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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Fiserv Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net operating profit after taxes (NOPAT)¹	1,797)	1,728)	1,565)	1,322)	1,176)
Cost of capital²	10.25%	10.68%	10.62%	11.55%	11.51%
Invested capital³	59,700)	60,165)	62,514)	9,909)	9,201)

Economic profit⁴	(4,324)	(4,700)	(5,075)	177)	117)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,797 – 10.25% × 59,700 = -4,324

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Fiserv Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income attributable to Fiserv, Inc.	1,334)	958)	893)	1,187)	1,246)
Deferred income tax expense (benefit)¹	(262)	71)	47)	133)	(247)
Increase (decrease) in allowance for doubtful accounts²	7)	9)	21)	3)	—)
Increase (decrease) in contract liabilities³	77)	86)	178)	(161)	69)
Increase (decrease) in employee termination costs reserve⁴	9)	13)	14)	—)	—)
Increase (decrease) in equity equivalents⁵	(169)	179)	260)	(25)	(178)
Interest expense	696)	716)	507)	193)	176)
Interest expense, operating lease liability⁶	20)	17)	22)	14)	12)
Adjusted interest expense	716)	733)	529)	207)	188)
Tax benefit of interest expense⁷	(150)	(154)	(111)	(43)	(66)
Adjusted interest expense, after taxes⁸	566)	579)	418)	163)	122)
Interest income	(3)	(7)	(34)	(4)	(1)
Investment income, before taxes	(3)	(7)	(34)	(4)	(1)
Tax expense (benefit) of investment income⁹	1)	1)	7)	1)	—)
Investment income, after taxes¹⁰	(2)	(6)	(27)	(3)	(1)
(Income) loss from discontinued operations, net of tax¹¹	—)	—)	—)	—)	(14)
Net income (loss) attributable to noncontrolling interest	69)	17)	21)	—)	—)
Net operating profit after taxes (NOPAT)	1,797)	1,728)	1,565)	1,322)	1,176)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in contract liabilities.

⁴ Addition of increase (decrease) in employee termination costs reserve.

⁵ Addition of increase (decrease) in equity equivalents to net income attributable to Fiserv, Inc..

⁶ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 737 × 2.70% = 20

⁷ 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 716 × 21.00% = 150

⁸ Addition of after taxes interest expense to net income attributable to Fiserv, Inc..

⁹ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 3 × 21.00% = 1

¹⁰ Elimination of after taxes investment income.

¹¹ Elimination of discontinued operations.

The analysis of the annual financial data reveals mixed trends in profitability measures over the five-year period ending December 31, 2021.

Net Income Attributable to Fiserv, Inc.: The net income shows some volatility throughout the years. From 2017 to 2018, it decreased slightly from 1246 million USD to 1187 million USD. A more significant decline occurred between 2018 and 2019, dropping to 893 million USD. However, this was followed by a modest recovery in 2020 to 958 million USD and a substantial increase in 2021 to 1334 million USD, surpassing the initial 2017 level. This pattern indicates a dip in profitability midway through the period, followed by a strong rebound in recent years.
Net Operating Profit After Taxes (NOPAT): NOPAT displayed a consistent upward trajectory over the entire five-year span. It increased from 1176 million USD in 2017 to 1322 million USD in 2018, with further growth to 1565 million USD in 2019. This positive trend persisted in 2020 at 1728 million USD and reached 1797 million USD by the end of 2021. The steady rise in NOPAT suggests improving operational efficiency and profitability after taxes despite fluctuations in net income.

Overall, while net income faced a decline mid-period before a recovery, NOPAT steadily improved year-over-year, indicating strengthening core operating performance. The divergence between net income and NOPAT trends could be attributed to factors such as non-operating items, tax effects, or one-time charges influencing net income figures differently than operating profit metrics.

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Fiserv Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Income tax provision	363)	196)	198)	378)	158)
Less: Deferred income tax expense (benefit)	(262)	71)	47)	133)	(247)
Add: Tax savings from interest expense	150)	154)	111)	43)	66)
Less: Tax imposed on investment income	1)	1)	7)	1)	—)
Cash operating taxes	775)	278)	255)	288)	471)

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 reveals varying trends in tax-related expenses over the five-year period ending in 2021.

Income Tax Provision: The income tax provision exhibits fluctuations without a clear linear trend. Starting at 158 million USD in 2017, it more than doubled to 378 million USD in 2018. This was followed by a significant reduction to 198 million USD in 2019 and stability around 196 million USD in 2020. In 2021, there was a notable increase to 363 million USD, approaching the 2018 level. This pattern suggests variability in taxable income, tax rates, or tax planning outcomes over the years.
Cash Operating Taxes: The cash operating taxes show a different pattern characterized by an initial decrease from 471 million USD in 2017 to 288 million USD in 2018 and a further decline to 255 million USD in 2019. In 2020, the figure rose slightly to 278 million USD, followed by a sharp increase to 775 million USD in 2021, which represents a nearly threefold jump compared to the previous year. This sharp rise in 2021 might reflect changes in operational profitability, tax timing differences, or alterations in cash tax policy or payments.

Overall, while income tax provision levels remained relatively volatile with peaks in 2018 and 2021, cash operating taxes demonstrated a steady decline until 2019, a minor uptick in 2020, and a significant surge in 2021. The disparity between the trends in provision and cash taxes in recent years may indicate differences in accrued versus actual cash tax payments, suggesting the influence of tax deferrals, credits, or adjustments impacting cash flow differently from the provision expense.

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Fiserv Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Short-term and current maturities of long-term debt	508)	384)	287)	4)	3)
Long-term debt, excluding current maturities	20,729)	20,300)	21,612)	5,955)	4,897)
Operating lease liability¹	737)	596)	743)	378)	366)
Total reported debt & leases	21,974)	21,280)	22,642)	6,337)	5,266)
Total Fiserv, Inc. shareholders’ equity	30,952)	32,330)	32,979)	2,293)	2,731)
Net deferred tax (assets) liabilities²	4,130)	4,361)	4,135)	725)	529)
Allowance for doubtful accounts³	55)	48)	39)	18)	15)
Contract liabilities⁴	810)	733)	647)	469)	606)
Employee termination costs reserve⁵	36)	27)	14)	—)	—)
Equity equivalents⁶	5,031)	5,169)	4,835)	1,212)	1,150)
Accumulated other comprehensive (income) loss, net of tax⁷	745)	387)	180)	67)	54)
Redeemable noncontrolling interests	278)	259)	262)	—)	—)
Noncontrolling interests	720)	740)	1,616)	—)	—)
Adjusted total Fiserv, Inc. shareholders’ equity	37,726)	38,885)	39,872)	3,572)	3,935)
Invested capital	59,700)	60,165)	62,514)	9,909)	9,201)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of contract liabilities.

⁵ Addition of employee termination costs reserve.

⁶ Addition of equity equivalents to total Fiserv, Inc. shareholders’ equity.

⁷ Removal of accumulated other comprehensive income.

The financial data reveals several significant trends in the company’s capital structure and financial positioning over the five-year period.

Total reported debt & leases: The reported debt and leases displayed an increasing trend from 2017 through 2019, rising sharply from $5,266 million in 2017 to $22,642 million in 2019. This substantial increase indicates a significant leveraging or financing activity during that period. In 2020 and 2021, the reported debt & leases figures stabilized somewhat, with slight decreases and then a modest increase ending at $21,974 million in 2021, suggesting a relatively stable level of debt in the most recent years considered.
Total shareholders’ equity: Shareholders’ equity experienced a decline from $2,731 million in 2017 to $2,293 million in 2018, followed by a dramatic increase to $32,979 million in 2019. This surge aligns with the observed rise in debt, which may reflect an equity issuance, revaluation, or comprehensive income increase that boosted equity considerably. Subsequently, shareholders’ equity declined slightly but remained high at $32,330 million in 2020 and then decreased further to $30,952 million in 2021. Despite these decreases, equity levels remain substantially higher than the initial 2017-2018 amounts.
Invested capital: Invested capital followed a trend similar to that of total debt and shareholders’ equity. Beginning at $9,201 million in 2017 and increasing modestly to $9,909 million in 2018, it then surged to $62,514 million by the end of 2019. This jump reflects the substantial changes in both debt and equity levels noted previously. Despite the surge, invested capital slightly decreased in 2020 and 2021, ending at $59,700 million in 2021, suggesting moderate adjustments or repayments affecting the overall invested capital base during these last two years.

In summary, the data illustrates a period of significant capital restructuring or acquisition activity around 2019, characterized by sharp increases in both debt and equity components. Following this peak, the company maintained relatively stable but high financial leverage and equity levels, with minor declines in invested capital and equity in recent years. This pattern may indicate strategic investments or financing followed by a phase of consolidation or optimization of the capital structure.

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Fiserv Inc., cost of capital calculations

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	62,324)	62,324)	÷	85,657)	=	0.73	0.73	×	13.22%	=	9.62%
Debt³	22,596)	22,596)	÷	85,657)	=	0.26	0.26	×	2.97% × (1 – 21.00%)	=	0.62%
Operating lease liability⁴	737)	737)	÷	85,657)	=	0.01	0.01	×	2.70% × (1 – 21.00%)	=	0.02%
Total:	85,657)					1.00					10.25%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	77,236)	77,236)	÷	101,076)	=	0.76	0.76	×	13.22%	=	10.10%
Debt³	23,244)	23,244)	÷	101,076)	=	0.23	0.23	×	3.14% × (1 – 21.00%)	=	0.57%
Operating lease liability⁴	596)	596)	÷	101,076)	=	0.01	0.01	×	2.90% × (1 – 21.00%)	=	0.01%
Total:	101,076)					1.00					10.68%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	73,709)	73,709)	÷	97,436)	=	0.76	0.76	×	13.22%	=	10.00%
Debt³	22,984)	22,984)	÷	97,436)	=	0.24	0.24	×	3.25% × (1 – 21.00%)	=	0.61%
Operating lease liability⁴	743)	743)	÷	97,436)	=	0.01	0.01	×	3.00% × (1 – 21.00%)	=	0.02%
Total:	97,436)					1.00					10.62%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,187)	33,187)	÷	39,574)	=	0.84	0.84	×	13.22%	=	11.08%
Debt³	6,009)	6,009)	÷	39,574)	=	0.15	0.15	×	3.69% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	378)	378)	÷	39,574)	=	0.01	0.01	×	3.69% × (1 – 21.00%)	=	0.03%
Total:	39,574)					1.00					11.55%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,363)	29,363)	÷	34,738)	=	0.85	0.85	×	13.22%	=	11.17%
Debt³	5,009)	5,009)	÷	34,738)	=	0.14	0.14	×	3.36% × (1 – 35.00%)	=	0.31%
Operating lease liability⁴	366)	366)	÷	34,738)	=	0.01	0.01	×	3.36% × (1 – 35.00%)	=	0.02%
Total:	34,738)					1.00					11.51%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Fiserv Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(4,324)	(4,700)	(5,075)	177)	117)
Invested capital²	59,700)	60,165)	62,514)	9,909)	9,201)
Performance Ratio
Economic spread ratio³	-7.24%	-7.81%	-8.12%	1.79%	1.27%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	8.74%	9.32%	—	—	—
Adobe Inc.	11.88%	4.15%	2.26%	—	—
AppLovin Corp.	-23.55%	—	—	—	—
Cadence Design Systems Inc.	9.14%	9.95%	—	—	—
CrowdStrike Holdings Inc.	-6.48%	4.38%	—	—	—
Datadog Inc.	0.39%	-5.28%	—	—	—
International Business Machines Corp.	-5.23%	-4.89%	—	—	—
Intuit Inc.	0.72%	4.10%	—	—	—
Microsoft Corp.	31.88%	29.92%	—	—	—
Oracle Corp.	5.47%	-0.14%	—	—	—
Palantir Technologies Inc.	-48.11%	-88.11%	—	—	—
Palo Alto Networks Inc.	-2.95%	-3.93%	—	—	—
Salesforce Inc.	-8.86%	-11.88%	—	—	—
ServiceNow Inc.	4.22%	5.84%	—	—	—
Synopsys Inc.	-3.98%	-3.80%	-6.78%	—	—
Workday Inc.	-15.64%	-19.12%	—	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -4,324 ÷ 59,700 = -7.24%

⁴ Click competitor name to see calculations.

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Fiserv Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(4,324)	(4,700)	(5,075)	177)	117)

Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Add: Increase (decrease) in contract liabilities	77)	86)	178)	(161)	69)
Adjusted revenue	16,303)	14,938)	10,365)	5,662)	5,765)
Performance Ratio
Economic profit margin²	-26.52%	-31.46%	-48.96%	3.13%	2.03%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	4.48%	4.74%	—	—	—
Adobe Inc.	14.80%	5.95%	3.40%	—	—
AppLovin Corp.	-47.16%	—	—	—	—
Cadence Design Systems Inc.	9.28%	10.02%	—	—	—
CrowdStrike Holdings Inc.	-13.45%	3.84%	—	—	—
Datadog Inc.	0.31%	-4.05%	—	—	—
International Business Machines Corp.	-9.98%	-8.50%	—	—	—
Intuit Inc.	0.92%	4.62%	—	—	—
Microsoft Corp.	26.46%	22.21%	—	—	—
Oracle Corp.	10.82%	-0.33%	—	—	—
Palantir Technologies Inc.	-79.24%	-179.49%	—	—	—
Palo Alto Networks Inc.	-3.97%	-6.38%	—	—	—
Salesforce Inc.	-20.33%	-29.24%	—	—	—
ServiceNow Inc.	3.65%	4.77%	—	—	—
Synopsys Inc.	-6.33%	-6.53%	-11.71%	—	—
Workday Inc.	-20.40%	-24.60%	—	—	—

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).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -4,324 ÷ 16,303 = -26.52%

³ Click competitor name to see calculations.

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Fiserv Inc. (NASDAQ:FISV)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin