Stock Analysis on Net

Gilead Sciences Inc. (NASDAQ:GILD)

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Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

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Income Tax Expense (Benefit)

Gilead Sciences Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Federal
State
Foreign
Current
Federal
State
Foreign
Deferred
Income tax expense (benefit)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Gilead Sciences Inc. current decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Gilead Sciences Inc. deferred increased from 2019 to 2020 and from 2020 to 2021.
Income tax expense (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Gilead Sciences Inc. income tax expense (benefit) increased from 2019 to 2020 and from 2020 to 2021.

Effective Income Tax Rate (EITR)

Gilead Sciences Inc., effective income tax rate (EITR) reconciliation

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Federal statutory tax rate
State taxes, net of federal benefit
Foreign earnings at different rates
Research and other credits
US tax on foreign earnings
Foreign-derived intangible income deduction
Deferred tax, intra-entity transfer of intangible assets
Settlement of tax examinations
Acquired IPR&D and related charges
Changes in valuation allowance
Non-taxable unrealized (gain) loss on investment
Other
Effective tax rate, before effects of Tax Reform
Transition tax
Deferred tax revaluation
Effective tax rate

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Effective tax rate, before effects of Tax Reform Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Gilead Sciences Inc. effective tax rate, before effects of Tax Reform increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Components of Deferred Tax Assets and Liabilities

Gilead Sciences Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net operating loss carryforwards
Stock-based compensation
Reserves and accruals not currently deductible
Excess of tax basis over book basis of intangible assets
Upfront and milestone payments
Deferred revenue
Depreciation related
Research and other credit carryforwards
Equity investments
Liability related to future royalties
Other, net
Deferred tax assets before valuation allowance
Valuation allowance
Deferred tax assets
Property, plant and equipment
Excess of book basis over tax basis of intangible assets
Intangibles
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax assets before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Gilead Sciences Inc. deferred tax assets before valuation allowance increased from 2019 to 2020 and from 2020 to 2021.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Gilead Sciences Inc. deferred tax assets increased from 2019 to 2020 and from 2020 to 2021.
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. Gilead Sciences Inc. net deferred tax assets (liabilities) decreased from 2019 to 2020 and from 2020 to 2021.

Deferred Tax Assets and Liabilities, Classification

Gilead Sciences Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Deferred tax asset
Deferred tax liability

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax asset 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. Gilead Sciences Inc. deferred tax asset decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.
Deferred tax liability Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Gilead Sciences Inc. deferred tax liability increased from 2019 to 2020 and from 2020 to 2021.

Adjustments to Financial Statements: Removal of Deferred Taxes

Gilead Sciences Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total Gilead Stockholders’ Equity
Total Gilead stockholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total Gilead stockholders’ equity (adjusted)
Adjustment to Net Income Attributable To Gilead
Net income attributable to Gilead (as reported)
Add: Deferred income tax expense (benefit)
Net income attributable to Gilead (adjusted)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


Gilead Sciences Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Gilead Sciences Inc., adjusted financial ratios

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Gilead Sciences Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Gilead Sciences Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
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.
Gilead Sciences Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Gilead Sciences Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Gilead Sciences Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Gilead Sciences Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Gilead
Product sales
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Gilead
Product sales
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Net profit margin = 100 × Net income attributable to Gilead ÷ Product sales
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Gilead ÷ Product sales
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Gilead Sciences Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Product sales
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Product sales
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Product sales ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Product sales ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Gilead Sciences Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Financial Leverage

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Gilead stockholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Gilead stockholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Total Gilead stockholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Gilead stockholders’ equity
= ÷ =

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.
Gilead Sciences Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Gilead
Total Gilead stockholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Gilead
Adjusted total Gilead stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROE = 100 × Net income attributable to Gilead ÷ Total Gilead stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income attributable to Gilead ÷ Adjusted total Gilead stockholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Gilead Sciences Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Gilead
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Gilead
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net income attributable to Gilead ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income attributable to Gilead ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Gilead Sciences Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.