Analysis of Property, Plant and Equipment
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- Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Property, Plant and Equipment Disclosure
Fiserv Inc., balance sheet: property, plant and equipment
US$ in millions
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 data for property, plant, and equipment over the five-year period reveals several notable trends. The gross value of property and equipment has shown a consistent upward trajectory, increasing from US$1,176 million in 2017 to US$3,234 million in 2021. This growth indicates significant investment in tangible assets over the period.
- Land
- The value of land fluctuated over the years, starting at US$13 million in 2017 and declining to US$10 million in 2018, followed by a sharp increase to US$61 million in 2019. Afterward, it decreased gradually to US$54 million in 2020 and US$48 million in 2021. This pattern may suggest sporadic acquisitions and disposals or revaluations of land holdings.
- Data Processing Equipment
- This category shows robust growth, with values rising markedly from US$726 million in 2017 to US$2,302 million in 2021. The growth is particularly steep from 2018 onward, reflecting increased investment in technology infrastructure, likely to support expanding operations or modernization efforts.
- Buildings and Leasehold Improvements
- Values for buildings and leasehold improvements remained relatively stable, starting at US$255 million in 2017 and peaking at US$555 million in 2020, before a slight decline to US$512 million in 2021. This trend suggests moderate enhancement and maintenance of physical structures during this period.
- Furniture and Equipment
- Initially steady at around US$182-186 million between 2017 and 2018, there was a substantial rise to US$576 million in 2019 and US$636 million in 2020, followed by a notable decrease to US$372 million in 2021. The rise may indicate a phase of expansion or upgrades, whereas the decrease could reflect asset disposals or write-downs.
- Accumulated Depreciation
- Accumulated depreciation consistently increased in magnitude from -US$786 million in 2017 to -US$1,492 million in 2021. This steady rise is typical as assets age and depreciation expenses accumulate, reflecting the consumption of asset value over time.
- Net Property and Equipment
- The net carrying amount of property and equipment showed a substantial increase from US$390 million in 2017 to US$1,742 million in 2021. Most notably, there was a sharp rise between 2018 and 2019, consistent with the gross asset increase during the same period, indicating significant acquisition of assets net of accumulated depreciation.
Overall, the data indicates considerable capital expenditure and asset growth over the five-year period. Investments appear to be concentrated mainly in data processing equipment and, to a lesser extent, in buildings and furniture. The increasing accumulated depreciation suggests ongoing usage and aging of the asset base, while the net property and equipment value increase reflects successful asset acquisition outpacing depreciation charges.
Asset Age Ratios (Summary)
Fiserv Inc., asset age ratios
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 data related to property, plant, and equipment reveals several notable trends over the five-year period from 2017 to 2021. These trends reflect changes in the asset base with respect to its aging, estimated useful life, and remaining life.
- Average Age Ratio (%)
- The average age ratio exhibited a decline from 67.58% in 2017 to a low of 40.55% in 2019. Following this decrease, the ratio increased gradually to 46.83% by 2021. This pattern indicates a reduction in the relative age of the assets up to 2019, suggesting either acquisitions of newer assets or disposals of older ones, followed by a moderate aging of the asset base thereafter.
- Estimated Total Useful Life (in years)
- The estimated total useful life remained stable at 13 years through 2018, then decreased to 11 years in 2019 and further sharply declined to 5 and 6 years in 2020 and 2021, respectively. This downward trend suggests a reassessment of the asset lifespan, possibly reflecting the acquisition of assets with shorter expected service lives or changes in accounting estimates and policies.
- Estimated Age, Time Elapsed Since Purchase (in years)
- This metric remained at 9 years for both 2017 and 2018, then dropped significantly to 4 years in 2019, followed by decreases to 2 years in 2020 and a slight increase to 3 years in 2021. The notable drop after 2018 implies a substantial acquisition of newer assets, resulting in a younger asset base overall, while the slight increase in 2021 indicates some aging of these assets.
- Estimated Remaining Life (in years)
- The estimated remaining life stayed constant at 4 years during 2017 and 2018, increased to 6 years in 2019, but then dropped to 3 years in both 2020 and 2021. This fluctuation is consistent with the changes observed in the estimated useful life and asset age, indicating an adjustment in the expected useful duration of assets, particularly from 2020 onward.
Overall, the data demonstrates a dynamic asset lifecycle wherein the company updated its asset base, leading to a younger average age ratio around 2019, accompanied by significant revisions in the projected useful life of assets. These changes may correspond with strategic investment in newer capital expenditures and prudent reassessment of asset valuation methodologies.
Average Age
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
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 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
- Property and Equipment, Gross
- The gross value of property and equipment shows a significant upward trend over the analyzed period. Starting at $1,176 million in 2017, the value increased modestly to $1,227 million in 2018. However, from 2018 onward, there was a substantial rise, reaching $2,660 million in 2019, $2,911 million in 2020, and $3,234 million in 2021. This indicates considerable investment or acquisition of property and equipment assets during these later years.
- Accumulated Depreciation
- Accumulated depreciation consistently increased each year, reflecting the aging and usage of physical assets. It rose from $786 million in 2017 to $829 million in 2018, followed by a more pronounced rise to $1,054 million in 2019. Further increases were seen in 2020 and 2021, with values of $1,283 million and $1,492 million respectively. This growing accumulated depreciation aligns with the increased gross property and equipment, indicating ongoing wear and tear or usage of the assets.
- Land
- The recorded value of land fluctuated during the period. It started at $13 million in 2017, decreased to $10 million in 2018, then rose sharply to $61 million in 2019. Afterward, it declined to $54 million in 2020 and further to $48 million in 2021. These fluctuations may suggest acquisitions and disposals or revaluations of land assets within the period.
- Average Age Ratio
- The average age ratio indicates a changing profile of the asset base over time. Initially high at 67.58% in 2017 and slightly increasing to 68.12% in 2018, it dropped markedly to 40.55% in 2019. Subsequently, it exhibited a gradual increase to 44.91% in 2020 and 46.83% in 2021. The sharp decrease in 2019 suggests a significant renewal or addition of new assets, thereby lowering the average age of the property and equipment. The modest increases following that year indicate a slower aging process or fewer recent additions relative to 2019.
Estimated Total Useful Life
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 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense for all property and equipment
= ( – ) ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment showed a substantial increase over the period. Starting at $1,176 million in 2017, it rose gradually to $1,227 million in 2018 before experiencing a significant jump to $2,660 million in 2019. This upward trend continued, reaching $2,911 million in 2020 and further increasing to $3,234 million by the end of 2021. This progression indicates ongoing investment in physical assets, particularly marked by the sizeable rise from 2018 to 2019.
- Land
- The value of land assets remained relatively stable but showed some fluctuations. It started at $13 million in 2017, dropped to $10 million in 2018, then sharply increased to $61 million in 2019. After this peak, the value declined slightly to $54 million in 2020 and further to $48 million in 2021. These variations suggest occasional acquisitions or disposals impacting the land component within the property portfolio.
- Depreciation Expense for All Property and Equipment
- Depreciation expense was stable at $92 million during 2017 and 2018. However, it escalated significantly to $247 million in 2019, more than doubling from the prior year. This expense continued to increase substantially to $523 million in 2020 before slightly decreasing to $498 million in 2021. The sharp rise in depreciation expense corresponds with the increases in gross property and equipment value, reflecting higher amortization of the expanded asset base.
- Estimated Total Useful Life
- The estimated useful life of the property and equipment demonstrated a downward trend across the period. It remained steady at 13 years in 2017 and 2018 but declined to 11 years in 2019. This reduction was followed by a significant decrease to 5 years in 2020, with a slight increase to 6 years in 2021. The shortening of the useful life estimate suggests either a shift towards assets with inherently shorter lifespans or a reassessment of asset longevity, likely contributing to the increased depreciation expense observed.
Estimated Age, Time Elapsed since Purchase
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 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense for all property and equipment
= ÷ =
The analysis of the property, plant, and equipment financial data reveals several notable trends over the five-year period ending December 31, 2021.
- Accumulated Depreciation
- The accumulated depreciation shows a consistent upward trend throughout the period. It increased from US$786 million in 2017 to US$1,492 million in 2021, nearly doubling over five years. This steady increase reflects ongoing depreciation charges being recognized each year against the company's assets.
- Depreciation Expense for All Property and Equipment
- The depreciation expense remained constant at US$92 million for the first two years (2017 and 2018), before experiencing a substantial rise in 2019 to US$247 million. This upward movement continued sharply through 2020, reaching US$523 million, followed by a slight decrease to US$498 million in 2021. The dramatic increase from 2018 to 2020 may indicate significant additions to property and equipment or changes in depreciation methodology or asset useful lives.
- Time Elapsed Since Purchase
- The time elapsed since purchase decreased from 9 years in 2017 and 2018 to 4 years in 2019, reaching as low as 2 years in 2020, before slightly increasing to 3 years in 2021. This pattern suggests the company renewed or replaced a considerable portion of its property and equipment assets beginning in 2019, resulting in a younger asset base and likely contributing to the observed increase in depreciation expense.
In summary, the data indicates that the company undertook significant investments or changes to its property and equipment starting in 2019, leading to a younger asset profile and increased depreciation charges. The accumulated depreciation's steady increase reflects consistent asset usage and aging over the period, while the fluctuation in depreciation expense post-2018 aligns with changes in asset acquisition timing and potentially depreciation policies.
Estimated Remaining Life
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 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense for all property and equipment
= ( – ) ÷ =
- Property and Equipment, Net
- There is a noticeable increase in net property and equipment from 2017 to 2019, with values rising sharply from $390 million in 2017 to $1,606 million in 2019. This upward trend continues more moderately through 2020 and 2021, reaching $1,742 million by the end of 2021. The significant jump between 2018 and 2019 suggests substantial investments or revaluations during this period.
- Land
- The value of land shows some fluctuation but remains relatively stable in comparison to the total property and equipment. Starting at $13 million in 2017, it decreases to $10 million in 2018, then increases sharply to $61 million in 2019 before declining gradually to $54 million in 2020 and further to $48 million in 2021. These variations might reflect occasional acquisitions or disposals of land assets.
- Depreciation Expense for All Property and Equipment
- Depreciation expense remains consistent at $92 million for 2017 and 2018, followed by a sharp increase to $247 million in 2019. The upward trajectory continues, peaking at $523 million in 2020 before slightly decreasing to $498 million in 2021. This pattern aligns with the rise in net property and equipment values, indicating increased depreciation charges corresponding to higher asset bases. The decline in 2021 may indicate asset disposals or adjustments in depreciation methods.
- Estimated Remaining Life
- The estimated remaining life of property and equipment recorded stability at 4 years during 2017 and 2018, followed by an increase to 6 years in 2019. However, it then declines sharply to 3 years in both 2020 and 2021. This reduction suggests a shorter expected useful life for newly acquired or revalued assets, potentially reflecting changes in asset composition or accelerated depreciation policies.