SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

                 Annual Report Pursuant to Section 13 or 15(d)
                   of the Securities and Exchange Act of 1934

                  For the fiscal year ended December 31, 1995
                          Commission file no. 0-14948

                                  FISERV, INC.
                                 -------------
             (Exact name of Registrant as specified in its charter)

                    WISCONSIN                     39-1506125
        --------------------------------      ------------------
        (State or other jurisdiction of        (I.R.S. Employer
          incorporation or organization)      Identification No.)

255 FISERV DRIVE, BROOKFIELD, WISCONSIN             53045
- ----------------------------------------          ----------
(Address of principal executive offices)          (Zip code)

Registrant's telephone number, including area code:  (414) 879-5000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      NONE
                                     -----
                                (Title of Class)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                          Common Stock, $.01 Par Value
                          ----------------------------
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes(X) No

State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of January 31, 1996:  $1,212,102,441

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of January 31, 1996:  44,892,683

DOCUMENTS INCORPORATED BY REFERENCE:  List the following documents if
incorporated by reference and the part of the Form 10-K into which the document
is incorporated:  (1) Any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.
1995 Annual Report to Shareholders - Parts II, IV
Proxy Statement for March 21, 1996 Meeting - Part III



                         FISERV, INC. AND SUBSIDIARIES
                                   FORM 10-K
                               December 31, 1995

PART I                                                                Page

Item 1.   Business                                                    1

Item 2.   Properties                                                  10

Item 3.   Legal Proceedings                                           11

Item 4.   Submission of Matters to a Vote of Security Holders         11

PART II

Item 5.   Market for the Registrant's Common Equity and
          Related Shareholder Matters                                 11

Item 6.   Selected Financial Data                                     11

Item 7.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations               11

Item 8.   Financial Statements and Supplementary Data                 11

Item 9.   Changes in and Disagreements with
          Accountants on Accounting and Financial Disclosure          11

PART III

Item 10.  Directors and Executive Officers of the Registrant          12

Item 11.  Executive Compensation                                      12

Item 12.  Security Ownership of Certain Beneficial Owners
          and Management                                              12

Item 13.  Certain Relationships and Related Transactions              12

PART IV

Item 14.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K                                         12



                         ==============================

                                     PART I

                         ==============================


ITEM 1.  BUSINESS

     Fiserv was formed on July 31, 1984, through the combination of two major
regional data processing firms located in Milwaukee, Wisconsin, and Tampa,
Florida.  These firms--First Data Processing of Milwaukee and Sunshine State
Systems of Tampa--began their operations in 1964 and 1971, respectively, as the
data processing operations of their parent financial institutions.
Historically, operations were expanded by developing a range of services for
these parent organizations as well as other financial institutions.
     Since its organization in 1984, the Company has grown through the
continuing development of highly-specialized services and product enhancements,
the addition of new clients and the acquisition of firms complementing the
Fiserv organization.

BUSINESS RESOURCES

     Fiserv conducts the following operations nationwide:  financial data
processing, software system development, item processing and check imaging,
multiple technology support and related product businesses.  In addition, the
Company has business support centers in London, England, and Singapore.  The
Fiserv organization, headquartered in Brookfield, Wisconsin, is prepared to meet
the variety of information technology and related product and service needs of
the financial industry.
     The SAVINGS & COMMUNITY BANK GROUP provides service bureau processing and
resource management services for savings institutions and community bank clients
and item processing services for all Fiserv clients nationwide.  Business units
within the Savings & Community Bank Group are arranged by regional markets as
follows:
     Western Region locations:  Phoenix, Arizona; Alameda, Fresno, Fullerton,
Sacramento, San Diego, San Leandro and Walnut, California; Seattle, Washington.
     Southwest Region locations:  Little Rock, Arkansas; Los Angeles,
California; Denver, Colorado; Bowling Green, Kentucky; New Orleans, Louisiana;
Amarillo (Facilities Management site), Beaumont, Dallas, Houston and San
Antonio, Texas.
     Midwest Region locations: Minneapolis and St. Paul, Minnesota; Fargo, North
Dakota.
     Central Region locations:  Chicago, Marion and Pontiac, Illinois; Davenport
and Des Moines, Iowa; Brookfield and Milwaukee, Wisconsin.
     Eastern Region locations:  Jacksonville, Miami and Tampa, Florida; Atlanta
and Macon, Georgia; Pittsburgh, Pennsylvania; Memphis, Tennessee.
     Northeast Region locations:  New Haven, Connecticut; Boston and Somerville,
Massachusetts; Piscataway and Princeton, New Jersey; Lake Success, New York;
Cleveland, Ohio.
     New York Chase alliance locations:  Brooklyn, Rochester and Syracuse, New
York.
     The BANK & CREDIT UNION GROUP includes Fiserv sectors and business units
that provide service bureau processing, in-house software systems and strategic
outsourcing for national and international bank, mortgage bank and credit union
clients.  The Bank & Credit Union Group includes the following:
     CBS Worldwide Sector with business units in Fresno, California; Orlando,
Florida; Arlington Heights, Illinois; London, England; Singapore.
     Financial Institutions Outsourcing Sector with business units in Covina and
Fresno, California; Honolulu, Hawaii; Arlington Heights, Illinois; Oklahoma
City, Oklahoma; Philadelphia and Pittsburgh, Pennsylvania.
     Credit Union Sector with business units in Titusville, Florida; Chicago,
Illinois; Flint and Troy, Michigan; Minneapolis, Minnesota; Corvallis, Oregon.
     Additional business units within the Bank & Credit Union Group include
BankLink cash management services (New York, New York); Data-Link Systems
mortgage banking services (South Bend, Indiana); Outsourcing & Government
Services; Fiserv EFT electronic funds transfer services (Portland, Oregon).
     The INDUSTRY PRODUCTS & SERVICES GROUP includes all Fiserv product and
service company businesses marketing to clients within the Fiserv Corporate
Groups, as well as marketing direct to clients within the financial, healthcare,
insurance, retail, telecommunications and related industries.

     The Industry Products & Services Group includes Cadre, Inc. disaster
recovery services (Hartford, Connecticut); Communications Design marketing
services (Sacramento, California); DataPro Card Services (Indianapolis,
Indiana); Fiserv Forms & Graphics (Seattle, Washington); Fiserv Human Resource
Information Services (Melville, New York); ImageSoft Technologies (Maitland,
Florida); National Embossing Company card services (Houston, Texas); RECOM
network consulting (Tampa, Florida); Sendero Corporation asset/liability
management and decision support systems (Scottsdale, Arizona).
     Fiserv is active in the servicing, administration and record keeping for
Individual Retirement Accounts (IRAs) and business retirement plans.  Three
subsidiary companies provide retirement plan processing services--FIRST TRUST
CORPORATION, LINCOLN TRUST COMPANY and THE AFFINITY GROUP, all headquartered in
Denver, Colorado.  The Affinity Group also does business in Florida as
Retirement Accounts, Inc.  Cumulatively, these Fiserv subsidiaries service
approximately 331,900 retirement plans and custodial accounts with assets valued
at more than $16.8 billion.
     INFORMATION TECHNOLOGY, INC. (ITI) is a Fiserv subsidiary company based in
Lincoln, Nebraska.  ITI is a nationwide leader in the design, development,
delivery, installation and support of the ITI Premier banking software and
related services.  The ITI product serves financial institutions directly
through in-house software licenses, and indirectly through outsourcing providers
using ITI software.

BUSINESS STRATEGY

     The market for products and services offered by financial institutions
continues to undergo change.  New alternative lending and investment products
are being introduced and implemented by the industry with great frequency; the
distinctions among financial services traditionally offered by savings and loan
associations, banks and credit unions continue to narrow; and financial
institutions diversify and consolidate on an ongoing basis in response to market
pressures, as well as under the auspices of the Federal Deposit Insurance
Corporation (FDIC) and the Credit Union National Association (CUNA).
     Although such market changes have led to consolidations which have reduced
the number of financial institutions in the United States, such consolidations
have not resulted in a material reduction of the number of customer accounts
serviced by the financial industry as a whole.  New entrants to the once limited
financial services industry have opened new markets for Fiserv services.
     To stay competitive in this changing marketplace, financial institutions
are finding they must aggressively meet the growing needs of their customers for
a broad variety of new products and services that are typically transaction-
oriented and fee-based.  The growing volume and types of transactions and
accounts have increased the data processing requirements of these institutions.
As a consequence, Fiserv management believes that the financial services
industry has become one of the largest users of data processing products and
services within the United States.
     Moreover, Fiserv expects that the industry will continue to require
significant commitments of capital and human resources to the information
systems requirements, to require application of more specialized systems, and to
require development, maintenance and enhancement of applications software.
Fiserv believes that economies of scale in data processing operations are
essential to justify the required level of expenditures and commitment of human
resources.
     In response to these market dynamics, the means by which financial
institutions obtain data processing services has changed.  Many smaller, local
and regional third-party data processors are leaving the business or
consolidating with larger providers.  A number of large financial institutions
previously providing third-party processing services for other institutions have
withdrawn from the business to concentrate on their primary, core businesses.
Similarly, an increasing number of financial institutions that previously
developed their own software systems and maintained their own data processing
operations have outsourced their data processing requirements by licensing their
software from a third party or by contracting with third-party processors to
reduce costs and enhance their products and services.  Outsourcing can involve
simply the licensing of software, thereby eliminating the costly technical
expertise within the financial institution, or the utilization of service
bureaus, facilities management or resource management capability.  Fiserv
provides all of these options to the financial industry.
     To capitalize on these industry trends and to become the premier national
provider of data processing products and services, Fiserv has implemented a
strategy of continuing to develop new products, improving the cost effectiveness
of services provided to clients, aggressively soliciting new clients and making
both opportunistic and strategic acquisitions.


ACQUISITION HISTORY
Founded Acquired Business Service - ------- -------- -------- ------- 1964 July 1984 First Data Processing, Milwaukee, WI Data processing 1971 July 1984 Sunshine State Systems, Tampa, FL Data processing 1966 Nov. 1984 San Antonio, Inc., San Antonio, TX Data processing 1982 Oct. 1985 Sendero Corporation, Scottsdale, AZ Asset/liability management 1962 Oct. 1985 First Trust Corporation, Denver, CO DP for retirement planning 1962 Oct. 1985 First Retirement Marketing, Denver, CO Retirement planning services 1973 Jan. 1986 On-Line, Inc., Seattle, WA Data processing, forms 1966 May 1986 First City Financial Systems, Inc., Beaumont, TX Data processing 1962 Feb. 1987 Pamico, Inc., Milwaukee, WI Specialized forms 1975 Apr. 1987 Midwest Commerce Data Corp., Elkhart, IN Data processing 1969 Apr. 1987 Fidelity Financial Services, Inc., Spokane, WA Data processing 1965 Oct. 1987 Capbanc Computer Corporation, Baton Rouge, LA Data processing 1971 Feb. 1988 Minnesota On-Line Inc., Minneapolis, MN Data processing 1965 May 1988 Citizens Financial Corporation, Cleveland, OH Data processing 1980 May 1988 ZFC Electronic Data Services, Inc., Bowling Green, KY Data processing 1969 June 1988 GESCO Corporation, Fresno, CA Data processing 1967 Nov. 1988 Valley Federal Data Services, Los Angeles, CA Data processing 1984 Dec. 1988 Northeast Savings Data Services, Hartford, CT Data processing 1982 May 1989 Triad Software Network, Ltd., Chicago, IL Data processing 1969 Aug. 1989 Northeast Datacom, Inc., New Haven, CT Data processing 1978 Feb. 1990 Financial Accounting Services Inc., Pittsburgh, PA Data processing 1974 June 1990 Accurate Data On Line, Inc., Titusville, FL Data processing 1982 June 1990 GTE EFT Services Money Network, Fresno, CA EFT networks 1968 July 1990 First Interstate Management, Milwaukee, WI Data processing 1982 Oct. 1990 GTE ATM Networks, Fresno, CA EFT networks 1867 Nov. 1990 Boston Safe Deposit & Trust Co. IP Services, Boston Item processing 1968 Dec. 1990 First Bank, N.A. IP Services, Milwaukee, WI Item processing 1979 Apr. 1991 Citicorp Information Resources, Inc., Stamford, CT Data processing 1980 Apr. 1991 BMS Processing, Inc., Randolph, MA Item processing 1979 May 1991 FHLB of Dallas IP Services, Dallas, TX Item processing 1980 Nov. 1991 FHLB of Chicago IP Services, Chicago, IL Item processing 1977 Feb. 1992 Data Holdings, Inc., Indianapolis, IN Automated card services 1980 Feb. 1992 BMS On-Line Services, Inc. (assets), Randolph, MA Data processing 1982 Mar. 1992 First American Information Services, St. Paul, MN Data processing 1981 July 1992 Cadre, Inc., Avon, CT Disaster recovery 1992 July 1992 Performance Analysis, Inc., Cincinnati, OH Asset/liability management 1986 Oct. 1992 Chase Manhattan Bank, REALM Software, NY Asset/liability management 1984 Dec. 1992 Dakota Data Processing, Inc., Fargo, ND Data processing 1983 Dec. 1992 Banking Group Services, Inc., Somerville, MA Item processing 1968 Feb. 1993 Basis Information Technologies, Atlanta, GA Data processing, EFT 1986 Mar. 1993 IPC Service Corporation (assets), Denver, CO Item processing 1973 May 1993 EDS' FHLB Seattle (assets), Seattle, WA Item processing 1982 June 1993 Datatronix Financial Services, San Diego, CA Item processing 1966 July 1993 Data Line Service, Covina, CA Data processing 1978 Nov. 1993 Financial Processors, Inc., Miami, FL Data processing 1974 Nov. 1993 Financial Data Systems, Jacksonville, FL Item processing 1961 Nov. 1993 Financial Institutions Outsourcing, Pittsburgh, PA Data processing 1972 Nov. 1993 Data-Link Systems, South Bend, IN Mortgage banking services 1985 Apr. 1994 National Embossing Company, Inc., Houston, TX Automated card services 1962 May 1994 Boatmen's Information Systems of Iowa, Des Moines Data processing 1981 Aug. 1994 FHLB of Atlanta IP Services, Atlanta, GA Item processing 1989 Nov. 1994 CBIS Imaging Technology Banking Unit, Maitland, FL Imaging technology 1987 Dec. 1994 RECOM Associates, Inc., Tampa, FL Network integration 1977 Feb. 1995 BankLink, Inc., New York, NY Cash management 1976 May 1995 Information Technology, Inc., Lincoln, NE Software & Services 1957 Aug. 1995 Lincoln Holdings, Inc., Denver, CO DP for retirement planning 1993 Sept. 1995 SRS, Inc., Austin, TX Data processing 1992 Sept. 1995 ALLTEL's Document Management Services, CA, NJ Item processing 1978 Nov. 1995 Financial Information Trust, Des Moines, IA Data processing
SYSTEMS, SERVICES AND PRODUCTS No matter what a financial institution requires, Fiserv offers a business- specific solution to satisfy its needs--from data processing to specialized in- house processing systems to customized outsourcing. Within this dynamic relationship, Fiserv brings the resources, expertise and technical specialization that gives an institution the security to focus its efforts on reaching its strategic business goals. All Fiserv products and services are designed to help clients meet their ultimate goal: giving their customers the best possible service quickly, accurately and completely. Through their relationship with Fiserv, financial institutions gain the tools to enhance and expand their customer service: advanced technology, dependable and responsive support, product and system flexibility, and value for their money. As a technology partner, Fiserv offers data processing solutions based on the financial institution's requirements. This broad base of offerings results in delivery options including service bureau capabilities; in-house software systems; and strategic technology alliances including facilities and resource management services. A host of financial information technology products and services complement these delivery methods: item processing and imaging technology services; backroom automation software systems; electronic funds transfer services; plastic cards and other related card management services; rate risk management systems; self-directed retirement plan processing; network installation and integration services; human resources outsourcing; disaster recovery; design and production of business forms and marketing literature; and delivery and support of leading third-party software and hardware products. COMPREHENSIVE SERVICE DIMENSION Fiserv focuses on providing financial data processing systems and related information management services and products to banks, credit unions, mortgage banks, savings institutions and other financial intermediaries. This focus allows the Company to concentrate its advanced technology, industry experience, research and development on creating and supporting solutions uniquely designed for the financial industry. Based on market surveys of total clients served, Fiserv is the nation's leading independent data processing provider for banks, savings institutions and credit unions with assets over $25 million. Many financial institutions, including banks, credit unions, mortgage banks and savings institutions, rely on Fiserv data center service bureau solutions for their information processing needs. These solutions offer clients a choice of online systems compatible with their existing equipment. Fiserv data centers focus on the financial institution's needs within its local business climate, helping to better serve the customer base and provide quality service at all points of customer contact. In-house software systems give clients a service delivery method that enables them to process their own work. These solutions offer clients a broad array of service capabilities to respond to emerging market opportunities. Specific to this Fiserv solution is the option of migrating between in-house or service bureau delivery approaches without new software conversion. The end result: a business alliance designed to help financial institutions respond to their customers while enabling each institution to select its preferred operating environment. Strategic technology alliances offer financial institutions the option of full data processing management by Fiserv personnel on-site; or management of their systems at a Fiserv data center. Facilities Management brings Fiserv personnel to the client's site, while Resource Management brings the client's operations to one of the many Fiserv data processing or computer service centers throughout the United States. Both solutions are designed to meet the unique requirements of the client by partnering to minimize operating costs while allowing each client to maintain control of its software applications. For institutions seeking to expand or enhance their mortgage banking capabilities, Fiserv offers a specialized line of mortgage products and services. The benefits of completely PC WindowsTM-based origination and secondary marketing solutions and online, real-time loan servicing solutions are available to help clients effectively meet their mortgage banking needs. Offering comprehensive item processing (IP) services to more financial institutions than any other external provider, Fiserv maintains a network of specialized, regional processing centers in more than 30 cities. In a field where efficiencies are gained through volume, Fiserv is well positioned to leverage its resources and technological expertise for the benefit of IP services clients nationwide. Other item processing services include: proof of deposit, inclearing, statement rendering, bulkfile, lockbox, item research, overdraft processing, qualified returns and return items, cash letter deposit, fine sorting, account reconcilement and adjustments. A growing trend in check operations is the use of imaging technology. Fiserv offers a full range of image integration products and services. Included are image and document management systems for management, storage and presentation of check and document images. Fiserv is among the nation's leading third-party providers of electronic funds transfer (EFT) services, providing transaction authorization, comprehensive Automated Teller Machine / Point of Sale (ATM / POS) processing and card management services. Product flexibility and current technology, coupled with access to all major EFT services networks, helps to keep Fiserv clients competitive. As a leading systems integrator, Fiserv creates joint ventures that combine core competencies in hardware, software, functional application systems, networks, data management and end-user computing, along with dedicated human resources. In addition, Fiserv complements its service offerings through numerous strategic alliances with specialized third-party technology providers. As a worldwide provider of financial decision-support systems, Fiserv offers asset/liability management, data warehousing and performance measurement solutions. Consulting services help to analyze, enhance and expedite the total financial management process. Office automation and communication network integration services are designed to meet specialized information technology needs. Included are hardware and software installation, maintenance, on-site education and support for financial institutions. For cash management services, Fiserv offers a variety of software products that take into account an institution's particular needs. This portfolio of cash management solutions includes electronic banking information, reporting and transaction initiation services. Fiserv backroom automation systems provide PC-based productivity tools that deliver the software, service and support necessary to meet the customer service challenges facing the financial industry. The systems are designed to streamline backroom operations by reducing time, keystrokes and labor. A full range of human resource, benefit and payroll information services are available through Fiserv to help large organizations enhance their personnel management tasks. Marketing communications and a comprehensive financial business forms service, including communications needs analysis and complete project management, provide assistance at all levels of planning and implementation. Concept, development and design of printed pieces, ranging from direct mail and collateral material to annual reports, assist clients in communicating with their customer base. To meet the requirements of examining agencies, business back-up and disaster recovery planning and services are important elements in continuous customer service. First Trust Corporation and Lincoln Trust Company, specialized providers of account processing, administration and trusteeship of self-directed individual and business retirement plans, are together the largest provider of their kind in the nation. Based in Denver, Colorado, these Fiserv companies specifically assist financial representatives and other financial service intermediaries in managing information through their proprietary data base technology. SERVICING THE MARKET The market for Fiserv data processing services and products has specific needs and requirements, with strong emphasis placed by clients on software flexibility, product quality, reliability of service, comprehensiveness and integration of product line, timely introduction of new products and features, and cost value. Through its multiple product offerings, the Company successfully services these market needs for clients ranging in size from start- ups to some of the largest institutions worldwide. Fiserv believes that the position it holds as an independent, growth- oriented company dedicated to its business is an advantage to its clients. The Company differs from many of the data processing resources currently available since it isn't a regional or local cooperatively-owned organization, nor a data processing subsidiary, an affiliate of a financial institution or a hardware vendor. Due to the economies of scale gained through its broad market presence, Fiserv offers clients a selection of data processing solutions designed to meet the specific needs of financial institutions. The Company believes this independence and primary focus on the financial industry helps its business development and related Client Service and Product Support teams remain responsive to the data processing needs of its market, now and for the future. "The Client Comes First" is one of the Company's founding principles. It's a belief backed by a dedication to providing ongoing client service and support- - -no matter the institution size. The Fiserv Client Support and Account Management staff is responsible for the day-to-day interface with the operations of clients. The Company's commitment of substantial resources to training and technical support helps keep Fiserv clients first. Fiserv conducts the majority of its new and ongoing client training in its data centers, where the Company maintains fully-equipped demonstration and training facilities containing equipment used in the delivery of Fiserv services. Fiserv also provides local and on-site training services. PRODUCT DEVELOPMENT In order to meet the changing data processing needs of the financial institutions served by Fiserv, the Company continually develops, maintains and enhances its systems. Resources applied to product development and maintenance are believed to be approximately 10% of company revenues, about half of which is dedicated to software development. Unique to Fiserv, its network of development and data processing centers applies the shared expertise of multiple Fiserv teams to design, develop and maintain specialized processing systems around the leading technology platforms. The applications of its account processing systems meet the preferences and diverse requirements of the various international, national, regional or local market-specific financial service environments of the Company's many clients. Though all Fiserv centers rely on the Company's nationally developed and supported software, each center has specialized capabilities that enable them to offer system application features and functions unique to their client base. Where the client's requirements warrant, Fiserv purchases software programs from third parties which are interfaced with existing Fiserv systems. In developing its products, Fiserv stresses responsiveness to the needs of its clients through close client contact. Fiserv provides a dedicated system designed, developed, maintained and enhanced according to each client's goals for service quality, business development, asset/liability mix, local-market positioning and other user- defined parameters. COMPETITION The market for data processing services to banks, credit unions and savings institutions is highly competitive. The Company's principal competitors include internal data processing departments, data processing affiliates of financial institutions or large computer hardware manufacturers, independent computer service firms and processing centers owned and operated as user cooperatives. Fiserv competitors include EDS, M&I, Bisys, ALLTEL, ISSC (IBM), Symitar and various regional firms. Certain of these competitors possess substantially greater financial, sales and marketing resources than the Company. Competition from in-house data processing and software departments is intensified by the efforts of computer hardware vendors who encourage the growth of internal data centers. Competitive factors for processing services include product quality, reliability of service, comprehensiveness and integration of product line, timely introduction of new products and features, and price. The Company believes that it competes favorably in each of these categories. In addition, the Company believes that its position as an independent vendor, rather than as a cooperative, an affiliate of a financial institution or a hardware vendor, is a competitive advantage. First Trust and Lincoln Trust compete with a number of large and small providers of retirement plan administration services. GOVERNMENT REGULATION The Company's data processing subsidiaries are not themselves directly subject to federal or state regulations specifically applicable to financial institutions such as banks, thrifts and credit unions. As a provider of services to these entities, however, the data processing operations are observed from time to time by the Federal Deposit Insurance Corporation, the National Credit Union Association, the Office of Thrift Supervision, the Office of the Comptroller of the Currency and various state regulatory authorities. These regulators make certain recommendations to the Company regarding various aspects of its data processing operations. Such recommendations are generally implemented by the Company. In addition, the Company's operations are reviewed annually by an independent auditor to provide required internal control evaluations for its clients' auditors and regulators. As trust companies under Colorado law, First Trust and Lincoln Trust are subject to the regulations of the Colorado Division of Banking. First Trust and Lincoln Trust historically have complied with such regulations and, although no assurance can be given, the Company believes First Trust and Lincoln Trust will continue to be able to comply with such regulations. Commencing in 1991, First Trust received approval of its application for Federal Deposit Insurance Corporation coverage of its customer deposits. EMPLOYEES Fiserv employs 8,222 specialists throughout the United States and worldwide in its information management centers and related product and service companies. This service support network includes employees with backgrounds in computer science and the financial industry, often complemented by management and other direct experience in banks, credit unions, mortgage firms, savings and other financial institution business environments. Fiserv employees provide expertise in sales and marketing; account management and client services; computer operations, network control and technical support; programming, software development, modification and maintenance; conversions and client training; and related support services. Fiserv employees are not represented by a union, and there have been no work stoppages, strikes or organizational attempts. The service nature of the Fiserv business makes its employees an important corporate asset, and while the market for qualified personnel is competitive, the Company does not experience difficulty with hiring or retaining its staff of top industry professionals. In assessing companies to acquire, the quality and stability of the prospective Company's staff are emphasized. Management attributes its ability to attract and keep quality employees to, among other things, the Company's growth and dedication to state-of-the-art software development tools and hardware technologies. ITEM 2. PROPERTIES Fiserv currently operates full-service data centers, software system development centers, and item processing and back-office support centers in 66 cities (64 in the United States): Phoenix and Scottsdale, Arizona; Little Rock, Arkansas; Alameda, Covina, Fresno, Fullerton, Los Angeles, Sacramento, San Leandro, San Diego and Walnut, California; Denver, Colorado; Hartford, New Haven and Stamford, Connecticut; Jacksonville, Maitland, Miami, Orlando, Tampa and Titusville, Florida; Atlanta and Macon, Georgia; Honolulu, Hawaii; Arlington Heights, Chicago, Marion and Pontiac, Illinois; Indianapolis and South Bend, Indiana; Davenport and Des Moines, Iowa; Bowling Green, Kentucky; New Orleans, Louisiana; Boston and Somerville, Massachusetts; Flint and Troy, Michigan; Minneapolis and St. Paul, Minnesota; Fargo, North Dakota; Piscataway and Princeton, New Jersey; Brooklyn, Long Island (Lake Success), Melville, Rochester and Syracuse, New York; Lincoln, Nebraska; Cleveland, Ohio; Oklahoma City, Oklahoma; Corvallis and Portland, Oregon; Philadelphia and Pittsburgh, Pennsylvania; Memphis, Tennessee; Dallas, Beaumont, Houston and San Antonio, Texas; Seattle, Washington; and Brookfield and Milwaukee, Wisconsin. International business centers are located in London, England, and Singapore. The Company owns facilities in Brookfield, Corvallis, Fresno, Hartford, Lincoln and Titusville; all other buildings in which centers are located are subject to leases expiring through 1998 and beyond. The Company owns or leases 128 mainframe computers (Data General, Digital, Hewlett Packard, IBM, NCR and Unisys). In addition, the Company maintains its own national data communication network consisting of communications processors and leased lines. Fiserv believes its facilities and equipment are generally well maintained and are in good operating condition. The Company believes that the computer equipment it owns and its various facilities are adequate for its present and foreseeable business. Fiserv periodically upgrades its mainframe capability as needed. Fiserv contracts with multiple sites to provide processing backup in the event of a disaster and maintains duplicate tapes of data collected and software used in its business in locations away from the Company's facilities. Fiserv regards its software as proprietary and utilizes a combination of trade secrecy law, internal security practices and employee non-disclosure agreements for protection. The Company has not patented or registered the copyrights on its software. The Company believes that legal protection of its software, while important, is less significant than the knowledge and experience of the Company's management and personnel and their ability to develop, enhance and market new products and services. The Company believes that it holds all proprietary rights necessary for the conduct of its business. ITEM 3. LEGAL PROCEEDINGS 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 opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the financial statements of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fourth quarter of the fiscal year covered by this report, no matter was submitted to a vote of security holders of the Company. ============================== PART II ============================== Pursuant to Instruction G(2) for Form 10-K, the information required in ITEMS 5 THROUGH 8 is incorporated by reference from the Company's annual report to shareholders, included in this Form 10-K - Annual Report as Exhibit 13. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. ============================== PART III ============================== Pursuant to Instruction G(3) to Form 10-K, the information required in ITEMS 10 THROUGH 13 is incorporated by reference from the Company's definitive proxy statement which is expected to be filed pursuant to Regulation 14A on or before February 27, 1996, and included in this Form 10-K Annual Report as Exhibit 28. ============================== PART IV ============================== ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) Financial Statements: The consolidated financial statements of the companies as of December 31, 1995 and 1994 and for each of the three years in the period ending December 31, 1995, together with the report thereon of Deloitte & Touche LLP, dated February 2, 1996, appear on pages 26 through 38 of the Company's annual report to shareholders, Exhibit 13 to this Form 10-K - Annual Report, and are incorporated herein by reference. (a) (2) Financial Statement Schedules: All financial statement schedules are omitted for the reason that they are either not applicable or not required or because the information required is contained in the consolidated financial statements or notes thereto. (b) Reports on Form 8-K: During 1995, the Company filed two reports on Form 8-K, one dated May 17, 1995, relating to the acquisition of Information Technology, Inc. and the other dated August 11, 1995, relating to the acquisition of Lincoln Holdings, Inc. (c) Exhibits: 2.1 Stock Purchase Agreement, dated as of April 6, 1995, by and between FIserv, Inc. and Information Technology, Inc. (filed as Exhibit 2.1 to the Company's Registration Statement on Form S-3, File No. 33- 58709, and incorporated herein by reference). 3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-4, File No. 33-62870, and incorporated herein by reference). 3.2 By-laws, (filed as Exhibit 3.2 to the Company's Registration Statement on Form S-4, File No. 33-62870, and incorporated herein by reference). 4.1 Credit Agreement dated as of May 17, 1995, by and among Fiserv, Inc., the Lenders Party Hereto, First Bank National Association, as Co- Agent and The Bank of New York, as Agent. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.2 Note Purchase Agreement dated as of March 15, 1991, as amended, among Fiserv, Inc., Aid Association for Lutherans, Northwestern National Life Insurance Company, Northern Life Insurance Company and The North Atlantic Life Insurance Company of America. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.3 Note Purchase Agreement dated as of April 30, 1990, as amended, among Fiserv, Inc. and Teachers Insurance and Annuity Association of America. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.4 Note Purchase Agreement dated as of May 17, 1995, as amended, among FIserv, Inc., Teachers Insurance and Annuity Association of America, Massachusetts Mutual Life Insurance Company, Aid Association for Lutherans, Northern Life Insurance Company and Northwestern National Life Insurance Company. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 10. Material contracts. 10.1 Stock Purchase Agreement, dated as of December 31, 1992, by and between Fiserv, Inc. and First Financial Management Corporation, as amended by Amendment dated as of February 10, 1993, included in the Company's Current Report on Form 8-K, dated February 10, 1993, and incorporated herein by reference. 10.2 Stock and Asset Purchase Agreement, dated as of July 30, 1993, as amended, by and between Mellon Bank Corporation, Mellon Bank, N.A., Mellon Financial Services Corporation #1 and Vertical Technologies, Inc., as Sellers, and Fiserv, Inc., as Purchaser, included in the Company's Annual Report on Form 10-K, dated February 28, 1994, and incorporated herein by reference. 11. Computation of Shares Used in Computing Earnings per Share. 13. The 1995 Annual Report to Shareholders. 21. List of Subsidiaries of the Registrant. 23. Manually signed Consent of Independent Auditors. 28. The Company's definitive proxy statement for the 1996 annual meeting of shareholders to be held on March 21, 1996, to be filed pursuant to Regulation 14A under the Securities and Exchange Act of 1934. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: February 27, 1996 FISERV, INC. By /S/ GEORGE D. DALTON ------------------------ George D. Dalton (Chairman of the Board) Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following person on behalf of the registrant and in the capacities indicated on February 27, 1996. SIGNATURE CAPACITY /S/ George D. Dalton - ------------------------ George D. Dalton Chairman of the Board, Chief Executive Officer /S/ Leslie M. Muma - ------------------------ Leslie M. Muma Vice Chairman of the Board, President, Chief Operating Officer /S/ Donald F. Dillon - ------------------------ Donald F. Dillon Vice Chairman of the Board, President - Information Technology, Inc. /S/ Kenneth R. Jensen - ------------------------ Kenneth R. Jensen Senior Executive Vice President, Chief Financial Officer, Treasurer, Director /S/ Bruce K. Anderson - ------------------------ Bruce K. Anderson Director /S/ Gerald J. Levy - ------------------------ Gerald J. Levy Director /S/ L. William Seidman - ------------------------ L. William Seidman Director /S/ Thekla R. Shackelford - ------------------------ Thekla R. Shackelford Director /S/ Roland D. Sullivan - ------------------------ Roland D. Sullivan Director
                                   EXHIBIT 11



      COMPUTATION OF SHARES USED IN COMPUTING EARNINGS PER SHARE



                                           Year Ended December 31,
                                        1995        1994        1993
                                      ----------  ----------  ----------
Primary:

Weighted Average Shares Outstanding   43,058,000  39,954,000  38,588,000
Common Stock Equivalents                 950,000     781,000     867,000
                                      ----------  ----------  ----------
Shares Used                           44,008,000  40,735,000  39,455,000
                                      ==========  ==========  ==========


Weighted average shares outstanding include for all periods approximately
881,000 shares issued in 1995 in connection with the acquisition of Lincoln
Holdings, Inc., accounted for as a pooling of interests.

Fully diluted earnings per share are essentially the same as primary earnings
per share for all periods presented.


Exhibit 21  Subsidiaries of the Registrant

                                                        State of
Name under which Subsidiary does Business            Incorporation

Accurate Data On-Line Corp.                       Florida
Aspen Investment Alliance, Inc.                   Colorado
BMS On-Line Services, Inc.                        Maine
BMS Management Services, Inc.                     Maine
BankLink, Inc.                                    New York
Cadre, Inc.                                       Connecticut
Data Link Systems, Inc.                           Indiana
FIserv Atlanta, Inc.                              Georgia
FIserv Basis, Inc.                                Georgia
FIserv Boston, Inc.                               Massachusetts
FIserv CIR, Inc.                                  Delaware
Citizens Financial Corporation d/b/a
FIserv Cleveland, Inc.                            Ohio
FIserv Data Pro Card Services, Inc.               Indiana
FIserv Des Moines, Inc.                           Iowa
FIserv EFT, Inc.                                  Oregon
FIserv Federal Systems, Inc.                      Delaware
FIserv Financial Systems, Inc.                    Texas
FIserv Financial Systems of Florida, Inc.         Florida
FIserv Fresno, Inc.                               California
FIserv Government Services, Inc.                  Delaware
FIserv Joint Venture, Inc.                        Delaware
FIserv Minneapolis, Inc.                          Minnesota
FIserv New Haven, Inc.                            Connecticut
FIserv Pittsburgh, Inc.                           Pennsylvania
FIserv St. Paul, Inc.                             Minnesota
FIserv San Diego, Inc.                            California
FIserv Seattle, Inc.                              Washington
Fiserv Solutions, Inc.                            Wisconsin
FIserv Spokane, Inc.                              Washington
FIserv Tampa, Inc.                                Florida
FIserv (Europe) Ltd.                              United Kingdom
FIserv (ASPAC) Pte., Ltd.                         Singapore
First Retirement Marketing, Inc.                  Colorado
First Trust Corporation                           Colorado
Information Technology, Inc.                      Nebraska
Integrated Business Systems                       California
Lincoln Trust Company                             Colorado
Lincoln Retirement Services, Inc.                 California
LT Securities                                     Colorado
National Embossing Company                        Texas
NewFit Co.                                        Iowa
Sendero Corporation                               Arizona
Sendero (ASPAC) Pte. Ltd.                         Singapore
SRS, Inc.                                         Texas
Summit Information Systems Corp.                  Oregon
The Affinity Group, Inc.                          Colorado


INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement 
No. 33-42088 of FIserv, Inc. on Form S-8 of our report 
dated February 2, 1996, incorporated by reference in the Annual Report on 
Form 10-K of FIserv, Inc. and subsidiaries for the year ended December 31, 1995.

/S/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin

February 26, 1996

 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH INFORMATION. 1,000 YEAR DEC-31-1995 DEC-31-1995 59,743 834,286 154,628 0 0 1,209,996 279,088 130,745 1,885,299 1,067,621 0 0 0 449 433,813 1,885,299 0 703,380 0 590,621 192,468 0 18,822 (98,531) (38,668) (59,863) 0 0 0 (59,863) (1.36) (1.36)
FISERV, INC. and Subsidiaries
Consolidated statements of operations

Year ended December 31,                     1995          1994         1993

REVENUES                                 $703,380,000  $579,839,000 $467,863,000
                                         ------------  ------------ ------------

COST OF REVENUES:
Salaries, commissions and payroll
  related costs                           330,845,000   281,651,000  223,271,000
Data processing expenses, rentals and
  telecommunication costs                  95,798,000    81,320,000   72,524,000
Other operating expenses                  125,498,000   109,975,000   90,162,000
Depreciation and amortization of
  property and equipment                   38,480,000    31,350,000   22,450,000
Purchased incomplete software
  technology Note 2                       172,970,000
Amortization of intangible assets          25,880,000    10,846,000    9,098,000
Capitalization of internally generated
  computer software-net                   (6,382,000)   (9,599,000)  (7,185,000)
                                         ------------  ------------ ------------
                 Total                    783,089,000   505,543,000  410,320,000
                                         ------------  ------------ ------------

OPERATING INCOME (LOSS)                   (79,709,000)   74,296,000   57,543,000
Interest expense - net                     18,822,000     6,951,000    4,366,000
                                         ------------  ------------ ------------

INCOME (LOSS) BEFORE INCOME TAXES         (98,531,000)   67,345,000   53,177,000
Income tax provision (credit) Note 4      (38,668,000)   26,938,000   20,464,000
                                         ------------  ------------ ------------

NET INCOME (LOSS)                        $(59,863,000) $ 40,407,000 $ 32,713,000
                                         ============  ============ ============
Net income (loss) per common and
  common equivalent share                      $(1.36)       $0.99         $0.83
                                         ============  ============ ============
Shares used in computing net
  income per share                         44,008,000    40,735,000   39,455,000
                                         ============  ============ ============
See notes to consolidated financial statements.



FISERV, INC. and Subsidiaries
Consolidated balance sheets

December 31,                                       1995               1994

ASSETS

Cash and cash equivalents Note 1               $   59,743,000     $   29,683,000
Accounts receivable                               154,628,000        122,984,000
Prepaid expenses and other assets Note 1           63,893,000         34,760,000
Due on sale of securities                          97,446,000
Investment securities Note 1                      834,286,000      1,041,474,000
Other investments Note 1                           55,748,000         64,777,000
Deferred income taxes Note 4                       39,527,000
Property and equipment-net Note 1                 148,343,000        114,966,000
Internally generated computer software-net         73,863,000         67,820,000
Identifiable intangible assets relating
 to acquisitions-net Note 1                        57,270,000         36,487,000
Goodwill-net                                      300,552,000        148,394,000
                                               --------------     --------------
                   TOTAL                       $1,885,299,000     $1,661,345,000
                                               ==============     ==============
LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable                               $   43,948,000     $   22,060,000
Accrued expenses                                   59,614,000         59,742,000
Accrued income taxes                                6,116,000          1,952,000
Deferred revenues                                  40,754,000         10,836,000
Trust account deposits                            917,189,000      1,035,217,000
Long-term debt Note 3                             381,361,000        143,864,000
Other obligations Note 3                            2,055,000          6,152,000
Deferred income taxes Note 4                                          22,800,000
                                               --------------     --------------
TOTAL LIABILITIES                               1,451,037,000      1,302,623,000

COMMITMENTS AND CONTINGENCIES Note 6

SHAREHOLDERS' EQUITY:
Common stock outstanding, 44,887,000 and
 40,038,000 shares, respectively                      449,000            400,000
Additional paid-in capital                        315,800,000        184,748,000
Unrealized gain on investments                     15,268,000         11,054,000
Accumulated earnings                              102,745,000        162,520,000
                                               --------------     --------------
TOTAL SHAREHOLDERS' EQUITY                        434,262,000        358,722,000
                                               --------------     --------------
                   TOTAL                       $1,885,299,000     $1,661,345,000
                                               ==============     ==============


See notes to consolidated financial statements.



FISERV, INC. and Subsidiaries
Consolidated statements of changes in shareholders' equity

Year ended December 31, 1995 1994 1993 SHARES ISSUED-75,000,000 AUTHORIZED: Balance at beginning of year 40,037,854 39,660,740 22,621,946 Shares issued in pooling of Lincoln Holdings, Inc. 880,970 Sale of common stock 1,403,911 Shares issued under stock plans-net 274,615 238,838 201,706 Shares issued for acquired companies 4,574,659 138,276 2,354,540 Stock split -- 3-for-2 12,197,667 ------------ ------------ ------------ Balance at end of year 44,887,128 40,037,854 39,660,740 ============ ============ ============ COMMON STOCK-PAR VALUE $.01 PER SHARE: Balance at beginning of year $ 400,000 $ 397,000 $ 226,000 Shares issued in pooling of Lincoln Holdings, Inc. 9,000 Sale of common stock 14,000 Shares issued under stock plans-net 3,000 2,000 2,000 Shares issued for acquired companies 46,000 1,000 24,000 Stock split -- 3-for-2 122,000 ------------ ------------ ------------ Balance at end of year 449,000 400,000 397,000 ============ ============ ============ CAPITAL IN EXCESS OF PAR VALUE: Balance at beginning of year 184,748,000 181,223,000 105,842,000 Acquired in pooling of Lincoln Holdings, Inc. 174,000 Sale of common stock 23,712,000 Shares issued under stock plans-net 670,000 2,660,000 324,000 Income tax reduction arising from the exercise of employee stock options 2,400,000 800,000 1,300,000 Shares issued for acquired companies 127,982,000 65,000 49,993,000 Stock split -- 3-for-2 (122,000) ------------ ------------ ------------ Balance at end of year 315,800,000 184,748,000 181,223,000 ============ ============ ============ UNREALIZED GAIN ON INVESTMENTS 15,268,000 11,054,000 9,230,000 ============ ============ ============ ACCUMULATED EARNINGS: Balance at beginning of year 162,520,000 122,023,000 86,405,000 Acquired in pooling of Lincoln Holdings, Inc. 2,974,000 Net income (loss) (59,863,000) 40,407,000 32,713,000 Foreign currency translation adjustment 88,000 90,000 (69,000) ------------ ------------ ------------ Balance at end of year 102,745,000 162,520,000 122,023,000 ============ ============ ============ TOTAL SHAREHOLDERS' EQUITY $434,262,000 $358,722,000 $312,873,000 ============ ============ ============
See notes to consolidated financial statements. FISERV, INC. and Subsidiaries Consolidated statements of cash flows
Year Ended December 31, 1995 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (59,863,000) $ 40,407,000 $ 32,713,000 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Deferred income taxes (58,952,000) 12,375,000 11,883,000 Depreciation and amortization of property and equipment 38,480,000 31,401,000 22,449,000 Amortization of intangible assets 25,880,000 10,846,000 9,098,000 Charge for incomplete software technology 172,970,000 Capitalization of internally generated computer software - net (6,382,000) (9,599,000) (7,185,000) ------------- ------------- ------------- 112,133,000 85,430,000 68,958,000 Cash provided (used) by changes in assets and liabilities, net of effects from acquisitions of businesses: Accounts receivable (10,014,000) (12,194,000) (13,672,000) Prepaid expenses and other assets (23,709,000) (3,935,000) (10,482,000) Accounts payable and accrued expenses (4,843,000) (3,954,000) (6,411,000) Deferred revenue 9,283,000 (123,000) (54,000) Accrued income taxes 5,756,000 2,059,000 285,000 ------------- ------------- ------------- Net cash provided by operating activities 88,606,000 67,283,000 38,624,000 ------------- ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (45,039,000) (53,193,000) (29,613,000) Investments and other assets 20,136,000 (26,545,000) (2,002,000) Payment for acquisition of businesses, net of cash acquired (258,237,000) (20,545,000) (113,268,000) Investment securities 207,603,000 (176,597,000) (90,216,000) Due on sale of securities (97,446,000) ------------- ------------- ------------- Net cash used by investing activities (172,983,000) (276,880,000) (235,099,000) ------------- ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings and other long-term obligations 252,977,000 39,165,000 63,000,000 Repayment of borrowings and other long- term obligations (21,150,000) (12,720,000) (3,441,000) Issuance of common stock 638,000 1,918,000 24,036,000 Trust account deposits (118,028,000) 174,567,000 82,803,000 ------------- ------------- ------------- Net cash provided by financing activities 114,437,000 202,930,000 166,398,000 ------------- ------------- ------------- Change in cash and cash equivalents 30,060,000 (6,667,000) (30,077,000) Beginning balance 29,683,000 36,350,000 66,427,000 ------------- ------------- ------------- Ending balance $ 59,743,000 $ 29,683,000 $ 36,350,000 ============= ============= =============
See notes to consolidated financial statements. FIserv, Inc. and Subsidiaries Notes to consolidated financial statements for the years ended December 31, 1995, 1994 and 1993 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents comprise cash and investments with original maturities of 90 days or less. Prepaid Expenses and Other Assets Prepaid expenses and other assets at December 31, 1995 and 1994 include $17,817,000 and $7,723,000, respectively, relating to long-term contracts, the profit from which is being recognized ratably over the periods to be benefited. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Trust Account Deposits and Investment Securities The Company's trust administration subsidiaries accept money market deposits from trust customers and invest the funds in securities. Such amounts due trust depositors represent the primary source of funds for the Company's investment securities and amounted to $917,189,000 and $1,035,217,000 in 1995 and 1994, respectively. The related investment securities comprised the following at December 31, 1995 and 1994: Principal Carrying 1995 Amount Value Market Value - -------------------------------- ------------- ------------- ------------- U. S. Government and government agency obligations $553,384,000 $558,893,000 $559,000,000 Corporate bonds 119,100,000 118,891,000 118,716,000 Repurchase agreements 96,671,000 96,671,000 96,671,000 Other fixed income obligations 59,877,000 59,831,000 59,831,000 ------------- ------------- ------------- Total $829,032,000 $834,286,000 $834,218,000 ============= ============= ============= 1994 - -------------------------------- U. S. Government and government agency obligations $ 693,711,000 $ 696,665,000 $ 663,504,000 Corporate bonds 51,840,000 51,836,000 51,373,000 Repurchase agreements 226,581,000 226,581,000 226,581,000 Other fixed income obligations 68,050,000 66,392,000 65,079,000 ------------- ------------- ------------- Total $1,040,182,000 $1,041,474,000 $1,006,537,000 ============= ============= ============= Substantially all of the investments have contractual maturities of one year or less except for government agency obligations. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using primarily the straight-line method over the estimated useful lives of the assets, ranging from 3 to 40 years: December 31, 1995 1994 - ------------------------------------ ------------- ------------- Data processing equipment $149,143,000 $121,844,000 Purchased software 39,810,000 31,522,000 Buildings and leasehold improvements 51,195,000 35,407,000 Furniture and equipment 38,940,000 31,409,000 ------------ ------------- 279,088,000 220,182,000 Less accumulated depreciation and amortization 130,745,000 105,216,000 ------------ ------------- Total $148,343,000 $114,966,000 ============= ============= Internally Generated Computer Software Certain costs incurred to develop new software and enhance existing software are capitalized and amortized over the expected useful life of the product, generally five years. At December 31, 1995 and 1994, the unamortized portion of internally generated computer software costs amounted to $73,863,000 and $67,820,000, respectively; amortization of such costs charged to expense amounted to $19,998,000, $16,655,000, and $13,995,000 in 1995, 1994 and 1993, respectively. Routine maintenance of software products, design costs and development costs incurred prior to establishment of a product's technological feasibility are expensed as incurred. Intangible Assets Intangible assets relate to acquisitions and consist of the following at December 31: 1995 1994 ------------- ------------ Computer software acquired $ 30,949,000 $ 5,565,000 Non-competition agreements 10,744,000 19,370,000 Contract rights and other 48,012,000 33,818,000 ------------- ------------ 89,705,000 58,753,000 Less accumulated amortization 32,435,000 22,266,000 ------------- ------------ $ 57,270,000 $ 36,487,000 ============= ============ Goodwill $318,410,000 $158,679,000 Less accumulated amortization 17,858,000 10,285,000 ------------- ------------ $300,552,000 $148,394,000 ============= ============ Except as noted below, the cost allocated to computer software acquired in corporate acquisitions is being amortized on a straight-line basis over its expected useful life (generally five years or less). In connection with certain acquisitions, the Company has entered into non-competition agreements with the sellers. The values assigned are being amortized on the straight-line method over the periods covered by the agreements (generally five years or less). Costs allocated to various customer data processing contracts at the dates of acquisition are being amortized on a straight-line basis over the remaining terms of the contracts (generally six years or less). The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired has been recorded as goodwill and is being amortized over forty years. The Company periodically reviews goodwill to assess recoverability, and impairments would be recognized in operating results if a permanent diminution in value were to occur. In connection with the acquisition of Information Technology, Inc. referred to in Note 2 below, the allocation of the purchase price to the various classes of assets was determined on the basis of an opinion expressed by a nationally recognized independent appraisal firm. Values determined for incomplete software have been expensed and values for completed software are being amortized utilizing accelerated methods. Income Taxes The consolidated financial statements are prepared on the accrual method of accounting. Deferred income taxes are provided for temporary differences between the Company's income for accounting and tax purposes. Revenue Recognition Revenues result primarily from the sale of data processing services to financial institutions, software sales, and administration of self-directed retirement plans. Such revenues are recognized as the related services are provided. Revenues include investment income of $35,695,000, $29,695,000, and $18,911,000, net of direct credits to depositors accounts of $27,561,000, $23,217,000, and $18,015,000 in 1995, 1994 and 1993, respectively. Deferred revenues consist primarily of advance billings for services and are recognized as revenue when the services are provided. Income per Share Income per common and common equivalent share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods, after giving effect to stock splits. Supplemental Cash Flow Information 1995 1994 1993 ----------- ---------- ---------- Interest paid $21,184,000 $ 8,871,000 $ 5,945,000 Income taxes paid 11,488,000 11,417,000 8,309,000 Liabilities assumed in acquisitions of businesses 49,279,000 3,416,000 47,000,000 2. ACQUISITIONS AND CAPITAL TRANSACTIONS Acquisitions During 1995, 1994 and 1993 the Company completed the following acquisitions:
Date Company Acquired Type of Business Consideration - -------------------------------------- -------- ------------------------------ ------------------ 1995 BankLink, Inc. Feb. 10 Cash management Cash for stock Information Technology, Inc. May 17 Financial processing systems Cash and stock for stock Lincoln Holdings, Inc. Aug. 1 Retirement plan administrators Stock for stock SRS, Inc. Sep. 29 Data processing Cash for stock Document Management Services Sep. 30 Item processing Cash for assets Division of ALLTEL Financial Information Services, Inc. Financial Information Trust Nov. 1 Data processing Cash for stock Outsource Technology L. C. Nov. 1 Data processing Cash for stock 1994: National Embossing Company, Inc. Apr. 19 Automated card services Cash for stock Boatmen's Information Systems May 2 Data processing Cash for assets data processing business Federal Home Loan Bank of Atlanta Aug. 19 Item processing Cash for assets item processing contracts Cincinnati Bell Information Systems Nov. 30 Image and document Cash for assets banking business management services RECOM Associates, Inc. Dec. 30 Network integration services Stock for stock 1993: Tomahawk Holding, Inc. and Feb. 10 Data processing for banks, Cash and stock its wholly-owned subsidiary thrifts and credit unions for stock Basis Information Technologies, Inc. IPC Service Corporation Mar. 2 Item processing Cash for assets EDS item processing May 17 Item processing Cash for assets contracts Datatronix Financial Services Jun. 25 Item processing Stock for stock Data Line Service Company Jul. 13 Data processing for thrifts Cash for stock Financial Processors, Inc. and Nov. 8 Data processing for banks Cash for stock Financial Data Systems Item processing Cash for assets Financial Institution Outsourcing and Nov. 30 Data processing for banks Cash for assets Data-Link Systems, Inc. Mortgage banking services Cash for stock
Certain of the acquisition agreements provide for additional cash payments contingent upon the attainment of specified revenue goals. Generally, the acquisitions were accounted for as purchases and, accordingly, the operations of the acquired companies are included in the consolidated financial statements since their respective dates of acquisition as set forth above. Certain of the acquisitions were accounted for as poolings of interests. However, except for the acquisition of Lincoln Holdings, Inc. (LHI), prior year financial statements were not restated due to immateriality. Results of operations of LHI have been included with those of the Company for all periods presented. Combined and separate results of the Company and LHI during the periods preceding the quarter ended June 30, 1995 and pro forma combined results, including preacquisition results of Information Technology, Inc. (ITI) for the years ended December 31, 1995 and 1994 (in thousands of dollars) were as follows:
Pro forma Company LHI Combined ITI combined ------------------ ---------- ----------- ---------- (unaudited) Quarter ended March 31, 1995 (unaudited) Revenues $152,605 $4,574 $157,179 Net income 10,449 792 11,241 Year ended December 31, 1995 Revenues 685,582 17,798 703,380 $25,435 $728,815 Net income (63,018) 3,155 (59,863) 2,811 (57,052) Year ended December 31, 1994 Revenues 563,590 16,249 579,839 60,868 640,707 Net income 37,664 2,743 40,407 5,885 46,292 Year ended December 31, 1993 Revenues 454,692 13,171 467,863 Net income 30,693 2,020 32,713
The acquisition of ITI was consummated for a consideration of approximately $377 million comprising approximately 4,574,000 shares of common stock of the Company and $249 million cash, including acquisition costs. Approximately 880,000 shares of common stock of the Company were issued in the acquisition of LHI. Net income of the Company has been determined after a pretax charge of $182.9 million relating to the writeoff of incomplete software technology and accelerated amortization of completed software relating to the acquisition of ITI. Accordingly, net income was reduced by $109.6 million, or $2.49 a share relating to such charges. Stock Purchase and Stock Option Plans The Company has a Restricted Stock Purchase Plan, a qualified Incentive Stock Option Plan and a Non- Qualified Stock Option Plan, each of which provide for grants of common stock to employees for a price not less than 100% of the fair value of the shares at the date of grant. There has been no recent activity in the Restricted Stock Purchase Plan. In general, 20% of the option shares awarded under the Incentive and Non-Qualified Stock Option Plans may be purchased annually and expire, generally, five to ten years from the date of the award. Plan activity during 1993, 1994 and 1995, adjusted for a 3-for-2 split effective in May 1993, is summarized as follows: Shares ----------------------- Non- Price Incentive Qualified Range ------------ ----------- ------------- Outstanding, December 31, 1992 1,880,116 $5.56-16.00 Granted 589,850 18.50-20.17 Assumed from Datatronix 76,895 66,415 1.63-7.10 Forfeited (32,550) Exercised (23,590) (277,027) 1.63-15.56 ------------ ----------- Outstanding, December 31, 1993 53,305 2,226,804 1.63-20.17 Granted 559,497 20.00-22.50 Forfeited (3,380) (102,945) Exercised (19,505) (211,529) 1.63-18.50 ------------ ----------- Outstanding, December 31, 1994 30,420 2,471,827 1.63-22.50 Granted 440,434 21.50-27.50 Forfeited (115,493) Exercised (10,140) (413,588) 1.63-21.81 ------------ ----------- OUTSTANDING, DECEMBER 31, 1995 20,280 2,383,180 5.56-27.50 ============ =========== SHARES EXERCISABLE, DECEMBER 31, 1995 7,774 1,300,455 ============ =========== Options outstanding include 158,819 and 63,686 shares granted in 1994 and 1995 at $20.00 and $22.00 a share, respectively, under a stock purchase plan requiring exercise within 30 days after a two-year period beginning on the date of grant. 3. LONG-TERM DEBT AND OTHER OBLIGATIONS The Company has available a $300,000,000 unsecured line of credit and commercial paper facility with a group of banks maturing in 2000 of which $247,712,000 was in use at December 31, 1995 at an average rate of 6.25%. The loan agreements covering the Company's long-term borrowings contain certain restrictive covenants including, among other things, the maintenance of minimum net worth and various operating ratios with which the Company was in compliance at December 31, 1995. A facility fee ranging from .175% to .325% per annum is required on the entire bank line regardless of usage. The facility is reduced to $255,000,000, $210,000,000 and $150,000,000, respectively, on May 17, 1997, 1998 and 1999 and expires on May 17, 2000. Long-term debt and other obligations outstanding at the respective year-ends comprised the following: December 31, 1995 1994 - ----------------------------------------- ------------ ------------ 9.45% senior notes payable, due 1996-2000 $ 21,429,000 $ 25,714,000 9.75% senior notes payable, due 1996-2001 15,000,000 17,500,000 8.00% senior notes payable, due 1999-2005 90,000,000 Bank notes and commercial paper 254,932,000 100,650,000 Other obligations 2,055,000 6,152,000 ------------ ------------ $383,416,000 $150,016,000 ============ ============ Annual principal payments required under the terms of the long-term agreements were as follows at December 31, 1995: Year - ------------------------------------------------ 1996 $ 9,781,000 1997 10,712,000 1998 45,780,000 1999 80,371,000 2000 169,877,000 Thereafter 66,895,000 ------------ $383,416,000 ============ Interest expense with respect to long-term debt and other obligations amounted to $22,006,000, $9,228,000 and $6,374,000 in 1995, 1994 and 1993, respectively. 4. INCOME TAXES A reconciliation of recorded income tax expense with income tax computed at the statutory federal tax rates follows: 1995 1994 1993 ------------- ----------- ------------ Statutory federal tax rate 35% 35% 35% Tax computed at statutory rate $(34,486,000) $23,571,000 $18,612,000 State income taxes net of federal effect (5,113,000) 2,792,000 2,647,000 Tax exempt income (688,000) (470,000) (326,000) Other 1,619,000 1,045,000 (469,000) ------------- ----------- ----------- Recorded income tax expense $(38,668,000) $26,938,000 $20,464,000 ============= =========== ============ The provision for income taxes consisted of the following: 1995 1994 1993 ------------- ----------- ----------- Currently Payable $ 17,884,000 $13,763,000 $ 7,280,000 Tax reduction credited to capital in excess of par value 2,400,000 800,000 1,300,000 Deferred (58,952,000) 12,375,000 11,884,000 ------------- ----------- ----------- Total $(38,668,000) $26,938,000 $20,464,000 ============= =========== =========== The approximate tax effects of temporary differences at December 31, 1995 and 1994 were as follows: 1995 1994 ----------- ------------ Allowance for doubtful accounts $ 2,319,000 $ 1,571,000 Accrued expenses not currently deductible 7,769,000 11,392,000 Deferred revenue 9,122,000 857,000 Other 1,728,000 1,074,000 Net operating loss and tax credit carryforwards 6,739,000 5,901,000 Deferred costs (9,143,000) (4,911,000) Internally generated capitalized software (30,283,000) (27,120,000) Excess of tax over book depreciation and amortization (4,419,000) (4,069,000) Purchased incomplete software technology 66,305,000 Unrealized gain on investments (10,610,000) (7,495,000) ------------------------ Total deferred income taxes $ 39,527,000 $(22,800,000) ========== ============= The net operating loss and tax credit carryforwards have expiration dates ranging from 1996 through 2010. 5. EMPLOYEE BENEFIT PROGRAMS The Company and its subsidiaries have contributory 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 also makes discretionary contributions based upon the attainment of certain profit goals. Company contributions vest at the rate of 20% for each year of service. Contributions charged to operations under these plans approximated $8,144,000, $8,900,000 and $6,346,000 in 1995, 1994 and 1993, respectively. 6. LEASES, OTHER COMMITMENTS AND CONTINGENCIES Leases Future minimum rental payments, as of December 31, 1995, on various operating leases for office facilities and equipment were due as follows: 1996 $ 32,937,000 1997 25,833,000 1998 19,469,000 1999 11,879,000 2000 6,495,000 Thereafter 10,493,000 ------------ Total minimum payments $107,106,000 ============ Rent expense applicable to all operating leases was approximately $48,038,000, $43,065,000 and $45,658,000 in 1995, 1994 and 1993, respectively. Other Commitments and Contingencies The Company's trust administration subsidiaries had fiduciary responsibility for the administration of approximately $17 billion in trust funds as of December 31, 1995. With the exception of the trust account investments discussed in Note 1, such amounts are not included in the accompanying balance sheets. 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 opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the financial statements of the Company. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth, for the periods indicated, the relative percentage which certain items in the Company's consolidated statements of income bear to revenues and the percentage change in those items from period to period. The table is based upon the accompanying supplemental schedule which excludes certain charges to 1995 operations associated with the acquisition of Information Technology, Inc.
Percentage of Revenues Year Ended December 31, Increase (Decrease) 1995 1994 1993 1995 vs. 1994 1994 vs. 1993 ------- ------- -------- ------------- --------- Revenues 100.0% 100.0% 100.0% 21.3% 23.9% ------- ------- -------- Cost of revenues: Salaries, commissions and payroll related costs 47.0 48.6 47.7 17.5 26.1 Data processing expenses, rentals and telecommunication costs 13.6 14.0 15.5 17.8 12.1 Other operating expenses 17.8 19.0 19.3 14.1 22.0 Depreciation and amortization of equipment and improvements 5.5 5.4 4.8 22.7 39.6 Amortization of intangible assets 2.3 1.9 1.9 47.2 19.2 Capitalization of internally generated computer software - net (0.9) (1.7) (1.5) (33.5) 33.6 ------- ------- -------- Total cost of revenues 85.3 87.2 87.7 18.7 23.2 ------- ------- -------- Operating income 14.7% 12.8% 12.3% 38.9 29.1 ======= ======= ======= Income before income taxes 12.0% 11.6% 11.4% 25.2 26.6 ======= ======= ======= Net income 7.1% 7.0% 7.0% 23.2 23.5 ======= ======= =======
The following discussion is based upon the accompanying supplemental schedule which excludes certain charges to 1995 operations associated with the acquisition of Information Technology, Inc. aggregating $182.9 million. Revenues increased $123,541,000 in 1995 and $111,976,000 in 1994. Approximately 55% of the 1995 growth and 80% of the 1994 growth resulted from the inclusion of revenues from the date of purchase of acquired businesses as set forth in Note 2 to the financial statements and the balance in each year from the addition of new clients, growth in the transaction volume experienced by existing clients and price increases. As a percentage of revenues, cost of revenues decreased 1.9% from 1994 to 1995 and .5% from 1993 to 1994. The make up of cost of revenues has been significantly affected in both years by business acquisitions and by changes in the mix of the Company's business as item processing and electronic funds transfer operations have enjoyed an increasing percentage of total revenues. A significant portion of the purchase price of the Company's acquisitions has been allocated to intangible assets, such as client contracts, computer software, non-competition agreements and goodwill, which are being amortized over time, generally three to forty years. Amortization of these costs increased $5,116,000 from 1994 to 1995 and $1,748,000 from 1993 to 1994. As a percentage of revenues, these costs have remained relatively constant from 1993 to 1994 and increased in 1995. Capitalization of internally generated computer software is stated net of amortization and increased $2,414,000 in 1994 and decreased $3,217,000 in 1995. As a percentage of revenues, net capitalized software remained relatively constant in 1994 but decreased .8% from 1994 to 1995. This trend is likely to continue. Operating income increased $28,883,000 in 1995 and $16,753,000 in 1994. As a percentage of revenues, operating income increased 1.9% in 1995 and .5% in 1994. The effective income tax rate was 41% in 1995, 40% in 1994, and 39% in 1993. The trend to higher income tax rates results from net increases in non- deductible permanent differences and an increase in 1993 in the federal income tax rate. The effective income tax rate for 1996 is expected to remain at 41%. The Company's growth has been accomplished largely through the acquisition of entities engaged in businesses which are complementary to its operations. Management believes that a number of acquisition candidates are available which would further enhance its competitive position and plans to pursue them vigorously. Management is engaged in an ongoing program to reduce expenses related to acquisitions 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. The following table sets forth (in thousands, except per share data) certain financial highlights and pro forma information for 1995, 1994 and 1993. Year Ended December 31, 1995 1994 1993 - ----------------------- --------- --------- -------- Revenues $703,380 $579,839 $467,863 Net income (loss) (59,863) 40,407 32,713 --------- -------- -------- Net income (loss) per share $(1.36) $0.99 $0.83 --------- -------- -------- Net income as originally reported and before certain charges related to acquisition of Information Technology, Inc. 49,771 37,664 30,693 --------- -------- -------- Net income per share as originally reported and before certain charges related to acquisition of Information Technology, Inc. $1.13 $0.95 $0.80 --------- -------- -------- The charges related to acquisition of Information Technology, Inc. (ITI) are a pre-tax special, one-time, non-cash charge of $173 million to expense the purchased ITI Premier II research and development and a pre-tax charge of $9.9 million for the accelerated amortization of the completed ITI Premier I software. The combined after-tax charge was $109.6 million ($2.49 per share). Liquidity and Capital Resources The following table summarizes (in thousands of dollars) the Company's primary sources of funds: Year Ended December 31, 1995 1994 1993 --------- -------- -------- Cash provided by operating activities $ 88,606 $ 67,283 $ 38,624 Issuance of common stock-net 638 1,918 24,036 Decrease (increase) in other investments 12,265 (28,575) (9,415) Increase in net borrowings 231,827 26,445 59,559 --------- -------- -------- $333,336 $ 67,071 $112,804 ========= ======== ======== The Company has applied a significant portion of its cash flow from operations and proceeds of its common stock offerings and additional borrowings to acquisitions. The 1994 increase in capital expenditures was abnormally high because of the need to provide a new facility and equipment for Financial Institution Outsourcing, acquired in November 1993. The Company believes that its cash flow from operations together with other available sources of funds will be adequate to meet its funding requirements. In the event that the Company makes significant future acquisitions, however, it may raise funds through additional borrowings or issuance of securities. Consolidated Statements of Income Supplemental Schedule (unaudited) Year ended December 31, 1995 1994 1993 - ----------------------- ------------ ------------ ------------ Revenues $703,380,000 $579,839,000 $467,863,000 ------------ ------------ ------------ Cost of revenues: Salaries, commissions and payroll related costs 330,845,000 281,651,000 223,271,000 Data processing expenses, rentals and telecommunication costs 95,798,000 81,320,000 72,524,000 Other expenses 125,498,000 109,975,000 90,162,000 Depreciation and amortization of property and equipment 38,480,000 31,350,000 22,450,000 Amortization of intangible assets 15,962,000 10,846,000 9,098,000 Capitalization of internally generated computer software-net (6,382,000) (9,599,000) (7,185,000) ------------ ------------ ------------ Total 600,201,000 505,543,000 410,320,000 ------------ ------------ ------------ Operating income 103,179,000 74,296,000 57,543,000 Interest expense - net 18,822,000 6,951,000 4,366,000 ------------ ------------ ------------ Income before income taxes 84,357,000 67,345,000 53,177,000 Income tax provision 34,586,000 26,938,000 20,464,000 ------------ ------------ ------------ Net income $ 49,771,000 $ 40,407,000 $ 32,713,000 Net income per common and common equivalent share $1.13 $0.99 $0.83 ============ ============ ============ Net income per common and common equivalent share as originally $1.13 $0.95 $0.80 reported ============ ============ ============ Shares used in computing net income per share 44,008,000 40,735,000 39,455,000 ============ ============ ============ Selected Financial Data The following data (in thousands, except per share data), which has been materially affected by acquisitions, should be read in conjunction with the financial statements and related notes thereto included elsewhere in this Annual Report.
Year Ended December 31, 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- -------- Revenues $ 703,380 $ 579,839 $ 467,863 $ 341,448 $288,450 Income (loss) before income taxes (98,531) 67,345 53,177 39,291 29,703 Income taxes (credit) (38,668) 26,938 20,464 14,925 10,686 Net income (loss) (59,863) 40,407 32,713 24,366 19,017 Net income (loss) per share $(1.36) $0.99 $0.83 $0.69 $0.57 ---------- ---------- ---------- ---------- -------- Total Assets $1,885,299 $1,661,345 $1,395,403 $1,097,339 $863,499 Long-term debt and other long- term obligations 383,416 150,016 122,417 59,472 57,768 Shareholders' equity 434,262 358,722 312,873 195,630 168,683 ---------- ---------- ---------- ---------- --------
Note: The above information has been restated to recognize (1) 3-for-2 stock splits effective in May 1993, June 1992 and July 1991 and (2) the acquisition in 1995 of Lincoln Holdings, Inc. accounted for as a pooling of interests. QUARTERLY FINANCIAL INFORMATION for the years ended December 31, 1995 and 1994 (Unaudited) (Amounts in thousands, except per share data)
Quarters 1995 First Second Third Fourth Total -------- -------- -------- -------- -------- Revenues $157,179 $173,470 $176,922 $195,809 $703,380 -------- -------- -------- -------- -------- Cost of revenues 136,288 148,725 148,286 349,790 783,089 -------- -------- -------- -------- -------- Operating income (loss) 20,891 24,745 28,636 (153,981) (79,709) -------- -------- -------- -------- -------- Income (loss) before income taxes 19,054 20,308 22,223 (160,116) (98,531) -------- -------- -------- -------- -------- Income taxes 7,813 8,326 9,111 (63,918) (38,668) -------- -------- -------- -------- -------- Net income (loss) $ 11,241 $ 11,982 $ 13,112 $(96,198) $(59,863) -------- -------- -------- -------- -------- Net income (loss) per share $0.27 $0.28 $0.29 $(2.10) $(1.36) -------- -------- -------- -------- -------- 1994 Revenues $139,852 $139,801 $143,661 $156,525 $579,839 -------- -------- -------- -------- -------- Cost of revenues 122,651 121,379 124,694 136,819 505,543 -------- -------- -------- -------- -------- Operating income 17,201 18,422 18,967 19,706 74,296 -------- -------- -------- -------- -------- Income before income taxes 15,627 16,790 17,154 17,774 67,345 -------- -------- -------- -------- -------- Income taxes 6,251 6,716 6,861 7,110 26,938 -------- -------- -------- -------- -------- Net income $ 9,376 $ 10,074 $ 10,293 $ 10,664 $ 40,407 -------- -------- -------- -------- -------- Net income per share $0.23 $0.25 $0.25 $0.26 $0.99 -------- -------- -------- -------- --------
The above information has been restated to recognize the acquisition in 1995 of Lincoln Holdings, Inc. accounted for on a pooling of interests basis. Market Price Information The following information relates to the closing price of the Company's $.01 par value common stock, which is traded on the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol FISV. 1995 1994 Quarter Ended High Low High Low March 31 27.75 21 23.5 18.5 June 30 28.375 25.75 22.25 20 September 30 31 25.5 22.75 18.75 December 31 30.125 25.5 23.5 19.25 At December 31, 1995, the Company's common stock was held by approximately 20,000 shareholders of record or through nominee or street name accounts with brokers. The closing sale price for the Company's stock on January 26, 1996 was $26.25 per share. The Company's present policy is to retain earnings to support future business opportunities, rather than to pay dividends. MANAGEMENT'S STATEMENT OF RESPONSIBILITY The management of FIserv, Inc. assumes responsibility for the integrity and objectivity of the information appearing in the 1995 Annual Report. This information was prepared in conformity with generally accepted accounting principles 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. Deloitte & Touche LLP, certified public accountants, audit the financial statements of the Company in accordance with generally accepted auditing standards. Their audit includes a review of the internal control system, and improvements are made to the system based upon their recommendations. 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. /S/ GEORGE D. DALTON GEORGE D. DALTON Chairman and Chief Executive Officer INDEPENDENT AUDITORS' REPORT Shareholders and Directors of FIserv, Inc.: We have audited the accompanying consolidated balance sheets of FIserv, Inc. and subsidiaries as of December 31, 1995 and 1994 and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1995. 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 generally accepted auditing standards. 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, 1995 and 1994 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. /S/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP Milwaukee, Wisconsin February 2,1996