Fiserv Reports Second Quarter 2008 Results

Free cash flow growth of 73 percent through June 30 Company affirms 2008 earnings guidance

Brookfield, Wis., July 29, 2008-Fiserv, Inc. (NASDAQ: FISV), a leading provider of information technology solutions to the financial and insurance industries, today reported financial results for the second quarter of 2008 which include the results of the CheckFree acquisition.

Total revenues increased 38 percent to $1.30 billion for the second quarter of 2008 compared with $939 million in 2007. For the first six months of 2008, revenues were $2.61 billion, up 38 percent compared with $1.88 billion in 2007. Adjusted internal revenue growth was 2 percent for the quarter and 3 percent for the first half of 2008 in the combined Financial Institution Services and Payments and Industry Products segments.

GAAP earnings per share for the second quarter were $0.60 compared with $0.64 in 2007, which included $0.02 from discontinued operations. GAAP earnings per share for the first six months of 2008 were $2.60, including $1.41 from discontinued operations due to gains on dispositions, compared with $1.30 in 2007, which included $0.08 from discontinued operations.

Adjusted earnings per share from continuing operations for the quarter were up 26 percent to $0.83 compared with $0.66 for the second quarter of 2007. For the first six months of the year, adjusted earnings per share were also up 26 percent to $1.61 compared with $1.28 for the first six months of 2007.

Adjusted operating margin increased 150 basis points to 25.5 percent in the second quarter, and was 25.2 percent for the first six months of 2008, an increase of 170 basis points compared with the prior year period. The margin expansion resulted primarily from favorable changes in the company's business mix and a continuing focus on operating efficiency.

"Our strong results in the quarter once again demonstrated the resiliency of our business model anchored by stable, recurring revenues and expense leverage" said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "In addition to delivering on our earnings commitments, our integration activities are progressing well, leading to increasingly more attractive market opportunities. We are very pleased with our progress to date and remain optimistic about our full-year results."

In July, Fiserv completed the sale of a 51 percent interest in its insurance business to Trident IV, LP, a private equity fund managed by Stone Point Capital LLC. Fiserv received approximately $510 million in net after-tax proceeds and retains a 49 percent equity interest in the business. Fiserv will no longer consolidate revenue and expenses from the insurance business, and will report its 49 percent share of net earnings as a separate income statement line item.

"The Fiserv 2.0 business transformation we envisioned nearly two years ago continued this quarter with the sale of a majority interest in our insurance business," Yabuki said. "This transaction allows us to intensify our focus on delivering mission critical products and services within the broad financial services and payments landscape."

SECOND QUARTER BUSINESS AND OPERATING HIGHLIGHTS

• Free cash flow increased 73 percent to $311 million for the first six months of 2008 compared with the prior year period;
  
• Adjusted operating margin in the financial segment was 25.4 percent in the first six months of 2008, up 40 basis points from the prior year period, while adjusted operating margin in the payments segment was 28.8 percent, up 250 basis points from the prior year period;
  
• The company signed 146 clients for its electronic bill payment services in the quarter;
  
• Associated Banc-Corp, a $22 billion bank based in Green Bay, Wis., completed a conversion to a new in-house core processing solution and a new Internet banking platform from Fiserv business units, CBS Worldwide and Corillian, respectively. Associated Banc-Corp also uses an integrated set of Fiserv technology solutions, including Carreker integrated consulting and software solutions, Fiserv loan servicing, ImageSoft imaging and content management solution, and InformEnt for enterprise business intelligence;
  
• Omaha Financial Holdings, the new banking division of insurance company Mutual of Omaha, selected the core banking solution of Fiserv business unit, CBS Worldwide, to deliver a full range of retail and commercial banking services to support its expansion into retail banking. Mutual of Omaha has acquired three banks to date, and has already moved the first of the recently acquired banks onto the Fiserv platform, with the remaining two to be completed by September. In addition to core services, the affiliate financial institutions access 11 integrated Fiserv solutions, including retail and commercial Internet banking and bill payment, electronic funds transfer services and item processing;
  
• Ukrainian Credit Union of Toronto, Ont. selected iSpectrum as its core operating platform. iSpectrum is provided by Summit Financial Technologies Canada, a Fiserv unit, and is an automated multi-currency and multi-lingual technology whose features allow the credit union's members - many of whom are from the Ukraine and former Soviet Bloc countries - to open accounts, write checks and make loan payments more efficiently in their language of choice;
  
• In July, the company announced a new authorization to repurchase up to 10 million shares of its common stock, approximately 6 percent of its outstanding shares.

OUTLOOK FOR 2008

Fiserv continues to expect full-year 2008 adjusted earnings from continuing operations to be within a range of $3.28 to $3.40 per share, which represents growth of 23 to 28 percent compared with adjusted earnings per share from continuing operations of $2.66 in 2007. This adjusted EPS range includes the impact of the sale of a majority interest in the company's insurance business, which the company expects to be dilutive by 2-3 cents for the year depending on reinvestment of proceeds. The company expects full-year 2008 adjusted internal revenue growth to be at the low end of its 4 to 6 percent range, which now excludes the results from the insurance segment.