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, 1996
                          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, 1997:  $1,516,736,302

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of January 31, 1997:  45,360,338

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.
1996 Annual Report to Shareholders - Parts II, IV 
Proxy Statement for March 20, 1997 Meeting - Part III
 



                          Fiserv, Inc. and Subsidiaries
                                    Form 10-K
                                December 31, 1996

PART I                                                                     Page

     Item 1.      Business                                                   1

     Item 2.      Properties                                                10

     Item 3.      Legal Proceedings                                         10

     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        11

     Item 11.     Executive Compensation                                    11

     Item 12.     Security Ownership of Certain Beneficial Owners and
                  Management                                                11

     Item 13.     Certain Relationships and Related Transactions            11


PART IV

     Item 14.     Exhibits, Financial Statement Schedules and Reports on
                  Form 8-K                                                  11





================================================================================
                                     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 Canada,  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  institution  and community  bank
clients and item processing services for all Fiserv clients nationwide. Business
units within the Savings & Community Bank Group include the following:
         Savings  Institutions  Division  with  business  units  in  New  Haven,
Connecticut;  Tampa, Florida;  Cleveland,  Ohio; Pittsburgh,  Pennsylvania;  San
Antonio, Texas; Seattle, Washington; and Brookfield, Wisconsin.
         Banking Division with business units in Los Angeles, California; Miami,
Florida;  Atlanta,  Georgia; Des Moines, Iowa; Bowling Green, Kentucky;  Boston,
Massachusetts;  Mendota Heights, Minnesota;  Amarillo, Beaumont, Houston and San
Antonio, Texas; and Brookfield, Wisconsin.
         Northern  Item  Processing  Region  with  business  units in New Haven,
Connecticut;  Chicago,  Marion and  Pontiac,  Illinois;  Boston,  Massachusetts;
Piscataway, New Jersey; Lake Success, New York; and Milwaukee, Wisconsin.
         Southern Item  Processing  Region with  business  units in Little Rock,
Arkansas;  Jacksonville  and Miami,  Florida;  Atlanta and Macon,  Georgia;  New
Orleans, Louisiana; and Beaumont, Dallas, Houston and San Antonio, Texas.
         Western Item Processing Region with business units in Phoenix, Arizona;
Alameda,  Fresno,  Fullerton,  Sacramento,  San Diego, San Leandro, Van Nuys and
Walnut, California; Denver, Colorado; Portland, Oregon; and Seattle, Washington.
         Fiserv Canada with item processing sites in Burlington, Calgary,
Edmonton, Halifax, London, Montreal,Ottawa, Regina, St. Catherines, Toronto,
Vancouver, Victoria and Winnipeg, Canada.
         The Bank & Credit  Union  Group  provides  service  bureau  processing,
in-house   software   systems  and  strategic   outsourcing   for  national  and
international  bank,  mortgage  bank and credit union  clients.  Business  units
within the Bank & Credit Union Group include the following:
         CBS  Worldwide  Division  with  business  units in Fresno,  California;
Orlando, Florida; Arlington Heights, Illinois; London, England; and Singapore.
         Financial  Institutions  Outsourcing  Division with  business  units in
Covina and Fresno,  California;  Honolulu,  Hawaii; Arlington Heights, Illinois;
Oklahoma City, Oklahoma; and Philadelphia and Pittsburgh,Pennsylvania.
         Credit Union Division with business units in Titusville, Florida; Flint
and Troy, Michigan; Minneapolis, Minnesota; and Corvallis, Oregon.
         Additional  business units within the Bank & Credit Union Group include
BankLink  cash  management  services  (New York,  New York);  Mortgage  Products
Division (Fort Lauderdale, Florida and South Bend, Indiana); Outsourced Services
Division  (Stamford,  Connecticut);  and 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  Communications  Design
marketing services (Sacramento,  California);  Fiserv Forms & Graphics (Seattle,
Washington);  Fiserv Human Resource Information  Services (Melville,  New York);
ImageSoft Technologies  (Maitland,  Florida);  NEC Card Services  (Indianapolis,
Indiana and Houston,  Texas);  RECOM network  consulting (Tampa,  Florida);  and
Sendero  Corporation  asset/liability  management and decision  support  systems
(Scottsdale, Arizona; London, England and Singapore).
         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
311,000  retirement plans and custodial accounts with assets valued at more than
$18.12 billion.
         Information Technology, Inc. (ITI) is a Fiserv subsidiary company based
in  Lincoln,  Nebraska,  with  an  additional  software  development  center  in
Birmingham,  Alabama.  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.
         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

Formed 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, MA 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 1970 Jan. 1995 Integrated Business Systems, Glendale, CA Specialized forms 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 1983 Jan. 1996 UniFi, Inc., Fort Lauderdale, FL Software & services 1982 Nov. 1996 Bankers Pension Services, Inc., Tustin, CA DP for retirement planning
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; 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 and savings institutions; the leading item processing provider for banks and savings institutions combined; the number two data processing provider for credit unions; and the number two software and service provider for the mortgage industry. 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 complete PC Windows(TM)-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 45 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. 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 8% to 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 8,590 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 75 cities (59 in the United States): Birmingham, Alabama; Phoenix and Scottsdale, Arizona; Little Rock, Arkansas; Alameda, Covina, Fresno, Fullerton, Los Angeles, Sacramento, San Diego, San Leandro, Van Nuys and Walnut, California; Denver, Colorado; New Haven and Stamford, Connecticut; Fort Lauderdale, 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; Des Moines, Iowa; Bowling Green, Kentucky; New Orleans, Louisiana; Boston, Massachusetts; Flint and Troy, Michigan; Mendota Heights and Minneapolis, Minnesota; Lincoln, Nebraska; Piscataway, New Jersey; Lake Success, Melville and New York, New York; Cleveland, Ohio; Oklahoma City, Oklahoma; Corvallis and Portland, Oregon; Philadelphia and Pittsburgh, Pennsylvania; Amarillo (FM), Beaumont, Dallas, Houston and San Antonio, Texas; Seattle, Washington; and Brookfield and Milwaukee, Wisconsin. International business centers are located in London, England; Singapore; and Burlington, Calgary, Edmonton, Halifax, London, Montreal, Ottawa, Regina, St. Catherines, Toronto, Vancouver, Victoria and Winnipeg, Canada. The Company owns facilities in Brookfield, Corvallis, Fresno, Hartford and Lincoln; all other buildings in which centers are located are subject to leases expiring through 1998 and beyond. The Company owns or leases 129 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) for 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 17, 1997, and included in the 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, 1996 and 1995 and for each of the three years in the period ending December 31, 1996, together with the report thereon of Deloitte & Touche LLP, dated January 31, 1997, appear on pages 23 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 1996, the Company filed three reports on Form 8-K, one dated April 4, 1996, relating to an amendment of its processing contract with Chase Manhattan Corporation, and two dated July 25, 1996, and December 19, 1996, relating to an item processing contract with Canadian Imperial Bank of Canada. (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, as amended, 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 29, 1994, and incorporated herein by reference. 11. Computation of Shares Used in Computing Earnings per Share. 13. The 1996 Annual Report to Shareholders. 21. List of Subsidiaries of the Registrant. 23. Manually signed Consent of Independent Auditors. 27. Financial Data Schedule 28. The Company's definitive proxy statement for the 1997 annual meeting of shareholders to be held on March 20, 1997, 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 17, 1997 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 17, 1997. /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/ 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,
                                            1996          1995           1994
                                      ------------------------------------------
Primary:

Weighted Average Shares Outstanding     45,229,000     43,058,000     39,954,000
Common Stock Equivalents                   969,000        950,000        781,000
                                      ------------------------------------------

Shares Used                             46,198,000     44,008,000     40,735,000
                                      ==========================================


Fully diluted  earnings per share are essentially  the same as primary  earnings
per share for all periods presented.
FISERV, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands, except per share data)
Year ended December 31,                           1996        1995         1994

REVENUES                                      $798,268    $703,380     $579,839
                                              ---------------------------------

COST OF REVENUES:
Salaries, commissions and payroll
  related costs ...........................    371,526     330,845      281,651
Data processing expenses, rentals and
  telecommunication costs .................     90,919      95,798       81,320
Other operating expenses ..................    145,230     125,498      109,975
Depreciation and amortization of
  property and equipment ..................     42,241      38,480       31,350
Purchased incomplete software
  technology Note 2 .......................                172,970
Amortization of intangible assets .........     20,983      25,880       10,846
Amortization (capitalization) of internally
  generated computer software-net .........      3,732      (6,382)      (9,599)
                                               ---------------------------------
TOTAL .....................................    674,631     783,089      505,543
                                               ---------------------------------
OPERATING INCOME (LOSS) ...................    123,637     (79,709)      74,296
Interest expense - net ....................     19,088      18,822        6,951
                                               ---------------------------------
INCOME (LOSS) BEFORE INCOME TAXES .........    104,549     (98,531)      67,345
Income tax provision (credit) Note 4 ......     42,865     (38,668)      26,938
                                               ---------------------------------
NET INCOME (LOSS) .........................   $ 61,684   $ (59,863)   $  40,407
                                               =================================
Net income (loss) per common and
  common equivalent share .................   $   1.34   $   (1.36)   $    0.99
                                               =================================
Shares used in computing net
  income per share ........................     46,198      44,008       40,735
                                               =================================
See notes to consolidated financial statements.



CONSOLIDATED BALANCE SHEETS


(In thousands)
December 31,                                            1996         1995
ASSETS
Cash and cash equivalents Note 1 ..............   $   80,833   $   59,743
Accounts receivable ...........................      160,747      154,628
Prepaid expenses and other assets Note 1 ......       54,354       63,893
Due on sale of investments ....................                    97,446
Trust account investments Note 1 ..............      970,553      834,286
Other investments Note 1 ......................       53,556       55,748
Deferred income taxes Note 4 ..................       32,083       39,527
Property and equipment-Net Note 1 .............      143,661      148,343
Internally generated computer software-Net ....       70,487       73,863
Identifiable intangible assets relating
 to acquisitions-Net Note 1 ...................       50,156       57,270
Goodwill-Net Note 1 ...........................      292,089      300,552
                                                  -----------------------
TOTAL..........................................   $1,908,519   $1,885,299
                                                  =======================

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable ..............................   $   43,486   $   43,948
Accrued expenses ..............................       60,747       59,614
Accrued income taxes ..........................        7,510        6,116
Deferred revenues .............................       46,089       40,754
Trust account deposits ........................      970,553      917,189
Long-term debt Note 3 .........................      271,502      381,361
Other obligations Note 3 ......................        1,362        2,055
                                                  -----------------------
TOTAL LIABILITIES .............................    1,401,249    1,451,037
COMMITMENTS AND CONTINGENCIES NOTE 6
SHAREHOLDERS' EQUITY:
Common stock outstanding, 45,348,000 and
 44,887,000 shares, respectively ..............          453          449
Additional paid-in capital ....................      323,268      315,800
Unrealized gain on investments ................       18,621       15,268
Accumulated earnings ..........................      164,928      102,745
                                                  -----------------------
TOTAL SHAREHOLDERS' EQUITY ....................      507,270      434,262
                                                  =======================
TOTAL .........................................   $1,908,519   $1,885,299
                                                  =======================

See notes to consolidated financial statements.




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


(In thousands)
Year ended December 31,                          1996        1995         1994

SHARES ISSUED-150,000,000 AUTHORIZED:
  Balance at beginning of year ..........      44,887      40,038       39,661
  Shares issued under stock plans-net ...         327         274          239
  Shares issued for acquired companies ..         134       4,575          138
                                             ---------------------------------
  Balance at end of year ................      45,348      44,887       40,038
                                             =================================

COMMON STOCK-PAR VALUE $.01 PER SHARE:
  Balance at beginning of year ..........   $     449   $     400    $     397
  Shares issued under stock plans-net ...           3           3            2
  Shares issued for acquired companies ..           1          46            1
                                             ---------------------------------
  Balance at end of year ................         453         449          400
                                             ---------------------------------
CAPITAL IN EXCESS OF PAR VALUE:
  Balance at beginning of year ..........     315,800     184,748      181,223
  Shares issued under stock plans-net ...       4,893         670        2,660
  Income tax reduction arising from the
    exercise of employee stock options ..       2,000       2,400          800
  Shares issued for acquired companies ..         575     127,982           65
                                             ---------------------------------
  Balance at end of year ................     323,268     315,800      184,748
                                             ---------------------------------
UNREALIZED GAIN ON INVESTMENTS ..........      18,621      15,268       11,054
                                             ---------------------------------
ACCUMULATED EARNINGS:
  Balance at beginning of year ..........     102,745     162,520      122,023
  Net income (loss) .....................      61,684     (59,863)      40,407
  Foreign currency translation adjustment         499          88           90
                                             ---------------------------------
  Balance at end of year ................     164,928     102,745      162,520
                                             ---------------------------------
TOTAL SHAREHOLDERS' EQUITY ..............   $ 507,270   $ 434,262    $ 358,722
                                             =================================

See notes to consolidated financial statements.




CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Year ended December 31, 1996 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) .............................. $ 61,684 $ (59,863) $ 40,407 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Deferred income taxes ......................... 3,456 (58,952) 12,375 Depreciation and amortization of property and equipment ....................... 42,241 38,480 31,401 Amortization of intangible assets ............. 20,983 25,880 10,846 Charge for incomplete software technology ..... 172,970 Amortization (capitalization) of internally generated computer software - net ............ 3,732 (6,382) (9,599) ----------------------------------- 132,096 112,133 85,430 Cash provided (used) by changes in assets and liabilities, net of effects from acquisitions of businesses: Accounts receivable .......................... (4,881) (10,014) (12,194) Prepaid expenses and other assets ............ 10,080 (23,709) (3,935) Accounts payable and accrued expenses ........ 2,288 (4,843) (3,954) Deferred revenues ............................ 5,232 9,283 (123) Accrued income taxes ......................... 4,085 5,756 2,059 ----------------------------------- Net cash provided by operating activities ...... 148,900 88,606 67,283 ----------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures .......................... (36,157) (45,039) (53,193) Payment for acquisition of businesses, net of cash acquired ......................... (8,025) (258,237) (20,545) Investments ................................... (128,394) 227,739 (203,142) Due on sale of investments .................... 97,446 (97,446) ----------------------------------- Net cash used by investing activities .......... (75,130) (172,983) (276,880) ----------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings and other long-term obligations .... 6,000 252,977 39,165 Repayment of borrowings and other long- term obligations ............................. (116,940) (21,150) (12,720) Issuance of common stock ...................... 4,896 638 1,918 Trust account deposits ........................ 53,364 (118,028) 174,567 ----------------------------------- Net cash (used) provided by financing activities (52,680) 114,437 202,930 ----------------------------------- Change in cash and cash equivalents ............ 21,090 30,060 (6,667) Beginning balance .............................. 59,743 29,683 36,350 ----------------------------------- Ending balance ................................. $ 80,833 $ 59,743 $ 29,683 ===================================
See notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31,1996, 1995 and 1994 NOTE 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, 1996 and 1995 include $12,013,000 and $17,817,000,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. FAIR VALUES The carrying amounts of cash and cash equivalents, accounts receivable and payable, and long-term borrowings approximated fair value as of December 31, 1996 and 1995. 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 $970,553,000 and $917,189,000 in 1996 and 1995, respectively. The related investment securities, including amounts representing Company funds, comprised the following at December 31, 1996 and 1995: (In thousands) PRINCIPAL CARRYING MARKET 1996 AMOUNT VALUE VALUE ----------------------------------- U. S. Government and government agency obligations ...................... $ 684,963 $ 695,955 $ 695,048 Corporate bonds ......................... 31,172 31,337 31,374 Repurchase agreements ................... 41,888 41,888 41,888 Other fixed income obligations .......... 263,878 262,293 261,939 ----------------------------------- TOTAL ................................... $1,021,901 $1,031,473 $1,030,249 ----------------------------------- Less amounts representing Company funds: Included in cash and cash equivalents 41,888 Included in other investments 19,032 ----------------------------------- Trust account investments ............... $ 970,553 =================================== 1995 U. S. Government and government agency obligations .................... $ 553,384 $ 558,893 $ 559,000 Corporate bonds ........................ 119,100 118,891 118,716 Repurchase agreements .................. 96,671 96,671 96,671 Other fixed income obligations ......... 59,877 59,831 59,831 ------------------------------------ TOTAL .................................. $ 829,032 834,286 $ 834,218 ==================================== 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 three to 40 years: (In thousands) December 31, 1996 1995 ------------------ Data processing equipment .................... $155,147 $149,143 Purchased software ........................... 47,833 39,810 Buildings and leasehold improvements ......... 52,329 51,195 Furniture and equipment ...................... 49,526 38,940 ------------------ 304,835 279,088 Less accumulated depreciation and amortization 161,174 130,745 ------------------ TOTAL ........................................ $143,661 $148,343 ================== 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, 1996 and 1995, the unamortized portion of internally generated computer software costs amounted to $70,487,000 and $73,863,000, respectively; amortization of such costs charged to expense amounted to $30,098,000, $19,998,000, and $16,655,000 in 1996, 1995 and 1994, respectively. During the fourth quarter of 1996, the Company recorded a charge of $5,443,000 relating to the accelerated amortization of software resulting from the planned consolidation of certain product lines. 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: (In thousands) 1996 1995 ------------------ Computer software acquired ................... $ 29,326 $30,949 Non-competition agreements ................... 9,139 10,744 Contract rights and other .................... 55,952 48,012 ------------------ 94,417 89,705 Less accumulated amortization ................ 44,261 32,435 ------------------ TOTAL......................................... $ 50,156 $ 57,270 ================== Goodwill ..................................... $317,077 $318,410 Less accumulated amortization ................ 24,988 17,858 ------------------ TOTAL......................................... $292,089 $300,552 ================== 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-compete 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 40 years. The Company periodically reviews goodwill and other long-lived assets 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 in 1995 of Information Technology, Inc. (ITI) 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 $37,572,000, $35,695,000, and $29,695,000, net of direct credits to depositors accounts of $24,050,000, $27,561,000, and $23,217,000 in 1996, 1995 and 1994, 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. SUPPLEMENTAL CASH FLOW INFORMATION (In thousands) 1996 1995 1994 ------------------------------- Interest paid............................... $22,942 $21,184 $8,871 Income taxes paid........................... 34,865 11,488 11,417 Liabilities assumed in acquisitions of businesses.............................. 1,596 49,279 3,416 NOTE 2 ACQUISITIONS AND CAPITAL TRANSACTIONS ACQUISITIONS During 1996, 1995 and 1994 the Company completed the following acquisitions:
MONTH COMPANY ACQUIRED TYPE OF BUSINESS CONSIDERATION - ------------------------------------------------------------------------------------------------------------------------------------ 1996: UniFi, Inc. Jan Software and services Cash for stock Bankers Pension Services, Inc. Nov Retirement plan administrators Stock for stock 1995: Integrated Business Systems Jan Forms Cash for stock BankLink, Inc. Feb Cash management Cash for stock Information Technology, Inc. May Financial processing systems Cash and stock for stock Lincoln Holdings, Inc. Aug Retirement plan administrators Stock for stock SRS, Inc. Sep Data processing Cash for stock Document Management Services Sep Item processing Cash for assets Division of ALLTEL Financial Information Services, Inc. Financial Information Trust Nov Data processing Cash for stock Outsource Technology L. C. Nov Data processing Cash for stock 1994: National Embossing Company, Inc. Apr Automated card services Cash for stock Boatmen's Information Systems May Data processing Cash for assets data processing business Federal Home Loan Bank of Atlanta Aug Item processing Cash for assets item processing contracts Cincinnati Bell Information Systems Nov Image and document Cash for assets banking business management services RECOM Associates, Inc. Dec Network integration services Stock for stock
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. Certain of the acquisition agreements provide for additional cash payments contingent upon the attainment of specified revenue goals. In connection with the acquisition of Bankers Pension Services, Inc. (BPS), the Company issued approximately 112,000 unregistered shares of its common stock. The Company relied upon the exemption provided in Section 4(2) of the Securities Act of 1933 and Rule 505 of Regulation D, based upon the number of shareholders of BPS and the aggregate value of the transaction. No underwriter was involved in the transaction and no commission was paid. 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 903,000 shares of common stock of the Company were issued in the acquisition of LHI. Net income of the Company for 1995 was 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 in 1995 by $109.6 million, or $2.49 a share, relating to such charges. STOCK OPTION PLAN The Company's 1996 Stock Option Plan provides for the granting to its employees and directors of either incentive or non-qualified options to purchase shares of the Company's common stock for a price not less than 100% of the fair value of the shares at the date of grant. In general, 20% of the shares awarded under the Plan may be purchased annually and expire, generally, five to 10 years from the date of the award. Activity under the current and prior plans during 1994, 1995 and 1996 is summarized as follows: SHARES ----------------------------- NON- PRICE INCENTIVE QUALIFIED RANGE ------------------------------------------ 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 1.63-27.50 Granted 617,354 26.50-36.75 Forfeited (89,147) Exercised (18,590) (309,977) 1.63-30.50 ----------------------------- Outstanding, December 31, 1996 1,690 2,601,410 5.77-36.75 ============================= Shares exercisable, December 31, 1996 1,690 1,757,795 =========================================== Options outstanding include 51,525 and 132,529 shares granted in 1995 and 1996 at $22.00 and $29.88 a share, respectively, under a stock purchase plan requiring exercise within 30 days after a two-year period beginning on the date of grant. At December 31, 1996, options to purchase 4,035,000 shares were available for grant under the Plan. The Company has accounted for its stock-based compensation plans in accordance with the provisions of APB Opinion 25. Accordingly, the Company did not record any compensation expense in the accompanying financial statements for its stock-based compensation plans. Had compensation expense been recognized consistent with FASB Statement 123 ("Accounting for Stock-Based Compensation"), the Company's net income would have been reduced by approximately $981,000 and $301,000 in 1996 and 1995, respectively. The related impact on earnings per share was immaterial. The assumptions used to estimate compensation expense were: expected volatility of 17.8%, risk-free interest rate of 6.5% and expected option lives of five years. NOTE 3 LONG-TERM DEBT AND OTHER OBLIGATIONS The Company has available a $225,000,000 unsecured line of credit and commercial paper facility with a group of banks, maturing in 2000, of which $141,669,000 was in use at December 31, 1996 at an average rate of 5.86%. 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, 1996. A facility fee ranging from .1% to .2% per annum is required on the entire bank line regardless of usage. The facility is reduced to $210,000,000 and $150,000,000, respectively, on May 17, 1998 and 1999 and expires on May 17, 2000. Long-term debt and other obligations outstanding at the respective year-ends comprised the following: (in thousands) December 31, 1996 1995 ---------------------------- 9.45% senior notes payable, due 1997-2000 $17,143 $21,429 9.75% senior notes payable, due 1997-2001 12,500 15,000 8.00% senior notes payable, due 1999-2005 90,000 90,000 Bank notes and commercial paper 151,859 254,932 Other obligations 1,362 2,055 ----------------------------- TOTAL $272,864 $383,416 ============================= Annual principal payments required under the terms of the long-term agreements were as follows at December 31, 1996: (In thousands) Year - ---------------------------------------------------------------------- 1997 $10,075 1998 8,074 1999 21,211 2000 162,424 2001 16,220 Thereafter 54,860 - ---------------------------------------------------------------------- TOTAL $272,864 ====================================================================== Interest expense with respect to long-term debt and other obligations amounted to $22,431,000, $22,006,000 and $9,228,000 in 1996, 1995 and 1994, respectively. NOTE 4 INCOME TAXES A reconciliation of recorded income tax expense with income tax computed at the statutory federal tax rates follows: (In thousands) 1996 1995 1994 ----------------------------------- Statutory federal tax rate 35% 35% 35% Tax computed at statutory rate $36,592 $(34,486) $23,571 State income taxes net of federal effect 4,473 (5,113) 2,792 Non-deductible amortization 1,504 1,239 1,157 Other 296 (308) (582) ------------------------------------ TOTAL $42,865 $(38,668) $26,938 ==================================== The provision for income taxes consisted of the following: (In thousands) 1996 1995 1994 ---------------------------------- Currently payable $37,409 $17,884 $13,763 Tax reduction credited to capital in excess of par value 2,000 2,400 800 Deferred 3,456 (58,952) 12,375 ---------------------------------- Total $42,865 $(38,668) $26,938 ================================== The approximate tax effects of temporary differences at December 31, 1996 and 1995 were as follows: (In thousands) 1996 1995 ------------------------ Allowance for doubtful acounts $1,529 $2,319 Accrued expenses not currently deductible 5,588 7,769 Deferred revenues 9,815 9,122 Other (232) 1,728 Net operating loss and credit carryforwards 3,871 6,739 Deferred costs (4,963) (9,143) Internally generated capitalized software (28,900) (30,283) Excess of tax over book depreciation and amortization (3,185) (4,419) Purchased incomplete software technology 61,500 66,305 Unrealized gain on investments (12,940) (10,610) ------------------------ TOTAL $32,083 $39,527 ======================== The net operating loss and tax credit carryforwards have expiration dates ranging from 1997 through 2010. NOTE 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 $10,074,000, $8,144,000 and $8,900,000 in 1996, 1995 and 1994, respectively. NOTE 6 LEASES, OTHER COMMITMENTS AND CONTINGENCIES LEASES Future minimum rental payments, as of December 31, 1996, on various operating leases for office facilities and equipment were due as follows: (In thousands) Year - ---------------------------------------------------------------------- 1997 $35,030 1998 29,115 1999 19,794 2000 15,581 2001 9,472 Thereafter 18,538 ====================================================================== TOTAL $127,530 ====================================================================== Rent expense applicable to all operating leases was approximately $48,752,000, $48,038,000 and $43,065,000 in 1996, 1995 and 1994, respectively. OTHER COMMITMENTS AND CONTINGENCIES The Company's trust administration subsidiaries had fiduciary responsibility for the administration of approximately $18 billion in trust funds as of December 31, 1996. 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 PERIOD TO PERIOD PERCENTAGE YEAR ENDED DECEMBER 31, INCREASE (DECREASE) ----------------------------------------------------------------------
1996 vs. 1995 vs. 1996 1995 1994 1995 1994 ----------------------------------- ----------------------------- Revenues 100.0% 100.0% 100.0% 13.4% 21.3% ----------------------------------- Cost of revenues: Salaries, commissions and payroll related costs 46.5 47.0 48.6 12.3 17.5 Data processing expenses, rentals and telecommunication costs 11.4 13.6 14.0 (5.1) 17.8 Other operating costs 18.2 17.8 19.0 15.7 14.1 Depreciation and amortization of equipment and improvements 5.3 5.5 5.4 9.8 22.7 Amortization of intangible assets 2.6 2.3 1.9 31.5 47.2 Amortization (capitalization) of internally generated software - net 0.5 (0.9) (1.7) (158.5) (33.5) ----------------------------------- ---------------------------- Total cost of revenues 84.5 85.3 87.2 12.4 18.7 ==================================== Operating income 15.5% 14.7% 12.8% 19.8 38.9 ==================================== Income before income taxes 13.1% 12.0% 11.6% 23.9 25.2 ==================================== Net income 7.7% 7.1% 7.0% 23.9 23.2 ====================================
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 $94,888,000 in 1996 and $123,541,000 in 1995. In both years, approximately 55% of the 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 net addition of new clients, growth in the transaction volume experienced by existing clients and price increases. Cost of revenues increased $74,430,000 in 1996 and $94,658,000 in 1995. As a percentage of revenues, cost of revenues decreased .8% from 1995 to 1996 and 1.9% from 1994 to 1995. 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 sales of software and related support activities and 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 40 years. Amortization of these costs increased $5,021,000 from 1995 to 1996 and $5,116,000 from 1994 to 1995. As a percentage of revenues, these costs also increased in both years. Capitalization of internally generated computer software is stated net of amortization and decreased $3,217,000 in 1995 and $10,114,000 in 1996. Net software capitalized was more than offset by amortization in 1996 due to the accelerated amortization of software resulting from the planned consolidation of certain product lines. Operating income increased $20,458,000 in 1996 and $28,883,000 in 1995. As a percentage of revenues, operating income increased .8% in 1996 and 1.9% in 1995. The effective income tax rate was 41% in 1996 and 1995 and 40% in 1994. The trend to higher income tax rates results from net increases in non-deductible permanent differences. The effective income tax rate for 1997 is expected to remain at 41%. The Company's growth has been largely accomplished 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. CONSOLIDATED STATEMENTS OF INCOME SUPPLEMENTAL SCHEDULE (Unaudited) (In thousands, except per share data) Year ended December 31, 1996 1995 1994 REVENUES $798,268 $703,380 $579,839 ------------------------------------ COST OF REVENUES: Salaries, commissions and payroll related costs 371,526 330,845 281,651 Data processing expenses, rentals and telecommunication costs 90,919 95,798 81,320 Other operating expenses 145,230 125,498 109,975 Depreciation and amortization of property and equipment 42,241 38,480 31,350 Amortization of intangible assets 20,983 15,962 10,846 Amortization (capitalization) of internally generated computer software - net 3,732 (6,382) (9,599) ------------------------------------ TOTAL 674,631 600,201 505,543 ------------------------------------ OPERATING INCOME 123,637 103,179 74,296 Interest expense - net 19,088 18,822 6,951 ----------------------------------- INCOME BEFORE INCOME TAXES 104,549 84,357 67,345 Income tax provision 42,865 34,586 26,938 ----------------------------------- NET INCOME $61,684 $49,771 $40,407 =================================== Net income per common and common equivalent share $1.34 $1.13 $0.99 =================================== Shares used in computing net income per share 46,198 44,008 40,735 =================================== Note: Supplemental information provided for comparative purposes. 1995 excludes certain charges associated with the acquisition of Information Technology, Inc. The following table sets forth certain financial highlights and pro forma information for 1996, 1995 and 1994.
(In thousands, except per share data) Year Ended December 31, 1996 1995 1994 - ---------------------------------------------------------------------------------------------------- Revenues $798,268 $703,380 $579,839 Net income (loss) 61,684 (59,863) 40,407 - ---------------------------------------------------------------------------------------------------- Net income (loss) per share $1.34 $(1.36) $0.99 - ---------------------------------------------------------------------------------------------------- Net income as originally reported and before certain charges related to acquisition of Information Technology, Inc. 61,684 49,771 37,664 - ---------------------------------------------------------------------------------------------------- Net income per share as originally reported and before certain charges related to acquisition of Information Technology, Inc. $1.34 $1.13 $0.95 - ----------------------------------------------------------------------------------------------------
The charges related to the acquisition of Information Technology, Inc. (ITI) in 1995 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 the Company's primary sources of funds: (In thousands) Year Ended December 31, 1996 1995 1994 -------------------------------------- Cash provided by operating activities $148,900 $88,606 $67,283 Issuance of common stock-net 4,896 638 1,918 Decrease (increase) in investments 22,416 12,265 (28,575) Increase (decrease) in net borrowings (110,940) 231,827 26,445 -------------------------------------- TOTAL $65,272 $333,336 $67,071 -------------------------------------- The Company has applied a significant portion of its cash flow from operations and proceeds of its common stock offerings to acquisitions and the reduction of long-term debt and invests the remainder in short-term obligations until it is needed for further acquisitions or operating purposes. 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. SELECTED FINANCIAL DATA The following 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.
(In thousands, except per share data) Year Ended December 31, 1996 1995 1994 1993 1992 ------------------------------------------------------------------------------ Revenues $798,268 $703,380 $579,839 $467,863 $341,448 Income (loss) before income taxes 104,549 (98,531) 67,345 53,177 39,291 Income taxes (credit) 42,865 (38,668) 26,938 20,464 14,925 Net income (loss) 61,684 (59,863) 40,407 32,713 24,366 Net income (loss) per share $1.34 $(1.36) $0.99 $0.83 $0.69 ------------------------------------------------------------------------------ Total assets $1,908,519 $1,885,299 $1,661,345 $1,395,403 $1,097,339 Long-term debt and other long-term obligations 272,864 383,416 150,016 122,417 59,472 Shareholders' equity 507,270 434,262 358,722 312,873 195,630 --------------------------------------------------------------------------------
Note: The above information has been restated to recognize (1) 3-for-2 stock splits effective in May 1993 and June 1992 and (2) the acquisition in 1995 of Lincoln Holdings, Inc. accounted for as a pooling of interests. QUARTERLY FINANCIAL INFORMATION (Unaudited)
(In thousands, except per share data) QUARTERS 1996 FIRST SECOND THIRD FOURTH TOTAL --------------------------------------------------------------------- Revenues $194,710 $196,464 $196,585 $210,509 $798,268 --------------------------------------------------------------------- Cost of revenues 164,205 165,612 165,633 179,181 674,631 --------------------------------------------------------------------- Operating income 30,505 30,852 30,952 31,328 123,637 --------------------------------------------------------------------- Income before income taxes 24,850 25,776 26,658 27,265 104,549 --------------------------------------------------------------------- Income taxes 10,189 10,568 10,929 11,179 42,865 --------------------------------------------------------------------- Net income $14,661 $15,208 $15,729 $16,086 $61,684 --------------------------------------------------------------------- Net income per share $0.32 $0.33 $0.34 $0.35 $1.34 ===================================================================== 1995 --------------------------------------------------------------------- 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 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 (credit) 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) =====================================================================
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. 1996 1995 - -------------------------------------------------------------------------------- QUARTER ENDED HIGH LOW HIGH LOW - -------------------------------------------------------------------------------- March 31 32 25 3/8 27 3/4 21 June 30 33 3/8 28 1/16 28 3/8 25 3/4 September 30 38 11/16 28 5/8 31 25 1/2 December 31 39 5/8 34 30 1/8 25 1/2 At December 31, 1996, the Company's common stock was held by approximately 30,000 shareholders of record or through nominee or street name accounts with brokers. The closing sale price for the Company's stock on January 17, 1997 was $37.00 per share. The Company's present policy is to retain earnings to support future business opportunities, rather than to pay dividends. 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, 1996 and 1995 and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1996. 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, 1996 and 1995 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /S/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP Milwaukee, Wisconsin January 31,1997 MANAGEMENT'S STATEMENT OF RESPONSIBILITY The management of Fiserv, Inc. assumes responsibility for the integrity and objectivity of the information appearing in the 1996 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

EXHIBIT 21



                                      SUBSIDIARIES OF THE REGISTRANT

                                                               State of
Name under which Subsidiary does Business                      Incorporation

Aspen Investment Alliance, Inc.                                Colorado
BMS On-Line Services, Inc.                                     Massachusetts
Data Link Systems, LLC                                         Wisconsin
FIserv CIR, Inc.                                               Delaware
FIserv Federal Systems, Inc.                                   Delaware
FIserv Fresno, Inc.                                            California
FIserv Government Services, Inc.                               Delaware
FIserv Joint Venture, Inc.                                     Delaware
Fiserv Solutions, Inc.                                         Wisconsin
FIserv (Europe) Ltd.                                           United Kingdom
FIserv (ASPAC) Pte., Ltd.                                      Singapore
First Retirement Marketing, Inc.                               Colorado
First Trust Corporation                                        Colorado
Information Technology, Inc.                                   Nebraska
Lincoln Trust Company                                          Colorado
The Affinity Group, Inc.                                       Colorado
Bankers Pension Services, Inc.                                 California
Fiserv Solutions of Canada Inc.                                Ontario


INDEPENDENT AUDITORS' CONSENT

We  consent  to the  incorporation  by  reference  in this  Amendment  No.  1 to
Registration  Statement No. 333-04417 of Fiserv,  Inc. on Form S-8 of our report
dated January 31, 1997,  incorporated  by reference in the Annual Report on Form
10-K of Fiserv, Inc. for the year ended December 31, 1996.

/S/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin

February 17, 1997

 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1996 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH INFORMATION. 1,000 YEAR DEC-31-1996 DEC-31-1996 80,833 970,553 160,747 0 0 1,266,487 304,835 161,174 1,908,519 1,128,385 0 0 0 453 506,817 1,908,519 0 798,268 0 649,916 24,715 0 19,088 104,549 42,865 61,684 0 0 0 61,684 1.34 1.34