fiserv presentation

8/13/2019 Fiserv Presentation

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Fourth Quarter 2012

Financial Results Conference Call

February 5, 2013



© 2013 Fiserv, Inc. or its affiliates.

The information disclosed in this presentation contains “forward-looking statements,” including statementsregarding the company’s expected “adjusted revenue,” “adjusted internal revenue,” “adjusted EPS,” “free

cash flow,” “free cash flow per share,” and “adjusted operating margin.” Statements can generally beidentified as forward-looking because they include words such as “believes,” “anticipates,” “expects,”“could,” “should” or words of similar meaning. Statements that describe the company’s future plans,objectives or goals are also forward-looking statements. Forward-looking statements are subject toassumptions, risks and uncertainties that may cause actual results to differ materially from those contemplatedby such forward-looking statements.

The factors that may affect the company’s results include, among others: the impact on the company’sbusiness of the current state of the economy, including the risk of reduction in revenue resulting fromdecreased spending on the products and services that the company offers; legislative and regulatory actions in

the United States and internationally, including the impact of the Dodd-Frank Wall Street Reform andConsumer Protection Act and related regulations; the company’s ability to successfully integrate acquisitions,including Open Solutions Inc., into its operations; changes in client demand for the company’s products orservices; pricing or other actions by competitors; the impact of the company’s strategic initiatives; thecompany’s ability to comply with government regulations, including privacy regulations; and other factorsincluded in the company’s filings with the SEC, including its Annual Report on Form 10-K for the year endedDecember 31, 2011 and in other documents that the company files with the SEC. You should consider thesefactors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance onsuch statements. The company assumes no obligation to update any forward-looking statements, which speakonly as of the date of this presentation.

This presentation includes the following non-GAAP financial measures: “adjusted revenue,” “adjusted internalrevenue,” “adjusted EPS,” “free cash flow,” “free cash flow per share,” “adjusted operating margin” and“adjusted operating income.” These non-GAAP measures are indicators that management uses to provideadditional comparisons between current results and prior reported results and as a basis for planning andforecasting future periods. We believe that these measures provide additional insight into our operatingperformance. The company’s prior year free cash flow has been restated to conform to the current yearpresentation. Additional information about these measures and reconciliations to the nearest GAAP financialmeasures are provided in the appendix to this presentation.

Forward-Looking Statements andNon-GAAP Financial Measures

2




4Q-12 Financial Metrics

3

Adjusted

Revenue

Adjusted

Internal

Revenue

Adjusted

EPS

Adjusted

Operating

Margin

4Q-12 $1,084 $1,082 $1.39 30.7%

4Q-11 $1,084 $1,084 $1.27 30.0%

Change -- -- 9% 70 bps

$ in millions, except per share amounts

See appendix for information regarding non-GAAP financial measures.




2012 Financial Metrics

4



Adjusted

Revenue

Adjusted

Internal

Revenue

Adjusted

EPS

2012 $4,196 $4,153 $5.13

2011 $4,071 $4,071 $4.58

Change 3% 2% 12%




2012 Financial Metrics

5

Free

Cash

Flow

Free Cash

Flow Per

Share

Adjusted

Operating

Margin

2012 $772 $5.61 29.6%

2011 $746 $5.18 29.2%

Change 3% 8% 40 bps






Adjusted Internal Revenue Growth by Segment

6

Segment 4Q 12 2012

Payments 3% 2%

Financial (3%) 2%

Total -- 2%



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4Q-12 Adjusted Operating Margin by Segment

7

Segment 4Q 12 4Q 11 Change

Payments 31.2% 31.2% --

Financial 33.1% 33.1% --

Total 30.7% 30.0% 70 bps




2012 Adjusted Operating Margin by Segment

8

Segment 2012 2011 Change

Payments 30.3% 31.0% (70 bps)

Financial 32.0% 30.6% 140 bps

Total 29.6% 29.2% 40 bps




Performance Metrics

9

1 Bill payment transactions represent online transactions occurring through financial institutions, brokerage firms or portals. Transaction growthexcludes the impact of the Wachovia deconversion due to acquisition.

2 The substantial majority of new bill payment sales also include e-bill.

3 Year-over-year social payments transaction growth includes Popmoney® and ZashPay® transactions in both the current and prior year periods.

4 Includes financial institution issuers’ signature debit, PIN POS, ATM and ACCEL/Exchange® transactions.

4Q 12 2012

Electronic Payments

Transaction

Growth

New

Sales

Transaction

Growth

New

Sales

Bill Payment 1,2 -- 113 1% 404

e-Bill 2 3% 108 1% 388

Social Payments 3 104% 113 114% 455

Debit / EFT 4 15% 40 16% 165



Performance Metrics

10

$ in millions

1 Integrated sales include sales from a designated list of products sold to account processing and other selected clients.Dollar amounts represent the amount of estimated recurring annual revenue.

2 Dollar amounts are the actual savings in the measurement period and are incremental to amounts in prior periods.

3 Sales quota attainment in the fourth quarter of 2012 was 126%.

2012

Objective

2012 Performance

Strategic Initiatives Dollars Percentage

Integrated Sales 1 $200 $189 95%

Operational Effectiveness 2 $40 $62 155%

Sales

4Q 12

Objective

2012

Attainment

Sales Quota Attainment 3 100% 105%



2013 Key Guidance

11

Financial Metric

Growth

Range

Adjusted Revenue > 10%

Adjusted Internal Revenue 3 – 4%

Adjusted EPS 15 – 18%



2013 Other Guidance

12

Financial Metric

Growth

Range

Free Cash Flow Per Share > $6.60

Adjusted Operating Margin Expansion 1 10-50 bps

1 Includes the negative impact of (i) approximately 60 bps from the conversion of a significant account processing client to its parentcompany’s account processing platform and the renewal of the Bank of America agreement; and (ii) the dilutive impact of the O penSolutions acquisition.




Appendix

13




Adjusted Internal Revenue Growth by Segment

14

Segment 1Q 12 2Q 12 3Q 12 4Q 12 2012

Payments 3% 1% 2% 3% 2%

Financial 4% 1% 5% (3%) 2%

Total 4% 1% 4% -- 2%

See page 2 for disclosures related to non-GAAP financial measures.

Adjusted internal revenue growth is measured as the increase in adjusted revenue, excluding all acquired revenue for thecurrent period, divided by adjusted revenue from the prior year period. Acquired revenue was $16 million in the first quarterof 2012 ($15 million in the Payments segment and $1 million in the Financial segment); $14 million in the Payments segment,and for the total company, in the second quarter of 2012; $11 million in the Payments segment, and for the total company, inthe third quarter of 2012; $2 million in the Financial segment, and for the total company, in the fourth quarter of 2012; and $43million ($40 million in the Payments segment and $3 million in the Financial segment) for the full year.



© 2013 Fiserv, Inc. or its affiliates.15

2012 Adjusted EPS

See page 2 for disclosures related to non-GAAP financial measures. Earnings per share is calculated using actual, unroundedamounts.

1 Represents a charge of $4 million of interest expense associated with hedge ineffectiveness of interest rate swap agreementssettled in conjunction with the company’s bond offering.

2 Represents certain discrete income tax benefits related to prior years recognized for GAAP purposes that have been excluded fromadjusted earnings per share.

1Q 12 2Q 12 3Q 12 4Q 12 2012

GAAP EPS - continuing operations $ 0.95 $ 1.18 $ 1.03 $ 1.18 $ 4.34

Adjustments – net of tax:

Merger and integration costs 0.01 0.01 0.02 0.02 0.06

Severance costs 0.06 -- -- -- 0.06

Amortization of acquisition-related intangible assets 0.18 0.19 0.19 0.19 0.76

Debt extinguishment and refinancing costs 1 -- -- 0.02 -- 0.02

Tax benefit 2 -- (0.10) -- -- (0.10)

Adjusted EPS $ 1.20 $ 1.28 $ 1.27 $ 1.39 $ 5.13




2011 Adjusted EPS

1 Represents the premium paid on the early retirement of debt and other costs associated with the issuance of senior notesand subsequent repurchase of certain notes due in 2012.

See page 2 for disclosures related to non-GAAP financial measures. Earnings per share is calculated using actual, unroundedamounts.

1Q 11 2Q 11 3Q 11 4Q 11 2011

GAAP EPS - continuing operations $ 0.77 $ 0.67 $ 0.89 $ 1.07 $ 3.40

Adjustments – net of tax:

Merger and integration costs 0.01 0.02 0.04 0.01 0.07

Severance costs 0.08 -- -- -- 0.08

Amortization of acquisition-related intangible assets 0.16 0.18 0.17 0.19 0.69

Debt extinguishment and refinancing costs1

-- 0.26 0.11 -- 0.37Tax benefit -- -- (0.02) -- (0.02)

Gain on sale of business by unconsolidated affiliate -- -- (0.02) -- (0.02)

Adjusted EPS $ 1.02 $ 1.13 $ 1.16 $ 1.27 $ 4.58




2012 Free Cash Flow

$ in millions, except per share amountsSee page 2 for disclosures related to non-GAAP financial measures. Free cash flow per share is calculated using actual,unrounded amounts.

Free cash flow is calculated as net cash provided by operating activities less capital expenditures and excludes the net change insettlement assets and obligations; tax-effected severance, merger and integration payments; and other items which managementbelieves may not be indicative of the future free cash flow of the company. Free cash flow does not include $70 million receivedin the fourth quarter of 2012, comprised of the portion of a cash dividend received from an unconsolidated affiliate that isincluded in “net cash from investing activities” and an insurance recovery in discontinued operations.

1Q 12 2Q 12 3Q 12 4Q 12 2012

Net cash provided by operating activities $ 236 $ 149 $ 163 $ 287 $ 835

Settlement of interest rate hedge contracts -- -- 88 -- 88

Capital expenditures (58 ) (44) (44) (49 ) (195)

Other adjustments 5 10 (4) 33 44

Free cash flow $ 183 $ 115 $ 203 $ 271 $ 772

Diluted shares 140.5 137.8 136.6 135.1 137.5

Free cash flow per share $ 1.30 $ 0.83 $ 1.49 $ 2.00 $ 5.61




2011 Free Cash Flow

1Q 11 2Q 11 3Q 11 4Q 11 2011

Net cash provided by operating activities $ 283 $ 135 $ 263 $ 272 $ 953

Settlement of interest rate hedge contracts -- 6 -- -- 6

Capital expenditures (56 ) (46 ) (42 ) (48 ) (192 )

Other adjustments 17 (4 ) (37 ) 3 (21 )

Free cash flow $ 244 $ 91 $ 184 $ 227 $ 746

Diluted shares 147.7 144.2 142.6 142.3 144.2

Free cash flow per share $ 1.65 $ 0.63 $ 1.29 $ 1.60 $ 5.18


See page 2 for disclosures related to non-GAAP financial measures. Free cash flow per share is calculated using actual,unrounded amounts.

Free cash flow is calculated as net cash provided by operating activities less capital expenditures and excludes the net change insettlement assets and obligations; tax-effected severance, merger and integration payments; and other items which managementbelieves may not be indicative of the future free cash flow of the company.




Total Company

$ in millions


Operating margin percentages are calculated using actual, unrounded amounts.

2012 Adjusted Revenue andAdjusted Operating Income

1Q 12 2Q 12 3Q 12 4Q 12 2012

Revenue $ 1,108 $ 1,100 $ 1,118 $ 1,156 $ 4,482

Output solutions postage reimbursements (74 ) (71) (69 ) (72) (286 )

Adjusted revenue $ 1,034 $ 1,029 $ 1,049 $ 1,084 $ 4,196

Operating income $ 241 $ 259 $ 267 $ 289 $ 1,056Merger and integration costs 3 2 4 4 13

Severance costs 12 -- -- -- 12

Amortization of acquisition-related intangible assets 40 41 41 41 163

Adjusted operating income $ 296 $ 302 $ 312 $ 334 $ 1,244

Operating margin 21.8% 23.6% 23.9% 25.0% 23.6%Adjusted operating margin 28.7% 29.3% 29.8% 30.7% 29.6%




Total Company

2011 Adjusted Revenue andAdjusted Operating Income

1Q 11 2Q 11 3Q 11 4Q 11 2011

Revenue $ 1,048 $ 1,065 $ 1,063 $ 1,161 $ 4,337

Output solutions postage reimbursements (66) (62) (61) (77) (266)

Adjusted revenue $ 982 $ 1,003 $ 1,002 $ 1,084 $ 4,071

Operating income $ 221 $ 251 $ 243 $ 281 $ 996Merger and integration costs 2 4 9 2 17

Severance costs 18 -- -- -- 18

Amortization of acquisition-related intangible assets 38 39 38 42 157

Adjusted operating income $ 279 $ 294 $ 290 $ 325 $ 1,188

Operating margin 21.1% 23.6% 22.9% 24.3% 23.0%Adjusted operating margin 28.3% 29.3% 29.0% 30.0% 29.2%

$ in millions






2012 Adjusted Revenue andAdjusted Operating Income By Segment

21

Financial Segment

Payments Segment

1Q 12 2Q 12 3Q 12 4Q 12 2012

Revenue $ 501 $ 502 $ 513 $ 524 $ 2,040

Operating income $ 151 $ 163 $ 165 $ 173 $ 652

Operating margin 30.2% 32.5% 32.1% 33.1% 32.0%

1Q 12 2Q 12 3Q 12 4Q 12 2012

Revenue $ 619 $ 609 $ 617 $ 644 $ 2,489


Adjusted revenue $ 545 $ 538 $ 548 $ 572 $ 2,203



Adjusted operating margin 29.5% 29.8% 30.7% 31.2% 30.3%

$ in millions





© 2013 Fiserv Inc or its affiliates

2011 Adjusted Revenue andAdjusted Operating Income By Segment

22

Financial Segment

Payments Segment

1Q 11 2Q 11 3Q 11 4Q 11 2011

Revenue $ 480 $ 497 $ 487 $ 540 $ 2,004



1Q 11 2Q 11 3Q 11 4Q 11 2011

Revenue $ 580 $ 579 $ 587 $ 635 $ 2,381


Adjusted revenue $ 514 $ 517 $ 526 $ 558 $ 2,115



Adjusted operating margin 30.3% 31.7% 30.8% 31.2% 31.0%

$ in millions



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