    21,981
    
    
    
    11,024
    
    
    
    279
    
    
    
    205,945Balance as of September 30, 2005
    
    $
    188,049
    
    
    $
    33,157
    
    
    $
    33,772
    
    
    $
    10,229
    
    
    $
    265,207
   Lease-RelatedSeverance
    
    
    Costs &(in thousands)
    
    Related
    
    
    Other
    
    
    TotalBalance at December 31, 2004
    
    $
    2,464
    
    
    $
    1,942
    
    
    $
    4,406Cash payments
    
    
    (256
    )
    
    
    (246
    )
    
    
    (502
    )Balance at March 31, 2005
    
    
    2,208
    
    
    
    1,696
    
    
    
    3,904Cash payments
    
    
    (358
    )
    
    
    (183
    )
    
    
    (541
    )Balance at June 30, 2005
    
    
    1,850
    
    
    
    1,513
    
    
    
    3,363Cash payments
    
    
    (750
    )
    
    
    (303
    )
    
    
    (1,053
    )Balance at September 30, 2005
    
    $
    1,100
    
    
    $
    1,210
    
    
    $
    2,310
   10




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(in thousands)
    
    2005
    
    
    2004Balance at beginning of year
    
    $
    1,162
    
    
    $
    1,890Charges to reserve
    
    
    (293
    )
    
    
    (345
    )Balance at March 31
    
    
    869
    
    
    
    1,545Provision for contract losses
    
    
    
    
    
    
    501Charges to reserve
    
    
    (561
    )
    
    
    (345
    )Balance at June 30
    
    
    308
    
    
    
    1,701Charges to reserve
    
    
    (308
    )
    
    
    (101
    )Balance at September 30
    
    $
    
    
    
    $
    1,600
   September 30,
    
    
    December 31,(in thousands)
    
    2005
    
    
    20045.39% Senior Notes due 2012
    
    $
    100,000
    
    
    $
    Revolving Credit Facility due 2010
    
    
    20,000
    
    
    
    Capital leases and other
    
    
    12,963
    
    
    
    5,524Less capital lease and other amounts due within one year
    
    
    (5,102
    )
    
    
    (1,955
    )Total
    
    $
    127,861
    
    
    $
    3,569
    11




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income per share  basicNet income
    
    $
    15,778
    
    
    $
    10,689
    
    
    $
    43,084
    
    
    $
    29,491Weighted average shares outstanding
    
    
    45,471
    
    
    
    48,258
    
    
    
    46,761
    
    
    
    47,944Net income per share  basic
    
    $
    0.35
    
    
    $
    0.22
    
    
    $
    0.92
    
    
    $
    0.62Net income per share  dilutedNet income
    
    $
    15,778
    
    
    $
    10,689
    
    
    $
    43,084
    
    
    $
    29,491Weighted average shares outstanding
    
    
    45,471
    
    
    
    48,258
    
    
    
    46,761
    
    
    
    47,944Dilutive impact of options
    
    
    1,270
    
    
    
    1,166
    
    
    
    1,350
    
    
    
    1,207Weighted average shares and potential dilutive shares outstanding
    
    
    46,741
    
    
    
    49,424
    
    
    
    48,111
    
    
    
    49,151Net income per share  diluted
    
    $
    0.34
    
    
    $
    0.22
    
    
    $
    0.90
    
    
    $
    0.60
       12




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net revenue:Electronic payments
    
    $
    71,274
    
    
    $
    49,276
    
    
    $
    174,422
    
    
    $
    150,678Risk management
    
    
    41,974
    
    
    
    36,839
    
    
    
    119,835
    
    
    
    106,996Global outsourcing
    
    
    19,902
    
    
    
    20,305
    
    
    
    69,425
    
    
    
    60,611ATM management1
    
    
    
    
    
    
    33,634
    
    
    
    
    
    
    
    103,367Total net revenue
    
    
    133,150
    
    
    
    140,054
    
    
    
    363,682
    
    
    
    421,652Operating expenses before overhead, restructuring and
provision for contract loss charges:Electronic payments
    
    
    64,042
    
    
    
    40,355
    
    
    
    152,378
    
    
    
    122,536Risk management
    
    
    23,075
    
    
    
    20,993
    
    
    
    68,967
    
    
    
    63,318Global outsourcing
    
    
    16,149
    
    
    
    15,404
    
    
    
    50,211
    
    
    
    46,626ATM management1
    
    
    
    
    
    
    31,845
    
    
    
    
    
    
    
    97,469Total operating expenses before overhead,
restructuring and provision for contract loss
charges
    
    
    103,266
    
    
    
    108,597
    
    
    
    271,556
    
    
    
    329,949Allocated overhead:Electronic payments
    
    
    3,159
    
    
    
    2,962
    
    
    
    9,950
    
    
    
    8,341Risk management
    
    
    2,262
    
    
    
    2,136
    
    
    
    6,780
    
    
    
    6,650Global outsourcing
    
    
    2,111
    
    
    
    1,521
    
    
    
    6,692
    
    
    
    4,808ATM management1
    
    
    
    
    
    
    1,932
    
    
    
    
    
    
    
    6,193Corporate
    
    
    4,452
    
    
    
    7,699
    
    
    
    13,671
    
    
    
    22,353Total allocated overhead
    
    
    11,984
    
    
    
    16,250
    
    
    
    37,093
    
    
    
    48,345Restructuring and provision for contract loss charges:Electronic payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,178Risk management
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )Global outsourcing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41ATM management1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Corporate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33Total restructuring and provision for contract
loss charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,253Income (loss) from operations:Electronic payments
    
    
    4,073
    
    
    
    5,959
    
    
    
    12,094
    
    
    
    18,623Risk management
    
    
    16,637
    
    
    
    13,710
    
    
    
    44,088
    
    
    
    37,036Global outsourcing
    
    
    1,642
    
    
    
    3,380
    
    
    
    12,522
    
    
    
    9,136ATM management1
    
    
    
    
    
    
    (143
    )
    
    
    
    
    
    
    (304
    )Corporate
    
    
    (4,452
    )
    
    
    (7,699
    )
    
    
    (13,671
    )
    
    
    (22,386
    )Income from operations
    
    $
    17,900
    
    
    $
    15,207
    
    
    $
    55,033
    
    
    $
    42,105
 
 1
    
    See Note 4. 13




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Depreciation and amortization:Electronic payments
    
    $
    6,749
    
    
    $
    4,239
    
    
    $
    13,848
    
    
    $
    11,476Risk management
    
    
    2,980
    
    
    
    2,957
    
    
    
    8,905
    
    
    
    8,672Global outsourcing
    
    
    1,795
    
    
    
    996
    
    
    
    4,437
    
    
    
    2,352ATM management
    
    
    
    
    
    
    1,163
    
    
    
    
    
    
    
    4,208Corporate
    
    
    293
    
    
    
    367
    
    
    
    851
    
    
    
    970Total depreciation and amortization
    
    $
    11,817
    
    
    $
    9,722
    
    
    $
    28,041
    
    
    $
    27,678
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004United States
    
    $
    119,145
    
    
    $
    126,214
    
    
    $
    325,543
    
    
    $
    376,322EMEA
    
    
    8,627
    
    
    
    7,446
    
    
    
    25,738
    
    
    
    22,868India
    
    
    2,466
    
    
    
    221
    
    
    
    4,203
    
    
    
    1,201Canada
    
    
    1,688
    
    
    
    5,120
    
    
    
    4,646
    
    
    
    17,593Latin America
    
    
    984
    
    
    
    899
    
    
    
    3,077
    
    
    
    3,228Asia
    
    
    240
    
    
    
    154
    
    
    
    475
    
    
    
    440Total consolidated
    
    $
    133,150
    
    
    $
    140,054
    
    
    $
    363,682
    
    
    $
    421,652
  September 30,
    
    
    December 31,(in thousands)
    
    2005
    
    
    2004United States
    
    $
    47,554
    
    
    $
    37,703India
    
    
    15,941
    
    
    
    11,875Canada
    
    
    531
    
    
    
    249United Kingdom and other
    
    
    490
    
    
    
    493Total consolidated
    
    $
    64,516
    
    
    $
    50,320
  Future commercial commitments
  Commitment Expiration by Period1(in thousands)
    
    Total
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLetters of credit and other
    
    $
    778
    
    
    $
    481
    
    
    $
    186
    
    
    $
    105
    
    
    $
    6
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    12,501
    
    
    
    1,065
    
    
    
    11,232
    
    
    
    45
    
    
    
    159
    
    
    
    
    
    
    
    Total commitments
    
    $
    13,279
    
    
    $
    1,546
    
    
    $
    11,418
    
    
    $
    150
    
    
    $
    165
    
    
    $
    
    
    
    $
    
 
 1
    
    Represents commercial commitment expirations during the last three months of 2005 and
the respective years ending December 31, 2006 through 2009 and thereafter.  14




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##### Table of Contents



Contractual cash obligations
  Payments Due by PeriodThree months
    
    
    Three Years
    
    
    Three YearsEnded
    
    
    Ended
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    December 31,(in thousands)
    
    Total
    
    
    2005
    
    
    2008
    
    
    2011
    
    
    ThereafterLong-term debt
    
    $
    120,000
    
    
    $
    
    
    
    $
    
    
    
    $
    20,000
    
    
    $
    100,000Capital lease obligations
    
    
    12,964
    
    
    
    994
    
    
    
    11,846
    
    
    
    124
    
    
    
    Operating lease
obligations1
    
    
    80,093
    
    
    
    3,632
    
    
    
    39,322
    
    
    
    21,353
    
    
    
    15,786Vendor obligations
    
    
    80,448
    
    
    
    9,628
    
    
    
    61,457
    
    
    
    9,363
    
    
    
    Total
    
    $
    293,505
    
    
    $
    14,254
    
    
    $
    112,625
    
    
    $
    50,840
    
    
    $
    115,786
 
 1
    
    Future minimum lease payments for non-cancelable operating
leases are presented net of minimum sublease rentals of $3.5 million
due in the future under non-cancelable subleases.  Other commitments
    15




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Other contingencies
    16




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    Our Business
   -
    
    Electronic Payments-
    
    Risk Management-
    
    Global Outsourcing-
    
    Automated Teller Machine (ATM) Management
   17




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##### Table of Contents



Electronic Payments
   Risk Management
  Global Outsourcing
  ATM Management
  18




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##### Table of Contents



Key Events During the Three Months Ended September 30, 2005
 
    
    We acquired WildCard Systems, a leading provider of prepaid and stored value solutions.
    
    We entered into a new $150 million revolving credit facility and terminated our prior
$100 million facility.
    
    We entered into a $100 million term loan and repaid it by issuing $100 million of seven
year notes through a private placement.
    
    We received a tax benefit during the quarter of $4.7 million primarily due to our
execution of an Advanced Pricing Agreement with the Internal Revenue Service.
    
    We executed a five year agreement through which we will perform setup, hosting,
maintenance and support activities for the United States Postal Services payment switch
operations.
    
    Larence Park, the former Chief Executive Officer of WildCard Systems, became our Senior
Vice President, Prepaid Solutions.
 Trends
  
    
    prepaid and stored value products are experiencing the highest growth rate of any
payment card product and this trend is expected to continue over the next several years,
although we expect to see some moderation in growth levels seen in this industry in future
periods;
    
    increased fraud and regulatory requirements are driving a sustained need for risk
management products, although the rate of growth in this business is slowing somewhat as
many customers and potential customers have already implemented required screening
procedures;
    
    there continues to be a migration from the use of traditional paper checks and cash to
electronic payments;
    
    larger financial institutions are developing increasing expectations regarding the
ability of their payment technology providers to deliver complex, comprehensive solutions
addressing all forms of electronic payment types;
    
    there has been an increase in regulatory and legislative activity regarding notice
requirements associated with incidents involving the misappropriation of consumer data
causing participants in the financial service and other industries to devote additional
efforts to maintain the security of their data files;
    
    the use of outsourcing as a means to control costs is driving demand for offshore
outsourcing services as well as an increased level of interest in developing expanded
offshore capabilities by industry participants and our competitors; and
    
    consolidation in the industries we serve has led to increased competition and pricing
pressures.
 Risks and Challenges
  
    
    Estimates of future financial results are inherently unreliable.
    
    Our ability to expand through acquisitions involves risks and may not be successful.
    
    If the security of our databases is compromised, our reputation could suffer and
customers may not be willing to use our products and services.
    
    Consolidation in the industries we serve may adversely affect our ability to sell our products and services.
    
    We are unable to predict the results of the purported class action lawsuit filed in Florida.
    
    We may be unable to protect our intellectual property rights or others may claim that we
are infringing on their intellectual property.
    
    We face intense competition in all areas of our business, and if we do not compete
effectively, our business will be harmed.
    
    If we experience system failures, the products and services we provide to our customers
could be delayed or interrupted, which could harm our business and reputation and result in
the loss of customers.
 19




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##### Table of Contents




    
    Legislation or regulation could impair our ability to collect and use data, increase our
operating costs or otherwise harm our business.
    
    We may experience software defects, development delays and installation difficulties,
which could harm our business and reputation and expose us to potential liability.
    
    There are a number of risks associated with our international sales and operations that
could harm our business.
    
    Changes in India tax laws could adversely affect our results of operations.
    
    We face termination and compliance risks with respect to our government contracts.
    
    Provisions in our charter documents and Delaware law may delay or prevent a change in
control of our Company that you may consider favorable.
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeNet revenue
    
    $
    133.2
    
    
    $
    140.1
    
    
    
    (5
    )%
    
    $
    363.7
    
    
    $
    421.7
    
    
    
    (14
    )%Operating expenses:Processing, communication and
service costs
    
    
    32.1
    
    
    
    57.6
    
    
    
    (44
    )
    
    
    88.6
    
    
    
    173.0
    
    
    
    (49
    )Employee costs
    
    
    54.8
    
    
    
    46.3
    
    
    
    18
    
    
    
    152.0
    
    
    
    143.0
    
    
    
    6Depreciation and amortization
    
    
    11.8
    
    
    
    9.7
    
    
    
    22
    
    
    
    28.0
    
    
    
    27.7
    
    
    
    1Other operating costs
    
    
    16.5
    
    
    
    11.2
    
    
    
    47
    
    
    
    39.9
    
    
    
    34.7
    
    
    
    15Restructuring and provision for
contract loss charges
    
    
    
    
    
    
    
    
    
    
    *
    
    
    
    
    
    
    
    1.3
    
    
    
    *Total operating expenses1
    
    
    115.3
    
    
    
    124.8
    
    
    
    (8
    )
    
    
    308.6
    
    
    
    379.5
    
    
    
    (19
    )Income from operations1
    
    
    17.9
    
    
    
    15.2
    
    
    
    18
    
    
    
    55.0
    
    
    
    42.1
    
    
    
    31Interest expense
    
    
    (2.1
    )
    
    
    (0.1
    )
    
    
    *
    
    
    
    (2.3
    )
    
    
    (0.2
    )
    
    
    *Other income  net
    
    
    1.0
    
    
    
    0.2
    
    
    
    *
    
    
    
    3.8
    
    
    
    0.2
    
    
    
    *Income before income taxes
    
    
    16.8
    
    
    
    15.3
    
    
    
    10
    
    
    
    56.5
    
    
    
    42.1
    
    
    
    34Provision for income taxes
    
    
    (1.0
    )
    
    
    (4.6
    )
    
    
    78
    
    
    
    (13.4
    )
    
    
    (12.6
    )
    
    
    (6
    )Net income1
    
    $
    15.8
    
    
    $
    10.7
    
    
    
    48
    
    
    $
    43.1
    
    
    $
    29.5
    
    
    
    46
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    Amounts may not sum due to rounding. 20




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Net Revenue
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeElectronic PaymentsEFT processing
    
    $
    32.6
    
    
    $
    27.0
    
    
    
    21
    %
    
    $
    92.4
    
    
    $
    81.2
    
    
    
    14
    %Prepaid and stored value
    
    
    19.8
    
    
    
    
    
    
    
    *
    
    
    
    19.8
    
    
    
    
    
    
    
    *Government services (EBT)
    
    
    11.4
    
    
    
    14.2
    
    
    
    (20
    )
    
    
    37.8
    
    
    
    42.9
    
    
    
    (12
    )Software sales
    
    
    7.5
    
    
    
    8.1
    
    
    
    (7
    )
    
    
    24.4
    
    
    
    26.6
    
    
    
    (8
    )71.3
    
    
    
    49.3
    
    
    
    45
    
    
    
    174.4
    
    
    
    150.7
    
    
    
    16Risk ManagementFinancial institution products
    
    
    36.3
    
    
    
    32.1
    
    
    
    13
    
    
    
    103.5
    
    
    
    93.0
    
    
    
    11Retail products
    
    
    5.7
    
    
    
    4.7
    
    
    
    21
    
    
    
    16.3
    
    
    
    14.0
    
    
    
    1642.0
    
    
    
    36.8
    
    
    
    14
    
    
    
    119.8
    
    
    
    107.0
    
    
    
    12Global OutsourcingBPO
    
    
    13.8
    
    
    
    13.0
    
    
    
    6
    
    
    
    44.6
    
    
    
    39.0
    
    
    
    14IT services
    
    
    6.1
    
    
    
    7.3
    
    
    
    (16
    )
    
    
    24.8
    
    
    
    21.6
    
    
    
    1519.9
    
    
    
    20.3
    
    
    
    (2
    )
    
    
    69.4
    
    
    
    60.6
    
    
    
    15ATM Management1
    
    
    
    
    
    
    33.6
    
    
    
    *
    
    
    
    
    
    
    
    103.4
    
    
    
    *Total net revenue2
    
    $
    133.2
    
    
    $
    140.1
    
    
    
    (5
    )
    
    $
    363.7
    
    
    $
    421.7
    
    
    
    (14
    )
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    See Note 4 in the notes to the condensed consolidated financial statements.2
    
    Amounts may not sum due to rounding. Electronic Payments
  Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 30(in millions)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004License fees
    
    $
    0.8
    
    
    $
    1.5
    
    
    $
    3.3
    
    
    $
    5.3Maintenance
    
    
    4.7
    
    
    
    5.0
    
    
    
    15.4
    
    
    
    15.3Software services
    
    
    2.0
    
    
    
    1.6
    
    
    
    5.7
    
    
    
    6.0$
    7.5
    
    
    $
    8.1
    
    
    $
    24.4
    
    
    $
    26.6
  Risk Management
  21




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Global Outsourcing
   ATM Management
  Business Segment Operating Income
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeOperating income (loss)Electronic payments
    
    $
    4.1
    
    
    $
    6.0
    
    
    
    (32
    )%
    
    $
    12.1
    
    
    $
    18.6
    
    
    
    (35
    )%Risk management
    
    
    16.6
    
    
    
    13.7
    
    
    
    21
    
    
    
    44.1
    
    
    
    37.0
    
    
    
    19Global outsourcing
    
    
    1.6
    
    
    
    3.4
    
    
    
    (53
    )
    
    
    12.5
    
    
    
    9.1
    
    
    
    37ATM management1
    
    
    
    
    
    
    (0.1
    )
    
    
    *
    
    
    
    
    
    
    
    (0.3
    )
    
    
    *Corporate
    
    
    (4.5
    )
    
    
    (7.7
    )
    
    
    42
    
    
    
    (13.7
    )
    
    
    (22.4
    )
    
    
    39Total operating
income2
    
    $
    17.9
    
    
    $
    15.2
    
    
    
    18
    
    
    $
    55.0
    
    
    $
    42.1
    
    
    
    31
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    See Note 4 in the notes to the condensed consolidated financial statements.2
    
    Amounts may not sum due to rounding. Electronic Payments
  Risk Management
  22




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Global Outsourcing
  ATM Management
  Corporate
  Operating Expenses
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeOperating expenses:Processing, communication and
service costs
    
    $
    32.1
    
    
    $
    57.6
    
    
    
    (44
    )%
    
    $
    88.6
    
    
    $
    173.0
    
    
    
    (49
    )%Employee costs
    
    
    54.8
    
    
    
    46.3
    
    
    
    18
    
    
    
    152.0
    
    
    
    143.0
    
    
    
    6Depreciation and amortization
    
    
    11.8
    
    
    
    9.7
    
    
    
    22
    
    
    
    28.0
    
    
    
    27.7
    
    
    
    1Other operating costs
    
    
    16.5
    
    
    
    11.2
    
    
    
    47
    
    
    
    39.9
    
    
    
    34.7
    
    
    
    15Restructuring and provision for
contract loss charges
    
    
    
    
    
    
    
    
    
    
    *
    
    
    
    
    
    
    
    1.3
    
    
    
    *Total operating expenses1
    
    $
    115.3
    
    
    $
    124.8
    
    
    
    (8
    )
    
    $
    308.6
    
    
    $
    379.5
    
    
    
    (19
    )
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    Amounts may not sum due to rounding. Processing, communication and service costs
   23




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##### Table of Contents



Employee costs
  Depreciation and amortization
  Other operating costs
  Interest expense
  Other income  net
  Provision for income taxes
  24




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Overview
  September 30,
    
    December 31,(dollars in millions)
    
    2005
    
    2004
    
    % ChangeCash and cash equivalents
    
    $
    92.3
    
    
    $
    274.5
    
    
    
    (66
    )%Short-term investments
    
    
    
    
    
    
    88.1
    
    
    
    *Long-term debt due within one year
    
    
    5.1
    
    
    
    2.0
    
    
    
    *Long-term debt
    
    
    127.9
    
    
    
    3.6
    
    
    
    *Stockholders equity
    
    
    430.2
    
    
    
    474.2
    
    
    
    (9
    )Net working capital
    
    
    111.0
    
    
    
    343.2
    
    
    
    (68
    )
 
 *
    
    Represents an increase or decrease in excess of 100%. Cash Resources
    25




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26




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##### Table of Contents



Payments Due by PeriodThree months
    
    
    Three Years
    
    
    Three YearsEnded
    
    
    Ended
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    December 31,(in millions)
    
    Total
    
    
    2005
    
    
    2008
    
    
    2011
    
    
    ThereafterLong-term debt
    
    $
    120.0
    
    
    $
    
    
    
    $
    
    
    
    $
    20.0
    
    
    $
    100.0Capital lease obligations
    
    
    13.0
    
    
    
    1.0
    
    
    
    11.9
    
    
    
    0.1
    
    
    
    Operating lease
obligations1
    
    
    80.1
    
    
    
    3.6
    
    
    
    39.3
    
    
    
    21.4
    
    
    
    15.8Vendor obligations
    
    
    80.4
    
    
    
    9.6
    
    
    
    61.4
    
    
    
    9.4
    
    
    
    Total 2
    
    $
    293.5
    
    
    $
    14.3
    
    
    $
    112.6
    
    
    $
    50.8
    
    
    $
    115.8
 
 1
    
    Future minimum lease payments for non-cancelable operating
leases are presented net of minimum sublease rentals of $3.5 million
due in the future under non-cancelable subleases.2
    
    Amounts may not sum due to rounding.   Sources and Uses of Cash
  Summary of Cash FlowsFor the Nine MonthsEnded September 30,(in millions)
    
    2005
    
    
    2004Cash provided by operating activities
    
    $
    15.2
    
    
    $
    59.6Cash used in investing activities
    
    
    (220.9
    )
    
    
    (56.5
    )Cash provided by financing activities
    
    
    23.5
    
    
    
    11.8Net (decrease) increase in cash and cash equivalents
    
    $
    (182.2
    )
    
    $
    14.9
  
    
    investment in projects intended to increase our product delivery and operational
effectiveness, enhance our product suite and the security and redundancy of our systems;
and
    
    funding our liquidity needs.
  Operating Activities
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Investing Activities
  Financing Activities
  Commercial Commitments
  Commitment Expiration by Period1(in millions)
    
    Total
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLetters of credit and other
    
    $
    0.8
    
    
    $
    0.5
    
    
    $
    0.2
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    12.5
    
    
    
    1.1
    
    
    
    11.2
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    Total commitments
    
    $
    13.3
    
    
    $
    1.6
    
    
    $
    11.4
    
    
    $
    0.1
    
    
    $
    0.2
    
    
    $
    
    
    
    $
    
 
 1
    
    Represents commercial commitment expirations during the last three months of 2005 and
the respective years ending December 31, 2006 through 2009 and thereafter.    FORWARD-LOOKING STATEMENTS 
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
    
    An effective tax rate between 33 and 35 percent for the balance of 2005;
 
    
    Cash outlays for capital expenditures and product development activities will be at or below
the low end of the $35 to $40 million estimate included in the Companys prior guidance.
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
  29




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 5. OTHER INFORMATION
 RISK FACTORS AND CAUTIONARY STATEMENTS.
      -
    
    the operations, technology and personnel of any acquired companies may be difficult
to integrate;-
    
    the allocation of management resources to consummate these transactions may disrupt
our day to day business;-
    
    the acquired businesses may not achieve anticipated revenues, earnings or cash
flow. Such a shortfall could require us to write-down the goodwill associated with any
acquired company, which would adversely affect our reported earnings; and-
    
    acquisitions may require us to revise our published earnings guidance and record
special charges that reduce our earnings.
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##### Table of Contents



-
    
    deter customers from using our products and services;-
    
    harm our reputation;-
    
    expose us to liability;-
    
    increase our operating expenses to remediate problems caused by the breach; and-
    
    decrease market acceptance of electronic commerce transactions in general.
    -
    
    current and potential customers;-
    
    market share if an entity resulting from a combination of our customers determines
that it is more efficient to develop in-house products and services similar to ours or to
use our competitors products and services; and-
    
    revenue if such a combined institution is able to negotiate a greater volume
discount for, or discontinue the use of, our products and services.
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##### Table of Contents



-
    
    third-party debit network processors, including First Data Corporation, VISA Debit
Processing Services, Fifth Third Processing Solutions, Metavante Corporation and Fiserv;-
    
    financial institutions that have developed in house processing capabilities or
services similar to ours, including Bank of America, M&I Bank and Fifth Third National
Bank;-
    
    prepaid and stored value providers, including First Data, TYSYS and Metavante;-
    
    government service (EBT) providers including J.P. Morgan Chase and ACS; and-
    
    electronic funds transfer software providers, including Transaction System Architects, S2 and S1.
  -
    
    providers of fraud management data and software including Primary Payment Systems
(a subsidiary of First Data Corporation), Equifax, Experian, TransUnion and RiskWise (a
division of Lexis-Nexis of Reed Elsevier); and-
    
    retail check verification and electronic check processing providers, including
Certegy and Telecheck, a subsidiary of First Data Corporation.
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##### Table of Contents



-
    
    delays in market acceptance;-
    
    additional development or installation costs;-
    
    loss of customers;-
    
    negative publicity; and-
    
    exposure to liability claims.
    -
    
    changes in foreign currency exchange rates;-
    
    changes in a specific countrys or regions political and economic conditions,
particularly in emerging markets;-
    
    potentially unfavorable tax rules;-
    
    tariffs, duties and other trade barriers;-
    
    reduced protection for intellectual property rights;-
    
    challenges in managing widespread operations;-
    
    changes in foreign laws and regulatory requirements or in foreign policy; and-
    
    varying business practices in foreign countries.
  34




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##### Table of Contents



-
    
    no cumulative voting by stockholders for directors;-
    
    a classified board of directors with three-year staggered terms;-
    
    the ability of our board to set the size of the board of directors, to create new
directorships and to fill vacancies;-
    
    the ability of our board to issue preferred stock, without stockholder approval,
with rights and preferences that may be superior to our common stock;-
    
    the ability of our board to amend our bylaws;-
    
    a prohibition of stockholder action by written consent;-
    
    advance notice requirements for stockholder proposals and for nominating candidates to our board;-
    
    restrictions under Delaware law on mergers and other business combinations between
us and any holder of 15% or more of our outstanding common stock;-
    
    a requirement that 66-2/3% of our stockholders and 66-2/3% of our directors approve
certain corporate transactions, including mergers and consolidations, sales of assets or
amendments to our certificate of incorporation; and-
    
    we have adopted a stockholder rights plan, which discourages the unauthorized
acquisition of 15% or more of our common stock or an unauthorized exchange or tender
offer.
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##### Table of Contents



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
  ExhibitNo.
    
    Description
    
    Method of filing3.1
    
    Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-1 (the S-1) filed by the
Company with the Commission on April 4, 2000, Registration
No. 333-33992)
    
    *3.2
    
    Bylaws (incorporated by reference to Exhibit 3.2 to the S-1)
    
    *4.1
    
    Form of common stock certificate (incorporated by reference
to Exhibit 4.1 to Amendment No. 1 to the S-1 filed by the
Company with the Commission on May 15, 2000 (Amendment No.
1), Registration No. 333-33992)
    
    *4.2
    
    Form of Rights Agreement by and between the Company and
Rights Agent, (incorporated by reference to Exhibit 4.2 to
Amendment No. 1)
    
    *4.3
    
    Certificate of Designation of Series A Participating
Preferred Stock (incorporated by reference to Exhibit 4.3
to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000)
    
    *10.1
    
    Schedule identifying Change in Control Agreements omitted
pursuant to Instruction 2 to Item 601 of Regulation S-K
    
    Filed herewith10.2
    
    Schedule identifying additional Transaction Assistance
Agreements omitted pursuant to Instruction 2 to Item 601 of
Regulation S-K
    
    Filed herewith10.3
    
    eFunds Corporation 2005 Special Supplemental Employment
Inducement Award Plan (incorporated by reference to Exhibit
4.1 to the Registration Statement on Form S-8 filed by the
Company with the Commission on August 10, 2005,
Registration No. 333-127433)
    
    *10.4
    
    Credit Agreement, dated July 1, 2005, among eFunds
Corporation, J.P. Morgan Chase Bank, N.A., Bank of America,
N.A., Wells Fargo Bank, National Association and J.P.
Morgan Securities, Inc.
    
    Filed herewith10.5
    
    Term Loan Agreement, dated July 1, 2005, among eFunds
Corporation, J.P. Morgan Chase Bank, N.A., and J.P. Morgan
Securities, Inc.
    
    Filed herewith10.6
    
    Note Purchase Agreement, dated September 30, 2005, among
eFunds Corporation and the purchasers of the Notes
thereunder
    
    Filed herewith31.1
    
    Section 302 Certification by Mr. Paul F. Walsh
    
    Filed herewith31.2
    
    Section 302 Certification by Mr. George W. Gresham
    
    Filed herewith32.1
    
    Section 906 Certification by Mr. Paul F. Walsh and Mr.
George W. Gresham
    
    Filed herewith
 
 *
    
    Incorporated by reference   36




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SIGNATURES
  eFunds Corporation(Registrant)Date: November 8, 2005
    
    /s/ Paul F. WalshPaul F. WalshChief Executive Officer and Chairman(Principal Executive Officer)Date: November 8, 2005
    
    /s/ George W. Gresham

George W. GreshamChief Financial Officer(Principal Financial and Accounting Officer)
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Index to Exhibits
 ExhibitNo.
    
    Description
    
    Page Number10.1
    
    Schedule identifying Change in Control Agreements
omitted pursuant to Instruction 2 to Item 601 of
Regulation S-K10.2
    
    Schedule identifying additional Transaction
Assistance Agreements omitted pursuant to
Instruction 2 to Item 601 of Regulation S-K10.4
    
    Credit Agreement, dated July 1, 2005, among
eFunds Corporation, J.P. Morgan Chase Bank, N.A.,
Bank of America, N.A., Wells Fargo Bank, National
Association and J.P. Morgan Securities, Inc.10.5
    
    Term Loan Agreement, dated July 1, 2005, among
eFunds Corporation, J.P. Morgan Chase Bank, N.A.,
and J.P. Morgan Securities, Inc.10.6
    
    Note Purchase Agreement, dated September 30,
2005, among eFunds Corporation and the purchasers
of the Notes thereunder31.1
    
    Section 302 Certification by Mr. Paul F. Walsh31.2
    
    Section 302 Certification by Mr. George W. Gresham32.1
    
    Section 906 Certification by Mr. Paul F. Walsh
and Mr. George W. Gresham
 39