SEC Filing - Fiserv, Inc.

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the fiscal year ended December 31, 1998 Commission file no. 0-14948 FISERV, INC. ------------ (Exact name of Registrant as specified in its charter) WISCONSIN 39-1506125 --------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 255 FISERV DRIVE, BROOKFIELD, WISCONSIN 53045 - --------------------------------------- ----- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (414) 879-5000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE ---- (Title of Class) SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, $.01 Par Value ---------------------------- (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) State the aggregate market value of the voting stock held by non-affiliates of the registrant as of January 29, 1999: $4,015,748,072 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of January 29, 1999: 82,058,709 DOCUMENTS INCORPORATED BY REFERENCE: List the following documents if incorporated by reference and the part of the Form 10-K into which the document is incorporated: (1) Any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. 1998 Annual Report to Shareholders - Parts II, IV Proxy Statement for March 25, 1999, Meeting - Part III

Fiserv, Inc. and Subsidiaries Form 10-K December 31, 1998 PART I Page - ------ ---- Item 1. Business 1 Item 2. Properties 7 Item 3. Legal Proceedings 8 Item 4. Submission of Matters to a Vote of Security Holders 9 PART II - ------- Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters 9 Item 6. Selected Financial Data 9 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 8. Financial Statements and Supplementary Data 9 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 9 PART III - -------- Item 10. Directors and Executive Officers of the Registrant 9 Item 11. Executive Compensation 9 Item 12. Security Ownership of Certain Beneficial Owners and Management 9 Item 13. Certain Relationships and Related Transactions 9 PART IV - ------- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 9

=============================================================================== PART I =============================================================================== Item 1. Business Fiserv, Inc. is a leading, independent provider of financial data processing systems and related information management services and products to the financial industry. The Company was formed on July 31, 1984, through the combination of two major regional data processing firms located in Milwaukee, Wisconsin, and Tampa, Florida. These firms--First Data Processing of Milwaukee and Sunshine State Systems of Tampa--began their operations in 1964 and 1971, respectively, as the data processing operations of their parent financial institutions. Historically, operations were expanded by developing a range of services for these parent organizations as well as other financial institutions. Since its organization in 1984, Fiserv has grown through the continuing development of highly specialized services and product enhancements, the addition of new clients and the acquisition of firms complementing the Fiserv organization. Headquartered in Brookfield, Wisconsin, Fiserv operates centers nationwide for full-service financial data processing, software system development, item processing and check imaging, technology support and related product businesses. In addition, the Company has business support centers in Australia, Canada, England, Indonesia, Philippines, Poland and Singapore. Business Strategy - ----------------- The market for products and services offered by financial institutions continues to undergo change. New alternative lending and investment products are being introduced and implemented by the financial industry with great frequency; the distinctions among financial services traditionally offered by banking and thrift organizations as well as by securities and insurance firms continue to narrow; and financial institutions diversify and consolidate on an ongoing basis in response to market pressures, as well as under the auspices of regulatory agencies. Although such market changes have led to consolidations which have reduced the number of financial institutions in the United States, such consolidations have not resulted in a material reduction of the number of customers or financial accounts serviced by the financial industry as a whole. New organizations entering the once limited financial services industry have opened new markets for Fiserv services. To stay competitive in this changing marketplace, financial institutions are finding they must aggressively meet the growing needs of their customers for a broad variety of new products and services that are typically transaction- oriented and fee-based. The growing volume and types of transactions and accounts have increased the data processing requirements of these institutions. As a consequence, Fiserv management believes that the financial services industry is one of the largest users of data processing products and services. Moreover, Fiserv expects that the industry will continue to require significant commitments of capital and human resources to the information systems requirements, to require 1

application of more specialized systems, and to require development, maintenance and enhancement of applications software. Fiserv believes that economies of scale in data processing operations are essential to justify the required level of expenditures and commitment of human resources. In response to these market dynamics, the means by which financial institutions obtain data processing services has changed. Many smaller, local and regional third-party data processors are leaving the business or consolidating with larger providers. A number of large financial institutions previously providing third-party processing services for other institutions have withdrawn from the business to concentrate on their primary, core businesses. Similarly, an increasing number of financial institutions that previously developed their own software systems and maintained their own data processing operations have outsourced their data processing requirements by licensing their software from a third party or by contracting with third-party processors to reduce costs and enhance their products and services. Outsourcing can involve simply the licensing of software, thereby eliminating the costly technical expertise within the financial institution, or the utilization of service bureaus, facilities management or resource management capabilities. Fiserv provides all of these options to the financial industry. To capitalize on these industry trends and to become the premier provider of data processing products and related services, Fiserv has implemented a strategy of continuing to develop new products, improving the cost effectiveness of services provided to clients, aggressively soliciting new clients and making both opportunistic and strategic acquisitions. Acquisition History - ------------------- Formed Acquired Company Service =========================================================================================================== 1964 July 1984 First Data Processing, Milwaukee, WI Data processing 1971 July 1984 Sunshine State Systems, Tampa, FL Data processing 1966 Nov. 1984 San Antonio, Inc., San Antonio, TX Data processing 1982 Oct. 1985 Sendero Corporation, Scottsdale, AZ Asset/liability management 1962 Oct. 1985 First Trust Corporation, Denver, CO DP for retirement planning 1962 Oct. 1985 First Retirement Marketing, Denver, CO Retirement planning services 1973 Jan. 1986 On-Line, Inc., Seattle, WA Data processing, forms 1966 May 1986 First City Financial Systems, Inc., Beaumont, TX Data processing 1962 Feb. 1987 Pamico, Inc., Milwaukee, WI Specialized forms 1975 Apr. 1987 Midwest Commerce Data Corp., Elkhart, IN Data processing 1969 Apr. 1987 Fidelity Financial Services, Inc., Spokane, WA Data processing 1965 Oct. 1987 Capbanc Computer Corp., Baton Rouge, LA (sold 1991) Data processing 1971 Feb. 1988 Minnesota On-Line Inc., Minneapolis, MN Data processing 1965 May 1988 Citizens Financial Corporation, Cleveland, OH Data processing 1980 May 1988 ZFC Electronic Data Services, Inc., Bowling Green, KY Data processing 1969 June 1988 GESCO Corporation, Fresno, CA Data processing 1967 Nov. 1988 Valley Federal Data Services, Los Angeles, CA Data processing 1984 Dec. 1988 Northeast Savings Data Services, Hartford, CT Data processing 1982 May 1989 Triad Software Network, Ltd., Chicago, IL (sold 1996) Data processing 2

Formed Acquired Company Service ========================================================================================================= 1969 Aug. 1989 Northeast Datacom, Inc., New Haven, CT Data processing 1978 Feb. 1990 Financial Accounting Services Inc., Pittsburgh, PA Data processing 1974 June 1990 Accurate Data On Line, Inc., Titusville, FL Data processing 1982 June 1990 GTE EFT Services Money Network, Fresno, CA EFT networks 1968 July 1990 First Interstate Management, Milwaukee, WI Data processing 1982 Oct. 1990 GTE ATM Networks, Fresno, CA EFT networks 1867 Nov. 1990 Boston Safe Deposit & Trust Co. IP Services, MA Item processing 1968 Dec. 1990 First Bank, N.A. IP Services, Milwaukee, WI Item processing 1979 Apr. 1991 Citicorp Information Resources, Inc., Stamford, CT Data processing 1980 Apr. 1991 BMS Processing, Inc., Randolph, MA Item processing 1979 May 1991 FHLB of Dallas IP Services, Dallas, TX Item processing 1980 Nov. 1991 FHLB of Chicago IP Services, Chicago, IL Item processing 1977 Feb. 1992 Data Holdings, Inc., Indianapolis, IN Automated card services 1980 Feb. 1992 BMS On-Line Services, Inc. (assets), Randolph, MA Data processing 1982 Mar. 1992 First American Information Services, St. Paul, MN Data processing 1981 July 1992 Cadre, Inc., Avon, CT (sold 1996) Disaster recovery 1992 July 1992 Performance Analysis, Inc., Cincinnati, OH Asset/liability management 1986 Oct. 1992 Chase Manhattan Bank, REALM Software, NY Asset/liability management 1984 Dec. 1992 Dakota Data Processing, Inc., Fargo, ND Data processing 1983 Dec. 1992 Banking Group Services, Inc., Somerville, MA Item processing 1968 Feb. 1993 Basis Information Technologies, Atlanta, GA Data processing, EFT 1986 Mar. 1993 IPC Service Corporation (assets), Denver, CO Item processing 1973 May 1993 EDS' FHLB Seattle (assets), Seattle, WA Item processing 1982 June 1993 Datatronix Financial Services, San Diego, CA Item processing 1966 July 1993 Data Line Service, Covina, CA Data processing 1978 Nov. 1993 Financial Processors, Inc., Miami, FL Data processing 1974 Nov. 1993 Financial Data Systems, Jacksonville, FL Item processing 1961 Nov. 1993 Financial Institutions Outsourcing, Pittsburgh, PA Data processing 1972 Nov. 1993 Data-Link Systems, South Bend, IN Mortgage banking services 1985 Apr. 1994 National Embossing Company, Inc., Houston, TX Automated card services 1962 May 1994 Boatmen's Information Systems of Iowa, Des Moines Data processing 1981 Aug. 1994 FHLB of Atlanta IP Services, Atlanta, GA Item processing 1989 Nov. 1994 CBIS Imaging Technology Banking Unit, Maitland, FL Imaging technology 1987 Dec. 1994 RECOM Associates, Inc., Tampa, FL (sold 1998) Network integration 1970 Jan. 1995 Integrated Business Systems, Glendale, CA Specialized forms 1977 Feb. 1995 BankLink, Inc., New York, NY Cash management 1976 May 1995 Information Technology, Inc., Lincoln, NE Software & services 1957 Aug. 1995 Lincoln Holdings, Inc., Denver, CO DP for retirement planning 1993 Sept. 1995 SRS, Inc., Austin, TX Data processing 1992 Sept. 1995 ALLTEL's Document Management Services, CA, NJ Item processing 1978 Nov. 1995 Financial Information Trust, Des Moines, IA Data processing 1983 Jan. 1996 UniFi, Inc., Fort Lauderdale, FL Software & services 1982 Nov. 1996 Bankers Pension Services, Inc., Tustin, CA DP for retirement planning 3

Formed Acquired Company Service ============================================================================================================= 1992 Apr. 1997 AdminaStar Communications, Indianapolis, IN Laser print/mailing services 1982 May 1997 Interactive Planning Systems, Atlanta, GA PC-based financial systems 1983 May 1997 BHC Financial, Inc., Philadelphia, PA Securities processing services 1968 Sept. 1997 FIS, Inc., Orlando, FL, and Baton Rouge, LA Data processing n/a Sept. 1997 Stephens Inc. clearing business, Little Rock, AR Securities processing services 1986 Oct. 1997 Emerald Publications, San Diego, CA Financial seminars & training 1968 Oct. 1997 Central Service Corp., Greensboro, NC Data & item processing 1993 Oct. 1997 Savoy Discount Brokerage, Seattle WA Securities processing services 1990 Dec. 1997 Hanifen, Imhoff Holdings, Inc., Denver,CO Securities processing services 1980 Jan. 1998 Automated Financial Technology, Inc., Malvern, PA Data processing 1981 Feb. 1998 The LeMans Group, King of Prussia, PA Automobile leasing software n/a Feb. 1998 PSI Group, Seattle, WA Laser printing 1956 Apr. 1998 Network Data Processing Corporation, Cedar Rapids, IA Insurance data processing 1977 Apr. 1998 CUSA Technologies, Inc., Salt Lake City, UT Software & services 1982 May 1998 Specialty Insurance Service, Orange, CA Insurance data processing 1985 Aug. 1998 Deluxe Card Services, St. Paul, MN Automated card services 1981 Oct. 1998 FHLB of Topeka IP Services, Topeka, KS Item processing n/a Oct. 1998 FiCATS, Norristown, PA Item processing 1984 Oct. 1998 Life Instructors, Inc., New Providence, NJ Insurance/securities training 1994 Nov. 1998 ASI Financial, Inc., New Jersey and New York PC-based financial systems 1986 Dec. 1998 The FREEDOM Group, Inc., Cedar Rapids, IA Insurance data processing Technology Resources - -------------------- Fiserv is a technology company focused on serving the financial data processing and related information management needs of financial intermediaries and service providers throughout the financial industry. No matter what a client requires for automation, Fiserv offers a business-specific technology solution to satisfy its needs. Fiserv products and services are designed to help clients meet their ultimate goal of giving their customers the best possible service quickly, accurately and completely. Account & Transaction Processing. The key point of contact between money and technology lies within the financial transaction. Since the Company's formation nearly 15 years ago, Fiserv has focused its technology on providing account and transaction processing services for the financial industry. This dedication hasn't changed. Processing financial transactions continues to be the main business of Fiserv, with banks, credit unions, thrifts and mortgage banks comprising its largest category of clients. Fiserv account and transaction processing solutions run as service bureau, resource management (operating a client's systems at a Fiserv data center), facilities management (onsite management of a client's operations by Fiserv personnel) or through licensed software for in-house systems. Comprehensive automation systems from Fiserv are designed for banks, credit unions, thrifts, mortgage banks, securities brokers, financial planners / investment advisers, insurance companies and leasing organizations. Fiserv provides a complete line of account and transaction processing systems and related information management products and services. Fiserv offers a comprehensive portfolio of securities processing and trust services, providing integrated brokerage processing and outsourcing services to securities brokerage affiliates of banks, mutual fund companies, insurance companies and independent broker-dealers. 4

Fiserv also provides comprehensive retirement plan and custodial account processing services designed to help individuals and businesses focus on saving for the future. Electronic Commerce Transactions. Fiserv is a leading provider of the technology solutions that support electronic commerce. The Company offers the more traditional services, including electronic funds transfer, transaction authorization, Automated Teller Machine (ATM) and debit card processing. Fiserv also provides automated voice response systems, remote banking services and comprehensive Internet solutions. Item / Back Office Processing. Fiserv currently has regional item processing centers in more than 60 cities throughout North America. As a leading provider of specialized check processing services to financial institutions, Fiserv has refined the outsourcing relationship to create the most beneficial partnership possible. This allows the Company's clients to maintain the high quality service and investment in technology that their customers expect, while maximizing their own efficiency through the expertise and resources of Fiserv. Operations Support. Operations support encompasses a number of different systems and services that are either made possible through or enhanced by technology. Fiserv provides financial institutions with advanced call center systems; financial investment and trading services; card-issuance and business communications solutions; industry-specific forms and related printed products; high-quality, technologically advanced imaging software and integration services; mortgage origination and tracking; financial seminar programs and related marketing and training systems; Internet-based online training programs for insurance and securities; and advanced terminal and platform systems. Management Information Systems. Fiserv provides a number of systems specifically designed to gather, analyze and disseminate information throughout an organization, including: cash and investment management services; enterprisewide data warehouse and data mining solutions; PC-based tools for strategic balance sheet management, profitability measurement, and financial accounting management and planning; and outsourcing for human resources and related personnel management tasks. Servicing the Market - -------------------- The market for Fiserv account and transaction processing services and products has specific needs and requirements, with strong emphasis placed by clients on software flexibility, product quality, reliability of service, comprehensiveness and integration of product line, timely introduction of new products and features, and cost effectiveness. Through its multiple product offerings, the Company successfully services these market needs for clients ranging in size from start-ups to some of the largest institutions worldwide. Fiserv believes that the position it holds as an independent, growth- oriented company dedicated to its business is an advantage to its clients. The Company differs from many of the account and transaction processing resources currently available since it isn't a regional or local cooperatively owned organization, nor a data processing subsidiary, an affiliate of a financial institution or a hardware vendor. Due to the economies of scale gained through its broad market presence, Fiserv offers clients a selection of data processing solutions designed to meet the specific needs of the ever-changing financial industry. The Company believes this independence and primary focus on the financial industry helps its business development and related client service and product support teams remain responsive to the technology needs of its market, now and for the future. "The Client Comes First" is one of the Company's founding principles. It's a belief 5

backed by a dedication to providing ongoing client service and support--no matter the client size. The Company's commitment of substantial resources to training and technical support helps keep Fiserv clients first. Fiserv conducts the majority of its new and ongoing client training in its technology centers, where the Company maintains fully equipped demonstration and training facilities containing equipment used in the delivery of Fiserv services. Fiserv also provides local and on-site training services. Product Development - ------------------- In order to meet the changing technology needs of the clients served by Fiserv, the Company continually develops, maintains and enhances its systems. Resources applied to product development and maintenance are believed to be approximately 8% to 10% of Company revenues, about half of which is dedicated to software development. Unique to Fiserv, its network of development and financial information technology centers applies the shared expertise of multiple Fiserv teams to design, develop and maintain specialized processing systems around the leading technology platforms. The applications of its account processing systems meet the preferences and diverse requirements of the various international, national, regional or local market-specific financial service environments of the Company's many clients. Though all Fiserv centers rely on the Company's nationally developed and supported software, each center has specialized capabilities that enable them to offer system application features and functions unique to their client base. Where the client's requirements warrant, Fiserv purchases software programs from third parties which are interfaced with existing Fiserv systems. In developing its products, Fiserv stresses interaction with and responsiveness to the needs of its clients. Fiserv provides a dedicated system designed, developed, maintained and enhanced according to each client's goals for service quality, business development, asset/liability mix, local-market positioning and other user- defined parameters. Competition - ----------- The market for information technology products and services within the financial industry is highly competitive. The Company's principal competitors include internal data processing departments, data processing affiliates of large companies or large computer hardware manufacturers, independent computer service firms and processing centers owned and operated as user cooperatives. Certain competitors possess substantially greater financial, sales and marketing resources than the Company. Competition for in-house data processing and software departments is intensified by the efforts of computer hardware vendors who encourage the growth of internal data centers. Competitive factors for processing services include product quality, reliability of service, comprehensiveness and integration of product line, timely introduction of new products and features, and price. The Company believes that it competes favorably in each of these categories. In addition, the Company believes that its position as an independent vendor, rather than as a cooperative, an affiliate of a larger corporation or a hardware vendor, is a competitive advantage. 6

Government Regulation - --------------------- The Company's data processing subsidiaries are not themselves directly subject to federal or state regulations specifically applicable to financial institutions such as banks, thrifts and credit unions. As a provider of services to these entities, however, the data processing operations are observed from time to time by the Federal Deposit Insurance Corporation, the National Credit Union Association, the Office of Thrift Supervision, the Office of the Comptroller of the Currency and various state regulatory authorities. In addition, the Company's operations are reviewed annually by an independent auditor to provide required internal control evaluations for its clients' auditors and regulators. As trust companies under Colorado law, First Trust and Lincoln Trust are subject to the regulations of the Colorado Division of Banking. First Trust and Lincoln Trust historically have complied with such regulations and although no assurance can be given, the Company believes First Trust and Lincoln Trust will continue to be able to comply with such regulations. Commencing in 1991, First Trust received approval of its application for Federal Deposit Insurance Corporation coverage of its customer deposits. The Company's clearing businesses, BHC Securities and affiliates and Fiserv Correspondent Services (formerly Hanifen, Imhoff Clearing Corp.), are subject to the broker-dealer rules of the Securities and Exchange Commission and the New York Stock Exchange, as well as the National Association of Securities Dealers and other stock exchanges of which they are members. Employees - --------- Fiserv employs approximately 12,500 specialists throughout the United States and worldwide in its information management centers and related product and service companies. This service support network includes employees with backgrounds in computer science and the financial industry, often complemented by management and other direct experience in banks, credit unions, mortgage firms, savings and other financial services business environments. Fiserv employees provide expertise in sales and marketing; account management and client services; computer operations, network control and technical support; programming, software development, modification and maintenance; conversions and client training; financial planning; and related support services. Fiserv employees are not represented by a union, and there have been no work stoppages, strikes or organizational attempts. The service nature of the Fiserv business makes its employees an important corporate asset, and while the market for qualified personnel is competitive, the Company does not experience significant difficulty with hiring or retaining its staff of top industry professionals. In assessing companies to acquire, the quality and stability of the prospective company's staff are emphasized. Management attributes its ability to attract and keep quality employees to, among other things, the Company's growth and dedication to state-of-the-art software development tools and hardware technologies. Item 2. Properties Fiserv currently operates full-service data centers, software system development centers and item processing and back-office support centers in 94 cities (78 in the United States): 7

Birmingham, Alabama; Little Rock, Arkansas; Phoenix and Scottsdale, Arizona; Covina, Fresno, Fullerton, Irvine, Orange, Sacramento, San Diego, San Leandro, Van Nuys and Walnut, California; Denver and Englewood, Colorado; New Haven, Connecticut; Jacksonville, Maitland, Miami, Orlando, Plantation, Tampa and Titusville, Florida; Atlanta, Macon and Norcross, Georgia; Cedar Rapids and Des Moines, Iowa; Arlington Heights, Chicago and Marion, Illinois; Indianapolis and South Bend, Indiana; Topeka, Kansas; Bowling Green, Kentucky; Baton Rouge and New Orleans, Louisiana; Braintree, Mansfield, Somerville and West Springfield, Massachusetts; Flint and Troy, Michigan; Mendota Heights and St. Paul, Minnesota; Lincoln and Omaha, Nebraska; New Providence and Piscataway, New Jersey; Brooklyn, Lake Success, Melville, New York, Syracuse and Utica, New York; Greensboro, North Carolina; Fargo, North Dakota; Cleveland, Ohio; Oklahoma City, Oklahoma; Corvallis and Portland, Oregon; Malvern, King of Prussia, Philadelphia, Pittsburgh, Valley Forge and Williamsport, Pennsylvania; Newberry, South Carolina; Amarillo (FM), Beaumont, Dallas, Houston and San Antonio, Texas; Salt Lake City, Utah; Seattle, Washington; and Brookfield and Milwaukee, Wisconsin. International business centers are located in Sydney, Australia; Calgary, Edmonton, Halifax, London, Montreal, Regina, Toronto, Vancouver, Victoria and Winnipeg, Canada; London, England; Jakarta, Indonesia; Manila, Philippines; Warsaw, Poland; and Singapore. The Company owns facilities in Brookfield, Corvallis, Fresno, Lincoln, Marion, Miami and South Bend; all other buildings in which centers are located are subject to leases expiring through 1999 and beyond. The Company owns or leases 140 mainframe computers (Data General, Hewlett Packard, IBM, NCR, Tandem and Unisys). In addition, the Company maintains its own national data communication network consisting of communications processors and leased lines. Fiserv believes its facilities and equipment are generally well maintained and are in good operating condition. The Company believes that the computer equipment it owns and its various facilities are adequate for its present and foreseeable business. Fiserv periodically upgrades its mainframe capability as needed. Fiserv contracts with multiple sites to provide processing backup in the event of a disaster and maintains duplicate tapes of data collected and software used in its business in locations away from the Company's facilities. Fiserv regards its software as proprietary and utilizes a combination of trade secrecy law, internal security practices and employee non-disclosure agreements for protection. The Company believes that legal protection of its software, while important, is less significant than the knowledge and experience of the Company's management and personnel and their ability to develop, enhance and market new products and services. The Company believes that it holds all proprietary rights necessary for the conduct of its business. Item 3. Legal Proceedings In the normal course of business, the Company and its subsidiaries are named as defendants in various lawsuits in which claims are asserted against the Company. In the opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the financial statements of the Company. 8

Item 4. Submission of Matters to a Vote of Security Holders During the fourth quarter of the fiscal year covered by this report, no matter was submitted to a vote of security holders of the Company. =============================================================================== PART II =============================================================================== Pursuant to Instruction G(2) for Form 10-K, the information required in Items 5 through 8 is incorporated by reference from the Company's annual report to shareholders included in this Form 10-K Annual Report as Exhibit 13. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. =============================================================================== PART III =============================================================================== Pursuant to Instruction G(3) for Form 10-K, the information required in Items 10 through 13 is incorporated by reference from the Company's definitive proxy statement which is expected to be filed pursuant to Regulation 14A on or before February 23, 1999. =============================================================================== PART IV =============================================================================== Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (1) Financial Statements: The consolidated financial statements of the companies as of December 31, 1998 and 1997 and for each of the three years in the period ending December 31, 1998, together with the report thereon of Deloitte & Touche LLP, dated January 29, 1999, appear on pages 23 through 42 of the Company's annual report to shareholders, Exhibit 13 to this Form 10-K Annual Report, and are incorporated herein by reference. Deloitte & Touche LLP relied upon the report of other 9

auditors (Exhibit 99.1) for 1996 as to BHC Financial, Inc. and subsidiaries (BHC), due to the acquisition of BHC by the Company in 1997 accounted for on a pooling of interests basis. (a) (2) Financial Statement Schedule: The following financial statement schedule of the Company and related documents are included in this Report on Form 10-K: Page ---- Independent Auditors' Report 13 Schedule II--Valuation and Qualifying Accounts 13 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. (b) Reports on Form 8-K: During 1998, the Company filed four reports on Form 8-K, as follows: 1. 1997 year-end earnings release filed on January 20, 1998. 2. Shareholders' Rights Plan filed on February 24, 1998. 3. 3-for-2 stock split announcement filed on March 24, 1998. 4. Exchange ratio applicable to CUSA Technologies, Inc. merger filed on May 8, 1998. (c) Exhibits: 2.1 Stock Purchase Agreement, dated as of April 6, 1995, by and between Fiserv, Inc. and Information Technology, Inc. (filed as Exhibit 2.1 to the Company's Registration Statement on Form S-3, File No. 33-58709, and incorporated herein by reference). 3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-4, File No. 333-23349, and incorporated herein by reference). 3.2 By-laws, as amended (filed as Exhibit 3.2 to the Company's Registration Statement on Form S-4, File No. 333-47199, and incorporated herein by reference). 3.3 Shareholder Rights Plan (filed as Exhibit 4 to the Company's Current Report on Form 8-K dated February 24, 1998 and incorporated herein by reference). 4.1 Credit Agreement dated as of May 17, 1995, as amended, by and among Fiserv, Inc., the Lenders Party Hereto, First Bank National Association, as Co- Agent and The Bank of New York, as Agent. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.2 Note Purchase Agreement dated as of March 15, 1991, as amended, among Fiserv, Inc., Aid Association for Lutherans, Northwestern National Life Insurance Company, Northern Life Insurance Company and The North Atlantic Life Insurance Company of America. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.3 Note Purchase Agreement dated as of April 30, 1990, as amended, among Fiserv, Inc. and Teachers Insurance and Annuity Association of America. (Not being filed herewith, 10

but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 4.4 Note Purchase Agreement dated as of May 17, 1995, as amended, among Fiserv, Inc., Teachers Insurance and Annuity Association of America, Massachusetts Mutual Life Insurance Company, Aid Association for Lutherans, Northern Life Insurance Company and Northwestern National Life Insurance Company. (Not being filed herewith, but will be provided to the Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.) 11. Computation of Shares Used in Computing Diluted Earnings per Share. 13. The 1998 Annual Report to Shareholders. 21. List of Subsidiaries of the Registrant. 23. Consent of Independent Auditors. 27. Financial Data Schedule. 99.1 Report of Independent Accountants. 11

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: February 23, 1999 FISERV, INC. /s/ George D. Dalton By ________________________________ George D. Dalton (Chairman of the Board) Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following person on behalf of the registrant and in the capacities indicated on February 23, 1999. Signature Capacity /s/ George D. Dalton _______________________________________ George D. Dalton Chairman of the Board, Chief Executive Officer /s/ Leslie M. Muma _______________________________________ Leslie M. Muma Vice Chairman of the Board, President, Chief Operating Officer /s/ Donald F. Dillon _______________________________________ Donald F. Dillon Vice Chairman of the Board, Chairman - Information Technology, Inc. /s/ Kenneth R. Jensen _______________________________________ Kenneth R. Jensen Senior Executive Vice President, Chief Financial Officer, Treasurer, Director /s/ Thomas P. Gerrity _______________________________________ Thomas P. Gerrity Director /s/ Gerald J. Levy _______________________________________ Gerald J. Levy Director /s/ L. William Seidman _______________________________________ L. William Seidman Director /s/ Thekla R. Shackelford _______________________________________ Thekla R. Shackelford Director 12

INDEPENDENT AUDITORS' REPORT Shareholders and Directors of Fiserv, Inc.: We have audited the consolidated financial statements of Fiserv, Inc. and subsidiaries as of December 31, 1998 and 1997, and for each of the three years in the period ended December 31, 1998, and have issued our report thereon dated January 29, 1999. Such consolidated financial statements and report are included in your 1998 Annual Report to Shareholders and are incorporated herein by reference. Our report on the consolidated financial statements indicates that our opinion as to the amounts included for BHC Financial, Inc. and subsidiaries for the year ended December 31, 1996, is based solely on the report of other auditors. Our audits also included the consolidated financial statement schedule of Fiserv, Inc., listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ DELOITTE & TOUCHE LLP - -------------------------- DELOITTE & TOUCHE LLP Milwaukee, Wisconsin January 29, 1999 SCHEDULE II Valuation and Qualifying Accounts Allowance for Doubtful Accounts Year Ended Beginning Charged December 31, Balance to Expense Write-offs Balance ------------ ---------- ---------- ----------- ------- 1998 $6,903,000 $4,762,000 ($5,124,000) $6,541,000 1997 3,796,000 3,483,000 (376,000) 6,903,000 1996 5,026,000 (630,000) (600,000) 3,796,000 13

EXHIBIT 11 COMPUTATION OF SHARES USED IN COMPUTING DILUTED EARNINGS PER SHARE Year Ended December 31, 1998 1997 1996 ------------------------------------------------ Diluted: Weighted Average Shares Outstanding 81,915,000 78,014,000 76,490,000 Common Stock Equivalents 2,854,000 2,278,000 1,579,000 ------------------------------------------------ Shares Used 84,769,000 80,292,000 78,069,000 ================================================ Note: Above information has been restated to recognize a 3-for-2 stock split effective May 29, 1998. 14

EXHIBIT 13 1998 ANNUAL REPORT FISERV, INC. AND SUBSIDIARIES 15

[1998] Consolidated Statements of Income................................. 24 Consolidated Balance Sheets....................................... 25 Consolidated Statements of Changes in Shareholders' Equity........ 26 Consolidated Statements of Cash Flows............................. 27 Notes to Consolidated Financial Statements........................ 28 Management's Discussion and Analysis.............................. 36 Quarterly Financial Information................................... 40 Management's Statement of Responsibility.......................... 41 Independent Auditors' Report...................................... 42 Fiserv, Inc. and Subsidiaries 23

CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) Year ended December 31, 1998 1997 1996 ----------- --------- --------- Revenues $ 1,233,670 $ 974,432 $ 879,449 ----------- --------- --------- Cost of Revenues: Salaries, commissions and payroll related costs 573,187 454,850 394,932 Data processing expenses, rentals and telecommunication costs 119,205 100,601 97,721 Other operating expenses 259,126 189,982 164,003 Depreciation and amortization of property and equipment 60,697 49,119 44,120 Amortization of intangible assets 15,754 14,067 21,391 (Capitalization) amortization of internally generated computer software--net (3,938) 36 3,732 ----------- --------- --------- Total 1,024,031 808,655 725,899 ----------- --------- --------- Operating Income 209,639 165,777 153,550 Interest expense--net 15,955 11,878 19,088 ----------- --------- --------- Income Before Income Taxes 193,684 153,899 134,462 Income tax provision 79,410 63,099 54,754 ----------- --------- --------- Net Income $ 114,274 $ 90,800 $ 79,708 ----------- --------- --------- Net Income Per Share: Basic $1.40 $1.16 $1.04 =========== ========= ========= Diluted $1.35 $1.13 $1.02 =========== ========= ========= Shares Used in Computing Net Income Per Share: Basic 81,915 78,014 76,490 =========== ========= ========= Diluted 84,769 80,292 78,069 =========== ========= ========= See notes to consolidated financial statements. 24 Fiserv, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 1998 1997 ---------- ---------- Assets Cash and cash equivalents $ 71,558 $ 89,377 Accounts receivable 246,851 197,771 Securities processing receivables 1,402,650 1,386,169 Prepaid expenses and other assets 83,453 91,278 Trust account investments 1,098,773 1,082,740 Other investments 180,099 125,999 Deferred income taxes 14,545 35,233 Property and equipment--net 179,434 149,055 Internally generated computer software--net 85,821 73,163 Intangible assets--net 595,154 405,706 ---------- ---------- Total $3,958,338 $3,636,491 ---------- ---------- Liabilities and Shareholders' Equity Accounts payable $ 65,385 $ 53,828 Securities processing payables 1,207,838 1,184,277 Short-term borrowings 38,350 94,975 Accrued expenses 150,519 123,380 Accrued income taxes 14,768 8,436 Deferred revenues 107,286 67,569 Trust account deposits 1,098,773 1,082,740 Long-term debt 389,622 252,031 ---------- ---------- Total Liabilities 3,072,541 2,867,236 Commitments and Contingencies Shareholders' Equity: Common stock issued, 83,253,000 and 80,887,000 shares, respectively 833 809 Additional paid-in capital 448,877 427,515 Accumulated other comprehensive income 39,875 16,563 Accumulated earnings 438,642 324,368 Treasury stock, at cost (1,200,000 shares) (42,430) ========== ========== Total Shareholders' Equity 885,797 769,255 ========== ========== Total $3,958,338 $3,636,491 ========== ========== See notes to consolidated financial statements. Fiserv, Inc. and Subsidiaries 25

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In thousands) Year ended December 31, 1998 1997 1996 -------------------- -------------------- ----------------------- Shares Issued--150,000,000 Authorized: Balance at beginning of year 53,925 51,032 50,571 Shares issued under stock plans--net 495 585 327 Shares issued for acquired companies 1,132 2,308 134 Three-for-two stock split 27,701 -------- -------- -------- Balance at end of year 83,253 53,925 51,032 -------- -------- -------- Common Stock--Par Value $.01 Per Share: Balance at beginning of year $ 539 $ 510 $ 506 Shares issued under stock plans--net 5 6 3 Shares issued for acquired companies 11 23 1 Three-for-two stock split 278 -------- -------- -------- Balance at end of year 833 539 510 -------- -------- -------- Additional Paid-in Capital: Balance at beginning of year 427,785 352,916 345,448 Shares issued under stock plans--net 5,036 10,034 4,893 Income tax reduction arising from the exercise of employee stock options 8,000 5,000 2,000 Shares issued for acquired companies 8,334 59,835 575 Three-for-two stock split (278) -------- -------- -------- Balance at end of year 448,877 427,785 352,916 -------- -------- -------- Accumulated Other Comprehensive Income: Balance at beginning of year 16,563 18,904 15,052 Unrealized gain (loss) on investments 23,492 $23,492 (2,179) ($2,179) 3,353 $3,353 Foreign currency translation adjustment (180) (180) (162) (162) 499 499 -------- -------- -------- Balance at end of year 39,875 16,563 18,904 -------- -------- -------- Accumulated Earnings: Balance at beginning of year 324,368 233,568 153,860 Net income 114,274 114,274 90,800 90,800 79,708 79,708 -------- -------- -------- -------- -------- ------- Balance at end of year 438,642 324,368 233,568 --------- --------- --------- Treasury Stock at Cost--1,200,000 Shares (42,430) -------- Total Comprehensive Income $137,586 $88,459 $83,560 -------- -------- ------- Total Shareholders' Equity $885,797 $769,255 $605,898 -------- -------- -------- See notes to consolidated financial statements. 26 Fiserv, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year ended December 31, 1998 1997 1996 --------- -------- -------- Cash Flows from Operating Activities: Net income $ 114,274 $ 90,800 $ 79,708 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 2,463 4,234 2,225 Depreciation and amortization of property and equipment 60,697 49,119 44,120 Amortization of intangible assets 15,754 14,067 21,391 (Capitalization) amortization of internally generated computer software - net (3,938) 36 3,732 --------- -------- -------- 189,250 158,256 151,176 Cash provided (used) by changes in assets and liabilities, net of effects from acquisitions of businesses: Accounts receivable (22,860) (19,191) (4,881) Securities processing receivables/payables - net 7,080 (5,948) (3,660) Prepaid expenses and other assets 9,618 (7,073) 8,252 Accounts payable and accrued expenses 32,422 23,681 8,034 Deferred revenues 21,197 17,313 5,232 Accrued income taxes 13,109 2,520 5,961 --------- -------- -------- Net cash provided by operating activities 249,816 169,558 170,114 --------- -------- -------- Cash Flows from Investing Activities: Capital expenditures (77,542) (39,765) (39,450) Payment for acquisition of businesses, net of cash acquired (217,792) (65,017) (8,025) Investments (30,779) (167,812) (133,979) Due on sale of investments 97,446 --------- -------- -------- Net cash used by investing activities (326,113) (272,594) (84,008) --------- -------- -------- Cash Flows from Financing Activities: Repayment of short-term obligations - net (56,625) (7,900) (8,700) Proceeds from borrowings on long-term obligations 143,245 18,120 6,000 Repayment of long-term obligations (6,785) (41,316) (116,940) Issuance of common stock 5,041 10,040 4,896 Purchases of treasury stock (42,430) Trust account deposits 16,032 112,187 53,364 --------- -------- -------- Net cash provided (used) by financing activities 58,478 91,131 (61,380) --------- -------- -------- Change in cash and cash equivalents (17,819) (11,905) 24,726 Beginning balance 89,377 101,282 76,556 --------- -------- -------- Ending balance $ 71,558 $ 89,377 $101,282 ========= ======== ======== See notes to consolidated financial statements. Fiserv, Inc. and Subsidiaries 27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ending December 31, 1998, 1997 and 1996 [Note 1] Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents comprise cash and investments with original maturities of 90 days or less. Prepaid Expenses and Other Assets Prepaid expenses and other assets at December 31, 1998 and 1997 include $10,180,000 and $10,526,000, respectively, relating to long-term contracts, the profit from which is being recognized ratably over the periods to be benefited. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Values The carrying amounts of cash and cash equivalents, accounts receivable and payable, securities processing receivables and payables, short and long-term borrowings and derivative instruments approximated fair value as of December 31, 1998 and 1997. Derivative Instruments Interest rate hedge transactions are utilized to manage interest rate exposure. The interest differential on interest rate swap contracts used to hedge underlying debt obligations is reflected as an adjustment to interest expense over the life of the contracts. Securities Processing Receivables and Payables The Company's securities processing subsidiaries had receivables from and payables to brokers or dealers and clearing organizations related to the following at December 31, 1998 and 1997: (In thousands) 1998 1997 ---------- ---------- Receivables: Securities failed to deliver $33,918 $22,280 Securities borrowed 586,210 495,834 Receivables from customers 758,669 833,348 Other 23,853 34,707 ---------- ---------- Total $1,402,650 $1,386,169 ========== ========== Payables: Securities failed to receive $20,935 $32,091 Securities loaned 703,164 567,253 Payables to customers 389,372 488,404 Other 94,367 96,529 ---------- ---------- Total $1,207,838 $1,184,277 ========== ========== Securities borrowed and loaned represent deposits made to or received from other broker-dealers. Receivables from and payables to customers represent amounts due on cash and margin transactions. Short-Term Borrowings The Company's securities processing subsidiaries had short-term bank loans payable of $38,350,000 and $94,975,000 as of December 31, 1998 and 1997, respectively, which bear interest at the respective bank's call rate and were collateralized by customers' margin account securities. Trust Account Investments and Deposits The Company's trust administration subsidiaries accept money market deposits from trust customers and invest the funds in securities. Such amounts due trust depositors represent the primary source of funds for the Company's investment securities and amounted to $1,098,773,000 and $1,082,740,000 in 1998 and 1997, respectively. The related investment securities, including amounts representing Company funds, comprised the following at December 31: 28 Fiserv, Inc. and Subsidiaries

(In thousands) Principal Carrying Market 1998 Amount Value Value ---------- ---------- ---------- U.S. Government and government agency obligations $ 756,928 $ 765,152 $ 766,708 Corporate bonds 5,492 5,494 5,501 Repurchase agreements 41,370 41,370 41,370 Other fixed income obligations 357,230 358,710 360,496 ---------- ---------- ---------- Total $1,161,020 1,170,726 $1,174,075 ========== ========== ========== Less amounts representing Company funds: Included in cash and cash equivalents 756 Included in other investments 71,197 ---------- Trust account investments $1,098,773 ========== 1997 U.S. Government and government agency obligations $ 671,384 $682,218 $ 686,765 Corporate bonds 18,326 18,371 18,364 Repurchase agreements 95,227 95,227 95,227 Other fixed income obligations 371,514 370,714 371,840 ---------- ---------- ---------- Total $1,156,451 1,166,530 $1,172,196 ========== ========== ========== Less amounts representing Company funds: Included in cash and cash equivalents 22,985 Included in other investments 60,805 ---------- Trust account investments $1,082,740 ========== Substantially all of the investments at December 31, 1998 have contractual maturities of one year or less except for government agency and certain fixed income obligations which have an average duration of approximately two years and six months. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using primarily the straight-line method over the estimated useful lives of the assets, ranging from three to 40 years: (In thousands) December 31, 1998 1997 -------- -------- Data processing equipment $227,346 $197,422 Purchased software 73,446 58,161 Buildings and leasehold improvements 75,158 56,307 Furniture and equipment 88,915 58,279 -------- -------- 464,865 370,169 Less accumulated depreciation and amortization 285,431 221,114 -------- -------- Total $179,434 $149,055 ======== ======== Fiserv, Inc. and Subsidiaries 29

Internally Generated Computer Software Certain costs incurred to develop new software and enhance existing software are capitalized and amortized over the expected useful life of the product, generally five years. Activity during the three years ended December 31, 1998 was as follows: (In thousands) 1998 1997 1996 -------- ------- ------- Beginning balance $ 73,163 $70,487 $73,863 Capitalized costs 30,579 25,011 26,366 Acquisitions--net 8,720 2,712 356 -------- ------- ------- 112,462 98,210 100,585 Less amortization 26,641 25,047 30,098 -------- ------- ------- Total $ 85,821 $73,163 $70,487 ======== ======= ======= During the fourth quarters of 1997 and 1996, the Company recorded charges of $3,207,000 and $5,443,000, respectively, relating to the accelerated amortization of software resulting from the planned consolidation of certain product lines. Routine maintenance of software products, design costs and development costs incurred prior to establishment of a product's technological feasibility are expensed as incurred. In addition, Year 2000 costs are expensed as incurred. Intangible Assets Intangible assets relate to acquisitions and consist of the following at December 31: (In thousands) 1998 1997 -------- -------- Goodwill $590,684 $387,750 Other 96,571 95,240 -------- -------- 687,255 482,990 Less accumulated amortization 92,101 77,284 -------- -------- Total $595,154 $405,706 ======== ======== The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired has been recorded as goodwill and is being amortized over 40 years. Other intangible assets comprise primarily computer software, contract rights, customer bases and trademarks applicable to business acquisitions. These assets are being amortized using the straight-line method over their estimated useful lives, ranging from three to 35 years. The Company periodically reviews goodwill and other long-lived assets to assess recoverability, and impairments would be recognized in operating results if a permanent diminution in value were to occur. Income Taxes The consolidated financial statements are prepared on the accrual method of accounting. Deferred income taxes are provided for temporary differences between the Company's income for accounting and tax purposes. Revenue Recognition Revenues from the sale of data processing services to financial institutions and administration of self-directed retirement plans are recognized as the related services are provided. Revenues include net investment income of $77,457,000, $63,620,000 and $49,237,000, net of direct credits to customer accounts of $50,180,000, $46,006,000 and $40,686,000 in 1998, 1997 and 1996, respectively. Deferred revenues consist primarily of advance billings for services and are recognized as revenue when the services are provided. Revenues from the sales of software are recognized in accordance with the AICPA's Statement of Position No. 97-2, "Software Revenue Recognition". Income Per Share Basic income per share is computed using the weighted average number of common shares outstanding during the periods. Diluted income per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Income per share for prior years has been restated to reflect a three-for-two stock split effective in May 1998. Supplemental Cash Flow Information (In thousands) 1998 1997 1996 ------- ------- ------- Interest paid $21,111 $17,358 $22,942 Income taxes paid 66,066 58,643 45,308 Liabilities assumed in acquisitions of businesses 39,816 197,235 1,596 30 Fiserv, Inc. and Subsidiaries

[Note 2] Acquisitions and Capital Transactions Acquisitions During 1998, 1997 and 1996 the Company completed the following acquisitions: Month Company Acquired Service Consideration -------- --------------------------------- ------------- 1998: Automated Financial Technology, Inc. Jan. Account Processing Stock for stock PSI Group laser printing and Feb. Laser printing Cash for assets custom packing operations The LeMans Group Feb. Automobile leasing software Cash for stock Network Data Processing Corporation Apr. Insurance data processing Stock for stock CUSA Technologies, Inc. Apr. Software and services Stock for stock Specialty Insurance Service May Insurance data processing Cash for stock Deluxe Card Services, a division of Aug. Automated card services Cash for assets Deluxe Corporation Federal Home Loan Bank of Topeka Oct. Item processing Cash for assets item processing contracts Life Instructors, Inc. Oct. Insurance and securities training Cash for stock FiCATS Oct. Item processing Cash for assets ASI Financial Services, Inc. Nov. PC-based financial systems Cash for stock The FREEDOM Group, Inc. Dec. Insurance data processing Cash for stock 1997: AdminaStar Communications Apr. Laser print and mailing services Cash for stock Interactive Planning Systems May Financial processing systems Stock for stock BHC Financial, Inc. May Securities processing services Stock for stock Florida Infomanagement Services, Inc. (FIS, Inc.) Sep. Data processing and software Cash for stock sales Stephens Inc., clearing brokerage operations Sep. Securities processing services Cash for assets Emerald Publications Oct. Financial seminars and training Stock for stock Central Service Corp. Oct. Data processing Cash for stock Savoy Discount Brokerage Oct. Securities processing services Cash for stock Hanifen, Imhoff Holdings, Inc. Dec. Securities processing services Cash and stock for stock 1996: UniFi, Inc. Jan. Software and services Cash for stock Bankers Pension Services, Inc. Nov. Retirement plan administrators Stock for stock Generally, the acquisitions were accounted for as purchases and, accordingly, the operations of the acquired companies are included in the consolidated financial statements since their respective dates of acquisition as set forth above. Pro forma information for acquisitions accounted for as purchases is not presented as the impact was not material. Certain of the acquisitions were accounted for as poolings of interests. Except for the 1997 acquisition of BHC Financial, Inc. (BHC), prior year financial statements were not restated because the aggregate effect was not material. Fiserv, Inc. and Subsidiaries 31

In connection with certain acquisitions consummated in 1998, the Company issued approximately 490,000 unregistered shares of its common stock. The Company relied upon the exemption provided in Section 4(2) of the Securities Act of 1933 and Rule 505 of Regulation D, based upon the number of shareholders of the respective companies and the aggregate value of the transactions. No underwriter was involved in the transactions and no commission was paid. Stock Option Plan The Company's Stock Option Plan provides for the granting to its employees and directors of either incentive or non-qualified options to purchase shares of the Company's common stock for a price not less than 100% of the fair value of the shares at the date of grant. In general, 20% of the shares awarded under the Plan may be purchased annually and expire, generally, 10 years from the date of the award. Activity under the current and prior plans during 1996, 1997 and 1998, adjusted for a three-for-two stock split effective May 29, 1998, is summarized as follows: Shares ---------------------- Weighted Non- Average Incentive Qualified Price Range Exercise Price ---------------------- -------------- -------------- Outstanding, December 31, 1995 30,420 3,574,770 $ 1.09 - 18.33 $11.25 Granted 926,031 17.67 - 24.50 19.63 Forfeited (133,720) 7.65 - 20.33 13.41 Exercised (27,885) (464,966) 1.09 - 20.33 10.37 ---------------------- Outstanding, December 31, 1996 2,535 3,902,115 3.85 - 24.50 13.26 Assumed from BHC 843,426 4.87 - 21.00 11.83 Granted 1,034,104 24.00 - 32.67 25.32 Forfeited (76,551) 4.14 - 24.00 19.17 Exercised (2,535) (960,547) 3.85 - 24.00 13.05 ---------------------- Outstanding, December 31, 1997 0 4,742,547 4.14 - 32.67 15.57 Granted 1,784,803 32.75 - 47.38 36.23 Forfeited (98,020) 6.76 - 36.00 29.22 Exercised (791,415) 4.14 - 36.00 12.64 ---------------------- Outstanding, December 31, 1998 0 5,637,915 4.14 - 47.38 21.85 ---------------------- Shares exercisable, December 31, 1998 0 3,562,594 ---------------------- Options outstanding include 87,000 and 223,000 shares granted in January 1997 and 1998 at $24.29 and $32.75 per share, respectively, under a stock purchase plan requiring exercise within 30 days after a two-year period beginning on the date of grant. At December 31, 1998, options to purchase 2,570,000 shares were available for grant under the Plan. The Company has accounted for its stock-based compensation plans in accordance with the provisions of APB Opinion 25. Accordingly, the Company did not record any compensation expense in the accompanying financial statements for its stock-based compensation plans. Had compensation expense been recognized consistent with Statement of Financial Accounting Standards (SFAS) No.123, "Accounting for Stock-Based Compensation", the Company's net income would have been reduced by approximately $3,700,000, $2,200,000 and $981,000 in 1998, 1997 and 1996, respectively. Earnings per share-diluted would have been reduced by $.04, $.03 and $.01 in 1998, 1997 and 1996, respectively. The assumptions used to estimate compensation expense for 1998 were: expected volatility of 18.3%, risk-free interest rate of 4.6% and expected option lives of five years. Shareholder Rights Plan On February 23, 1998 the Company adopted a Shareholder Rights Plan (the Plan). Under the Plan, the shareholders of record as of March 9, 1998 were granted a dividend of one preferred stock purchase right for each outstanding share of Company common stock. The stock purchase rights are not exercisable until certain events occur. The Company filed a Form 8-K with the Securities and Exchange Commission on February 24, 1998 which provides a full description of the Plan. 32 Fiserv, Inc. and Subsidiaries

[Note 3] Long-Term Debt The Company has available a $330,000,000 unsecured line of credit and commercial paper facility with a group of banks, of which $248,000,000 was in use at December 31, 1998 at an average rate of 5.73%. The loan agreements covering the Company's long-term borrowings contain certain restrictive covenants including, among other things, the maintenance of minimum net worth and various operating ratios with which the Company was in compliance at December 31, 1998. A facility fee ranging from 0.1% to 0.2% per annum is required on the entire bank line regardless of usage. The facility is reduced to $150,000,000, on May 17, 1999 and expires on May 17, 2000. The Company plans to refinance the bank facility prior to May 17, 1999. During 1998, the Company entered into interest rate swap agreements to fix the interest rate on certain floating rate debt at an average rate approximating 5.75% (based on current bank fees) for a principal amount of $200,000,000 with a remaining life of five to seven years. Long-term debt outstanding at the respective year-ends comprised the following: (in thousands) December 31, 1998 1997 -------- -------- 9.45% senior notes payable, due 1999-2000 $ 8,571 $ 12,857 9.75% senior notes payable, due 1999-2001 7,500 10,000 8.00% senior notes payable, due 1999-2005 90,000 90,000 Bank notes and commercial paper 279,641 136,585 Other obligations 3,910 2,589 -------- -------- Total $389,622 $252,031 ======== ======== Annual principal payments required under the terms of the long-term agreements were as follows at December 31, 1998: (in thousands) Year 1999 $131,786 2000 186,215 2001 16,811 2002 13,857 2003 13,857 Thereafter 27,096 -------- Total $389,622 ======== Interest expense with respect to long-term debt amounted to $21,330,000, $16,964,000 and $22,431,000 in 1998, 1997 and 1996, respectively. [Note 4] Income Taxes A reconciliation of recorded income tax expense with income tax computed at the statutory federal tax rates is as follows: (in thousands) 1998 1997 1996 ------- ------- ------- Statutory federal tax rate 35% 35% 35% Tax computed at statutory rate $67,789 $53,865 $47,062 State income taxes - net of federal effect 7,601 5,995 5,093 Non-deductible amortization 2,737 1,408 1,504 Other 1,283 1,831 1,095 ------- ------- ------- Total $79,410 $63,099 $54,754 ======= ======= ======= The provision for income taxes consisted of the following: (in thousands) 1998 1997 1996 ------- ------- ------- Currently payable $68,947 $53,865 $50,068 Tax reduction credited to additional paid-in capital 8,000 5,000 2,000 Deferred 2,463 4,234 2,686 ------- ------- ------- Total $79,410 $63,099 $54,754 ======= ======= ======= Fiserv, Inc. and Subsidiaries 33

The approximate tax effects of temporary differences at December 31, 1998 and 1997 were as follows: (in thousands) 1998 1997 -------- -------- Purchased incomplete software technology $ 52,276 $ 56,888 Accrued expenses not currently deductible 25,329 18,862 Deferred revenues 14,558 8,688 Other (5,512) (1,789) Internally generated capitalized software (35,188) (29,999) Excess of tax over book depreciation and amortization (9,167) (5,992) Unrealized gain on investments (27,751) (11,425) -------- -------- Total $ 14,545 $ 35,233 ======== ======== [Note 5] Employee Benefit Programs The Company and its subsidiaries have contributory savings plans covering substantially all employees, under which eligible participants may elect to contribute a specified percentage of their salaries, subject to certain limitations. The Company makes matching contributions, subject to certain limitations, and also makes discretionary contributions based upon the attainment of certain profit goals. Company contributions vest at the rate of 20% for each year of service. Contributions charged to operations under these plans approximated $16,948,000, $14,383,000 and $10,074,000 in 1998, 1997 and 1996, respectively. [Note 6] Leases, Other Commitments and Contingencies Leases Future minimum rental payments, as of December 31, 1998, on various operating leases for office facilities and equipment were due as follows: (in thousands) Year 1999 $ 56,547 2000 48,102 2001 35,721 2002 28,019 2003 20,598 Thereafter 33,554 -------- Total $222,541 ======== Rent expense applicable to all operating leases was approximately $72,172,000, $55,515,000 and $52,638,000 in 1998, 1997 and 1996, respectively. Other Commitments and Contingencies The Company's trust administration subsidiaries had fiduciary responsibility for the administration of approximately $22 billion in trust funds as of December 31, 1998. With the exception of the trust account investments discussed in Note 1, such amounts are not included in the accompanying balance sheets. The Company's securities processing subsidiaries are subject to the Uniform Net Capital Rule of the Securities and Exchange Commission. At December 31, 1998, the aggregate net capital of such subsidiaries was $135,584,000, exceeding the net capital requirement by $118,744,000. In the normal course of business, the Company and its subsidiaries are named as defendants in various lawsuits in which claims are asserted against the Company. In the opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the financial statements of the Company. 34 Fiserv, Inc. and Subsidiaries

[Note 7] Business Segment Information The Company is a leading independent provider of financial data processing systems and related information management services and products to financial institutions and other financial intermediaries. In accordance with SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information" the Company's operations have been classified into three business segments: financial institution data processing and software services, securities processing and trust services and other (including corporate). Summarized financial information by business segment for each of the three years in the period ended December 31, 1998 is as follows: (in thousands) Year ended December 31, 1998 1997 1996 ---------- ---------- ---------- Revenues: Financial institution data processing and software services $ 951,010 $ 753,209 $ 696,827 Securities processing and trust services 234,699 179,217 157,976 Other 47,961 42,006 24,646 ---------- ---------- ---------- Total $1,233,670 $ 974,432 $ 879,449 ---------- ---------- ---------- Operating income: Financial institution data processing and software services $ 148,774 $ 117,467 $ 101,240 Securities processing and trust services 70,074 51,770 51,431 Other (9,209) (3,460) 879 ---------- ---------- ---------- Total $ 209,639 $ 165,777 $ 153,550 ---------- ---------- ---------- Identifiable assets: Financial institution data processing and software services $1,049,741 $ 798,237 $ 775,976 Securities processing and trust services 2,790,318 2,753,523 1,871,858 Other 118,279 84,731 51,145 ---------- ---------- ---------- Total $3,958,338 $3,636,491 $2,698,979 ---------- ---------- ---------- Depreciation expense: Financial institution data processing and software services $ 46,880 $ 38,098 $ 35,876 Securities processing and trust services 8,631 7,285 6,817 Other 5,186 3,736 1,427 ---------- ---------- ---------- Total $ 60,697 $ 49,119 $ 44,120 ---------- ---------- ---------- Capital expenditures: Financial institution data processing and software services $ 60,075 $28,627 $ 28,541 Securities processing and trust services 11,255 6,667 6,627 Other 6,212 4,471 4,282 ---------- ---------- ---------- Total $ 77,542 $ 39,765 $ 39,450 ---------- ---------- ---------- Fiserv, Inc. and Subsidiaries 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth, for the periods indicated, the relative percentage which certain items in the Company's consolidated statements of income bear to revenues and the percentage change in those items from period to period. Percentage of Revenues Period to Period Percentage Year Ended December 31, Increase (Decrease) ---------------------------- ----------------------------- 1998 vs. 1997 vs. 1998 1997 1996 1997 1996 ---------------------------- ----------------------------- Revenues 100.0% 100.0% 100.0% 26.6% 10.8% ---------------------------- Cost of revenues: Salaries, commissions and payroll related costs 46.4 46.7 44.9 26.0 15.2 Data processing expenses, rentals and telecommunication costs 9.7 10.3 11.1 18.5 2.9 Other operating costs 21.0 19.5 18.6 36.4 15.8 Depreciation and amortization of property and equipment 4.9 5.0 5.0 23.6 11.3 Amortization of intangible assets 1.3 1.5 2.4 12.0 (34.2) (Capitalization) amortization of internally generated computer software--net (0.3) 0.4 ---------------------------- Total cost of revenues 83.0 83.0 82.4 26.6 11.4 =========================== Operating income 17.0% 17.0% 17.6% 26.5 8.0 =========================== Income before income taxes 15.7% 15.8% 15.3% 25.9 14.5 =========================== Net income 9.3% 9.3% 9.1% 25.9 13.9 =========================== Revenues increased $259,238,000 in 1998 and $94,983,000 in 1997. In 1998 and 1997, approximately 60% and 50%, respectively, of the growth resulted from the inclusion of revenues from the date of purchase of acquired businesses as set forth in Note 2 to the financial statements and the balance in each year from the net addition of new clients, growth in the transaction volume experienced by existing clients and price increases. Cost of revenues increased $215,376,000 in 1998 and $82,756,000 in 1997. As a percentage of revenues, cost of revenues remained the same in 1997 and 1998, and increased .6% from 1996 to 1997. The make up of cost of revenues has been affected in all years by business acquisitions and by changes in the mix of the Company's business as sales of software and related support activities and securities processing operations have enjoyed an increasing percentage of total revenues. A portion of the purchase price of the Company's acquisitions has been allocated to intangible assets, such as goodwill, computer software and client contracts, which are being amortized over time, generally three to 40 years. Amortization of these costs increased $1,687,000 from 1997 to 1998 and decreased $7,324,000 from 1996 to 1997. As a percentage of revenues, intangible amortization has decreased over the last three years due primarily to accelerated amortization in 1997 and 1996 for completed software acquired in the acquisition of Information Technology, Inc. in 1995. Capitalization of internally generated computer software is stated net of amortization and increased $3,974,000 in 1998 and $3,696,000 in 1997. Net internally generated software capitalized increased in 1998 as both 1997 and 1996 included accelerated amortization of software resulting from the planned consolidation of certain product lines. 36 Fiserv, Inc. and Subsidiaries

Operating income increased $43,862,000 in 1998 and $12,227,000 in 1997. As a percentage of revenues, operating income was substantially identical in both years. The effective income tax rate was 41% in all three years, and the effective income tax rate for 1999 is expected to remain at 41%. The Company's growth has been accomplished, to a significant degree, through the acquisition of businesses which are complementary to its operations. Management believes that a number of acquisition candidates are available which would further enhance its competitive position and plans to pursue them vigorously. Management is engaged in an ongoing program to reduce expenses related to acquisitions by eliminating operating redundancies. The Company's approach has been to move slowly in achieving this goal in order to minimize the amount of disruption experienced by its clients and the potential loss of clients due to this program. The following supplemental schedule presents the results of operations of the Company for the periods presented as originally reported before restatement of 1996 for BHC Financial, Inc. (In thousands, except per share data) Year ended December 31, 1998 1997 1996 ---------- -------- -------- Revenues $1,233,670 $974,432 $798,268 ---------- -------- -------- Cost of Revenues: Salaries, commissions and payroll related costs 573,187 454,850 371,526 Data processing expenses, rentals and telecommunication costs 119,205 100,601 90,919 Other operating expenses 259,126 189,982 145,230 Depreciation and amortization of property and equipment 60,697 49,119 42,241 Amortization of intangible assets 15,754 14,067 20,983 (Capitalization) amortization of internally generated computer software -- net (3,938) 36 3,732 ---------- -------- -------- Total 1,024,031 808,655 674,631 ---------- -------- -------- Operating Income 209,639 165,777 123,637 Interest expense -- net 15,955 11,878 19,088 ---------- -------- -------- Income Before Income Taxes 193,684 153,899 104,549 Income tax provision 79,410 63,099 42,865 ---------- -------- -------- Net Income $ 114,274 $ 90,800 $ 61,684 ---------- -------- -------- Net income per common share: Diluted $ 1.35 $ 1.13 $ 0.89 ---------- -------- -------- Shares used in computing net income per share: Diluted 84,769 80,292 69,297 ---------- -------- -------- Fiserv, Inc. and Subsidiaries 37

YEAR 2000 SYSTEMS EVALUATION The Company provides data processing and other related services to financial institutions of all kinds. Failure by the Company in making its proprietary software systems Year 2000 compliant would have a material adverse effect on its business. The Company believes, however, that its remediation process started in 1996 will be successful and anticipates no material processing problems. The Company has completed its assessment of its proprietary systems and has largely completed upgrading and revising the software it will continue to use in providing service to its clients. The Company anticipates that all of its proprietary systems will be completely upgraded to Year 2000 compliance, tested (including client testing) and implemented by March 31, 1999. The Company's contingency plans provide for a variety of actions in the event that a business unit has not progressed sufficiently to meet its remediation goals, including adding necessary resources, and/or migration of clients to other Company software that is Year 2000 compliant. The Company does not anticipate the need for these contingency plans based on the current system remediation status. Testing and implementation of the remaining non-mission critical systems, which are not material to the Company's business, are expected to be completed by mid- 1999. The Company has received Year 2000 disclosures prepared by its principal vendors indicating that they will be Year 2000 compliant in all material respects. The Company's contingency plans include actions required should any vendor experience Year 2000-related problems. In addition, the Company has no reason to believe that its clients will not be Year 2000 compliant in all material respects, and in many cases has assisted its clients in their Year 2000 efforts. The Company believes that it has and will continue to meet its Year 2000 compliance commitments using existing resources, without incurring significant incremental expenses. Although the Company does not maintain accounting records that separately identify all of the costs associated with its Year 2000 activities, it has estimated that commencing with 1996 such costs have approximated $15 million a year. Estimated cost for the year 1999 when the project is scheduled for completion is approximately $10 to $12 million. The disclosure set forth above contains forward-looking statements. Specifically, such statements are contained in sentences including the words "expect" or "anticipate" or "could" or "should". Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include the failure by third parties to adequately remediate Year 2000 issues or the inability of the Company to complete writing and/or testing software changes on the time schedules currently expected. Nevertheless, the Company expects that its Year 2000 compliance efforts will be successful without any adverse effects on its business. 38 Fiserv, Inc. and Subsidiaries

Liquidity and Capital Resources The following table summarizes the Company's primary sources of funds: (In thousands) Year ended December 31, 1998 1997 1996 -------- -------- --------- Cash provided by operating activities before changes in securities processing receivables and payables--net $242,736 $175,506 $ 173,774 Securities processing receivables and payables--net 7,080 (5,948) (3,660) -------- -------- --------- Cash provided by operating activities 249,816 169,558 170,114 (Purchases) issuance of common stock--net (37,389) 10,040 4,896 (Increase) decrease in investments (14,747) (55,625) 16,831 Increase (decrease) in net borrowings 79,835 (31,096) (119,640) -------- -------- --------- Total $277,515 $ 92,877 $ 72,201 ======== ======== ========= The Company has applied a significant portion of its cash flow from operations to acquisitions and capital expenditures with any remainder in 1997 and 1996 applied to the reduction of long-term debt. The Company believes that its cash flow from operations together with other available sources of funds will be adequate to meet its funding requirements. In the event that the Company makes significant future acquisitions, however, it may raise funds through additional borrowings or issuance of securities. Selected Financial Data The following data, which has been materially affected by acquisitions, should be read in conjunction with the financial statements and related notes thereto included elsewhere in this Annual Report. (In thousands, except per share data) Year ended December 31, 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- Revenues $1,233,670 $ 974,432 $ 879,449 $ 769,104 $ 635,297 Income (loss) before income taxes 193,684 153,899 134,462 (76,146) 84,098 Income taxes (credit) 79,410 63,099 54,754 (30,220) 33,067 Net income (loss) 114,274 90,800 79,708 (45,926) 51,031 Net income (loss) per share: Basic $1.40 $1.16 $1.04 $(0.62) $0.73 ---------- ---------- ---------- ---------- ---------- Diluted $1.35 $1.13 $1.02 $(0.62) $0.72 ---------- ---------- ---------- ---------- ---------- As originally reported--Diluted $1.35 $1.13 $0.89 $0.75 $0.63 ---------- ---------- ---------- ---------- ---------- Total assets $3,958,338 $3,636,491 $2,698,979 $2,514,597 $2,204,832 Long-term debt 389,622 252,031 272,864 383,416 150,599 Shareholders' equity 885,797 769,255 605,898 514,866 425,389 Note: The above information has been restated to recognize (1) a three-for-two stock split effective in May 1998 and (2) the acquisitions of Lincoln Holdings, Inc. in 1995 and of BHC Financial, Inc. in 1997 accounted for as poolings of interests. The net income (loss) per share as originally reported is before restatements due to poolings of interests and excludes the one-time after-tax charges of $1.66 per share related to the acquisition of Information Technology, Inc. in 1995. Fiserv, Inc. and Subsidiaries 39

QUARTERLY FINANCIAL INFORMATION (Unaudited) (In thousands, except per share data) Quarters ----------------------------------------------- 1998 First Second Third Fourth Total -------- -------- -------- -------- ---------- Revenues $273,829 $311,220 $309,543 $339,078 $1,233,670 Cost of revenues 224,445 258,398 256,609 284,579 1,024,031 -------- -------- -------- -------- ---------- Operating income 49,384 52,822 52,934 54,499 209,639 -------- -------- -------- -------- ---------- Income before income taxes 46,017 48,594 48,936 50,137 193,684 Income taxes 18,867 19,924 20,063 20,556 79,410 -------- -------- -------- -------- ---------- Net income $ 27,150 $ 28,670 $ 28,873 $ 29,581 $ 114,274 -------- -------- -------- -------- ---------- Net income per share: Basic $ 0.34 $ 0.34 $ 0.35 $ 0.36 $ 1.40 ======== ======== ======== ======== ========== Diluted $ 0.33 $ 0.33 $ 0.34 $ 0.35 $ 1.35 ======== ======== ======== ======== ========== 1997 Revenues $228,319 $238,386 $238,255 $269,472 $ 974,432 Cost of revenues 186,522 199,748 196,252 226,133 808,655 -------- -------- -------- -------- ---------- Operating income 41,797 38,638 42,003 43,339 165,777 -------- -------- -------- -------- ---------- Income before income taxes 38,310 35,297 39,302 40,990 153,899 Income taxes 15,707 14,472 16,114 16,806 63,099 -------- -------- -------- -------- ---------- Net income $ 22,603 $ 20,825 $ 23,188 $ 24,184 $ 90,800 -------- -------- -------- -------- ---------- Net income per share: Basic $ 0.29 $ 0.27 $ 0.30 $ 0.31 $ 1.16 ======== ======== ======== ======== ========== Diluted $ 0.29 $ 0.26 $ 0.29 $ 0.30 $ 1.13 ======== ======== ======== ======== ========== Market Price Information The following information relates to the closing price of the Company's $.01 par value common stock, which is traded on the Nasdaq National Market tier of the Nasdaq Stock Market under the symbol FISV. Information for quarters ended March 31, 1998 and prior has been adjusted (to the nearest 1/32) to recognize a three- for-two stock split effective May 29, 1998. 1998 1997 - ------------- ------------------- --------------------- Quarter Ended High Low High Low - ------------- ------------------- --------------------- March 31 42 1/4 31 26 21 13/16 June 30 44 29/32 38 29 3/4 24 1/2 September 30 49 39 33 29 1/4 December 31 53 1/8 38 1/4 33 13/32 26 1/2 At December 31, 1998, the Company's common stock was held by 2,534 shareholders of record. It is estimated that an additional 28,000 shareholders own the Company's stock through nominee or street name accounts with brokers. The closing sale price for the Company's stock on January 19, 1999 was $51.625 per share. The Company's present policy is to retain earnings to support future business opportunities, rather than to pay dividends. 40 Fiserv, Inc. and Subsidiaries

MANAGEMENT'S STATEMENT OF RESPONSIBILITY The management of Fiserv, Inc. assumes responsibility for the integrity and objectivity of the information appearing in the 1998 Annual Report. This information was prepared in conformity with generally accepted accounting principles and necessarily reflects the best estimates and judgment of management. To provide reasonable assurance that transactions authorized by management are recorded and reported properly and that assets are safeguarded, the Company maintains a system of internal controls. The concept of reasonable assurance implies that the cost of such a system is weighed against the benefits to be derived therefrom. Deloitte & Touche LLP, certified public accountants, audit the financial statements of the Company in accordance with generally accepted auditing standards. Their audit includes a review of the internal control system, and improvements are made to the system based upon their recommendations. The Audit Committee ensures that management and the independent auditors are properly discharging their financial reporting responsibilities. In performing this function, the Committee meets with management and the independent auditors throughout the year. Additional access to the Committee is provided to Deloitte & Touche LLP on an unrestricted basis, allowing discussion of audit results and opinions on the adequacy of internal accounting controls and the quality of financial reporting. /s/ George D. Dalton - ------------------------------------- George D. Dalton Chairman and Chief Executive Officer Fiserv, Inc. and Subsidiaries 41

INDEPENDENT AUDITORS' REPORT Shareholders and Directors of Fiserv, Inc. We have audited the accompanying consolidated balance sheets of Fiserv, Inc. and subsidiaries as of December 31, 1998 and 1997 and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of BHC Financial, Inc. and subsidiaries for the year ended December 31, 1996 which statements reflect total revenues of $81,181,000 for the year then ended. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for BHC Financial, Inc. and subsidiaries for such period, is based solely on the report of such other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Fiserv, Inc. and subsidiaries at December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1998 in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP - ------------------------- Deloitte & Touche LLP Milwaukee, Wisconsin January 29, 1999 42 Fiserv, Inc. and Subsidiaries

EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT State (Country) of Name under which Subsidiary does Business Incorporation Aspen Investment Alliance, Inc. Colorado BMS On-Line, Inc. Massachusetts Data-Link Systems, LLC Wisconsin FIserv CIR, Inc. Delaware FIserv Federal Systems, Inc. Delaware FIserv Fresno, Inc. California FIserv Government Services, Inc. Delaware FIserv Joint Venture, Inc. Delaware Fiserv Solutions, Inc. Wisconsin FIserv (Europe) Ltd. United Kingdom FIserv (ASPAC) Pte., Ltd. Singapore Fiserv Australia Pty Limited Australia Pt Fiserv Indonesia Indonesia First Retirement Marketing, Inc. Colorado First Trust Corporation Colorado Information Technology, Inc. Nebraska Lincoln Trust Company Colorado The Affinity Group, Inc. Colorado Fiserv Solutions of Canada Inc. Ontario Fiserv Clearing, Inc. Delaware BHC Investments, Inc. Delaware BHC Trading Corporation Delaware NetVest, Inc. Delaware BHC Securities, Inc. Delaware TradeStar Investments, Inc. Delaware Fiserv Investor Services, Inc. Delaware BHCM Insurance Agency, Inc. Delaware F.T. Agency, Inc. Ohio Tower Agency, Inc. Ohio Fiserv Insurance Agency of Alabama, Inc. Alabama Fiserv Correspondent Services, Inc. Colorado Investment Consulting Group, Inc. Colorado FCS Funding, Inc. Colorado WUB2 Management Company Colorado WUB3 Capital Management, Inc. Colorado WUB4 Capital Partners, LLP Colorado Life Instructors, Inc. New Jersey RK & DR Concepts, Inc. Utah New Benchmark Computer Systems, Inc. Utah Fiserv LeMans, Inc. Pennsylvania Specialty Insurance Service California The Freedom Group, Inc. Iowa LeMans International, Inc. Pennsylvania Specialty Software Service, Inc. California Fiserv Mercosur, Inc. Delaware Fiserv International (Barbados) Limited Barbados 16

EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 333-64353, 333-04417, 333-28113, 333-28115, 333-28117, 333-28119 and 333-28121 of Fiserv, Inc. on Form S-8; Registration Statement Nos. 333-44935 and 333-47199 on Form S-4; and Registration Statement Nos. 333-55909, 333-49615, 333-45841, 333-00913, 333-23581 and 333-31465 on Form S-3 of our reports dated January 29, 1999, appearing in and incorporated by reference in the Annual Report on Form 10-K of Fiserv, Inc. for the year ended December 31, 1998. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP Milwaukee, Wisconsin February 18, 1999 17

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH INFORMATION. 1,000 YEAR DEC-31-1998 DEC-31-1998 71,558 1,098,773 246,851 0 0 2,903,285 464,865 285,431 3,958,338 2,682,919 0 0 0 833 884,964 3,958,338 0 1,233,670 0 1,012,215 11,816 0 15,955 193,684 79,410 114,274 0 0 0 114,274 1.40 1.35

EXHIBIT 99.1 REPORT OF INDEPENDENT ACCOUNTANTS To the Stockholders and Board of Directors of BHC Financial, Inc.: We have audited the consolidated statement of financial condition of BHC Financial, Inc. and Subsidiaries as of December 31, 1996 and the related consolidated statement of income, stockholders' equity and cash flows for the year ended December 31, 1996 and the related financial statement schedules, not separately presented herein. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements and the related financial statement schedules referred to above present fairly, in all material respects, the financial position of BHC Financial, Inc. and Subsidiaries as of December 31, 1996 and the results of their operations and their cash flows for the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ PricewaterhouseCoopers LLP - ------------------------------ Coopers & Lybrand L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 14, 1997, except for note 12 as to which the date is March 3, 1997 19