Stock Analysis on Net
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 Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Express Scripts Holding Co., income tax expense (benefit), continuing operations

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Federal 1,991,900 1,456,200 1,722,000 1,315,800 1,483,400
State 79,300 37,900 102,700 146,100 192,300
Foreign 5,000 2,800 1,700 (200) 2,000
Current provision 2,076,200 1,496,900 1,826,400 1,461,700 1,677,700
Federal (1,677,300) (392,600) (429,000) (395,600) (520,000)
State (1,600) (104,700) (32,900) (32,000) (45,300)
Foreign — (100) (200) (2,900) (8,400)
Deferred benefit (1,678,900) (497,400) (462,100) (430,500) (573,700)
Provision for income taxes 397,300 999,500 1,364,300 1,031,200 1,104,000

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
Current provision Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Express Scripts Holding Co. current provision decreased from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Deferred benefit Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Express Scripts Holding Co. deferred benefit decreased from 2015 to 2016 and from 2016 to 2017.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Express Scripts Holding Co. provision for income taxes decreased from 2015 to 2016 and from 2016 to 2017.

Effective Income Tax Rate (EITR)

Express Scripts Holding Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Statutory federal income tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
State taxes, net of federal benefit 2.10% 0.40% 0.70% 2.00% 2.60%
Non-controlling interest -0.10% -0.20% -0.20% -0.30% -0.30%
Impact of the Tax Act -28.00% 0.00% 0.00% 0.00% 0.00%
Recognition of previously unrecognized PolyMedica Corporation (Liberty) tax benefit 0.00% -11.60% 0.00% 0.00% 0.00%
Investment in foreign subsidiaries 0.00% 0.00% 0.00% 0.00% -0.70%
Other, net -0.90% -1.00% -0.20% -3.10% -0.20%
Effective tax rate 8.10% 22.60% 35.30% 33.60% 36.40%

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
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Express Scripts Holding Co. effective tax rate decreased from 2015 to 2016 and from 2016 to 2017.

Components of Deferred Tax Assets and Liabilities

Express Scripts Holding Co., components of deferred tax assets and liabilities

US$ in thousands

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Allowance for doubtful accounts 10,400 11,100 13,400 41,800 70,900
Note premium 3,600 24,700 43,100 61,900 81,600
Tax attributes 164,900 72,600 102,900 99,800 85,900
Equity compensation 95,400 148,500 144,100 166,300 268,700
Accrued expenses 149,600 293,400 327,300 365,400 406,000
Benefit of uncertain tax positions 67,100 132,400 172,100 203,500 181,800
Other 38,000 47,800 54,600 42,000 22,800
Gross deferred tax assets 529,000 730,500 857,500 980,700 1,117,700
Valuation allowance (124,000) (31,200) (92,400) (87,500) (66,900)
Net deferred tax assets 405,000 699,300 765,100 893,200 1,050,800
Depreciation, property and computer software differences (187,400) (278,600) (257,400) (356,500) (434,300)
Goodwill and intangible assets (2,365,400) (3,945,600) (4,534,700) (5,044,400) (5,585,900)
Outside basis difference in eviCore (357,000) — — — —
Other (27,500) (47,300) (42,800) (24,700) (15,800)
Gross deferred tax liabilities (2,937,300) (4,271,500) (4,834,900) (5,425,600) (6,036,000)
Net deferred tax assets (liabilities) (2,532,300) (3,572,200) (4,069,800) (4,532,400) (4,985,200)

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
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Express Scripts Holding Co. gross deferred tax assets decreased from 2015 to 2016 and from 2016 to 2017.
Net deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Express Scripts Holding Co. net deferred tax assets decreased from 2015 to 2016 and from 2016 to 2017.
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. Express Scripts Holding Co. net deferred tax assets (liabilities) increased from 2015 to 2016 and from 2016 to 2017.

Deferred Tax Assets and Liabilities, Classification

Express Scripts Holding Co., deferred tax assets and liabilities, classification

US$ in thousands

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Current deferred tax assets — — — 390,800 455,400
Noncurrent deferred tax assets (included in Other assets) 30,100 31,100 — — —
Noncurrent deferred tax liabilities 2,562,400 3,603,300 4,069,800 4,923,200 5,440,600

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
Noncurrent deferred tax assets (included in Other 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. Express Scripts Holding Co. noncurrent deferred tax assets (included in Other assets) increased from 2015 to 2016 but then slightly decreased from 2016 to 2017.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Express Scripts Holding Co. noncurrent deferred tax liabilities decreased from 2015 to 2016 and from 2016 to 2017.

Adjustments to Financial Statements: Removal of Deferred Taxes

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 Current Assets
Current assets (as reported) 11,957,100 12,363,400 12,059,500 10,568,100 8,491,400
Less: Current deferred tax assets, net — — — 390,800 455,400
Current assets (adjusted) 11,957,100 12,363,400 12,059,500 10,177,300 8,036,000
Adjustment to Total Assets
Total assets (as reported) 54,255,800 51,744,900 53,243,300 53,798,900 53,548,200
Less: Current deferred tax assets, net — — — 390,800 455,400
Less: Noncurrent deferred tax assets, net 30,100 31,100 — — —
Total assets (adjusted) 54,225,700 51,713,800 53,243,300 53,408,100 53,092,800
Adjustment to Total Liabilities
Total liabilities (as reported) 36,130,500 35,501,100 35,862,800 33,734,900 31,703,400
Less: Noncurrent deferred tax liabilities, net 2,562,400 3,603,300 4,069,800 4,923,200 5,440,600
Total liabilities (adjusted) 33,568,100 31,897,800 31,793,000 28,811,700 26,262,800
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: Net deferred tax assets (liabilities) (2,532,300) (3,572,200) (4,069,800) (4,532,400) (4,985,200)
Total Express Scripts stockholders’ equity (adjusted) 20,651,900 19,808,200 21,442,600 24,586,600 26,822,600
Adjustment to Net Income Attributable To Express Scripts
Net income attributable to Express Scripts (as reported) 4,517,400 3,404,400 2,476,400 2,007,600 1,844,600
Add: Deferred income tax expense (benefit) (1,678,900) (497,400) (462,100) (430,500) (573,700)
Net income attributable to Express Scripts (adjusted) 2,838,500 2,907,000 2,014,300 1,577,100 1,270,900

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 Deferred Taxes (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
Current Ratio
Reported current ratio 0.67 0.75 0.70 0.62 0.64
Adjusted current ratio 0.67 0.75 0.70 0.60 0.61
Net Profit Margin
Reported net profit margin 4.51% 3.39% 2.43% 1.99% 1.77%
Adjusted net profit margin 2.84% 2.90% 1.98% 1.56% 1.22%
Total Asset Turnover
Reported total asset turnover 1.84 1.94 1.91 1.88 1.94
Adjusted total asset turnover 1.85 1.94 1.91 1.89 1.96
Financial Leverage
Reported financial leverage 2.99 3.19 3.06 2.68 2.45
Adjusted financial leverage 2.63 2.61 2.48 2.17 1.98
Return on Equity (ROE)
Reported ROE 24.93% 20.97% 14.25% 10.01% 8.45%
Adjusted ROE 13.74% 14.68% 9.39% 6.41% 4.74%
Return on Assets (ROA)
Reported ROA 8.33% 6.58% 4.65% 3.73% 3.44%
Adjusted ROA 5.23% 5.62% 3.78% 2.95% 2.39%

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 current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Express Scripts Holding Co. adjusted current ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Express Scripts Holding Co. adjusted net profit margin ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.
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 deteriorated significantly from 2016 to 2017.
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.		 Express Scripts Holding Co. adjusted financial leverage ratio increased from 2015 to 2016 and from 2016 to 2017.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Express Scripts Holding Co. adjusted ROE improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Express Scripts Holding Co. adjusted ROA improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

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

Adjusted Current Ratio

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)
Current assets 11,957,100 12,363,400 12,059,500 10,568,100 8,491,400
Current liabilities 17,846,400 16,428,100 17,155,300 17,016,900 13,235,300
Liquidity Ratio
Current ratio1 0.67 0.75 0.70 0.62 0.64
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted current assets 11,957,100 12,363,400 12,059,500 10,177,300 8,036,000
Current liabilities 17,846,400 16,428,100 17,155,300 17,016,900 13,235,300
Liquidity Ratio
Adjusted current ratio2 0.67 0.75 0.70 0.60 0.61

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 Current ratio = Current assets ÷ Current liabilities
= 11,957,100 ÷ 17,846,400 = 0.67

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 11,957,100 ÷ 17,846,400 = 0.67

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Express Scripts Holding Co. adjusted current ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Net Profit Margin

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
Revenues 100,064,600 100,287,500 101,751,800 100,887,100 104,098,800
Profitability Ratio
Net profit margin1 4.51% 3.39% 2.43% 1.99% 1.77%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Express Scripts 2,838,500 2,907,000 2,014,300 1,577,100 1,270,900
Revenues 100,064,600 100,287,500 101,751,800 100,887,100 104,098,800
Profitability Ratio
Adjusted net profit margin2 2.84% 2.90% 1.98% 1.56% 1.22%

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 Net profit margin = 100 × Net income attributable to Express Scripts ÷ Revenues
= 100 × 4,517,400 ÷ 100,064,600 = 4.51%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Express Scripts ÷ Revenues
= 100 × 2,838,500 ÷ 100,064,600 = 2.84%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Express Scripts Holding Co. adjusted net profit margin ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

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 Deferred Taxes
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 54,225,700 51,713,800 53,243,300 53,408,100 53,092,800
Activity Ratio
Adjusted total asset turnover2 1.85 1.94 1.91 1.89 1.96

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 ÷ 54,225,700 = 1.85

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 deteriorated significantly from 2016 to 2017.

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets 54,225,700 51,713,800 53,243,300 53,408,100 53,092,800
Adjusted total Express Scripts stockholders’ equity 20,651,900 19,808,200 21,442,600 24,586,600 26,822,600
Solvency Ratio
Adjusted financial leverage2 2.63 2.61 2.48 2.17 1.98

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
= 54,225,700 ÷ 20,651,900 = 2.63

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.		 Express Scripts Holding Co. adjusted financial leverage ratio increased from 2015 to 2016 and from 2016 to 2017.

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Express Scripts 2,838,500 2,907,000 2,014,300 1,577,100 1,270,900
Adjusted total Express Scripts stockholders’ equity 20,651,900 19,808,200 21,442,600 24,586,600 26,822,600
Profitability Ratio
Adjusted ROE2 13.74% 14.68% 9.39% 6.41% 4.74%

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 × Adjusted net income attributable to Express Scripts ÷ Adjusted total Express Scripts stockholders’ equity
= 100 × 2,838,500 ÷ 20,651,900 = 13.74%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Express Scripts Holding Co. adjusted ROE improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Express Scripts 2,838,500 2,907,000 2,014,300 1,577,100 1,270,900
Adjusted total assets 54,225,700 51,713,800 53,243,300 53,408,100 53,092,800
Profitability Ratio
Adjusted ROA2 5.23% 5.62% 3.78% 2.95% 2.39%

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 × Adjusted net income attributable to Express Scripts ÷ Adjusted total assets
= 100 × 2,838,500 ÷ 54,225,700 = 5.23%

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