Biogen Inc. (NASDAQ:BIIB)

Current Income Tax Expense

The current income tax expense demonstrates a consistent downward trend over the five-year period. It declined from 2,367,000 thousand US dollars in 2017 to 479,300 thousand US dollars in 2021. This represents a substantial reduction, with the most notable decreases occurring between 2017 to 2019 and continuing progressively through to 2021.

Deferred Income Tax Expense

The deferred income tax expense exhibits more fluctuation compared to the current expense. It started at 91,700 thousand US dollars in 2017 and increased to 108,300 thousand US dollars in 2018. In 2019, it dropped to 67,100 thousand US dollars, followed by an increase to 149,000 thousand US dollars in 2020. However, in 2021, there was a significant shift with the deferred tax expense turning negative to -426,800 thousand US dollars, indicating a deferred tax benefit or reversal of prior deferred tax liabilities.

Overall Income Tax Expense

The total income tax expense, which combines both current and deferred components, follows the general downward pattern seen in the current tax expense, decreasing from 2,458,700 thousand US dollars in 2017 to 52,500 thousand US dollars in 2021. The reduction is consistent each year, though the sharp decline in deferred tax in 2021 contributes markedly to the overall lower tax expense in that year. This suggests a significant tax strategy change or one-time tax event affecting the deferred tax calculation during that period.

The analyzed period reveals a significant fluctuation and general downward trend in the effective tax rate of the company from 2017 to 2021. The effective tax rate started at a high level in 2017 and decreased markedly by 2021, reaching a notably low value.

U.S. Federal Statutory Tax Rate

The rate dropped sharply from 35% in 2017 to 21% in 2018 and remained steady at 21% through 2021. This reduction aligns with tax reform efforts implemented in the United States during this period.

State Taxes

State tax rates remained relatively stable, fluctuating slightly between 0.6% and 0.8% over the five years.

Taxes on Foreign Earnings

There is a consistent negative percentage impact from taxes on foreign earnings, which grew more pronounced in 2021 at -10.5%. The values suggest reductions or credits related to foreign tax liabilities.

Tax Credits

Tax credits increased in absolute impact over the period, starting at -0.8% and moving to -3.8% by 2021, indicating an increasing role of tax credits in reducing overall tax expenses.

Purchased Intangible Assets

The impact decreased from a positive contribution in earlier years to a negative impact of -1.6% in 2021, reflecting changes in accounting or valuation of intangible assets.

Other Significant One-Time or Episodic Items

Various special items such as divestiture impacts, internal reorganizations, impairments, and reforms affected the tax rate unevenly over the years. For example, a 1% positive effect from Denmark operations divestiture appeared in 2019, while a -2.1% impact from intellectual property reorganization was recorded in the same year. The Neurimmune tax impacts turned significant in 2021 at -5.3%, and a TECFIDERA impairment had a 1.8% positive impact in 2020.

Global Intangible Low-Taxed Income (GILTI)

This item appeared starting 2018 with a steady positive impact around 1.3%-1.6%, indicating ongoing tax implications related to intangible income.

Other Permanent Items and Miscellaneous Effects

These varied moderately, with some positive and negative adjustments each year, including impacts from Swiss tax reform and impairments, reflecting nuanced tax position changes.

Effective Tax Rate Trends

The effective tax rate before U.S. tax reform declined steadily from 25% in 2017 to just 3% in 2021, highlighting significant tax planning and structural changes. The influence of the U.S. tax reform is evident in 2017 and 2018 with notable positive spikes, after which its data is less pronounced. The overall effective tax rate mirrors this decline, dropping from nearly 48% in 2017 to 3% in 2021, demonstrating strong downward pressure on the tax burden.

In summary, the financial data indicates substantial tax rate reduction over five years driven primarily by lower U.S. statutory tax rates, increased tax credits, strategic foreign tax position management, and episodic adjustments related to reorganizations and impairments. These factors collectively contribute to a markedly lower effective tax rate by the end of the period, which may reflect both regulatory changes and company-specific tax strategies.

Tax Credits

Tax credits increased steadily from 60,000 thousand USD in 2017 to 121,000 thousand USD in 2021, indicating a continuous accumulation of allowable tax benefits.

Inventory, Other Reserves, and Accruals

This category showed a generally increasing trend, rising from 147,800 thousand USD in 2017 to 199,400 thousand USD in 2021, with minor fluctuations in the intermediate years.

Intangibles, Net

Intangible assets increased sharply from 378,800 thousand USD in 2017 to a peak of 3,380,000 thousand USD in 2019, followed by a significant decline to 1,477,500 thousand USD by 2021, indicating substantial amortization or asset impairment after 2019.

Neurimmune’s Tax Basis in ADUHELM

Recorded only in 2021, the value stands at 475,800 thousand USD, reflecting a new or specific recognition related to this asset in the referenced year.

Net Operating Loss

Net operating loss values remained relatively stable around 200,000 thousand USD from 2017 to 2019, before sharply increasing to over 2 billion USD in 2020 and sustaining near that value in 2021, which may suggest implementation of significant operating losses or carryforwards during these years.

Share-Based Compensation

Share-based compensation showed a slight decrease from 26,900 thousand USD in 2017 to 23,300 thousand USD in 2020, followed by an increase to 31,700 thousand USD in 2021, indicating variable expense recognition related to employee incentives.

Other

The 'Other' category increased notably, particularly from 25,100 thousand USD in 2017 to 208,800 thousand USD in 2021, with a marked surge in 2019 and 2021, indicating either diverse miscellaneous items or one-off entries.

Deferred Tax Assets, Gross

These assets displayed a strong upward trend, rising from 848,400 thousand USD in 2017 to 4,487,200 thousand USD in 2021, reflecting expanding deferred tax benefits over the years.

Valuation Allowance

The valuation allowance showed minor negative values initially, but saw a dramatic increase in negative balance starting in 2020, reaching -1,961,300 thousand USD by 2021, likely offsetting deferred tax assets due to changes in expectations of realizability.

Deferred Tax Assets

Net deferred tax assets grew from 831,800 thousand USD in 2017 to a peak of 3,905,400 thousand USD in 2019, then declined significantly to 2,525,900 thousand USD in 2021, paralleling changes in valuation allowance and reflecting adjustments in anticipated tax benefits.

Purchased Intangible Assets

Purchased intangibles consistently showed negative values throughout the period, fluctuating between -232,800 thousand USD and -396,200 thousand USD, with a slight recovery to -256,600 thousand USD in 2021, indicating ongoing amortization or impairments of acquired intangible assets.

GILTI (Global Intangible Low-Taxed Income)

GILTI was not recorded in 2017, but from 2018 onward showed large negative values, ranging between -544,600 thousand USD and -1,381,600 thousand USD, suggesting increasing recognized tax liabilities or adjustments related to international income.

Tax Credits (Second Entry)

This row shows negative values from 2018, reaching a maximum negative of -1,617,200 thousand USD in 2019, then decreasing substantially in magnitude by 2021, which could correspond to utilization or reclassification of tax credits.

Depreciation, Amortization, and Other

This expense category increased in absolute value from -107,900 thousand USD in 2017 to -250,900 thousand USD in 2021, indicating accelerated depreciation or amortization expenses over the period.

Deferred Tax Liabilities

Deferred tax liabilities fluctuated significantly, initially recorded at -358,600 thousand USD in 2017, peaking at -3,484,100 thousand USD in 2019, then declining to -1,805,300 thousand USD by 2021, suggesting volatility in expected future tax obligations.

Deferred Tax Assets (Liabilities), Net

The net position of deferred tax assets and liabilities rose from 473,200 thousand USD in 2017 to 720,600 thousand USD in 2021, with a dip during 2019 and 2020, reflecting varying balances between deferred tax assets and liabilities over time.

Deferred Tax Asset

The deferred tax asset exhibited significant growth from 2017 to 2019, increasing from approximately 596 million US dollars to over 3.2 billion US dollars. This upward trend peaked in 2019, followed by a sharp decline in 2020 to nearly 1.37 billion US dollars. In 2021, the value experienced a modest recovery, rising slightly to around 1.42 billion US dollars.

Deferred Tax Liability

The deferred tax liability showed a similar pattern of rapid increase between 2017 and 2019, rising from about 123 million to approximately 2.81 billion US dollars. After reaching this peak in 2019, the liability decreased substantially in the subsequent years, falling to roughly 1.03 billion in 2020 and further decreasing to approximately 695 million US dollars in 2021.

Overall Observations

Both deferred tax assets and liabilities experienced notable growth over the first three years, culminating in peaks in 2019. From 2020 onwards, there was a notable reversal with significant declines in both categories, though the deferred tax asset showed a slight rebound in the final reported year. These patterns suggest substantial changes in the company's tax positions during the observed period, with potential implications on its deferred tax balances likely influenced by shifts in underlying taxable differences or changes in tax regulations or rates.

The analysis of financial data over the five-year period reveals several notable trends in the company’s asset base, liabilities, shareholders’ equity, and net income, with distinctions observed between reported and adjusted figures.

Total Assets

Reported total assets showed a general upward trend from 2017 to 2019, increasing from approximately 23.7 billion to 27.2 billion US dollars. However, a decline occurred in 2020 and 2021, bringing the assets down to about 23.9 billion by the end of 2021. Adjusted total assets follow a similar pattern but with less pronounced fluctuations, increasing from roughly 23.1 billion in 2017 to 24.0 billion in 2019, then declining to approximately 22.5 billion in 2021. The adjusted figures are consistently lower than reported totals, indicating some adjustments that reduce asset valuation over the period.

Total Liabilities

Reported total liabilities increased steadily from about 11.1 billion US dollars in 2017 to a peak of nearly 14.0 billion in 2020, before declining to approximately 12.9 billion in 2021. Conversely, adjusted total liabilities initially decreased from 10.9 billion in 2017 to 10.6 billion in 2018, followed by a moderate increase through 2019, a significant rise to 12.9 billion in 2020, and a small decrease in 2021. The adjustments appear to have a more stabilizing effect on liabilities before the sharp rise in 2020, suggesting deferred tax or similar accounting impacts affecting reported versus adjusted liabilities.

Shareholders’ Equity

The reported shareholders’ equity experienced growth from approximately 12.6 billion US dollars in 2017 to a peak of around 13.3 billion in 2019, followed by a noticeable decline to roughly 10.8 billion by 2021. Adjusted equity showed a parallel trend with slightly lower values, increasing from about 12.1 billion to 12.9 billion through 2019 before decreasing to 10.2 billion in 2021. The decline in 2020 and 2021 indicates possible impacts from net income reductions or other comprehensive income losses affecting equity.

Net Income Attributable to Shareholders

Reported net income exhibited considerable volatility, rising substantially from approximately 2.5 billion US dollars in 2017 to a peak of nearly 5.9 billion in 2019. This was followed by a sharp decline to 4.0 billion in 2020 and a further steep drop to 1.6 billion in 2021. Adjusted net income follows a similar trend: increasing to about 6.0 billion in 2019, then falling more sharply to 4.1 billion in 2020, and declining further to just over 1.1 billion in 2021. The adjustments do not materially alter the overall trend but generally present slightly higher net income figures than the reported data, except in 2021 where adjusted net income is notably lower, possibly indicating specific one-time or tax-related adjustments impacting profitability in the latest year.

Net profit margin

The reported net profit margin showed an increasing trend from 20.69% in 2017 to a peak of 40.96% in 2019, followed by a decline to 14.17% in 2021. The adjusted net profit margin follows a similar pattern, peaking at 41.42% in 2019 and then sharply decreasing to 10.28% in 2021. This suggests that profitability improved steadily through 2019 before facing significant pressure in the subsequent years.

Total asset turnover

The reported total asset turnover remained relatively stable from 2017 to 2020, fluctuating slightly around 0.52 to 0.55, but then declined to 0.46 in 2021. The adjusted figures exhibit a rising trend from 0.53 in 2017, peaking at 0.6 in 2019, and then decreasing to 0.49 in 2021. This indicates asset utilization improved until 2019 but weakened notably in the later period.

Financial leverage

The reported financial leverage ratio increased from 1.88 in 2017 to a high of 2.3 in 2020, before slightly decreasing to 2.19 in 2021. Adjusted financial leverage showed a similar trajectory, with a small dip from 1.9 in 2017 to 1.85 in 2018, then a rise reaching 2.24 in 2020 and settling at 2.21 in 2021. This reflects a general increase in leverage over time, indicating a higher reliance on debt or liabilities to finance assets.

Return on equity (ROE)

Reported ROE expanded significantly from 20.13% in 2017 to a peak of 44.13% in 2019, then decreased to 14.28% in 2021. The adjusted ROE followed a similar pattern, peaking higher at 46.09% in 2019 before declining to 11.1% in 2021. This demonstrates that shareholder returns improved substantially until 2019 but deteriorated in the ensuing years, aligning with the observed declines in net profit margins and asset turnover.

Return on assets (ROA)

The reported ROA rose steadily from 10.73% in 2017 to 21.62% in 2019 before dropping to 6.52% in 2021. The adjusted ROA also increased from 11.41% to 24.81% over 2017 to 2019 but declined to 5.03% by 2021. The diminishing ROA post-2019 signals reduced efficiency in generating returns from the asset base during the latest reported periods.

Overall trends and insights

Between 2017 and 2019, the company exhibited strong operational and financial performance, evidenced by rising profitability, improved asset efficiency, and increasing returns to equity holders. However, starting in 2020 and continuing into 2021, there is a consistent downward trend across all key metrics including net profit margin, asset turnover, ROE, and ROA. Despite increased financial leverage through this period, the declines in profitability and efficiency suggest challenges that impacted overall financial health. Adjusted figures generally mirror the reported data, indicating that the exclusion of income tax effects did not materially alter the observed performance trends.

The analysis of the financial data indicates a varied performance trend over the five-year period examined. The reported net income attributable to Biogen Inc. exhibited an increase from 2017 to 2019, reaching a peak in 2019, followed by a notable decline in 2020 and a further decrease in 2021. Similarly, the adjusted net income follows a comparable pattern, with the highest value recorded in 2019, subsequent reduction in 2020, and a more significant drop in 2021.

Reported Net Income Attributable to Biogen Inc.

The reported net income increased steadily from approximately 2.54 billion US dollars in 2017 to about 5.89 billion US dollars in 2019. However, the value decreased to around 4 billion US dollars in 2020 and further declined sharply to approximately 1.56 billion US dollars by the end of 2021.

Adjusted Net Income Attributable to Biogen Inc.

The adjusted net income shows a similar trend, rising from around 2.63 billion US dollars in 2017 to nearly 6 billion US dollars in 2019. This figure subsequently fell to roughly 4.15 billion US dollars in 2020 and further declined to about 1.13 billion US dollars in 2021, indicating possibly more significant adjustments or impacts during the latest year.

Reported Net Profit Margin

The reported net profit margin displayed an upward trend from 20.69% in 2017 to a peak of 40.96% in 2019. This was followed by a substantial decline to 29.76% in 2020 and a steep decrease down to 14.17% in 2021, suggesting a deterioration in profitability relative to revenue.

Adjusted Net Profit Margin

The adjusted net profit margin mirrors the pattern of the reported margin, increasing from 21.43% in 2017 to 41.42% in 2019, then decreasing to 30.86% in 2020 before a sharp fall to 10.28% in 2021. The lower margins in 2021 reflect reduced profitability after adjustments, possibly due to increased costs or reduced income not captured in the reported figures alone.

Overall, the data reveals a peak in both income and profit margins in 2019, followed by a marked decline in the subsequent two years. The sharper decrease observed in 2021 for both reported and adjusted figures indicates considerable challenges impacting earnings and profitability in that year. The adjusted figures suggest that after accounting for special items or tax effects, the income and profits have declined even more pronouncedly in the latest period.

Reported Total Assets

The reported total assets increased steadily from 23,652,600 thousand US dollars in 2017 to 27,234,300 thousand US dollars in 2019. After peaking in 2019, there was a decline to 24,618,900 thousand US dollars in 2020, followed by a further decrease to 23,877,300 thousand US dollars in 2021. This indicates an overall growth phase until 2019, succeeded by contraction in the asset base in the subsequent two years.

Adjusted Total Assets

The adjusted total assets showed a more subdued trend with an increase from 23,056,700 thousand US dollars in 2017 to 24,002,200 thousand US dollars in 2019. Thereafter, adjusted assets declined to 23,249,400 thousand US dollars in 2020 and continued decreasing to 22,462,200 thousand US dollars in 2021. The adjusted figures reflect a similar but less pronounced pattern compared to reported assets, with a moderate rise followed by a progressive decline.

Reported Total Asset Turnover

The reported total asset turnover ratio remained relatively stable between 2017 and 2020, varying slightly between 0.52 and 0.55. This indicates a consistent efficiency in generating revenue from assets during this period. However, in 2021, the ratio dropped significantly to 0.46, suggesting a reduction in the efficiency of asset utilization in generating sales or revenues during that year.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio exhibited an upward trend from 0.53 in 2017 to a peak of 0.60 in 2019, indicating improving asset efficiency. This was followed by a decrease to 0.58 in 2020 and a more pronounced decline to 0.49 in 2021. Overall, despite the decline in the final year, the adjusted turnover ratios suggest better performance in asset utilization compared to the reported figures, particularly in the 2018–2019 period.

Overall Analysis

Both reported and adjusted total assets demonstrate a growth phase until 2019, followed by a decline through 2021. The decline in total asset turnover ratios in 2021, both reported and adjusted, may indicate challenges related to asset utilization efficiency. The adjusted financial data presents slightly more favorable asset turnover ratios than reported data, suggesting that adjustments for deferred income taxes potentially improve the portrayal of operational efficiency. The simultaneous contraction in asset base and turnover in 2021 points to potential operational or market difficulties impacting the company’s financial performance in that year.

The financial data indicates a general trend of fluctuation in the reported and adjusted total assets over the five-year period. From 2017 to 2019, both reported and adjusted total assets show a growth trajectory, peaking in 2019. Following this peak, there is a decline observed in 2020 and 2021. The adjusted total assets consistently remain below the reported figures each year, reflecting adjustments related to income tax considerations.

Shareholders’ equity, both reported and adjusted, experiences a modest increase from 2017 through 2019, reaching the highest values in 2019. However, a notable decline occurs in 2020, with only a slight recovery in 2021. Similar to total assets, adjusted shareholders’ equity is systematically lower than the reported figures, indicating ongoing adjustments applied to reported earnings.

Financial leverage ratios reveal an increasing trend when considering the reported data, rising steadily from 1.88 in 2017 to a peak of 2.3 in 2020, followed by a slight drop to 2.19 in 2021. Conversely, the adjusted financial leverage ratio remains steadier from 2017 through 2019, with values close to 1.85-1.9, before experiencing a marked increase in 2020. This adjusted ratio sustains the higher level in 2021, slightly above 2.2.

Total assets

Reported total assets grow 15% from 2017 to 2019, then decline by approximately 12% by 2021. Adjusted total assets exhibit a similar pattern, with overall growth until 2019, followed by a decrease through 2021.

Shareholders’ equity

Reported equity shows steady growth until 2019 (+6% approximately), then declines significantly by over 19% in 2020, with only a minor recovery in 2021. Adjusted equity follows the same pattern but remains consistently lower, indicating the impact of deferred income tax adjustments.

Financial leverage

Reported leverage ratio increases from under 2 to a peak above 2.3, driven largely by the drop in equity in 2020. Adjusted leverage remained relatively stable initially but rises sharply after 2019, reflecting similar leverage dynamics once tax adjustments are considered.

In summary, the data shows a phase of asset and equity growth until 2019, followed by notable declines in 2020 and 2021, which affect leverage ratios correspondingly. Adjustments for deferred income tax reduce both assets and equity values consistently, slightly moderating the reported trends but maintaining the same overall trajectory. The rise in financial leverage in the latter part of the period suggests increased reliance on liabilities relative to equity, highlighting potential shifts in the company's capital structure or operational performance during these years.

Over the five-year period from 2017 to 2021, net income attributable to the company experienced significant fluctuations. Both reported and adjusted net income showed an upward trend from 2017 through 2019, peaking in 2019 with reported net income at approximately 5.89 billion US dollars and adjusted net income slightly higher at roughly 5.96 billion US dollars. However, in 2020, there was a notable decline to around 4 billion US dollars reported and 4.15 billion US dollars adjusted. This downward trajectory continued sharply in 2021, with net income falling to 1.56 billion (reported) and 1.13 billion (adjusted) US dollars respectively, marking the lowest point in the five-year span.

Shareholders’ equity followed a somewhat different pattern. Reported total equity increased gradually from about 12.6 billion US dollars at the end of 2017 to a peak of 13.3 billion US dollars in 2019. Subsequently, it decreased significantly in 2020 to approximately 10.7 billion US dollars and then showed a slight recovery in 2021, reaching approximately 10.9 billion US dollars. Adjusted total shareholders’ equity displayed a similar trend with values steadily rising from 12.1 billion US dollars in 2017 to nearly 12.9 billion US dollars in 2019, before declining to about 10.4 billion in 2020 and further to 10.2 billion US dollars in 2021.

The return on equity (ROE) metrics, both reported and adjusted, mirrored the income and equity trends observed. ROE improved markedly from 2017 to 2019, reaching a high of 44.13% reported and 46.09% adjusted in 2019. In 2020, ROE declined yet remained at relatively high levels (37.39% reported and 40.04% adjusted). The most pronounced decrease occurred in 2021, where ROE dropped sharply to 14.28% reported and 11.1% adjusted. This sharp decline indicates less efficient use of shareholders’ equity to generate net income in that year.

Overall, the data illustrates a period of growth and strong performance through 2019, followed by a significant downturn in 2020 and especially 2021 across all reported and adjusted metrics. The decline in net income and ROE in the latter years suggests operational or market challenges impacting profitability and equity returns, while the contraction in shareholders’ equity signals potential asset reductions, shareholder distributions, or losses not fully offset by earnings in the most recent years.

Net Income Trends

Growth from 2017 to 2019 followed by decline in 2020 and sharp fall in 2021.

Shareholders’ Equity Trends

Gradual increase through 2019, followed by notable decreases in 2020 and stabilization at a lower level in 2021.

Return on Equity Trends

Strong improvement through 2019 with peak ROE values, moderate decline in 2020, and sharp decrease in 2021, reflecting lowered profitability relative to equity.

Overall Insights

Performance peaked in 2019 with subsequent challenges leading to reduced profitability, equity base contraction, and diminished returns to shareholders in the last two years.

Net Income Trends

The reported net income attributable to Biogen Inc. exhibited a rising trend from 2017 through 2019, increasing from approximately $2.54 billion to nearly $5.89 billion. However, from 2019 onwards, a decline is evident, with reported net income dropping to about $4 billion in 2020 and further to $1.56 billion in 2021. The adjusted net income follows a similar pattern, starting at about $2.63 billion in 2017, peaking at roughly $5.96 billion in 2019, then decreasing to about $4.15 billion in 2020, and sharply falling to $1.13 billion in 2021. This indicates significant challenges affecting profitability particularly after 2019.

Total Assets Analysis

Reported total assets grew from $23.65 billion in 2017 to a peak of approximately $27.23 billion in 2019, followed by a reduction to around $24.82 billion in 2020 and $23.88 billion in 2021. Adjusted total assets show a steadier but declining trend starting at $23.06 billion in 2017, rising modestly to $24 billion in 2019, and then decreasing to $23.25 billion in 2020 and $22.46 billion in 2021. This pattern suggests that asset base expansion was more pronounced in reported figures than in adjusted ones and that the company experienced asset contraction after 2019, possibly reflecting divestitures, impairments, or other adjustments.

Return on Assets (ROA) Evaluation

Reported ROA indicates strong profitability improvements from 10.73% in 2017 to a high of 21.62% in 2019, followed by a decline to 16.25% in 2020 and a sharper fall to 6.52% in 2021. Adjusted ROA reveals a similar but more pronounced pattern, increasing from 11.41% in 2017 to a peak of 24.81% in 2019, then decreasing to 17.85% in 2020 and dropping further to 5.03% in 2021. The alignment between reported and adjusted ROA suggests that non-recurring tax items significantly impacted these returns. The declining ROA after 2019 points to reduced efficiency in asset utilization or lower profitability margins in recent years.

Overall Observations

The company’s financial performance demonstrates robust growth up to 2019, with increasing net income, asset base, and profitability metrics. Post-2019, a noticeable downward trend in income and profitability is apparent, concurrent with a reduction in asset size. The decreasing returns on assets imply diminished operational efficiency or adverse market conditions affecting earnings. Adjusted figures generally reflect a more conservative and less volatile perspective, yet they confirm the overall decline in financial performance in the latest periods.