Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted 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)

The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. Biogen evaluates the realizability of the deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. In December 2018 Biogen elected to recognize deferred taxes associated with the global intangible low-taxed income (GILTI) tax calculations.

In October 2016 the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory. This standard eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity transfers of assets other than inventory within Biogen’s consolidated group, both current and deferred, are recorded as a prepaid tax or deferred charge and recognized through the consolidated statements of income when the asset is transferred.

Biogen accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. Biogen evaluates uncertain tax positions on a quarterly basis and considers various factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. Biogen also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense.

Source: 10-K (filing date: 2019-02-06).

Biogen Inc., income tax expense (benefit), continuing operations

USD $ in thousands

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Federal
	State
	Foreign
	Current
	Federal
	State
	Foreign
	Deferred
	Income tax expense

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Biogen Inc.’s current increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Biogen Inc.’s deferred increased from 2016 to 2017 and from 2017 to 2018.
Income tax expense	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Biogen Inc.’s income tax expense increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

Biogen Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	U.S. federal statutory tax rate
	State taxes
	Taxes on foreign earnings
	Credits and net operating loss utilization
	Purchased intangible assets
	Manufacturing deduction
	Other permanent items
	2017 Tax Act
	GILTI
	Impairment of ZINBRYTA related tax assets
	Other
	Effective tax rate

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Biogen Inc.’s effective tax rate increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Biogen Inc., components of deferred tax assets and liabilities

USD $ in thousands

		Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Tax credits
	Inventory, other reserves, and accruals
	Intangibles, net
	Net operating loss
	Share-based compensation
	Other
	Deferred tax assets, gross
	Valuation allowance
	Deferred tax assets
	Purchased intangible assets
	GILTI
	Tax credits
	Depreciation, amortization and other
	Deferred tax liabilities
	Deferred tax assets and liabilities, net

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Item	Description	The company
Deferred tax assets, gross	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Biogen Inc.’s deferred tax assets, gross declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Biogen Inc.’s deferred tax assets declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Deferred tax assets and liabilities, net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Biogen Inc.’s deferred tax assets and liabilities, net declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Biogen Inc., deferred tax assets and liabilities, classification

USD $ in thousands

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Deferred tax asset
	Deferred tax liability

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Item	Description	The company
Deferred tax asset	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.	Biogen Inc.’s deferred tax asset declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Deferred tax liability	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Biogen Inc.’s deferred tax liability increased from 2016 to 2017 and from 2017 to 2018.

Biogen Inc., adjustments to financial data

USD $ in thousands

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Biogen Inc. Shareholders’ Equity
	Total Biogen Inc. shareholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Biogen Inc. shareholders’ equity (adjusted)
	Adjustment to Net Income Attributable To Biogen Inc.
	Net income attributable to Biogen Inc. (as reported)
	Add: Deferred income tax expense (benefit)
	Net income attributable to Biogen Inc. (adjusted)

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Biogen Inc., Financial Data: Reported vs. Adjusted

Biogen Inc., adjusted ratios

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Biogen Inc.’s adjusted net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Biogen Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.
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.	Biogen Inc.’s adjusted financial leverage declined from 2016 to 2017 and from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Biogen Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Biogen Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Biogen Inc., Ratios: Reported vs. Adjusted

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income attributable to Biogen Inc.
	Revenues
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income attributable to Biogen Inc.
	Revenues
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

¹ Net profit margin = 100 × Net income attributable to Biogen Inc. ÷ Revenues
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income attributable to Biogen Inc. ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Biogen Inc.’s adjusted net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Revenues
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Revenues
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Biogen Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Total assets
	Total Biogen Inc. shareholders’ equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted total assets
	Adjusted total Biogen Inc. shareholders’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

¹ Financial leverage = Total assets ÷ Total Biogen Inc. shareholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Biogen Inc. shareholders’ equity
= hidden ÷ hidden = hidden

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.	Biogen Inc.’s adjusted financial leverage declined from 2016 to 2017 and from 2017 to 2018.

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income attributable to Biogen Inc.
	Total Biogen Inc. shareholders’ equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income attributable to Biogen Inc.
	Adjusted total Biogen Inc. shareholders’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

¹ ROE = 100 × Net income attributable to Biogen Inc. ÷ Total Biogen Inc. shareholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income attributable to Biogen Inc. ÷ Adjusted total Biogen Inc. shareholders’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Biogen Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income attributable to Biogen Inc.
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income attributable to Biogen Inc.
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

¹ ROA = 100 × Net income attributable to Biogen Inc. ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income attributable to Biogen Inc. ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Biogen Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

	Biogen Inc.	Other companies (not purchased previously)
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Biogen Inc. (BIIB)

Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Biogen Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Biogen Inc., 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)