Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Vertex Pharmaceuticals Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Federal	900,400)	779,000)	374,900)	71,377)	—)
State	46,200)	34,900)	26,500)	18,851)	13,528)
Foreign	350,100)	372,400)	141,500)	37,582)	37,194)
Current taxes	1,296,700)	1,186,300)	542,900)	127,810)	50,722)
Federal	(569,900)	(404,000)	(36,900)	510,220)	184,312)
State	(21,900)	(11,000)	(19,300)	6,700)	7,872)
Foreign	55,300)	139,100)	(98,400)	(239,579)	(24,797)
Deferred taxes	(536,500)	(275,900)	(154,600)	277,341)	167,387)
Provision for income taxes	760,200)	910,400)	388,300)	405,151)	218,109)

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
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Vertex Pharmaceuticals Inc. current taxes increased from 2021 to 2022 and from 2022 to 2023.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Vertex Pharmaceuticals Inc. deferred taxes decreased from 2021 to 2022 and from 2022 to 2023.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Vertex Pharmaceuticals Inc. provision for income taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Vertex Pharmaceuticals Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
U.S. federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State taxes, net of federal benefit	0.30%	0.60%	0.80%	0.60%	0.60%
Foreign income tax rate differential	-0.60%	-0.30%	-0.30%	0.20%	0.40%
U.S. tax on foreign earnings, net of credits	0.70%	1.90%	0.70%	2.70%	0.00%
Foreign derived intangible income deduction	-1.70%	-1.40%	-0.80%	-0.20%	0.00%
Tax credits	-6.00%	-2.20%	-6.40%	-1.80%	-4.30%
Tax rate change	0.00%	0.00%	-3.50%	-1.20%	0.00%
Stock compensation (benefit), shortfalls and cancellations	-0.80%	-0.80%	0.00%	-2.30%	-4.00%
Long-term intercompany receivable write-off	0.00%	0.00%	0.00%	-1.70%	0.00%
Uncertain tax positions	3.40%	2.70%	2.00%	1.30%	1.00%
Intra-entity transfer of intellectual property rights	0.00%	0.00%	0.00%	-6.70%	0.00%
Other	1.10%	0.00%	0.70%	1.10%	0.90%
Effective tax rate	17.40%	21.50%	14.20%	13.00%	15.60%

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
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Vertex Pharmaceuticals Inc. effective tax rate increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Vertex Pharmaceuticals Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Tax credit carryforwards	261,000)	223,000)	202,400)	406,120)	549,543)
Intangible assets	799,200)	738,500)	802,800)	507,484)	275,290)
Stock-based compensation	144,100)	124,400)	94,600)	89,203)	85,199)
Finance lease liabilities	92,100)	94,900)	103,400)	118,749)	119,160)
Operating lease assets	72,500)	79,600)	81,100)	65,046)	13,114)
R&D capitalization	919,300)	438,300)	—)	—)	—)
Other	146,600)	146,600)	196,900)	209,838)	584,052)
Gross deferred tax assets	2,434,800)	1,845,300)	1,481,200)	1,396,440)	1,626,358)
Valuation allowance	(266,600)	(237,800)	(220,400)	(213,750)	(205,192)
Deferred tax assets	2,168,200)	1,607,500)	1,260,800)	1,182,690)	1,421,166)
Property and equipment	(145,100)	(139,800)	(118,200)	(116,955)	(101,235)
Acquired intangibles	(130,200)	(130,500)	(87,000)	(87,025)	(87,160)
Operating lease liabilities	(55,600)	(63,100)	(64,800)	(63,310)	(13,118)
Other	(25,200)	(27,200)	(56,300)	(32,621)	(28,838)
Deferred tax liabilities	(356,100)	(360,600)	(326,300)	(299,911)	(230,351)
Net deferred tax assets (liabilities)	1,812,100)	1,246,900)	934,500)	882,779)	1,190,815)

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
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Vertex Pharmaceuticals Inc. gross deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Vertex Pharmaceuticals Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Vertex Pharmaceuticals Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Vertex Pharmaceuticals Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	Deferred tax assets	1,812,100)	1,246,900)	934,500)	882,779)	1,190,815)

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
Deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Vertex Pharmaceuticals Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.

Vertex Pharmaceuticals Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	22,730,200)	18,150,900)	13,432,500)	11,751,808)	8,318,465)
Less: Noncurrent deferred tax assets, net	1,812,100)	1,246,900)	934,500)	882,779)	1,190,815)
Total assets (adjusted)	20,918,100)	16,904,000)	12,498,000)	10,869,029)	7,127,650)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	17,580,400)	13,912,700)	10,100,000)	8,686,815)	6,085,244)
Less: Net deferred tax assets (liabilities)	1,812,100)	1,246,900)	934,500)	882,779)	1,190,815)
Shareholders’ equity (adjusted)	15,768,300)	12,665,800)	9,165,500)	7,804,036)	4,894,429)
Adjustment to Net Income
Net income (as reported)	3,619,600)	3,322,000)	2,342,100)	2,711,647)	1,176,810)
Add: Deferred income tax expense (benefit)	(536,500)	(275,900)	(154,600)	277,341)	167,387)
Net income (adjusted)	3,083,100)	3,046,100)	2,187,500)	2,988,988)	1,344,197)

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).

Vertex Pharmaceuticals Inc., Financial Data: Reported vs. Adjusted

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Vertex Pharmaceuticals Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	36.68%	37.20%	30.92%	43.70%	28.27%
Adjusted net profit margin	31.24%	34.11%	28.88%	48.17%	32.29%
Total Asset Turnover
Reported total asset turnover	0.43	0.49	0.56	0.53	0.50
Adjusted total asset turnover	0.47	0.53	0.61	0.57	0.58
Financial Leverage
Reported financial leverage	1.29	1.30	1.33	1.35	1.37
Adjusted financial leverage	1.33	1.33	1.36	1.39	1.46
Return on Equity (ROE)
Reported ROE	20.59%	23.88%	23.19%	31.22%	19.34%
Adjusted ROE	19.55%	24.05%	23.87%	38.30%	27.46%
Return on Assets (ROA)
Reported ROA	15.92%	18.30%	17.44%	23.07%	14.15%
Adjusted ROA	14.74%	18.02%	17.50%	27.50%	18.86%

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).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Vertex Pharmaceuticals Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Vertex Pharmaceuticals Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Vertex Pharmaceuticals Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Vertex Pharmaceuticals Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	3,619,600)	3,322,000)	2,342,100)	2,711,647)	1,176,810)
Revenues	9,869,200)	8,930,700)	7,574,400)	6,205,683)	4,162,821)
Profitability Ratio
Net profit margin¹	36.68%	37.20%	30.92%	43.70%	28.27%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	3,083,100)	3,046,100)	2,187,500)	2,988,988)	1,344,197)
Revenues	9,869,200)	8,930,700)	7,574,400)	6,205,683)	4,162,821)
Profitability Ratio
Adjusted net profit margin²	31.24%	34.11%	28.88%	48.17%	32.29%

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).

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenues
= 100 × 3,619,600 ÷ 9,869,200 = 36.68%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 3,083,100 ÷ 9,869,200 = 31.24%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Vertex Pharmaceuticals Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenues	9,869,200)	8,930,700)	7,574,400)	6,205,683)	4,162,821)
Total assets	22,730,200)	18,150,900)	13,432,500)	11,751,808)	8,318,465)
Activity Ratio
Total asset turnover¹	0.43	0.49	0.56	0.53	0.50
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenues	9,869,200)	8,930,700)	7,574,400)	6,205,683)	4,162,821)
Adjusted total assets	20,918,100)	16,904,000)	12,498,000)	10,869,029)	7,127,650)
Activity Ratio
Adjusted total asset turnover²	0.47	0.53	0.61	0.57	0.58

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).

2023 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 9,869,200 ÷ 22,730,200 = 0.43

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 9,869,200 ÷ 20,918,100 = 0.47

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	22,730,200)	18,150,900)	13,432,500)	11,751,808)	8,318,465)
Shareholders’ equity	17,580,400)	13,912,700)	10,100,000)	8,686,815)	6,085,244)
Solvency Ratio
Financial leverage¹	1.29	1.30	1.33	1.35	1.37
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	20,918,100)	16,904,000)	12,498,000)	10,869,029)	7,127,650)
Adjusted shareholders’ equity	15,768,300)	12,665,800)	9,165,500)	7,804,036)	4,894,429)
Solvency Ratio
Adjusted financial leverage²	1.33	1.33	1.36	1.39	1.46

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).

2023 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 22,730,200 ÷ 17,580,400 = 1.29

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 20,918,100 ÷ 15,768,300 = 1.33

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Vertex Pharmaceuticals Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	3,619,600)	3,322,000)	2,342,100)	2,711,647)	1,176,810)
Shareholders’ equity	17,580,400)	13,912,700)	10,100,000)	8,686,815)	6,085,244)
Profitability Ratio
ROE¹	20.59%	23.88%	23.19%	31.22%	19.34%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	3,083,100)	3,046,100)	2,187,500)	2,988,988)	1,344,197)
Adjusted shareholders’ equity	15,768,300)	12,665,800)	9,165,500)	7,804,036)	4,894,429)
Profitability Ratio
Adjusted ROE²	19.55%	24.05%	23.87%	38.30%	27.46%

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).

2023 Calculations

¹ ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 3,619,600 ÷ 17,580,400 = 20.59%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 3,083,100 ÷ 15,768,300 = 19.55%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Vertex Pharmaceuticals Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	3,619,600)	3,322,000)	2,342,100)	2,711,647)	1,176,810)
Total assets	22,730,200)	18,150,900)	13,432,500)	11,751,808)	8,318,465)
Profitability Ratio
ROA¹	15.92%	18.30%	17.44%	23.07%	14.15%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	3,083,100)	3,046,100)	2,187,500)	2,988,988)	1,344,197)
Adjusted total assets	20,918,100)	16,904,000)	12,498,000)	10,869,029)	7,127,650)
Profitability Ratio
Adjusted ROA²	14.74%	18.02%	17.50%	27.50%	18.86%

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).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 3,619,600 ÷ 22,730,200 = 15.92%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 3,083,100 ÷ 20,918,100 = 14.74%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Vertex Pharmaceuticals Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Vertex Pharmaceuticals Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)