10-KPeriod: FY2008

FISERV INC Annual Report, Year Ended Dec 31, 2008

Filed February 27, 2009For Securities:FISV

Summary

Fiserv, Inc. reported revenues of $4.739 billion for the fiscal year ended December 31, 2008, a significant increase of 22% over the prior year, largely driven by the acquisition of CheckFree Corporation in late 2007. While total revenues grew substantially, the company navigated a challenging economic environment. This was reflected in a 2% internal revenue decline in the Financial segment, impacted by reduced home-equity processing revenues. However, the Payments segment showed robust internal growth of 6%, demonstrating resilience. Operationally, Fiserv demonstrated strong cash flow generation, with operating cash flow increasing by 37% to $775 million. Despite significant debt taken on for the CheckFree acquisition, the company managed its leverage and remained in compliance with debt covenants. Strategic divestitures of non-core assets, such as Fiserv Health and a majority stake in Fiserv Insurance, were completed in 2008, contributing to financial flexibility. The company continues to focus on its "Fiserv 2.0" strategy, emphasizing enhanced client relationships, strategic acquisitions, innovation, operational excellence, and capital discipline.

Financial Highlights

52 data points
Beta

Revenue

$4.59B

80.0% Gross Margin

Net Income

$569.00M

12.4% Net Margin

EPS (Diluted)

$0.87

Total Assets

$9.33B

Cash & Equivalents

$230.00M

Free Cash Flow

$568.00M

Financial Statements
Beta
Revenue$4.59B
Cost of Revenue$917.00M
Gross Profit$3.67B
SG&A Expenses$813.00M
Operating Expenses$3.68B
Operating Income$908.00M
Interest Expense$260.00M
Net Income$569.00M
EPS (Basic)$0.88
EPS (Diluted)$0.87
Shares Outstanding (Basic)648.00M
Shares Outstanding (Diluted)652.40M

Key Highlights

  • 1Fiserv's total revenues grew 22% to $4.739 billion in 2008, primarily due to the acquisition of CheckFree.
  • 2The company generated strong operating cash flow of $775 million, a 37% increase year-over-year.
  • 3Internal revenue growth in the Payments segment was 6%, while the Financial segment experienced a 2% decline due to economic headwinds.
  • 4Significant divestitures were completed in 2008, including Fiserv Health and a majority stake in Fiserv Insurance, impacting reported revenue but providing strategic focus.
  • 5Fiserv managed a substantial debt load of $4.1 billion, remaining compliant with its loan covenants.
  • 6Goodwill and intangible assets represented a significant portion of total assets, with annual impairment testing indicating no impairment in 2008.
  • 7The company emphasized its "Fiserv 2.0" strategy focused on client relationships, innovation, and operational efficiency.

Frequently Asked Questions

The acquisition of CheckFree Corporation in December 2007 significantly boosted Fiserv's total revenues by $1.06 billion in 2008, contributing to a 22% year-over-year increase. It particularly strengthened the Payments segment, driving revenue growth and creating opportunities for synergies, though it also increased debt and related interest expenses.

The challenging economic environment impacted Fiserv's Financial segment, leading to a 2% decline in internal revenue growth due to reduced home-equity processing revenues and slower discretionary spending by clients. However, the Payments segment demonstrated resilience with 6% internal revenue growth, driven by electronic payments and output solutions.

Fiserv has a substantial debt load, primarily from the CheckFree acquisition, totaling $4.1 billion at the end of 2008. The company utilizes a $900 million revolving credit facility and has managed its debt by repaying $1.3 billion in 2008 using operating cash flow and proceeds from divestitures. They maintain compliance with debt covenants and focus on generating strong operating cash flow to meet debt obligations and fund capital expenditures, prioritizing debt repayment over dividends.

In 2008, Fiserv completed several significant transactions: the sale of a majority of its health businesses (Fiserv Health) for approximately $480 million, the divestiture of its Investment Support Services segment (Fiserv ISS) in two transactions, and the sale of a 51% interest in its Insurance segment (Fiserv Insurance) for approximately $500 million cash and a note. These divestitures helped streamline operations and provide capital.