2 2 S T R E N G T H i n N U M B E R S f i s e r v a n n u a l r e p o r t Numbers, in all their many variations, are key to measuring the strength of the financial industry. Numbers also present an insightful perspective on Fiserv. For example, we have a long history of strong financial performance, reporting record results year after year. Our broad portfolio of solu- tions is used throughout the financial services industry to process millions of account transactions daily. And from just under 200 clients in 1984, we’ve become a worldwide organization with more than 13,000 clients in over 60 countries — supported by more than 19,000 employees. That’s strength in numbers. Fiserv, Inc. is a leading, independent provider of integrated data processing and information management solutions to the financial industry. We deliver a full range of information, account and trans- action processing systems, software and services to clients in many financial services markets. Our clients include banks, broker-dealers, credit unions, financial planners and investment advisers, insurance companies and agents, mortgage banks and savings institutions. t a b l e o f c o n t e n t s 2 letter to shareholders 4 momentum 8 leadership 12 fiserv at a glance 14 financial details 41 leadership teams f i s e r v 2 0 0 2 a n n u a l r e p o r t One of the fundamental m e a s u r e s o f a n y c o m p a n y i s i t s f i n a n c i a l s , and we believe the strength of our numbers speaks clearly to our ongoing success. While 2002 was a difficult year for many companies, Fiser v tur ned in a strong per for mance, p o s t i n g r e c o r d r e v e n u e s , n e t i n c o m e a n d e a r n i n g s p e r s h a r e f o r t h e 1 6 t h c o n s e c u t i v e y e a r. h Our annual processing and services revenues for 2002 were $2.28 billion, an 18% increase over the $1.93 billion in 2001. Net income per share-diluted (excluding realized gains from sale of investment) for the year ended December 31, 2002, was $1.36 per share compared to $1.07 in 2001. This financial strength reflects the effectiveness of our proven business strategy, which is based on a focused dedication to serving the financial services industry. In adhering to a business model that emphasizes recurring revenues from long-term contracts, we’ve built a strong organization that’s well-positioned for growth. Our strategy encompasses key principles that form the foundation of our success and continues to serve us well. We are passionate about service quality, and our client retention rating is one of the highest in the industry. We continue to sign more new clients than our competitors, while leveraging our large client base by cross-selling an increasing number of additional products and services 2 f i s e r v 2 0 0 2 a n n u a l r e p o r t into our existing relationships. We acquire successful companies to expand our core compe- tencies, enhance our product suite and grow market share. We identify and act on industry trends based on client and market needs. In 2002, we saw continued solid growth in new sales and cross sales, achieving a record sales year. And with five acquisitions closed in the year, we added combined annual- ized revenues of more than $210 million and over 1,100 new employees. These organiza- tions encompass all of our business lines — from banking to insurance to securities — as we continue to seek out companies that complement the Fiserv portfolio of products and serv- ices. We foresee continued strength in our sales pipelines and acquisition opportunities across all of our major business lines as we enter 2003. As a shareholder, you expect the company you invest in to deliver a good return on your investment. You also deserve steady growth, responsible management and financial sta- bility — especially in today’s volatile market. At Fiserv, we strive not only to achieve consis- tent, solid performance, but to attain it through the rigorous use of conservative and fiscally sound business principles. Looking back on the year, we owe our thanks to the 19,000-plus Fiserv employees who contributed their talent, experience and hard work to our success. And we thank you, our shareholders, for your continued confidence. Our goal is to provide value to you, and we will continue our efforts to meet your expectations in the future. February 28, 2003 D O N A L D F . D I L L O N L E S L I E M . M U M A Chairman of the Board President and Chief Executive Officer 3 f i s e r v 2 0 0 2 a n n u a l r e p o r t m o m e n t u m m o m e n t u m A young mother uses a debit c ard to revenues have grown at a 24% rate, and earn- buy groceries at the supermarket. A banker ings per share have risen 20%. The Company taps a few computer keys to see all the bank’s continues to build momentum, acquiring more relationships with its biggest customer. A than 110 complementary businesses and human resources manager logs onto a Web site making steady gains in client relationships. to check the status of a health insurance claim. The Fiserv growth strategy is a blend of sales Every day, people around the world use Fiserv systems to manage their financial needs. Every day, Fiserv infor- mation management tech- nology is used to process millions of transactions, work- ing behind the scenes to help our clients simplify and improve their business opera- tions. Finding new ways to solve everyday problems for financial services providers is and marketing efforts that generate a steady stream of new business, and an acquisi- tion philosophy designed to capitalize on industry changes, capture market share and further our position as an industry leader. The five acquisitions we completed in 2002 reflect the changes in the financial services industry and the evolving needs of our clients. fiserv systems manage millions of transactions, everywhere, every day. at the core of our business, and it has driven Crossing all of our major lines of business, our growth from the beginning. these acquisitions included an insurance pro- Formed in 1984 through the combination cessing operation, two mortgage loan services of two regional data processing firms in Florida firms, a securities clearing business and an elec- and Wisconsin, Fiserv today is a multi-billion- tronic funds transfer network processor. We dollar global company and a recognized leader remain focused on the financial services indus- in financial information management. We try, acquiring strategic businesses that enable us became a publicly traded company in 1986 and to translate industry trends into tools our clients since then, on a compounded annual basis, our need to grow and prosper. 4 Gaining speed, buil ding s tea m. But reco rd e ar n ings? How many year s c an yo u h ave o f that? Ho w ab o ut16. An d w e hav e no int en tio n of s top p in g. f i s e r v 2 0 0 2 a n n u a l r e p o r t As our history suggests, acquisitions play a Fiserv information management solution. key role in our strategy. An active and disci- Our insurance businesses are developing plined acquirer, Fiserv looks for financial nicely, fortified by several acquisitions in 2001 services companies that can expand the scale and 2002 that position Fiserv as a key player in and scope of our organization. We select the health care benefits management market. profitable companies with capable management, On the financial institution side, we’re seeing strong cash flow and a loyal client base. We continued growth as sales of outsourcing for focus on businesses that are successful, and we both account and check processing increase. walk away from far more acquisition candidates Additionally, check imaging continues to show than we buy. We keep the management teams in steady growth, as imaging technology gains place to continue the spirit of entrepreneurship acceptance as a substitute for paper-based check and involvement in the business. It’s a philoso- processing. We look forward to new business phy we’ve believed in from the beginning, and opportunities and a strong sales outlook one of the primary reasons our acquisition strat- in 2003. egy is so successful. The bank information processing business 02 01 00 The Fiserv strategy also pivots that Fiserv began nearly 20 years ago has grown on what we call “organic growth”— tremendously. Regulatory, technological and gaining new clients and making market dynamics have transformed banking additional sales to current ones. into a fiercely competitive business scenario Built on solid experience with involving insurance, securities, electronic com- financial institutions, our business merce, financial planning and more. As the model is anchored by long-term client contracts financial services landscape has continued to that produce predictable, recurring revenues. unfold, we’ve consistently responded by posi- The breadth and diversity of our product line tioning Fiserv to reflect our markets and pre- enables us to offer multiple solutions to our pare for future growth. In 2002, we modified clients, creating opportunities to generate new our organizational structure to better focus on revenue by selling additional products and serv- specific business segments where we see ices. The potential for Fiserv to grow through strong growth potential, and at the same time this strategy is clearly illustrated by the experi- give some of our talented managers a chance ence of one of our longtime clients. A major to step up and take on broader leadership New England banking concern first purchased roles. Our core business of providing informa- a Fiserv profitability analysis product in 1986, tion management technology remains then added a mortgage processing system and unchanged, while clients benefit from fresh a few years later, an Internet banking solution. thinking and new emphasis on the markets in In 2002, the bank signed on for its 10th which they compete. 6 over 13,000clients 13,000 13,000 Financial services providers worldwide rely on Fiserv for their information management needs. f i s e r v 2 0 0 2 a n n u a l r e p o r t l e a d e r s h i p l e a d e r s h i p l e a d e r s h i p The strength and integrity of the for the requirements of today’s financial services Fiserv leadership team is a primary reason that providers. Our highly skilled employees com- our Company is as successful as it is. Our man- bine industry disciplines with practical market agement brings a deep pool of business-specific experience. And with Fiserv as their technology expertise and experience. Combine this depth partner, our clients are confident that we will of talent with the entrepreneurial spirit fostered keep their information management systems across the Fiserv organization, and you’ll find the extra edge that keeps our business at the forefront of the financial serv- ices industry. Our most valuable resource is our people. Not only the leadership team, but every single member of our professional staff is significant to the ongoing success of Fiserv. We pride ourselves on applying a mix of industry running smoothly, accurately and efficiently. Within the financial serv- ices industry, Fiserv serves a number of different market segments, ranging from banks to brokerage firms to insur- ance companies. While this broad client base may seem to have little in common, they all come to us with a similar need: transactions that require processing. leadership demands determination, insight and dedication. knowledge and advanced technology skills to And that’s where we have invested our expert- meet our clients’ needs for comprehensive ise, in developing advanced information information management solutions. In an indus- management solutions that automate account try where service is key, our extensive network and transaction processing. of professionals has a history of strong dedica- Fiserv is the leading provider in North tion to service excellence — and it shows. America in number of total clients served; that From the beginning, we have clearly includes banks and thrifts, credit unions, mort- defined our market focus and have never gage providers, bank-owned broker-dealers, strayed. Our systems are designed specifically auto leasing companies, and financial planners 8 Why do busin ess in the busine ss? wit h t he be st 85A sk our clie nts . Th ey’r e o f th e top 100 ba n ks . f i s e r v 2 0 0 2 a n n u a l r e p o r t and advisers. We continue to expand our leader- the products and services most in demand by ship position in the insurance arena (including their customers. One measure of this devotion insurance companies, agents and related health to service excellence is our client retention care services) and for finance companies, while rating — it’s consistently one of the highest in on an international level we are strategically and the industry. systematically expanding our presence. We are continually monitoring the evolving We’ve been financial services landscape, identifying serving clients relevant business trends and then committing worldwide since the resources necessary to expand, develop 1985, when our or acquire solutions that address the market’s banking products needs. Fiserv devotes significant resources were first launched annually to research and development in order throughout Europe, to enhance and complement our product suite Asia and Latin America. Since then, we’ve to maintain our competitive edge. created an extensive infrastructure for support- Fiserv was formed with a singular vision, ing clients in international markets. Our employ- and through the years we’ve stayed true to that ees speak the same language as our clients; they vision and to our supporting mission statement. also understand the differences in the style of It’s these values and principles, which we doing business, as well as the financial products believe in so strongly, that will continue to requirements and regulations unique to each guide our future success. client and its specific market. Our international business currently represents approximately 5% of total Company processing and services v i s i o n : revenues, but our market presence is To be the leading information services growing steadily. provider for the financial industry worldwide. To be a leader in the financial services industry, you need first and foremost to focus m i s s i o n : on service quality. Dedicated relationship man- To deliver products and services that help agement teams throughout Fiserv help clients our clients grow their businesses and enhance evaluate their ongoing goals and strategies, and service to their customers; to enable our then make sure they have the appropriate Fiserv people to achieve outstanding job perform- solutions to achieve their goals. With the insight ance and personal growth; and to produce we gain through this interactive partnership, we a favorable level of earnings and consistent continually broaden our solutions portfolio to earnings growth for our Company, and help our clients improve their ability to offer increased value for our shareholders. 10 19,000 19,000 19,000 dedicated professionals Our experienced team is focused on helping clients maintain their competitive edge. f i s e r v 2 0 0 2 a n n u a l r e p o r t `qf i s e r v a t a g l a n c e f i s e r v p rov i d e s t e c h n o l o g y s o l u t i o n s to t h e f i n a n c i a l wo r l d . from transaction processing for deposit accounts and loan servicing to processing systems for insurance, securities and retirement plan administration, fiserv has the financial industry’s technology needs covered. financial institutions m a r k e t s Serving banks, credit unions, leasing companies, laser printing and mailing; electronic document mortgage lenders, savings institutions; health, life distribution and archival and annuity insurance companies; workers compen- sation, flood, and property and casualty insurance companies; self-insured employers; insurance agents, brokers and financial planners b u s i n e s s g r o u p s Bank Servicing: Outsourced (service bureau) core processing systems, credit processing services and value-added solutions for banks and thrifts Insurance Solutions: Comprehensive insurance processing services and products, with a strong emphasis on business process outsourcing (bpo), for the health, life and annuity, and property and casualty sectors Item Processing: End-to-end solution for the item and image processing needs of financial institu- tions, providing resources and technology for processing and automating paper-based pay- Bank Systems & eProducts: In-house core process- ment transactions ing and e-based solution sets for banks and thrifts, including electronic funds transfer (eft) processing, cash and treasury management solu- tions, risk management, imaging solutions, cus- tomer contact solutions and data warehousing Lending Systems & Services: Outsourced and licensed software and services for the lending industry, including loan origination and closing, mortgage loan servicing, automated property valuation, loan and lease portfolio management Credit Union & Industry Products: Core account and disposition services for the auto finance processing solutions for credit unions; plastic market, loan settlement support and contact card production and services; high-volume center services 12 f i s e r v 2 0 0 2 a n n u a l r e p o r t c a p a b i l i t i e s Account and transaction processing services, systems and software; lending systems; auto leasing systems; revolving credit services; item processing; e-commerce products and services; eft services; imaging technology; plastic card financial institutions, continued d i m e n s i o n s services; document solutions; printing and Client relationships with more than 8,100 fulfillment services; treasury management financial institutions and 2,500 insurance solutions; business intelligence; executive companies. 258 million customer deposit, information; customer relationship management; loan and lease accounts processed annually. health plan management services; general 3.7 billion electronic/atm/pos transactions ledger and annual statement software; claims processed annually. 4.7 billion checks processed administration systems; flood and homeowners annually. Serving more than 159,000 agents and processing and claims management services; registered representatives. $4.3 billion in insur- rating and quoting systems; computer-based ance claims paid. Sixth largest service provider training for insurance professionals; and to self-insured employer health plan market. financial marketing systems and services s e c u r i t i e s & t r u s t m a r k e t s c a p a b i l i t i e s Serving institutional, retail, full-service and discount Outsourced and in-house systems, licensed broker-dealers, registered investment advisers, munic- software and support for brokerage services, ipal bond dealers, underwriters, retail brokerage including securities clearing, trade execution, operations of financial institutions, insurance firms account management, portfolio maintenance, and mutual fund companies, financial institutions, quotes and research; IRA and qualified plan financial intermediaries, financial planners, third- administration; asset custody, back office, party pension administrators and individual automated record keeping and electronic investors b u s i n e s s g r o u p Securities & Trust: Complete processing and clearing services for traditional and electronic securities trading. Self-directed retirement plan administration services, and mutual fund custody and trading mutual fund trading services; custody and automated trade support for daily valuation retirement plans d i m e n s i o n s Client relationships with 415 broker-dealers and financial institutions. 2.9 million active accounts. Over 5.6 million trades processed annually. Administering over 318,000 plans (84% in IRAs). More than $25 billion in assets under administration. 13 f i s e r v 2 0 0 2 a n n u a l r e p o r t f i n a n c i a l h i g h l i g h t s p r o c e s s i n g a n d s e r v i c e s r e v e n u e s $1,927 $1,686 $1,408 $1,234 n e t i n c o m e e a r n i n g s p e r s h a r e - d i l u t e d $2,278 $265 $1.36 $205 $172 $0.73 $0.60 $1.07 $0.91 $138 $114 98 99 00 01 02 98 99 00 01 02 98 99 00 01 02 doll ars in millions doll ars in millions in do ll ars The above pro forma information has been restated to recognize stock splits and to exclude realized gains from sale of investment. 2002 excludes amortization of goodwill in accordance with FASB No. 142. 1 5 - y e a r s t o c k p r i c e h i g h l i g h t s $42.32 $33.95 $31.63 $22.86 $25.54 $14.56 $10.89 $8.89 $6.37 $5.70 $4.99 $4.97 $1.66 $1.91 $2.73 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 december closing, split adjusted, i n do ll ars Fiserv, Inc. common stock trades on The Nasdaq Stock Market® under the symbol FISV. c h a r t s n o t t o s c a l e 14 f i s e r v 2 0 0 2 a n n u a l r e p o r t b o a r d o f d i r e c to r s Q donald f. dillon, 62, Chairman of leslie m. muma , 58, President and the Board of Directors of Fiserv, Inc. and Chief Executive Officer of Fiserv, Inc. With Chairman of Information Technology, Inc. more than 35 years in the data processing With more than 35 years in the financial and industry, Mr. Muma has served as a Director data processing industries, Mr. Dillon has since 1984. served as a Director since 1995. glenn m. renwick, 47, President and kenneth r. jensen, 59, Senior Chief Executive Officer of The Progressive Executive Vice President, Chief Financial Corporation. With more than 15 years in the Officer, Treasurer and Assistant Secretary of insurance industry, Mr. Renwick has served as Fiserv, Inc. With more than 40 years in the data a Director since 2001. processing industry, Mr. Jensen has served as a Director since 1984. l. william seidman, 81, Chief Commentator for CNBC-TV, Publisher of Bank daniel p. kearney, 63, Financial Director and Board Member magazines, and Consultant. With more than 30 years in the Industry Consultant. With more than 35 banking, insurance and legal industries, Mr. years in the business, financial and political Kearney has served as a Director since 1999. arenas, Mr. Seidman has served as a Director gerald j. levy, 70, Lead Director, since 1992. Fiserv, Inc.; Chairman of the Board of Guaranty thekla r. shackelford, 68, Bank, F.S.B. With over 40 years in the financial Educational Consultant. With more than 30 and business arenas, Mr. Levy has served as a years in the fields of education and public Director since 1986. service, Ms. Shackelford has served as a Director since 1994. for comple t e profile s of t he fiserv board of directors, please see t he proxy statement. YY + 41 f i s e r v 2 0 0 2 a n n u a l r e p o r t e x e c u t i v e c o m m i t t e e from left to right: donald f. dillon, leslie m. muma, kenneth r. jensen, norman j. balthasar Donald F. Dillon, 62, see Board of Directors for profile. Norman J. Balthasar, 56, Senior Executive Vice President Leslie M. Muma, 58, see Board of Directors for profile. & Chief Operating Officer. With more than 30 years in the financial industry, Mr. Balthasar has been with Fiserv Kenneth R. Jensen, 59, see Board of Directors for profile. and its predecessor company since 1974. Rr m a n a g e m e n t c o m m i t t e e Kenneth R. Acheson, 54, Group President, Item Processing. Rodney D. Poskochil, 50, Group President, Bank Systems & With more than 30 years in the financial and data pro- eProducts. With more than 25 years in the financial and cessing industries, Mr. Acheson has been with Fiserv data processing industries, Mr. Poskochil has been with since 1996. Fiserv since 1995. Robert H. Beriault, 51, Group President, Securities & Trust James C. Puzniak, 56, Group President, Lending Systems Services. With more than 20 years in the financial services & Services. With more than 35 years in the financial industry, Mr. Beriault has been with Fiserv since 1995. services industry, Mr. Puzniak has been with Fiserv Douglas J. Craft, 49, Senior Vice President, Operating since 1993. Group Chief Financial Officer. With more than 20 years Dean C. Schmelzer, 52, Group President, Marketing & in the financial industry, Mr. Craft has been with Fiserv Sales. With nearly 30 years in the data processing indus- since 1985. try, Mr. Schmelzer has been with Fiserv since 1992. Patrick C. Foy, 48, Group President, Bank Servicing. With Charles W. Sprague, 53, Executive Vice President, General more than 20 years in the financial services industry, Mr. Counsel & Chief Administrative Officer. With over 27 Foy has been with Fiserv since 2001. years in the legal profession and the financial services Thomas A. Neill, 53, Group President, Credit Union & Industry Products. With more than 20 years in the financial services industry, Mr. Neill has been with Fiserv since 1993. industry, Mr. Sprague has been with Fiserv since 1994. 42 e x e c u t i v e l e a d e r s h i p i t e m p r o c e s s i n g g r o u p Kevin J. Collins, 45 President, Fiserv LeMans b a n k s e r v i c i n g c r e d i t u n i o n & g r o u p i n d u s t r y p r o d u c t s g r o u p Thomas J. Gorman, 48 President, Custom Outsourcing William A. Anderson, 54 Solutions President, XP Systems David G. Krystowiak, 53 Joseph A. Antellocy, 44 President, Bank Servicing President, AFTECH Division I David W. Santi, 42 President, CBS Outsourcing Frank M. Smeal, 60 President, Bank Servicing Division III Joseph A. Barry, 49 President, USERS Dennis L. Connick, 54, President, CUSA Jorge M. Diaz, 38 President, Personix b a n k s y s t e m s & e p r o d u c t s g r o u p Richard P. Fitzgerald, 53, President, Document Solutions Paul E. Brammeier, 60 President, Customer Contact Solutions Pedro E. Kaufmann, 44 President, EPSIIA Roger L. Kuhns, 55 Anthony S. Catalfano, 39 President, Credit Union President & COO, EFT / CNS Western Region Grant P. Christenson, 51 CEO, EFT / CNS Timothy M. Milz, 40 President, GalaxyPlus Paul A. Frank, 59 Kevin L. Sparks, 46 President, ePayments Division; President, Summit President, BANKLINK Alexander H. Groenendyk, 46 President, CBS Worldwide i n s u r a n c e s o l u t i o n s g r o u p Ronald E. Thompson, 55 James W. Cox, 39 President, ImageSoft Technologies President, Fiserv Health Division David E. Ulrich, 46 President, IPS-Sendero Thomas P. Cusick, 49 President, Benefit Planners Therese K. Carstensen, 47 President, Western Region Leslie J. Howlett III, 43 President, Integrated Loan Services Mark J. Damico, 34 President, Fiserv Solutions of Andrew J. Shaevel, 38 Co-CEO, Remarketing Canada & INTRIA Items Inc. Services of America Frank E. Eisel, Jr., 45 Gerald A. Smith, 56 President, Rocky Mountain Region CEO, Integrated Loan Services Richard J. Franas, 54 John R. Tenuta, 55 President, Fiserv – JPM Chase President, Fiserv Lending Solutions Guy J. Fries, 45 President, Southern Region Sadu Thinakal, 53 President, MortgageServ Allan N. Weiss, 43 W. David Hamilton, 51 President, Case Shiller Weiss President, Midwest Region Norman S. Himes, 59 President, Mid-Atlantic Region Robert F. McPherson, 56 President, Northern Region s e c u r i t i e s & t r u s t s e r v i c e s g r o u p Lawrence E. Donato, 54 President, Securities Division D. Terry Reitan, 56 President, Trust Division Anna M. Quinlan, 51 Nancy M. Sympson, 50 President, RemitStream Solutions President, Fiserv Investor Services Thomas R. Taylor, 55 EVP, Item Processing Technology & Support Operations & TradeStar c o r p o r a t e m a n a g e m e n t Kenneth P. True, 38 President, Fiserv – The Northern Jack P. Bucalo, 64 Trust IP Operations Stephen J. Ward, 50 Senior Vice President, Human Resources EVP, Item Processing Market Christina Slemon-Dokos, 47 Development Senior Vice President, Marketing l e n d i n g s y s t e m s & s e r v i c e s g r o u p Thomas J. Hirsch, 39 Senior Vice President, Controller Michael K. Young, 47 President, Information Technology, Inc. Craig J. Faulkner, 49 President, Marketing & Learning Solutions Division Curtis M. Lund, 62 President, Flood & Homeowners Insurance Processing Division Anthony T. Perdichezzi, 55 President, Administrative Solutions Division Peter M. Alexander, 50 President, Lenders Financial Services Stuart H. Angert, 61 Co-CEO, Remarketing Services of America Daniel F. Murphy, 53 Senior Vice President, Director of Audit c o r p o r a t e o f f i c e 255 Fiser v Drive Brookfield, Wisconsin 53045 262.879.5000 w o r l d w i d e w e b www.fiser v.com i n v e s t o r r e l a t i o n s 800.425.FISV t r a n s f e r a g e n t EquiSer ve Trust Company, N.A. P.O. Box 2500 Jersey City, New York, 07303-2500 800.446.2617 2 0 0 3 a n n u a l s h a r e h o l d e r s ’ m e e t i n g Thursday, April 3, 2003 Fiser v Corporate Of fice Brookfield, Wisconsin fiserv is a registered trademark of fiserv, inc. all product and brand names mentioned are the property of their respective companies. 2003 fiserv, inc. all rights reserved.