FISERV INC. 10-K Summary: Fiscal Year Ended December 31, 2000
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2000 for Fiserv, Inc., a leading technology resource for information management systems serving the financial industry. Headquartered in Brookfield, Wisconsin, the company provides data processing, software development, and related services to banks, broker-dealers, credit unions, and insurance companies. Operations are conducted through three segments: Financial Institution Outsourcing, Systems and Services; Securities Processing and Trust Services; and All Other and Corporate. The company employs approximately 14,000 specialists worldwide and operates centers in 121 cities across the U.S. and internationally.
Key Financial Metrics
Note: Specific revenue, profit, cash flow, and debt figures are incorporated by reference from the 2000 Annual Report to Shareholders (Exhibit 13) and are not explicitly detailed in the provided text.
- Market Capitalization: The aggregate market value of voting and non-voting common equity held by non-affiliates as of January 31, 2001, was $6,427,897,972.
- Shares Outstanding: 124,060,757 shares of Common Stock as of January 31, 2001.
- Allowance for Doubtful Accounts: The balance increased from $11,606,000 in 1999 to $16,001,000 in 2000, with $6,803,000 charged to expense and $2,408,000 in write-offs.
- Product Development: Resources applied to product development and maintenance are approximately 8% to 10% of Company revenues.
- Debt and Liquidity: The filing references Credit Agreements and Note Purchase Agreements in the Exhibit Index but does not disclose specific outstanding debt balances or liquidity ratios in the provided text.
Material Changes and Operational Highlights
The company continues to grow through organic development and strategic acquisitions. The filing details an extensive acquisition history, with significant activity in 1999 and 2000, including:
- 2000 Acquisitions: Patterson Press, Inc. (Card services); Resources Trust Company (Retirement planning); and National Flood Services, Inc. (Insurance data processing).
- 1999 Acquisitions: Included QuestPoint, Eldridge & Associates, FIPSCO, Inc., Progressive Data Solutions, JWGenesis Clearing Corporation, and Envision Financial Technologies.
- Strategic Shift: The company notes a market trend where financial institutions are increasingly outsourcing data processing to reduce costs and enhance services, a trend Fiserv is capitalizing on.
Guidance, Risks, and Management Commentary
Forward-Looking Statements: The filing includes a special note regarding forward-looking statements, cautioning that actual results may differ due to economic, competitive, governmental, and technological factors.
Management Commentary:
- Strategy: Fiserv aims to be the premier provider of data processing products by developing new products, improving cost-effectiveness, and making strategic acquisitions.
- Competition: The market is highly competitive, with rivals including internal data processing departments, hardware manufacturers, and user cooperatives. Fiserv competes on product quality, reliability, and its independence as a vendor.
- Regulation: While not directly regulated as financial institutions, Fiserv's operations are observed by regulators such as the FDIC and OTS. Its securities businesses are subject to SEC and NYSE rules.
Risks and Contingencies:
- Legal Proceedings: The company is involved in various lawsuits in the normal course of business. Management believes liabilities, if any, will not have a material adverse effect on financial statements.
- Technology and Market Risk: Risks include the need for significant capital and human resources to maintain information systems and the potential for market consolidation to reduce the number of customers.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the 2000 Annual Report to Shareholders (Exhibit 13), as these are incorporated by reference and not listed in the 10-K text.
- Review the Consolidated Financial Statements (pages 23-44 of the Annual Report) for detailed debt obligations and liquidity positions.
- Examine Note 8 of the Consolidated Financial Statements for segment-specific financial performance (Financial Institution Outsourcing vs. Securities Processing).
- Confirm the status of legal proceedings and any potential contingent liabilities not detailed in the summary.
- Assess the impact of recent acquisitions (e.g., Patterson Press, Resources Trust) on future earnings and integration costs.