Fiserv
Annual Report 2008

Download report
Bookmark report

More annual reports from Fiserv:

2023 Report
2022 Report
2021 Report
2020 Report
2019 Report

Peers and competitors of Fiserv:

Inghams Group Limited
RELX
DCC
Dr. Reddy's Laboratories Ltd
Redcentric plc

Plain-text annual report

2008 Summary Annual Report The Power Within. Corporate Headquarters 255 Fiserv Drive Brookfield, WI 53045 Phone: 262-879-5000 Toll Free: 800-872-7882 general_info@fiserv.com www.fiserv.com Fiserv is a registered trademark of Fiserv, Inc. All product and brand names mentioned are property of their respective companies. ©2009 Fiserv, Inc. All rights reserved. Financial Highlights $5 $5 $5 $5 $600 $4.7 $600 $600 $600 $4.00 $537 $4.00 $4.00 $4.00 $4.00 $4.00 $3.75 $4.00 $4.00 (In millions, except per share and stock price data) 2008 2007 2006 2005 Revenues Adjusted income Adjusted earnings per share Cash flow from operations Free cash flow Free cash flow per share Stock price Average share count $ 4,739 $ 3,897 $ 3,544 $ 3,229 537 3.29 775 611 3.75 450 2.67 565 443 2.62 410 2.31 541 381 2.15 379 1.98 526 385 2.02 36.37 163.1 55.49 168.8 52.42 177.5 43.27 191.0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 05 06 07 08 05 06 07 05 08 06 07 08 05 500 400 300 200 100 0 06 500 400 300 200 100 0 500 400 300 200 100 0 $3.29 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 500 400 300 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 200 100 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 * Adjusted income, adjusted earnings per share, free cash flow and free cash flow per share are non-GAAP financial measures. See page 24 for additional information about these non-GAAP financial measures. All results are derived from continuing operations and exclude discontinued operations. Revenues (in billions) Adjusted income (in millions) Adjusted earnings per share Free cash flow per share Revenues Revenues Revenues Revenues Adjusted Income Adjusted Income Adjusted Income Adjusted Income Adjusted Earnings Adjusted Earnings Adjusted Earnings Adjusted Earnings Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share 05 07 06 08 07 08 05 06 07 05 08 06 07 08 05 06 05 07 06 08 0 0.00 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 0.00 05 08 06 05 07 06 08 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 08 05 06 07 08 Corporate Information Board of Directors Donald F. Dillon Chairman of the Board Operating Committee Jeffery W. Yabuki President and Chief Executive Officer Directors Daniel P. Kearney Peter J. Kight Gerald J. Levy Denis J. O’Leary Glenn M. Renwick Kim M. Robak Doyle R. Simons Thomas C. Wertheimer Jeffery W. Yabuki Peter J. Kight Vice Chairman James W. Cox Executive Vice President, Corporate Development Douglas J. Craft Executive Vice President, Depository Institution Services Bridie A. Fanning Executive Vice President, Human Resources Rahul Gupta Executive Vice President, Card Services Stephen E. Olsen Group President, Depository Institution Services Charles W. Sprague Executive Vice President, General Counsel and Secretary Murray C. Walton Senior Vice President, Chief Risk Officer Thomas W. Warsop, III Group President, Financial Institution Services Thomas J. Hirsch Executive Vice President, Chief Financial Officer and Treasurer Richard K. Jones Executive Vice President, Chief Information Officer Donald J. MacDonald Executive Vice President, Chief Marketing Officer Daniel F. Murphy Senior Vice President, Director of Corporate Audit Thomas A. Neill Executive Vice President, Depository Institution Services Our Leadership Our Leadership Fiserv opens The NASDAQ Stock Market in honor of its 25th anniversary and new brand launch Corporate Headquarters Fiserv, Inc. Shareholder Information Copies of the company’s annual, 255 Fiserv Drive Brookfield, WI 53045 (262) 879-5000 Websites www.fiserv.com www.newfiserv.com quarterly and current reports, as filed with the Securities and Exchange Commission, are available on request from the company. Visit our website, www.fiserv.com, for updated news releases, stock performance, financial reports, conference call webcast, SEC filings, Investor Relations (800) 425-FISV corporate governance and other investor information. Stock Listing and Symbol NASDAQ Global Select Market Symbol: FISV Shareholders’ Meeting The 2009 Annual Meeting of Shareholders will be held on Wednesday, May 20, 2009 Independent Registered Public Accounting Firm Deloitte & Touche LLP Milwaukee, Wisconsin Transfer Agent Computershare Trust Company, N.A. P.O. Box 43069 at 10:00 a.m. Central Time Providence, RI 02940-3069 at the Fiserv Corporate (800) 446-2617 Headquarters, 255 Fiserv Drive, www.computershare.com Brookfield, Wisconsin. 2008 Summary Annual Report The Power Within. Corporate Headquarters 255 Fiserv Drive Brookfield, WI 53045 Phone: 262-879-5000 Toll Free: 800-872-7882 general_info@fiserv.com www.fiserv.com Fiserv is a registered trademark of Fiserv, Inc. All product and brand names mentioned are property of their respective companies. ©2009 Fiserv, Inc. All rights reserved. Financial Highlights $5 $5 $5 $5 $600 $4.7 $600 $600 $600 $4.00 $537 $4.00 $4.00 $4.00 $4.00 $4.00 $3.75 $4.00 $4.00 (In millions, except per share and stock price data) 2008 2007 2006 2005 Revenues Adjusted income Adjusted earnings per share Cash flow from operations Free cash flow Free cash flow per share Stock price Average share count $ 4,739 $ 3,897 $ 3,544 $ 3,229 537 3.29 775 611 3.75 450 2.67 565 443 2.62 410 2.31 541 381 2.15 379 1.98 526 385 2.02 36.37 163.1 55.49 168.8 52.42 177.5 43.27 191.0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 05 06 07 08 05 06 07 05 08 06 07 08 05 500 400 300 200 100 0 06 500 400 300 200 100 0 500 400 300 200 100 0 $3.29 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 500 400 300 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 200 100 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 * Adjusted income, adjusted earnings per share, free cash flow and free cash flow per share are non-GAAP financial measures. See page 24 for additional information about these non-GAAP financial measures. All results are derived from continuing operations and exclude discontinued operations. Revenues (in billions) Adjusted income (in millions) Adjusted earnings per share Free cash flow per share Revenues Revenues Revenues Revenues Adjusted Income Adjusted Income Adjusted Income Adjusted Income Adjusted Earnings Adjusted Earnings Adjusted Earnings Adjusted Earnings Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share 05 07 06 08 07 08 05 06 07 05 08 06 07 08 05 06 05 07 06 08 0 0.00 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 0.00 05 08 06 05 07 06 08 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 08 05 06 07 08 Corporate Information Board of Directors Donald F. Dillon Chairman of the Board Operating Committee Jeffery W. Yabuki President and Chief Executive Officer Directors Daniel P. Kearney Peter J. Kight Gerald J. Levy Denis J. O’Leary Glenn M. Renwick Kim M. Robak Doyle R. Simons Thomas C. Wertheimer Jeffery W. Yabuki Peter J. Kight Vice Chairman James W. Cox Executive Vice President, Corporate Development Douglas J. Craft Executive Vice President, Depository Institution Services Bridie A. Fanning Executive Vice President, Human Resources Rahul Gupta Executive Vice President, Card Services Stephen E. Olsen Group President, Depository Institution Services Charles W. Sprague Executive Vice President, General Counsel and Secretary Murray C. Walton Senior Vice President, Chief Risk Officer Thomas W. Warsop, III Group President, Financial Institution Services Thomas J. Hirsch Executive Vice President, Chief Financial Officer and Treasurer Richard K. Jones Executive Vice President, Chief Information Officer Donald J. MacDonald Executive Vice President, Chief Marketing Officer Daniel F. Murphy Senior Vice President, Director of Corporate Audit Thomas A. Neill Executive Vice President, Depository Institution Services Our Leadership Our Leadership Fiserv opens The NASDAQ Stock Market in honor of its 25th anniversary and new brand launch Corporate Headquarters Fiserv, Inc. Shareholder Information Copies of the company’s annual, 255 Fiserv Drive Brookfield, WI 53045 (262) 879-5000 Websites www.fiserv.com www.newfiserv.com quarterly and current reports, as filed with the Securities and Exchange Commission, are available on request from the company. Visit our website, www.fiserv.com, for updated news releases, stock performance, financial reports, conference call webcast, SEC filings, Investor Relations (800) 425-FISV corporate governance and other investor information. Stock Listing and Symbol NASDAQ Global Select Market Symbol: FISV Shareholders’ Meeting The 2009 Annual Meeting of Shareholders will be held on Wednesday, May 20, 2009 Independent Registered Public Accounting Firm Deloitte & Touche LLP Milwaukee, Wisconsin Transfer Agent Computershare Trust Company, N.A. P.O. Box 43069 at 10:00 a.m. Central Time Providence, RI 02940-3069 at the Fiserv Corporate (800) 446-2617 Headquarters, 255 Fiserv Drive, www.computershare.com Brookfield, Wisconsin. We Look Different. Because We Are. Because We Are. As we begin our 25th year, we have taken another significant step in our commitment to extend our leadership and enhance the value we provide to our clients. We have unveiled a new brand identity to reflect an enhanced market approach and new energy. Our new brand mark speaks volumes about where we’ve been and where we’re headed. Continuing with the rich heritage of the Fiserv name, our new logo signals a progressive and unified organization. Our new signature orange reflects a vibrant, energized company. All lowercase, the mark conveys a quiet confidence blended with approachability. The period within the mark, or “proof point,” punctuates our commitment to leading the transformation of financial services technology for our clients’ benefit – period. Unified under one brand, we’re making it easier for clients to experience the full breadth of our solutions. We’re not only addressing their day-to-day technology requirements, we’re delivering the innovation they’ll need now and in the future to meet the demands of an increasingly digital and connected world. 1 2 My Fellow Shareholders My Fellow Shareholders 2008 was a watershed year. A year when economic and political factors converged to form the beginning of what will be a multi-year transformation of the global financial services industry. The adage, “expect the unexpected,” became the norm, and we buckled in for what will likely be the most economic turbulence in more than 70 years. Change is not Optional The financial services industry is the eye of the storm. In fact, some might say the broad-based group that comprises depository institutions – banks, thrifts and credit unions – is under siege. And while the negative pressure is spreading rapidly across the entire economy, the financial services sector has felt the majority of the early impact. The wave of bad news across much of the industry, and the impact on those serving financial services providers, grew progressively worse during the year. And even though Fiserv achieved strong financial performance in 2008, our results were clearly impacted by the negative market conditions. The range of business opportunities we have seen over the last several years, along with the manner in which consumers acquire financial services, is now in flux. That point is without debate. While we would certainly prefer a very healthy end market, we view the current dislocation as an additional catalyst to accelerate our level of change. 3 Clients know that we are their partner in possibility. Clients know that we are their partner in possibility. $700 600 500 400 300 200 100 0 60 50 40 30 20 10 0 $800 700 600 500 400 300 200 100 0 06 07 08 05 06 07 08 05 06 07 08 Free cash flow (in millions) Stock Cash flow from operations (in millions) Tom Hirsch, CFO, and Pete Kight, Vice Chairman of Fiserv In 2006 we launched our platform for change, known as Fiserv 2.0. This transformation has proven even more apropos as the dynamic global financial services market is impacting how we all do business. The proactive approach 26.3% we started several years ago has us in the enviable position of being well ahead of the 24.4% change curve. 21.8% 06 07 08 Adjusted operating margin For the last few years, we have taken a number of steps to extend our business model, with a stronger focus on integration and innovation, enhancing efficiency, pinpointing the most distinct market opportunities, and executing a more disciplined approach to capital allocation. The events of 2008 have served as a further catalyst, which is helping us to achieve a larger share of the market opportunities. We expect the efforts we began two years ago to pay Adjusted Operating Margin dividends well into the future. Meeting Our Commitments At the beginning of 2008, we shared three primary goals with our shareholders: • Deliver earnings results consistent with our commitments, regardless of economic conditions • Make significant progress in integrating CheckFree • Enhance our level of competitive differentiation through innovation and integration, leading to superior results for our clients and shareholders We shared these goals as a road map for our owners to assess our financial and strategic performance, given the acquisition of CheckFree and the prospect of challenging market conditions. We are proud to say that we achieved our objectives on all three fronts 4 in a market that was far worse than we the businesses, we have identified more anticipated. We did what we said we would do, opportunity to create market differentiation and and more. economic upside than we originally anticipated. “We have identified more opportunity We continued to enhance our focus on to create market differentiation and economic upside than we originally anticipated.” Our financial performance for the year was strong. Total revenue for the year increased nearly $1 billion largely on the strength of the 2007 acquisition of CheckFree. And while the environment clearly impacted our internal revenue growth, we served more clients and delivered more products than ever before. innovation and were rewarded a number of times during the year. In addition to several top awards for product innovation, we once again claimed the top spot in the FinTech 100. Fiserv was ranked among the top five in the InformationWeek 500, and importantly, as the most innovative user of technology for the Financial Services and Banking industry. Our early efforts to spur innovation are making a difference for clients and energizing our associates. Clients know that we are their partner in possibility. Clients know that we are their partner in possibility. We grew adjusted earnings per share by 23 percent to $3.29. This growth reflected the resilience and diversity of our business model, along with strong execution, which offset several negative environmental impacts on our results. We negotiated a three-year contract 60 extension with our largest client, which added $611 more certainty and longevity to this important 50 relationship. We also generated record free cash flow of $611 million, which we deployed 40 to a combination of acquisition, share 30 repurchase and more than $1.3 billion of debt repayment. 20 Our top strategic accomplishment for the year 10 was the integration of CheckFree. We are ahead of schedule on the integration, which 05 is translating to more value for clients and 07 08 06 0 shareholders. In addition, as we have combined $700 600 500 400 300 200 100 0 06 07 08 Free cash flow (in millions) Fiserv 2.0 Momentum We introduced Fiserv 2.0 in order to continuously evolve and enhance our level of market leadership. We designed a platform to extend our leadership and better serve the needs of our clients. $800 700 We made distinct progress in our transformation. 600 We continued to deliver more integrated value 500 to clients, achieving better than 130 percent of our integrated sales targets for the year. 400 We enhanced our payments relationships with clients – selling bill payment services to 200 550 clients in our initial year after the CheckFree acquisition and winning more than 200 new 100 EFT/debit relationships during the year. And, 300 0 although in many cases we are just getting 07 08 06 05 06 07 08 started, the remaining potential is tremendous. Free cash flow (in millions) Stock Cash flow from operations (in millions) Adjusted Operating Margin 5 6 We further refined our mix of businesses by For us, the proof point is in what we do every selling a majority interest in our insurance group, day. It’s not an accident that we lead the which allows us to place additional focus on industry on virtually any metric that measures our core businesses. We freed up capital from sustainable success: product innovation, clients this transaction and will share in the potential served, sales wins, transactions processed, additional value to be created in the future. award-winning recognition, cash flow and a “ Our dynamic new color palette of the organization’s commitment to excellence whole host of others. It’s the cumulative result At Left: (From left to right) Jeff Yabuki, President and CEO, with Don Dillon, Chairman of the Board Below: (From left to right) Tom Warsop, Group President, Financial Institution Services; Pete Kight, Vice Chairman; Steve Olsen, Group President, Depository Institution Services; and Tom Hirsch, CFO, all of Fiserv visually separates us from the commonality of the competitive mass.” In early 2009, we launched a vibrant and energetic brand identity that embodies the spirit of our new organization. The response from clients, associates and shareholders has been tremendous. This new identity represents the next stage of our evolution. Our dynamic new color palette visually separates us from the commonality of the competitive mass. The lower-case typeface is a manifestation each and every day. Fiserv as a Beacon The death of the banking industry has been greatly exaggerated. The key driver of the banking industry is less the number of institutions, which has been shrinking for more than 20 years, than the number of accounts that underlie those institutions. Over the last five years, the number of deposit accounts in the U.S. has increased by 6 percent annually, even while the total number of institutions declined by more than 2,000 over the same period. of the confidence that resonates across our client base as a result of their relationships with Fiserv. Our clients know that we are their “partner in possibility” by working to further their business goals “Being a Fiserv client is not a question; it’s a statement.” Consumers and businesses will continue to transact, and although there may be some short-term variability, we expect transactions and accounts to grow over time. The strength of Fiserv’s recurring revenue business model is that our key revenue drivers are more and enable their desired aligned with accounts and transactions than levels of success. Being a Fiserv client is not a question; it’s a statement. with the number of institutions. That business model, along with the quality of our people, will allow us to prosper even in this challenging environment. We recognize that market share is won and lost in a time of crisis. We are investing in our products and solutions, with a goal of significantly increasing the number of Fiserv flags. As the economic tides change, we expect 7 to be even better positioned to realize additional As we celebrate our 25th anniversary we are success. Those investments, along with the reminded of the commitment and dedication of leading solutions we have today, will have the the many people whose collective efforts have cumulative effect of placing our clients among shaped the company. Fiserv is an American the most successful in the evolving landscape success story, and a reminder that leadership of financial services. “Serving clients extraordinarily well is in our DNA. It always has been, and it always will be.” Our continuing ability to deliver a full range of solutions in this environment further validates the quality of our solutions, the diversity of our client base, and the strength of our comes in all shapes, sizes and colors. We have the right combination of energy, innovation, excellence, and an unprecedented commitment to transform the delivery of financial services. Moving forward, the color of financial services technology leadership is orange. management team. It is also testament to our Jeffery W. Yabuki 20,000 associates around the world who stand (cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103) together to help financial institutions navigate choppy waters. Serving clients extraordinarily well is in our DNA. It always has been, and it always will be. Donald F. Dillon Chairman of the Board Jeff Yabuki talks with Fiserv associates, Tony Drewes and Judy Ladwig 8 Celebrating 25 Years Celebrating 25 Years History and experience are invaluable teachers. They, along with our privileged client partnerships, will shape the Fiserv of tomorrow. In 2009, Fiserv celebrates 25 years of innovation and growth. 1984 George Dalton and Leslie Muma combine First Data Processing and Sunshine State Systems to form Fiserv “George and I decided that our company would focus on serving the needs of the financial industry exclusively. Our people, and our investments in research and development, are dedicated toward that one goal.” Leslie Muma, Founder and Former CEO 1986 Fiserv becomes a public company and is listed on The NASDAQ Stock Market under the symbol FISV, as a $70 million regional processor 1991 Fiserv enters the commercial bank, international and credit union account processing markets 1995 Fiserv acquires Information Technology, Inc., significantly expanding the company’s account processing client base 1997 “E-bills” are available to consumers 1998 Fiserv hits $1 billion revenue milestone “ Our clients in 1999 are facing a changing competitive landscape. The financial world is both converging and expanding, as a new type of financial institution emerges. Fiserv is ready to help our clients stay ahead of their competition and maximize their profitability.” George Dalton, Founder and Former Chairman “ Fiserv has a strategic vision that is driven by responsiveness and foresight. As a service company, our livelihood depends on our responsiveness, and as a technology company, our foresight is key to our longevity.” Ken Jensen, Former CFO 2003 Check 21 is signed into law – fostering innovation in payment systems through electronic imaging 2004 Fiserv is named #1 on the first FinTech 100 ranking of companies serving the financial industry published by American Banker and Financial Insights, Inc. 2005 Fiserv hires Jeff Yabuki as CEO in December 2002 Fiserv pushes above $2 billion in revenue Financial institutions begin to offer electronic billing and payment services for free 2006 The company launches Fiserv 2.0 Fiserv enters the Fortune 500 ranking of the largest companies in the United States 2007 Fiserv acquires CheckFree Corporation, the global leader in online banking and bill payment, and the largest acquisition in Fiserv’s history 2008 Fiserv generates more than $600 million in free cash flow for the first time Fiserv launches mobile banking Information Week 500 selects Fiserv as No.1 in the Banking and Financial Services category “The history of Fiserv and CheckFree reverberates with countless events that have set us on a path to defining online banking in the U.S. Our rich history leads us to be even more energized about the opportunities ahead.” Pete Kight, Vice Chairman 2009 Fiserv announces a new market approach and brand identity, unifying all businesses representing a single- enterprise company “ We know it’s the quality of our people, and their commitment to our mission, that creates the basis for our success. We are proud of what we have done in our first 25 years and couldn’t be more excited about our prospects for the next.” Jeff Yabuki, CEO (cid:48)(cid:69)(cid:79)(cid:80)(cid:76)(cid:69)(cid:12)(cid:207)(cid:73)(cid:68)(cid:69)(cid:65)(cid:83)(cid:207)(cid:65)(cid:78)(cid:68)(cid:207)(cid:84)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)(cid:207)(cid:65)(cid:76)(cid:76)(cid:207)(cid:87)(cid:79)(cid:82)(cid:75)(cid:73)(cid:78)(cid:71)(cid:207)(cid:84)(cid:79)(cid:71)(cid:69)(cid:84)(cid:72)(cid:69)(cid:82)(cid:14)(cid:207)(cid:41)(cid:84)(cid:7)(cid:83)(cid:207)(cid:72)(cid:65)(cid:80)(cid:80)(cid:69)(cid:78)(cid:73)(cid:78)(cid:71)(cid:207)(cid:72)(cid:69)(cid:82)(cid:69)(cid:14)(cid:207)(cid:55)(cid:75)(cid:68)(cid:87)(cid:112)(cid:86)(cid:3)(cid:75)(cid:82)(cid:90)(cid:3)(cid:41)(cid:76)(cid:86)(cid:72)(cid:85)(cid:89)(cid:3)(cid:76)(cid:86)(cid:3) (cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:73)(cid:82)(cid:85)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:68)(cid:92)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:81)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:20)(cid:25)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3)(cid:70)(cid:79)(cid:76)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:90)(cid:76)(cid:71)(cid:72)(cid:17)(cid:3)(cid:41)(cid:76)(cid:86)(cid:72)(cid:85)(cid:89)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:72)(cid:70)(cid:78)(cid:41)(cid:85)(cid:72)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:90)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:76)(cid:74)(cid:75)(cid:87)(cid:86)(cid:16)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:81)(cid:3)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:75)(cid:72)(cid:79)(cid:83)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:79)(cid:76)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:50)(cid:81)(cid:79)(cid:76)(cid:81)(cid:72)(cid:17)(cid:3)(cid:58)(cid:76)(cid:87)(cid:75)(cid:3)(cid:41)(cid:76)(cid:86)(cid:72)(cid:85)(cid:89)(cid:15)(cid:3)(cid:92)(cid:82)(cid:88)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:76)(cid:89)(cid:72)(cid:3)(cid:92)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:90)(cid:75)(cid:68)(cid:87)(cid:112)(cid:86)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:15)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:81)(cid:82)(cid:90)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:17)(cid:3)(cid:87)(cid:87)(cid:87)(cid:14)(cid:78)(cid:69)(cid:87)(cid:218)(cid:1)(cid:83)(cid:69)(cid:82)(cid:86)(cid:14)(cid:67)(cid:79)(cid:77) (cid:48)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:207)(cid:207)(cid:207) (cid:207)(cid:207)(cid:207)(cid:48)(cid:82)(cid:79)(cid:67)(cid:69)(cid:83)(cid:83)(cid:73)(cid:78)(cid:71)(cid:207)(cid:51)(cid:69)(cid:82) (cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:207)(cid:207)(cid:207) (cid:207)(cid:207)(cid:207)(cid:50)(cid:73)(cid:83)(cid:75)(cid:207)(cid:6)(cid:207)(cid:35)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:207)(cid:207)(cid:207) (cid:207)(cid:207)(cid:207)(cid:35)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:207)(cid:6)(cid:207)(cid:35)(cid:72)(cid:65)(cid:78)(cid:78)(cid:69)(cid:76)(cid:207)(cid:45)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:207)(cid:207)(cid:207) (cid:207)(cid:207)(cid:207)(cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:207)(cid:41)(cid:78)(cid:84)(cid:69)(cid:76)(cid:76)(cid:73)(cid:71)(cid:69)(cid:78)(cid:67)(cid:69)(cid:207)(cid:6)(cid:207)(cid:47)(cid:80)(cid:84)(cid:73)(cid:77)(cid:73)(cid:90)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78) (cid:198)(cid:207)(cid:18)(cid:16)(cid:16)(cid:25)(cid:207)(cid:38)(cid:73)(cid:83)(cid:69)(cid:82)(cid:86)(cid:12)(cid:207)(cid:41)(cid:78)(cid:67)(cid:14)(cid:207)(cid:38)(cid:73)(cid:83)(cid:69)(cid:82)(cid:86)(cid:207)(cid:65)(cid:78)(cid:68)(cid:207)(cid:73)(cid:84)(cid:83)(cid:207)(cid:65)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:207)(cid:76)(cid:79)(cid:71)(cid:79)(cid:207)(cid:65)(cid:82)(cid:69)(cid:207)(cid:82)(cid:69)(cid:71)(cid:73)(cid:83)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:207)(cid:73)(cid:78)(cid:207)(cid:84)(cid:72)(cid:69)(cid:207)(cid:53)(cid:14)(cid:51)(cid:14)(cid:207)(cid:48)(cid:65)(cid:84)(cid:69)(cid:78)(cid:84)(cid:207)(cid:65)(cid:78)(cid:68)(cid:207)(cid:52)(cid:82)(cid:65)(cid:68)(cid:69)(cid:77)(cid:65)(cid:82)(cid:75)(cid:207)(cid:47)(cid:70)(cid:108)(cid:207)(cid:67)(cid:69)(cid:14) 9 10 A Relationship A Relationship Spanning 30 Years When Don Dillon first sold account processing software to First Interstate Bank in the late 1970s, little did he know they would still be using it 30 years later, or that his software would one day become one of the strategic building blocks for Fiserv – the $4.7 billion company he now chairs. “We are primarily family owned, ‘generational,’ and aren’t quick to make long-term decisions,” explains Lyle Knight, president and CEO of First Interstate Bank. “i_Tech was a part of our family for more than 40 years. The decision to sell it was not an easy one.” With that bold investment in a new technology, First Interstate Bancsystem, Inc. of Billings, It was the strength and mutual trust of our Montana became one of the first financial decades-long relationship that sealed the deal. institutions to use Premier®, Fiserv’s original “We decided that, instead of continuing as a strong account processing solution. Today, Premier competitor, we’d much rather be an important is the nation’s most popular banking platform, client of a technology partner ready to help us serving more than 2,000 Fiserv clients. First succeed for the next 20 years,” says Knight. Interstate soon became a vendor and reseller of that solution through its sister company, i_Tech “ A bank is a mirror of its community. Corporation, a regional data center for banks. At Left: (From left to right) Lyle Knight, President and CEO, First Interstate; Tom King, VP Operations, First Interstate; Josh Dannenberg, Account Manager, Fiserv, formerly i_Tech “To work, a relationship needs to be mutual,” says Ali Worick, program manager for Fiserv. “Our partnership with First Interstate Bank works both ways. They helped improve the original product, and have used it successfully for all these years.” Fast forward to December 2008, when Fiserv bought i_Tech Corporation from First Interstate – a decision that focused on the bank’s long-term success. This acquisition enabled us to expand our account processing footprint by adding more than 150 clients in several Western states and to maintain a state-of-the-art processing system for the bank. More importantly, the transaction allowed First Interstate, a $6 billion regional institution with more than 70 branches and a network of 150 ATMs, to focus on banking. If you have a strong and stable community, your bank should do just fine.” – Lyle Knight, First Interstate Bank As Fiserv’s solutions continue to evolve, First Interstate is able to provide the most efficient and profitable services to its customers. Using Premier as a starting point, the bank will convert to Fiserv’s electronic bill payment solution, and is also migrating its EFT, debit and ATM processing to our ACCEL/Xchange Network. Addressing the current economy, Knight says weathering the storm is a bit easier in his region than in others. “A bank is a mirror of its community,” he explains. “If you have a strong and stable community, your bank should do just fine. Stability is what we have here in Big Sky Country, but with stability comes competition. As a regional bank, we need to compete with both the nationals and the locals, and that requires a solid technology partner. Fiserv continues to deliver the right solutions, just when we need them.” 11 Bringing the Digital Branch to Life Digital Branch to Life Consumer and business customer expectations are transforming the ways in which financial institutions provide services. As the undisputed market leader in online banking and bill payment, Fiserv is delivering digital solutions that enable our clients to exceed their customers’ expectations. representative, ATM or branch – customers want a consistent experience and data access across all channels. Fiserv is at the forefront of this digital revolution. Through our top-rated online banking and bill Consumer and business customers are payment solutions, we serve nearly 4,000 redefining their expectations around service. financial institutions and touch more than 50 When it comes to financial services, they tell us million households. Last year alone, this vast that excellent personal service is not necessarily digital footprint processed 1.3 billion bill payment face to face. Rather, it should also include access transactions and delivered 300 million e-bills. As anytime, anywhere to their financial information consumers continue to migrate to the security, and services. The financial institutions that control and convenience of electronic billing and effectively utilize data integration and analytics payment, the number of transactions will grow to provide a more personalized set of services as well. across multiple delivery channels will emerge as tomorrow’s industry leaders. Whether they Recently, we launched Corillian Online, our are interacting with their financial institution via award-winning, next generation online banking, desktop, laptop, mobile device, customer service bill payment and financial management platform. Corillian Online Corillian Online from Fiserv, the next-generation online personal financial management platform, brings the digital branch to life. It integrates industry-leading online banking and bill payment capabilities, along with a full complement of value-added services. Corillian Online provides a rich, user-friendly experience that enables consum- ers to conduct nearly 70 percent of their daily financial management tasks – banking, bill pay, balance inquiry, transfers, personal money management and other services – from a single web page. Corillian Online redefines the ways in which consumers interact with their financial institution. Consumers enjoy a more personalized, holistic experience through a streamlined and intuitive user interface. Consumers expect their online banking experience to be personalized through the application of user data and past online behavior. For the financial institution, Corillian Online provides the capability to use information about their customer to increase cross- sell effectiveness through targeted communications, Above: Steve Shaw, Director of Strategic Marketing, Electronic Banking Services, Fiserv Below: Erich Litch, SVP, Sales and Strategy, Electronic Banking Services, Fiserv 12 Delivering a revolutionary online banking experience involves balancing a financial institution’s desire for online channel profitability with customers’ needs for instant, easy access to their overall financial picture. We are building online delivery and data analytics capabilities to help our financial institution clients protect their investments, evolve their online banking platform to meet their customers’ changing needs, and deliver superior financial results. “Online banking is no longer just about checking balances and transferring funds,” says Steve Shaw, director of strategic marketing, electronic banking services, Fiserv. “Now, it’s about giving online customers – consumers and businesses – new ways to manage their finances, and providing financial institutions with new capabilities to deepen relationships and enhance profitability by leveraging customer transactional data.” marketing and personalized offerings. This ability to provide a customized experience enables the financial provider to improve retention and profitability by deepening account relationships. Erich Litch, senior vice president, sales and strategy for Fiserv, adds: “Whether online or face-to-face, consumers expect the Proof Points Proof Points “ Umpqua prides itself on bringing innovation into the customer experience, whether in our stores or online. By partnering with Fiserv, we’re creating a next-generation online environment that will enable the bank to drive greater customer acquisition, retention and profitability through this increasingly efficient channel.” – Umpqua Bank, Roseburg, OR “We are excited about offering Corillian Online – the best online banking product in the marketplace. This robust solution allows us to enhance our customers’ banking experiences while improving integration with our Fiserv account processing solutions.” – Union Savings Bank, Danbury, CT “ We are engaged in rethinking how members access their services and communicate with us. Fiserv provides a cornerstone for us to build new remote services that will evolve with us. Combining a flexible architecture with a credit union that’s not afraid to use it – you can’t help but stand out in the crowd.” best experience, period. They require an online banking site – Coastal Federal Credit Union, Raleigh, NC where they can securely analyze, manage and control their finances from the convenience of any online access point. Corillian Online delivers this experience to consumers and provides financial institutions with a platform to unlock the profitability of their online channel.” The online channel is the fastest growing outlet for customer interaction as consumers become more sophisticated Internet users. Transitioning from traditional banking at the branch to relying exclusively on the convenience of the Internet, Fiserv’s online banking solutions provide excellent growth opportunities for our clients. 13 14 Keeping a Close Association Close Association Flexibility. Innovation. Trust. These are the key ingredients behind our long-term partnership with Wisconsin-based Associated Bank. We first connected with Associated Bank more than 20 years ago when they were a $2 billion community bank. Now, with more than $24 billion in assets, this regional bank has 300 branches in Wisconsin, Illinois and Minnesota. This growth required a technology partner that could handle increasing volumes and drive expansion with innovative solutions. Mark Quinlan, chief information officer at Associated Bank, talks about how the features and functionality of our solutions prove to be an important part of their success. “We have used a Fiserv account processing platform for many years,” says Quinlan. “Ultimately, it is our trusted relationship – in addition to a variety of stable solutions – that keeps us close.” In 2008, Associated Bank converted its account processing platform to Signature™ from another Fiserv solution, which better suited their changing needs. “The fact that Associated Bank stayed with Fiserv speaks volumes about the technology and innovation we bring to our clients,” says Allan MacKinnon, senior vice president, market development for Fiserv. “Core conversions are a major undertaking, but we provided a solution that will meet their needs for years to come.” Over a single weekend in May 2008, each of the bank’s 300 branches converted to the Signature account processing platform. Quinlan labeled the conversion “incredibly smooth,” thanks to months of planning and collaboration. In addition to the Signature account processing platform, the bank implemented other new Fiserv solutions including online banking and business intelligence. Consumer bill payment and presentment solutions – key to consumer retention for the bank – will be added this spring. “ We knew we would get best- of-breed technology and other enhanced offerings with Fiserv. The enhancements improved our pricing, increased efficiency and layered on new innovations – letting us strengthen the consumer experience.” – Mark Quinlan, Associated Bank “There is no question this change will prove “We expanded to a point where it made to be the right choice for our long-term growth,” sense to convert to a platform geared toward adds Quinlan. “It gives us greater control, larger financial institutions, which we could which is important. It also supplies us with run ourselves,” says Quinlan. “We knew innovative solutions to help us respond quickly we would get best-of-breed technology and to market changes. Fiserv – as it has throughout other enhanced offerings with Fiserv. The our long association – continues to be our enhancements improved our pricing, increased trusted partner.” efficiency and layered on new innovations – letting us strengthen the consumer experience.” At Left: (From left to right) Allan MacKinnon, SVP, Market Development, Fiserv, talks with Mark Quinlan, CIO, Associated Bank 15 Capturing the Optimal Technology Solution Optimal Technology Solution Consumer behavior is transforming the way financial institutions manage their deposits, with today’s remote deposit capture capabilities enabling broader consumer demand for self-service options. The Fiserv approach: Source Capture Like all Fiserv solutions, our Source Capture Optimization™, aimed at delivering the Solutions are developed around client needs. convenience of anytime, anywhere deposits Gary Brand, director of channel marketing for financial institution customers, and for Fiserv, says, “Our Source Capture Solutions optimizing efficiency at every touch point – help banks retain existing customers and gain be it the branch, teller, home office, ATM or new ones in a challenging and dynamic business. It’s an approach formulated from industry. Using our advanced technology, experience and insight gained from working institutions can process deposits more with a broad base of financial institutions, and efficiently and effectively.” an example of Fiserv 2.0 in action. Source Capture Solutions enable financial The concept is simple. Through a single, institutions to grow deposits by offering faster web-based technology platform, Source Capture processing and added convenience for business Solutions from Fiserv turn paper items – such as and retail customers. These solutions can also checks and deposit slips – into digitized images increase transaction volume through capture at any capture point. Why is this important? technology which can create a virtual footprint The volume of paper checks – about 30 billion far beyond their office locations. in 2008 – is declining about four percent annually. The demand for faster, less expensive Cost savings are a key benefit. “Financial check processing is accelerating. We enable institutions can consolidate processing centers, financial institutions to succeed in today’s reduce long teller lines and increase daily fiercely competitive market by offering services, float. It’s a win-win for both the bank and the like source capture, to their customers. consumer,” says Brand. Our solutions employ unique “straight-through” “Our clients definitely see the overall value processing, putting the consumer and the in our solutions. More than 1,500 different branch on a fully integrated, web-based financial institutions are now using Fiserv platform that provides an enterprise view of Source Capture Solutions. We expect adoption all deposit sources and and usage to increase dramatically over the standardizes reporting next three to four years,” adds Teri Carstensen, and processing. division president for Fiserv. Below: (From left to right) Gary Brand, Director of Channel Marketing, Fiserv; and Teri Carstensen, Division President, Item Processing and Payment Solutions, Fiserv 16 Source Capture Solutions Our single, web-based technology platform allows us to handle deposits from multiple capture points. With Source Capture Solutions, our financial institution clients are able to: • Reduce fraud. Through our single platform, we can immediately detect if a duplicate check is being processed. • Grow deposits. Banks can expand their virtual footprints, attracting and retaining depositors from geographic areas where they don’t necessarily have a physical location. Proof Point Proof Point “ Fiserv Source Capture has improved the banking experience for our clients by moving the imaging function to the branch – enabling faster clearing and reducing the chances of encountering fraud. At the same time, we have reduced item-related operating costs and redistributed the savings to improve our overall product and service delivery. We enjoy the highest penetration of branch capture among our competitors, which has helped us to achieve nearly 100 percent image clearing.” • Preserve capital. With digitized payments, banks – BB&T Corporation, Raleigh, NC can reduce the unit cost of processing checks and infrastructure investments for large check-sorting equipment. Instead, banks can put the capital to work in growing their business. • Increase efficiency. Our Source Capture Solutions reduce processing time and improve customer satisfaction. Chuck Doherty, VP Product Management & Business Development, shows Joyce Ho, Product Support Specialist, both of Fiserv, how a check can be transformed into an image and then immediately processed with Consumer Capture from Fiserv 17 18 Keeping the Community Connection Community Connection Just as we do, Lake City Bank counts on trusted relationships to grow its business. And grow it has. Since becoming a Fiserv client in the early 1980s, Lake City Bank of Warsaw, Indiana has grown organically from a $143 million institution with a handful of branches to a $2.5 billion bank with 43 locations in 12 northern Indiana counties. With 21 consecutive years of record earnings, Lake City Bank has maintained its “community bank” moniker. But that moniker doesn’t shield it from the rigors of competition. Engaged and helping them navigate their markets, we are proud to be Lake City Bank’s partner. David Findlay, EVP-Administration and CFO for Lake City Bank, tells us why our partnership is important to him. “We compete every day with larger banks with more resources,” he says. “That’s why our Fiserv partnership is critical. Fiserv is continually developing new products that keep us on risk management, financial accounting and mortgage origination processing, Lake City Bank has recently added bill payment and revenue enhancement solutions. In all, we provide an integrated set of 18 solutions for the bank. “ The consistency and reliability we experience with Fiserv – coupled with continued integration of new and existing solutions – makes it easy to add components that keep us competitive.” the leading edge of banking technology. The – David Findlay, Lake City Bank consistency and reliability we experience with Fiserv – coupled with continued integration of We care about their success. Amy McChesney, new and existing solutions – makes it easy to senior account executive and 25-year employee add components that keep us competitive.” tells us why. “Lake City Bank is more than a client for us. They are our partner. We work Mike Kubacki, chairman, president and CEO, with them daily and are involved in their talks about our relationship. “Our clients feel strategic planning.” they have found the right partner with Lake City Bank through the comfort, familiarity and trust Angie Ritchey, VP of operations and technology that comes with a good banking relationship. for Lake City Bank and current co-chair of a Fiserv’s values mesh well with ours.” Fiserv Client Advisory Board, sums up the Fiserv connection this way: “In today’s world, staying The relationship between our two companies with a company for 25 years is not the norm. predates the 1984 founding of Fiserv. Lake The strengths behind our long-term relationship City Bank began its processing operation with are the solutions, the people and – most of all – a software platform that later became – and Fiserv’s commitment to our success.” remains – a Fiserv account processing solution. To its historic set of add-on solutions like Above: (From top to bottom) Mike Kubacki, CEO; Angie Ritchey, VP Operations and Technology; and Lisa Fulton, VP Operations, all of Lake City Bank In Photo at Left: Amy Dalson McChesney, Senior Account Executive, Fiserv (far left), with David Findlay, EVP CFO, Lake City Bank (far right) 19 Fiserv at a Glance at a Glance Fiserv, Inc. (NASDAQ: FISV) is the leading global provider of information management and electronic commerce systems for the financial services industry, driving innovation in Payments; Processing Services; Risk and Compliance; Customer and Channel Management; and Business Intelligence and Optimization. As we celebrate our 25th year, we are leading the transformation of financial services technology to help our clients change the way financial services are delivered. We’re delivering more innovation and more integration – all to help our clients grow their businesses and increase profitability. Financial Financial Institution Institution Services Services (53% of revenue) (53% of revenue) Lending Item Processing 9% 8% Payments and Industry Products (47% of revenue) Account Processing & Other 36% 31% 8% 8% Payments Output Solutions Risk & Investment Market Reach Market Reach Financial Institution Services Payments and Industry Products • Market leader in account processing • Leading provider of bill payment and services in U.S. with nearly 6,000 clients presentment services • Relationships with the top 50 U.S. banking • Nearly 1.3 billion online bill pay transactions institutions and 99 of the top 100 processed through financial institutions, • Largest independent U.S. check processor, brokerage firms or portals handling one out of every 10 checks written • More than 3,000 total bill pay clients • Provider of network clearing services to • More than 3,000 biller relationships 800 client institutions through the Fiserv • Leading Internet banking services provider, Clearing Network serving nearly 4,000 client institutions • Approximately six billion ATM/debit card transactions processed • Delivered 300 million e-bills 20 Client Solutions Client Solutions Fiserv offers an unmatched array of innovative solutions that are supported by the highest quality client service. Our comprehensive set of solutions gives Fiserv the ability to provide next-generation products and services to our clients. Account and transaction processing, payment processing, risk management, compliance, business intelligence, business optimization and mobile banking are counted among our collection of market-leading, award-winning solutions. 16,000 Clients Served 16,000 Clients Served • Financial institutions: banks, credit unions and thrifts • Mortgage lenders and leasing companies • Telecommunication and utility companies • Brokerage and investment firms • Healthcare and insurance providers • Retail establishments • Municipalities Largest Client 5% 17% Next 49 Financial Institution Clients Percent of Percent of Total Revenue Total Revenue by Client by Client 78% All Other Clients Proof Points Proof Points Number One on the FinTech 100 Survey of Top Technology Companies by American Banker and Financial Insights, Inc. Number One Online Banking provider for three consecutive years by Celent Number One for Branch and Teller Source Capture Solutions by Aite Group Top Ranked Company on “The Innovators” listing provided by BankTechnology News First in the Bank and Financial Services industry category on the InformationWeek 500 listing Top Ten in the Chartis RiskTech 100 Report Fortune 500 468 on this prestigious ranking of top U.S. companies Best of Show for our Online Banking solution at Finovate 2008 21 Consolidated Statements of Income Income In millions, except per share data Years ended December 31, Revenues: Processing and services Product Total Revenues Expenses: Cost of processing and services Cost of product Selling, general and administrative Total Expenses Operating Income Interest expense Interest income Loss on sale of businesses Income from continuing operations before income taxes and income from investment in unconsolidated affiliate Income tax provision Income from investment in unconsolidated affiliate, net of income taxes Income from continuing operations Income from discontinued operations, net of income taxes 2008 2007 2006 $ 3,616 1,123 4,739 2,099 917 833 3,849 890 ( 260 ) 13 (24 ) 619 (279 ) 6 346 223 $ 2,668 1,229 3,897 1,639 979 540 3,158 739 (76 ) 7 – 670 (256 ) – 414 25 $ 2,466 1,078 3,544 1,573 839 465 2,877 667 (41 ) – – 626 (236 ) – 390 60 Net Income $ 569 $ 439 $ 450 Net income per share - basic: Continuing operations Discontinued operations Total Net income per share - diluted: Continuing operations Discontinued operations Total Shares used in computing net income per share: Basic Diluted $ 2.14 1.37 $ 3.51 $ 2.12 1.36 $ 3.49 162.0 163.1 $ 2.48 0.15 $ 2.64 $ 2.45 0.15 $ 2.60 166.6 168.8 $ 2.23 0.34 $ 2.57 $ 2.20 0.34 $ 2.53 175.0 177.5 Note: Our Annual Report on Form 10-K, which includes Management’s Discussion and Analysis, Financial Statements and related Footnotes, is available online under “For Investors” on our website, www.fiserv.com. 22 Consolidated Statements of Cash Flows Cash Flows In millions Years ended December 31, Cash Flows from Operating Activities: Net income Adjustment for discontinued operations Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes Share-based compensation Excess tax benefit from exercise of stock options Loss on sale of businesses Income from investment in unconsolidated affiliate Settlement of interest rate hedge contracts Amortization of acquisition-related intangible assets Depreciation and other amortization Changes in assets and liabilities, net of effects from acquisitions and dispositions: Trade accounts receivable Prepaid expenses and other assets Trade accounts payable and other liabilities Deferred revenues Net cash provided by operating activities Cash Flows from Investing Activities: ( 4 ) 34 (2 ) 24 (6 ) – 158 204 (27 ) (7 ) 44 11 775 Capital expenditures, including capitalization of software costs ( 199 ) Payment for acquisitions of businesses, net of cash acquired Proceeds from sale of businesses, net of cash sold and expenses paid Other investing activities Net cash provided by (used in) investing activities (85 ) 498 (8) 206 Cash Flows from Financing Activities: (Repayments of) proceeds from revolving credit facility, net ( 740 ) Repayments of long-term debt Proceeds from long-term debt Issuance of stock for employee stock plans Purchases of treasury stock Excess tax benefit from exercise of stock options Deferred financing costs Other financing activities (563 ) – 37 (441 ) 2 (1 ) 7 ) ( 2008 2007 2006 $ 569 (223 ) $ 439 (25 ) $ 450 (60 ) 20 23 (12 ) – – (30 ) 39 147 (35 ) (32 ) 23 8 565 (156 ) (4,333 ) – 19 (4,470 ) 285 (71 ) 4,248 50 (469 ) 12 (24 ) (7 ) 14 26 (10 ) – – – 24 143 (54 ) (13 ) 11 10 541 (160 ) (187 ) – (1 ) (348 ) 144 (16 ) 10 36 (560 ) 10 – 3 (373 ) (180 ) 150 146 Net cash (used in) provided by financing activities (1,713 ) 4,024 Net change in cash and cash equivalents Net cash transactions transferred from discontinued operations Beginning balance Ending balance (732) 667 297 119 62 116 $ 232 $ 297 $ 116 NOTe: Cash flows from discontinued operations are excluded from the above statements of cash flows. Our Annual Report on Form 10-K, which includes Management’s Discussion and Analysis, Financial Statements and related Footnotes, is available online under “For Investors” on our website, www.fiserv.com. 23 Consolidated Balance Sheets Balance Sheets In millions December 31, Assets Cash and cash equivalents Trade accounts receivable, less allowance for doubtful accounts Deferred income taxes Prepaid expenses and other current assets Assets of discontinued operations held for sale Total Current Assets Property and equipment, net Intangible assets, net Goodwill Other long-term assets Total Assets Liabilities and Shareholders’ Equity Trade accounts payable Accrued expenses Deferred revenues Current maturities of long-term debt Liabilities of discontinued operations held for sale Total Current Liabilities Long-term debt Deferred income taxes Other long-term liabilities Total Liabilities Shareholders’ Equity Total Liabilities and Shareholders’ Equity 2008 2007 $ 232 $ 297 601 71 295 946 2,145 303 2,121 4,409 353 $ 9,331 836 71 353 2,683 4,240 370 2,299 4,808 129 $ 11,846 $ 101 $ 522 338 255 831 2,047 3,850 530 310 6,737 2,594 $ 9,331 181 597 351 510 2,112 3,751 4,895 574 159 9,379 2,467 $ 11,846 Note: Our Annual Report on Form 10-K, which includes Management’s Discussion and Analysis, Financial Statements and related Footnotes, is available online under “For Investors” on our website, www.fiserv.com. Forward-looking Statements and Non-GAAP Financial Measures This report contains forward-looking statements that are subject to significant risks and uncertainties. Forward-looking statements include those that express a plan, belief, expectation, estimation, anticipation, intent, contingency, future development, objective, goal or similar expression, and can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “could,” “should” or words of similar meaning. For more information about forward-looking statements and the factors that could cause actual results to differ materially from our current expectations, you should refer to our Annual Report on Form 10-K for the year ended December 31, 2008. “Adjusted earnings per share from continuing operations” and “adjusted income from continuing operations” exclude amortization of acquisition-related intangible assets ($0.60 per share, $0.14 per share, $0.08 per share and $0.07 per share in 2008, 2007, 2006 and 2005, respectively) and exclude an after-tax loss on the sale of businesses of $57 million ($0.35 per share) in 2008. 2008 and 2007 exclude merger related costs associated with our acquisition of CheckFree totaling $59 million ($0.22 per share) and $13 million ($0.05 per share), respectively. 2007 and 2006 exclude charges totaling $7 million ($0.03 per share) and $9 million ($0.03 per share), respectively, related to employee severance and facility shutdown expenses. 2005 excludes a pre-tax gain of $87 million ($0.29 per share) from the sale of two investments and the receipt of a $26 million ($0.09 per share) contract termination fee and includes the pro forma impact of SFAS 123R for share-based compensation of $0.10 per share. “Adjusted operating margin” excludes: revenues ($513 million, $804 million and $706 million in 2008, 2007 and 2006, respectively) and operating income ($44 million, $78 million and $110 million in 2008, 2007 and 2006, respectively) for Fiserv Insurance which we have sold our majority interest in; customer reimbursements of $203 million, $158 million and $132 million in 2008, 2007 and 2006, respectively, which are included in both revenues and expenses; amortization of acquisition-related intangible assets of $158 million, $39 million and $24 million in 2008, 2007 and 2006, respectively; and charges of $59 million, $18 million and $9 million in 2008, 2007 and 2006, respectively, primarily for merger related costs and restructuring expenses. “Free cash flow” represents net cash provided by operating activities less capital expenditures, plus non-recurring payments totaling $35 million and $34 million in 2008 and 2007, respectively, related to after-tax merger costs and one-time liabilities assumed on the opening balance sheets of acquired companies. “Free cash flow per share” represents “free cash flow” divided by diluted shares outstanding during the year. All third party trademarks are the property of their respective owners. 24 Financial Highlights $5 $5 $5 $5 $600 $4.7 $600 $600 $600 $4.00 $537 $4.00 $4.00 $4.00 $4.00 $4.00 $3.75 $4.00 $4.00 (In millions, except per share and stock price data) 2008 2007 2006 2005 Revenues Adjusted income Adjusted earnings per share Cash flow from operations Free cash flow Free cash flow per share Stock price Average share count $ 4,739 $ 3,897 $ 3,544 $ 3,229 537 3.29 775 611 3.75 450 2.67 565 443 2.62 410 2.31 541 381 2.15 379 1.98 526 385 2.02 36.37 163.1 55.49 168.8 52.42 177.5 43.27 191.0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 05 06 07 08 05 06 07 05 08 06 07 08 05 500 400 300 200 100 0 06 500 400 300 200 100 0 500 400 300 200 100 0 $3.29 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 500 400 300 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 200 100 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 * Adjusted income, adjusted earnings per share, free cash flow and free cash flow per share are non-GAAP financial measures. See page 24 for additional information about these non-GAAP financial measures. All results are derived from continuing operations and exclude discontinued operations. Revenues (in billions) Adjusted income (in millions) Adjusted earnings per share Free cash flow per share Revenues Revenues Revenues Revenues Adjusted Income Adjusted Income Adjusted Income Adjusted Income Adjusted Earnings Adjusted Earnings Adjusted Earnings Adjusted Earnings Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share Free Cash Flow/Share 05 07 06 08 07 08 05 06 07 05 08 06 07 08 05 06 05 07 06 08 0 0.00 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 0.00 05 08 06 05 07 06 08 0.00 07 08 05 06 0.00 07 05 08 06 0.00 07 08 05 06 07 08 Corporate Information Board of Directors Donald F. Dillon Chairman of the Board Operating Committee Jeffery W. Yabuki President and Chief Executive Officer Directors Daniel P. Kearney Peter J. Kight Gerald J. Levy Denis J. O’Leary Glenn M. Renwick Kim M. Robak Doyle R. Simons Thomas C. Wertheimer Jeffery W. Yabuki Peter J. Kight Vice Chairman James W. Cox Executive Vice President, Corporate Development Douglas J. Craft Executive Vice President, Depository Institution Services Bridie A. Fanning Executive Vice President, Human Resources Rahul Gupta Executive Vice President, Card Services Stephen E. Olsen Group President, Depository Institution Services Charles W. Sprague Executive Vice President, General Counsel and Secretary Murray C. Walton Senior Vice President, Chief Risk Officer Thomas W. Warsop, III Group President, Financial Institution Services Thomas J. Hirsch Executive Vice President, Chief Financial Officer and Treasurer Richard K. Jones Executive Vice President, Chief Information Officer Donald J. MacDonald Executive Vice President, Chief Marketing Officer Daniel F. Murphy Senior Vice President, Director of Corporate Audit Thomas A. Neill Executive Vice President, Depository Institution Services Our Leadership Our Leadership Fiserv opens The NASDAQ Stock Market in honor of its 25th anniversary and new brand launch Corporate Headquarters Fiserv, Inc. Shareholder Information Copies of the company’s annual, 255 Fiserv Drive Brookfield, WI 53045 (262) 879-5000 Websites www.fiserv.com www.newfiserv.com quarterly and current reports, as filed with the Securities and Exchange Commission, are available on request from the company. Visit our website, www.fiserv.com, for updated news releases, stock performance, financial reports, conference call webcast, SEC filings, Investor Relations (800) 425-FISV corporate governance and other investor information. Stock Listing and Symbol NASDAQ Global Select Market Symbol: FISV Shareholders’ Meeting The 2009 Annual Meeting of Shareholders will be held on Wednesday, May 20, 2009 Independent Registered Public Accounting Firm Deloitte & Touche LLP Milwaukee, Wisconsin Transfer Agent Computershare Trust Company, N.A. P.O. Box 43069 at 10:00 a.m. Central Time Providence, RI 02940-3069 at the Fiserv Corporate (800) 446-2617 Headquarters, 255 Fiserv Drive, www.computershare.com Brookfield, Wisconsin. 2008 Summary Annual Report The Power Within. Corporate Headquarters 255 Fiserv Drive Brookfield, WI 53045 Phone: 262-879-5000 Toll Free: 800-872-7882 general_info@fiserv.com www.fiserv.com Fiserv is a registered trademark of Fiserv, Inc. All product and brand names mentioned are property of their respective companies. ©2009 Fiserv, Inc. All rights reserved.

Continue reading text version or see original annual report in PDF format above