10-KPeriod: FY2009

FISERV INC Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:FISV

Summary

Fiserv, Inc.'s 2010 10-K filing reveals a company that, while facing economic headwinds in 2009, demonstrated resilience and strategic focus. The company reported total revenues of $4.1 billion, a decrease from the prior year primarily due to the divestiture of certain business segments, notably the sale of a 51% stake in its Insurance segment. Despite this, Fiserv maintained strong operating income and improved its operating margin, signaling effective cost management and operational efficiencies. The company's core Financial Institution Services and Payments segments showed stable or growing revenues, bolstered by strategic acquisitions like CheckFree in late 2007, which continued to integrate and contribute positively. Key financial highlights include robust operating cash flow generation, which was utilized for debt reduction and share repurchases, reflecting a commitment to capital discipline. The company's balance sheet showed a significant portion of assets in goodwill and intangible assets, primarily from acquisitions. Risk factors highlighted include economic downturns impacting the financial services industry, competition, and the need for continuous technological adaptation. Management's strategy, referred to as "Fiserv 2.0," emphasizes enhancing client relationships, strategic acquisitions, innovation, and operational excellence to drive long-term growth.

Financial Highlights

52 data points
Beta

Revenue

$4.08B

86.9% Gross Margin

Net Income

$476.00M

11.7% Net Margin

EPS (Diluted)

$0.77

Total Assets

$8.38B

Cash & Equivalents

$363.00M

Free Cash Flow

$652.00M

Financial Statements
Beta
Revenue$4.08B
Cost of Revenue$536.00M
Gross Profit$3.54B
SG&A Expenses$751.00M
Operating Expenses$3.13B
Operating Income$946.00M
Interest Expense$220.00M
Net Income$476.00M
EPS (Basic)$0.77
EPS (Diluted)$0.77
Shares Outstanding (Basic)618.00M
Shares Outstanding (Diluted)621.60M

Key Highlights

  • 1Total revenues for 2009 were $4.1 billion, down from $4.6 billion in 2008, largely due to the sale of a 51% interest in the Insurance segment.
  • 2Operating income increased by 4% to $946 million in 2009, with operating margins improving to 23.2% from 19.8% in 2008, driven by efficiency gains and strategic initiatives.
  • 3Net income from continuing operations was $473 million, or $3.04 per diluted share, showing solid profitability.
  • 4The company generated strong operating cash flow of $850 million in 2009, which was used for debt repayment and share repurchases.
  • 5Fiserv continued its strategy of "Fiserv 2.0," focusing on client value, strategic acquisitions, innovation, operational excellence, and capital discipline.
  • 6Goodwill and intangible assets represented a significant portion of the company's assets, reflecting a history of strategic acquisitions, notably CheckFree in 2007.
  • 7Key risk factors identified include economic conditions affecting the financial services industry, consolidation among clients, and technological obsolescence.

Frequently Asked Questions

Fiserv's total revenues decreased by 11% in 2009 compared to 2008, primarily driven by the sale of a 51% interest in its Insurance segment, which accounted for a $513 million decrease. The Payments segment saw a 1% increase, while the Financial segment experienced a 3% decline. Incremental revenue from other acquisitions contributed about 1%.

Fiserv generated $850 million in operating cash flow from continuing operations in 2009. The company utilized this cash flow to repay $475 million of debt, reducing its total outstanding debt to $3.64 billion. Fiserv also continued its share repurchase program. The company maintained access to a $900 million revolving credit facility, with $870 million available at year-end.

Goodwill and intangible assets represented a substantial portion of Fiserv's total assets, amounting to approximately 75% as of December 31, 2009. These assets are primarily a result of strategic acquisitions, most notably the acquisition of CheckFree Corporation. The company conducts annual impairment tests for these assets, and any significant impairment could materially affect its financial results.

Fiserv identified several key risks, including the adverse impact of U.S. and global market and economic conditions on the financial services industry, consolidation and failures within the banking sector leading to reduced client numbers, intense competition, the need to adapt products and services to technological changes, and the risk of failing to renew client contracts on favorable terms. The company also highlighted risks related to its significant goodwill and intangible assets, potential indemnification obligations from past business sales, intellectual property infringement, security breaches, increased leverage, and risks associated with its acquisition strategy and operational failures.