##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
   o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 
 eFunds Corporation
  Delaware
    
    39-1506286(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)
 Gainey Center II
8501 N. Scottsdale Road, Suite 300
Scottsdale, Arizona
    
    85253(Address of principal executive offices)
    
    (Zip Code)
   X
  X




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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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESExhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 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)June 30,
    
    
    December 31,(dollars in thousands)
    
    2005
    
    
    2004Current assets:Cash and cash equivalents
    
    $
    205,976
    
    
    $
    274,477Short-term investments
    
    
    
    
    
    
    88,140Restricted cash
    
    
    3,877
    
    
    
    2,392Accounts receivable  net
    
    
    75,628
    
    
    
    73,505Deferred income taxes
    
    
    11,701
    
    
    
    14,340Prepaid expenses and other current assets
    
    
    13,902
    
    
    
    15,710Total current assets
    
    
    311,084
    
    
    
    468,564Property and equipment  net
    
    
    54,354
    
    
    
    50,320Intangible assets  net
    
    
    155,732
    
    
    
    103,672Long-term deferred income taxes
    
    
    13,009
    
    
    
    13,964Other non-current assets
    
    
    11,166
    
    
    
    6,441Total non-current assets
    
    
    234,261
    
    
    
    174,397Total assets
    
    $
    545,345
    
    
    $
    642,961Current liabilities:Accounts payable
    
    $
    20,665
    
    
    $
    21,984Accrued liabilities
    
    
    37,570
    
    
    
    44,142Accrued income taxes
    
    
    13,901
    
    
    
    40,879Deferred revenue and gains
    
    
    22,447
    
    
    
    16,445Long-term debt due within one year
    
    
    2,315
    
    
    
    1,955Total current liabilities
    
    
    96,898
    
    
    
    125,405Long-term deferred gains
    
    
    32,676
    
    
    
    37,539Long-term debt
    
    
    3,052
    
    
    
    3,569Other long-term liabilities
    
    
    1,894
    
    
    
    2,244Total liabilities
    
    
    134,520
    
    
    
    168,757Commitments and contingencies (Notes 3, 12, & 13)Stockholders equity:Preferred stock $.01 par value; 100,000,000 shares authorized; no shares
issued and outstanding
    
    
    
    
    
    
    Common stock $.01 par value (authorized: 250,000,000 shares; issued
and outstanding: 49,970,337 and 45,379,094 shares,
respectively at June 30, 2005 and 49,305,446 shares at December 31,
2004)
    
    
    500
    
    
    
    493Additional paid-in capital
    
    
    456,500
    
    
    
    446,825Treasury stock at cost (4,591,243 shares at June 30, 2005)
    
    
    (100,000
    )
    
    
    Retained earnings
    
    
    50,537
    
    
    
    23,231Accumulated other comprehensive income
    
    
    3,288
    
    
    
    3,655Stockholders equity
    
    
    410,825
    
    
    
    474,204Total liabilities and stockholders equity
    
    $
    545,345
    
    
    $
    642,961
  1




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EFUNDS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net revenue
    
    $
    116,294
    
    
    $
    140,712
    
    
    $
    230,532
    
    
    $
    281,598Operating expenses:Processing, communication and service costs
    
    
    27,612
    
    
    
    56,661
    
    
    
    56,515
    
    
    
    115,331Employee costs
    
    
    48,034
    
    
    
    47,787
    
    
    
    97,278
    
    
    
    96,729Depreciation and amortization
    
    
    8,077
    
    
    
    9,027
    
    
    
    16,224
    
    
    
    17,956Other operating costs
    
    
    12,229
    
    
    
    13,108
    
    
    
    23,382
    
    
    
    23,431Restructuring and provision for contract loss charges
    
    
    
    
    
    
    1,253
    
    
    
    
    
    
    
    1,253Total operating expenses
    
    
    95,952
    
    
    
    127,836
    
    
    
    193,399
    
    
    
    254,700Income from operations
    
    
    20,342
    
    
    
    12,876
    
    
    
    37,133
    
    
    
    26,898Other income (expense)  net
    
    
    1,086
    
    
    
    585
    
    
    
    2,561
    
    
    
    (39
    )Income before income taxes
    
    
    21,428
    
    
    
    13,461
    
    
    
    39,694
    
    
    
    26,859Provision for income taxes
    
    
    (7,286
    )
    
    
    (4,038
    )
    
    
    (12,388
    )
    
    
    (8,057
    )Net income
    
    $
    14,142
    
    
    $
    9,423
    
    
    $
    27,306
    
    
    $
    18,802Weighted average shares outstanding
    
    
    45,649
    
    
    
    47,886
    
    
    
    47,417
    
    
    
    47,786Weighted average shares and potential dilutive shares outstanding
    
    
    47,095
    
    
    
    49,268
    
    
    
    48,924
    
    
    
    49,192Net income per share  basic
    
    $
    0.31
    
    
    $
    0.20
    
    
    $
    0.58
    
    
    $
    0.39Net income per share  diluted
    
    $
    0.30
    
    
    $
    0.19
    
    
    $
    0.56
    
    
    $
    0.38
  2




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EFUNDS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months EndedJune 30,(in thousands)
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    27,306
    
    
    $
    18,802Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation
    
    
    6,947
    
    
    
    6,488Amortization
    
    
    9,277
    
    
    
    11,468Deferred income taxes
    
    
    3,594
    
    
    
    303Other  net
    
    
    (191
    )
    
    
    837Changes in assets and liabilities, net of effects
from acquisitions and dispositions:Restricted cash
    
    
    6,715
    
    
    
    872Accounts receivable
    
    
    (187
    )
    
    
    (6,834
    )Accounts payable
    
    
    (5,344
    )
    
    
    (977
    )Deferred revenue and gains
    
    
    (547
    )
    
    
    3,486Income taxes receivable/payable
    
    
    (25,629
    )
    
    
    2,097Other assets and liabilities
    
    
    (16,031
    )
    
    
    (5,736
    )Net cash provided by operating activities
    
    
    5,910
    
    
    
    30,806Cash flows from investing activities:Capital expenditures
    
    
    (11,790
    )
    
    
    (11,423
    )Acquisitions
    
    
    (54,598
    )
    
    
    (6,079
    )Purchase of short-term investments
    
    
    (98,925
    )
    
    
    (57,035
    )Proceeds from sale of short-term investments
    
    
    187,065
    
    
    
    46,985Other  net
    
    
    (3,258
    )
    
    
    (508
    )Net cash provided by (used in) investing activities
    
    
    18,494
    
    
    
    (28,060
    )Cash flows from financing activities:Purchase of common stock
    
    
    (100,000
    )
    
    
    Issuance of common stock
    
    
    8,079
    
    
    
    8,225Payments on long-term debt
    
    
    (984
    )
    
    
    (4,185
    )Net cash (used in) provided by financing activities
    
    
    (92,905
    )
    
    
    4,040Net (decrease) increase in cash and cash equivalents
    
    
    (68,501
    )
    
    
    6,786Cash and cash equivalents at beginning of period
    
    
    274,477
    
    
    
    104,456Cash and cash equivalents at end of period
    
    $
    205,976
    
    
    $
    111,242Supplemental disclosures:Cash paid for income taxes
    
    $
    32,810
    
    
    $
    4,934Cash paid for interest
    
    $
    236
    
    
    $
    158Noncash investing and financing activities:Purchase of assets under capital lease obligations
    
    $
    984
    
    
    $
    3,650
  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
  5




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income, as reported
    
    $
    14,142
    
    
    $
    9,423
    
    
    $
    27,306
    
    
    $
    18,802Total stock-based employee compensation
expense determined under fair value
based method for all awards, net of tax
    
    
    (1,210
    )
    
    
    (1,021
    )
    
    
    (2,484
    )
    
    
    (1,860
    )Pro forma net income
    
    $
    12,932
    
    
    $
    8,402
    
    
    $
    24,822
    
    
    $
    16,942Earnings per share:Basic-as reported
    
    $
    0.31
    
    
    $
    0.20
    
    
    $
    0.58
    
    
    $
    0.39Basic-pro forma
    
    $
    0.28
    
    
    $
    0.18
    
    
    $
    0.52
    
    
    $
    0.35Diluted-as reported
    
    $
    0.30
    
    
    $
    0.19
    
    
    $
    0.56
    
    
    $
    0.38Diluted-pro forma
    
    $
    0.27
    
    
    $
    0.17
    
    
    $
    0.51
    
    
    $
    0.34
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Expected volatility
    
    
    34.8
    %
    
    
    36.3
    %
    
    
    34.0
    %
    
    
    39.2
    %Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Risk-free interest rate
    
    
    3.6
    %
    
    
    3.9
    %
    
    
    3.9
    %
    
    
    3.4
    %Expected life
    
    5 years
    
    5 years
    
    5 years
    
    5 years
  Income Taxes
     6




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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
     7




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Wtd. Avg.
    
    
    June 30, 2005
    
    
    December 31, 2004Amort.Period
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    
    
    
    
    Gross Carrying
    
    
    Accumulated(dollars in thousands)
    
    In Years
    
    
    Amounts
    
    
    Amortization
    
    
    Net
    
    
    Amounts
    
    
    Amortization
    
    
    NetSoftware-internal use
    
    
    4
    
    
    $
    98,517
    
    
    $
    (74,165
    )
    
    $
    24,352
    
    
    $
    94,272
    
    
    $
    (69,388
    )
    
    $
    24,884Software-licensing
and resale
    
    
    5
    
    
    
    60,604
    
    
    
    (42,980
    )
    
    
    17,624
    
    
    
    54,996
    
    
    
    (40,522
    )
    
    
    14,474Acquired contracts
and other
    
    
    7
    
    
    
    44,946
    
    
    
    (23,963
    )
    
    
    20,983
    
    
    
    28,755
    
    
    
    (23,703
    )
    
    
    5,052$
    204,067
    
    
    $
    (141,108
    )
    
    $
    62,959
    
    
    $
    178,023
    
    
    $
    (133,613
    )
    
    $
    44,410
   Electronic
    
    
    Risk(in thousands)
    
    Payments
    
    
    Management
    
    
    Global Outsourcing
    
    
    Other
    
    
    TotalBalance as of December 31, 2004
    
    $
    15,388
    
    
    $
    11,176
    
    
    $
    22,748
    
    
    $
    9,950
    
    
    $
    59,262Goodwill acquired
    
    
    
    
    
    
    22,188
    
    
    
    11,090
    
    
    
    233
    
    
    
    33,511Balance as of June 30, 2005
    
    $
    15,388
    
    
    $
    33,364
    
    
    $
    33,838
    
    
    $
    10,183
    
    
    $
    92,773
   Lease-Related Costs(in thousands)
    
    Severance 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
    
    
    $
    3,363
   8




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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
    
    
    $
    1,701
   June 30,
    
    
    December 31,(in thousands)
    
    2005
    
    
    2004Capital leases and other
    
    $
    5,367
    
    
    $
    5,524Less amount due within one year
    
    
    (2,315
    )
    
    
    (1,955
    )Total
    
    $
    3,052
    
    
    $
    3,569
     Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income per share  basicNet income
    
    $
    14,142
    
    
    $
    9,423
    
    
    $
    27,306
    
    
    $
    18,802Weighted average shares outstanding
    
    
    45,649
    
    
    
    47,886
    
    
    
    47,417
    
    
    
    47,786Net income per share  basic
    
    $
    0.31
    
    
    $
    0.20
    
    
    $
    0.58
    
    
    $
    0.39Net income per share  dilutedNet income
    
    $
    14,142
    
    
    $
    9,423
    
    
    $
    27,306
    
    
    $
    18,802Weighted average shares outstanding
    
    
    45,649
    
    
    
    47,886
    
    
    
    47,147
    
    
    
    47,786Dilutive impact of options
    
    
    1,446
    
    
    
    1,382
    
    
    
    1,777
    
    
    
    1,406Weighted average shares and potential dilutive shares outstanding
    
    
    47,095
    
    
    
    49,268
    
    
    
    48,924
    
    
    
    49,192Net income per share  diluted
    
    $
    0.30
    
    
    $
    0.19
    
    
    $
    0.56
    
    
    $
    0.38
  9




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Three Months Ended June 30,
    
    
    Six Months Ended June 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net revenue:Electronic payments
    
    $
    52,377
    
    
    $
    51,719
    
    
    $
    103,148
    
    
    $
    101,402Risk management
    
    
    40,255
    
    
    
    35,033
    
    
    
    77,861
    
    
    
    70,157Global outsourcing
    
    
    23,662
    
    
    
    19,387
    
    
    
    49,523
    
    
    
    40,306ATM management1
    
    
    
    
    
    
    34,573
    
    
    
    
    
    
    
    69,733Total net revenue
    
    
    116,294
    
    
    
    140,712
    
    
    
    230,532
    
    
    
    281,598Operating expenses before overhead, restructuring and
provision for contract loss charges:Electronic payments
    
    
    44,044
    
    
    
    42,027
    
    
    
    88,336
    
    
    
    82,181Risk management
    
    
    23,686
    
    
    
    20,845
    
    
    
    45,892
    
    
    
    42,325Global outsourcing
    
    
    16,459
    
    
    
    15,158
    
    
    
    34,062
    
    
    
    31,222ATM management1
    
    
    
    
    
    
    32,435
    
    
    
    
    
    
    
    65,624Total operating expenses before overhead,
restructuring and provision for contract loss
charges
    
    
    84,189
    
    
    
    110,465
    
    
    
    168,290
    
    
    
    221,352Allocated overhead:Electronic payments
    
    
    3,224
    
    
    
    2,569
    
    
    
    6,791
    
    
    
    5,379Risk management
    
    
    2,010
    
    
    
    2,203
    
    
    
    4,518
    
    
    
    4,514Global outsourcing
    
    
    2,216
    
    
    
    1,602
    
    
    
    4,581
    
    
    
    3,287ATM management1
    
    
    
    
    
    
    2,098
    
    
    
    
    
    
    
    4,261Corporate
    
    
    4,313
    
    
    
    7,646
    
    
    
    9,219
    
    
    
    14,654Total allocated overhead
    
    
    11,763
    
    
    
    16,118
    
    
    
    25,109
    
    
    
    32,095Restructuring and provision for contract loss charges:Electronic payments
    
    
    
    
    
    
    1,178
    
    
    
    
    
    
    
    1,178Risk management
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Global outsourcing
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    41ATM management1
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9Corporate
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    33Total restructuring and provision for contract
loss charges
    
    
    
    
    
    
    1,253
    
    
    
    
    
    
    
    1,253Income (loss) from operations:Electronic payments
    
    
    5,109
    
    
    
    5,945
    
    
    
    8,021
    
    
    
    12,664Risk management
    
    
    14,559
    
    
    
    11,993
    
    
    
    27,451
    
    
    
    23,326Global outsourcing
    
    
    4,987
    
    
    
    2,586
    
    
    
    10,880
    
    
    
    5,756ATM management1
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    (161
    )Corporate
    
    
    (4,313
    )
    
    
    (7,679
    )
    
    
    (9,219
    )
    
    
    (14,687
    )Income from operations
    
    $
    20,342
    
    
    $
    12,876
    
    
    $
    37,133
    
    
    $
    26,898
 
 1
    
    See Note 4.  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Depreciation and amortization:Electronic payments
    
    $
    3,493
    
    
    $
    3,648
    
    
    $
    7,099
    
    
    $
    7,237Risk management
    
    
    2,994
    
    
    
    2,803
    
    
    
    5,925
    
    
    
    5,715Global outsourcing
    
    
    1,339
    
    
    
    549
    
    
    
    2,642
    
    
    
    1,356ATM management
    
    
    
    
    
    
    1,694
    
    
    
    
    
    
    
    3,045Corporate
    
    
    251
    
    
    
    333
    
    
    
    558
    
    
    
    603Total depreciation and amortization
    
    $
    8,077
    
    
    $
    9,027
    
    
    $
    16,224
    
    
    $
    17,956
 11




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004United States
    
    $
    104,355
    
    
    $
    124,788
    
    
    $
    206,398
    
    
    $
    250,108EMEA
    
    
    8,235
    
    
    
    7,303
    
    
    
    17,111
    
    
    
    15,422Canada
    
    
    1,460
    
    
    
    6,266
    
    
    
    2,958
    
    
    
    12,473Latin America
    
    
    1,194
    
    
    
    1,548
    
    
    
    2,093
    
    
    
    2,329India
    
    
    970
    
    
    
    670
    
    
    
    1,737
    
    
    
    980Asia
    
    
    80
    
    
    
    137
    
    
    
    235
    
    
    
    286Total consolidated
    
    $
    116,294
    
    
    $
    140,712
    
    
    $
    230,532
    
    
    $
    281,598
  June 30,
    
    
    December 31,(in thousands)
    
    2005
    
    
    2004United States
    
    $
    36,718
    
    
    $
    37,703India
    
    
    16,728
    
    
    
    11,875Canada
    
    
    461
    
    
    
    249United Kingdom and other
    
    
    447
    
    
    
    493Total consolidated
    
    $
    54,354
    
    
    $
    50,320
  Future commercial commitments
  Commitment Expiration by Period1(in thousands)
    
    Total
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLetters of credit and other
    
    $
    877
    
    
    $
    498
    
    
    $
    379
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    12,501
    
    
    
    1,811
    
    
    
    10,620
    
    
    
    45
    
    
    
    25
    
    
    
    
    
    
    
    Total commitments
    
    $
    13,378
    
    
    $
    2,309
    
    
    $
    10,999
    
    
    $
    45
    
    
    $
    25
    
    
    $
    
    
    
    $
    
 
 1
    
    Represents commercial commitment expirations during the last six months of 2005 and
the respective years ending December 31, 2006 through 2009 and thereafter.   Contractual cash obligations
  12




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##### Table of Contents



Payments Due by PeriodSix months Ended
    
    
    Three Years Ended
    
    
    Three Years EndedTotal
    
    
    December 31, 2005
    
    
    December 31, 2008
    
    
    December 31, 2011
    
    
    Thereafter(in thousands)Capital lease obligations
    
    $
    5,367
    
    
    $
    1,269
    
    
    $
    3,973
    
    
    $
    125
    
    
    $
    Operating lease
obligations1
    
    
    69,216
    
    
    
    5,494
    
    
    
    29,230
    
    
    
    18,541
    
    
    
    15,951Vendor obligations
    
    
    84,738
    
    
    
    18,004
    
    
    
    57,371
    
    
    
    9,363
    
    
    
    Total
    
    $
    159,321
    
    
    $
    24,767
    
    
    $
    90,574
    
    
    $
    28,029
    
    
    $
    15,951
 
 1
    
    Future minimum lease payments for non-cancelable operating
leases are presented net of minimum sublease rentals of $2.4 million
due in the future under non-cancelable subleases.  Other commitments
     13




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##### Table of Contents



Other contingencies
       14




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  15




---



##### Table of Contents



Our Business
   
    
    Electronic Payments
    
    Risk Management
    
    Global Outsourcing
    
    Automated Teller Machine (ATM) Management
    Electronic Payments
  16




---



##### Table of Contents



Risk Management
  Global Outsourcing
  ATM Management
  Key Events During the Three Months Ended June 30, 2005
 
    
    We entered into a definitive agreement to acquire WildCard.
    
    We completed a $100 million stock repurchase program, repurchasing approximately 4.6 million shares.
    
    We acquired National Check Protection Services Business Trust and National Data
Verification Service Business Trust (collectively, NCPS) and the India Switch Company
(ISC).
    
    We signed an agreement with Société Générale, a major European financial institution, to
provide a comprehensive suite of card processing services to its international
subsidiaries.
 17




---



##### Table of Contents




    
    George W. Gresham was promoted and became our Senior Vice President and Chief Financial
Officer following the retirement of Thomas S. Liston and Kay J. Nichols joined us as Senior
Vice President, Strategy and Marketing.
    
    We received a $1.8 million refund of business and occupancy state taxes.
    
    Janet M. Clarke, Robert C. Nackasone and Hatim A. Tyabji were re-elected to our Board of
Directors at our annual stockholders meeting.
 Trends
  
    
    there has been an increase in reported instances of the misappropriation of consumer
data and we are devoting additional effort to maintaining the security of our data files;
    
    increased fraud and regulatory requirements are driving a sustained need for risk
management products, although the rate of growth in this business is slowing as many
customers and potential customers have already implemented required screening procedures;
    
    prepaid and stored value products are expected to experience the highest growth rate of
any payment card product over the next several years;
    
    there continues to be a migration from the use of traditional paper checks to electronic
payments;
    
    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 industries we serve is resulting in increasing 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 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.
    
    Legislation or regulation would harm 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 and we
expect our revenues from this business to decline in upcoming periods.
    
    We may be unable to protect our intellectual property rights.
    
    Provisions in our charter documents and Delaware law may delay or prevent a change in
control of our Company that you may consider favorable.
 18




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeNet revenue
    
    $
    116.3
    
    
    $
    140.7
    
    
    
    (17
    )%
    
    $
    230.5
    
    
    $
    281.6
    
    
    
    (18
    )%Operating expenses:Processing, communication and
service costs
    
    
    27.6
    
    
    
    56.7
    
    
    
    (51
    )
    
    
    56.5
    
    
    
    115.3
    
    
    
    (51
    )Employee costs
    
    
    48.0
    
    
    
    47.8
    
    
    
    
    
    
    
    97.3
    
    
    
    96.7
    
    
    
    1Depreciation and amortization
    
    
    8.1
    
    
    
    9.0
    
    
    
    (10
    )
    
    
    16.2
    
    
    
    18.0
    
    
    
    (10
    )Other operating costs
    
    
    12.2
    
    
    
    13.1
    
    
    
    (7
    )
    
    
    23.4
    
    
    
    23.4
    
    
    
    Restructuring and provision for
contract loss charges
    
    
    
    
    
    
    1.3
    
    
    
    *
    
    
    
    
    
    
    
    1.3
    
    
    
    *Total operating expenses1
    
    
    96.0
    
    
    
    127.8
    
    
    
    (25
    )
    
    
    193.4
    
    
    
    254.7
    
    
    
    (24
    ).Income from operations
    
    
    20.3
    
    
    
    12.9
    
    
    
    57
    
    
    
    37.1
    
    
    
    26.9
    
    
    
    38Other income (expense)  net
    
    
    1.1
    
    
    
    0.6
    
    
    
    83
    
    
    
    2.6
    
    
    
    
    
    
    
    *Income before income taxes
    
    
    21.4
    
    
    
    13.5
    
    
    
    59
    
    
    
    39.7
    
    
    
    26.9
    
    
    
    48Provision for income taxes
    
    
    (7.3
    )
    
    
    (4.0
    )
    
    
    (83
    )
    
    
    (12.4
    )
    
    
    (8.1
    )
    
    
    (53
    )Net income1
    
    $
    14.1
    
    
    $
    9.4
    
    
    
    50
    
    
    $
    27.3
    
    
    $
    18.8
    
    
    
    45
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    Amounts may not sum due to rounding. Net Revenue
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeElectronic PaymentsEFT processing
    
    $
    30.7
    
    
    $
    28.6
    
    
    
    7
    %
    
    $
    59.8
    
    
    $
    54.2
    
    
    
    10
    %Government services (EBT)
    
    
    13.2
    
    
    
    14.1
    
    
    
    (6
    )
    
    
    26.4
    
    
    
    28.7
    
    
    
    (8
    )Software sales
    
    
    8.5
    
    
    
    9.0
    
    
    
    (6
    )
    
    
    16.9
    
    
    
    18.5
    
    
    
    (9
    )52.4
    
    
    
    51.7
    
    
    
    1
    
    
    
    103.1
    
    
    
    101.4
    
    
    
    2Risk ManagementFinancial institution products
    
    
    34.5
    
    
    
    30.3
    
    
    
    14
    
    
    
    67.2
    
    
    
    60.9
    
    
    
    10Retail products
    
    
    5.8
    
    
    
    4.7
    
    
    
    23
    
    
    
    10.7
    
    
    
    9.3
    
    
    
    1540.3
    
    
    
    35.0
    
    
    
    15
    
    
    
    77.9
    
    
    
    70.2
    
    
    
    11Global OutsourcingBPO
    
    
    14.2
    
    
    
    12.9
    
    
    
    10
    
    
    
    30.8
    
    
    
    26.0
    
    
    
    18IT services
    
    
    9.5
    
    
    
    6.5
    
    
    
    46
    
    
    
    18.7
    
    
    
    14.3
    
    
    
    3123.7
    
    
    
    19.4
    
    
    
    22
    
    
    
    49.5
    
    
    
    40.3
    
    
    
    23ATM Management1
    
    
    
    
    
    
    34.6
    
    
    
    *
    
    
    
    
    
    
    
    69.7
    
    
    
    *Total net revenue
    
    $
    116.3
    2
    
    $
    140.7
    
    
    
    (17
    )
    
    $
    230.5
    
    
    $
    281.6
    
    
    
    (18
    )
 
 *
    
    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
  
    
    an increase in EFT transaction volumes and customer reimbursed fees, offset somewhat by
a decline in EBT processing revenues related to the expiration of contracts; and
    
    lower software sales due primarily to a slowdown in license sales.
 19




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in millions)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004License fees
    
    $
    1.5
    
    
    $
    1.9
    
    
    $
    2.5
    
    
    $
    3.9Maintenance
    
    
    5.1
    
    
    
    5.1
    
    
    
    10.7
    
    
    
    10.3Software services
    
    
    1.9
    
    
    
    2.0
    
    
    
    3.7
    
    
    
    4.3$
    8.5
    
    
    $
    9.0
    
    
    $
    16.9
    
    
    $
    18.5
  Risk Management
  Global Outsourcing
  ATM Management
  Business Segment Operating Income
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeOperating income (loss)Electronic payments
    
    $
    5.1
    
    
    $
    5.9
    
    
    
    (14
    )%
    
    $
    8.0
    
    
    $
    12.7
    
    
    
    (37
    )%Risk management
    
    
    14.6
    
    
    
    12.0
    
    
    
    22
    
    
    
    27.5
    
    
    
    23.3
    
    
    
    18Global outsourcing
    
    
    5.0
    
    
    
    2.6
    
    
    
    92
    
    
    
    10.9
    
    
    
    5.8
    
    
    
    88ATM management1
    
    
    
    
    
    
    0.1
    
    
    
    *
    
    
    
    
    
    
    
    (0.2
    )
    
    
    *Corporate
    
    
    (4.3
    )
    
    
    (7.7
    )
    
    
    44
    
    
    
    (9.2
    )
    
    
    (14.7
    )
    
    
    37Total operating
income2
    
    $
    20.3
    
    
    $
    12.9
    
    
    
    57
    
    
    $
    37.1
    
    
    $
    26.9
    
    
    
    38
 
 *
    
    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. 20




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##### Table of Contents



Electronic Payments
 .
 Risk Management
  Global Outsourcing
  ATM Management
  Corporate
  21




---



##### Table of Contents



Operating Expenses
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % Change
    
    
    2005
    
    
    2004
    
    
    % ChangeOperating expenses:Processing, communication and
service costs
    
    $
    27.6
    
    
    $
    56.7
    
    
    
    (51
    )%
    
    $
    56.5
    
    
    $
    115.3
    
    
    
    (51
    )%Employee costs
    
    
    48.0
    
    
    
    47.8
    
    
    
    
    
    
    
    97.3
    
    
    
    96.7
    
    
    
    1Depreciation and amortization
    
    
    8.1
    
    
    
    9.0
    
    
    
    (10
    )
    
    
    16.2
    
    
    
    18.0
    
    
    
    (10
    )Other operating costs
    
    
    12.2
    
    
    
    13.1
    
    
    
    (7
    )
    
    
    23.4
    
    
    
    23.4
    
    
    
    Restructuring and provision for
contract loss charges
    
    
    
    
    
    
    1.3
    
    
    
    *
    
    
    
    
    
    
    
    1.3
    
    
    
    *Total operating expenses1
    
    $
    96.0
    
    
    $
    127.8
    
    
    
    (25
    )
    
    $
    193.4
    
    
    $
    254.7
    
    
    
    (24
    )
 
 *
    
    Represents an increase or decrease in excess of 100%.1
    
    Amounts may not sum due to rounding. Processing, communication and service costs
   Employee costs
  Depreciation and amortization
  Other operating costs
  22




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##### Table of Contents



Other income (expense)  net
  Provision for income taxes
    Overview
  June 30,
    
    
    December 31,(dollars in millions)
    
    2005
    
    
    2004
    
    
    % ChangeCash and cash equivalents
    
    $
    206.0
    
    
    $
    274.5
    
    
    
    (25
    )%Short-term investments
    
    
    
    
    
    
    88.1
    
    
    
    *Long-term debt due within one year
    
    
    2.3
    
    
    
    2.0
    
    
    
    15Long-term debt
    
    
    3.1
    
    
    
    3.6
    
    
    
    (14
    )Stockholders equity
    
    
    410.8
    
    
    
    474.2
    
    
    
    (13
    )Net working capital
    
    
    214.2
    
    
    
    343.2
    
    
    
    (38
    )
 
 *
    
    Represents an increase or decrease in excess of 100%. Cash Resources
  23




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##### Table of Contents



24




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##### Table of Contents



Payments Due by PeriodSix months Ended
    
    
    Three Years Ended
    
    
    Three Years Ended(in millions)
    
    Total
    
    
    December 31, 2005
    
    
    December 31, 2008
    
    
    December 31, 2011
    
    
    ThereafterCapital lease obligations
    
    $
    5.4
    
    
    $
    1.3
    
    
    $
    4.0
    
    
    $
    0.1
    
    
    $
    Operating lease
obligations1
    
    
    69.2
    
    
    
    5.5
    
    
    
    29.2
    
    
    
    18.5
    
    
    
    16.0Vendor obligations
    
    
    84.7
    
    
    
    18.0
    
    
    
    57.4
    
    
    
    9.3
    
    
    
    Total 2
    
    $
    159.3
    
    
    $
    24.8
    
    
    $
    90.6
    
    
    $
    28.0
    
    
    $
    16.0
 
 1
    
    Future minimum lease payments for non-cancelable operating
leases are presented net of minimum sublease rentals of $2.4 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 Six MonthsEnded June 30,(in millions)
    
    2005
    
    
    2004Cash provided by operating activities
    
    $
    5.9
    
    
    $
    30.8Cash provided by (used in) investing activities
    
    
    18.5
    
    
    
    (28.1
    )Cash (used in) provided by financing activities
    
    
    (92.9
    )
    
    
    4.0Net (decrease) increase in cash and cash
equivalents1
    
    $
    (68.5
    )
    
    $
    6.8
 
 1
    
    Amounts may not sum due to rounding.  
    
    investment in projects intended to increase our product delivery and operational
effectiveness, enhance our product suite and the redundancy of our systems; and
    
    funding our liquidity needs.
  25




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##### Table of Contents



Operating Activities
   Investing Activities
  Financing Activities
  Commercial Commitments
  Commitment Expiration by Period1(in millions)
    
    Total
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLetters of credit and other
    
    $
    0.9
    
    
    $
    0.5
    
    
    $
    0.4
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Performance bonds
    
    
    12.5
    
    
    
    1.8
    
    
    
    10.6
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Total commitments
    
    $
    13.4
    
    
    $
    2.3
    
    
    $
    11.0
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 1
    
    Represents commercial commitment expirations during the last six months of 2005 and
the respective years ending December 31, 2006 through 2009 and thereafter.     26




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
    
    
    The net revenues of WildCard increase approximately 30 percent over the revenues of
$56.5 million recorded last year, with a slight majority of this revenue being recognized
in the latter half of 2005; because the business of WildCard is
notably more seasonal than that of the Company, nearly all of the expected $.03  $.05 earnings dilution resulting from the
transaction in 2005 will be seen in the third quarter;
    
    An effective tax rate between 33 and 35 percent for the
balance of 2005 (excluding the
effects of the anticipated recognition of a $4 to $6 million tax benefit in the third
quarter as described in Note 13 of the notes to the condensed
consolidated financial statements);
    
    Capital expenditures and product development activities of approximately $35 to $40
million.
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    27




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total number of
    
    
    Approximate dollarshares purchased as
    
    
    value of shares thatpart of publicly
    
    
    may yet be purchasedTotal number of
    
    
    Average price paid
    
    
    announced plans or
    
    
    under the plans orFiscal Periods
    
    shares purchased
    
    
    per share
    
    
    programs
    
    
    programPeriod 1
2/23/2005 - 2/28/2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    100,000,000Period 2
3/1/2005 - 3/31/2005
    
    
    2,029,200
    
    
    
    21.56
    
    
    
    2,029,200
    
    
    
    56,250,448Period 3
4/1/2005 - 4/30/2005
    
    
    2,451,100
    
    
    
    21.96
    
    
    
    4,480,300
    
    
    
    2,431,838Period 4
5/1/2005 - 5/3/2005
    
    
    110,943
    
    
    
    21.92
    
    
    
    4,591,243
    
    
    
    Total
    
    
    4,591,243
    
    
    $
    21.78
    
    
    
    4,591,243
    
    
    $
    
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  28




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Nominee
    
    For
    
    WithheldJanet M. Clarke
    
    
    44,314,609
    
    
    
    260,116Robert C. Nakasone
    
    
    44,412,687
    
    
    
    162,038Hatim A. Tyabji
    
    
    44,415,441
    
    
    
    159,284
   For
    
    Against
    
    Abstain44,238,058
    
    
    318,783
    
    
    
    17,884
 
 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;
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
    
    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.
   
    
    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;
    
    diversion of technical and other resources;
    
    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.
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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
  Exhibit No.
    
    Description
    
    Method of filing2.1
    
    Agreement and Plan of Merger, dated as of June 9, 2005 (the Merger
Agreement), by and between eFunds Corporation, Marlin Transaction
Corp., WildCard Systems, Inc. and Larence Park and Tench Coxe, as
shareholder representatives (incorporated by reference to Exhibit 2.1
to the Current Report on Form 8-K filed by the Company with the
Securities and Exchange Commission (the Commission) on June 14, 2005
    
    *2.2
    
    Amendment No. 1 to the Merger Agreement (incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K filed by the Company
with the Commission on July 1, 2005)
    
    *3.1
    
    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
    
    Asset Purchase Agreement, dated as of May 3, 2005, by and between
eFunds Corporation, Chex Systems, Inc., National Check Protection
Service Business Trust, National Data Verification Service Business
Trust and the shareholders.
    
    Filed herewith10.2
    
    Thomas S. Liston Independent Contractor Agreement, dated April 1, 2005.
    
    Filed herewith10.3
    
    Schedule identifying Change in Control Agreements omitted pursuant to
Instruction 2 to Item 601 of Regulation S-K
    
    Filed herewith10.4
    
    Schedule identifying additional Transaction Assistance Agreements
omitted pursuant to Instruction 2 to Item 601 of Regulation S-K
    
    Filed herewith10.5
    
    eFunds Corporation 2000 Stock Incentive Plan, (as amended May 20, 2005)
    
    Filed herewith10.6
    
    eFunds Corporation Non-Employee Directors Deferred Compensation
Program (as amended June 20, 2005)
    
    Filed herewith31.1
    
    Section 302 Certification by Mr. Paul F. Walsh
    
    Filed herewith31.2
    
    Section 302 Certification by Mr. George W. Gresham
    
    Filed herewith
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32.1
    
    Section 906 Certification by Mr. Paul F. Walsh and Mr. George W.
Gresham
    
    Filed herewith
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SIGNATURES
  eFunds Corporation
(Registrant)Date: August 5, 2005
    
    /s/ Paul F. WalshPaul F. Walsh
Chief Executive Officer and ChairmanDate: August 5, 2005
    
    /s/ George W. GreshamGeorge W. Gresham
Chief Financial Officer
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##### Table of Contents



Index to Exhibits
 Exhibit No.
    
    Description
    
    Page Number10.1
    
    Asset Purchase Agreement, dated as of May 3, 2005, by and between
eFunds Corporation, Chex Systems, Inc., National Check Protection
Service Business Trust, National Data Verification Service Business
Trust and the shareholders.10.2
    
    Thomas S. Liston Independent Contractor Agreement, dated April 1, 2005.10.3
    
    Schedule identifying Change in Control Agreements omitted pursuant to
Instruction 2 to Item 601 of Regulation S-K10.4
    
    Schedule identifying additional Transaction Assistance Agreements
omitted pursuant to Instruction 2 to Item 601 of Regulation S-K10.5
    
    eFunds Corporation 2000 Stock Incentive Plan, (as amended May 20, 2005)10.6
    
    eFunds Corporation Non-Employee Directors Deferred Compensation
Program (as amended June 20, 2005)31.1
    
    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
 38