Certegy Reports Third Quarter 2004 Diluted EPS of $0.46

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Plan Approved to Sell Merchant Acquiring Business

ALPHARETTA, Ga., Oct. 21 -- Certegy Inc. (NYSE:CEY) today reported third quarter 2004 diluted earnings per share of $0.46. The Certegy Inc. Board of Directors has approved a plan to sell the Company`s retail merchant acquiring business, which has been reclassified as a discontinued operation in the accompanying financial statements and discussion of results.

THIRD QUARTER FINANCIAL HIGHLIGHTS

Highlights of the 2004 third quarter results as compared to the prior year quarter are as follows:

* Revenue increased 13.2% to $262.7 million.
* Operating income increased 12.6% to $47.1 million.
* Interest expense of $3.3 million increased $1.2 million.
* Net income increased 10.5% to $29.1 million, comprised of $27.8 million from continuing operations and $1.3 million from discontinued operations.
* Diluted earnings per share increased 15.0% to $0.46 per share, comprised of $0.44 from continuing operations and $0.02 from discontinued operations.
* Approximately $47.8 million was used to repurchase 1.2 million shares of common stock.

"We are pleased to report another solid quarter of revenue and earnings growth," stated Lee Kennedy, chairman and chief executive officer of Certegy. "We are particularly pleased with the performance of our Check Services and international card processing business."

SEGMENT RESULTS

Card Services generated revenue of $149.5 million in the third quarter of 2004, an increase of 6.7% above the 2003 quarter. Revenue growth of 5.2% in the Company`s North American card issuing operation resulted from growth in transactions, new customer signings, sales of e-banking services and card loyalty programs, and revenue from the acquisition of Crittson Financial LLC, which closed in the first quarter. International card issuing revenue increased by 26.0%, primarily due to growth from existing customers, card re- issuance fees, and the third quarter 2004 acquisition of Caribbean CariCard Services. Card Services operating income of $36.7 million increased 5.1%, compared to $34.9 million in the third quarter of 2003. Card Services operating margin was 24.5%, compared to 24.9% in the third quarter of 2003.

Check Services generated revenue of $113.1 million in the third quarter of 2004, an increase of 23.3% above the 2003 quarter. The strong performance was driven by growth in the Company`s domestic and international customer base, and growth in cash access services, including the first quarter 2004 acquisition of Game Financial Corporation. Check Services operating income of $15.5 million increased 30.6%, compared to $11.9 million in the third quarter of 2003. Check Services operating margin was 13.7%, compared to 12.9% in the third quarter of 2003.

Corporate expense of $5.1 million increased 2.9% over the prior year quarter. The increase in corporate expense has moderated from the first half of 2004 due to favorable insurance premium renewals and the containment of discretionary costs.

Interest expense of $3.3 million increased by $1.2 million compared to the third quarter of 2003. Higher interest rates on the Company`s borrowings driven by the September 2003 issuance of 4.75% fixed rate notes, higher average outstanding revolving credit borrowings, and the impact of FIN 46 lease accounting, effective December 31, 2003, generated the increase in interest expense.

DISCONTINUED OPERATIONS

The Board of Directors of Certegy Inc has approved a plan to sell the Company`s retail merchant acquiring business. The Company will continue to provide clearing and settlement processing services to its North American financial institution customers. In the third quarters of 2004 and 2003, income from discontinued operations amounted to $0.02 per diluted share.

OUTLOOK

The Company expects revenue growth of 14% to 16% in the fourth quarter of 2004, and diluted earnings per share from continuing operations of $0.53 to $0.55. Discontinued operations could contribute an additional $0.02 per diluted share, if held for the entire quarter. The Company expects to realize an undisclosed gain upon sale of the merchant acquiring business, which is not included in these per share amounts.

TELECONFERENCE

Management will host a teleconference to discuss second quarter earnings on Thursday, October 21, 2004, at 9:00 a.m. Eastern Time. The live audio Webcast will be available at http://www.certegy.com/ . Please be advised that Microsoft`s Windows Media Player(TM) must be downloaded prior to accessing the Webcast. It can be downloaded from http://www.microsoft.com/windows/mediaplayer . A replay of the Webcast will be available in the Investor Center section of the website after the call ends.

Certegy (NYSE:CEY) provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to over 6,500 financial institutions, 117,000 retailers and 100 million consumers worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, United Kingdom, Ireland, France, Chile, Brazil, Australia, New Zealand, Thailand and the Caribbean. As a leading payment services provider, Certegy offers a comprehensive range of transaction processing services, check risk management solutions and integrated customer support programs that facilitate the exchange of business and consumer payments. Certegy generated over $1.0 billion in revenue in 2003. For more information on Certegy, please visit http://www.certegy.com/ .

Forward-Looking Statements

The statements in this release include forward-looking statements that are based on current expectations, assumptions, estimates, and projections about Certegy and our industry. Without limitation, Certegy`s revenue, operating income and earnings per share projections for fiscal 2004 under the heading "Outlook" above are forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Certegy`s control that may cause actual results to differ significantly from what is expressed in those statements. Factors that could, either individually or in the aggregate, affect our performance include: our reliance on a small number of business segments and strategic relationships; our ability to comply with bankcard association rules and government regulations; the sensitivity of our business to the economy; the results of our acquisitions; and other factors described in detail in the section entitled "Certain Factors Affecting Forward-Looking Statements" in our 2003 Annual Report on Form 10-K filed on February 17, 2004, with the SEC.