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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

AmerisourceBergen Corp., economic profit calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Net operating profit after taxes (NOPAT)¹	2,392,410)	1,778,708)	(4,619,749)	1,185,025)	1,018,004)	771,526)
Cost of capital²	8.70%	7.99%	8.49%	8.41%	8.47%	8.53%
Invested capital³	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)

Economic profit⁴	1,259,522)	747,262)	(5,225,272)	147,191)	(22,334)	(156,037)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,392,410 – 8.70% × 13,020,519 = 1,259,522

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	AmerisourceBergen Corp. economic profit increased from 2020 to 2021 and from 2021 to 2022.

AmerisourceBergen Corp., NOPAT calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Net income (loss) attributable to AmerisourceBergen Corporation	1,698,820)	1,539,932)	(3,408,716)	855,365)	1,658,405)	364,484)
Deferred income tax expense (benefit)¹	196,184)	334,866)	(1,544,971)	28,537)	(795,524)	319,069)
Increase (decrease) in allowances for returns and credit losses²	270,045)	(60,624)	194,402)	186,573)	(14,028)	145,016)
Increase (decrease) in LIFO reserve³	67,200)	(203,000)	7,400)	(22,600)	67,400)	(157,800)
Increase (decrease) in equity equivalents⁴	533,429)	71,242)	(1,343,169)	192,510)	(742,152)	306,285)
Interest expense	231,982)	182,544)	158,522)	195,474)	189,640)	149,042)
Interest expense, operating lease liability⁵	32,924)	32,075)	17,785)	17,396)	16,379)	9,826)
Adjusted interest expense	264,906)	214,619)	176,307)	212,870)	206,019)	158,868)
Tax benefit of interest expense⁶	(55,630)	(45,070)	(37,024)	(44,703)	(50,475)	(55,604)
Adjusted interest expense, after taxes⁷	209,275)	169,549)	139,283)	168,167)	155,545)	103,264)
Interest income	(21,309)	(8,470)	(20,639)	(37,705)	(14,941)	(3,857)
Investment income, before taxes	(21,309)	(8,470)	(20,639)	(37,705)	(14,941)	(3,857)
Tax expense (benefit) of investment income⁸	4,475)	1,779)	4,334)	7,918)	3,661)	1,350)
Investment income, after taxes⁹	(16,834)	(6,691)	(16,305)	(29,787)	(11,280)	(2,507)
Net income (loss) attributable to noncontrolling interest	(32,280)	4,676)	9,158)	(1,230)	(42,513)	—)
Net operating profit after taxes (NOPAT)	2,392,410)	1,778,708)	(4,619,749)	1,185,025)	1,018,004)	771,526)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances for returns and credit losses.

³ Addition of increase (decrease) in LIFO reserve. See details »

⁴ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to AmerisourceBergen Corporation.

⁵ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,022,472 × 3.22% = 32,924

⁶ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 264,906 × 21.00% = 55,630

⁷ Addition of after taxes interest expense to net income (loss) attributable to AmerisourceBergen Corporation.

⁸ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 21,309 × 21.00% = 4,475

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	AmerisourceBergen Corp. NOPAT increased from 2020 to 2021 and from 2021 to 2022.

AmerisourceBergen Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Provision (benefit) for income taxes	516,517)	677,251)	(1,894,273)	112,971)	(438,469)	553,403)
Less: Deferred income tax expense (benefit)	196,184)	334,866)	(1,544,971)	28,537)	(795,524)	319,069)
Add: Tax savings from interest expense	55,630)	45,070)	37,024)	44,703)	50,475)	55,604)
Less: Tax imposed on investment income	4,475)	1,779)	4,334)	7,918)	3,661)	1,350)
Cash operating taxes	371,488)	385,676)	(316,612)	121,219)	403,869)	288,588)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	AmerisourceBergen Corp. cash operating taxes increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

AmerisourceBergen Corp., invested capital calculation (financing approach)

US$ in thousands

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Short-term debt	1,070,473)	300,213)	501,259)	139,012)	151,657)	12,121)
Long-term debt, net of current portion	4,632,360)	6,383,711)	3,618,261)	4,033,880)	4,158,532)	3,429,934)
Operating lease liability¹	1,022,472)	1,121,507)	478,094)	473,995)	446,301)	257,899)
Total reported debt & leases	6,725,305)	7,805,431)	4,597,614)	4,646,887)	4,756,490)	3,699,954)
Total AmerisourceBergen Corporation stockholders’ equity (deficit)	(211,559)	223,354)	(1,018,924)	2,878,917)	2,932,824)	2,064,461)
Net deferred tax (assets) liabilities²	1,382,842)	1,394,505)	324,845)	1,860,195)	1,829,410)	2,492,612)
Allowances for returns and credit losses³	1,626,729)	1,356,684)	1,417,308)	1,222,906)	1,036,333)	1,050,361)
LIFO reserve⁴	1,383,400)	1,316,200)	1,519,200)	1,511,800)	1,534,400)	1,467,000)
Equity equivalents⁵	4,392,971)	4,067,389)	3,261,353)	4,594,901)	4,400,143)	5,009,973)
Accumulated other comprehensive (income) loss, net of tax⁶	1,830,970)	445,442)	108,830)	111,965)	79,253)	95,850)
Noncontrolling interests	282,832)	361,057)	179,288)	114,289)	117,137)	—)
Adjusted total AmerisourceBergen Corporation stockholders’ equity (deficit)	6,295,214)	5,097,242)	2,530,547)	7,700,072)	7,529,357)	7,170,284)
Invested capital	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

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 LIFO reserve. See details »

⁵ Addition of equity equivalents to total AmerisourceBergen Corporation stockholders’ equity (deficit).

⁶ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	AmerisourceBergen Corp. invested capital increased from 2020 to 2021 and from 2021 to 2022.

AmerisourceBergen Corp., cost of capital calculations

Sep 30, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,875,680)	33,875,680)	÷	40,098,925)	=	0.84	0.84	×	9.86%	=	8.33%
Debt³	5,200,773)	5,200,773)	÷	40,098,925)	=	0.13	0.13	×	3.00% × (1 – 21.00%)	=	0.31%
Operating lease liability⁴	1,022,472)	1,022,472)	÷	40,098,925)	=	0.03	0.03	×	3.22% × (1 – 21.00%)	=	0.06%
Total:	40,098,925)					1.00					8.70%

Based on: 10-K (reporting date: 2022-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	25,737,771)	25,737,771)	÷	33,921,091)	=	0.76	0.76	×	9.86%	=	7.48%
Debt³	7,061,813)	7,061,813)	÷	33,921,091)	=	0.21	0.21	×	2.67% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	1,121,507)	1,121,507)	÷	33,921,091)	=	0.03	0.03	×	2.86% × (1 – 21.00%)	=	0.07%
Total:	33,921,091)					1.00					7.99%

Based on: 10-K (reporting date: 2021-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	20,813,049)	20,813,049)	÷	25,818,802)	=	0.81	0.81	×	9.86%	=	7.95%
Debt³	4,527,659)	4,527,659)	÷	25,818,802)	=	0.18	0.18	×	3.56% × (1 – 21.00%)	=	0.49%
Operating lease liability⁴	478,094)	478,094)	÷	25,818,802)	=	0.02	0.02	×	3.72% × (1 – 21.00%)	=	0.05%
Total:	25,818,802)					1.00					8.49%

Based on: 10-K (reporting date: 2020-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	18,082,027)	18,082,027)	÷	22,853,434)	=	0.79	0.79	×	9.86%	=	7.80%
Debt³	4,297,412)	4,297,412)	÷	22,853,434)	=	0.19	0.19	×	3.67% × (1 – 21.00%)	=	0.55%
Operating lease liability⁴	473,995)	473,995)	÷	22,853,434)	=	0.02	0.02	×	3.67% × (1 – 21.00%)	=	0.06%
Total:	22,853,434)					1.00					8.41%

Based on: 10-K (reporting date: 2019-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	18,834,530)	18,834,530)	÷	23,432,588)	=	0.80	0.80	×	9.86%	=	7.92%
Debt³	4,151,757)	4,151,757)	÷	23,432,588)	=	0.18	0.18	×	3.67% × (1 – 24.50%)	=	0.49%
Operating lease liability⁴	446,301)	446,301)	÷	23,432,588)	=	0.02	0.02	×	3.67% × (1 – 24.50%)	=	0.05%
Total:	23,432,588)					1.00					8.47%

Based on: 10-K (reporting date: 2018-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,328,800)	17,328,800)	÷	21,121,320)	=	0.82	0.82	×	9.86%	=	8.09%
Debt³	3,534,621)	3,534,621)	÷	21,121,320)	=	0.17	0.17	×	3.81% × (1 – 35.00%)	=	0.41%
Operating lease liability⁴	257,899)	257,899)	÷	21,121,320)	=	0.01	0.01	×	3.81% × (1 – 35.00%)	=	0.03%
Total:	21,121,320)					1.00					8.53%

Based on: 10-K (reporting date: 2017-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

AmerisourceBergen Corp., economic spread ratio calculation, comparison to benchmarks

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	1,259,522)	747,262)	(5,225,272)	147,191)	(22,334)	(156,037)
Invested capital²	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)
Performance Ratio
Economic spread ratio³	9.67%	5.79%	-73.30%	1.19%	-0.18%	-1.44%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	-0.27%	0.18%	-3.09%	-4.39%	—	—
Cigna Group	0.46%	-0.48%	2.41%	-0.78%	—	—
CVS Health Corp.	-4.27%	-0.29%	0.22%	-0.56%	—	—
Elevance Health Inc.	-0.66%	0.64%	-1.31%	-0.50%	—	—
Intuitive Surgical Inc.	4.15%	19.77%	7.75%	24.44%	—	—
Medtronic PLC	-3.33%	-4.94%	-4.04%	-2.96%	—	—
UnitedHealth Group Inc.	4.33%	4.18%	4.78%	4.80%	—	—

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,259,522 ÷ 13,020,519 = 9.67%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	AmerisourceBergen Corp. economic spread ratio improved from 2020 to 2021 and from 2021 to 2022.

AmerisourceBergen Corp., economic profit margin calculation, comparison to benchmarks

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	1,259,522)	747,262)	(5,225,272)	147,191)	(22,334)	(156,037)
Revenue	238,587,006)	213,988,843)	189,893,926)	179,589,121)	167,939,635)	153,143,826)
Performance Ratio
Economic profit margin²	0.53%	0.35%	-2.75%	0.08%	-0.01%	-0.10%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	-0.38%	0.26%	-5.39%	-8.00%	—	—
Cigna Group	0.22%	-0.25%	1.42%	-0.48%	—	—
CVS Health Corp.	-1.64%	-0.13%	0.11%	-0.31%	—	—
Elevance Health Inc.	-0.28%	0.30%	-0.62%	-0.27%	—	—
Intuitive Surgical Inc.	3.59%	15.55%	7.95%	18.11%	—	—
Medtronic PLC	-7.32%	-11.85%	-9.94%	-7.04%	—	—
UnitedHealth Group Inc.	2.22%	2.05%	2.44%	2.34%	—	—

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × 1,259,522 ÷ 238,587,006 = 0.53%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	AmerisourceBergen Corp. economic profit margin improved from 2020 to 2021 and from 2021 to 2022.

AmerisourceBergen Corp. (NYSE:ABC)

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