Express Scripts Holding Co. (NASDAQ:ESRX)

Current Provision

The current provision for income taxes demonstrates a fluctuating but overall increasing trend from 2013 to 2017. It started at approximately 1,677,700 thousand US dollars in 2013, decreased to about 1,461,700 thousand in 2014, then rose to 1,826,400 thousand in 2015. Following a decline to 1,496,900 thousand in 2016, the figure substantially increased to 2,076,200 thousand in 2017, marking the highest value in the five-year period.

Deferred Benefit

The deferred benefit consistently presented as a negative value throughout the analyzed period, indicating deferred tax benefits rather than expenses. Starting from -573,700 thousand in 2013, the deferred benefit decreased in absolute terms to -430,500 thousand in 2014, and then slightly fluctuated in subsequent years, reaching -462,100 thousand in 2015 and -497,400 thousand in 2016. In 2017, there was a notable sharp increase in the deferred benefit to -1,678,900 thousand, representing the largest deferred benefit within the time span.

Provision for Income Taxes

The overall provision for income taxes, which aggregates current and deferred items, presented a downward trend over the years. Beginning at 1,104,000 thousand in 2013, it slightly decreased to 1,031,200 thousand in 2014, before rising to 1,364,300 thousand in 2015. Thereafter, it declined again to 999,500 thousand in 2016 and sharply dropped to 397,300 thousand in 2017, the lowest value observed across the five years. The substantial decline in 2017 coincides with the large increase in deferred benefits during the same year, implying a significant impact of deferred tax adjustments on the total tax provision.

Statutory Federal Income Tax Rate

The statutory federal income tax rate remained constant at 35% over the entire five-year period, indicating no changes in the underlying federal tax legislation affecting the company during these years.

State Taxes, Net of Federal Benefit

State taxes, net of federal benefit, exhibited a general decline from 2.6% in 2013 to a low of 0.4% in 2016, followed by a rebound to 2.1% in 2017. This fluctuation suggests variability in state tax obligations or benefits impacting the overall tax expense during the period.

Non-Controlling Interest

Non-controlling interest had a slight negative impact on the effective tax rate, reducing from -0.3% in 2013 and 2014 to -0.1% in 2017, indicating a diminishing influence of minority interests on the company's tax expenses.

Impact of the Tax Act

The year 2017 saw a significant one-time tax adjustment related to the Tax Act, resulting in a large negative impact of -28%, which substantially lowered the effective tax rate for that year.

Recognition of Previously Unrecognized PolyMedica Corporation (Liberty) Tax Benefit

In 2016, a notable tax benefit of -11.6% was recognized, reflecting the acknowledgment of deferred tax assets or benefits that had not been previously accounted for, contributing to the reduced effective tax rate that year.

Investment in Foreign Subsidiaries

A modest negative impact of -0.7% was observed in 2013, with no recorded effects in subsequent years, suggesting limited or stabilized foreign tax implications after that year.

Other, Net

The “Other, net” category displayed volatility, ranging from a small negative impact of -0.2% in 2013 and 2015 to a more pronounced negative impact of -3.1% in 2014 and -1.0% in 2016, indicating miscellaneous tax-related adjustments affecting the overall tax rate variably.

Effective Tax Rate

The effective tax rate demonstrated a downward trend over the five-year span. It decreased from 36.4% in 2013 to 33.6% in 2014, slightly rose to 35.3% in 2015, then dropped sharply to 22.6% in 2016, and further declined to 8.1% in 2017. This decreasing trend is primarily due to the significant tax benefits recognized in 2016 and the substantial impact of the Tax Act in 2017, demonstrating effective tax rate management and the influence of legislative changes and one-time adjustments.

Allowance for doubtful accounts

The allowance showed a continuous decline from 70,900 thousand USD in 2013 to 10,400 thousand USD in 2017, indicating improved collectability or reduced credit risk over the period.

Note premium

There was a consistent decrease in note premium from 81,600 thousand USD in 2013 to 3,600 thousand USD in 2017, reflecting a reduction in associated note liabilities or amortization effects.

Tax attributes

Tax attributes experienced some fluctuation, rising from 85,900 thousand USD in 2013 to 102,900 thousand USD in 2015, followed by a dip to 72,600 in 2016, but then sharply increased to 164,900 thousand USD in 2017, suggesting a significant change in tax-related positions or benefits towards the end of the period.

Equity compensation

This item declined noticeably from 268,700 thousand USD in 2013 to 95,400 thousand USD in 2017, indicating a reduced expense or liability related to equity-based compensation arrangements over time.

Accrued expenses

Accrued expenses steadily decreased from 406,000 thousand USD in 2013 to 149,600 thousand USD in 2017, signaling a reduction in outstanding obligations or accrued costs.

Benefit of uncertain tax positions

There was a downward trend from 181,800 thousand USD in 2013 to 67,100 thousand USD in 2017, implying a reduced benefit from uncertain tax positions as tax risks or exposures diminished.

Other (asset category)

Values fluctuated, rising from 22,800 thousand USD in 2013 to a peak of 54,600 thousand USD in 2015, then declined to 38,000 thousand USD in 2017, indicating variability in miscellaneous deferred tax assets.

Gross deferred tax assets

The gross deferred tax assets showed a consistent and substantial decline from 1,117,700 thousand USD in 2013 to 529,000 thousand USD in 2017, suggesting significant utilization or write-downs of these assets.

Valuation allowance

The valuation allowance fluctuated, starting at -66,900 thousand USD in 2013, increasing negatively to -92,400 thousand USD in 2015, then improving sharply to -31,200 thousand USD in 2016, before worsening again to -124,000 thousand USD in 2017. This volatility reflects changing assessments of realizability of deferred tax assets.

Net deferred tax assets

These assets decreased steadily from 1,050,800 thousand USD in 2013 to 405,000 thousand USD in 2017, mirroring the decline in gross deferred tax assets and indicating diminishing net tax benefits.

Depreciation, property and computer software differences

Negative values showed improvement from -434,300 thousand USD in 2013 to -187,400 thousand USD in 2017. This suggests a decreasing deferred tax liability related to depreciation and amortization differences.

Goodwill and intangible assets

A large negative balance reduced significantly over time from -5,585,900 thousand USD in 2013 to -2,365,400 thousand USD in 2017, indicating substantial impairment or amortization of goodwill and intangible assets.

Outside basis difference in eviCore

This liability appeared only in 2017 with a value of -357,000 thousand USD, reflecting a newly recognized deferred tax liability related to an outside basis difference in the eviCore segment.

Other (liability category)

These liabilities increased negatively from -15,800 thousand USD in 2013 to -47,300 thousand USD in 2016 before improving somewhat to -27,500 thousand USD in 2017, indicating fluctuating miscellaneous deferred tax liabilities.

Gross deferred tax liabilities

A marked decrease was observed from -6,036,000 thousand USD in 2013 to -2,937,300 thousand USD in 2017. This trend points to a significant reduction in future tax obligations or deferred tax liabilities.

Net deferred tax assets (liabilities)

There was a steady improvement in the net position from -4,985,200 thousand USD in 2013 to -2,532,300 thousand USD in 2017, though it remained negative throughout. This trend reflects a reduction in overall net deferred tax liabilities over time.

Current Deferred Tax Assets

The current deferred tax assets decreased from 455,400 thousand US dollars in 2013 to 390,800 thousand US dollars in 2014. Data for subsequent years are not available, indicating either a discontinuation of reporting or a negligible balance in this category during those years.

Noncurrent Deferred Tax Assets

Noncurrent deferred tax assets first appear in 2016 with a value of 31,100 thousand US dollars and slightly decrease to 30,100 thousand US dollars in 2017. This suggests the recognition of such assets began later during the observed period, with a small decline towards the end of the timeline.

Noncurrent Deferred Tax Liabilities

Noncurrent deferred tax liabilities consistently decreased throughout the period, dropping from 5,440,600 thousand US dollars in 2013 to 2,562,400 thousand US dollars in 2017. This downward trend indicates a significant reduction of long-term deferred tax obligations over the five years.

The financial data over the five-year period reveals notable trends in both reported and tax-adjusted figures related to assets, liabilities, equity, and net income.

Current Assets

Reported current assets increased steadily from $8,491,400 thousand in 2013 to a peak of $12,363,400 thousand in 2016 before declining slightly to $11,957,100 thousand in 2017. Adjusted current assets closely mirrored this pattern, beginning lower at $8,036,000 thousand in 2013 but aligning with reported values by 2015 and onwards, indicating adjustments diminished over time or converged with reported values.

Total Assets

Reported total assets remained relatively flat with minor fluctuations, starting at $53,548,200 thousand in 2013, dipping slightly below $52 billion in 2016, then increasing to $54,255,800 thousand in 2017. Adjusted total assets followed a similar pattern but consistently remained slightly lower than the reported values until 2017 when the difference became minimal, illustrating the effect of deferred income tax adjustments impacting asset valuation primarily in earlier years.

Total Liabilities

Reported liabilities showed a steady increase year-over-year from $31,703,400 thousand in 2013 to $36,130,500 thousand in 2017. In contrast, adjusted liabilities were considerably lower in earlier years, starting at $26,262,800 thousand in 2013 and increasing significantly to $33,568,100 thousand by 2017. The growing adjusted liabilities suggest deferred tax liabilities were initially large but reduced comparatively as a portion of total liabilities over the period.

Stockholders’ Equity

Reported stockholders’ equity declined markedly from $21,837,400 thousand in 2013 to a low of $16,236,000 thousand in 2016 before a slight recovery to $18,119,600 thousand in 2017. Adjusted equity values are higher throughout the period, decreasing from $26,822,600 thousand in 2013 to $19,808,200 thousand in 2016 and stabilizing somewhat in 2017 at $20,651,900 thousand. This pattern highlights the impact of deferred tax adjustments increasing equity values relative to reported figures, especially in earlier years.

Net Income Attribution

Reported net income attributable to Express Scripts showed consistent growth from $1,844,600 thousand in 2013 to $4,517,400 thousand in 2017, more than doubling over the period. Adjusted net income follows a similar upward trend but exhibits lower values in each year with a notable reduction in growth in the final year—rising from $1,270,900 thousand in 2013 to a peak of $2,907,000 thousand in 2016 but then declining to $2,838,500 thousand in 2017. This divergence in the last year suggests increased tax-related adjustments or other non-operational factors affecting net income.

In summary, the company’s financial position shows growth in assets and liabilities with a decrease in equity in reported terms, while tax adjustments have moderated equity and liabilities values, producing higher adjusted equity than reported equity overall. Net income continues to grow substantially on a reported basis but adjusted earnings exhibit slower growth and some volatility, reflecting the material effect of deferred income tax accounting on reported performance metrics.

Liquidity

The reported current ratio showed a fluctuating trend, beginning at 0.64 in 2013, declining slightly to 0.62 in 2014, then improving to 0.7 in 2015 and 0.75 in 2016, before decreasing again to 0.67 in 2017. The adjusted current ratio followed a very similar pattern, mirroring the reported values closely over the entire period.

Profitability Margins

The reported net profit margin consistently increased from 1.77% in 2013 to a substantial 4.51% in 2017, indicating a steady improvement in profitability. The adjusted net profit margin also rose, starting at 1.22% in 2013 and peaking at 2.9% in 2016, though it slightly decreased to 2.84% in 2017. Despite the growth, the adjusted margin remains significantly lower than the reported margin throughout the period.

Asset Efficiency

The reported total asset turnover ratio remained relatively stable, fluctuating marginally between 1.84 and 1.94 over the years, with a small declining trend observable toward 2017. The adjusted total asset turnover mirrored this pattern closely, suggesting consistent efficiency in asset utilization throughout the period.

Leverage

Reported financial leverage increased from 2.45 in 2013 to a peak of 3.19 in 2016, followed by a decline to 2.99 in 2017. Adjusted financial leverage also rose steadily from 1.98 in 2013 to 2.63 in 2017, displaying a less pronounced but consistent upward trend. The adjusted leverage was consistently lower than the reported leverage, indicating adjustments that reduce the apparent level of financial risk.

Return on Equity (ROE)

Reported ROE showed a marked upward trajectory, moving from 8.45% in 2013 to an impressive 24.93% in 2017, demonstrating strong growth in shareholder returns. The adjusted ROE experienced a similar upward trend but at significantly lower levels, starting at 4.74% in 2013 and reaching 13.74% in 2017, with a notable increase particularly between 2014 and 2016.

Return on Assets (ROA)

Reported ROA improved steadily over the period, increasing from 3.44% in 2013 to 8.33% in 2017, reflecting enhanced asset profitability. The adjusted ROA also showed growth, from 2.39% in 2013 to 5.62% in 2016, although it declined to 5.23% in 2017, suggesting some challenges in asset returns after 2016.

Overall Insights

The data indicates overall positive trends in profitability and returns, with reported figures generally outperforming adjusted figures, which may reflect the effects of deferred income tax adjustments. Liquidity remained modest, showing slight improvement mid-period but without strong upward momentum. Asset turnover was stable, indicating consistent operational efficiency. Increasing financial leverage alongside rising ROE suggests a strategy leveraging debt to enhance shareholder returns, though adjusted leverage levels imply a more conservative financial position when accounting for tax adjustments. The divergence between reported and adjusted profitability and returns highlights the material impact of tax-related adjustments on financial performance indicators.

Current Assets

Reported current assets exhibit a clear upward trend from 2013 to 2016, increasing from 8,491,400 thousand US dollars to a peak of 12,363,400 thousand US dollars. However, in 2017, there is a slight decline to 11,957,100 thousand US dollars. Adjusted current assets, which account for deferred income tax adjustments, follow a very similar pattern with values slightly lower than reported figures until 2014 but converging thereafter, reaching the same level as reported current assets in 2015 and onwards.

Current Ratio

The reported current ratio indicates modest improvement over the five-year span, starting at 0.64 in 2013, dipping slightly in 2014 to 0.62, then improving steadily to 0.75 in 2016, before decreasing to 0.67 in 2017. The adjusted current ratio mirrors this trajectory closely, with marginally lower values initially but identical in later years. This ratio movement suggests fluctuating but generally improving short-term liquidity until 2016, followed by a reduction in liquidity in 2017.

Summary of Trends

Overall, both reported and adjusted current assets demonstrate growth with a minor setback in the final year observed. The close alignment between reported and adjusted metrics from 2015 onward implies that deferred income tax adjustments had diminishing impact on current assets and liquidity ratios in the latter periods. The improvement in the current ratio through 2016 points to enhanced ability to cover short-term liabilities, yet the decline in 2017 signals a potential weakening in liquidity position that warrants further monitoring.

The financial data presents an analysis of both reported and adjusted net income attributable to Express Scripts over a five-year period ending in 2017, along with their respective net profit margins.

Reported Net Income

The reported net income shows a consistent and significant upward trend throughout the years. Starting at 1,844,600 thousand US dollars in 2013, it increased steadily each year, reaching 4,517,400 thousand US dollars by 2017. This represents a more than doubling of the reported net income within the five-year span, indicative of strong profitability growth.

Adjusted Net Income

Adjusted net income also exhibits a general increasing trend from 2013 to 2016, rising from 1,270,900 thousand US dollars to 2,907,000 thousand US dollars. However, in 2017, there is a notable decrease to 2,838,500 thousand US dollars, marking a slight decline compared to the previous year. Despite this, the adjusted net income in 2017 remains significantly higher than the initial value in 2013.

Reported Net Profit Margin

The reported net profit margin improves consistently over the period, starting at 1.77% in 2013 and reaching 4.51% by 2017. This demonstrates an increasing efficiency and profitability relative to revenues, nearly tripling the margin over five years.

Adjusted Net Profit Margin

The adjusted net profit margin shows a similar upward movement from 1.22% in 2013 to 2.9% in 2016. However, unlike the reported margin, it slightly declines to 2.84% in 2017. Despite the minor drop, the adjusted margin still reflects a significant improvement compared to the initial year.

In summary, both reported and adjusted net income and profit margins indicate improved financial performance over the period. The reported figures display steady growth without any decline, while the adjusted figures suggest strong growth with a modest reduction in the final year. This slight divergence between reported and adjusted results in 2017 could suggest non-recurring items or adjustments impacting the adjusted income, warranting further investigation for comprehensive understanding.

The data reveals the financial performance trends over a five-year period, focusing on reported and adjusted total assets alongside their respective asset turnover ratios.

Total Assets

Reported total assets demonstrate a relatively stable pattern with a slight fluctuation. Beginning at approximately 53.5 billion US dollars in 2013, assets remained close to this level through 2015, followed by a decline in 2016 to about 51.7 billion US dollars. There was a subsequent increase in 2017, reaching roughly 54.3 billion US dollars, the highest in the period.

Adjusted total assets follow a similar trend, maintaining close alignment with reported totals. Minor differences appear, notably in 2014 and 2016, where adjustments slightly lowered the asset values. However, the overall pattern mirrors the reported totals, including the decrease in 2016 and increase in 2017.

Total Asset Turnover Ratios

Reported total asset turnover ratios exhibit a modest decline over the five years. Starting at 1.94 in 2013, the ratio decreases gradually to 1.84 by 2017, indicating a slight reduction in the efficiency of asset utilization.

Adjusted total asset turnover ratios closely track the reported ratios, with only minor numerical differences. The pattern confirms the observed trend of slowly diminishing asset turnover efficiency, concluding at 1.85 in 2017.

Overall, the data suggests that while total assets remained fairly consistent with some yearly fluctuations, the ability to generate revenue from those assets experienced a slight decline. The closeness of reported and adjusted figures indicates that adjustments related to deferred income taxes had minimal impact on these particular financial metrics during the analyzed timeframe.

The analysis of the financial data over the five-year period reveals several important trends in the company's asset base, equity, and leverage ratios, both reported and adjusted for deferred income tax impacts.

Total Assets

The reported total assets fluctuate moderately, starting at approximately $53.5 billion at the end of 2013, rising slightly in 2014, then declining through 2016 before increasing again in 2017 to about $54.3 billion. Adjusted total assets follow the same overall pattern but are slightly lower each year, reflecting the impact of deferred income tax adjustments. The difference between reported and adjusted asset values narrows in later years, suggesting that the tax adjustments have less impact on total assets over time.

Stockholders’ Equity

Reported stockholders’ equity shows a continuous decline from about $21.8 billion in 2013 to approximately $16.2 billion in 2016, before a moderate recovery to $18.1 billion in 2017. The adjusted equity figures, which incorporate income tax adjustments, start considerably higher at $26.8 billion in 2013 but similarly decline over the years to $19.8 billion in 2016 and then rise slightly to $20.7 billion in 2017. This pattern indicates that deferred tax assets or adjustments significantly enhance the equity base, although the overall downward trend suggests consistent equity erosion likely due to losses, dividends, or other comprehensive factors.

Financial Leverage

The reported financial leverage ratio increases from 2.45 in 2013 to a peak of 3.19 in 2016, indicating rising reliance on debt relative to equity. In 2017, this ratio declines somewhat to 2.99, reflecting the partial equity rebound or asset growth. The adjusted leverage ratios are lower in all years, beginning at 1.98 in 2013 and steadily increasing to 2.63 by 2017. This discrepancy stems from the higher adjusted equity values used in the denominator. The rising leverage trend overall suggests increased financial risk, although the adjusted leverage remains more moderate compared to the reported figures.

In summary, the company exhibits relatively stable total asset levels with minor fluctuations. However, there is a clear downward trend in stockholders’ equity, softened by deferred tax adjustments, indicating potentially significant tax-related balance sheet effects. Financial leverage ratios increase over the period, pointing to elevated financial risk, though adjustments lower these ratios, suggesting that the true leverage might be less severe than it appears from reported data alone.

The financial data reveals several notable trends over the five-year period ending December 31, 2017. Reported net income attributable to the company demonstrated a consistent upward trajectory, increasing from approximately $1.84 billion in 2013 to $4.52 billion in 2017. This represents a substantial growth in profitability. Adjusted net income also followed an upward trend, rising from about $1.27 billion in 2013 to $2.84 billion in 2017, although the increase was more moderate compared to reported figures. Interestingly, adjusted net income peaked in 2016 at around $2.91 billion before slightly declining in 2017.

Total stockholders' equity under reported figures showed a declining trend from $21.8 billion in 2013 to $16.2 billion in 2016, before rebounding to $18.1 billion in 2017. Conversely, adjusted total equity consistently decreased from $26.8 billion in 2013 to $19.8 billion in 2016, with a modest recovery to $20.7 billion in 2017. The adjusted equity values remained higher than reported figures throughout the period, suggesting the exclusion of certain accounting adjustments in the adjusted measure.

Return on equity (ROE) displayed substantial growth on a reported basis, rising from 8.45% in 2013 to a peak of 24.93% in 2017. Adjusted ROE also increased, though at a slower pace, from 4.74% in 2013 to 13.74% in 2017, with a peak of 14.68% in 2016. The divergence between reported and adjusted ROE highlights the impact of the adjustments on profitability metrics relative to equity.

Profitability Trends

Both reported and adjusted net income showed growth, with reported figures increasing more sharply. The slight decline in adjusted net income in 2017 after a peak in 2016 suggests some variability in adjusted earnings performance.

Equity Trends

Total stockholders' equity declined until 2016 under both reported and adjusted metrics, followed by a partial recovery in 2017. Adjusted equity values were persistently higher than reported, indicating adjustments that likely exclude certain liabilities or accounting effects.

Return on Equity Insights

Reported ROE improved markedly, nearly tripling from 2013 to 2017, reflecting strong earnings growth relative to declining equity. Adjusted ROE also improved but remained significantly lower than reported ROE, indicating that adjustments reduce the profitability ratio relative to equity.

Overall, the data suggests a strong increase in reported profitability and efficiency in the use of equity over the period, accompanied by declining equity balances that impact return ratios. The adjustments applied to income and equity moderate reported results but still show similar directional trends.

The financial data reveals several key trends in Express Scripts Holding Co.'s performance over the five-year period ending December 31, 2017. Both reported and adjusted figures show notable growth, though with varying magnitudes and trajectories.

Net Income

The reported net income attributable to Express Scripts increased consistently each year, rising from approximately $1.84 billion in 2013 to about $4.52 billion in 2017. This indicates strong profitability growth. The adjusted net income, which likely excludes certain tax effects and non-recurring items, also showed a general upward trend, increasing from roughly $1.27 billion in 2013 to a peak of $2.91 billion in 2016 before declining slightly to $2.84 billion in 2017. The divergence between reported and adjusted net income widens over time, suggesting increasing impacts from tax adjustments or deferred tax considerations on the company's bottom line.

Total Assets

Reported total assets remained relatively stable across the timeframe, fluctuating modestly around the $53.5 billion to $54.3 billion range without a clear directional trend. The adjusted total assets mirrored this pattern closely. The stability in total assets suggests consistent investment levels and capital management despite variations in profitability.

Return on Assets (ROA)

Reported ROA showed a marked improvement, advancing from 3.44% in 2013 to a robust 8.33% in 2017. This represents significant enhancement in asset utilization efficiency from an accounting standpoint. Adjusted ROA also increased over the years but to a lesser extent, climbing from 2.39% in 2013 to a peak of 5.62% in 2016, before declining to 5.23% in 2017. The divergence in the ROA metrics further emphasizes the impact of the adjustments on profitability measures, with reported ROA benefiting more from recognized tax-related effects or deferred items. The slight decline in adjusted ROA in 2017 warrants attention and may indicate emerging challenges in asset profitability once adjustments are taken into account.

Overall, the data depicts a company experiencing solid growth in reported earnings and improved efficiency in asset utilization. However, the adjusted figures suggest that underlying earnings growth, excluding tax and other adjustments, is somewhat less pronounced and has softened slightly in the final year. The stable asset base supports these earnings trends without significant capital expansion or contraction.