Fiserv Inc. (NASDAQ:FISV)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Fiserv Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%	35.00%
State income taxes, net of federal effect	1.60%	2.00%	3.70%	3.20%	2.30%
Foreign tax law changes	8.00%	2.80%	0.00%	0.00%	0.00%
Foreign derived intangibles income deduction	-3.10%	-3.20%	-0.20%	-0.20%	0.00%
Excess tax benefit from share-based awards	-2.20%	-3.90%	-5.10%	-2.20%	-3.60%
Sale of businesses and subsidiary restructuring	-2.10%	0.70%	-2.60%	1.30%	0.00%
Unrecognized tax benefits	-2.70%	-1.00%	-0.10%	0.00%	0.00%
Nondeductible executive compensation	0.70%	2.00%	1.00%	0.20%	0.00%
Valuation Allowance	-1.30%	-1.70%	0.30%	0.00%	0.00%
Domestic production activities deduction	0.00%	0.00%	0.00%	0.00%	-2.00%
Other, net	1.90%	-2.00%	0.30%	-0.20%	0.20%
Effective income tax rate, before tax expense (benefit) due to federal tax reform	21.80%	16.70%	18.30%	23.10%	31.90%
Tax expense (benefit) due to federal tax reform	0.00%	0.00%	0.00%	1.20%	-20.30%
Effective income tax rate	21.80%	16.70%	18.30%	24.30%	11.60%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The effective income tax rate (EITR) exhibited significant volatility between 2017 and 2021, primarily driven by structural changes in federal tax legislation and evolving international tax complexities.

Impact of Federal Tax Reform: A fundamental shift occurred between 2017 and 2018, with the statutory federal income tax rate decreasing from 35.00% to 21.00%. In 2017, the EITR was artificially lowered to 11.60% due to a substantial tax benefit of -20.30% associated with federal tax reform. Once this one-time benefit subsided, the EITR rose to 24.30% in 2018 before fluctuating between 16.70% and 21.80% in subsequent years.
International Tax Influence: Foreign tax factors became increasingly influential toward the end of the period. Foreign tax law changes exerted significant upward pressure on the EITR, rising from 2.80% in 2020 to 8.00% in 2021. This increase was partially mitigated by the Foreign Derived Intangibles Income (FDII) deduction, which provided a consistent tax reduction that deepened from -0.20% in 2018 to -3.10% in 2021.
Operational Tax Drivers: Several recurring operational items consistently reduced the effective tax rate. Excess tax benefits from share-based awards provided a steady reduction, peaking at -5.10% in 2019. Unrecognized tax benefits also trended downward, moving from -0.10% in 2019 to -2.70% in 2021, further lowering the tax burden. These were partially offset by nondeductible executive compensation, which peaked at 2.00% in 2020.
Variable Adjustments and State Taxes: State income taxes, net of federal effect, peaked at 3.70% in 2019 before declining to 1.60% by 2021. Additionally, the impact of business sales and subsidiary restructuring remained volatile, shifting from a 1.30% increase in 2018 to a 2.10% reduction in 2021.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Fiserv Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Accrued expenses	171)	189)	303)	74)	39)
Share-based compensation	134)	185)	216)	43)	40)
Net operating loss and credit carry-forwards	804)	1,158)	1,444)	131)	131)
Foreign tax credits on undistributed earnings	—)	—)	289)	—)	—)
Leasing liabilities	194)	171)	219)	—)	—)
Other	194)	76)	65)	30)	33)
Deferred tax assets, gross	1,497)	1,779)	2,536)	278)	243)
Valuation allowance	(697)	(888)	(1,145)	(101)	(103)
Deferred tax assets	800)	891)	1,391)	177)	140)
Capitalized software development costs	(633)	(614)	(622)	(129)	(117)
Intangible assets	(2,676)	(2,993)	(3,297)	(437)	(455)
Property and equipment	(280)	(198)	(143)	(66)	(49)
Capitalized commissions	(95)	(87)	(86)	(80)	—)
Investments in joint ventures	(630)	(908)	(841)	(78)	—)
Leasing right-of-use assets	(142)	(141)	(205)	—)	—)
Other	(474)	(311)	(332)	(112)	(48)
Deferred tax liabilities	(4,930)	(5,252)	(5,526)	(902)	(669)
Net deferred tax assets (liabilities)	(4,130)	(4,361)	(4,135)	(725)	(529)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The net deferred tax position remained consistently in a liability state throughout the observed period, characterized by a dramatic expansion in 2019. The net deferred tax liability increased from -529 million USD in 2017 to -4,135 million USD in 2019, eventually peaking at -4,361 million USD in 2020 before slightly moderating to -4,130 million USD by the end of 2021.

Gross Deferred Tax Asset Dynamics: Gross deferred tax assets experienced a significant spike in 2019, rising to 2,536 million USD from 278 million USD in the previous year. This increase was primarily driven by net operating loss and credit carry-forwards, which surged from 131 million USD in 2018 to 1,444 million USD in 2019. However, a substantial valuation allowance of -1,145 million USD was recognized in 2019, suggesting a significant portion of these assets was deemed potentially unrealizable at that time. From 2020 to 2021, gross deferred tax assets followed a downward trend, ending at 1,497 million USD.
Deferred Tax Liability Drivers: Deferred tax liabilities saw a massive escalation in 2019, increasing to -5,526 million USD compared to -902 million USD in 2018. The primary catalyst for this change was the valuation of intangible assets, which grew from -437 million USD to -3,297 million USD. Other contributing factors included a sharp increase in deferred tax liabilities related to investments in joint ventures, which rose to -841 million USD, and capitalized software development costs, which increased to -622 million USD. These liabilities gradually decreased to -4,930 million USD by December 31, 2021.
Net Position and Structural Trends: The overall tax position is dominated by liabilities related to intangible assets and software capitalization, which heavily outweigh the assets generated by operating losses and accrued expenses. While the net liability widened significantly in 2019, the subsequent years show a stabilization period. The reduction in the valuation allowance from -1,145 million USD in 2019 to -697 million USD in 2021 indicates an improving outlook on the recoverability of the deferred tax assets.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Fiserv Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Noncurrent deferred tax assets (included in Other long-term assets)	42)	28)	112)	20)	23)
	Noncurrent deferred tax liabilities	4,172)	4,389)	4,247)	745)	552)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The deferred tax profile experienced a significant structural shift between 2017 and 2021, characterized by a substantial expansion of noncurrent deferred tax liabilities and intermittent volatility in noncurrent deferred tax assets.

Noncurrent Deferred Tax Liabilities: A dramatic increase in liabilities is observed beginning in 2019. Following a moderate rise from 552 million in 2017 to 745 million in 2018, liabilities surged to 4,247 million in 2019. This elevated trajectory continued into 2020, reaching a peak of 4,389 million, before experiencing a slight contraction to 4,172 million in 2021.
Noncurrent Deferred Tax Assets: Noncurrent deferred tax assets remained relatively low and stable during 2017 and 2018, at 23 million and 20 million respectively. A notable peak occurred in 2019, where assets rose to 112 million, followed by a sharp decline to 28 million in 2020 and a modest recovery to 42 million by the end of 2021.
Net Deferred Tax Position: The overall tax position is heavily dominated by liabilities. The net deferred tax liability widened exponentially in 2019, moving from a net position of approximately 529 million in 2017 to over 4.1 billion in 2019. This wide gap persisted through 2021, indicating a long-term increase in future taxable obligations relative to available deferred tax benefits.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Fiserv Inc., Financial Data: Reported vs. Adjusted

Fiserv Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	76,249)	74,619)	77,539)	11,262)	10,289)
Less: Noncurrent deferred tax assets, net	42)	28)	112)	20)	23)
Total assets (adjusted)	76,207)	74,591)	77,427)	11,242)	10,266)
Adjustment to Total Liabilities
Total liabilities (as reported)	44,299)	41,290)	42,682)	8,969)	7,558)
Less: Noncurrent deferred tax liabilities, net	4,172)	4,389)	4,247)	745)	552)
Total liabilities (adjusted)	40,127)	36,901)	38,435)	8,224)	7,006)
Adjustment to Total Fiserv, Inc. Shareholders’ Equity
Total Fiserv, Inc. shareholders’ equity (as reported)	30,952)	32,330)	32,979)	2,293)	2,731)
Less: Net deferred tax assets (liabilities)	(4,130)	(4,361)	(4,135)	(725)	(529)
Total Fiserv, Inc. shareholders’ equity (adjusted)	35,082)	36,691)	37,114)	3,018)	3,260)
Adjustment to Net Income Attributable To Fiserv, Inc.
Net income attributable to Fiserv, Inc. (as reported)	1,334)	958)	893)	1,187)	1,246)
Add: Deferred income tax expense (benefit)	(262)	71)	47)	133)	(247)
Net income attributable to Fiserv, Inc. (adjusted)	1,072)	1,029)	940)	1,320)	999)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

A significant expansion of the balance sheet is observed beginning in 2019, where total assets and liabilities increased by several magnitudes. The application of adjustments to remove deferred taxes reveals a consistent divergence between reported and adjusted financial positions, particularly concerning liabilities and shareholders' equity.

Impact on Total Assets: The variance between reported and adjusted total assets remains minimal throughout the analyzed period. While reported assets grew from 10,289 million USD in 2017 to 76,249 million USD in 2021, the adjusted figures closely track this trend, indicating that deferred tax assets constitute a negligible portion of the overall asset base.
Impact on Total Liabilities: A substantial reduction in obligations is evident when deferred taxes are removed. The gap between reported and adjusted liabilities widened significantly following the 2019 expansion. By December 31, 2021, adjusted total liabilities were 40,127 million USD, compared to reported liabilities of 44,299 million USD, representing a reduction of approximately 4,172 million USD.
Impact on Shareholders' Equity: The removal of deferred tax liabilities results in a consistent increase in adjusted shareholders' equity. Adjusted equity remained higher than reported equity in every year from 2017 to 2021. In 2021, the adjusted equity of 35,082 million USD exceeds the reported equity of 30,952 million USD, demonstrating that deferred tax obligations create a significant downward pressure on the reported book value of the company.
Net Income Variance: Adjustments to net income exhibit more volatility than balance sheet items. While reported net income saw a peak of 1,334 million USD in 2021, the adjusted net income for the same period was lower at 1,072 million USD. Conversely, in 2018, adjusted net income (1,320 million USD) was higher than reported net income (1,187 million USD), suggesting that the impact of deferred tax adjustments on earnings varies annually based on the nature of the tax recognized or deferred.

The overall financial trend indicates that the removal of deferred taxes strengthens the perceived solvency and equity position of the entity by reducing reported liabilities and increasing the net equity available to shareholders.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Fiserv Inc., Financial Ratios: Reported vs. Adjusted

Fiserv Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	8.22%	6.45%	8.77%	20.38%	21.88%
Adjusted net profit margin	6.61%	6.93%	9.23%	22.67%	17.54%
Total Asset Turnover
Reported total asset turnover	0.21	0.20	0.13	0.52	0.55
Adjusted total asset turnover	0.21	0.20	0.13	0.52	0.55
Financial Leverage
Reported financial leverage	2.46	2.31	2.35	4.91	3.77
Adjusted financial leverage	2.17	2.03	2.09	3.72	3.15
Return on Equity (ROE)
Reported ROE	4.31%	2.96%	2.71%	51.77%	45.62%
Adjusted ROE	3.06%	2.80%	2.53%	43.74%	30.64%
Return on Assets (ROA)
Reported ROA	1.75%	1.28%	1.15%	10.54%	12.11%
Adjusted ROA	1.41%	1.38%	1.21%	11.74%	9.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance from 2017 to 2021 is characterized by a significant shift in profitability, asset efficiency, and return metrics, with a pronounced transition occurring between 2018 and 2019. While early periods showed high margins and returns, the subsequent years reflect a substantial contraction across most key indicators.

Net Profit Margin: A significant downward trend is observed in the reported net profit margin, which fell from 21.88% in 2017 to 8.22% by 2021. The adjusted net profit margin, which removes the impact of deferred taxes, shows a similar trajectory but highlights a discrepancy in 2017, where the adjusted margin was lower than the reported figure. Conversely, from 2019 onward, the adjusted margins remained slightly higher or closely aligned with reported figures, suggesting that deferred tax adjustments provided a marginal cushion to profitability in the later years.
Total Asset Turnover: Total asset turnover experienced a sharp decline, dropping from 0.55 in 2017 to a low of 0.13 in 2019, before partially recovering to 0.21 by 2021. There is no variance between the reported and adjusted ratios for this metric, indicating that the removal of deferred taxes has no impact on the assessment of asset utilization efficiency.
Financial Leverage: Reported financial leverage peaked in 2018 at 4.91 before stabilizing around 2.31 to 2.46 between 2019 and 2021. A consistent gap is observable between reported and adjusted leverage, with adjusted leverage remaining lower across all observed years. This indicates that deferred tax liabilities contribute significantly to the reported leverage levels, and their removal presents a more conservative view of the capital structure.
Return on Equity (ROE): A precipitous decline in ROE is evident, with reported ROE falling from a peak of 51.77% in 2018 to 4.31% in 2021. The adjusted ROE is consistently lower than the reported ROE throughout the period, suggesting that the accounting treatment of deferred taxes historically inflated the reported return on equity.
Return on Assets (ROA): Reported ROA followed a downward trajectory similar to ROE, decreasing from 12.11% in 2017 to 1.75% in 2021. Unlike ROE, the adjusted ROA was lower than the reported figure in 2017 and 2018 but became slightly higher than the reported figure from 2020 to 2021, indicating a shift in the impact of deferred tax adjustments on asset-based returns over time.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Fiserv, Inc.	1,334)	958)	893)	1,187)	1,246)
Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Profitability Ratio
Net profit margin¹	8.22%	6.45%	8.77%	20.38%	21.88%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Fiserv, Inc.	1,072)	1,029)	940)	1,320)	999)
Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Profitability Ratio
Adjusted net profit margin²	6.61%	6.93%	9.23%	22.67%	17.54%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net income attributable to Fiserv, Inc. ÷ Revenue
= 100 × 1,334 ÷ 16,226 = 8.22%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Fiserv, Inc. ÷ Revenue
= 100 × 1,072 ÷ 16,226 = 6.61%

The financial performance from 2017 to 2021 indicates a significant divergence between absolute net income growth and profit margin efficiency, suggesting a substantial shift in the company's operational or capital structure.

Net Income Trends: Reported net income demonstrated volatility, declining from 1,246 million US$ in 2017 to a low of 893 million US$ in 2019, before recovering to a five-year peak of 1,334 million US$ in 2021. Adjusted net income followed a different pattern, peaking in 2018 at 1,320 million US$ and subsequently stabilizing within a range of 940 million to 1,072 million US$ between 2019 and 2021.
Net Profit Margin Compression: A pronounced downward trend is observed in profitability ratios following 2018. The adjusted net profit margin experienced a sharp contraction, falling from a peak of 22.67% in 2018 to 6.61% by 2021. Similarly, the reported net profit margin declined from 20.38% in 2018 to a minimum of 6.45% in 2020, ending the period at 8.22% in 2021.
Comparison of Reported and Adjusted Metrics: The relationship between reported and adjusted margins shifted throughout the analyzed period. Reported margins were higher than adjusted margins in 2017 and 2021. Conversely, adjusted margins outperformed reported margins from 2018 through 2020. The sharp decline in both margin metrics starting in 2019, despite the eventual recovery of reported net income in 2021, indicates that revenue growth significantly outpaced the growth of net earnings during this timeframe.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Total assets	76,249)	74,619)	77,539)	11,262)	10,289)
Activity Ratio
Total asset turnover¹	0.21	0.20	0.13	0.52	0.55
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Adjusted total assets	76,207)	74,591)	77,427)	11,242)	10,266)
Activity Ratio
Adjusted total asset turnover²	0.21	0.20	0.13	0.52	0.55

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 16,226 ÷ 76,249 = 0.21

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 16,226 ÷ 76,207 = 0.21

The financial period between 2017 and 2021 is characterized by a significant structural shift in the asset base, which had a direct and pronounced impact on operational efficiency metrics.

Asset Base Expansion: A substantial increase in both reported and adjusted total assets occurred between December 31, 2018, and December 31, 2019. Total assets grew from $11,262 million to $77,539 million, representing a nearly sevenfold increase within a single fiscal year. Following this surge, the asset base remained relatively stable, ending 2021 at $76,249 million.
Adjusted Total Asset Turnover Performance: The adjusted total asset turnover ratio exhibited a sharp decline corresponding with the asset expansion. The ratio fell from 0.52 in 2018 to a low of 0.13 in 2019. This downward movement indicates that the rapid growth in the asset base significantly outpaced the growth in revenue during that period, leading to a temporary reduction in asset productivity.
Recovery and Stabilization Trends: Since the 2019 low, a gradual recovery in the adjusted total asset turnover ratio is observed. The ratio increased to 0.20 in 2020 and further to 0.21 in 2021. While these levels remain well below the pre-2019 figures of 0.52 to 0.55, the upward trajectory suggests a progressive improvement in the utilization of the expanded asset base to generate revenue.

Overall, the data reflects a period of massive balance sheet expansion followed by a slow but steady trend toward improving asset efficiency. The convergence of reported and adjusted figures across both asset totals and turnover ratios indicates that adjustments had a negligible impact on these specific performance metrics during the analyzed period.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	76,249)	74,619)	77,539)	11,262)	10,289)
Total Fiserv, Inc. shareholders’ equity	30,952)	32,330)	32,979)	2,293)	2,731)
Solvency Ratio
Financial leverage¹	2.46	2.31	2.35	4.91	3.77
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	76,207)	74,591)	77,427)	11,242)	10,266)
Adjusted total Fiserv, Inc. shareholders’ equity	35,082)	36,691)	37,114)	3,018)	3,260)
Solvency Ratio
Adjusted financial leverage²	2.17	2.03	2.09	3.72	3.15

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Fiserv, Inc. shareholders’ equity
= 76,249 ÷ 30,952 = 2.46

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Fiserv, Inc. shareholders’ equity
= 76,207 ÷ 35,082 = 2.17

An analysis of the financial structure between 2017 and 2021 reveals a significant shift in the balance sheet composition, characterized by a substantial increase in both assets and equity starting in 2019, which fundamentally altered the leverage profile of the organization.

Asset and Equity Expansion: Adjusted total assets grew from 10,266 million US dollars in 2017 to 77,427 million US dollars in 2019, representing a scale increase of approximately 7.5 times. This expansion was mirrored by adjusted shareholders' equity, which rose from 3,260 million US dollars in 2017 to a peak of 37,114 million US dollars in 2019. Following this surge, both metrics remained relatively stable through 2021, with adjusted assets ending at 76,207 million US dollars and adjusted equity experiencing a slight decline to 35,082 million US dollars.
Financial Leverage Trends: Reported financial leverage experienced an upward trend from 3.77 in 2017 to 4.91 in 2018, before dropping sharply to 2.35 in 2019. Adjusted financial leverage followed a similar trajectory, peaking at 3.72 in 2018 and subsequently declining to 2.09 in 2019. This sharp reduction in leverage ratios directly coincides with the massive increase in the equity base during the 2019 fiscal year.
Comparative Analysis of Adjusted Leverage: A consistent variance is observed between reported and adjusted leverage ratios, with the adjusted leverage remaining lower throughout the entire five-year period. After the significant reset in 2019, adjusted financial leverage reached its lowest point in 2020 at 2.03, before increasing slightly to 2.17 by the end of 2021. The overall trend indicates a transition from a higher-leverage environment prior to 2019 to a more stable, lower-leverage capital structure in the subsequent years.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Fiserv, Inc.	1,334)	958)	893)	1,187)	1,246)
Total Fiserv, Inc. shareholders’ equity	30,952)	32,330)	32,979)	2,293)	2,731)
Profitability Ratio
ROE¹	4.31%	2.96%	2.71%	51.77%	45.62%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Fiserv, Inc.	1,072)	1,029)	940)	1,320)	999)
Adjusted total Fiserv, Inc. shareholders’ equity	35,082)	36,691)	37,114)	3,018)	3,260)
Profitability Ratio
Adjusted ROE²	3.06%	2.80%	2.53%	43.74%	30.64%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income attributable to Fiserv, Inc. ÷ Total Fiserv, Inc. shareholders’ equity
= 100 × 1,334 ÷ 30,952 = 4.31%

² Adjusted ROE = 100 × Adjusted net income attributable to Fiserv, Inc. ÷ Adjusted total Fiserv, Inc. shareholders’ equity
= 100 × 1,072 ÷ 35,082 = 3.06%

Between 2017 and 2021, a significant structural shift occurred in the capital composition of the organization, leading to a dramatic compression of both reported and adjusted return on equity (ROE) metrics.

Net Income Performance: Reported net income demonstrated volatility over the five-year period, declining from 1,246 million USD in 2017 to a low of 893 million USD in 2019, before recovering to 1,334 million USD by 2021. Adjusted net income followed a similar pattern, peaking at 1,320 million USD in 2018 and stabilizing at 1,072 million USD by the end of 2021. The relative stability of earnings indicates that the subsequent collapse in ROE was driven by balance sheet changes rather than a failure in profitability.
Shareholders' Equity Expansion: A massive increase in shareholders' equity occurred between 2018 and 2019. Reported equity surged from 2,293 million USD to 32,979 million USD, while adjusted equity rose from 3,018 million USD to 37,114 million USD during the same interval. This exponential growth in the equity base suggests a major capital event or acquisition that fundamentally altered the denominator of the ROE calculation.
Return on Equity (ROE) Analysis: The sharp expansion of the equity base resulted in a precipitous decline in efficiency ratios. Reported ROE fell from a high of 51.77% in 2018 to 2.71% in 2019. Similarly, adjusted ROE dropped from 43.74% in 2018 to 2.53% in 2019. Although a marginal recovery trend is observable from 2020 to 2021, with adjusted ROE increasing slightly to 3.06%, the ratio remains significantly lower than the levels observed prior to 2019.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Fiserv, Inc.	1,334)	958)	893)	1,187)	1,246)
Total assets	76,249)	74,619)	77,539)	11,262)	10,289)
Profitability Ratio
ROA¹	1.75%	1.28%	1.15%	10.54%	12.11%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Fiserv, Inc.	1,072)	1,029)	940)	1,320)	999)
Adjusted total assets	76,207)	74,591)	77,427)	11,242)	10,266)
Profitability Ratio
Adjusted ROA²	1.41%	1.38%	1.21%	11.74%	9.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income attributable to Fiserv, Inc. ÷ Total assets
= 100 × 1,334 ÷ 76,249 = 1.75%

² Adjusted ROA = 100 × Adjusted net income attributable to Fiserv, Inc. ÷ Adjusted total assets
= 100 × 1,072 ÷ 76,207 = 1.41%

The financial performance between 2017 and 2021 is characterized by a structural shift in the balance sheet, which led to a significant compression of return on assets (ROA) metrics.

Asset Base Expansion: A substantial increase in total assets occurred between 2018 and 2019, where reported total assets grew from 11,262 million US$ to 77,539 million US$. This expansion remained relatively stable through 2021, ending at 76,249 million US$. The scale of this increase indicates a fundamental change in the company's capital structure or operational scale during the 2019 fiscal year.
Net Income Performance: Adjusted net income showed more stability than reported net income over the five-year period. Adjusted net income rose from 999 million US$ in 2017 to a peak of 1,320 million US$ in 2018, before stabilizing between 940 million US$ and 1,072 million US$ from 2019 to 2021. Reported net income experienced greater volatility, reaching its highest point in 2021 at 1,334 million US$.
Adjusted ROA Trends: The Adjusted ROA experienced a sharp decline corresponding with the asset expansion. In 2018, the Adjusted ROA stood at 11.74%, but it fell precipitously to 1.21% in 2019. This decline reflects the fact that the growth in the asset base significantly outpaced the growth in adjusted net income. From 2019 to 2021, a modest recovery trend is observable, with the Adjusted ROA incrementally rising to 1.41%.
Reported vs. Adjusted Metrics: A divergence between reported and adjusted figures is evident, particularly in the ROA. While both metrics followed the same downward trajectory in 2019, the reported ROA showed a more pronounced recovery in the final two years, reaching 1.75% in 2021 compared to the adjusted ROA of 1.41%. This indicates that non-adjusted items had a more positive impact on the bottom line in the latter part of the analyzed period.

AI Ask an analyst for more