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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

Regeneron Pharmaceuticals Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	3,215,097)	3,674,128)	7,856,069)	3,761,743)	2,305,860)
Cost of capital²	5.72%	5.70%	5.64%	5.59%	5.73%
Invested capital³	11,998,500)	12,287,700)	10,786,500)	8,423,300)	6,771,900)

Economic profit⁴	2,529,064)	2,973,121)	7,248,134)	3,290,874)	1,917,533)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 3,215,097 – 5.72% × 11,998,500 = 2,529,064

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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.	Regeneron Pharmaceuticals Inc. economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Regeneron Pharmaceuticals Inc., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	3,953,600)	4,338,400)	8,075,300)	3,513,200)	2,115,800)
Deferred income tax expense (benefit)¹	(837,800)	(746,400)	(147,100)	75,600)	(130,600)
Increase (decrease) in deferred revenue²	37,900)	32,400)	(120,200)	148,100)	294,000)
Increase (decrease) in equity equivalents³	(799,900)	(714,000)	(267,300)	223,700)	163,400)
Interest expense	73,000)	59,400)	57,300)	56,900)	30,200)
Interest expense, operating lease liability⁴	4,718)	3,546)	3,546)	3,546)	3,546)
Adjusted interest expense	77,718)	62,946)	60,846)	60,446)	33,746)
Tax benefit of interest expense⁵	(16,321)	(13,219)	(12,778)	(12,694)	(7,087)
Adjusted interest expense, after taxes⁶	61,397)	49,728)	48,069)	47,753)	26,660)
(Gain) loss on marketable securities	—)	—)	—)	(29,000)	—)
Investment income, before taxes	—)	—)	—)	(29,000)	—)
Tax expense (benefit) of investment income⁷	—)	—)	—)	6,090)	—)
Investment income, after taxes⁸	—)	—)	—)	(22,910)	—)
Net operating profit after taxes (NOPAT)	3,215,097)	3,674,128)	7,856,069)	3,761,743)	2,305,860)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in deferred revenue.

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 87,700 × 5.38% = 4,718

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 77,718 × 21.00% = 16,321

⁶ Addition of after taxes interest expense to net income.

⁷ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 0 × 21.00% = 0

⁸ 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.	Regeneron Pharmaceuticals Inc. NOPAT decreased from 2021 to 2022 and from 2022 to 2023.

Regeneron Pharmaceuticals Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense	245,700)	520,400)	1,250,500)	297,200)	313,300)
Less: Deferred income tax expense (benefit)	(837,800)	(746,400)	(147,100)	75,600)	(130,600)
Add: Tax savings from interest expense	16,321)	13,219)	12,778)	12,694)	7,087)
Less: Tax imposed on investment income	—)	—)	—)	6,090)	—)
Cash operating taxes	1,099,821)	1,280,019)	1,410,378)	228,204)	450,987)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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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.	Regeneron Pharmaceuticals Inc. cash operating taxes decreased from 2021 to 2022 and from 2022 to 2023.

Regeneron Pharmaceuticals Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Finance lease liabilities, current portion	—)	—)	719,700)	—)	—)
Long-term debt	1,982,900)	1,981,400)	1,980,000)	1,978,500)	—)
Finance lease liabilities, excluding current portion	720,000)	720,000)	—)	717,200)	713,900)
Operating lease liability¹	87,700)	68,200)	68,200)	68,200)	68,200)
Total reported debt & leases	2,790,600)	2,769,600)	2,767,900)	2,763,900)	782,100)
Stockholders’ equity	25,973,100)	22,664,000)	18,768,800)	11,025,300)	11,089,700)
Net deferred tax (assets) liabilities²	(2,575,400)	(1,723,700)	(876,900)	(718,700)	(791,400)
Deferred revenue³	585,600)	547,700)	515,300)	635,500)	1,210,700)
Equity equivalents⁴	(1,989,800)	(1,176,000)	(361,600)	(83,200)	419,300)
Accumulated other comprehensive (income) loss, net of tax⁵	80,900)	238,800)	26,200)	(29,300)	(21,100)
Adjusted stockholders’ equity	24,064,200)	21,726,800)	18,433,400)	10,912,800)	11,487,900)
Construction in progress⁶	(1,345,000)	(980,500)	(767,700)	(724,500)	(644,800)
Marketable securities⁷	(13,511,300)	(11,228,200)	(9,647,100)	(4,528,900)	(4,853,300)
Invested capital	11,998,500)	12,287,700)	10,786,500)	8,423,300)	6,771,900)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

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

³ Addition of deferred revenue.

⁴ Addition of equity equivalents to stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in progress.

⁷ Subtraction of marketable securities.

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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.	Regeneron Pharmaceuticals Inc. invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Regeneron Pharmaceuticals Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	102,773,356)	102,773,356)	÷	105,109,056)	=	0.98	0.98	×	5.79%	=	5.66%
Long-term debt and finance lease liabilities³	2,248,000)	2,248,000)	÷	105,109,056)	=	0.02	0.02	×	2.92% × (1 – 21.00%)	=	0.05%
Operating lease liability⁴	87,700)	87,700)	÷	105,109,056)	=	0.00	0.00	×	5.38% × (1 – 21.00%)	=	0.00%
Total:	105,109,056)					1.00					5.72%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	85,367,935)	85,367,935)	÷	87,599,135)	=	0.97	0.97	×	5.79%	=	5.65%
Long-term debt and finance lease liabilities³	2,163,000)	2,163,000)	÷	87,599,135)	=	0.02	0.02	×	2.86% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	68,200)	68,200)	÷	87,599,135)	=	0.00	0.00	×	5.20% × (1 – 21.00%)	=	0.00%
Total:	87,599,135)					1.00					5.70%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	67,550,508)	67,550,508)	÷	70,225,408)	=	0.96	0.96	×	5.79%	=	5.57%
Long-term debt and finance lease liabilities³	2,606,700)	2,606,700)	÷	70,225,408)	=	0.04	0.04	×	2.02% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	68,200)	68,200)	÷	70,225,408)	=	0.00	0.00	×	5.20% × (1 – 21.00%)	=	0.00%
Total:	70,225,408)					1.00					5.64%

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

¹ US$ in thousands

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	53,019,577)	53,019,577)	÷	55,762,977)	=	0.95	0.95	×	5.79%	=	5.51%
Long-term debt and finance lease liabilities³	2,675,200)	2,675,200)	÷	55,762,977)	=	0.05	0.05	×	2.02% × (1 – 21.00%)	=	0.08%
Operating lease liability⁴	68,200)	68,200)	÷	55,762,977)	=	0.00	0.00	×	5.20% × (1 – 21.00%)	=	0.01%
Total:	55,762,977)					1.00					5.59%

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

¹ US$ in thousands

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,013,264)	42,013,264)	÷	42,795,364)	=	0.98	0.98	×	5.79%	=	5.69%
Long-term debt and finance lease liabilities³	713,900)	713,900)	÷	42,795,364)	=	0.02	0.02	×	3.05% × (1 – 21.00%)	=	0.04%
Operating lease liability⁴	68,200)	68,200)	÷	42,795,364)	=	0.00	0.00	×	5.20% × (1 – 21.00%)	=	0.01%
Total:	42,795,364)					1.00					5.73%

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

¹ US$ in thousands

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Regeneron Pharmaceuticals Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	2,529,064)	2,973,121)	7,248,134)	3,290,874)	1,917,533)
Invested capital²	11,998,500)	12,287,700)	10,786,500)	8,423,300)	6,771,900)
Performance Ratio
Economic spread ratio³	21.08%	24.20%	67.20%	39.07%	28.32%
Benchmarks
Economic Spread Ratio, Competitors⁴
AbbVie Inc.	-3.94%	5.48%	4.86%	-3.00%	7.27%
Amgen Inc.	2.80%	7.48%	7.46%	11.78%	13.99%
Bristol-Myers Squibb Co.	2.02%	-0.68%	1.57%	-14.00%	-3.67%
Danaher Corp.	-7.56%	-2.62%	-1.97%	-3.37%	-6.77%
Eli Lilly & Co.	3.24%	10.57%	12.27%	18.93%	15.76%
Gilead Sciences Inc.	5.94%	2.43%	8.96%	-4.10%	7.21%
Johnson & Johnson	0.05%	5.27%	10.34%	5.11%	4.02%
Merck & Co. Inc.	-8.50%	11.68%	11.82%	4.66%	11.24%
Pfizer Inc.	-8.88%	18.71%	11.87%	-2.85%	5.76%
Thermo Fisher Scientific Inc.	-4.50%	-2.72%	-0.90%	0.11%	-3.78%
Zoetis Inc.	9.02%	3.79%	6.57%	3.32%	4.29%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,529,064 ÷ 11,998,500 = 21.08%

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.	Regeneron Pharmaceuticals Inc. economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Regeneron Pharmaceuticals Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	2,529,064)	2,973,121)	7,248,134)	3,290,874)	1,917,533)

Revenues	13,117,200)	12,172,900)	16,071,700)	8,497,100)	7,863,400)
Add: Increase (decrease) in deferred revenue	37,900)	32,400)	(120,200)	148,100)	294,000)
Adjusted revenues	13,155,100)	12,205,300)	15,951,500)	8,645,200)	8,157,400)
Performance Ratio
Economic profit margin²	19.22%	24.36%	45.44%	38.07%	23.51%
Benchmarks
Economic Profit Margin, Competitors³
AbbVie Inc.	-4.95%	7.75%	8.29%	-6.79%	13.72%
Amgen Inc.	7.29%	11.98%	12.36%	18.85%	23.55%
Bristol-Myers Squibb Co.	3.03%	-1.06%	2.72%	-29.69%	-14.09%
Danaher Corp.	-24.83%	-6.50%	-4.92%	-9.87%	-21.95%
Eli Lilly & Co.	2.79%	9.00%	11.32%	18.94%	15.18%
Gilead Sciences Inc.	10.10%	4.10%	15.86%	-8.46%	10.25%
Johnson & Johnson	0.06%	6.33%	10.83%	6.10%	4.75%
Merck & Co. Inc.	-9.89%	14.57%	17.17%	5.55%	12.88%
Pfizer Inc.	-23.50%	20.65%	12.80%	-7.06%	13.46%
Thermo Fisher Scientific Inc.	-8.99%	-5.02%	-1.83%	0.20%	-7.79%
Zoetis Inc.	12.20%	5.88%	9.81%	5.74%	6.74%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 2,529,064 ÷ 13,155,100 = 19.22%

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.	Regeneron Pharmaceuticals Inc. economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

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