SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 1999 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: (262) 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) Preferred Stock Purchase Rights ------------------------------- (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 ( ) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] State the aggregate market value of the voting and nonvoting common equity held by non-affiliates of the registrant as of January 31, 2000: $3,934,477,511 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of January 31, 2000: 122,617,706 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. 1999 Annual Report to Shareholders - Parts II, IV Proxy Statement for March 30, 2000, Meeting - Part III Fiserv, Inc. and Subsidiaries Form 10-K December 31, 1999
PART I Page - ------ ---- Item 1. Business 1 Item 2. Properties 8 Item 3. Legal Proceedings 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Executive Officers of the Registrant 9 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 7a. Quantitative and Qualitative Disclosure about Market Risk 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 ================================================================================ Special Note Regarding Forward-Looking Statements Certain matters discussed in this Annual Report on Form 10-K are `forward- looking statements' intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as "believes," "anticipates" or "expects," or words of similar import. Similarly, statements that describe future plans, objectives or goals of Fiserv, Inc. ("Fiserv" or the "Company") are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Factors that could affect results include, among others, economic, competitive, governmental and technological factors affecting the Company's operations, markets, services and related products, prices and other factors discussed in the Company's prior filings with the Securities and Exchange Commission. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Item 1. Business Fiserv is a leading technology resource for information management systems used by the financial industry. The Company 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, Fiserv 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. Headquartered in Brookfield, Wisconsin, Fiserv provides information management technology and related services to banks, broker-dealers, credit unions, financial planners and investment advisers, insurance companies, leasing companies, mortgage lenders and savings institutions. The Company operates centers nationwide for full-service financial data processing, software system development, item processing and check imaging, technology support and related product businesses. In addition, the Company has business support centers in Australia, Canada, Indonesia, Philippines, Poland, Singapore and the United Kingdom. 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 financial industry with great frequency; the distinctions among financial services traditionally offered by banking and thrift organizations as well as by securities and insurance firms continue to narrow; and financial institutions diversify and consolidate on an ongoing basis in response to 1 market pressures, as well as under the auspices of regulatory agencies. Although such market changes have led to consolidations that have reduced the number of financial institutions in the United States, such consolidations have not resulted in a material reduction of the number of customers or financial accounts serviced by the financial industry as a whole. New organizations entering 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 is 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 have 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 capabilities. Fiserv provides all of these options to the financial industry. To capitalize on these industry trends and to become the premier provider of data processing products and related 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 Company 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
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Formed Acquired Company Service ===================================================================================================== 1969 Apr. 1987 Fidelity Financial Services, Inc., Spokane, WA Data processing 1965 Oct. 1987 Capbanc Computer Corp., Baton Rouge, LA (sold 1991) 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 (sold 1996) 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 (sold 1996) 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 (sold 1998) Network integration 1970 Jan. 1995 Integrated Business Systems, Glendale, CA Specialized forms
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Formed Acquired Company Service ============================================================================================================= 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 1992 Apr. 1997 AdminaStar Communications, Indianapolis, IN Laser print/mailing services 1982 May 1997 Interactive Planning Systems, Atlanta, GA PC-based financial systems 1983 May 1997 BHC Financial, Inc., Philadelphia, PA Securities services 1968 Sept. 1997 FIS, Inc., Orlando, FL, and Baton Rouge, LA Data processing n/a Sept. 1997 Stephens Inc. clearing business, Little Rock, AR Securities services 1986 Oct. 1997 Emerald Publications, San Diego, CA Financial seminars & training 1968 Oct. 1997 Central Service Corp., Greensboro, NC Data & item processing 1993 Oct. 1997 Savoy Discount Brokerage, Seattle, WA Securities services 1990 Dec. 1997 Hanifen, Imhoff Holdings, Inc., Denver, CO Securities services 1980 Jan. 1998 Automated Financial Technology, Inc., Malvern, PA Data processing 1981 Feb. 1998 The LeMans Group, King of Prussia, PA Automobile leasing software n/a Feb. 1998 PSI Group, Seattle, WA Laser printing 1956 Apr. 1998 Network Data Processing Corporation, Cedar Rapids, IA Insurance data processing 1977 Apr. 1998 CUSA Technologies, Inc., Salt Lake City, UT Software & services 1982 May 1998 Specialty Insurance Service, Orange, CA Insurance data processing 1985 Aug. 1998 Deluxe Card Services, St. Paul, MN Automated card services 1981 Oct. 1998 FHLB of Topeka IP Services, Topeka, KS Item processing n/a Oct. 1998 FiCATS, Norristown, PA Item processing 1984 Oct. 1998 Life Instructors, Inc., New Providence, NJ Insurance/securities training 1994 Nov. 1998 ASI Financial, Inc., New Jersey and New York PC-based financial systems 1986 Dec. 1998 The FREEDOM Group, Inc., Cedar Rapids, IA Insurance data processing 1994 Jan. 1999 QuestPoint, Philadelphia, PA Item processing 1981 Feb. 1999 Eldridge & Associates, Lafayette, CA PC-based financial systems 1984 Feb. 1999 RF/Spectrum Decision Science Corporation Oakland, CA Software & services 1978 Mar. 1999 FIPSCO, Inc., Des Plaines, IL Insurance marketing systems 1987 Apr. 1999 Progressive Data Solutions, Inc. / Infinity Software Insurance software systems Systems, Inc., Orlando, FL 1973 June 1999 JWGenesis Clearing Corporation, Boca Raton, FL Securities services 1987 June 1999 Alliance ADS, Redwood Shores, CA Imaging technology 1962 Aug. 1999 Envision Financial Technologies, Inc., Chicago, IL Data processing 1995 Oct. 1999 Pinehurst Analytics, Inc., Chapel Hill, NC PC-based financial systems 1982 Dec. 1999 Humanic Design Corporation, Mahwah, NJ Software & services
Information Technology Services - ------------------------------- Fiserv is a technology company focused on helping financial services providers meet the challenges and opportunities of today's dynamic financial marketplace. The Company's core business is serving the needs of banking, lending, insurance, financial planners and securities providers. With its wide array of industry-specific products, Fiserv clients can satisfy their 4 customers' growing desire for anywhere, anytime financial services. The Company's operations have been classified into three business segments: Financial institution outsourcing, systems and services; Securities processing and trust services; and "All other and corporate." The financial institution outsourcing, systems and services segment provides account and transaction processing solutions and services to financial institutions and other financial intermediaries. The securities processing and trust services segment provides securities processing solutions and retirement plan administration services to brokerage firms, financial planners and financial institutions. The "All other and corporate" segment provides plastic card services and document solutions, and includes general corporate expenses. The following discussion covers the two major operating segments. Financial Institution Outsourcing, Systems & Services. Account processing is a core requirement of every financial institution. It's also vital to the operations of brokerage firms and insurance companies. No matter how the industry may consolidate and evolve, there will always remain the need for account processing. That's where Fiserv is positioned--as a leader in financial information management. Fiserv provides comprehensive solutions designed to meet the information processing requirements of financial institutions, including account and transaction processing services, item processing, loan servicing and lending systems. The Company offers its clients service bureau and in-house processing systems, e-commerce solutions and complementary products. In essence, Fiserv provides all the technology a bank, credit union, mortgage lender, savings or financing institution needs to run its operations--from deposit accounts to loans to general ledger to check processing. Fiserv products, services and software solutions are available through multiple delivery channels to financial institutions in the United States, and many of its systems have applications designed for the unique requirements of financial institutions operating outside of North America. Fiserv international teams develop, sell, install and support core banking and delivery channel integration solutions for a wide range of international banks and financial services companies located in over 50 countries. All Fiserv core systems can be complemented with a number of other products that allow clients to create a total servicing solution, depending on their requirements. These complementary products and back-office solutions include treasury and investment management, decision support and performance measurement solutions, electronic funds transfer services, imaging systems, human resource information systems, call center systems, loan origination and tracking, auto leasing software, data warehousing/data mining and credit services. The insurance industry, like banking, has requirements for basic administration services and information processing systems. Fiserv brings expertise in information management technology and related administration processing services to the insurance and banking industries. The products and solutions offered by the Company automate the full range of insurance services and support the growing convergence between banking and insurance. Fiserv insurance solutions include administration services and software for life, annuity, health insurance, property/casualty and workers compensation; award-winning claims workstation software; comprehensive financial accounting systems; computer-based training for insurance and securities; and electronic sales platforms that can be delivered over the Internet. Securities Processing and Trust Services. The securities business is about transactions and volume; advanced technology that makes executing and clearing trades faster, easier and more economical; and service excellence and customer satisfaction. Fiserv has accumulated the technology resources and industry knowledge required to meet the needs of brokerage firms and financial institutions that are expanding into this business. The Company provides comprehensive clearing, execution and brokerage services. With Fiserv, brokerage firms and financial institutions gain a technology resource with the volumes, management expertise, products and service necessary to help satisfy customer needs. 5 The administration of self-directed retirement plans is also a highly specialized business that benefits, as do all financial services applications, from technology. Fiserv has built a trusted reputation in this field by applying its expertise to technology for administration of business and self-directed retirement plans and related services. As a leading provider of retirement plan administration and processing services to financial planners, Fiserv provides a full range of services including trustee services, proprietary software for registered investment advisors, financial seminars and related marketing materials. Financial information concerning the Company's industry segments is included in Note 8 to the Consolidated Financial Statements contained in the Company's annual report to shareholders included in this Annual Report on Form 10-K as Exhibit 13 and such information is incorporated herein by reference. Servicing the Market - -------------------- The market for Fiserv account and transaction 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 lines, timely introduction of new products and features, cost effectiveness and demand for service excellence. 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 financial services providers 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 account and transaction 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 information management and data processing solutions designed to meet the specific needs of the ever-changing financial industry. 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 technology 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 client size. 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 technology 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. Fiserv has been an international company since 1986, when its retail banking products were first launched throughout Europe, Asia and Latin America. Since then, the Company has grown an impressive infrastructure for supporting clients in international markets. Fiserv currently maintains international support staffs in Australia; Canada; Orlando, Florida; Singapore; and the United Kingdom. Product Development - ------------------- In order to meet the changing technology needs of the clients 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. 6 The unique Fiserv network of development and financial information technology 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 multiple Fiserv centers share the Company's variety of nationally developed and supported software, each center has specialized capabilities that enable it to offer system application features and functions unique to its client base. Where the client's requirements warrant, Fiserv purchases software programs from third parties that are interfaced with existing Fiserv systems. In developing its products, Fiserv stresses interaction with and responsiveness to the needs of its clients. Fiserv provides a dedicated solution 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. 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 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. Competition - ----------- The market for information technology products and services within the financial industry is highly competitive. The Company's principal competitors include internal data processing departments, data processing affiliates of large companies or large computer hardware manufacturers, independent computer service firms and processing centers owned and operated as user cooperatives. Certain competitors possess substantially greater financial, sales and marketing resources than the Company. Competition for 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 lines, 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 larger corporation or a hardware vendor, is a competitive advantage. 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. In addition, several of the Company's operations are reviewed annually by independent auditors to provide internal control evaluations for its clients' auditors and regulators. As trust companies under Colorado law, First Trust and Lincoln Trust are subject to the 7 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. The Company's securities businesses, Fiserv Securities, Inc. (formerly BHC Financial, Inc.) and affiliates and Fiserv Correspondent Services, Inc. (formerly Hanifen, Imhoff Clearing Corporation and JWGenesis Clearing Corporation), are subject to the broker-dealer rules of the Securities and Exchange Commission and the New York Stock Exchange, as well as the National Association of Securities Dealers and other stock exchanges of which they are members. Employees - --------- Fiserv employs approximately 13,500 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 services 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; financial planning and related support services. In supporting international markets, Fiserv works closely with its clients to help ensure their continued success. Fiserv employees speak the same language as their clients, they also understand the differences in the style of doing business, as well as the financial products requirements and regulations unique to each client and its specific market. 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 significant 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 137 cities (125 in the United States): Birmingham, Alabama; Little Rock, Arkansas; Phoenix and Scottsdale, Arizona; Atherton, Fresno, Glendale, Irvine, Lafayette, Moorpark, Oakland, Ontario, Orange, Redwood City, Sacramento, San Diego, San Leandro, Van Nuys and Walnut, California; Denver and Englewood, Colorado; Wallingford, Connecticut; Boca Raton, Jacksonville, Lake Mary, Lake Wales, Lakeland, Maitland, Miami, Orlando, Plantation, Tampa and Titusville, Florida; Atlanta, Duluth, Macon, Marietta and Norcross, Georgia; Honolulu, Hawaii; Cedar Rapids and West Des Moines, Iowa; Arlington Heights, Chicago, Des Plaines, Marion and Rock Island, Illinois; Indianapolis and South Bend, Indiana; Topeka, Kansas; Bowling Green and Louisville, Kentucky; Baton Rouge and Kenner, Louisiana; Rockville, Maryland; Braintree, Mansfield, and Somerville, Massachusetts; Flint, Northville and 8 Troy, Michigan; Mendota Heights and Shoreview, Minnesota; Kansas City and Springfield, Missouri; Lincoln and Omaha, Nebraska; Mahwah, New Providence and South Plainfield, New Jersey; Santa Fe, New Mexico; Fayetteville, Great Neck, Melville, New York, Syracuse and Utica, New York; Chapel Hill, Greensboro and Raleigh, North Carolina; Fargo, North Dakota; Cincinnati and Cleveland, Ohio; Oklahoma City, Oklahoma; Corvallis and Portland, Oregon; Bensalem, Bryn Mawr, Erie, King of Prussia, Malvern, Norristown, Philadelphia, Pittsburgh, Valley Forge and Williamsport, Pennsylvania; Newberry, South Carolina; Memphis, Tennessee; Addison, Austin, Beaumont, Dallas, Denton, Houston, San Antonio, Southlake and Stafford, Texas; Salt Lake City, Utah; Williamsburg, Virginia; Bellevue, Kent, Seattle and Yakima, Washington; and Brookfield, Milwaukee and New Berlin, Wisconsin. International business centers are located in Adelaide, South Australia, New South Wales and Sydney, Australia; Bogota, Colombia; London, Uxbridge, and Middlesex, England; Jakarta, Indonesia; Manila, Philippines; Warsaw, Poland; and Singapore. The Company owns facilities in Brookfield, Corvallis, Greensboro, Lincoln, Marion, Moorpark, South Bend and Valley Forge; all other buildings in which centers are located are subject to leases expiring through 2001 and beyond. The Company owns or leases 149 mainframe computers (Data General, Digital, Hewlett Packard, IBM, NCR, Tandem 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. 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. Executive Officers of the Registrant - ------------------------------------ The executive officers and other officers of the Company as of February 14, 2000, together with their ages, positions and business experience are described below: Name Age Position Leslie M. Muma 55 Vice-Chairman of the Board, President and Chief Executive Officer Donald F. Dillon 59 Vice-Chairman of the Board and Chairman of Information Technology, Inc. 9 Kenneth R. Jensen 56 Senior Executive Vice President, Chief Financial Officer and Treasurer Howard F. Arner 59 President and Chief Operating Officer, Insurance Solutions Group Norman J. Balthasar 53 President and Chief Operating Officer, Financial Institution Outsourcing Group Robert H. Beriault 48 President and Chief Operating Officer, Securities Group Frank R. Martire 52 President and Chief Operating Officer, Financial Institution Systems and Services Group Gordon G. Rockafellow 63 President and Chief Operating Officer, Trust Services Group Dean C. Schmelzer 49 Executive Vice President - Marketing & Sales Charles W. Sprague 50 Executive Vice President, General Counsel, Chief Administrative Officer and Secretary Mr. Muma has been a Director of the Company since it was established in 1984; he was named Vice Chairman of the Board of Directors in 1995 and Chief Executive Officer in 1999. Mr. Muma served as President and Chief Operating Officer of the Company from 1984 to 1999. Mr. Dillon was named Vice Chairman of the Board of Directors of the Company in 1995. From 1976 to 1995, Mr. Dillon was co-founder and President of Information Technology, Inc. ("ITI"), a software and services company that was acquired by the Company in 1995 and Mr. Dillon currently serves as Chairman of ITI. Mr. Jensen has been Executive Vice President, Chief Financial Officer, Treasurer, Assistant Secretary and a Director of the Company since it was established in 1984. He was named Senior Executive Vice President in 1986. Mr. Arner was named President and Chief Operating Officer of the Fiserv Insurance Solutions Group in 1999. He served as Corporate Executive Vice President and President-Insurance Solutions Group from 1998 to 1999. Mr. Arner was Chief Executive Officer of Network Data Processing from 1994 to 1998, when it was acquired by the Company. Mr. Balthasar was named President and Chief Operating Officer of the Fiserv Financial Institution Outsourcing Group in 1999. He served as Corporate Executive Vice President and President-Savings and Community Bank Group from 1996 to 1999. Mr. Balthasar has been with Fiserv and its predecessor company since 1974. Mr. Beriault was named President and Chief Operating Officer of the Fiserv Securities Group in 1999. He served as Corporate Executive Vice President and President-Securities Processing Group from 1998 to 1999. Mr. Beriault was President of Lincoln Trust Company from 1986 to 1995, when it was acquired by the Company. Mr. Martire was named President and Chief Operating Officer of the Fiserv Financial Institution Systems and Services Group in 1999. He served as Corporate Executive Vice President and President-Bank & Credit Union Group from 1996 to 1999. Mr. Martire was with Citicorp Information Resources from 1969 to 1991. He was the President and CEO of Citicorp Information Resources in 1991, when it was acquired by the Company. Mr. Rockafellow was named President and Chief Operating Officer of the Fiserv Trust Services Group in 1999. He served as Corporate Executive Vice President and President-Trust 10 Group from 1996 to 1999. Mr. Rockafellow was the President and CEO of First Trust Company from 1982 to 1985, when it was acquired by the Company. Mr. Schmelzer was named Executive Vice President, Marketing & Sales for the Company in 1992. Prior to joining Fiserv, he was Director of Commercial Analysis for IBM. Mr. Sprague has been Executive Vice President and Chief Administrative Officer of the Company since 1999. He served as Corporate Executive Vice President, General Counsel and Secretary from 1994 to 1999. He has been involved with the Company's corporate and legal concerns since it was formed in 1984. ================================================================================ PART II ================================================================================ Pursuant to Instruction G(2) for Form 10-K, the information required in Items 5 through 8 are 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 28, 2000. ================================================================================ PART IV ================================================================================ Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (1) Financial Statements: The consolidated financial statements of the Company as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999, together with the report thereon of Deloitte & Touche LLP, dated January 28, 2000, appear on pages 23 through 44 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 Schedule: The following financial statement schedule of the Company and related documents are included in this Report on Form 10-K: Page ---- Independent Auditors' Report 14 Schedule II--Valuation and Qualifying Accounts 14 11 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended December 31, 1999. (c) Exhibits: The exhibits listed in the accompanying exhibit index are filed as part of this Annual Report on Form 10-K. 12 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 28, 2000 FISERV, INC. By /s/ Leslie M. Muma -------------------------------- Leslie M. Muma (Chief Executive Officer) 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 28, 2000. Signature Capacity /s/ Leslie M. Muma - ---------------------------------- Leslie M. Muma Vice Chairman of the Board, President, Chief Executive Officer /s/ Donald F. Dillon - ---------------------------------- Donald F. Dillon Vice Chairman of the Board, Chairman -Information Technology, Inc. /s/ Kenneth R. Jensen - ---------------------------------- Kenneth R. Jensen Director, Senior Executive Vice President, Chief Financial Officer, Treasurer /s/ George D. Dalton - ---------------------------------- George D. Dalton Chairman of the Board /s/ Daniel P. Kearney - ---------------------------------- Daniel P. Kearney 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 13 INDEPENDENT AUDITORS' REPORT Shareholders and Directors of Fiserv, Inc.: We have audited the consolidated financial statements of Fiserv, Inc. and subsidiaries as of December 31, 1999 and 1998, and for each of the three years in the period ended December 31, 1999, and have issued our report thereon dated January 28, 2000; such consolidated financial statements and report are included in your 1999 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Fiserv, Inc., listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Milwaukee, Wisconsin January 28, 2000 SCHEDULE II Valuation and Qualifying Accounts
Allowance for Doubtful Accounts Year Ended Beginning Charged December 31, Balance to Expense Write-offs Balance ------------------- --------------- --------------- ---------------- --------------- 1999 $8,041,000 $7,028,000 ($3,463,000) $11,606,000 1998 6,903,000 6,262,000 (5,124,000) 8,041,000 1997 3,796,000 3,483,000 (376,000) 6,903,000
14 EXHIBIT INDEX Exhibit Number Exhibit Description - ------ ------------------- 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 Restated Articles of Incorporation, as amended. 3.2 By-laws, as amended. 4.1 Credit Agreements dated as of May 17, 1999, by and among Fiserv, Inc., the Lenders Party Hereto, and The Bank of New York, as Administrative 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.) 4.5 Shareholder Rights Plan (filed as Exhibit 4 to the Company's Current Report on Form 8-K dated February 24, 1998, and incorporated herein by reference (File No. 0-14948.)) 13. The 1999 Annual Report to Shareholders (to the extent incorporated by reference herein). 21. List of Subsidiaries of the Registrant. 23. Independent Auditors' Consent. 27. Financial Data Schedule (EDGAR version only). 15