FISERV INC. 10-K Summary (Fiscal Year Ended December 31, 2002)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2002 for Fiserv, Inc., a leading provider of integrated data processing and information management systems to the financial industry. The company serves over 13,000 financial services providers worldwide, including banks, broker-dealers, credit unions, and insurance companies. Operations are divided into two primary segments: Financial Institution Outsourcing, Systems and Services, and Securities Processing and Trust Services. The company employs approximately 19,400 specialists and operates centers in 165 cities globally.
Key Financial Metrics
The provided filing text incorporates detailed financial statements by reference to the 2002 Annual Report to Shareholders and does not contain the specific numerical values for revenue, net income, cash flow, or debt levels within the body of this document. However, the following data points are available:
- Product Development Expenses: Represented approximately 8% of processing and services revenues in 2002.
- Allowance for Doubtful Accounts (2002):
- Beginning Balance: $14,703,000
- Charged to Expense: $2,713,000
- Write-offs: $(4,248,000)
- Ending Balance: $13,168,000
- Equity Compensation Plans: As of December 31, 2002, there were 11,610,000 shares to be issued upon exercise of outstanding options with a weighted-average exercise price of $21.77. 8,962,000 shares remained available for future issuance.
- Market Value of Equity: The aggregate market value of voting and non-voting common equity held by non-affiliates was $5,715,000,000 as of January 31, 2003.
Note: Specific figures for total revenue, profit, cash flow, margins, and total debt are not present in the provided text.
Material Changes and Acquisitions
Fiserv continued its strategy of growth through acquisitions in 2002. The company acquired five businesses during the year, adding combined annual revenues of more than $210 million and approximately 1,100 employees. Notable 2002 acquisitions included:
- Case Shiller Weiss, Inc. (Lending services)
- Investec Ernst & Company's clearing operations (Securities clearing)
- Willis Group's TPA operations (Insurance data processing)
- EDS Corporation's Consumer Network Services (EFT data processing)
- Lenders Financial Services (Lending services)
The company also adopted Statement of Financial Accounting Standards No. 142 ("Goodwill and Other Intangible Assets") in 2002, as noted in the Independent Auditors' Report.
Outlook, Risks, and Legal Proceedings
Management Commentary and Outlook: Management anticipates continued demand for data processing services due to the financial industry's need for specialized systems and economies of scale. The company expects to continue developing new products and making strategic acquisitions to remain competitive against internal data processing departments and other third-party providers.
Risks and Uncertainties: The filing includes a "Special Note Regarding Forward-Looking Statements," cautioning that actual results may differ due to economic, competitive, governmental, and technological factors. The market is highly competitive, with rivals including ALLTEL Information Services, Bisys, Jack Henry and Associates, and Metavante.
Legal Proceedings: On October 4, 2001, Fiserv initiated legal action against E*TRADE Securities, Inc. regarding a bond with a carrying value of $27.0 million (as of December 31, 2002) that E*TRADE refused to accept. Fiserv expects to prevail and recover the value. Management believes liabilities from lawsuits will not have a material adverse effect on consolidated financial statements.
Investor Verification Checklist
- Verify the specific revenue, net income, and cash flow figures in the 2002 Annual Report to Shareholders (incorporated by reference as Exhibit 13), as these are not listed in the 10-K text provided.
- Review the impact of the adoption of FAS 142 on goodwill and intangible assets in the full financial statements.
- Monitor the status of the $27.0 million legal dispute with E*TRADE Securities, Inc.
- Assess the integration progress of the five 2002 acquisitions totaling over $210 million in revenue.
- Confirm the details of the Equity Compensation Plan and the 11.6 million outstanding options with a $21.77 exercise price.