Bristol-Myers Squibb Co. (NYSE:BMY)

The analysis of current and deferred income tax expenses over the five-year period reveals notable fluctuations and trends.

Current Income Tax Expense

The current tax expense shows an overall increasing trend from 2020 to 2022, rising from 1,141 million USD in 2020 to a peak of 4,106 million USD in 2022. This is followed by a decline in the subsequent years, dropping to 3,688 million USD in 2023 and further to 2,643 million USD in 2024. The initial growth period may reflect higher taxable income or changes in tax rates, whereas the recent decrease could indicate reduced taxable income or optimization in tax strategies.

Deferred Income Tax Expense

The deferred tax expense displays a contrasting pattern with a positive value of 983 million USD in 2020 but shifts to negative values from 2021 onwards. The amounts become increasingly negative, reaching -3,288 million USD in 2023 before slightly recovering to -2,089 million USD in 2024. The negative figures suggest deferred tax benefits, possibly from temporary differences such as timing differences in recognizing revenues and expenses or the realization of deferred tax assets. The trend toward larger negative amounts indicates increasing deferred tax benefits over this period, although the reduction in negativity in 2024 might signal a partial reversal or lessening of those benefits.

Total Income Tax Provision

The total income tax provision, combining current and deferred taxes, demonstrates a declining trend overall. It decreased from 2,124 million USD in 2020 to 1,084 million USD in 2021, then experienced a mild increase to 1,368 million USD in 2022. Thereafter, it sharply declined to 400 million USD in 2023 before a modest increase to 554 million USD in 2024. This pattern indicates that despite rising current tax expenses through 2022, the substantial deferred tax benefits significantly lowered the effective tax provision, especially in the most recent years. The low provision levels in 2023 and 2024 may reflect effective tax planning or differing impacts of temporary differences in those years.

Analysis of the annual financial data reveals several noteworthy trends and fluctuations in tax-related percentages over the five-year period.

U.S. statutory Federal income tax rate

The U.S. statutory Federal income tax rate remains constant at 21% across all years, indicating a stable tax legislative environment at the federal level throughout the period.

Nondeductible R&D charges

This item shows negative values in 2020 and 2024 only, with -35.8% and -30.3% respectively, and no reported data in intermediate years. The significant negative values suggest substantial nondeductible research and development expenses in those years, which may impact taxable income.

GILTI, net of foreign derived intangible income deduction

The Global Intangible Low-Taxed Income (GILTI) component fluctuates notably. It is negative at -10% in 2020, becomes positive and relatively stable at around 8-8.2% during 2021 and 2022, decreases to 2.6% in 2023, and returns to a negative -6% in 2024. This variability indicates shifting impacts of international tax provisions and changes in foreign income composition or tax planning strategies.

Foreign tax effect of certain operations in Ireland, Puerto Rico and Switzerland

This item trends downward from a small positive 1.3% in 2020 to increasingly negative values in 2021 (-1.8%), 2022 (-5.4%), and 2023 (-10.1%), before rebounding to a positive 3.6% in 2024. Such volatility suggests fluctuations in the foreign tax environment or changes in operational results in those jurisdictions affecting the effective tax rate.

Non-U.S. tax ruling

Data is available only for 2023, showing a negative adjustment of -7.8%, implying a favorable non-U.S. tax ruling that reduced tax expense that year.

Internal transfers of intangible and other assets

The negative percentages in 2020 (-12.4%), 2021 (-12.1%), and 2022 (-1.2%) progressively move towards zero, with no data for later years. This trend suggests diminishing tax impacts from internal asset transfers over time.

U.S. Federal valuation allowance

Values start near zero in 2021 (0.1%), increase slightly to 0.8% in 2022, then reverse to negative values of -2% in 2023 and -0.5% in 2024. This indicates a shifting stance on allowance for deferred tax assets, potentially reflecting changing expectations on tax benefits realization.

U.S. Federal, state and foreign contingent tax matters

The values move from negative (-2%) in 2020, to positive in 2021 (1.9%), back to negative in 2022 (-3.9%), and then positive in 2023 (1.7%) and 2024 (5.5%). This oscillation suggests variable adjustments related to contingent tax liabilities or disputes across jurisdictions.

U.S. Federal research-based credits

The credits start positively at 2.4% in 2020, turn negative for three consecutive years (-2%, -1.8%, -2.9% in 2021-2023), then rebound to 3.5% in 2024. This indicates fluctuating recognition or utilization of federal research tax credits over the period.

Charitable contributions of inventory

This item exhibits minor fluctuation, with small positive and negative values between 0.5% and -1.2% over the years, reflecting relatively stable and limited impact on taxes from inventory donations.

Contingent value rights

Reported only in 2020 (5.3%) and 2021 (-1.3%), with no data afterward. The absence of values later suggests this item ceased to influence tax calculations or was no longer applicable.

Puerto Rico excise tax credit

Shows positive 2.1% in 2020, turning negative at -1.9% for 2021 and 2022, and no data beyond 2022, indicating diminishing or cessation of this credit's impact.

State and local taxes, net of valuation allowance

This component trends from a negative -1.5% in 2020 through small positive percentages between 0.3% and 1.3% from 2021 to 2024, indicating a gradual increase in net state and local tax liabilities or reductions in related allowances.

Foreign and other

Values start negative at -1.8% in 2020, shift to positive values between 1.6% and 2% from 2021 to 2023, and drop sharply to -4.1% in 2024. This suggests fluctuating foreign tax impacts and other miscellaneous items significantly affecting the effective tax rate.

Effective tax rate

The effective tax rate shows considerable volatility, starting strongly negative at -30.9% in 2020, shifting to a positive 13.4% and 17.7% in 2021 and 2022 respectively, declining sharply to 4.7% in 2023, and turning negative again at -6.6% in 2024. This variation reflects the combined influences of all aforementioned factors and possibly other operational or accounting effects impacting tax expense recognition.

The financial data reveals several notable trends and fluctuations over the examined periods.

Foreign net operating loss and other carryforwards

There is a significant decline from 2020 to 2022, dropping from 3,271 million to 566 million US dollars. However, this figure rebounds sharply to 2,017 million in 2023 before decreasing again to 1,521 million in 2024, indicating volatility in foreign tax-related losses.

State net operating loss and credit carryforwards

This category shows a consistent upward trend from 325 million in 2020 to 529 million in 2024, suggesting an increasing utilization or accumulation of state-level tax benefits.

U.S. Federal capital loss, net operating loss and tax credit

There is a moderate decline from 435 million in 2020 to 226 million in 2021, followed by a slight increase through 2023, ending with a substantial rise to 695 million in 2024. The sharp increase in 2024 may imply improvements in tax positions or recognition of additional credits.

Milestone payments and license fees

This item shows growth from 643 million in 2020 to a peak of 1,030 million in 2022, with a slight reduction in 2023 before increasing again to 999 million in 2024. The overall upward movement reflects strengthening revenue or contractual income related to milestones and licenses.

Capitalized research expenditures

This figure, absent in 2020 and 2021, demonstrates a strong increasing trend from 1,573 million in 2022 to 3,886 million in 2024, indicating a substantial investment in research activities that is being capitalized over recent years.

Other

The 'Other' category declines steadily from 1,677 million in 2020 to 1,284 million in 2022, followed by a recovery to 1,883 million in 2023 and a slight decrease to 1,738 million in 2024. This pattern shows moderate variability without a clear directional trend.

Deferred tax assets

A noticeable drop occurs from 6,351 million in 2020 to 3,752 million in 2021, but thereafter the deferred tax assets increase significantly to 9,368 million by 2024, reflecting potentially stronger future tax benefit expectations or adjustments.

Valuation allowance

The valuation allowance decreases from -2,809 million in 2020 to -764 million in 2023, suggesting a reduction in potential tax asset impairments. However, it marginally increases again to -929 million in 2024, indicating a minor reassessment of realizability.

Deferred tax assets net of valuation allowance

This net figure decreases from 3,542 million in 2020 to 2,696 million in 2021 but experiences a sharp increase to 8,439 million by 2024. This reflects the combined effect of increasing deferred tax assets alongside diminishing valuation allowances over time.

Acquired intangible assets

There is a consistent decline in intangible assets, from -6,612 million in 2020 to -3,781 million in 2024, which may indicate amortization or impairment of these assets.

Goodwill and other

The goodwill and other intangible line items reduce from -1,176 million in 2020 to -605 million in 2022, then fluctuate somewhat, ending at -791 million in 2024. This may reflect impairment charges or revaluations as well as possible acquisitions or disposals.

Deferred tax liabilities

This category shows a steady decrease from -7,788 million in 2020 to -4,572 million in 2024, indicating a diminishing obligation related to deferred taxes.

Deferred tax assets (liabilities), net

Initially negative at -4,246 million in 2020, this net balance improves significantly, reaching a positive 3,867 million in 2024. This change represents a turnaround in the company's net tax position, shifting from a net deferred tax liability to a net asset outlook by the end of the period.

The financial data reveals distinct trends in the deferred income taxes assets and liabilities over the five-year period ending in 2024. These trends suggest evolving tax positions and potential shifts in the company's deferred tax strategy or underlying temporary differences.

Deferred Income Taxes Assets, Non-Current

The deferred income tax assets show a generally increasing trend. Starting at US$1,161 million at the end of 2020, the value rises to US$1,439 million in 2021, experiences a slight decline to US$1,344 million in 2022, and then substantially increases to US$2,768 million by the end of 2023. The upward trajectory continues into 2024, reaching US$4,236 million. This significant growth in deferred tax assets over recent years might indicate increasing deductible temporary differences or tax credits expected to reduce future tax payments substantially.

Deferred Income Taxes Liabilities, Non-Current

The deferred income taxes liabilities exhibit a markedly decreasing trend. Beginning at a high of US$5,407 million at the end of 2020, the liabilities decline steadily to US$4,501 million in 2021 and sharply drop to US$2,166 million in 2022. The downward trend becomes even more pronounced in 2023, falling to US$338 million, and shows a marginal increase to US$369 million by the end of 2024. This sharp reduction in liabilities suggests that the company may have recognized fewer taxable temporary differences or settled previously recorded liabilities, leading to a lighter deferred tax burden.

Overall, the contrasting movements between non-current deferred income tax assets and liabilities indicate a potential rebalancing of the company's deferred tax positions. The substantial increase in deferred tax assets coupled with the significant decrease in deferred tax liabilities might reflect changes in expected future taxable income, tax planning strategies, or the resolution of timing differences related to revenue and expense recognition. These patterns are important for assessing the company's future tax obligations and their impact on profitability and cash flows.

The analysis of the financial data over the five-year period reveals several notable trends and insights across assets, liabilities, shareholders’ equity, and net earnings.

Total Assets

Both reported and adjusted total assets exhibit a consistent downward trend from 2020 to 2024. Reported total assets decreased from approximately $118.5 billion in 2020 to about $92.6 billion in 2024. Adjusted total assets follow a similar pattern, declining from $117.3 billion to $88.4 billion over the same period. The decline suggests a reduction in the company’s asset base, which may be attributed to asset disposals, depreciation, or strategic shifts in asset management.

Total Liabilities

Reported total liabilities show a decline from 2020 through 2022, dropping from around $80.6 billion to $65.7 billion, but then increase sharply to $76.2 billion by 2024. Adjusted total liabilities mirror this trajectory, initially decreasing from approximately $75.2 billion in 2020 to $63.5 billion in 2022, before rising significantly to $75.8 billion in 2024. This increase in liabilities towards the end of the period may indicate new borrowings, increased obligations, or other liabilities accruing in recent years.

Shareholders’ Equity

The reported shareholders’ equity exhibits a steady decline throughout the period, from $37.8 billion in 2020 to a substantial drop to $16.3 billion in 2024. Adjusted shareholders’ equity shows a similar but more pronounced decreasing trend, falling from $42.1 billion in 2020 to $12.5 billion in 2024. The marked decline in equity, especially notable in the final year, could reflect accumulated losses, dividend payments exceeding profits, or other equity-related adjustments impacting net worth.

Net Earnings (Loss) Attributable to the Company

There is considerable volatility in reported net earnings. The company experienced a significant loss in 2020 (-$9.0 billion), rebounded to positive earnings in 2021 ($7.0 billion), and maintained profitability through 2023 with fluctuating profits. However, in 2024, the company returned to a significant loss (-$8.9 billion). The adjusted net earnings follow a similar trend but generally report lower values, with losses in 2020 and 2024 and more moderate earnings in the intervening years. This oscillation suggests the company faced substantial challenges impacting profitability during the period, with some recovery phases but recurring losses in key years.

Overall, the financial data points to a contraction in asset size and shareholders’ equity accompanied by volatile earnings performance and an increase in liabilities in the latter years. These trends could indicate underlying operational difficulties, restructuring efforts, or changes in financial strategy. The pronounced decline in equity along with recurring net losses in specific years merit close attention for potential risks to financial stability and shareholder value.

Net Profit Margin

Both reported and adjusted net profit margins exhibit significant fluctuations over the observed periods. The reported net profit margin starts at -21.2% in 2020, improving to positive values between 13.71% and 17.83% from 2021 to 2023, before sharply declining to -18.53% in 2024. The adjusted net profit margin follows a similar pattern but presents consistently lower positive margins, peaking at 12.08% in 2021 and declining to -22.85% by 2024. This indicates increasing profitability from 2020 through 2023, with deterioration evident in the most recent year.

Total Asset Turnover

The total asset turnover ratio demonstrates a steady upward trend in both reported and adjusted terms. Reported turnover improves from 0.36 in 2020 to 0.52 in 2024, while adjusted turnover increases from 0.36 to 0.55 over the same period. These increases suggest enhanced efficiency in utilizing assets to generate sales, with the adjusted figures slightly higher than reported values in later years.

Financial Leverage

Financial leverage ratios show a moderate increase from 2020 through 2023, followed by a notable spike in 2024. The reported leverage increases from 3.13 in 2020 to 3.23 in 2023, then sharply jumps to 5.67 in 2024. Adjusted financial leverage follows a similar path, rising from 2.79 to 3.42 before surging to 7.09 in 2024. This pattern points to a significant increase in reliance on debt or other liabilities to finance assets in the most recent year, which could contribute to risk exposure.

Return on Equity (ROE)

ROE shows considerable volatility. The reported ROE begins negative at -23.84% in 2020, improves to a peak of 27.27% in 2023, and then falls drastically to -54.78% in 2024. Adjusted ROE follows the same trend, with less pronounced positive returns between 2021 and 2023, peaking at 17.54%, and then declining sharply to -88.52% in 2024. This instability suggests varying profitability and potential challenges affecting shareholders' returns, especially in the latest year.

Return on Assets (ROA)

ROA reflects improvements from negative values in 2020 to moderate positive values through 2021 to 2023, with reported ROA increasing from -7.61% to 8.43%, and adjusted ROA from -6.85% to 5.13%. However, in 2024, both metrics decline sharply to negative territory, with reported ROA at -9.66% and adjusted ROA at -12.49%. This indicates periods of operational efficiency and profitability, yet marked setbacks in asset returns in the most recent year.

The data reveals significant fluctuations in both reported and adjusted net earnings attributable to the company over the five-year period. Initially, in 2020, both reported and adjusted net earnings showed substantial losses, with reported net earnings reaching nearly -9 billion US dollars and adjusted net earnings close to -8 billion US dollars. The following years, 2021 through 2023, demonstrated a recovery trend, with reported net earnings turning positive and peaking at over 8 billion US dollars in 2023. Adjusted earnings followed a similar trajectory, improving from approximately 5.6 billion US dollars in 2021 to nearly 4.7 billion US dollars in 2023 despite a decline from the prior year.

However, in 2024, a sharp reversal occurred, with both reported and adjusted net earnings plunging back into negative territory. The reported figure declined to approximately -8.9 billion US dollars, while the adjusted figure decreased even further to about -11 billion US dollars, marking the most significant loss in the observed timeframe.

Regarding profitability, the reported net profit margin mirrored the earnings trends, moving from a negative margin of -21.2% in 2020 to positive margins exceeding 15% in 2021 and remaining robust through 2023 before falling back to a negative margin of -18.5% in 2024. Adjusted net profit margins followed a similar course but were consistently lower than the reported margins in positive years and showed more pronounced negative margins in years of loss. Notably, the adjusted margin fell from -18.9% in 2020 to a peak of 12.1% in 2021, then gradually decreased to 7.8% in 2022 and 10.5% in 2023, before plunging to -22.9% in 2024.

Overall, the company experienced substantial volatility with large swings between losses and profits. The recovery phase observed between 2021 and 2023 suggests improvements in operational or financial performance, but the sharp decline in 2024 indicates renewed challenges or adverse events impacting profitability and earnings. The adjusted figures generally reflect a more conservative profitability assessment, with lower margins and larger losses relative to reported figures, highlighting the impact of tax adjustments and other items excluded from the reported earnings.

The financial data reveals a consistent downward trend in both reported and adjusted total assets over the five-year period. Reported total assets declined from 118,481 million US dollars in 2020 to 92,603 million in 2024. Similarly, adjusted total assets decreased from 117,320 million US dollars in 2020 to 88,367 million in 2024. This indicates a gradual contraction in the asset base.

Contrasting with the asset contraction, the total asset turnover ratios—both reported and adjusted—show a clear upward trend, suggesting improving efficiency in asset utilization. The reported total asset turnover increased steadily from 0.36 in 2020 to 0.52 in 2024, while the adjusted total asset turnover rose from 0.36 to 0.55 over the same period. This implies that the company is generating higher sales per unit of asset, enhancing operational efficiency despite the shrinking asset base.

Total Assets

The decrease in total assets may reflect asset disposals, amortization, or strategic downsizing.

Asset Turnover Ratios

The upward trend in asset turnovers indicates efficient deployment of assets to generate revenue, suggesting effective management and possibly higher sales growth relative to the asset base.

Adjusted vs. Reported Figures

The close alignment between adjusted and reported figures for both assets and turnovers demonstrates consistency in the adjustments related to income tax considerations, with no significant divergence impacting the overall trends.

The financial data over the five-year period reveals several notable trends in the company's asset base, shareholders’ equity, and financial leverage ratios, both on a reported and adjusted basis.

Assets

Reported total assets exhibited a consistent decline from US$118,481 million in 2020 to US$92,603 million in 2024, indicating a gradual contraction of the company's asset base. Adjusted total assets followed a similar downward trajectory, decreasing from US$117,320 million in 2020 to US$88,367 million in 2024. The decline in adjusted assets generally paralleled the reported figures, albeit at slightly lower levels, reflecting the impact of income tax adjustments on asset valuation.

Shareholders’ Equity

Reported total shareholders’ equity decreased steadily from US$37,822 million in 2020 to US$16,335 million in 2024, representing a substantial reduction over the period. Adjusted shareholders’ equity showed a sharper decline, falling from US$42,068 million in 2020 to US$12,468 million in 2024. This more pronounced decrease in adjusted equity suggests that the effects of deferred income tax adjustments materially impacted the equity base, contributing to a lower net equity position when adjustments are considered.

Financial Leverage

Reported financial leverage, defined as the ratio of total assets to shareholders’ equity, remained relatively stable from 2020 to 2023, fluctuating slightly between 3.04 and 3.23. However, in 2024, it increased significantly to 5.67, indicating a marked rise in leverage and reliance on debt financing or other liabilities relative to equity. Adjusted financial leverage similarly showed stability from 2020 to 2022, with ratios near 2.77 to 2.99, then increased in 2023 to 3.42 and surged sharply to 7.09 in 2024. The adjusted leverage ratio's elevated level compared to the reported ratio in 2024 reflects the compounding impact of adjustments reducing equity more than total assets, thus amplifying leverage.

Overall, the data indicates a shrinking asset and equity base over the five years, accompanied by increasing financial leverage, especially pronounced in 2024. The adjusted figures highlight a steeper decline in equity and more significant leverage than the reported figures suggest, underscoring the importance of income tax-related adjustments in evaluating the company's financial position. The sharp rise in leverage ratios in the final year suggests escalating financial risk and potentially greater vulnerability to financial distress if the trend continues.

The financial data indicates significant volatility in earnings and shareholders’ equity over the analyzed periods. Reported net earnings attributable to the company fluctuate markedly, with a deep loss in 2020, subsequent gains peaking around 2023, and a substantial loss returning in 2024. Adjusted net earnings follow a similar pattern but demonstrate generally lower figures compared to reported amounts, with a pronounced decline in 2024.

Shareholders’ equity shows a downward trend across both reported and adjusted figures. Reported total equity decreases steadily from 2020 through 2024, with a particularly sharp decline apparent in the final year. Adjusted total equity mirrors this pattern, starting at a higher base but converging downward significantly, reaching its lowest point in 2024.

The return on equity (ROE) percentages emphasize the fluctuations in profitability relative to equity. Reported ROE moves from a large negative value in 2020 to positive territory in the following years, peaking in 2023 before plunging drastically to a deeply negative figure in 2024. Adjusted ROE follows similar volatility but shows consistently lower values, culminating in an even more severe negative return in 2024.

Earnings Trends

Both reported and adjusted net earnings reveal high volatility, with losses in 2020 and 2024 framing gains in the intermediate years. The adjusted earnings are persistently lower than reported figures, highlighting the impact of adjustments on profitability assessments.

Equity Trends

There is a clear downward trajectory in total shareholders’ equity, reported and adjusted. This suggests a reduction in the company's net asset base over the five-year span, with a notable acceleration of asset decline in the final year, which may raise concerns about sustainability.

Profitability (ROE)

The ROE metrics illustrate wide swings in profitability, with negative returns at the start and end of the period and intermittent periods of positive returns. The disproportionate negative returns in 2020 and 2024 indicate periods of significant loss relative to equity.

Overall, the data reflects considerable financial instability with recurring losses and declining equity values. The pronounced negative swings at both ends of the period under review may warrant a closer examination of underlying causes and potential strategic adjustments to restore financial health.

Reported and adjusted net earnings (loss) attributable to BMS

The reported net earnings exhibited significant volatility over the observed period. There was a substantial loss of approximately $9 billion at the end of 2020, followed by a recovery with positive earnings in 2021 and subsequent years through 2023, peaking at around $8 billion. However, in 2024, the figure reverted sharply to a loss close to $9 billion. Adjusted net earnings mirrored this trend with persistent losses in 2020 and 2024 but with lower profitability and smaller positive values in the intervening years, indicating ongoing challenges in maintaining consistent profit levels after adjustments.

Reported and adjusted total assets

Total assets showed a declining trend across the period. Reported total assets decreased steadily from approximately $118 billion at the end of 2020 to $92.6 billion in 2024. Adjusted total assets followed a similar downward path, starting at about $117 billion and falling to $88.4 billion in 2024. This decline suggests asset reductions or divestitures impacting the company's asset base continuously over time.

Reported and adjusted Return on Assets (ROA)

Reported ROA values fluctuated widely, beginning with a negative return of -7.61% in 2020, improving to positive figures between 6.4% and 8.43% from 2021 to 2023, then falling sharply to -9.66% in 2024. Adjusted ROA showed a similar pattern but generally lower returns than reported ROA in the positive years, moving from a negative -6.85% in 2020, peaking at 5.19% in 2021, declining to 3.76% in 2022, rising slightly to 5.13% in 2023, and then dropping significantly to -12.49% in 2024. These fluctuations indicate unstable profitability efficiency relative to assets, with especially poor returns in the first and last years.

Overall observations

The financial data points toward periods of recovery and profitability between two notable losses in 2020 and 2024. Asset contraction is consistent, which could reflect strategic portfolio adjustments or responses to market conditions. Profitability ratios reinforce a pattern of volatility, with notable declines in the initial and final periods of the data set. These dynamics suggest the company faced significant operational and financial challenges during both the beginning and the end of the reported timeframe, warranting further investigation into underlying causes.