Express Scripts Holding Co. (NASDAQ:ESRX)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrates a consistent upward trend from 2013 to 2016, increasing from approximately 1.82 billion to 3.38 billion. However, in 2017, there is a slight decline to about 3.27 billion, indicating a marginal decrease after the prior years' growth.

Cost of Capital

The cost of capital remains relatively stable throughout the five-year period, fluctuating slightly around the range of 10.84% to 11.87%. There is a small decrease from 11.74% in 2013 to 10.84% in 2016, with a minor increase to 10.89% in 2017, suggesting consistent capital costs with limited volatility.

Invested Capital

Invested capital shows a steady decline from 2013 through 2016, decreasing from approximately 41.29 billion to 35.71 billion. In 2017, this trend reverses marginally, with invested capital increasing to about 37.01 billion, indicating a slight reinvestment or capital growth after a period of reduction.

Economic Profit

Economic profit is negative across all years, but the magnitude of the losses shows a consistent improvement from a loss of roughly 3.03 billion in 2013 to a smaller loss of about 495 million in 2016. In 2017, economic profit worsens somewhat, with a loss of approximately 757 million, suggesting challenges in fully generating returns above the cost of capital despite the improvements up to 2016.

Summary of Trends

Overall, the data reflect a company that improved operational profitability significantly over the observed period, as evidenced by the growing NOPAT through 2016. The stable cost of capital indicates consistent financing conditions. The decrease in invested capital until 2016 could reflect efficient asset utilization or divestment, while the slight uptick in 2017 may signal renewed investment. Despite operational gains, economic profit remains negative each year, although losses narrowed through 2016 before deteriorating in 2017. This pattern suggests that, although the company improved its core operations, generating returns above its capital costs remains a challenge, especially after 2016.

Net Income Attributable to Express Scripts

The net income attributable to the company showed a consistent upward trend throughout the five-year period. Starting from approximately 1.84 billion US dollars in 2013, the net income increased annually, reaching about 4.52 billion US dollars by the end of 2017. This represents a more than doubling of net income over the duration analyzed, indicating strong profitability growth.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures likewise showed an overall increasing trend, rising from roughly 1.82 billion US dollars in 2013 to over 3.27 billion US dollars in 2017. The growth is generally steady, with an especially notable increase between 2015 and 2016. However, unlike net income, NOPAT slightly declined in 2017 compared to the previous year, decreasing from approximately 3.38 billion to 3.27 billion US dollars.

Comparative Insights

Both net income and NOPAT demonstrate sustained profitability improvements over the analyzed timeframe, highlighting effective operational and financial management. The disparity in 2017, where net income continued rising but NOPAT decreased, may suggest changes in operating efficiency, tax impact, or other factors affecting post-tax operating profits.

Provision for Income Taxes

The provision for income taxes exhibits fluctuation over the five-year period. It begins at 1,104,000 thousand US dollars at the end of 2013, then decreases slightly in 2014 to 1,031,200 thousand US dollars. A notable increase occurs in 2015, with the provision reaching 1,364,300 thousand US dollars, followed by a decline in 2016 to 999,500 thousand US dollars. By the end of 2017, there is a significant drop to 397,300 thousand US dollars, marking the lowest figure in the observed timeframe.

Cash Operating Taxes

Cash operating taxes demonstrate more variability with an overall upward trajectory throughout the period. Starting at 1,890,614 thousand US dollars in 2013, the amount decreases to 1,669,615 thousand US dollars in 2014. Subsequently, a sharp increase is observed in 2015, reaching 2,004,540 thousand US dollars. In 2016, cash operating taxes decline again to 1,743,214 thousand US dollars before climbing significantly to 2,292,125 thousand US dollars by the end of 2017, the highest level recorded in the five years.

Comparative Observations

Overall, the provision for income taxes and cash operating taxes do not follow the same trend patterns. While the provision for income taxes peaks in 2015 before steadily declining to its lowest point in 2017, cash operating taxes show a general increasing trend despite year-to-year fluctuations. The divergence between these two tax-related metrics may suggest differences in tax accounting policies, timing differences, or changes in cash flow management relating to tax obligations.

Total Reported Debt & Leases

The total reported debt and leases show a fluctuating trend over the five-year period. The value decreased slightly from approximately 14.27 billion USD at the end of 2013 to about 13.86 billion USD in 2014. However, from 2014 onward, the debt increased steadily, reaching around 16.25 billion USD by the end of 2017. This reflects a rising leverage position in the latter years.

Total Express Scripts Stockholders’ Equity

Stockholders’ equity demonstrates a declining trend from 2013 through 2016, dropping from roughly 21.84 billion USD in 2013 to about 16.24 billion USD in 2016. This decline represents a significant reduction in equity over this period. Notably, in 2017, there is a reversal of this downward trend with equity increasing to about 18.12 billion USD, suggesting a partial recovery or accumulation of retained earnings or capital injection during that year.

Invested Capital

Invested capital also declined consistently from 2013 to 2016, moving from approximately 41.29 billion USD to around 35.71 billion USD. In 2017, a modest increase to about 37.01 billion USD is observed. This trend indicates a contraction in the total capital employed by the company initially, followed by a slight expansion towards the end of the period.

Economic Profit

The economic profit exhibited a significant upward trend over the analyzed period, starting from a substantial negative figure of -3,027,795 thousand US dollars in 2013 and improving to -756,861 thousand US dollars by 2017. This trajectory reflects a continuous reduction in losses, indicating enhanced profitability or more efficient capital utilization, although economic profit remained negative throughout the period.

Invested Capital

The invested capital demonstrated a downward trend from 41,289,230 thousand US dollars in 2013 to 35,712,343 thousand US dollars in 2016, before experiencing a slight increase to 37,007,152 thousand US dollars in 2017. This overall decrease suggests a strategic reduction or optimization of capital investment, except for the minor uptick in the final year that may indicate new investments or asset acquisitions.

Economic Spread Ratio

The economic spread ratio, reflecting the return on invested capital over the cost of capital, showed consistent improvement from -7.33% in 2013 to -2.05% in 2017, with an intermediate low of -1.38% in 2016. Despite the gradual positive movement, the ratio remained negative in all years, indicating that the company’s returns were below its capital costs, though approaching closer to breakeven.

The financial data reveals notable trends in economic profit, revenues, and economic profit margin over a five-year period.

Economic Profit

There is a clear upward trend in economic profit, with losses decreasing significantly from approximately -3.03 billion US dollars in 2013 to about -0.76 billion US dollars in 2017. This improvement suggests enhanced value creation or reduced economic costs over the years, implying better operational efficiency or strategic adjustments.

Revenues

Revenues remain relatively stable across the five years, fluctuating within a narrow range around 100 billion US dollars annually. This stability indicates consistent sales or service delivery without substantial growth or decline.

Economic Profit Margin

The economic profit margin shows a consistent upward trajectory, improving from -2.91% in 2013 to -0.76% in 2017. Although still negative, the margin approaches closer to breakeven, reflecting progress in generating profit relative to revenue and possibly better cost management or increased operational leverage.

Overall, the data indicates that despite stable revenues, the company has made progress in reducing its economic losses and improving profitability ratios, demonstrating enhanced financial health over the analyzed period.