On Dec. 3, 2007, the company completed its acquisition of CheckFree Corporation (“CheckFree”) for approximately $4.4 billion in cash, significantly enhancing its presence in the fast-growing markets of on-line bill payment, Internet banking, operational risk management and investment services.

On Jan. 10, 2008, Fiserv completed the disposition of a majority of its health businesses to UnitedHealthcare. The company estimates net proceeds from this transaction of approximately $460 million after income taxes, final net working capital adjustments and transaction costs.

On Feb. 4, 2008, Fiserv completed the sale of the majority of the Fiserv Investment Support Services (“Fiserv ISS”) business to TD Ameritrade, the first of two transactions related to the sale of these assets. The company estimates net proceeds from the TD Ameritrade transaction – including excess capital and excluding any contingent earn-out payment – of approximately $200 million. The second part of the sale – to Robert Beriault Holdings, Inc. – is expected to close by the end of the second quarter of 2008.

On Dec. 31, 2007, Fiserv completed the disposition of CredStar, a mortgage credit reporting unit, and, on Jan. 24, 2008, the company divested Del Mar Database, a provider of loan broker management products.

Full-year free cash flow from continuing operations was up 15 percent to $438 million compared with 2006;

Overall adjusted operating margin in the fourth quarter of 2007 was 25.8 percent, up 110 basis points year over year. For the full year 2007, adjusted operating margin was 26.1 percent, up 100 basis points compared with 2006. Adjusted operating margin in the financial segment was 27.0 percent in the fourth quarter of 2007 and 27.1 percent for the full year 2007, up 200 and 270 basis points versus the prior year, respectively;

Fiserv EFT completed 46 new sales in the quarter with 90 percent made within the Fiserv core processing client base;

In the quarter, the company added 90 clients for its branch capture product and 142 clients for its merchant capture product;

In the quarter, the company signed 97 new clients for its electronic bill payment services and now has nearly 3,300 electronic bill pay clients;

CheckFree’s Electronic Biller Services added significant content by implementing e-Bills for American Express’s 20 million U.S. consumer cardholders, and for more than 17 million U.S. policyholders of Allstate Insurance;

American Chartered Bank, a $2.6 billion financial institution based in Schaumburg, Ill., signed a three-year renewal agreement with Fiserv ITI Outsourcing. The bank also selected Fiserv EFT to handle processing of its debit card and ATM processing business, a competitive takeaway for Fiserv;

Personix, a Fiserv business unit, was selected by Misys Healthcare Systems to provide print and electronic fulfillment for clients’ billing statements and explanations of benefits. Headquartered in Raleigh, N.C., Misys Healthcare serves more than 100,000 health care professionals delivering software and services to physicians, caregivers, and the healthcare community;

In 2007, Fiserv added a total of 52 new de novo bank clients to its roster, an increase of 44 percent over the signings in 2006.

Revenues

Processing and services

Product

Total revenues

Expenses

Cost of processing and services

Cost of product

Selling, general and administrative⁽²⁾

Total expenses

Operating income

Interest expense – net

Income from continuing operations before income taxes

Income tax provision

Income from continuing operations

Income from discontinued operations – net of tax ⁽³⁾

Net income

GAAP Earnings per share

Continuing operations ⁽¹⁾⁽²⁾

Discontinued operations ⁽³⁾

Total

Diluted shares used in computing earnings per share

⁽¹⁾

The 2007 results include the operations of CheckFree from the date of acquisition on Dec. 3, 2007. The company has reflected 28 days of CheckFree results in the fourth quarter.

⁽²⁾

Selling, general and administrative expenses include a $7.5 million charge recorded in the fourth quarter of 2007 in connection with the amendment of an employment agreement originally entered in October 2005 for the creation of a wholly-owned offshore captive operation. In addition, the company incurred merger costs associated with the acquisition of CheckFree totaling $9.5 million and a charge of $9.1 million primarily associated with consolidation of operations within the company’s lending division in the fourth quarter of 2007. See page 9 for further detail associated with these items and a reconciliation of GAAP earnings per share from continuing operations to adjusted earnings per share from continuing operations.

⁽³⁾

The company has reported Fiserv ISS, certain health businesses (Fiserv Health) and certain lending businesses as discontinued operations. Discontinued operations includes pre-tax charges of $32 million in 2007, or $0.13 per share, primarily comprised of $18 million related to the disposition activities including retention bonuses, severance and other sales expenses and a $14 million charge in Fiserv Health for employee severance, facility shutdown and other charges to cease an investment in a new technology platform in the health plan management business in the second quarter of 2007. The company anticipates that the gain on sale of Fiserv Health will be reflected in the first quarter of 2008 and the gain on sale of Fiserv ISS will be reflected in 2008.

Assets

Cash and cash equivalents

Trade accounts receivable - net

Deferred income taxes

Prepaid expenses and other current assets

Assets of discontinued operations held for sale ⁽¹⁾

Total current assets

Property and equipment - net

Intangible assets - net

Goodwill

Other long-term assets

Total

Liabilities and Shareholders’ Equity

Trade accounts payable

Accrued expenses

Current maturities of long-term debt

Deferred revenues

Liabilities of discontinued operations held for sale ⁽¹⁾

Total current liabilities

Long-term debt

Deferred income taxes

Other long-term liabilities

Total Liabilities

Shareholders’ Equity

Total

⁽¹⁾

Assets and liabilities of Fiserv ISS, Fiserv Health and certain lending businesses are reported as assets and liabilities of discontinued operations held for sale for all periods presented.

Cash flows from operating activities

Net income

Adjustment for discontinued operations

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes

Share-based compensation

Excess tax benefit from exercise of stock options

Settlement of interest rate hedge contracts

Depreciation and amortization

Changes in assets and liabilities, net of effects from acquisitions:

Trade accounts receivable

Prepaid expenses and other assets

Trade accounts payable and other liabilities

Deferred revenues

Net cash provided by operating activities

Cash flows from investing activities

Capital expenditures, including capitalization of software costs

Payment for acquisitions of businesses, net of cash acquired

Other investing activities

Net cash used in investing activities

Cash flows from financing activities

Proceeds from long-term debt - net

Issuance of common stock and treasury stock

Purchases of treasury stock

Excess tax benefit from exercise of stock options

Other financing activities

Net cash provided by (used in) financing activities

Change in cash and cash equivalents

Net cash transactions from discontinued operations

Beginning balance

Ending balance

⁽¹⁾

Cash flows from discontinued operations, comprised of Fiserv ISS, Fiserv Health and certain lending businesses, are excluded from the above Condensed Consolidated Statements of Cash Flows for all periods presented.

GAAP income from continuing operations⁽¹⁾

Adjustments:

Employee severance, facility shutdown and other ⁽²⁾

Merger costs and other adjustments ⁽³⁾

Amortization of acquisition-related intangible assets

Tax benefit of adjustments

Adjusted income from continuing operations⁽¹⁾

GAAP earnings per share - continuing operations⁽¹⁾

Adjustments - net of income taxes:

Employee severance, facility shutdown and other ⁽²⁾

Merger costs and other adjustments ⁽³⁾

Amortization of acquisition-related intangible assets

Adjusted earnings per share - continuing operations⁽¹⁾

Diluted shares used in computing earnings per share

⁽¹⁾

GAAP and adjusted income from continuing operations include a $7.5 million pre-tax charge, or $0.03 per share, recorded in the fourth quarter of 2007 in connection with the amendment of an employment agreement originally entered in October 2005 for the creation of a wholly-owned offshore captive operation. The original agreement required the company to make a special performance payment based on a multiple of the cumulative operating profits of the business unit through the end of 2008. Due to the planned, continuing globalization of the company’s workforce in 2008 significantly in excess of the current 1,900 employees, the company amended the agreement to provide for two payments: a payment of $7.5 million, which was expensed in 2007; and an additional payment of $7.5 million to be earned and expensed in 2008 and paid in 2009.

⁽²⁾

These charges relate primarily to employee severance and facility shutdown expenses in the company’s lending and insurance businesses totaling $9.1 million in the fourth quarter of 2007, $12 million for the full year 2007 and $9 million in the comparable periods of 2006. The charges in the fourth quarter of 2007 include $7.5 million in the company’s lending division related primarily to facility closures and severance costs associated with combining operations due to the overall market decline in home equity processing volumes. The actions associated with these charges are designed to more closely align the existing cost structure with the current revenues from these businesses.

⁽³⁾

Merger costs primarily represent expenses associated with the acquisition of CheckFree, which closed on Dec. 3, 2007, including integration project management, employee severance, retention bonuses, net interest expense on borrowings incurred prior to closing, and other expenses totaling $9.5 million. In accordance with GAAP, merger and integration costs such as severance and facility shutdown costs directly related to existing Fiserv operations are required to be expensed. However, direct merger and certain integration costs related to CheckFree operations are recorded in the initial purchase accounting for the acquisition. In addition, in connection with the preliminary purchase price allocation, the company estimated the fair value of certain deferred revenue from license fees and other customer payments assumed in connection with the CheckFree acquisition. Revenue in December totaling $3.1 million would have been recognized by CheckFree or companies it acquired consistent with past practices. However, such revenue was not recorded by the company during the period ending December 31, 2007 due to the deferred revenue purchase accounting adjustment recorded in accordance with GAAP.

Revenues – GAAP

Prescription product costs

Customer reimbursements

Deferred revenue adjustment

Adjusted revenues

Operating income – GAAP

Employee severance, facility shutdown and other

Merger costs and other adjustments

Amortization of acquisition-related intangible assets

Adjusted operating income

Operating margin – GAAP

Adjusted operating margin

Net income

Adjustment for discontinued operations

Share-based compensation

Settlement of interest rate hedge contracts

Depreciation and amortization

Capital expenditures

Free cash flow before changes in working capital

Changes in working capital-net

CheckFree financing and other non-recurring items

Free cash flow

Net cash provided by operating activities

Capital expenditures

CheckFree financing and other non-recurring items

Free cash flow

Financial Institution Services (“Financial”)

Revenues – GAAP ⁽¹⁾

Customer reimbursements

Adjusted revenues

Operating income – GAAP ⁽¹⁾

Employee severance, facility shutdown and other

Amortization of acquisition-related intangible assets

Adjusted operating income

Operating margin – GAAP

Adjusted operating margin

Insurance Services (“Insurance”)

Revenues – GAAP ⁽²⁾

Prescription product costs

Customer reimbursements

Adjusted revenues

Operating income – GAAP ⁽²⁾

Employee severance, facility shutdown and other

Amortization of acquisition-related intangible assets

Adjusted operating income

Operating margin – GAAP

Adjusted operating margin

CheckFree ⁽³⁾

Revenues – GAAP

Deferred revenue adjustment

Adjusted revenues

Operating income – GAAP

Merger costs and other adjustments

Amortization of acquisition-related intangible assets

Adjusted operating income

Operating margin – GAAP

Adjusted operating margin

⁽¹⁾

Included in the Financial segment results were early contract termination fees of $5.5 million for the three months ended and $35.0 million for the year ended December 31, 2007, compared with $6.9 million and $23.3 million, respectively, for the comparable periods in 2006. This segment’s businesses generally enter into three- to five-year contracts that contain early contract termination fees. These fees are unpredictable and can vary significantly from period to period based on the number and size of terminated contracts and how early in the contract term a contract is terminated.

⁽²⁾

Included in the Insurance segment results was a decline of $32.8 million in higher-margin flood claims processing revenues from $36.3 million in 2006 to $3.6 million in 2007.

⁽³⁾

CheckFree is presented as a separate segment because it was acquired on Dec. 3, 2007. In 2008, the company will realign its reporting segments when its new reporting structure is finalized.

Segment

Financial

Insurance

Total ⁽²⁾

Financial

Insurance

Total ⁽²⁾

⁽¹⁾

Internal revenue growth percentages are measured as the increase in total revenues for the current period less “acquired revenue from acquisitions” divided by total revenues from the prior year period plus “acquired revenue from acquisitions.” “Acquired revenue from acquisitions” was $63.9 million ($5.7 million in the Financial segment and $58.2 million in the Insurance segment) for the fourth quarter of 2007 and $147.0 million ($43.7 million in the Financial segment and $103.3 million in the Insurance segment) for the year ended December 31, 2007 and represents pre-acquisition adjusted revenue of acquired companies, less dispositions, for the comparable prior year period. Acquired revenues in the Financial segment for the year ended December 31, 2006, include customer reimbursement pass-through costs of $22.7 million.

⁽²⁾

Total internal revenue growth percentage excludes the recent acquisition of CheckFree in December due to only 28 days of revenue and earnings being recorded in 2007.

⁽³⁾

The adjusted internal revenue growth percentages exclude the impact of customer reimbursements and prescription product costs, which are included in revenues and expenses under GAAP. The adjusted internal revenue growth percentages for 2006 exclude the impact of a large contract termination fee recognized in the fourth quarter of 2005 of $26.3 million in the Financial segment.

⁽⁴⁾

Flood claims processing revenue was $0.6 million, $1.8 million and $15.9 million in the fourth quarter of 2007, 2006 and 2005 and $3.6 million, $36.3 million and $28.5 million in the full year of 2007, 2006 and 2005, respectively. Excluding flood claim processing revenue, the adjusted internal revenue growth (decline) rate for the company and the Insurance segment would have been 4 percent and (2) percent in the full year of 2007, 5 percent and (4) percent in the full year of 2006, and 5 percent and 3 percent in the fourth quarter of 2006, respectively.

Revenues

Processing and services

Product

Total revenues

Expenses

Cost of processing and services

Cost of product

Selling, general and administrative

Total expenses

Operating income

Interest expense – net

Income from continuing operations before income taxes

Income tax provision

Income from continuing operations

Income from discontinued operations – net of tax

Net income

GAAP earnings per share

Continuing operations

Discontinued operations

Total

Adjusted earnings per share – continuing operations

Earnings per share – continuing operations

Employee severance, facility shutdown and other

Merger costs and other adjustments