Fiserv Annual Report 2003

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FY2003 Annual Report · Fiserv

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Corporate Office

255 Fiserv Drive
Brookfield, Wisconsin 53045
(262) 879-5000
www.fiserv.com

Investor Relations

(800) 425-FISV

Stock Listing

Exchange: Nasdaq
Symbol: FISV

Transfer Agent

EquiServe Trust Company, N.A.
P.O. Box 43069
Providence, Rhode Island 02940-3069
(800) 446-2617
www.equiserve.com

Fiserv is a registered trademark of Fiserv, Inc. All product and brand names
mentioned are the property of their respective companies.
© 2004 Fiserv, Inc. All rights reserved.

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thinking

DRIVING

delivering
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thinking » driving » delivering

together » growth » value

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» financial highlights »

(Dollars in millions except per-share amounts and stock price data.)

2003

2002

% Change

Processing and services revenues

Net income

Diluted earnings per share

Cash flow from operations*

Year-end market price per share

Employees

Clients

$2,699.6

$2,205.7

$ 315.0

$ 266.1

1.61

1.37

$ 598.1

$ 515.3

$ 39.54

$ 33.95

21,700

19,400

15,000

13,000

Processing &
Services Revenues
in millions

Net Income

in millions

Earnings
Per Share—Diluted
in dollars

Cash Flow
From Operations
in millions

$3,000

$2,700

$350

$315

$2.00

$598

$600

2,500

2,000

1,500

1,000

500

300

250

200

150

100

$1.61

1.50

1.00

0.50

500

400

300

200

100

'99

'00

'01

'02

'03

'99

'00

'01

'02

'03

'99

'00

'01

'02

'03

'99

'00

'01

'02

'03

*Excludes securities processing receivables and payables. See management’s discussion and analysis for details.

**Figures adjusted to recognize 3-for-2 stock splits in 1999 and 2001.

Fiserv provides technology solutions to the financial industry. Our software, systems and services are

used by more than 15,000 clients worldwide to process transactions, automate business operations

and manage information. Made up of eight Business Groups specializing in solutions for many

financial industry sectors, Fiserv delivers the technology and support our clients need to compete and

flourish in today’s challenging marketplace.

f i s e r v » AT A G L A N C E

2003
Processing and Services Revenues

Securities &
Trust Services

15%

Health Plan
Management Services

77%

Financial
Institution Services
and other

Bank Systems & eProducts
Bank Servicing
Item Processing
Credit Union & Industry Products
Lending Systems & Services
Insurance Solutions

D e l i v e r i n g i n f o r m a t i o n m a n a g e m e n t

t e c h n o l o g y , s y s t e m s a n d s e r v i c e s t o t h e f i n a n c i a l w o r l d

FINANCIAL INSTITUTION SERVICES and Other

Six of the Fiserv Business Groups specialize in outsourcing, systems and services tailored to

the needs of financial institutions.

C l i e n ts

Banks, savings institutions, credit unions,
insurance companies and agents, leasing
companies, mortgage lenders

M a r k e t R e a c h

Client relationships with more than 9,400
financial institutions and 2,700 insurance
companies
» 300 million customer deposit, loan and

lease accounts processed annually

» 3.9 billion electronic/ATM/POS trans-

actions processed annually

» 4.2 billion checks processed annually
» 2.8 billion images archived

I t em P r o c e s s i n g

Complete solution for the item and
image processing needs of financial institu-
tions, providing resources and technology
for processing and automating paper-based
payment transactions

C r e di t U n io n &

I n d u s t ry P r od u c ts

Core account processing and value-added
solutions for credit unions, plastic card
production and services, high-volume laser
printing and mailing, electronic document
distribution and archival

L e n di n g S y s t em s

B a n k S y s t em s & E P r od u c ts

& S e rv ic e s

In-house core processing and e-based solution
sets for banks and thrifts, including EFT
processing, cash and treasury management
solutions, risk management, imaging
solutions, customer contact solutions and
data warehousing

Outsourced and licensed software and
services for the lending industry, including
mortgage loan servicing, automated property
valuation, loan and lease portfolio manage-
ment for the auto finance market, loan settle-
ment support and contact center services

B a n k S e rv ic i n g

I n s u r a n c e S olu t io n s

Outsourced (service bureau) core processing
systems, credit processing services and value-
added solutions for banks and thrifts

Comprehensive insurance processing services
and products, emphasizing business process
outsourcing for the life, annuity and property
and casualty sectors

HEALTH PLAN
MANAGEMENT SERVICES

Outsourced services for self-funded and other

medical, dental, vision and disability plans,

including health plan administration, care

and disease management and pharmacy

benefit management.

C l i e n t s

Self-funded commercial and government
employers, health insurance companies, health
maintenance organizations and pharmacies

M a r k e t R e a c h

» $6 billion in claims paid annually
» Over 30 million claims processed annually
» Over 1,000 client relationships

SECURITIES & TRUST SERVICES
SECURITIES & TRUST SERVICES

2003 ACQUISITIONS
2003 ACQUISITIONS

Complete processing and clearing services for
Complete processing and clearing services for
traditional and electronic securities trading.
traditional and electronic securities trading.
Self-directed retirement plan administration
Self-directed retirement plan administration
services and mutual fund custody and trading.
services and mutual fund custody and trading.

C l i e n t s
C l i e n t s

Institutional, retail, full-service and discount
Institutional, retail, full-service and discount
broker-dealers, registered investment advisors,
broker-dealers, registered investment advisors,
municipal bond dealers, underwriters, financial
municipal bond dealers, underwriters, financial
institutions, insurance firms, pension administra-
institutions, insurance firms, pension administra-
tors and mutual fund companies
tors and mutual fund companies

M a r k e t R e a c h
M a r k e t R e a c h

» Client relationships with over 500 broker-
» Client relationships with over 500 broker-

dealers and financial institutions
dealers and financial institutions

» 1.4 million active accounts
» 1.4 million active accounts
» Over 4 million trades processed annually
» Over 4 million trades processed annually
» $30 billion in retirement trust assets
» $30 billion in retirement trust assets

under administration
under administration

The 12 companies Fiserv acquired in 2003 are listed below, along with the Business Group
The 12 companies Fiserv acquired in 2003 are listed below, along with the Business Group
they joined. These acquisitions encompass nearly all of our major lines of business, and
they joined. These acquisitions encompass nearly all of our major lines of business, and
further our goal to be the single-source technology services provider to our clients.
further our goal to be the single-source technology services provider to our clients.

C o m pa n y
C o m pa n y

Avidyn
Avidyn

B u s i n e s s G r o u p
B u s i n e s s G r o u p

Health Plan Management
Health Plan Management

Chase Credit Research/Chase Credit Systems
Chase Credit Research/Chase Credit Systems

Lending Systems and Services
Lending Systems and Services

EDS Credit Union Industry Group
EDS Credit Union Industry Group

Credit Union & Industry Products
Credit Union & Industry Products

Federal Home Loan Bank-Indianapolis
Federal Home Loan Bank-Indianapolis

Item Processing Services
Item Processing Services

General American Corporation
General American Corporation

Item Processing
Item Processing

Lending Systems & Services
Lending Systems & Services

Insurance Management Solutions Group
Insurance Management Solutions Group

Insurance Solutions
Insurance Solutions

MedPay Corporation
MedPay Corporation

MI-Assistant Software
MI-Assistant Software

Precision Computer Systems
Precision Computer Systems

ReliaQuote
ReliaQuote

Unisure
Unisure

Wausau Benefits
Wausau Benefits

Health Plan Management
Health Plan Management

Insurance Solutions
Insurance Solutions

Bank Systems & eProducts
Bank Systems & eProducts

Insurance Solutions
Insurance Solutions

Health Plan Management
Health Plan Management

3
3

Fiserv provides technology solutions to the financial industry. Our software, systems and services are

used by more than 15,000 clients worldwide to process transactions, automate business operations

and manage information. Made up of eight Business Groups specializing in solutions for many

financial industry sectors, Fiserv delivers the technology and support our clients need to compete and

flourish in today’s challenging marketplace.

f i s e r v » AT A G L A N C E

2003
Processing and Services Revenues

Securities &
Trust Services

15%

Health Plan
Management Services

77%

Financial
Institution Services
and other

Bank Systems & eProducts
Bank Servicing
Item Processing
Credit Union & Industry Products
Lending Systems & Services
Insurance Solutions

D e l i v e r i n g i n f o r m a t i o n m a n a g e m e n t

t e c h n o l o g y , s y s t e m s a n d s e r v i c e s t o t h e f i n a n c i a l w o r l d

FINANCIAL INSTITUTION SERVICES and Other

Six of the Fiserv Business Groups specialize in outsourcing, systems and services tailored to

the needs of financial institutions.

C l i e n ts

Banks, savings institutions, credit unions,
insurance companies and agents, leasing
companies, mortgage lenders

M a r k e t R e a c h

Client relationships with more than 9,400
financial institutions and 2,700 insurance
companies
» 300 million customer deposit, loan and

lease accounts processed annually

» 3.9 billion electronic/ATM/POS trans-

actions processed annually

» 4.2 billion checks processed annually
» 2.8 billion images archived

I t em P r o c e s s i n g

Complete solution for the item and
image processing needs of financial institu-
tions, providing resources and technology
for processing and automating paper-based
payment transactions

C r e di t U n io n &

I n d u s t ry P r od u c ts

Core account processing and value-added
solutions for credit unions, plastic card
production and services, high-volume laser
printing and mailing, electronic document
distribution and archival

L e n di n g S y s t em s

B a n k S y s t em s & E P r od u c ts

& S e rv ic e s

B a n k S e rv ic i n g

I n s u r a n c e S olu t io n s

Outsourced (service bureau) core processing
systems, credit processing services and value-
added solutions for banks and thrifts

Comprehensive insurance processing services
and products, emphasizing business process
outsourcing for the life, annuity and property
and casualty sectors

HEALTH PLAN
MANAGEMENT SERVICES

Outsourced services for self-funded and other

medical, dental, vision and disability plans,

including health plan administration, care

and disease management and pharmacy

benefit management.

C l i e n t s

Self-funded commercial and government
employers, health insurance companies, health
maintenance organizations and pharmacies

M a r k e t R e a c h

» $6 billion in claims paid annually
» Over 30 million claims processed annually
» Over 1,000 client relationships

SECURITIES & TRUST SERVICES
SECURITIES & TRUST SERVICES

2003 ACQUISITIONS
2003 ACQUISITIONS

C l i e n t s
C l i e n t s

M a r k e t R e a c h
M a r k e t R e a c h

» Client relationships with over 500 broker-
» Client relationships with over 500 broker-

dealers and financial institutions
dealers and financial institutions

under administration
under administration

C o m pa n y
C o m pa n y

Avidyn
Avidyn

B u s i n e s s G r o u p
B u s i n e s s G r o u p

Health Plan Management
Health Plan Management

Chase Credit Research/Chase Credit Systems
Chase Credit Research/Chase Credit Systems

Lending Systems and Services
Lending Systems and Services

EDS Credit Union Industry Group
EDS Credit Union Industry Group

Credit Union & Industry Products
Credit Union & Industry Products

Federal Home Loan Bank-Indianapolis
Federal Home Loan Bank-Indianapolis

Item Processing Services
Item Processing Services

General American Corporation
General American Corporation

Item Processing
Item Processing

Lending Systems & Services
Lending Systems & Services

Insurance Management Solutions Group
Insurance Management Solutions Group

Insurance Solutions
Insurance Solutions

MedPay Corporation
MedPay Corporation

MI-Assistant Software
MI-Assistant Software

Precision Computer Systems
Precision Computer Systems

ReliaQuote
ReliaQuote

Unisure
Unisure

Wausau Benefits
Wausau Benefits

Health Plan Management
Health Plan Management

Insurance Solutions
Insurance Solutions

Bank Systems & eProducts
Bank Systems & eProducts

Insurance Solutions
Insurance Solutions

Health Plan Management
Health Plan Management

3
3

thinking » together

donald f. dillon

Leslie M. Muma

President and Chief Executive Officer

Donald F. Dillon

Chairman of the Board

February 27, 2004

To Our Shareholders

In part through acquisitions, but also through thoughtful

efforts, many established clients, including KeyCorp, Porsche

Fiserv turned in another outstanding performance in 2003,

marking its 19th consecutive record year, excluding a one-

time charge in 1995 related to an acquisition. Your company

again achieved or exceeded its revenue and earnings targets,

and we hope that gives every shareholder a reason to smile.

» Processing revenues climbed 22% to $2.7 billion.

» Net income grew 18% to $315 million.

» Net income per share-diluted rose to $1.61,

an 18% gain over 2002.

» Operating cash flow increased 16% to $598 million.

Our cash position, a key indicator of the company’s financial

strength, mirrored our strong net income growth. The

Fiserv business model, which is built around high recurring

revenues, creates a stable business base that leads to consis-

tent earnings and cash flow growth. Our steady cash flow

and access to debt markets enable us to act quickly when

potential acquisitions or other growth opportunities appear.

The year’s strong results were fueled by a combination

of acquisitions and internal, or “organic,” growth. Once

again, these central components of our strategy delivered

the combination of consistency, growth and balance that

Fiserv investors have come to expect.

Acquisitions were a big part of 2003, with a dozen

companies joining the Fiserv fold. Touching nearly all of our

major lines of business, these fine companies brought com-

bined annualized revenues of more than $610 million and

increased our total employees to nearly 22,000 worldwide.

strategic planning, we made great strides in positioning

Financial Services, and Abbey, a UK-based banking company,

and strengthening Fiserv in promising growth markets.

expanded their scope of services with us, adding products

Our health plan management business is rapidly becoming a

such as automotive financing solutions and outsourced

leader in self-funded health benefits administration. Insurance

business banking support.

is another area with strong growth potential, and four of

Overall, industry and market forces are aiding our business

our 2003 acquisitions were in this sector. Both businesses are

development efforts. Legislation such as Check 21, which is

focused on recurring revenues and involve transaction process-

expected to encourage banks and other financial services organ-

ing in large, fragmented markets where we can become a

izations to adopt check imaging technology, and the Health

major player. Several acquisitions also helped round out our

Insurance Portability and Accountability Act, or HIPAA, which

offerings for the lending market and enhanced our presence

requires employers to comply with new privacy regulations,

in the banking and credit union sectors.

creates demand for the solutions we provide.

Organic growth complements acquired growth by helping

Fiserv is well known for its acquisitions, broad product

to provide a predictable revenue and earnings stream for

portfolio and presence across the financial services market-

Fiserv. Achieving organic growth at the level we’d like was

place. But the goal we reach for every day is to be recognized

challenging in 2003, as soft economies in our international

for superior quality in everything we do. Every system con-

markets curbed spending on information technology and

version, every sales call, every phone conversation. Quality is

services, and low interest rates and weak trading volumes

the most important tool in our kit, and it’s the one that keeps

hampered the securities and trust businesses. Despite this,

the client and wins the sale.

Fiserv’s organic growth rate was 5% in 2003, and we con-

Without question, 2003 was a year of many rewards—and

tinue to deliver record earnings year after year. That’s a

some challenges, too. And once again, credit for our success

real testament to the value of our business model.

belongs to the employees of Fiserv, who got the job done

Looking at organic growth in 2003, we signed new clients

with speed, efficiency and professionalism. Fiserv people are

at a steady clip, including agreements with Ohio Savings

the best in the business, and we thank them for another

Bank, HSBC Mortgage Corporation (USA), Cardtronics and

exceptional performance. We also thank you, our sharehold-

Arch Coal, for services ranging from core processing and

ers, for your confidence and support as Fiserv continues to

call center support to loan portfolio servicing and medical

drive for growth and deliver value.

plan administration. Reflecting our vigorous cross-selling

thinking » together

donald f. dillon

Leslie M. Muma

President and Chief Executive Officer

Donald F. Dillon

Chairman of the Board

February 27, 2004

To Our Shareholders

In part through acquisitions, but also through thoughtful

efforts, many established clients, including KeyCorp, Porsche

Fiserv turned in another outstanding performance in 2003,

marking its 19th consecutive record year, excluding a one-

time charge in 1995 related to an acquisition. Your company

again achieved or exceeded its revenue and earnings targets,

and we hope that gives every shareholder a reason to smile.

» Processing revenues climbed 22% to $2.7 billion.

» Net income grew 18% to $315 million.

» Net income per share-diluted rose to $1.61,

an 18% gain over 2002.

» Operating cash flow increased 16% to $598 million.

Our cash position, a key indicator of the company’s financial

strength, mirrored our strong net income growth. The

Fiserv business model, which is built around high recurring

revenues, creates a stable business base that leads to consis-

tent earnings and cash flow growth. Our steady cash flow

and access to debt markets enable us to act quickly when

potential acquisitions or other growth opportunities appear.

The year’s strong results were fueled by a combination

of acquisitions and internal, or “organic,” growth. Once

again, these central components of our strategy delivered

the combination of consistency, growth and balance that

Fiserv investors have come to expect.

Acquisitions were a big part of 2003, with a dozen

companies joining the Fiserv fold. Touching nearly all of our

major lines of business, these fine companies brought com-

bined annualized revenues of more than $610 million and

increased our total employees to nearly 22,000 worldwide.

strategic planning, we made great strides in positioning

Financial Services, and Abbey, a UK-based banking company,

and strengthening Fiserv in promising growth markets.

expanded their scope of services with us, adding products

Our health plan management business is rapidly becoming a

such as automotive financing solutions and outsourced

leader in self-funded health benefits administration. Insurance

business banking support.

is another area with strong growth potential, and four of

Overall, industry and market forces are aiding our business

our 2003 acquisitions were in this sector. Both businesses are

development efforts. Legislation such as Check 21, which is

focused on recurring revenues and involve transaction process-

expected to encourage banks and other financial services organ-

ing in large, fragmented markets where we can become a

izations to adopt check imaging technology, and the Health

major player. Several acquisitions also helped round out our

Insurance Portability and Accountability Act, or HIPAA, which

offerings for the lending market and enhanced our presence

requires employers to comply with new privacy regulations,

in the banking and credit union sectors.

creates demand for the solutions we provide.

Organic growth complements acquired growth by helping

Fiserv is well known for its acquisitions, broad product

to provide a predictable revenue and earnings stream for

portfolio and presence across the financial services market-

Fiserv. Achieving organic growth at the level we’d like was

place. But the goal we reach for every day is to be recognized

challenging in 2003, as soft economies in our international

for superior quality in everything we do. Every system con-

markets curbed spending on information technology and

version, every sales call, every phone conversation. Quality is

services, and low interest rates and weak trading volumes

the most important tool in our kit, and it’s the one that keeps

hampered the securities and trust businesses. Despite this,

the client and wins the sale.

Fiserv’s organic growth rate was 5% in 2003, and we con-

Without question, 2003 was a year of many rewards—and

tinue to deliver record earnings year after year. That’s a

some challenges, too. And once again, credit for our success

real testament to the value of our business model.

belongs to the employees of Fiserv, who got the job done

Looking at organic growth in 2003, we signed new clients

with speed, efficiency and professionalism. Fiserv people are

at a steady clip, including agreements with Ohio Savings

the best in the business, and we thank them for another

Bank, HSBC Mortgage Corporation (USA), Cardtronics and

exceptional performance. We also thank you, our sharehold-

Arch Coal, for services ranging from core processing and

ers, for your confidence and support as Fiserv continues to

call center support to loan portfolio servicing and medical

drive for growth and deliver value.

plan administration. Reflecting our vigorous cross-selling

FISERV » thinking » driving » delivering »

thinking » together

A true measure of a company’s vitality is the depth

of its management team. At Fiserv, rising stars are

encouraged, coached and trained for leadership, with

a focus on strategic thinking, service excellence and

business acumen. Acquisitions bring talented execu-

tives who add their skills and experience to an already

seasoned team, helping to keep our ideas fresh, our

viewpoints open and our sights set on growth.

Stock Price Performance

$100 invested in Fiserv stock on December 31,1993, grew to nearly $700 at the end of 2003, delivering a 21%
compounded average return per year and outperforming two major stock indexes.

Fiserv

Nasdaq

S&P 500

$800

700

600

500

400

300

200

100

’93

’94

’95

’96

’97

’98

’99

’00

’01

’02

’03

norman j. balthasar

Senior Executive Vice President and
Chief Operating Officer

kenneth r. jensen

Senior Executive Vice President
and Chief Financial Officer

leveraging
our strengths

Leslie M. Muma

President and
Chief Executive Officer

driving » growth

The Essential Role of
Organic Growth

For Fiserv, organic growth is driven by three primary factors:

products into our base of over 15,000 clients has always been

our ability to retain current clients, gain new ones, and

important, but it’s become a key strategic focus throughout

sell additional products and services to both. Built on solid

Fiserv as we continue to drive for growth. We’ve charged

experience in the financial industry, the Fiserv business model

our nationwide sales force as well as more than 450 client

is anchored by long-term client contracts that produce

relationship managers, who have direct responsibility for

predictable, recurring revenues. These steady relationships

servicing client accounts, to take the lead in this effort.

represent our core line of business and are an integral part

Nearly half of our core processing clients already use two

of our organic growth picture, accounting for approximately

or more Fiserv products, and we believe that increasing the

85% of our annual revenues.

interconnectivity of our products will drive up that ratio. A

Our reputation for exceptional client service, comprehen-

focused effort to create a technology framework to accom-

sive technology solutions and solid expertise in managing

plish this is well underway. With more than 60 projects

information system conversions helps us maintain a 99%

involving the integration of various products, we expect this

retention rate with these long-term clients, and attract others

initiative to play significantly in spurring organic growth over

away from competitors. We have a significant share of the

the long term.

bank processing market, and more than 90 of America’s top

Market and industry dynamics also are positive. The

100 banks are on the Fiserv client roster.

demands of maintaining current technology systems can be

Many factors are working in our favor. The breadth and

daunting, particularly in a climate where customers expect

diversity of our product line, which includes more than 200

sophisticated, easy-to-use services. As financial services organ-

solution sets, presents a significant opportunity to generate

izations focus on their core competencies to stay competitive,

organic growth. From Internet banking and cash management

they are increasingly likely to outsource some or all of their

systems to trust services, securities clearing and insurance

technology needs.

administration, Fiserv offers an array of technology solutions

One event more than any other in 2003 is prompting

that spans the financial services industry. Cross-selling these

banks to consider outsourcing one of their most traditional

» Our growth strategy pivots on satisfied clients, a
steady stream of new business and acquisitions that
further our position as an industry leader.»

operations—check processing. The October passage of the

Check Clearing for the 21st Century Act, or Check 21,

encourages banks to exchange checks electronically and

makes a digitally generated copy of a check the legal equiva-

lent of a paper check. The new rules, which will take effect

in late 2004, have sweeping implications for the technology

needs of financial institutions and are expected to trigger a

massive, though gradual, shift to check imaging and trans-

mission technology.

Check 21 creates exciting growth opportunities for

Fiserv, as a provider of both outsourced imaging services and

software solutions for clients with in-house applications. We

operate the nation’s largest network of check processing

centers—a total of 49, all equipped with imaging technology.

Our national image archive already delivers imaged statements

and check images over the Internet for more than 900 clients,

and we average converting about one client a day from paper

processing to imaging. The Fiserv Clearing Network is a clear-

inghouse that enables our clients to settle their checks, and

soon, their images, entirely within the Fiserv realm. And we’ve

built collaborative relationships with key industry players to

position Fiserv as a gateway for our clients to this new era

in check processing.

driving » growth

Acquisitions Augment
Scale and Scope

A disciplined and active acquirer, Fiserv has completed 126

Because good client relationships are so critical to our suc-

acquisitions since the company was founded in 1984.

cess, we strive to make the change in ownership as seamless

Reflecting the dynamics of the financial services market-

as possible for the acquired company’s clients. Any integration

place, the tempo of our 2003 acquisition activity was

with Fiserv systems is managed gradually, behind the scenes,

brisk, generating 12 transactions that cross nearly all of

with close attention to our clients’ changing technology and

our major lines of business.

service needs.

Several key principles guide our approach to acquisitions

The acquisitions we made in 2003 will contribute $610

and are instrumental in our success. The financial services

million to annualized revenues and strengthen our position in

industry is the backbone of Fiserv’s business, and we seek out

several key markets. Three transactions expanded our pres-

companies that can expand the capabilities of our organiza-

ence in the health plan management business, a relatively

tion in this sector. A predictable, recurring revenue stream

new but very promising market for Fiserv. Two others

and steady profit growth are other requirements, as are

bolstered our growing business in the lending systems

strong cash flow and a sound balance sheet. Solid financials

market, and the remaining seven added to our capabilities

help ensure that every acquisition contributes to the bottom

in the insurance, credit union and bank systems markets.

line within the first 12 months of joining Fiserv.

Fiserv acquires companies for both strategic and oppor-

However, the cornerstone of the Fiserv acquisition

tunistic reasons, but acquisitions typically contribute to our

strategy is finding proven companies with strong

growth picture in three ways: First, they enable us to stay

management and loyal, satisfied clients—and then pro-

abreast of changing client and market needs by quickly

viding an environment that supports their continued growth.

adding new technologies, products and services; second,

We encourage and enhance the strengths that attracted

we can more efficiently enter new markets or capitalize on

us to the company, and focus on keeping the management

industry changes; and third, acquisitions help expand our

team and employees together so they continue to thrive

position and capabilities in existing markets.

as part of the Fiserv family.

Here’s a snapshot of how we’ve put a few of our recent

acquisitions to work:

» Our reputation for blending quality and stability with
an entrepreneurial environment continues to attract
top-notch companies to the Fiserv family.»

» Adding new technologies: With our 2001 purchase of

EPSIIA Corporation, we gained an Internet-based technology

for high-volume delivery and storage of electronic documents.

The acquisition complemented our existing paper-based solu-

tion and enabled us to respond to growing market demand

for electronic document presentment and delivery with a

technologically superior offering.

» Entering new markets: Fiserv FSC, acquired in 2001,

specializes in providing comparative insurance rating services

to independent agents and brokers. A nationally recognized

leader in this niche market, Fiserv FSC has developed a

profitable business model that will help us take this success-

ful regional operation nationwide. In 2003, we acquired

MI-Assistant Software to further this expansion.

» Expanding our presence: Meeting the processing and

automation needs of banks, thrifts, credit unions and other

financial institutions is our mainstay, and three acquisitions in

2003 added to our strength in this area. Precision Computer

Systems and IntegraSys (formerly the EDS Credit Union Industry

Group) specialize in core processing solutions for the bank and

credit union markets, respectively. And the Indianapolis item

processing operations of the Federal Home Loan Bank broad-

ened our nationwide infrastructure at a time of great change

in the check processing industry.

delivering » value

c a s e s t u d y »

A P a r t n e r t o C o u n t O n

A Fiserv client since 1989, one of the biggest banks in the

Midwest still looks to us when it’s ready to grow. Since we

began running its core account processing system nearly 15

years ago, this $13 billion Omaha-based bank not only

enhanced its original solution by adding item processing

services, but signed on for data warehouse software, multiple

loan processing tools, ATM services and a customer contact

management system. All the technology this client needs is

in one place—the Fiserv family of companies.

» Confidence. Responsiveness. Quality. Clients look to
Fiserv to help manage their technology needs so they can
focus on enhancing profitability and satisfying customers.»

The speed of technological change can be exhilarating or

Technology-driven competitive pressures also are influencing

terrifying, depending on your readiness for it. In the financial

the insurance industry, a sector Fiserv entered in 1998.

services industry, the move to back-office automated data

Mainstream insurers are beginning to embrace outsourcing

processing just a few decades ago has been followed by the

and as the industry’s drive for efficiency and innovation grows,

rapid-fire growth of sophisticated information management

Fiserv can offer a broad portfolio of software, systems

systems, debit cards and Internet banking, on-line securities

and services keyed to their requirements. Using a targeted,

trading, digital document archiving and much more. Challenged

needs-based approach, we’ve already carved a successful

to stay current with new technologies and to staff up to

niche in the flood insurance processing sector, ranking as

support them, many financial institutions opt to hand off

the nation’s largest provider of administration and claims

all or part of their technology infrastructure to third-party

processing services for this market.

providers like Fiserv.

Escalating costs, new government regulations and the sheer

Clearly, changing technology is an important growth

complexity of health insurance management have employers,

driver for Fiserv, and so is the value clients see in our services.

insurers and individuals reeling. Recognizing the demands

Clients often turn to us to help them manage their technol-

that health insurance administration places on self-funded

ogy needs so they can focus on improving profitability and

employers, in 2001 Fiserv began offering outsourced services

enhancing customer satisfaction. In the banking and credit

to address these needs. On behalf of our clients, we provide

union business, for example, consumers now expect to have

transaction processing and administration for employee health

access to their financial information whenever and wherever

plans, pharmacy benefits and workers compensation prescrip-

they choose. We help clients evaluate how to respond to

tion services. Again, our focus is on providing the expertise

those expectations, and we deliver the customized tools,

and support to simplify a complex problem, so our clients can

services and support they need. Our strength as a business

concentrate on running their businesses.

partner is one reason Fiserv is the leading provider of out-

sourced and in-house technology to banks, thrifts and credit

unions nationwide, based on total clients served.

delivering » value

» A time-tested approach and disciplined financial formula
add up to an acquisition strategy that creates value for
shareholders and clients alike. Below, the stories behind
some of our more recent transactions.»

» L e n d i n g S y s t e m s & S e r v i c e s

» F i s e r v H e a l t h

» F i s e r v E F T / C N S

Making loans has always been a rather piecemeal process,

As pressures mounted in the health insurance industry, we

Anytime, anywhere banking has its roots in the automated

from the title search to servicing the account. Now it doesn’t

began building a portfolio of products and services to help

teller machines that transformed branch banking years ago.

have to be. Through eight acquisitions over several years, Fiserv

self-funded employers grapple with rising costs and complex

Fiserv has always been a player in electronic banking, building

is creating true “end-to-end” business and technology support

administration issues.

on our presence with the acquisition of several electronic funds

capable of handling every aspect of a transaction. Mortgage

We entered the health care transaction processing busi-

transfer (EFT) networks in the early 1990s. We continued to

applications, settlement and closings. Auto loans and leases.

ness in 2001 with the acquisition of Benefit Planners, which

develop the business over the years, and the 2002 acquisition

Collections. Appraisals. Loan evaluation and tracking. All the

specializes in administering health plans for self-funded

of EDS Consumer Network Services made Fiserv one of the

technology a lender needs to get the job done.

employers. Since then, we’ve expanded the capabilities of

industry’s top five processors of EFT services.

Strategic acquisitions have added vital components to

the Fiserv Health group with the additions of Trewit in 2001,

The combination of Consumer Network Services and our

the mix. With the 2001 purchases of Case Shiller Weiss and

the health administration operations of Willis Group in 2002,

existing operations created Fiserv EFT/CNS, a coast-to-coast

Integrated Loan Services, we gained Internet-based home val-

and Avidyn, Wausau Benefits and MedPay in 2003. Each of

powerhouse that drives more than 16,000 ATMs and

uation technology to streamline the appraisal process and

these acquisitions added another strategic component to

processes nearly 4 billion EFT transactions per year. We also

speedy, anytime, anywhere loan closing capability. Two 2003

our offerings for this growing market.

own and operate ACCEL / Exchange(cid:2), a major United States-

acquisitions, General American Corporation and Chase Credit

While Fiserv Health focuses on the health plan management

based EFT network with international reach, and we launched

Systems, added real estate settlement technology and services

market, its business model mirrors the approach we’ve used

a new national brand for the network less than a year after

and an important credit-reporting piece.

successfully for years in the banking and insurance industries:

closing the CNS acquisition.

The value to clients is clear: Time- and money-saving tech-

Help our clients manage through business challenges with a

Cross-sell opportunities through this business are outstand-

nologies, specifically designed for the lending industry and all

strong product line and top-notch service. Through organic

ing, ranging from ATM driving, hosting and management

available from one source—Fiserv. Reflecting the vigorous

growth and acquisitions, Fiserv Health has become a major

services to debit card and point-of-sale transaction processing.

market for these services, Lending Systems & Services is one

provider of health plan administration and related services in

Results in the debit card market were particularly strong for us

of the fastest growing Fiserv business groups.

the United States, posting an 85% gain in revenues in 2003.

during the year, with processing volumes up 20% over 2002.

delivering » value

» L e n d i n g S y s t e m s & S e r v i c e s

» F i s e r v H e a l t h

» F i s e r v E F T / C N S

Making loans has always been a rather piecemeal process,

As pressures mounted in the health insurance industry, we

Anytime, anywhere banking has its roots in the automated

from the title search to servicing the account. Now it doesn’t

began building a portfolio of products and services to help

teller machines that transformed branch banking years ago.

have to be. Through eight acquisitions over several years, Fiserv

self-funded employers grapple with rising costs and complex

Fiserv has always been a player in electronic banking, building

is creating true “end-to-end” business and technology support

administration issues.

on our presence with the acquisition of several electronic funds

capable of handling every aspect of a transaction. Mortgage

We entered the health care transaction processing busi-

transfer (EFT) networks in the early 1990s. We continued to

applications, settlement and closings. Auto loans and leases.

ness in 2001 with the acquisition of Benefit Planners, which

develop the business over the years, and the 2002 acquisition

Collections. Appraisals. Loan evaluation and tracking. All the

specializes in administering health plans for self-funded

of EDS Consumer Network Services made Fiserv one of the

technology a lender needs to get the job done.

employers. Since then, we’ve expanded the capabilities of

industry’s top five processors of EFT services.

Strategic acquisitions have added vital components to

the Fiserv Health group with the additions of Trewit in 2001,

The combination of Consumer Network Services and our

the mix. With the 2001 purchases of Case Shiller Weiss and

the health administration operations of Willis Group in 2002,

existing operations created Fiserv EFT/CNS, a coast-to-coast

Integrated Loan Services, we gained Internet-based home val-

and Avidyn, Wausau Benefits and MedPay in 2003. Each of

powerhouse that drives more than 16,000 ATMs and

uation technology to streamline the appraisal process and

these acquisitions added another strategic component to

processes nearly 4 billion EFT transactions per year. We also

speedy, anytime, anywhere loan closing capability. Two 2003

our offerings for this growing market.

own and operate ACCEL / Exchange(cid:2), a major United States-

acquisitions, General American Corporation and Chase Credit

While Fiserv Health focuses on the health plan management

based EFT network with international reach, and we launched

Systems, added real estate settlement technology and services

market, its business model mirrors the approach we’ve used

a new national brand for the network less than a year after

and an important credit-reporting piece.

successfully for years in the banking and insurance industries:

closing the CNS acquisition.

The value to clients is clear: Time- and money-saving tech-

Help our clients manage through business challenges with a

Cross-sell opportunities through this business are outstand-

nologies, specifically designed for the lending industry and all

strong product line and top-notch service. Through organic

ing, ranging from ATM driving, hosting and management

available from one source—Fiserv. Reflecting the vigorous

growth and acquisitions, Fiserv Health has become a major

services to debit card and point-of-sale transaction processing.

market for these services, Lending Systems & Services is one

provider of health plan administration and related services in

Results in the debit card market were particularly strong for us

of the fastest growing Fiserv business groups.

the United States, posting an 85% gain in revenues in 2003.

during the year, with processing volumes up 20% over 2002.

thinking » driving » delivering

together » growth » value

The passion of an entrepreneur and the track record of an industry veteran. That’s the

Fiserv way, and it’s driven our growth for nearly 20 years. We are a strong, focused

company, intent on delivering value for clients and shareholders through superior

performance. In 2004, we will stretch beyond the successes of this year to deepen

client relationships, build on our position as an industry leader and create solid

returns for our shareholders.

» financial report »

consolidated statements of income

consolidated balance sheets

consolidated statements of shareholders’ equity

consolidated statements of cash flows

notes to consolidated financial statements

management’s discussion and analysis of
financial condition and results of operations

selected financial data

market price information

quarterly financial information (unaudited)

management’s statement of responsibility

independent auditors’ report

board of directors

executive committee

management committee

executive leadership

» 18

» 19

» 20

» 21

» 22

» 35

» 42

» 43

» 44

» 45

» 46

» 47

» 48

Fiserv, Inc. and Subsidiaries

» 17

» consolidated statements of income

» consolidated balance sheets

In thousands, except per share data
Y E A R S E N D E D D E C E M B E R 3 1 ,

2003

2002

2001

Dollars in thousands
D E C E M B E R 3 1 ,

2003

2002

REVENUES:

Processing and services

Customer reimbursements

TOTAL REVENUES

COST OF REVENUES:

Salaries, commissions and payroll related costs

Customer reimbursement expenses
Data processing costs and equipment rentals

Other operating expenses

Depreciation and amortization

TOTAL COST OF REVENUES

OPERATING INCOME

Interest expense

Interest income

INCOME BEFORE INCOME TAXES

Income tax provision

NET INCOME

NET INCOME PER SHARE:

Basic

Diluted

SHARES USED IN COMPUTING

NET INCOME PER SHARE:

Basic

Diluted

See notes to consolidated financial statements.

$2,699,609

$2,205,734

$1,905,531

334,061

291,245

262,151

3,033,670

2,496,979

2,167,682

1,262,209

1,090,315

334,061
217,201

516,440

171,791

291,245
165,283

363,563

141,114

936,233

262,151
148,469

314,032

147,696

2,501,702

2,051,520

1,808,581

531,968

(22,895)

7,340

516,413

201,401

445,459

(17,758)

8,589

436,290

170,153

359,101

(20,159)

8,086

347,028

138,811

$ 315,012

$ 266,137

$ 208,217

$1.63

$1.61

$1.39

$1.37

$1.11

$1.09

193,240

195,937

191,386

194,951

186,929

191,584

ASSETS

Cash and cash equivalents

Accounts receivable, less allowance for doubtful accounts

Securities processing receivables

Prepaid expenses and other assets

Investments

Property and equipment

Intangible assets
Goodwill

TOTAL

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable

Securities processing payables

Short-term borrowings

Accrued expenses

Accrued income taxes

Deferred revenues

Customer funds held and retirement account deposits

Deferred income taxes

Long-term debt

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY

Preferred stock, no par value:

25,000,000 shares authorized; none issued

Common stock, $0.01 par value:

450,000,000 shares authorized;

194,260,000 and 192,450,000 shares issued

Additional paid-in capital

Accumulated other comprehensive income

Accumulated earnings

Treasury stock, at cost, 804,775 shares at December 31, 2002

TOTAL SHAREHOLDERS’ EQUITY

TOTAL

See notes to consolidated financial statements.

$ 202,768

$ 227,239

417,521

1,940,414

120,168

1,904,161

206,076

557,822
1,865,245

339,737

1,740,512

119,882

2,115,778

223,070

342,614
1,329,873

$7,214,175

$6,438,705

$ 179,184

1,786,763

$ 122,266

1,666,863

139,000

303,765

23,313

208,996

100,000

280,614

23,711

181,173

1,582,698

1,707,458

91,532

699,116

46,127

482,824

5,014,367

4,611,036

—

1,943

637,623

17,345

1,542,897

—

1,924

599,700

23,882

1,227,885

(25,722)

2,199,808

1,827,669

$7,214,175

$6,438,705

18 »

Fiserv, Inc. and Subsidiaries

» 19

» consolidated statements of income

» consolidated balance sheets

In thousands, except per share data
Y E A R S E N D E D D E C E M B E R 3 1 ,

2003

2002

2001

Dollars in thousands
D E C E M B E R 3 1 ,

2003

2002

REVENUES:

Processing and services

Customer reimbursements

TOTAL REVENUES

COST OF REVENUES:

Salaries, commissions and payroll related costs

Customer reimbursement expenses
Data processing costs and equipment rentals

Other operating expenses

Depreciation and amortization

TOTAL COST OF REVENUES

OPERATING INCOME

Interest expense

Interest income

INCOME BEFORE INCOME TAXES

Income tax provision

NET INCOME

NET INCOME PER SHARE:

Basic

Diluted

SHARES USED IN COMPUTING

NET INCOME PER SHARE:

Basic

Diluted

See notes to consolidated financial statements.

$2,699,609

$2,205,734

$1,905,531

334,061

291,245

262,151

3,033,670

2,496,979

2,167,682

1,262,209

1,090,315

334,061
217,201

516,440

171,791

291,245
165,283

363,563

141,114

936,233

262,151
148,469

314,032

147,696

2,501,702

2,051,520

1,808,581

531,968

(22,895)

7,340

516,413

201,401

445,459

(17,758)

8,589

436,290

170,153

359,101

(20,159)

8,086

347,028

138,811

$ 315,012

$ 266,137

$ 208,217

$1.63

$1.61

$1.39

$1.37

$1.11

$1.09

193,240

195,937

191,386

194,951

186,929

191,584

ASSETS

Cash and cash equivalents

Accounts receivable, less allowance for doubtful accounts

Securities processing receivables

Prepaid expenses and other assets

Investments

Property and equipment

Intangible assets
Goodwill

TOTAL

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable

Securities processing payables

Short-term borrowings

Accrued expenses

Accrued income taxes

Deferred revenues

Customer funds held and retirement account deposits

Deferred income taxes

Long-term debt

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY

Preferred stock, no par value:

25,000,000 shares authorized; none issued

Common stock, $0.01 par value:

450,000,000 shares authorized;

194,260,000 and 192,450,000 shares issued

Additional paid-in capital

Accumulated other comprehensive income

Accumulated earnings

Treasury stock, at cost, 804,775 shares at December 31, 2002

TOTAL SHAREHOLDERS’ EQUITY

TOTAL

See notes to consolidated financial statements.

$ 202,768

$ 227,239

417,521

1,940,414

120,168

1,904,161

206,076

557,822
1,865,245

339,737

1,740,512

119,882

2,115,778

223,070

342,614
1,329,873

$7,214,175

$6,438,705

$ 179,184

1,786,763

$ 122,266

1,666,863

139,000

303,765

23,313

208,996

100,000

280,614

23,711

181,173

1,582,698

1,707,458

91,532

699,116

46,127

482,824

5,014,367

4,611,036

—

1,943

637,623

17,345

1,542,897

—

1,924

599,700

23,882

1,227,885

(25,722)

2,199,808

1,827,669

$7,214,175

$6,438,705

18 »

Fiserv, Inc. and Subsidiaries

» 19

» consolidated statements of shareholders’ equity

In thousands

Balance at December 31, 2000
Net income
Foreign currency translation
Change in unrealized gains on available-for-sale

investments—net of tax

Reclassification adjustment for realized

investment gains included in net income

Fair market value adjustment on
cash flow hedges—net of tax

Other

Comprehensive income
Shares issued under stock plans
including income tax benefits

Shares issued for acquired companies
Three-for-two stock split

Balance at December 31, 2001
Net income
Foreign currency translation
Change in unrealized gains on available-for-sale

investments—net of tax

Reclassification adjustment for realized

investment gains included in net income

Fair market value adjustment on
cash flow hedges—net of tax

Comprehensive income
Shares issued under stock plans
including income tax benefits

Purchase of treasury stock

Balance at December 31, 2002
Net income
Foreign currency translation
Change in unrealized gains on available-for-sale

investments—net of tax

Reclassification adjustment for realized

investment gains included in net income

Fair market value adjustment on
cash flow hedges—net of tax

Comprehensive income
Shares issued under stock plans
including income tax benefits

Shares issued for acquired companies

Common Stock

Amount

Additional
Paid-In
Capital

125,388

$1,254

$455,444

248
1,955
62,690

2
20
627

9,442
100,700
(627)

190,281

1,903

564,959

2,169

34,741

192,450

1,924

599,700

1,265
545

13
6

20,411
17,512

Accumulated
Earnings

$ 753,531
208,217

Treasury
Stock

$(37,026)

Comprehensive
Income

$208,217
(881)

Accumulated
Other
Comprehensive
Income

$ 78,869

(881)

9,710

(3,513)

(5,272)

$208,261

(5,272)
(2,697)

$266,137
1,166

76,216

1,166

961,748
266,137

(45,184)

(1,573)

(6,743)

$213,803

$315,012
1,078

23,882

1,078

1,227,885
315,012

(927)

(10,264)

3,576

$308,475

20,655
16,371

—

7,856
(33,578)

(25,722)

11,761
13,961

Balance at December 31, 2003

194,260

$1,943

$637,623

$ 17,345

$1,542,897

—

See notes to consolidated financial statements.

20 »

Fiserv, Inc. and Subsidiaries

» consolidated statements of cash flows

In thousands
Y E A R S E N D E D D E C E M B E R 3 1 ,

2003

2002

2001

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

Adjustments to reconcile net income to net cash

provided by operating activities:

Deferred income taxes

Depreciation and amortization

Changes in assets and liabilities, net of effects

from acquisitions of businesses:

Accounts receivable

Prepaid expenses and other assets

Accounts payable and accrued expenses

Deferred revenues

Accrued income taxes

Securities processing receivables and payables—net

$ 315,012

$ 266,137

$ 208,217

24,897

171,791

30,805

141,114

11,700

147,696

17,268

7,540

19,298

9,420

32,877

(80,002)

6,022

(7,899)

30,302

10,072

38,762

63,923

(1,656)

(10,694)

(7,669)

6,422

15,127

78,396

Net cash provided by operating activities

518,101

579,238

447,539

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures, including capitalization of software

costs for external customers

Payment for acquisitions of businesses, net of cash acquired

Investments

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (repayments of) short-term borrowings—net

Proceeds from long-term debt

Repayments of long-term debt

Issuance of common stock and treasury stock

Purchases of treasury stock

Customer funds held and retirement account deposits

Net cash provided by (used in) financing activities

Change in cash and cash equivalents

Beginning balance

Ending balance

See notes to consolidated financial statements.

(143,242)

(735,917)

187,968

(141,880)

(406,578)

(305,642)

(104,609)

(224,842)

(77,975)

(691,191)

(854,100)

(407,426)

39,000

248,268

(32,474)

18,585

—

(124,760)

148,619

(24,471)

227,239

(12,286)

156,481

(16,908)

11,420

(33,578)

260,884

366,013

91,151

136,088

93,075

1,800

(8,113)

15,053

—

(104,696)

(2,881)

37,232

98,856

$ 202,768

$ 227,239

$ 136,088

Fiserv, Inc. and Subsidiaries

» 21

» notes

t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
For the years ended December 31, 2003, 2002 and 2001

1 » Summary of Significant Accounting Policies

» Use of Estimates

» Description of the Business

Fiserv, Inc. and subsidiaries (the “Company”) is an inde-

pendent provider of data processing systems and related
information management services and products to financial
institutions and other financial intermediaries. The Company’s
operations are primarily in the United States and consist of
four business segments based on the services provided by
each: Financial institution outsourcing, systems and services;
Health plan management services; Securities processing and
trust services; and All other and corporate. The Financial insti-
tution outsourcing, systems and services segment provides
account and transaction processing products and services to
financial institutions and other financial intermediaries. The
Health plan management services segment provides services
to employers who self-fund their health plan, including serv-
ices such as handling payments to healthcare providers, assist-
ing with cost controls, plan design services, medical provider
administration, prescription benefit management and other
related services. The Securities processing and trust services
segment provides securities processing services and retirement
plan administration services to brokerage firms, financial plan-
ners and financial institutions. The All other and corporate
segment provides plastic card and document services and
includes general corporate expenses. The plastic card and doc-
ument services businesses provide plastic card issuance services,
card design, personalization and mailing, along with electronic
document delivery and print-related services.

» Principles of Consolidation

The consolidated financial statements include the accounts

of Fiserv, Inc. and all majority owned subsidiaries. All signifi-
cant intercompany transactions and balances have been
eliminated in consolidation.

» Reclassifications

Certain amounts reported in prior periods have been
reclassified to conform to the 2003 presentation. The reclassi-
fications did not impact the Company’s net income or net
income per share.

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

» Fair Values

The fair values of cash equivalents, accounts receivable,

accounts payable, securities processing receivables and
payables, customer funds held and retirement account
deposits, short-term borrowings and accrued expenses
approximate the carrying values due to the short period of
time to maturity. The fair value of investments is determined
based on quoted market prices. The fair value of long-term
debt is estimated using discounted cash flows based on the
Company’s current incremental borrowing rates and the fair
value of derivative instruments is determined based on dealer
quotes (see Note 3).

» Derivative Instruments

The Company uses interest rate swaps to hedge its exposure

to interest rate changes. The Company’s accounting method
for cash flow interest rate swaps is based upon the designation
of such instruments as cash flow hedges under accounting
principles generally accepted in the United States of America
and changes in the fair value are recognized in other compre-
hensive income until the hedged item is recognized in net
income (see Note 3). It is the policy of the Company to execute
such instruments with credit-worthy banks and not to enter
into derivative financial instruments for speculative purposes.

» Revenue Recognition

Revenues from the sale of data processing services, plastic
card services, document solutions, consulting and administra-
tion fees on trust accounts are recognized as the related serv-
ices are provided or when the product is shipped. Revenues

from the sale of securities processing services are recognized
as securities transactions are processed on a trade-date basis.
Revenues from securities processing and trust services include
net investment income of $86.9 million, $95.4 million and
$101.6 million, net of direct credits to customer accounts of
$13.5 million, $20.0 million and $45.2 million in 2003, 2002
and 2001, respectively. Revenues from software license fees
(representing approximately 5%, 6% and 8% of 2003, 2002
and 2001 processing and services revenues, respectively) are
recognized when written contracts are signed, delivery of the
product has occurred, the fee is fixed or determinable and
collection is probable. Maintenance fee revenues are recog-
nized ratably over the term of the related support period,
generally 12 months. Deferred revenues consist primarily of
advance billings for services and are recognized as revenues
when the services are provided.

Revenues from sales of prescription drugs to members of

our clients are recognized when the prescriptions are dis-
pensed. Our responsibilities under our client contract to adju-
dicate member claims properly, our separate contractual
pricing relationships and responsibilities to the pharmacies
in our networks, and our interaction with members, among
other factors, qualify us as the principal under the indicators
set forth in Emerging Issues Task Force No. 99-19 “Reporting
Gross Revenues as a Principal vs. Net as an Agent” in the
majority of our transactions with customers. Revenues from
our pharmacy network contracts where we are the principal
are recognized on a gross basis, at the prescription price
(ingredient cost plus dispensing fee) negotiated with our
clients, excluding the portion of the price to be settled directly
by the member (co-payment), plus our administrative fees.

» Cash and Cash Equivalents

Cash and cash equivalents consist of cash and investments

with original maturities of 90 days or less.

» n o t e s c o n t i n u e d »

» Allowance for Doubtful Accounts

The Company specifically analyzes accounts receivable
and historical bad debts, customer credit-worthiness, current
economic trends, and changes in our customer payment
terms and collection trends when evaluating the adequacy
of its allowance for doubtful accounts. Any change in the
assumptions used in analyzing a specific account receivable
may result in additional allowance for doubtful accounts
being recognized in the period in which the change occurs.
The allowance for doubtful accounts increased by $12.7 mil-
lion in 2003 from $13.2 million at December 31, 2002 to
$25.9 million at December 31, 2003 primarily due to the
acquisition of certain businesses.

» Securities Processing Receivables and Payables

The Company’s securities processing subsidiaries had
receivables from and payables to brokers or dealers and clear-
ing organizations related to the following at December 31:

In thousands

RECEIVABLES:
Securities failed to deliver
Securities borrowed
Receivables from customers
Other

TOTAL

PAYABLES:
Securities failed to receive
Securities loaned
Payables to customers
Other

TOTAL

2003

2002

65,660
934,816
899,574
40,364

90,965
904,045
683,854
61,648

$1,940,414

$1,740,512

39,919
1,004,208
615,441
127,195

79,259
824,369
624,099
139,136

$1,786,763

$1,666,863

Securities failed to deliver and failed to receive represent
the contract value of securities that have not been delivered
or received as of the settlement date. Securities borrowed
and loaned represent deposits made to or received from
other broker-dealers. Receivables from and payables to cus-
tomers represent amounts due or payable on cash and
margin transactions.

22 »

Fiserv, Inc. and Subsidiaries

» 23

» notes

t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
For the years ended December 31, 2003, 2002 and 2001

1 » Summary of Significant Accounting Policies

» Use of Estimates

» Description of the Business

Fiserv, Inc. and subsidiaries (the “Company”) is an inde-

» Principles of Consolidation

The consolidated financial statements include the accounts

of Fiserv, Inc. and all majority owned subsidiaries. All signifi-
cant intercompany transactions and balances have been
eliminated in consolidation.

» Reclassifications

Certain amounts reported in prior periods have been
reclassified to conform to the 2003 presentation. The reclassi-
fications did not impact the Company’s net income or net
income per share.

» Fair Values

The fair values of cash equivalents, accounts receivable,

» Derivative Instruments

The Company uses interest rate swaps to hedge its exposure

» Revenue Recognition

Revenues from sales of prescription drugs to members of

» Cash and Cash Equivalents

Cash and cash equivalents consist of cash and investments

with original maturities of 90 days or less.

» n o t e s c o n t i n u e d »

» Allowance for Doubtful Accounts

» Securities Processing Receivables and Payables

The Company’s securities processing subsidiaries had
receivables from and payables to brokers or dealers and clear-
ing organizations related to the following at December 31:

In thousands

RECEIVABLES:
Securities failed to deliver
Securities borrowed
Receivables from customers
Other

TOTAL

PAYABLES:
Securities failed to receive
Securities loaned
Payables to customers
Other

TOTAL

2003

2002

65,660
934,816
899,574
40,364

90,965
904,045
683,854
61,648

$1,940,414

$1,740,512

39,919
1,004,208
615,441
127,195

79,259
824,369
624,099
139,136

$1,786,763

$1,666,863

22 »

Fiserv, Inc. and Subsidiaries

» 23

» n o t e s c o n t i n u e d »

» Investments

The following summarizes the Company’s investments at December 31:

In thousands

Mortgage-backed obligations and
U.S. Government obligations

Corporate debt obligations
Private mortgage-backed securities
Other fixed income obligations

Total held-to-maturity investments
Available-for-sale investments
Money market mutual funds
Repurchase agreements
Other investments

TOTAL

In thousands

Mortgage-backed obligations and
U.S. Government obligations

Corporate debt obligations
Private mortgage-backed securities
Other fixed income obligations

Total held-to-maturity investments
Available-for-sale investments
Money market mutual funds
Other investments

TOTAL

2003

Amortized/
Historical
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

Carrying
Value

$1,633,133
30,527
9,468
3,847

1,676,975
8,503
98,002
55,030
20,466

$11,052
4,401
242
108

15,803
45,185
—
—
—

$(28,732)
—
—
—

(28,732)
—
—
—
—

$1,615,453
34,928
9,710
3,955

1,664,046
53,688
98,002
55,030
20,466

$1,633,133
30,527
9,468
3,847

1,676,975
53,688
98,002
55,030
20,466

$1,858,976

$60,988

$(28,732)

$1,891,232

$1,904,161

Amortized/
Historical
Cost

Gross
Unrealized
Gains

$1,493,668
45,121
174,579
4,420

1,717,788
34,547
283,636
18,631

$25,750
5,044
5,049
219

36,062
61,413
—
—

2002

Gross
Unrealized
Losses

$ (1,632)
(146)
(1)
—

(1,779)
(237)
(14)
—

Estimated
Fair Value

Carrying
Value

$1,517,786
50,019
179,627
4,639

1,752,071
95,723
283,622
18,631

$1,493,668
45,121
174,579
4,420

1,717,788
95,723
283,636
18,631

$2,054,602

$97,475

$ (2,030)

$2,150,047

$2,115,778

The Company’s trust administration subsidiaries accept
money market deposits from trust customers and invest the
funds in securities. Such amounts due trust depositors rep-
resent the primary source of funds for the Company’s invest-
ment securities and amounted to $1.5 billion and $1.7 billion

as of December 31, 2003 and 2002, respectively. The Company’s
mortgage-backed obligations and U.S. Government obligations
consist primarily of GNMA, FNMA and FHLMC mortgage-
backed pass-through securities and collateralized mortgage
obligations rated AAA by Standard & Poor’s. Mortgage-backed

obligations may contain prepayment risk and the Company
has never experienced a default on these types of securities.
Substantially all of the trust administration subsidiary’s invest-
ments are rated AAA or equivalent except for certain corpo-
rate debt obligations which are classified as investment grade.
Investments in mortgage-backed obligations and certain fixed
income obligations had an average duration of approximately
2 years and 4 months at December 31, 2003. These invest-
ments are accounted for as held-to-maturity and are carried
at amortized cost as the Company has the ability and intent
to hold these investments to maturity.

Available-for-sale investments are carried at market, based

upon quoted market prices. Unrealized gains or losses on
available-for-sale investments are accumulated in sharehold-
ers’ equity as accumulated other comprehensive income, net
of related deferred income taxes. Realized gains or losses are
computed based on specific identification of the investments
sold, based on the trade date.

» Property and Equipment

Property and equipment are stated at cost. Depreciation and

amortization are computed primarily using the straight-line
method over the estimated useful lives of the assets. Property
and equipment consist of the following at December 31:

In thousands

Data processing equipment
Buildings and leasehold

Estimated
Useful Lives

2003

2002

3 to 5 years

$319,383

$299,263

improvements

Furniture and equipment

5 to 40 years
3 to 10 years

122,169
146,290

123,553
127,860

Less accumulated depreciation

and amortization

TOTAL

587,842

550,676

381,766

327,606

$206,076

$223,070

» Intangible Assets

Intangible assets consist of the following at December 31:

2003
In thousands

Software development
costs for external
customers

Purchased software
Customer base
Trade names
Other

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

$ 450,346
188,484
339,824
56,911
4,846

$295,793
112,103
72,286
—
2,407

$154,553
76,381
267,538
56,911
2,439

TOTAL

$1,040,411

$482,589

$557,822

2002
In thousands

Software development
costs for external
customers

Purchased software
Customer base
Trade names
Other

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

$ 362,558
145,486
211,738
20,111
4,412

$245,981
90,333
63,954
—
1,423

$116,577
55,153
147,784
20,111
2,989

TOTAL

$ 744,305

$401,691

$342,614

Software development costs for external customers include
internally generated computer software for external customers
and software acquired in conjunction with acquisitions of busi-
nesses. The Company capitalizes certain costs incurred to
develop new software or enhance existing software which is
marketed externally or utilized by the Company to process cus-
tomer transactions in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 86, “Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed.” Costs are capitalized commencing when the
technological feasibility of the software has been established.
Routine maintenance of software products, design costs and
development costs incurred prior to establishment of a prod-
uct’s technological feasibility are expensed as incurred. Amor-
tization of all software is computed on a straight-line basis
over the expected useful life of the product, generally three
to five years.

24 »

Fiserv, Inc. and Subsidiaries

» 25

» n o t e s c o n t i n u e d »

» Investments

The following summarizes the Company’s investments at December 31:

In thousands

Mortgage-backed obligations and
U.S. Government obligations

Corporate debt obligations
Private mortgage-backed securities
Other fixed income obligations

Total held-to-maturity investments
Available-for-sale investments
Money market mutual funds
Repurchase agreements
Other investments

TOTAL

In thousands

Mortgage-backed obligations and
U.S. Government obligations

Corporate debt obligations
Private mortgage-backed securities
Other fixed income obligations

Total held-to-maturity investments
Available-for-sale investments
Money market mutual funds
Other investments

TOTAL

2003

Amortized/
Historical
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

Carrying
Value

$1,633,133
30,527
9,468
3,847

1,676,975
8,503
98,002
55,030
20,466

$11,052
4,401
242
108

15,803
45,185
—
—
—

$(28,732)
—
—
—

(28,732)
—
—
—
—

$1,615,453
34,928
9,710
3,955

1,664,046
53,688
98,002
55,030
20,466

$1,633,133
30,527
9,468
3,847

1,676,975
53,688
98,002
55,030
20,466

$1,858,976

$60,988

$(28,732)

$1,891,232

$1,904,161

Amortized/
Historical
Cost

Gross
Unrealized
Gains

$1,493,668
45,121
174,579
4,420

1,717,788
34,547
283,636
18,631

$25,750
5,044
5,049
219

36,062
61,413
—
—

2002

Gross
Unrealized
Losses

$ (1,632)
(146)
(1)
—

(1,779)
(237)
(14)
—

Estimated
Fair Value

Carrying
Value

$1,517,786
50,019
179,627
4,639

1,752,071
95,723
283,622
18,631

$1,493,668
45,121
174,579
4,420

1,717,788
95,723
283,636
18,631

$2,054,602

$97,475

$ (2,030)

$2,150,047

$2,115,778

Available-for-sale investments are carried at market, based

» Property and Equipment

Property and equipment are stated at cost. Depreciation and

amortization are computed primarily using the straight-line
method over the estimated useful lives of the assets. Property
and equipment consist of the following at December 31:

In thousands

Data processing equipment
Buildings and leasehold

Estimated
Useful Lives

2003

2002

3 to 5 years

$319,383

$299,263

improvements

Furniture and equipment

5 to 40 years
3 to 10 years

122,169
146,290

123,553
127,860

Less accumulated depreciation

and amortization

TOTAL

587,842

550,676

381,766

327,606

$206,076

$223,070

» Intangible Assets

Intangible assets consist of the following at December 31:

2003
In thousands

Software development
costs for external
customers

Purchased software
Customer base
Trade names
Other

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

$ 450,346
188,484
339,824
56,911
4,846

$295,793
112,103
72,286
—
2,407

$154,553
76,381
267,538
56,911
2,439

TOTAL

$1,040,411

$482,589

$557,822

2002
In thousands

Software development
costs for external
customers

Purchased software
Customer base
Trade names
Other

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

$ 362,558
145,486
211,738
20,111
4,412

$245,981
90,333
63,954
—
1,423

$116,577
55,153
147,784
20,111
2,989

TOTAL

$ 744,305

$401,691

$342,614

24 »

Fiserv, Inc. and Subsidiaries

» 25

» n o t e s c o n t i n u e d »

Gross software development costs for external customers

capitalized for new products and enhancements to existing
products totaled $52.4 million, $44.9 million and $36.6 mil-
lion in 2003, 2002 and 2001, respectively. Amortization of
previously capitalized development costs, included in deprecia-
tion and amortization, was $47.8 million, $38.3 million and
$35.5 million in 2003, 2002 and 2001, respectively, resulting
in net capitalized development costs of $4.6 million, $6.6 mil-
lion and $1.1 million in 2003, 2002 and 2001, respectively.

Customer base intangible assets represent customer con-

tracts and relationships obtained as part of acquired busi-
nesses and are amortized using the straight-line method over
their estimated useful lives, ranging from five to 20 years.

Trade names have been determined to have indefinite lives
and therefore are not amortized in accordance with the
provisions of SFAS No. 142 “Goodwill and Other Intangible
Assets.” Other intangible assets consist primarily of non-
compete agreements, which are generally amortized over
their estimated useful lives.

Amortization expense for intangible assets was $90.8 mil-

lion, $74.8 million and $58.0 million for the years ended
December 31, 2003, 2002 and 2001, respectively. Aggregate
amortization expense with respect to existing intangible
assets with finite lives resulting from acquisitions of busi-
nesses, excluding software amortization, should approximate
$21 million annually.

» Goodwill

On January 1, 2002, the Company adopted SFAS No. 142, which requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead be tested for impairment at least annually. Accordingly, effective January 1,
2002, the Company discontinued the amortization of goodwill and intangible assets with indefinite lives. The Company com-
pleted its annual impairment test for goodwill and intangible assets with indefinite lives and determined that no impairment
exists. Pro forma net income and net income per share for the year ended December 31, 2001, adjusted to eliminate historical
amortization of goodwill and related tax effects, is as follows:

In thousands, except per share data

Reported net income
Add: goodwill amortization, net of tax

Pro forma net income

Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

2001

$208,217
18,439

$226,656

$1.11
1.09

$1.21
1.18

The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired is recorded
as goodwill. The changes in the carrying amount of goodwill by business segment during the years ended December 31, 2003
and 2002 are as follows:

In thousands

Balance, December 31, 2001
Goodwill additions

Balance, December 31, 2002
Goodwill additions

Balance, December 31, 2003

Financial Institution
Outsourcing,
Systems and Services

Health Plan
Management
Services

Securities
Processing and
Trust Services

All Other
and
Corporate

$ 735,955
244,745

980,700
319,256

$148,462
22,628

171,090
216,116

$107,887
37,629

145,516
—

$29,830
2,737

32,567
—

Total

$1,022,134
307,739

1,329,873
535,372

$1,299,956

$387,206

$145,516

$32,567

$1,865,245

» Impairment of Long-Lived Assets

The Company periodically assesses the likelihood of
recovering the cost of long-lived assets based on current
and projected operating results and cash flows of the related
business operations using undiscounted cash flow analyses.
These factors, along with management’s plans with respect
to the operations, are considered in assessing the recover-
ability of property and equipment and intangible assets sub-
ject to amortization. Measurement of any impairment loss
is based on discounted operating cash flows.

The computation of the number of shares used in calculating
basic and diluted net income per common share is as follows:

In thousands

2003

2002

2001

Weighted-average common

shares outstanding used for
calculation of net income
per share—basic
Employee stock options

Total shares used for calculation of
net income per share—diluted

193,240
2,697

191,386
3,565

186,929
4,655

195,937

194,951

191,584

» Short-Term Borrowings

The Company’s securities and trust processing subsidiaries

» Stock-Based Compensation

had short-term borrowings of $139.0 million and $100.0
million as of December 31, 2003 and 2002, respectively, with
an average interest rate of 1.5% and 1.9% as of December
31, 2003 and 2002, respectively, and were collateralized by
investments and customers’ margin account securities valued
at $148.6 million and $102.0 million at December 31, 2003
and 2002, respectively. The Company’s securities and trust
processing subsidiaries had uncommitted lines of credit of
$271.0 million as of December 31, 2003.

» Income Taxes

Deferred income taxes are provided for temporary differ-

ences between the Company’s income for accounting and
tax purposes.

» Net Income Per Share

Basic net income per share is computed using the weighted-

average number of common shares outstanding during the
periods. Diluted net income per share is computed using the
weighted-average number of common and dilutive common
equivalent shares outstanding during the periods. Common
equivalent shares consist of stock options and are computed
using the treasury stock method. During the years ended
December 31, 2003, 2002 and 2001, the Company excluded
3.4 million, 1.3 million and 1.9 million weighted-average
shares under stock options from the calculation of common
equivalent shares as the impact was anti-dilutive.

The Company accounts for its stock-based compensation

plans in accordance with the intrinsic value provisions
of Accounting Principles Board Opinion (“APB”) No. 25,
“Accounting for Stock Issued to Employees.” Stock options
are generally granted at prices equal to the fair market value
of the Company’s common stock on the grant dates (see
Note 5). Accordingly, the Company did not record any
compensation expense in the accompanying consolidated
financial statements for its stock-based compensation plans.
Had compensation expense been recognized consistent with
the fair value provisions of SFAS No.123, “Accounting for
Stock-Based Compensation,” the Company’s net income
and net income per share—basic and diluted would have
been changed to the pro forma amounts indicated below
for the years ended December 31:

In thousands, except per share data

Net income:

As reported
Less: stock compensation
expense—net of tax

2003

2002

2001

$315,012

$266,137

$208,217

(17,000)

(18,200)

(13,400)

Pro forma

$298,012

$247,937

$194,817

Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

$1.63
1.61

$1.54
1.52

$1.39
1.37

$1.30
1.27

$1.11
1.09

$1.04
1.02

26 »

Fiserv, Inc. and Subsidiaries

» 27

» n o t e s c o n t i n u e d »

Gross software development costs for external customers

Customer base intangible assets represent customer con-

tracts and relationships obtained as part of acquired busi-
nesses and are amortized using the straight-line method over
their estimated useful lives, ranging from five to 20 years.

Amortization expense for intangible assets was $90.8 mil-

» Goodwill

In thousands, except per share data

Reported net income
Add: goodwill amortization, net of tax

Pro forma net income

Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

2001

$208,217
18,439

$226,656

$1.11
1.09

$1.21
1.18

In thousands

Balance, December 31, 2001
Goodwill additions

Balance, December 31, 2002
Goodwill additions

Balance, December 31, 2003

Financial Institution
Outsourcing,
Systems and Services

Health Plan
Management
Services

Securities
Processing and
Trust Services

All Other
and
Corporate

$ 735,955
244,745

980,700
319,256

$148,462
22,628

171,090
216,116

$107,887
37,629

145,516
—

$29,830
2,737

32,567
—

Total

$1,022,134
307,739

1,329,873
535,372

$1,299,956

$387,206

$145,516

$32,567

$1,865,245

» Impairment of Long-Lived Assets

The computation of the number of shares used in calculating
basic and diluted net income per common share is as follows:

In thousands

2003

2002

2001

Weighted-average common

shares outstanding used for
calculation of net income
per share—basic
Employee stock options

Total shares used for calculation of
net income per share—diluted

193,240
2,697

191,386
3,565

186,929
4,655

195,937

194,951

191,584

» Short-Term Borrowings

The Company’s securities and trust processing subsidiaries

» Stock-Based Compensation

» Income Taxes

Deferred income taxes are provided for temporary differ-

ences between the Company’s income for accounting and
tax purposes.

» Net Income Per Share

Basic net income per share is computed using the weighted-

The Company accounts for its stock-based compensation

In thousands, except per share data

Net income:

As reported
Less: stock compensation
expense—net of tax

2003

2002

2001

$315,012

$266,137

$208,217

(17,000)

(18,200)

(13,400)

Pro forma

$298,012

$247,937

$194,817

Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

$1.63
1.61

$1.54
1.52

$1.39
1.37

$1.30
1.27

$1.11
1.09

$1.04
1.02

26 »

Fiserv, Inc. and Subsidiaries

» 27

» n o t e s c o n t i n u e d »

The fair value of each stock option granted in 2003, 2002
and 2001 was estimated on the date of grant using the Black-
Scholes option-pricing model with the following weighted-
average assumptions:

2003

2002

2001

Expected life (in years)
Risk-free interest rate
Volatility
Dividend yield

5.0
3.0%

5.0
5.0
4.6%
4.4%
52.3% 50.0% 49.8%
0.0%
0.0%

0.0%

The weighted-average estimated fair value of stock options
granted during the years ended December 31, 2003, 2002 and
2001 was $15.14, $20.24 and $18.02 per share, respectively.

» Shareholder Rights Plan

The Company has a shareholder rights plan. Under this
plan, each shareholder holds one preferred stock purchase
right for each outstanding share of the Company’s common
stock held. The stock purchase rights are not exercisable
until certain events occur.

2 » Acquisitions

» Accumulated Other Comprehensive Income

Accumulated other comprehensive income consists of the

following at December 31:

In thousands

Unrealized gains on investments,

net of tax

Unrealized losses on cash
flow hedges, net of tax

Foreign currency translation adjustments

TOTAL

2003

2002

$ 28,832

$ 40,023

(11,136)
(351)

(14,712)
(1,429)

$ 17,345

$ 23,882

» Supplemental Cash Flow Information

In thousands

Interest paid
Income taxes paid
Liabilities assumed in

2003

2002

2001

$ 22,164
144,130

$17,724
97,808

$ 19,469
117,443

acquisitions of businesses

85,072

29,033

68,833

During 2003, 2002 and 2001 the Company completed the following acquisitions of businesses. The results of operations
of all of these acquired businesses have been included in the accompanying consolidated statements of income from the dates
of acquisition.

Company

2003:
AVIDYN, Inc.
Precision Computer Systems, Inc.
ReliaQuote, Inc.
WBI Holdings Corporation
Electronic Data Systems Corporation’s Credit Union

Industry Group business

Chase Credit Systems Inc. & Chase Credit Research Inc.
Unisure, Inc.
Insurance Management Solutions Group, Inc.
GAC Holdings Corporation
Federal Home Loan Bank of Indianapolis IP services
MI-Assistant Software, Inc.
MedPay Corporation

Month
Acquired

Jan.
Mar.
Apr.
May

July
July
Sept.
Sept.
Sept.
Oct.
Nov.
Dec.

Service

Consideration

Health plan management
Software and services
Insurance services
Health plan management

Credit union data processing
Lending services
Insurance data processing
Insurance data processing
Lending services
Item processing
Insurance software systems
Health plan management

Stock for stock
Cash for stock
Cash for stock
Cash for stock

Cash for assets
Cash for stock
Cash for assets
Cash for stock
Cash for stock
Cash for assets
Cash for assets
Cash for stock

Company

2002:
Case, Shiller, Weiss, Inc.
Investec Ernst & Company’s clearing operations
Willis Group’s TPA operations
Electronic Data Systems Corporation’s Consumer

Network Services business

Lenders Financial Services

2001:
Benefit Planners

Marshall & Ilsley IP services
Facilities and Services Corp.
Remarketing Services of America, Inc.
EPSIIA Corporation
Catapult Technology Limited
Federal Home Loan Bank of Pittsburgh IP services
NCR bank processing operations
NCSI
Integrated Loan Services
Trewit Inc.

FACT 400 credit card solution

Month
Acquired

Service

Consideration

May
Aug.
Nov.

Dec.
Dec.

Jan.

Feb.
Mar.
Mar.
July
July
Sept.
Nov.
Nov.
Nov.
Nov.

Nov.

Lending services
Securities clearing services
Health plan management

EFT data processing
Lending services

Health plan management

Item processing
Insurance software systems
Automobile leasing services
Data processing
Software and services
Item processing
Data and item processing
Insurance data processing
Lending services
Health plan management

Software and services

Cash for stock
Cash for assets
Cash for assets

Cash for assets
Cash for stock

Cash and stock
for stock
Cash for assets
Cash for stock
Cash for stock
Cash for stock
Cash for stock
Cash for assets
Cash for assets
Cash for stock
Cash for assets
Cash and stock
for stock
Cash for assets

During 2003, the Company completed 12 acquisitions
accounted for as purchases. Net cash paid for these acquisi-
tions was $702.8 million, subject to certain adjustments. In
addition to cash consideration, the Company issued, in
conjunction with one of the acquisitions, approximately
310,000 shares of its common stock, valued at $10.9 million.
Goodwill recorded in conjunction with these acquisitions was
$476.1 million. The following unaudited pro forma combined
information, assuming the 2003 acquisitions and the 2002
acquisition of Electronic Data Systems (“EDS”) Corporation’s
Consumer Network Services business were all completed on
January 1, 2002, is provided for illustrative purposes only and
should not be relied upon as necessarily being indicative of
the historical results that would have been obtained if these
acquisitions had actually occurred during those periods, or
the results that may be obtained in the future.

In thousands, except per share data

Processing and services revenues
Net income
Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

2003

2002

$3,137,280
337,993

$2,873,066
294,784

$1.63
1.61

$1.75
1.73

$1.39
1.37

$1.54
1.51

During 2002, the Company completed five acquisitions
accounted for as purchases. Net cash paid for these acquisi-
tions was $366.9 million, subject to certain adjustments. Good-
will recorded in conjunction with all of these acquisitions was
$290.6 million.

28 »

Fiserv, Inc. and Subsidiaries

» 29

» n o t e s c o n t i n u e d »

The fair value of each stock option granted in 2003, 2002
and 2001 was estimated on the date of grant using the Black-
Scholes option-pricing model with the following weighted-
average assumptions:

2003

2002

2001

Expected life (in years)
Risk-free interest rate
Volatility
Dividend yield

5.0
3.0%

5.0
5.0
4.6%
4.4%
52.3% 50.0% 49.8%
0.0%
0.0%

0.0%

The weighted-average estimated fair value of stock options
granted during the years ended December 31, 2003, 2002 and
2001 was $15.14, $20.24 and $18.02 per share, respectively.

» Shareholder Rights Plan

2 » Acquisitions

» Accumulated Other Comprehensive Income

Accumulated other comprehensive income consists of the

following at December 31:

In thousands

Unrealized gains on investments,

net of tax

Unrealized losses on cash
flow hedges, net of tax

Foreign currency translation adjustments

TOTAL

2003

2002

$ 28,832

$ 40,023

(11,136)
(351)

(14,712)
(1,429)

$ 17,345

$ 23,882

» Supplemental Cash Flow Information

In thousands

Interest paid
Income taxes paid
Liabilities assumed in

2003

2002

2001

$ 22,164
144,130

$17,724
97,808

$ 19,469
117,443

acquisitions of businesses

85,072

29,033

68,833

Company

2003:
AVIDYN, Inc.
Precision Computer Systems, Inc.
ReliaQuote, Inc.
WBI Holdings Corporation
Electronic Data Systems Corporation’s Credit Union

Industry Group business

Month
Acquired

Jan.
Mar.
Apr.
May

July
July
Sept.
Sept.
Sept.
Oct.
Nov.
Dec.

Service

Consideration

Health plan management
Software and services
Insurance services
Health plan management

Credit union data processing
Lending services
Insurance data processing
Insurance data processing
Lending services
Item processing
Insurance software systems
Health plan management

Stock for stock
Cash for stock
Cash for stock
Cash for stock

Cash for assets
Cash for stock
Cash for assets
Cash for stock
Cash for stock
Cash for assets
Cash for assets
Cash for stock

Company

2002:
Case, Shiller, Weiss, Inc.
Investec Ernst & Company’s clearing operations
Willis Group’s TPA operations
Electronic Data Systems Corporation’s Consumer

Network Services business

Lenders Financial Services

2001:
Benefit Planners

FACT 400 credit card solution

Month
Acquired

Service

Consideration

May
Aug.
Nov.

Dec.
Dec.

Jan.

Feb.
Mar.
Mar.
July
July
Sept.
Nov.
Nov.
Nov.
Nov.

Nov.

Lending services
Securities clearing services
Health plan management

EFT data processing
Lending services

Health plan management

Software and services

Cash for stock
Cash for assets
Cash for assets

Cash for assets
Cash for stock

In thousands, except per share data

Processing and services revenues
Net income
Reported net income per share:

Basic
Diluted

Pro forma net income per share:

Basic
Diluted

2003

2002

$3,137,280
337,993

$2,873,066
294,784

$1.63
1.61

$1.75
1.73

$1.39
1.37

$1.54
1.51

28 »

Fiserv, Inc. and Subsidiaries

» 29

» n o t e s c o n t i n u e d »

During 2001, the Company completed 12 acquisitions
accounted for as purchases. Net cash paid for these acquisitions
was $224.8 million, subject to certain adjustments. In addition
to cash consideration, the Company issued, in conjunction
with two of the acquisitions, approximately 3.1 million shares
of its common stock, valued at approximately $117.0 million.
Goodwill recorded in conjunction with the 2001 acquisitions
was $285.7 million.

The Company may be required to pay additional cash
consideration for acquisitions up to maximum payments
of $230.1 million through 2007, if certain of the acquired
entities achieve specific escalating operating income targets.
During 2003, as a result of previously acquired entities
achieving their operating income targets, the Company paid
additional cash consideration of $33.1 million and issued
approximately 678,000 shares of its common stock valued
at $20.6 million. The additional consideration was treated
as additional purchase price.

3 » Long-Term Debt

The Company has available a $510.0 million unsecured line
of credit and commercial paper facility with a group of banks, of
which $395.6 million was in use at December 31, 2003, with a
weighted-average variable interest rate of 1.8% and 2.0% at
December 31, 2003 and 2002, respectively. The credit facilities,
which expire in May 2004, consist of a $250.0 million five-year
revolving credit facility and a $260.0 million 364-day revolving
credit facility. The Company expects to renew its debt facility
agreements prior to expiration in the second quarter of 2004.
There were no significant commitment fees or compensating
balance requirements under these facilities. The Company must,
among other requirements, maintain a minimum net worth of
$976.1 million as of December 31, 2003, maintain a fixed charge
coverage ratio of 1.35 to one, and limit its total debt to no more
than three and one-half times the Company’s earnings before
interest, taxes, depreciation and amortization. The Company
was in compliance with all debt covenants throughout 2003. As
of December 31, 2003, the Company has available $10.0 million
in additional unsecured lines of credit, of which none was in use.

As of December 31, 2003, the Company had cash flow
interest rate swap agreements to fix the interest rates on cer-
tain floating-rate debt at an average rate approximating 6.8%
(based on current bank fees and spreads) for a principal
amount of $200.0 million until 2005. During the second quar-
ter of 2003, the Company entered into additional cash flow
interest rate swap agreements to fix the interest rates on cer-
tain floating-rate debt at an average rate approximating 5.0%
(based on current bank fees and spreads) for a principal
amount of $150.0 million from 2005 to 2008. The estimated
fair value of the cash flow interest rate swap agreements of
$18.5 million and $24.1 million as of December 31, 2003
and 2002, respectively, is included on the accompanying
consolidated balance sheets in accrued expenses.

During the second quarter of 2003, the Company had two
note offerings totaling $250.0 million of five-year notes due
in 2008. The first note offering was for $150.0 million at a
4.0% fixed interest rate. The Company entered into fixed to
floating interest rate swap agreements on the $150.0 million
notes until April 2008 with a weighted-average variable inter-
est rate of 2.0% at December 31, 2003. The second offering
of five-year notes was for $100.0 million at a 3.0% fixed
interest rate.

The carrying value and estimated fair values of the
Company’s long-term debt are as follows at December 31:

2003

2002

Carrying
Value

Estimated
Fair Value

Carrying
Value

Estimated
Fair Value

$395,600

$393,347

In thousands

Bank notes and

commercial paper,
at short-term rates

3.0% senior notes

payable, due 2008

99,900

96,921

4.0% senior notes

payable, due 2008

149,897

151,540

—

8.0% senior notes
payable, due
2004–2005

Other

25,714
28,005

27,230
28,005

38,571
50,906

42,068
50,906

Total long-term debt

$699,116

$699,296

$482,824

$486,321

Annual principal payments required under the terms of the
long-term debt agreements are as follows at December 31, 2003:

Significant components of the Company’s deferred tax
assets and liabilities consist of the following at December 31:

In thousands

Years ending December 31,
2004
2005
2006
2007
2008

TOTAL

4 » Income Taxes

A reconciliation of recorded income tax expense with
income tax computed at the statutory federal tax rates is as
follows for the three years ended December 31:

In thousands

Statutory federal tax rate
Tax computed at
statutory rate
State income taxes,

2003

2002

2001

35%

$180,745

$152,702

$121,460

net of federal effect

18,514

15,712

12,033

Non-deductible

amortization expense

Other—net

TOTAL

—
2,142

—
1,739

4,219
1,099

$434,290
14,317
491
473
249,545

$699,116

In thousands

2003

2002

Purchased incomplete software technology
Accrued expenses not currently deductible
Deferred revenues
Unrealized losses on cash flow hedges
Net operating loss carryforwards
Other

$ 26,672
39,375
14,203
7,003
4,487
14,323

$ 32,980
28,721
12,218
9,405
6,034
5,202

Total deferred tax assets

106,063

94,560

Software development costs for

external customers

Excess of tax over book depreciation
Excess of tax over book amortization
Unrealized gains on investments
Other

(43,281)
(21,651)
(92,921)
(16,341)
(23,401)

(36,095)
(11,127)
(49,538)
(25,573)
(18,354)

Total deferred tax liabilities

(197,595)

(140,687)

TOTAL

$ (91,532)

$ (46,127)

Tax benefits associated with the exercise of non-qualified

employee stock options were credited directly to additional
paid-in capital and amounted to $13.2 million, $31.2 million
and $15.0 million in 2003, 2002 and 2001, respectively.

$201,401

$170,153

$138,811

At December 31, 2003, the Company has state net oper-

The provision for income taxes consisted of the following

at December 31:

ating loss carryforwards of $71.8 million, with expiration
dates ranging from 2004 through 2023.

In thousands

Current:

Federal
State
Foreign

Deferred:
Federal
State
Foreign

2003

2002

2001

$144,413
27,651
4,440

$116,021
21,564
1,763

$105,081
18,118
3,912

176,504

139,348

127,111

25,983
1,747
(2,833)

29,386
2,226
(807)

11,067
948
(315)

24,897

30,805

11,700

TOTAL

$201,401

$170,153

$138,811

30 »

Fiserv, Inc. and Subsidiaries

» 31

» n o t e s c o n t i n u e d »

3 » Long-Term Debt

The carrying value and estimated fair values of the
Company’s long-term debt are as follows at December 31:

2003

2002

Carrying
Value

Estimated
Fair Value

Carrying
Value

Estimated
Fair Value

$395,600

$393,347

In thousands

Bank notes and

commercial paper,
at short-term rates

3.0% senior notes

payable, due 2008

99,900

96,921

4.0% senior notes

payable, due 2008

149,897

151,540

—

8.0% senior notes
payable, due
2004–2005

Other

25,714
28,005

27,230
28,005

38,571
50,906

42,068
50,906

Total long-term debt

$699,116

$699,296

$482,824

$486,321

Annual principal payments required under the terms of the
long-term debt agreements are as follows at December 31, 2003:

Significant components of the Company’s deferred tax
assets and liabilities consist of the following at December 31:

In thousands

Years ending December 31,
2004
2005
2006
2007
2008

TOTAL

4 » Income Taxes

A reconciliation of recorded income tax expense with
income tax computed at the statutory federal tax rates is as
follows for the three years ended December 31:

In thousands

Statutory federal tax rate
Tax computed at
statutory rate
State income taxes,

2003

2002

2001

35%

$180,745

$152,702

$121,460

net of federal effect

18,514

15,712

12,033

Non-deductible

amortization expense

Other—net

TOTAL

—
2,142

—
1,739

4,219
1,099

$434,290
14,317
491
473
249,545

$699,116

In thousands

2003

2002

Purchased incomplete software technology
Accrued expenses not currently deductible
Deferred revenues
Unrealized losses on cash flow hedges
Net operating loss carryforwards
Other

$ 26,672
39,375
14,203
7,003
4,487
14,323

$ 32,980
28,721
12,218
9,405
6,034
5,202

Total deferred tax assets

106,063

94,560

Software development costs for

external customers

Excess of tax over book depreciation
Excess of tax over book amortization
Unrealized gains on investments
Other

(43,281)
(21,651)
(92,921)
(16,341)
(23,401)

(36,095)
(11,127)
(49,538)
(25,573)
(18,354)

Total deferred tax liabilities

(197,595)

(140,687)

TOTAL

$ (91,532)

$ (46,127)

Tax benefits associated with the exercise of non-qualified

employee stock options were credited directly to additional
paid-in capital and amounted to $13.2 million, $31.2 million
and $15.0 million in 2003, 2002 and 2001, respectively.

$201,401

$170,153

$138,811

At December 31, 2003, the Company has state net oper-

The provision for income taxes consisted of the following

at December 31:

ating loss carryforwards of $71.8 million, with expiration
dates ranging from 2004 through 2023.

In thousands

Current:

Federal
State
Foreign

Deferred:
Federal
State
Foreign

2003

2002

2001

$144,413
27,651
4,440

$116,021
21,564
1,763

$105,081
18,118
3,912

176,504

139,348

127,111

25,983
1,747
(2,833)

29,386
2,226
(807)

11,067
948
(315)

24,897

30,805

11,700

TOTAL

$201,401

$170,153

$138,811

30 »

Fiserv, Inc. and Subsidiaries

» 31

» n o t e s c o n t i n u e d »

5 » Employee Benefit Plans

» Stock Option Plan

The Company’s Stock Option Plan (the “Plan”) provides for
the granting to its employees and directors of either incentive
or non-qualified options to purchase shares of the Company’s
common stock for a price not less than 100% of the fair
value of the shares at the date of grant. Stock options are
typically granted in the first quarter of the year, generally vest
20% on the date of grant and 20% each year thereafter and
expire 10 years from the date of the award.

Changes in stock options outstanding are as follows:

Outstanding, December 31, 2000
Granted
Forfeited
Exercised

Outstanding, December 31, 2001
Granted
Forfeited
Exercised

Outstanding, December 31, 2002
Granted
Forfeited
Exercised

Number
of Shares
In thousands

Weighted-
Average
Exercise Price

12,458
2,277
(387)
(1,345)

13,003
1,519
(116)
(2,796)

11,610
1,719
(326)
(1,414)

$12.76
36.99
18.18
8.68

17.18
41.21
24.49
10.70

21.77
30.96
36.90
9.37

Outstanding, December 31, 2003

11,589

$24.21

The number of shares under option that were exercisable at December 31, 2003, 2002 and 2001 were 8.2 million, 8.1 mil-
lion, and 9.0 million, at weighted-average exercise prices of $20.19, $16.69 and $12.80, respectively. The following summarizes
information about the Company’s stock options outstanding and exercisable at December 31, 2003:

Options Outstanding

Options Outstanding
and Exercisable

Range of
Exercise Prices

$ 3.01 – $ 9.04
9.33 – 16.00
17.00 – 21.33
21.67 – 36.97
37.04 – 45.99

Number
of Shares
In thousands

1,482
2,473
2,510
1,891
3,233

$ 3.01 – $45.99

11,589

Weighted-
Average
Exercise Price

$ 7.30
13.86
20.54
30.61
38.97

$24.21

Weighted-Average
Remaining
Contractual Life
In years

1.6
3.7
5.5
8.8
7.5

5.7

Number
of Shares
In thousands

1,482
2,441
2,200
418
1,640

8,181

Weighted-
Average
Exercise Price

$ 7.30
13.86
20.51
29.36
38.51

$20.19

At December 31, 2003, options to purchase 7.1 million shares were available for grant under the Plan.

» Employee Stock Purchase Plan

7 » Leases, Other Commitments and Contingencies

The Company’s employee stock purchase plan provides
that eligible employees may purchase a limited number of
shares of common stock each quarter through payroll deduc-
tions, at a purchase price equal to 85% of the closing price
of the Company’s common stock on the last business day of
each calendar quarter. During the year ended December 31,
2003, 0.6 million shares were issued under the employee
stock purchase plan. As of January 1, 2004, there were 1.0 mil-
lion shares available for grant under this plan.

» Employee Savings Plan

The Company and its subsidiaries have defined contribu-
tion savings plans covering substantially all employees, under
which eligible participants may elect to contribute a specified
percentage of their salaries, subject to certain limitations. The
Company makes matching contributions, subject to certain
limitations, and makes discretionary contributions based upon
the attainment of certain profit goals. Company contributions
vest ratably at 20% for each year of service. Company contri-
butions charged to operations under these plans approximated
$44.3 million, $41.5 million and $35.3 million in 2003, 2002
and 2001, respectively.

6 » Restructuring and Other Charges

During 2001, the Company recorded $12.3 million of
pre-tax charges consisting of severance and related termina-
tion benefits, future lease and other contractual obligations,
and the disposal and write-down of assets. These charges
related to management’s plan to improve overall business
efficiencies by consolidating the Company’s securities pro-
cessing operations and eliminating duplicate operational
functions. At December 31, 2003 and 2002, approximately
$1.9 million and $3.4 million, respectively, of future lease
and other obligations were yet to be incurred.

» Leases

The Company leases certain office facilities and equipment

under operating leases. Future minimum rental payments on
operating leases with initial noncancellable lease terms in excess
of one year were due as follows as of December 31, 2003:

In thousands

Years ending December 31,
2004
2005
2006
2007
2008
Thereafter

TOTAL

$ 98,359
83,360
64,595
49,234
39,786
96,203

$431,537

Rent expense applicable to all operating leases was
approximately $118.1 million, $99.7 million and $87.1 mil-
lion during the years ended December 31, 2003, 2002 and
2001, respectively.

» Other Commitments and Contingencies

The Company’s trust administration subsidiaries had fiduci-

ary responsibility for the administration of approximately
$29.8 billion in trust funds as of December 31, 2003. The
Company’s securities processing subsidiaries are subject to
the Uniform Net Capital Rule of the Securities and Exchange
Commission. At December 31, 2003, the aggregate net capi-
tal of such subsidiaries was $125.1 million, exceeding the net
capital requirement by $103.3 million.

In the normal course of business, the Company and its
subsidiaries are named as defendants in various lawsuits in
which claims are asserted against the Company. In the opin-
ion of management, the liabilities, if any, which may ulti-
mately result from such lawsuits are not expected to have a
material adverse effect on the consolidated financial state-
ments of the Company.

32 »

Fiserv, Inc. and Subsidiaries

» 33

» n o t e s c o n t i n u e d »

5 » Employee Benefit Plans

» Stock Option Plan

Changes in stock options outstanding are as follows:

Outstanding, December 31, 2000
Granted
Forfeited
Exercised

Outstanding, December 31, 2001
Granted
Forfeited
Exercised

Outstanding, December 31, 2002
Granted
Forfeited
Exercised

Number
of Shares
In thousands

Weighted-
Average
Exercise Price

12,458
2,277
(387)
(1,345)

13,003
1,519
(116)
(2,796)

11,610
1,719
(326)
(1,414)

$12.76
36.99
18.18
8.68

17.18
41.21
24.49
10.70

21.77
30.96
36.90
9.37

Outstanding, December 31, 2003

11,589

$24.21

Options Outstanding

Options Outstanding
and Exercisable

Range of
Exercise Prices

$ 3.01 – $ 9.04
9.33 – 16.00
17.00 – 21.33
21.67 – 36.97
37.04 – 45.99

Number
of Shares
In thousands

1,482
2,473
2,510
1,891
3,233

$ 3.01 – $45.99

11,589

Weighted-
Average
Exercise Price

$ 7.30
13.86
20.54
30.61
38.97

$24.21

Weighted-Average
Remaining
Contractual Life
In years

1.6
3.7
5.5
8.8
7.5

5.7

Number
of Shares
In thousands

1,482
2,441
2,200
418
1,640

8,181

Weighted-
Average
Exercise Price

$ 7.30
13.86
20.51
29.36
38.51

$20.19

At December 31, 2003, options to purchase 7.1 million shares were available for grant under the Plan.

» Employee Stock Purchase Plan

7 » Leases, Other Commitments and Contingencies

» Employee Savings Plan

6 » Restructuring and Other Charges

» Leases

The Company leases certain office facilities and equipment

under operating leases. Future minimum rental payments on
operating leases with initial noncancellable lease terms in excess
of one year were due as follows as of December 31, 2003:

In thousands

Years ending December 31,
2004
2005
2006
2007
2008
Thereafter

TOTAL

$ 98,359
83,360
64,595
49,234
39,786
96,203

$431,537

Rent expense applicable to all operating leases was
approximately $118.1 million, $99.7 million and $87.1 mil-
lion during the years ended December 31, 2003, 2002 and
2001, respectively.

» Other Commitments and Contingencies

The Company’s trust administration subsidiaries had fiduci-

32 »

Fiserv, Inc. and Subsidiaries

» 33

» n o t e s c o n t i n u e d »

8 » Business Segment Information

Due to the recent growth of the health plan management services of the Company, the Company changed its reportable
business segments in 2003 to add the Health Plan Management Services segment. All amounts previously presented have been
reclassified to conform with the current presentation. The following table excludes the revenues and expenses associated with
customer reimbursements because management believes that it is not appropriate to include the customer reimbursements
in analyzing the current performance of the Company as these balances offset in revenues and expenses with no impact on
operating income and these amounts are not an indicator of current or future business trends. Summarized financial informa-
tion by business segment is as follows for each of the three years ended December 31:

In thousands

2003
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

2002
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

2001
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

Financial Institution
Outsourcing,
Systems and Services

Health Plan
Management
Services

Securities
Processing and
Trust Services

All Other
and
Corporate

Total

$1,974,406
458,883
2,370,324

$399,066
49,674
598,163

$ 224,405
27,778
4,118,418

$101,732
(4,367)
127,270

$2,699,609
531,968
7,214,175

123,695
131,569

10,141
11,852

8,212
21,793

1,194
6,577

143,242
171,791

$1,665,976
384,760
1,864,252

$216,145
34,064
257,339

$ 230,621
31,259
4,136,980

$ 92,992
(4,624)
180,134

$2,205,734
445,459
6,438,705

118,057
106,287

7,580
7,371

12,306
22,127

3,937
5,329

141,880
141,114

$1,498,703
311,369
1,456,136

$ 55,610
10,704
209,739

$ 264,841
40,197
3,560,483

$ 86,377
(3,169)
95,884

$1,905,531
359,101
5,322,242

87,461
113,026

3,573
2,803

10,092
25,004

3,483
6,863

104,609
147,696

The Company’s domestic operations comprised approximately 96%, 95% and 92% of processing and services revenues
for the years ended December 31, 2003, 2002 and 2001, respectively. No single customer accounted for more than 3% of
consolidated processing and services revenues during the years ended December 31, 2003, 2002 and 2001.

» management’s discussion

a n d a n a l y s i s o f f i n a n c i a l c o n d i t i o n a n d r e s u l t s o f o p e r a t i o n s

» Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995

Certain matters discussed herein are “forward-looking
statements” intended to qualify for the safe harbor from lia-
bility established by the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can generally
be identified as such because the context of the statement
will include words such as “believes,” “anticipates” or
“expects,” or words of similar import. Similarly, statements
that describe future plans, objectives or goals of the Company
are also forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from
those currently anticipated. Factors that could affect results
include, among others, economic, competitive, governmental,
regulatory and technological factors affecting the Company’s
operations, markets, services and related products, prices and
other factors discussed in the Company’s prior filings with the
Securities and Exchange Commission. Shareholders, potential
investors and other readers are urged to consider these fac-
tors carefully in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such
forward-looking statements. The Company assumes no obli-
gation to update any forward-looking statements, whether
as a result of new information, future events or otherwise.

» Critical Accounting Policies

The Company’s consolidated financial statements and
accompanying notes have been prepared in accordance with
accounting principles generally accepted in the United States
of America. The preparation of these financial statements
requires the Company’s management to make estimates,
judgments and assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses. The Company
continually evaluates the accounting policies and estimates
it uses to prepare the consolidated financial statements. The

Company bases its estimates on historical experience and
assumptions believed to be reasonable under current facts
and circumstances. Actual amounts and results could differ
from these estimates made by management.

The majority of the Company’s revenues are generated
from monthly account and transaction-based fees in which
revenue is recognized when the related services have been
rendered. The revenues are recognized under service agree-
ments having stipulated terms and conditions which are long
term in nature, generally three to five years, and do not
require management to make significant judgments or assump-
tions. Given the nature of the Company’s business and the
applicable rules guiding revenue recognition, the Company’s
revenue recognition practices do not contain significant esti-
mates that materially affect its results of operations.

The Company has reviewed the carrying value of good-
will and other intangible assets by comparing such amounts
to their fair values and has determined that the carrying
amounts of goodwill and other intangible assets do not
exceed their respective fair values. The Company is required
to perform this comparison at least annually or more fre-
quently if circumstances indicate possible impairment. When
determining fair value, the Company uses various assump-
tions, including projections of future cash flows. Given the
significance of goodwill and other intangible asset balances,
an adverse change to the fair value could result in an impair-
ment charge, which could be material to the Company’s
financial statements.

The Company does not participate in, nor has it created,
any off-balance sheet variable interest entities or other off-
balance sheet financing, other than operating leases. In addi-
tion, the Company does not enter into any derivative financial
instruments for speculative purposes and uses derivative
financial instruments primarily for managing its exposure to
changes in interest rates and managing its ratio of fixed to
floating-rate long-term debt.

34 »

Fiserv, Inc. and Subsidiaries

» 35

» n o t e s c o n t i n u e d »

8 » Business Segment Information

In thousands

2003
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

2002
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

2001
Processing and services revenues
Operating income
Identifiable assets
Capital expenditures, including

capitalization of software development
costs for external customers

Depreciation and amortization expense

Financial Institution
Outsourcing,
Systems and Services

Health Plan
Management
Services

Securities
Processing and
Trust Services

All Other
and
Corporate

Total

$1,974,406
458,883
2,370,324

$399,066
49,674
598,163

$ 224,405
27,778
4,118,418

$101,732
(4,367)
127,270

$2,699,609
531,968
7,214,175

123,695
131,569

10,141
11,852

8,212
21,793

1,194
6,577

143,242
171,791

$1,665,976
384,760
1,864,252

$216,145
34,064
257,339

$ 230,621
31,259
4,136,980

$ 92,992
(4,624)
180,134

$2,205,734
445,459
6,438,705

118,057
106,287

7,580
7,371

12,306
22,127

3,937
5,329

141,880
141,114

$1,498,703
311,369
1,456,136

$ 55,610
10,704
209,739

$ 264,841
40,197
3,560,483

$ 86,377
(3,169)
95,884

$1,905,531
359,101
5,322,242

87,461
113,026

3,573
2,803

10,092
25,004

3,483
6,863

104,609
147,696

» management’s discussion

a n d a n a l y s i s o f f i n a n c i a l c o n d i t i o n a n d r e s u l t s o f o p e r a t i o n s

» Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995

» Critical Accounting Policies

34 »

Fiserv, Inc. and Subsidiaries

» 35

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Market Risk

Market risk refers to the risk that a change in the level of
one or more market prices, interest rates, indices, correlations
or other market factors, such as liquidity, will result in losses
for a certain financial instrument or group of financial instru-
ments. The Company is exposed primarily to interest rate risk
and market price risk on investments and borrowings. The
Company actively monitors these risks through a variety of
control procedures involving senior management.

The Company’s trust administration subsidiaries accept
money market account deposits from trust customers and
invest those funds in marketable securities. Substantially all of
the investments are rated within the highest investment grade
categories for securities. The Company’s trust administration
subsidiaries utilize simulation models for measuring and moni-
toring interest rate risk and market value of portfolio equities.
A formal Asset Liability Committee of the Company meets
quarterly to review interest rate risks, capital ratios, liquidity
levels, portfolio diversification, credit risk ratings and adher-
ence to investment policies and guidelines. Substantially all
of the investments at December 31, 2003 have contractual
maturities of one year or less except for mortgage-backed
obligations and U.S. Government obligations, which have an
average duration of approximately 2 years and 4 months. The
Company does not believe any significant changes in interest
rates would have a material impact on the consolidated
financial statements.

The Company manages its debt structure and interest
rate risk through the use of fixed and floating-rate debt and

through the use of interest rate swaps. The Company uses
interest rate swaps to partially hedge its exposure to interest
rate changes, and to control its financing costs. Generally,
under these swaps, the Company agrees with a counter party
to exchange the difference between fixed-rate and floating-
rate interest amounts based on an agreed principal amount.
While changes in interest rates could decrease the Company’s
interest income or increase its interest expense, the Company
does not believe that it has a material exposure to changes in
interest rates, primarily due to approximately 45% of the
Company’s long-term debt having fixed interest rates as of
December 31, 2003. Based on the Company’s long-term debt
with variable interest rates as of December 31, 2003, a 1%
increase in the Company’s borrowing rate would increase
annual interest expense by $3.7 million. Based on the controls
in place, management believes the risks associated with finan-
cial instruments at December 31, 2003, will not have a mate-
rial effect on the Company’s consolidated financial position or
results of operations.

» Results of Operations

The Company is an independent provider of financial
data processing systems and related information management
services and products to financial institutions and other finan-
cial intermediaries. The Company’s operations have been
classified into four business segments: Financial institution
outsourcing, systems and services (“FIS”); Health plan man-
agement services (“Health”); Securities processing and trust
services (“Securities and Trust”); and All other and corporate.

The following table presents, for the period indicated, certain amounts included in the Company’s consolidated statements

of income, the relative percentage that those amounts represent to processing and services revenues, and the percentage
change in those amounts from year to year. This information should be read along with the consolidated financial statements
and notes thereto. This table and the following discussion exclude the revenues and expenses associated with customer reim-
bursements because management believes that it is not appropriate to include the customer reimbursements in analyzing the
current performance of the Company as these balances offset in revenues and expenses with no impact on operating income
and these amounts are not an indicator of current or future business trends. Customer reimbursements, which primarily consist
of pass-through expenses such as postage and data communication costs, were $334.1 million, $291.2 million and $262.2 mil-
lion for the years ended December 31, 2003, 2002 and 2001, respectively.

Year ended December 31,
In millions

Percent of Processing Revenue
Year ended December 31,

Percent
Increase (Decrease)

2003

2002

2001

2003

2002

2001

PROCESSING AND SERVICES REVENUES:
Financial institution outsourcing,

systems and services

Health plan management services
Securities processing and trust services
All other and corporate

$1,974.4
399.1
224.4
101.7

$1,666.0
216.1
230.6
93.0

$1,498.7
55.6
264.8
86.4

73%
15%
8%
4%

76%
10%
10%
4%

79%
3%
14%
5%

TOTAL

$2,699.6

$2,205.7

$1,905.5

100%

2003
vs.
2002

2002
vs.
2001

19%
85%
(3)%
9%

22%

11%
289%
(13)%
8%

16%

COST OF REVENUES:
Salaries, commissions and
payroll related costs
Data processing costs and

equipment rentals

Other operating expenses
Depreciation and amortization

$1,262.2

$1,090.3

$ 936.2

47%

49%

16%

217.2
516.4
171.8

165.3
363.6
141.1

148.5
314.0
147.7

TOTAL

$2,167.6

$1,760.3

$1,546.4

OPERATING INCOME:
Financial institution outsourcing,

systems and services(1)

Health plan management services(1)
Securities processing and trust services(1)
All other and corporate(2)

$ 458.9
49.7
27.8
(4.4)

$ 384.8
34.1
31.3
(4.6)

$ 311.4
10.7
40.2
(3.2)

8%
19%
6%

80%

23%
12%
12%

7%
16%
6%

80%

23%
16%
14%

8%
16%
8%

81%

21%
19%
15%

31%
42%
22%

23%

11%
16%
(4)%

14%

19%
46%
(11)%

24%
218%
(22)%

TOTAL

$ 532.0

$ 445.5

$ 359.1

20%

19%

24%

(1) Percent of segment revenues is calculated as a percent of FIS, Health, and Securities and Trust revenues.

(2) Percents not meaningful, amounts include corporate expenses.

36 »

Fiserv, Inc. and Subsidiaries

» 37

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Market Risk

The Company manages its debt structure and interest
rate risk through the use of fixed and floating-rate debt and

» Results of Operations

The following table presents, for the period indicated, certain amounts included in the Company’s consolidated statements

Year ended December 31,
In millions

Percent of Processing Revenue
Year ended December 31,

Percent
Increase (Decrease)

2003

2002

2001

2003

2002

2001

PROCESSING AND SERVICES REVENUES:
Financial institution outsourcing,

systems and services

Health plan management services
Securities processing and trust services
All other and corporate

$1,974.4
399.1
224.4
101.7

$1,666.0
216.1
230.6
93.0

$1,498.7
55.6
264.8
86.4

73%
15%
8%
4%

76%
10%
10%
4%

79%
3%
14%
5%

TOTAL

$2,699.6

$2,205.7

$1,905.5

100%

2003
vs.
2002

2002
vs.
2001

19%
85%
(3)%
9%

22%

11%
289%
(13)%
8%

16%

COST OF REVENUES:
Salaries, commissions and
payroll related costs
Data processing costs and

equipment rentals

Other operating expenses
Depreciation and amortization

$1,262.2

$1,090.3

$ 936.2

47%

49%

16%

217.2
516.4
171.8

165.3
363.6
141.1

148.5
314.0
147.7

TOTAL

$2,167.6

$1,760.3

$1,546.4

OPERATING INCOME:
Financial institution outsourcing,

systems and services(1)

Health plan management services(1)
Securities processing and trust services(1)
All other and corporate(2)

$ 458.9
49.7
27.8
(4.4)

$ 384.8
34.1
31.3
(4.6)

$ 311.4
10.7
40.2
(3.2)

8%
19%
6%

80%

23%
12%
12%

7%
16%
6%

80%

23%
16%
14%

8%
16%
8%

81%

21%
19%
15%

31%
42%
22%

23%

11%
16%
(4)%

14%

19%
46%
(11)%

24%
218%
(22)%

TOTAL

$ 532.0

$ 445.5

$ 359.1

20%

19%

24%

(1) Percent of segment revenues is calculated as a percent of FIS, Health, and Securities and Trust revenues.

(2) Percents not meaningful, amounts include corporate expenses.

36 »

Fiserv, Inc. and Subsidiaries

» 37

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Internal Revenue Growth

» Processing and Services Revenues

» Cost of Revenues

Internal revenue growth percentages are measured as the increase or decrease in total processing and services revenues for

the current period less “acquired revenue from acquisitions” divided by total processing and services revenues from the prior
year period plus “acquired revenue from acquisitions.” “Acquired revenue from acquisitions” represents pre-acquisition normal-
ized revenue of acquired companies for the comparable prior year periods. Internal revenue growth percentage is a non-GAAP
financial measure that the Company believes is useful to investors because it provides an alternative to measure revenue growth
excluding the impact of acquired revenues. The following table sets forth the calculation of internal revenue growth percentages:

Year ended December 31,
In millions

2003

2002

Increase
(Decrease)

2003
Internal
Growth %

Year ended December 31,
In millions

2002

2001

Increase
(Decrease)

2002
Internal
Growth %

TOTAL COMPANY:
Processing and services revenue
Acquired revenue from acquisitions

$2,699.6

$2,205.7
373.5

$ 493.9
(373.5)

$2,205.7

$1,905.5
243.1

$ 300.2
(243.1)

Adjusted revenues

$2,699.6

$2,579.2

$ 120.4

$2,205.7

$2,148.6

$ 57.1

BY SEGMENT:
Financial institution outsourcing,

systems and services

Processing and services revenue
Acquired revenue from acquisitions

$1,974.4

$1,666.0
270.8

$ 308.4
(270.8)

$1,666.0

$1,498.7
106.9

$ 167.3
(106.9)

Adjusted revenues

$1,974.4

$1,936.8

$ 37.6

$1,666.0

$1,605.6

$ 60.4

Health plan management

services

Processing and services revenue
Acquired revenue from acquisitions

$ 399.1

$ 216.1
88.5

$ 182.9
(88.5)

$ 216.1

55.6
128.7

$ 160.5
(128.7)

Adjusted revenues

$ 399.1

$ 304.6

$ 94.4

31%

$ 216.1

$ 184.3

$ 31.8

17%

Securities processing and

trust services

Processing and services revenue
Acquired revenue from acquisitions

$ 224.4

$ 230.6
14.2

$ (6.2)
(14.2)

$ 230.6

$ 264.8
7.5

$ (34.2)
(7.5)

Adjusted revenues

$ 224.4

$ 244.8

$ (20.4)

(8)%

$ 230.6

$ 272.3

$ (41.7)

(15)%

All other and corporate
Processing and services revenue

$ 101.7

93.0

8.7

93.0

86.4

6.6

Total processing and services revenues increased $493.9 mil-
lion, or 22%, in 2003 compared to 2002 and $300.2 million, or
16%, in 2002 compared to 2001. Internal revenue growth was
5% in 2003 and 3% in 2002 with the remaining growth result-
ing from acquisitions. Internal revenue growth was derived from
sales to new clients, cross-sales to existing clients, increases in
transaction volumes from existing clients and price increases.

The FIS segment had positive revenue growth of $308.4 mil-
lion, or 19%, in 2003 compared to 2002 and $167.3 million,
or 11%, in 2002 compared to 2001. Internal revenue growth
in our FIS segment was 2% in 2003 and 4% in 2002 with the
remaining growth resulting from acquisitions.

The Health segment had positive revenue growth of
$182.9 million, or 85%, in 2003 compared to 2002 and
$160.5 million, or 289%, in 2002 compared to 2001. Internal
revenue growth in our Health segment was 31% in 2003 (18%
related to the prescription benefit management business that
generates operating margins in the low single digits and 13%
related to the remaining businesses in the segment) and 17%
in 2002 with the remaining growth resulting from acquisitions.
Revenue in the Securities and Trust segment decreased by
$6.2 million, or 3%, in 2003 compared to 2002 and $34.2 mil-
lion, or 13%, in 2002 compared to 2001. The internal revenue
growth percentage decrease in our Securities and Trust seg-
ment was 8% in 2003 and 15% in 2002, offset by growth
related to one acquisition. The Securities and Trust segment’s
revenue in 2003 continued to be impacted by the weak, but
improving U.S. retail securities financial market trading environ-
ment which impacts the Securities division and lower interest
rates which negatively impact both our Securities and Trust
divisions. During 2003, the Securities and Trust segment recog-
nized an increase in revenues of $15.8 million from the sale of
available-for-sale investment securities and incurred a decrease
in revenues of $17.0 million that resulted from an apparently
fraudulent trading scheme at one of its broker-dealer clients.
The Company has insurance that may cover part or all of this
loss; however, no recovery amount is being recorded pending
resolution of a claim. The Company also intends to pursue all
recovery methods from the broker-dealer and its principals.

Total cost of revenues increased $407.4 million, or 23%, in
2003 compared to 2002 and $213.9 million, or 14%, in 2002
compared to 2001. As a percent of processing and services
revenues, cost of revenues were 80% in 2003, 80% in 2002,
and 81% in 2001. The make up of cost of revenues each year
has been affected by business acquisitions and changes in the
mix of the Company’s business.

As a percent of processing and services revenues, salaries,

commissions and payroll related costs were 47% in 2003,
49% in 2002, and 49% in 2001, and data processing costs
and equipment rentals were 8% in 2003, 7% in 2002, and
8% in 2001, respectively. The Company completed the
acquisitions of EDS Corporation’s Consumer Network Serv-
ices in December 2002 and EDS Corporation’s Credit Union
Industry Group in July 2003, which both have higher data
processing costs and equipment rentals and lower salary
costs. These acquisitions have contributed to an increase
in data processing costs and equipment rentals and a
decrease in salary costs as a percentage of revenues in 2003
compared to 2002.

As a percent of processing and services revenues, other
operating expenses were 19% in 2003, 16% in 2002, and
16% in 2001. The increase in other operating expenses as
a percentage of revenues in 2003 compared to 2002 was
primarily due to the growth in the Health segment’s pre-
scription benefit management (“PBM”) business. The PBM
business has a very high proportion of costs included in
other operating expenses due to the nature of its business
(see Note 1).

Depreciation and amortization expense increased $30.7 mil-
lion in 2003 compared to 2002 and decreased $6.6 million
in 2002 compared to 2001. The decrease in 2002 was prima-
rily attributable to the adoption of SFAS No. 142 that resulted
in a reduction of goodwill amortization expense of approxi-
mately $24.0 million in 2002 compared to 2001, offset prima-
rily by incremental depreciation and amortization expense
from capital expenditures and other intangible assets subject
to amortization.

38 »

Fiserv, Inc. and Subsidiaries

» 39

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Internal Revenue Growth

» Processing and Services Revenues

» Cost of Revenues

Internal revenue growth percentages are measured as the increase or decrease in total processing and services revenues for

Year ended December 31,
In millions

2003

2002

Increase
(Decrease)

2003
Internal
Growth %

Year ended December 31,
In millions

2002

2001

Increase
(Decrease)

2002
Internal
Growth %

TOTAL COMPANY:
Processing and services revenue
Acquired revenue from acquisitions

$2,699.6

$2,205.7
373.5

$ 493.9
(373.5)

$2,205.7

$1,905.5
243.1

$ 300.2
(243.1)

Adjusted revenues

$2,699.6

$2,579.2

$ 120.4

$2,205.7

$2,148.6

$ 57.1

BY SEGMENT:
Financial institution outsourcing,

systems and services

Processing and services revenue
Acquired revenue from acquisitions

$1,974.4

$1,666.0
270.8

$ 308.4
(270.8)

$1,666.0

$1,498.7
106.9

$ 167.3
(106.9)

Adjusted revenues

$1,974.4

$1,936.8

$ 37.6

$1,666.0

$1,605.6

$ 60.4

Health plan management

services

Processing and services revenue
Acquired revenue from acquisitions

$ 399.1

$ 216.1
88.5

$ 182.9
(88.5)

$ 216.1

55.6
128.7

$ 160.5
(128.7)

Adjusted revenues

$ 399.1

$ 304.6

$ 94.4

31%

$ 216.1

$ 184.3

$ 31.8

17%

Securities processing and

trust services

Processing and services revenue
Acquired revenue from acquisitions

$ 224.4

$ 230.6
14.2

$ (6.2)
(14.2)

$ 230.6

$ 264.8
7.5

$ (34.2)
(7.5)

Adjusted revenues

$ 224.4

$ 244.8

$ (20.4)

(8)%

$ 230.6

$ 272.3

$ (41.7)

(15)%

All other and corporate
Processing and services revenue

$ 101.7

93.0

8.7

93.0

86.4

6.6

As a percent of processing and services revenues, salaries,

38 »

Fiserv, Inc. and Subsidiaries

» 39

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Operating Income

Operating income increased $86.5 million, or 19%, in
2003 compared to 2002 and $86.4 million, or 24%, in 2002
compared to 2001. The operating income increase in 2003
compared to 2002 was primarily derived from the FIS segment
which increased $74.1 million in 2003 compared to 2002
and $73.4 million in 2002 compared to 2001 and the Health
segment which increased $15.6 million in 2003 compared
to 2002 and $23.4 million in 2002 compared to 2001. The
increase in operating income in 2003 compared to 2002 in
the FIS segment was due to a number of factors, including
continued strong operating margins of 23% and revenue
growth. Operating margins in the Health segment were 12%
in 2003, 16% in 2002 and 19% in 2001. The decrease in
operating margins in the Health segment in 2003 compared
to 2002 was due primarily to the low single digit operating
margins in the PBM business. Operating income in the Secu-
rities and Trust segment decreased $3.5 million in 2003 and
$8.9 million in 2002, primarily due to continued weakness in
the United States retail securities financial markets and the
lower interest rate environment.

» Income Tax Provision

The effective income tax rate was 39% in 2003 and 2002
and 40% in 2001. The income tax rate for 2004 is expected
to remain at 39%.

» Net Income Per Share—Diluted

Net income per share—diluted for 2003 was $1.61 com-

pared to $1.37 in 2002 and $1.09 in 2001. The impact of
adopting SFAS No. 142 would have increased 2001 net
income per share—diluted by approximately $0.09 per
share due to the elimination of goodwill amortization.

The Company’s growth has been accomplished, to a sig-
nificant degree, through the acquisition of businesses which
are complementary to its operations. Management believes
that a number of acquisition candidates are available which
would further enhance the Company’s competitive position
and plans to pursue them vigorously. Management is engaged

in an ongoing program to reduce expenses related to acquisi-
tions by eliminating operating redundancies. The Company’s
approach has been to move slowly in achieving this goal in
order to minimize the amount of disruption experienced by its
clients and the potential loss of clients due to this program.

» Liquidity and Capital Resources

Free cash flow is measured as net cash provided by operating

activities before changes in securities processing receivables
and payables less capital expenditures including capitalization
of software costs for external customers, as reported in the
Company’s consolidated statements of cash flows. As the
changes in securities processing receivables and payables are
generally offset by changes in short-term borrowings and
investments, which are included in financing and investing
activities, management believes it is more meaningful to ana-
lyze changes in operating cash flows before the changes in
securities processing receivables and payables. Free cash flow
is a non-GAAP financial measure that the Company believes
is useful to investors because it provides another measure of
available cash flow after the Company has satisfied the capital
requirements of its operations. The following table summa-
rizes free cash flow for the Company during the years ended
December 31:

In millions

Net cash provided by
operating activities

Changes in securities processing
receivables and payables—net

Net cash provided by operating
activities before changes in
securities processing
receivables and payables—net
Capital expenditures, including
capitalization of software
costs for external customers

2003

2002

2001

$ 518.1

$ 579.2

$ 447.5

80.0

(63.9)

(78.4)

598.1

515.3

369.1

(143.2)

(141.9)

(104.6)

Free cash flow

$ 454.9

$ 373.4

$ 264.5

Free cash flow increased by $81.5 million, or 22%, in
2003 compared to 2002. In 2003, the Company primarily
used its free cash flow of $454.9 million and net proceeds
from long-term borrowings of $215.8 million to fund the
12 acquisitions closed in 2003 totaling $702.8 million. At
December 31, 2003, the Company had $699.1 million of
long-term debt, while shareholders’ equity was $2.2 billion.

Long-term debt includes $395.6 million borrowed under
the Company’s $510.0 million credit and commercial paper
facility which is payable in May 2004 or earlier at the
Company’s option. The Company expects to renew its debt
facility agreements prior to expiration in the second quarter
of 2004. The Company has $93.6 million available under its
credit facility at December 31, 2003. The Company must,
among other requirements, maintain a minimum net worth
of $976.1 million as of December 31, 2003, maintain a fixed
charge coverage ratio of 1.35 to one, and limit its total debt
to no more than three and one-half times the Company’s
earnings before interest, taxes, depreciation and amortization.
The Company was in compliance with all debt covenants
throughout 2003.

During the second quarter of 2003, the Company had
two note offerings totaling $250.0 million of five-year notes
due in 2008. The first note offering was for $150.0 million at
a 4% fixed interest rate. The Company entered into fixed to
floating interest rate swap agreements on the $150.0 million
notes to manage its total ratio of fixed to floating-rate long-
term debt over the period of these notes. The second offering
of five-year notes was for $100.0 million at a 3% fixed inter-
est rate. The Company used the net proceeds from the offer-
ings primarily to repay existing credit facilities and for general
corporate purposes including the funding of acquisitions.

At December 31, 2003, the Company has operating lease
commitments for office facilities and equipment aggregating
$431.5 million, of which $98.3 million will be incurred in 2004.
The Company believes that its cash flow from operations
together with other available sources of funds will be ade-
quate to meet its operating requirements, debt repayments,

contingent payments in connection with business acquisitions
and ordinary capital spending needs. At December 31, 2003,
the Company had $103.6 million available for borrowing
and $202.8 million in cash and cash equivalents. In the event
that the Company makes significant future acquisitions, how-
ever, it may raise funds through additional borrowings or the
issuance of securities.

The Company’s current policy is to retain earnings to sup-
port future business opportunities, rather than to pay dividends.
During 1999, the Company’s Board of Directors authorized
the repurchase of up to 4.9 million shares of the Company’s
common stock. Shares purchased under the authorization will
be made through open market transactions that may occur
from time to time as market conditions warrant. Shares
acquired will be held for issuance in connection with acqui-
sitions and employee stock option and purchase plans. As
of December 31, 2003, approximately 1.7 million shares
remained available under the repurchase authorization.

» Off-Balance Sheet Arrangements and
Contractual Obligations

The Company does not have any material off-balance
sheet arrangements. The following table details certain
of the Company’s contractual cash obligations at
December 31, 2003.

In millions

Total

Less
than
1 year

1–3
years

3–5
years

More
than
5 years

Long-term debt
Minimum

operating
lease payments

Short-term debt
Purchase

obligations

$ 699.1

$434.3

$ 14.8

$250.0

$ —

431.5
139.0

98.3
139.0

148.0
—

89.0
—

96.2
—

7.5

2.6

4.1

0.8

—

TOTAL

$1,277.1

$674.2

$166.9

$339.8

$96.2

40 »

Fiserv, Inc. and Subsidiaries

» 41

» m a n a g e m e n t ’ s d i s c u s s i o n c o n t i n u e d »

» Operating Income

» Income Tax Provision

The effective income tax rate was 39% in 2003 and 2002
and 40% in 2001. The income tax rate for 2004 is expected
to remain at 39%.

» Net Income Per Share—Diluted

Net income per share—diluted for 2003 was $1.61 com-

» Liquidity and Capital Resources

Free cash flow is measured as net cash provided by operating

In millions

Net cash provided by
operating activities

Changes in securities processing
receivables and payables—net

2003

2002

2001

$ 518.1

$ 579.2

$ 447.5

80.0

(63.9)

(78.4)

598.1

515.3

369.1

(143.2)

(141.9)

(104.6)

Free cash flow

$ 454.9

$ 373.4

$ 264.5

» Off-Balance Sheet Arrangements and
Contractual Obligations

The Company does not have any material off-balance
sheet arrangements. The following table details certain
of the Company’s contractual cash obligations at
December 31, 2003.

In millions

Total

Less
than
1 year

1–3
years

3–5
years

More
than
5 years

Long-term debt
Minimum

operating
lease payments

Short-term debt
Purchase

obligations

$ 699.1

$434.3

$ 14.8

$250.0

$ —

431.5
139.0

98.3
139.0

148.0
—

89.0
—

96.2
—

7.5

2.6

4.1

0.8

—

TOTAL

$1,277.1

$674.2

$166.9

$339.8

$96.2

40 »

Fiserv, Inc. and Subsidiaries

» 41

» selected financial data

The following data, which has been affected by acquisitions, should be read in conjunction with the consolidated financial

statements and related notes thereto included elsewhere in this Annual Report.

In thousands, except per share data
Y E A R S E N D E D D E C E M B E R 3 1 ,

2003

2002

2001

2000

1999

Processing and services revenues

Income before income taxes

Income tax provision

Net income

Net income per share:

Basic

Diluted

Total assets

Long-term debt

Shareholders’ equity

$2,699,609

$2,205,734

$1,905,531

$1,681,871

$1,407,545

516,413

201,401

315,012

1.63

1.61

436,290

170,153

266,137

1.39

1.37

347,028

138,811

208,217

1.11

1.09

300,035

123,014

177,021

0.96

0.93

233,675

95,807

137,868

0.75

0.73

$7,214,175

$6,438,705

$5,322,242

$5,586,320

$5,307,710

699,116

2,199,808

482,824

343,093

334,958

472,824

1,827,669

1,604,826

1,252,072

1,091,016

Note: The above information excludes the revenues and expenses associated with customer reimbursements recorded in accordance with
EITF No. 01-14. Processing and services revenues and cost of revenues were reclassified in the first nine months of 2003 and for the full years
2002, 2001 and 2000 to reflect the preferred industry methods of accounting for flood insurance processing and prescription benefit management
revenues. The reclassifications attributable to flood insurance processing reduced processing and services revenues and cost of revenues by
$78 million in the first nine months of 2003, $74 million in 2002, $27 million in 2001 and $4 million in 2000. The reclassification attributable
to prescription benefit management services increased processing and services revenues and cost of revenues by $32 million in the first nine
months of 2003. These reclassifications did not impact the Company’s financial position, operating income or net income.

» market price information

The following information relates to the closing price of
the Company’s common stock, which is traded on the Nasdaq
Stock Market under the symbol FISV.

2003

2002

Quarter ended

High

Low

High

Low

March 31
June 30
September 30
December 31

$35.85
37.05
40.20
40.00

$27.57
28.77
35.93
33.81

$46.60
46.08
39.25
35.04

$39.88
35.16
28.08
22.60

At December 31, 2003, the Company’s common stock
was held by 10,513 shareholders of record. It is estimated
that an additional 45,000 shareholders own the Company’s
stock through nominee or street name accounts with brokers.
The closing sale price for the Company’s stock on January 23,
2004, was $37.71 per share.

42 »

Fiserv, Inc. and Subsidiaries

» quarterly financial information (unaudited)

In thousands, except per share data

2003
Processing and services revenues

Cost of revenues

Operating income

Interest expense—net

Income before income taxes

Income tax provision

Net income

Net income per share:

Basic

Diluted

2002
Processing and services revenues

Cost of revenues

Operating income

Interest expense—net

Income before income taxes

Income tax provision

Net income

Net income per share:

Basic

Diluted

Quarters

First

Second

Third

Fourth

Total

$604,262

$643,888

$701,956

$749,503

$2,699,609

479,665

511,829

565,661

610,486

2,167,641

124,597

(2,977)

121,620

47,432

132,059

(3,474)

128,585

50,148

136,295

(4,472)

131,823

51,411

139,017

(4,632)

134,385

52,410

531,968

(15,555)

516,413

201,401

$ 74,188

$ 78,437

$ 80,412

$ 81,975

$ 315,012

$0.39

$0.38

$0.41

$0.40

$0.42

$0.41

$0.42

$1.63

$1.61

$543,204

$543,858

$543,406

$575,266

$2,205,734

433,775

432,426

433,157

460,917

1,760,275

109,429

(2,687)

106,742

41,629

111,432

(2,178)

109,254

42,609

110,249

(1,804)

108,445

42,294

114,349

(2,500)

111,849

43,621

445,459

(9,169)

436,290

170,153

$ 65,113

$ 66,645

$ 66,151

$ 68,228

$ 266,137

$0.34

$0.33

$0.35

$0.34

$0.36

$0.35

$1.39

$1.37

Note: The above information excludes the revenues and expenses associated with customer reimbursements recorded in accordance with
EITF No. 01-14.

Fiserv, Inc. and Subsidiaries

» 43

» management’s statement of responsibility

» independent auditors’ report

The management of Fiserv, Inc. assumes responsibility for the integrity and objectivity of the information appearing in the
2003 Annual Report. This information was prepared in conformity with accounting principles generally accepted in the United
States of America and necessarily reflects the best estimates and judgment of management.

To provide reasonable assurance that transactions authorized by management are recorded and reported properly and that
assets are safeguarded, the Company maintains a system of internal controls. The concept of reasonable assurance implies that
the cost of such a system is weighed against the benefits to be derived therefrom.

The control environment is complemented by the Company’s internal audit function, which evaluates the adequacy of the
controls, policies and procedures in place, as well as adherence to them, and recommends improvements for implementation
when applicable. In addition, Deloitte & Touche LLP, certified public accountants, audits the consolidated financial statements
of the Company in accordance with auditing standards generally accepted in the United States of America. Improvements are
made to the system based upon recommendations proposed as a result of observations made during the course of their audit.
The Audit Committee ensures that management and the independent auditors are properly discharging their financial
reporting responsibilities. In performing this function, the Committee meets with management and the independent auditors
throughout the year. Additional access to the Committee is provided to Deloitte & Touche LLP on an unrestricted basis, allowing
discussion of audit results and opinions on the adequacy of internal accounting controls and the quality of financial reporting.

LESLIE M. MUMA, President and Chief Executive Officer

Shareholders and Directors of Fiserv, Inc.

We have audited the accompanying consolidated balance sheets of Fiserv, Inc. and subsidiaries as of December 31, 2003
and 2002, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years
in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Fiserv,
Inc. and subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United
States of America.

As described in Note 1 to the consolidated financial statements, on January 1, 2002, the Company adopted Statement of

Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

Deloitte & Touche LLP
Milwaukee, Wisconsin
January 30, 2004

44 »

Fiserv, Inc. and Subsidiaries

» 45

» management’s statement of responsibility

» independent auditors’ report

LESLIE M. MUMA, President and Chief Executive Officer

Shareholders and Directors of Fiserv, Inc.

As described in Note 1 to the consolidated financial statements, on January 1, 2002, the Company adopted Statement of

Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

Deloitte & Touche LLP
Milwaukee, Wisconsin
January 30, 2004

44 »

Fiserv, Inc. and Subsidiaries

» 45

» board of directors

» executive committee

Donald F. Dillon

Glenn M. Renwick

Norman J. Balthasar

Kenneth R. Jensen

63, Chairman of the Board of Directors of Fiserv, Inc. With more

48, President and Chief Executive Officer of The Progressive

57, Senior Executive Vice President and Chief Operating Officer.

See Board of Directors for profile.

than 35 years in the financial and data processing businesses,

Corporation. With more than 15 years in the insurance industry,

Mr. Dillon has served on the Fiserv Board since 1995.

Mr. Renwick has served as a Director since 2001.

Kenneth R. Jensen

Kim M. Robak

60, Senior Executive Vice President, Chief Financial Officer,

48, Vice President for External Affairs and Corporation Secretary,

Treasurer and Assistant Secretary of Fiserv, Inc. With more than

University of Nebraska. With more than 20 years of experience

40 years in the data processing industry, Mr. Jensen has served

in the fields of law, education and public service, Ms. Robak

as a Director since 1984.

joined the Fiserv Board in 2003.

Daniel P. Kearney

L. William Seidman

64, Financial Consultant. With more than 30 years in the

82, Chief Commentator for CNBC-TV, Publisher of Bank Director

banking, insurance and legal professions, Mr. Kearney has

and Board Member magazines, and Industry Consultant. With

served as a Director since 1999.

more than 45 years in the business, financial and political arenas,

Mr. Seidman has served as a Director since 1992.

Gerald J. Levy

71, Lead Director, Fiserv, Inc.; Chairman of the Board and Chief

Thekla R. Shackelford

Executive Officer of Guaranty Bank, S.S.B. With over 40 years

69, Educational Consultant. With more than 25 years in the

experience in the financial and business arenas, Mr. Levy has

fields of education and public service, Ms. Shackelford has

served as a Director since 1986.

served as a Director since 1994.

Leslie M. Muma

Thomas C. Wertheimer

59, President and Chief Executive Officer of Fiserv, Inc. With

63, Consultant. With more than 35 years in the financial services

more than 35 years in the data processing industry, Mr. Muma

profession, Mr. Wertheimer joined the Fiserv Board in 2003.

has served as a Director since 1984.

With more than 30 years in the financial services industry,

Mr. Balthasar has been with Fiserv and its predecessor company

since 1974.

Leslie M. Muma

See Board of Directors for profile.

» management committee

Robert H. Beriault

Rodney D. Poskochil

52, Group President, Securities & Trust Services. With more than

51, Group President, Bank Systems & eProducts. With more

20 years in the financial services industry, Mr. Beriault has been

than 25 years in the financial and data processing industries,

with Fiserv since 1995.

Mr. Poskochil has been with Fiserv since 1995.

James W. Cox

James C. Puzniak

40, Group President, Fiserv Health. With more than 15 years

57, Group President, Lending Systems & Services. With more

in the financial services and health administration industries,

than 35 years in the financial services industry, Mr. Puzniak has

Mr. Cox has been with Fiserv since 2001.

been with Fiserv since 1993.

Douglas J. Craft

Dean C. Schmelzer

50, Executive Vice President, Operating Group Chief Financial

53, Group President, Marketing & Sales. With nearly 30 years

Officer. With more than 20 years in the financial industry,

in the data processing industry, Mr. Schmelzer has been with

Mr. Craft has been with Fiserv since 1985.

Fiserv since 1992.

Mark J. Damico

Charles W. Sprague

35, Group President, Item Processing. With nearly 15 years in

54, Executive Vice President, General Counsel & Chief

the financial and data processing industries, Mr. Damico has

Administrative Officer. With more than 27 years in the legal

been with Fiserv since 1995.

profession and the financial services industry, Mr. Sprague has

Patrick C. Foy

49, Group President, Bank Servicing. With more than 20 years

Terry R. Wade

been with Fiserv since 1994.

in the financial services industry, Mr. Foy has been with Fiserv

43, Group President, Insurance Solutions. With nearly 20 years

since 2001.

Thomas A. Neill

54, Group President, Credit Union & Industry Products. With

nearly 30 years in the financial services industry, Mr. Neill has

been with Fiserv since 1993.

in the insurance, technology and outsourcing industries,

Mr. Wade has been with Fiserv since 2003.

For complete profiles of the Fiserv Board of Directors, please see the proxy statement.

46 »

Fiserv, Inc. and Subsidiaries

» 47

» board of directors

» executive committee

Donald F. Dillon

Glenn M. Renwick

Norman J. Balthasar

Kenneth R. Jensen

63, Chairman of the Board of Directors of Fiserv, Inc. With more

48, President and Chief Executive Officer of The Progressive

57, Senior Executive Vice President and Chief Operating Officer.

See Board of Directors for profile.

than 35 years in the financial and data processing businesses,

Corporation. With more than 15 years in the insurance industry,

Mr. Dillon has served on the Fiserv Board since 1995.

Mr. Renwick has served as a Director since 2001.

Kenneth R. Jensen

Kim M. Robak

60, Senior Executive Vice President, Chief Financial Officer,

48, Vice President for External Affairs and Corporation Secretary,

Treasurer and Assistant Secretary of Fiserv, Inc. With more than

University of Nebraska. With more than 20 years of experience

40 years in the data processing industry, Mr. Jensen has served

in the fields of law, education and public service, Ms. Robak

as a Director since 1984.

joined the Fiserv Board in 2003.

Daniel P. Kearney

L. William Seidman

64, Financial Consultant. With more than 30 years in the

82, Chief Commentator for CNBC-TV, Publisher of Bank Director

banking, insurance and legal professions, Mr. Kearney has

and Board Member magazines, and Industry Consultant. With

served as a Director since 1999.

more than 45 years in the business, financial and political arenas,

Mr. Seidman has served as a Director since 1992.

Gerald J. Levy

71, Lead Director, Fiserv, Inc.; Chairman of the Board and Chief

Thekla R. Shackelford

Executive Officer of Guaranty Bank, S.S.B. With over 40 years

69, Educational Consultant. With more than 25 years in the

experience in the financial and business arenas, Mr. Levy has

fields of education and public service, Ms. Shackelford has

served as a Director since 1986.

served as a Director since 1994.

Leslie M. Muma

Thomas C. Wertheimer

59, President and Chief Executive Officer of Fiserv, Inc. With

63, Consultant. With more than 35 years in the financial services

more than 35 years in the data processing industry, Mr. Muma

profession, Mr. Wertheimer joined the Fiserv Board in 2003.

has served as a Director since 1984.

With more than 30 years in the financial services industry,

Mr. Balthasar has been with Fiserv and its predecessor company

since 1974.

Leslie M. Muma

See Board of Directors for profile.

» management committee

Robert H. Beriault

Rodney D. Poskochil

52, Group President, Securities & Trust Services. With more than

51, Group President, Bank Systems & eProducts. With more

20 years in the financial services industry, Mr. Beriault has been

than 25 years in the financial and data processing industries,

with Fiserv since 1995.

Mr. Poskochil has been with Fiserv since 1995.

James W. Cox

James C. Puzniak

40, Group President, Fiserv Health. With more than 15 years

57, Group President, Lending Systems & Services. With more

in the financial services and health administration industries,

than 35 years in the financial services industry, Mr. Puzniak has

Mr. Cox has been with Fiserv since 2001.

been with Fiserv since 1993.

Douglas J. Craft

Dean C. Schmelzer

50, Executive Vice President, Operating Group Chief Financial

53, Group President, Marketing & Sales. With nearly 30 years

Officer. With more than 20 years in the financial industry,

in the data processing industry, Mr. Schmelzer has been with

Mr. Craft has been with Fiserv since 1985.

Fiserv since 1992.

Mark J. Damico

Charles W. Sprague

35, Group President, Item Processing. With nearly 15 years in

54, Executive Vice President, General Counsel & Chief

the financial and data processing industries, Mr. Damico has

Administrative Officer. With more than 27 years in the legal

been with Fiserv since 1995.

profession and the financial services industry, Mr. Sprague has

Patrick C. Foy

49, Group President, Bank Servicing. With more than 20 years

Terry R. Wade

been with Fiserv since 1994.

in the financial services industry, Mr. Foy has been with Fiserv

43, Group President, Insurance Solutions. With nearly 20 years

since 2001.

Thomas A. Neill

54, Group President, Credit Union & Industry Products. With

nearly 30 years in the financial services industry, Mr. Neill has

been with Fiserv since 1993.

in the insurance, technology and outsourcing industries,

Mr. Wade has been with Fiserv since 2003.

For complete profiles of the Fiserv Board of Directors, please see the proxy statement.

46 »

Fiserv, Inc. and Subsidiaries

» 47

» executive leadership

Bank Servicing Group

Patrick C. Foy, 49
President, SourceOne

Max S. Narro, 41
President, Credit Services

Michael J. Rigney, 53
President, VISION

David W. Santi, 43
President, CBS Outsourcing

Frank M. Smeal, 61
President, Bank Servicing
Division III

Bank Systems &
eProducts Group

Anthony S. Catalfano, 40
President & COO,
Fiserv EFT/CNS

Bruce C. Christensen, 53
President, Precision
Computer Systems

Grant P. Christenson, 52
CEO, Fiserv EFT/CNS

Paul A. Frank, 60
President,
Fiserv ePayments Division;
President, Banklink

Julie Gabelmann, 48
General Manager,
Customer Contact Solutions

Alexander H.
Groenendyk, 47
President, CBS Worldwide

Ronald E. Thompson, 56
President, Imagesoft
Technologies

David E. Ulrich, 47
President, IPS-Sendero

Michael K. Young, 48
President, Information
Technology, Inc.

Credit Union & Industry
Products Group

Joseph A. Antellocy, 44
President, AFTECH

Joseph A. Barry, 50
President, Credit Union
Eastern Region

Jeffery S. Butler, 41
President, IntegraSys

Dennis L. Connick, 55
President, CUSA

Jorge M. Diaz, 39
President, Personix

John A. Edwards, 57
President, XP Systems

Richard P. Fitzgerald, 54
President,
Document Solutions

Pedro E. Kaufmann, 45
President, EPSIIA

Roger L. Kuhns, 56
President, Credit Union
Western Region

Timothy M. Milz, 41
President, GalaxyPlus

John N. Schooler, 49
President, USERS

Kevin L. Sparks, 47
President, Summit

Fiserv Health Group

Jay M. Anliker, 42
Executive Vice President
& COO, Wausau Benefits

Rita M. Ayers, 47
Senior Vice President
& General Manager,
DirectCompRx

Mark Campbell,
Pharm.D., 42
President & CEO, Innoviant

Joseph A. Hensley, 49
Division President

Jeffrey D. Mills, 44
President,
Harrington Benefit Services

Elaine H. Mischler, M.D., 60
Executive Vice President &
Chief Medical Officer,
Avidyn Health

Alfred P. Moore, 58
Division President

James R. Petrich, 50
President, Fiserv Health
Kansas and Tennessee

Omar Rodriguez, 45
President, Benefit Planners

Andrew M. Thompson, 59
President, Benesight

J.R. Thompson, 47
President & COO,
Third Party Solutions

John D. Weymer, 52
Executive Vice President
& COO, Avidyn Health

Insurance Solutions Group

Craig J. Faulkner, 50
President,
Emerald Publications

William E. Jerro, 32
President, ReliaQuote

Curtis M. Lund, 63
President,
Flood Insurance Division

Robert Meyerson, 57
President, Fiserv FSC

Anthony T. Perdichezzi, 54
President, Administrative
Solutions Division

Item Processing Group

Kenneth R. Acheson, 55
President, Fiserv Solutions of
Canada & INTRIA Items Inc.

Therese K. Carstensen, 48
President, Western Region

Frank E. Eisel, Jr., 46
President,
Rocky Mountain Region

Richard J. Franas, 55
President, Fiserv-JPM Chase

Guy J. Fries, 46
President, Southern Region

W. David Hamilton, 52
President, Midwest Region

Norman S. Himes, 60
President, Mid-Atlantic Region

Robert F. McPherson, 57
President, Northern Region

Anna M. Quinlan, 52
President,
RemitStream Solutions

Thomas R. Taylor, 56
Executive Vice President,
Item Processing Technology
& Support

Kenneth P. True, 39
President, Fiserv-The
Northern Trust IP Operations

Stephen J. Ward, 51
Executive Vice President,
Item Processing Market
Development

Lending Systems &
Services Group

Stuart H. Angert, 62
Co-CEO, Remarketing
Services of America

Paul Brammeier, 61
Chief Operating Officer,
Chase Credit

Kevin J. Collins, 46
President, Fiserv LeMans

Leslie J. Howlett III, 44
President, Integrated
Loan Services

Andrew J. Shaevel, 39
Co-CEO, Remarketing
Services of America

Gerald A. Smith, 57
CEO, Integrated Loan
Services

Richard A. Snedden, 50
President & CEO, General
American Corporation

John R. Tenuta, 56
President, Fiserv
Lending Solutions;
President, MortgageServ

Allan N. Weiss, 44
President, Case Shiller Weiss

Securities &
Trust Services Group

Walter J. Koller, 39
President, Securities Division

D. Terry Reitan, 57
President, Trust Division

Nancy M. Sympson, 51
President, Fiserv Investor
Services & TradeStar

Corporate Management

Jack P. Bucalo, 65
Senior Vice President,
Human Resources

Christina Slemon-Dokos, 48
Senior Vice President,
Marketing

Thomas J. Hirsch, 40
Senior Vice President
& Controller

Daniel F. Murphy, 54
Senior Vice President,
Director of Audit

48 »

Fiserv, Inc. and Subsidiaries

thinking » driving » delivering

together » growth » value

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Corporate Office

255 Fiserv Drive
Brookfield, Wisconsin 53045
(262) 879-5000
www.fiserv.com

Investor Relations

(800) 425-FISV

Stock Listing

Exchange: Nasdaq
Symbol: FISV

Transfer Agent

EquiServe Trust Company, N.A.
P.O. Box 43069
Providence, Rhode Island 02940-3069
(800) 446-2617
www.equiserve.com

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thinking

DRIVING

delivering
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