Stock Analysis on Net

Express Scripts Holding Co. (NASDAQ:ESRX)

This company has been moved to the archive! The financial data has not been updated since October 31, 2018.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Express Scripts Holding Co., balance sheet: goodwill and intangible assets

US$ in thousands

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Customer contracts 17,579,000 17,570,500 17,570,300 17,571,400 17,602,300
Trade names 232,500 226,600 226,600 226,600 226,600
Miscellaneous 8,700 8,700 116,600 111,600
Pharmacy Benefit Management (PBM) 17,811,500 17,805,800 17,805,600 17,914,600 17,940,500
Customer relationships 2,272,700 39,400 120,100 120,200 127,300
Trade names 56,100 35,700 35,700 35,800 35,800
Other Business Operations 2,328,800 75,100 155,800 156,000 163,100
Other intangible assets, gross carrying amount 20,140,300 17,880,900 17,961,400 18,070,600 18,103,600
Accumulated amortization (10,514,400) (9,244,000) (7,491,700) (5,815,400) (4,088,000)
Other intangible assets, net carrying amount 9,625,900 8,636,900 10,469,700 12,255,200 14,015,600
Goodwill 31,099,700 29,277,800 29,277,300 29,280,900 29,305,400
Goodwill and other intangibles 40,725,600 37,914,700 39,747,000 41,536,100 43,321,000

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Item Description The company
Other intangible assets, net carrying amount Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Express Scripts Holding Co. other intangible assets, net carrying amount decreased from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Express Scripts Holding Co. goodwill increased from 2015 to 2016 and from 2016 to 2017.
Goodwill and other intangibles Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Express Scripts Holding Co. goodwill and other intangibles decreased from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Adjustments to Financial Statements: Removal of Goodwill

Express Scripts Holding Co., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Adjustment to Total Assets
Total assets (as reported) 54,255,800 51,744,900 53,243,300 53,798,900 53,548,200
Less: Goodwill 31,099,700 29,277,800 29,277,300 29,280,900 29,305,400
Total assets (adjusted) 23,156,100 22,467,100 23,966,000 24,518,000 24,242,800
Adjustment to Total Express Scripts Stockholders’ Equity
Total Express Scripts stockholders’ equity (as reported) 18,119,600 16,236,000 17,372,800 20,054,200 21,837,400
Less: Goodwill 31,099,700 29,277,800 29,277,300 29,280,900 29,305,400
Total Express Scripts stockholders’ equity (adjusted) (12,980,100) (13,041,800) (11,904,500) (9,226,700) (7,468,000)

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).


Express Scripts Holding Co., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Express Scripts Holding Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Total Asset Turnover
Reported total asset turnover 1.84 1.94 1.91 1.88 1.94
Adjusted total asset turnover 4.32 4.46 4.25 4.11 4.29
Financial Leverage
Reported financial leverage 2.99 3.19 3.06 2.68 2.45
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE 24.93% 20.97% 14.25% 10.01% 8.45%
Adjusted ROE
Return on Assets (ROA)
Reported ROA 8.33% 6.58% 4.65% 3.73% 3.44%
Adjusted ROA 19.51% 15.15% 10.33% 8.19% 7.61%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Express Scripts Holding Co. adjusted total asset turnover ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Express Scripts Holding Co. adjusted ROA improved from 2015 to 2016 and from 2016 to 2017.

Express Scripts Holding Co., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in thousands)
Revenues 100,064,600 100,287,500 101,751,800 100,887,100 104,098,800
Total assets 54,255,800 51,744,900 53,243,300 53,798,900 53,548,200
Activity Ratio
Total asset turnover1 1.84 1.94 1.91 1.88 1.94
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenues 100,064,600 100,287,500 101,751,800 100,887,100 104,098,800
Adjusted total assets 23,156,100 22,467,100 23,966,000 24,518,000 24,242,800
Activity Ratio
Adjusted total asset turnover2 4.32 4.46 4.25 4.11 4.29

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 100,064,600 ÷ 54,255,800 = 1.84

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 100,064,600 ÷ 23,156,100 = 4.32

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Express Scripts Holding Co. adjusted total asset turnover ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in thousands)
Total assets 54,255,800 51,744,900 53,243,300 53,798,900 53,548,200
Total Express Scripts stockholders’ equity 18,119,600 16,236,000 17,372,800 20,054,200 21,837,400
Solvency Ratio
Financial leverage1 2.99 3.19 3.06 2.68 2.45
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 23,156,100 22,467,100 23,966,000 24,518,000 24,242,800
Adjusted total Express Scripts stockholders’ equity (12,980,100) (13,041,800) (11,904,500) (9,226,700) (7,468,000)
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 Financial leverage = Total assets ÷ Total Express Scripts stockholders’ equity
= 54,255,800 ÷ 18,119,600 = 2.99

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Express Scripts stockholders’ equity
= 23,156,100 ÷ -12,980,100 =


Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Express Scripts 4,517,400 3,404,400 2,476,400 2,007,600 1,844,600
Total Express Scripts stockholders’ equity 18,119,600 16,236,000 17,372,800 20,054,200 21,837,400
Profitability Ratio
ROE1 24.93% 20.97% 14.25% 10.01% 8.45%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Express Scripts 4,517,400 3,404,400 2,476,400 2,007,600 1,844,600
Adjusted total Express Scripts stockholders’ equity (12,980,100) (13,041,800) (11,904,500) (9,226,700) (7,468,000)
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 ROE = 100 × Net income attributable to Express Scripts ÷ Total Express Scripts stockholders’ equity
= 100 × 4,517,400 ÷ 18,119,600 = 24.93%

2 Adjusted ROE = 100 × Net income attributable to Express Scripts ÷ Adjusted total Express Scripts stockholders’ equity
= 100 × 4,517,400 ÷ -12,980,100 =


Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Express Scripts 4,517,400 3,404,400 2,476,400 2,007,600 1,844,600
Total assets 54,255,800 51,744,900 53,243,300 53,798,900 53,548,200
Profitability Ratio
ROA1 8.33% 6.58% 4.65% 3.73% 3.44%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Express Scripts 4,517,400 3,404,400 2,476,400 2,007,600 1,844,600
Adjusted total assets 23,156,100 22,467,100 23,966,000 24,518,000 24,242,800
Profitability Ratio
Adjusted ROA2 19.51% 15.15% 10.33% 8.19% 7.61%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

2017 Calculations

1 ROA = 100 × Net income attributable to Express Scripts ÷ Total assets
= 100 × 4,517,400 ÷ 54,255,800 = 8.33%

2 Adjusted ROA = 100 × Net income attributable to Express Scripts ÷ Adjusted total assets
= 100 × 4,517,400 ÷ 23,156,100 = 19.51%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Express Scripts Holding Co. adjusted ROA improved from 2015 to 2016 and from 2016 to 2017.