Eli Lilly & Co. (NYSE:LLY)

Current Tax Expense

The current tax expense exhibits a consistent and notable increase over the five-year period. Starting at approximately $1.17 billion in 2020, it rises to about $4.77 billion by the end of 2024. This upward trajectory suggests a growing taxable income or adjustments leading to higher current tax liabilities year over year.

Deferred Tax Benefit

The deferred tax benefit shows a negative value throughout the period, indicating that it acts as a tax credit or reduction in future tax liabilities. Starting at approximately -$134.5 million in 2020, the benefit significantly deepens, reaching around -$2.68 billion in 2024. This increase in deferred tax benefit magnitude may reflect growing temporary differences or timing variances in recognizing tax expenses, which effectively reduce the total tax burden recognized in the current period.

Income Taxes

The overall income tax expense, which is the net result of current tax expense and deferred tax benefit, shows an initial decline from about $1.04 billion in 2020 to approximately $573.8 million in 2021. It remains relatively stable in 2022 before rising substantially again to $2.09 billion by 2024. This trend suggests that while the company manages significant deferred tax benefits, the current tax expense increases outweigh these benefits over time, leading to a net increase in income tax expenses in the most recent year.

Summary

Overall, the data indicates a pattern of escalating current tax expenses coupled with increasing deferred tax benefits. Despite the substantial deferred tax benefits reducing the expense burden, the rising current tax liabilities ultimately drive an upward trend in net income tax expense by the end of the period. This pattern may imply growing profitability or changes in tax regulations affecting current liabilities more than deferred tax benefits can offset.

The analyzed financial data reveals notable trends in the statutory and effective income tax rates over a five-year period ending in 2024.

U.S. Federal Statutory Tax Rate

The statutory tax rate remained constant at 21% throughout the entire period from 2020 to 2024, indicating no legislative changes affecting the baseline tax rate applicable to the company.

Effective Income Tax Rate

The effective income tax rate displayed significant fluctuations across the years. It started at 14.33% in 2020 and decreased steadily to a low of 8.25% by 2022. However, in 2023, the effective tax rate rose sharply to 20.05%, approaching the statutory rate, before declining again to 16.49% in 2024.

This pattern suggests varying impacts of deductions, credits, or other tax strategies influencing taxable income differently each year. The low effective rates in 2021 and 2022 may reflect favorable tax planning or one-time benefits, whereas the spike in 2023 indicates either reduced preferential treatments or increased taxable income components subject to higher tax burdens. The partial reduction in 2024 implies some restoration of tax efficiencies, though still above the earlier lows.

The data reveals several notable trends in financial items over the five-year period ending in 2024.

Capitalized Research and Development

This item shows a strong upward trajectory, increasing from 135,200 thousand US$ in 2020 to 4,598,700 thousand US$ in 2024. The sharp growth, particularly between 2021 and 2024, indicates intensified investment in capitalized R&D activities.

Purchases of Intangible Assets

There is a consistent decline in purchases of intangible assets, falling from 2,560,600 thousand US$ in 2020 to 1,781,400 thousand US$ in 2024. This downward trend suggests a reduction in acquisitions of new intangible assets or perhaps a strategic pivot away from purchasing in this category.

Sales Rebates and Discounts

Sales rebates and discounts have risen steadily from 461,300 thousand US$ in 2020 to 1,775,700 thousand US$ by 2024, reflecting increasing incentives or concessions given on sales, which could impact gross margins.

Correlative Tax Adjustments

Correlative tax adjustments have increased substantially, from 404,200 thousand US$ in 2020 to 1,604,300 thousand US$ in 2024, indicating growing tax-related adjustments possibly associated with changes in tax regulations or company operations.

Tax Loss and Other Tax Carryforwards

This figure fluctuated over the years, beginning at 488,300 thousand US$, peaking at 645,400 thousand US$ in 2021 and dropping to 527,200 thousand US$ in 2023 before a slight rise to 586,900 thousand US$ in 2024. The variability suggests changing utilization or recognition of tax loss carryforwards.

Tax Credit Carryforwards

Tax credit carryforwards have remained relatively stable around the mid-500,000 thousand US$ range, showing minor fluctuations but ending at 577,000 thousand US$ in both 2023 and 2024.

Compensation and Benefits

This item demonstrates a declining trend from 1,045,600 thousand US$ in 2020 down to 427,900 thousand US$ in 2022, followed by a modest recovery to 565,200 thousand US$ in 2024. The initial decrease may reflect cost-cutting or restructuring efforts.

Foreign Tax Redeterminations

There is a slight upward trend, increasing from 242,800 thousand US$ in 2020 to 334,800 thousand US$ in 2024, indicating adjustments related to foreign taxes becoming somewhat more significant over time.

Operating Lease Liabilities

These liabilities remained relatively stable until a marked increase in 2023 to 253,300 thousand US$ before a small decrease to 240,500 thousand US$ in 2024, possibly reflecting changes in lease agreements or accounting standards.

Other

The “Other” category fluctuated between 605,800 thousand US$ in 2020 and a low of 358,600 thousand US$ in 2024, showing variability without a clear directional trend.

Gross Deferred Tax Assets

This asset grew significantly from 6,618,000 thousand US$ in 2020 to 12,423,100 thousand US$ in 2024, underscoring an increase in deferred tax benefits or timing differences.

Valuation Allowances

Valuation allowances remained negative and relatively stable, slightly increasing in magnitude from -816,300 thousand US$ in 2020 to -963,700 thousand US$ in 2024, which indicates consistent reservations against certain deferred tax assets.

Deferred Tax Assets

After being fairly flat from 2020 through 2021, deferred tax assets rose sharply to 11,459,400 thousand US$ in 2024, signaling enhanced recognition of deferred tax benefits over the latter years.

Intangibles

The intangible asset balance shows a decreasing negative balance from -1,465,700 thousand US$ in 2020 to -1,176,400 thousand US$ in 2024, reflecting a reduction in net intangible assets or amortization over time.

Earnings of Foreign Subsidiaries

Negative earnings improved consistently from -1,905,300 thousand US$ in 2020 to -773,100 thousand US$ in 2024, suggesting a reduction in losses or increased profitability in foreign subsidiaries.

Prepaid Employee Benefits

Prepaid employee benefits increased their negative balance from -410,100 thousand US$ in 2020 to -611,000 thousand US$ in 2024, indicating rising prepaid amounts or potential liabilities related to employee benefits.

Property and Equipment

There is a steady increase in negative net balances from -315,200 thousand US$ in 2020 to -557,600 thousand US$ in 2024, showing asset additions or depreciation effects impacting this category.

Operating Lease Assets

This item remained relatively stable from 2020 to 2022, then experienced a sharp decline to -237,100 thousand US$ in 2023 and slightly improved to -219,100 thousand US$ in 2024, mirroring the liability trends.

Financial Instruments

Financial instruments saw variability, starting at -216,900 thousand US$ and experiencing fluctuations with a low of -75,100 thousand US$ in 2023, ending at -137,300 thousand US$ in 2024, indicating changing valuations or exposures.

Inventories

Inventories remained generally stable in negative balances around -600,000 thousand US$, but showed a notable improvement in 2024 at -58,200 thousand US$, which could signify inventory reduction or obsolescence adjustments.

Deferred Tax Liabilities

Deferred tax liabilities have decreased steadily, from -5,071,200 thousand US$ in 2020 to -3,532,700 thousand US$ in 2024, signaling a reduction in deferred tax obligations.

Deferred Tax Assets (Liabilities), Net

This net figure shows significant growth, rising from 730,500 thousand US$ in 2020 to 7,926,700 thousand US$ in 2024. The marked increase suggests an improving net deferred tax asset position, resulting from growing deferred tax assets combined with declining liabilities.

The data reveals distinct trends in deferred tax assets and liabilities over the five-year period.

Deferred Tax Assets

The deferred tax assets demonstrate a generally increasing trend. Initially, they decreased from 2,830,400 thousand US dollars in 2020 to 2,489,300 thousand US dollars in 2021. However, from 2021 onwards, a steady and significant growth is evident, reaching 2,792,900 thousand US dollars in 2022, 5,477,300 thousand US dollars in 2023, and peaking at 8,000,600 thousand US dollars in 2024. This surge especially from 2022 to 2024 signifies improving expectations regarding deductible temporary differences or future tax benefits available to the company.

Deferred Tax Liabilities

Deferred tax liabilities show a markedly different pattern. There is a sharp decline from 2,099,900 thousand US dollars in 2020 to 1,733,700 thousand US dollars in 2021, followed by a substantial drop to 87,300 thousand US dollars in 2022. This downward trajectory continues modestly with values of 103,900 thousand and 73,900 thousand US dollars for 2023 and 2024 respectively. The steep reduction in liabilities suggests a significant decrease in taxable temporary differences over the analyzed period.

Overall, the company appears to be in a position where deferred tax assets are rising substantially, while deferred tax liabilities are diminishing sharply. This combination potentially indicates a net deferred tax asset position that is strengthening through time, reflecting favorable conditions such as increased tax credits or deductible differences that might benefit future tax settlements. The data suggests enhanced tax efficiency or changes in tax planning strategies that influence these positions notably in recent years.

The data presents a financial overview with reported and deferred income tax adjustments over five consecutive years, focusing on total assets, total liabilities, shareholders’ equity, and net income.

Total Assets

Reported total assets show a steady increase from approximately 46.6 billion USD in 2020 to 78.7 billion USD in 2024, with a significant jump observed between 2022 and 2023. The adjusted total assets follow a similar trend, rising from about 43.8 billion USD in 2020 to 70.7 billion USD in 2024. This reflects consistent asset growth, although the adjusted figures remain slightly lower throughout the period, indicating the impact of deferred income tax adjustments.

Total Liabilities

Reported total liabilities decrease slightly from roughly 40.8 billion USD in 2020 to 38.7 billion USD in 2022, then sharply increase to 53.1 billion USD in 2023 and further to 64.4 billion USD in 2024. Adjusted liabilities mirror this movement closely, indicating that the deferred tax adjustments have a relatively minor effect on liabilities. The sharp increase in liabilities in the latter years suggests increased obligations or financing activities during this period.

Shareholders’ Equity

The reported shareholders’ equity grows steadily from about 5.6 billion USD in 2020 to 14.2 billion USD in 2024, with a notable increase from 2023 to 2024. Conversely, adjusted shareholders’ equity starts at approximately 4.9 billion USD in 2020 and rises to about 6.3 billion USD in 2024, but with fluctuations and a decline observed between 2022 and 2023. This divergence between reported and adjusted figures highlights the effects of deferred income tax adjustments on equity, which appear to reduce the equity base when compared to reported figures.

Net Income

Reported net income exhibits variability, decreasing from roughly 6.2 billion USD in 2020 to 5.2 billion USD in 2023, but then surging to 10.6 billion USD in 2024. Adjusted net income shows a consistent downward trend from 6.1 billion USD in 2020 to 2.9 billion USD in 2023, before increasing to 7.9 billion USD in 2024. The adjusted net income remains below the reported values across all periods, reflecting the deferred tax impact on earnings. The sharp rebound in 2024 in both measures suggests an improved profitability or favorable tax adjustments in that year.

Overall, the data indicates growth in total assets and reported shareholders’ equity over the observed period, with liabilities rising notably in the last two years. Deferred income tax adjustments significantly influence shareholders’ equity and net income, consistently reducing their reported amounts. The notable increase in net income and equity in 2024, combined with rising liabilities and assets, suggests a period of significant financial activity and improved profitability.

The financial data reveals several key trends in the company's profitability, efficiency, and leverage over the five-year period.

Profit Margins

The reported net profit margin exhibited a decline from 25.24% in 2020 to 15.36% in 2023, before recovering to 23.51% in 2024. The adjusted net profit margin showed a more pronounced downward trend from 24.69% in 2020 to a low of 8.5% in 2023, followed by a rebound to 17.55% in 2024. This suggests that while profitability faced pressure during the middle years, particularly on an adjusted basis, there was significant improvement in the final year.

Total Asset Turnover

Reported total asset turnover increased modestly from 0.53 in 2020 to 0.58 in both 2021 and 2022, then dipped back to 0.53 in 2023 before rising again to 0.57 in 2024. Adjusted total asset turnover remained consistently higher than reported values, rising from 0.56 in 2020 to a peak of 0.64 in 2024. Overall, asset utilization showed slight improvements over the period, especially on the adjusted basis.

Financial Leverage

Reported financial leverage decreased significantly from 8.27 in 2020 to 4.65 in 2022, before increasing again to 5.94 in 2023 and slightly declining to 5.55 in 2024. Conversely, adjusted financial leverage fell from 8.92 in 2020 to 5.63 in 2021, then increased sharply to 10.84 in 2023 and further to 11.29 in 2024. This divergence suggests that adjusted figures reflect a substantially higher reliance on debt or other financial obligations in the later years.

Return on Equity (ROE)

Reported ROE demonstrated a sharp decrease from 109.79% in 2020 to 48.65% in 2023, followed by a strong recovery to 74.62% in 2024. Adjusted ROE showed a similar trend, decreasing from a very high 123.38% in 2020 to a low of 51.1% in 2022, then improving noticeably to 126.2% in 2024. The volatility and high figures suggest significant variability in earnings relative to shareholder equity, with a remarkable rebound in the final year.

Return on Assets (ROA)

Reported ROA declined from 13.28% in 2020 to 8.19% in 2023, followed by an increase to 13.45% in 2024. Adjusted ROA showed a more pronounced decrease from 13.83% in 2020 to 4.95% in 2023, then recovered to 11.18% in 2024. The patterns indicate fluctuating overall asset profitability, with adjusted figures suggesting a more severe impact on asset returns during the mid-period.

In summary, the data portrays a challenging interval between 2021 and 2023 where profitability, asset efficiency, and returns declined, especially on an adjusted basis. Financial leverage as per adjusted data increased markedly in the latter years, implying greater financial risk or structural changes in capitalization. The final year shows signs of recovery across most metrics, indicating improved operational performance and financial structure.

Reported Net Income

Reported net income fluctuated over the analyzed periods, starting at 6,193,700 thousand US dollars in 2020, then declining to 5,581,700 thousand in 2021. It rose again to 6,244,800 thousand in 2022 but dropped significantly in 2023 to 5,240,400 thousand. By 2024, there was a strong recovery with net income reaching 10,590,000 thousand US dollars, nearly doubling the previous year's figure.

Adjusted Net Income

Adjusted net income showed a consistent downward trend from 6,059,200 thousand US dollars in 2020 to a low of 2,899,400 thousand in 2023. However, in 2024, adjusted net income rebounded notably to 7,906,900 thousand US dollars, indicating a significant improvement after several years of decline.

Reported Net Profit Margin

The reported net profit margin declined from 25.24% in 2020 to a low of 15.36% in 2023. A recovery is observed in 2024, with the margin increasing to 23.51%, suggesting improved efficiency or profitability during the final period.

Adjusted Net Profit Margin

Adjusted net profit margin exhibited a downward trajectory from 24.69% in 2020 to 8.5% in 2023, reflecting deteriorating core operational profitability over time. In 2024, the margin improved to 17.55%, indicating a partial recovery but still below the initial levels observed in 2020.

Overall Trends and Insights

Both reported and adjusted net incomes experienced volatility, with a generally declining trend through 2023 before a significant upturn in 2024. The disparity between reported and adjusted net incomes widened over time until 2024, when both metrics showed substantial improvement. The reported net profit margin consistently remained higher than the adjusted margin, indicating the influence of adjustments on the company's earnings quality. The notable recovery in 2024 across all metrics suggests possible positive changes in operational performance, cost management, or tax impacts affecting reported and adjusted income figures.

The analysis of the financial data reveals several noteworthy trends in asset levels and asset turnover ratios over the five-year period.

Total Assets

Both reported and adjusted total assets demonstrate a consistent upward trajectory from 2020 through 2024. Reported total assets increase from approximately 46.6 billion US dollars in 2020 to 78.7 billion US dollars in 2024, indicating significant asset growth over the period. Similarly, adjusted total assets grow from about 43.8 billion US dollars in 2020 to 70.7 billion US dollars in 2024, mirroring the reported figures with a comparable increase. The adjusted asset values are consistently lower than the reported figures each year, suggesting that deferred income tax adjustments reduce the total assets reported.

Total Asset Turnover Ratios

The reported total asset turnover ratio fluctuates moderately over the period, beginning at 0.53 in 2020, peaking at 0.58 in 2021 and 2022, declining again to 0.53 in 2023, then rising slightly to 0.57 in 2024. This pattern reflects some variability in the efficiency with which the company utilizes its assets to generate revenue. The adjusted total asset turnover ratio is consistently higher than the reported ratio each year, starting at 0.56 in 2020 and reaching 0.64 in 2024. The trend for the adjusted ratio shows a general improvement in asset utilization efficiency, with a small dip in 2023 but an overall upward movement across the time frame.

Overall, the data signals a period of substantial asset growth alongside a generally stable to improving efficiency in asset usage when considering adjustments for deferred income taxes. The adjusted figures suggest a more favorable trend in turnover efficiency than the reported figures alone indicate, which might provide a refined perspective on the company's operational performance.

The financial data exhibits notable changes and trends in asset values, shareholders’ equity, and financial leverage over the five-year period examined.

Total Assets

Both reported and adjusted total assets show an overall increase from 2020 to 2024. Reported total assets grew steadily from approximately 46.6 billion to 78.7 billion US dollars, indicating a significant expansion in asset base. Adjusted total assets followed a similar upward trajectory, rising from about 43.8 billion to 70.7 billion US dollars. The adjusted figures consistently remain slightly lower than reported assets but mirror the general growth pattern.

Shareholders’ Equity

The reported shareholders’ equity increased substantially from 5.6 billion US dollars in 2020 to 14.2 billion in 2024, reflecting strengthened equity capital over the period. In contrast, the adjusted shareholders’ equity experienced a different pattern: it initially increased from roughly 4.9 billion to 8.2 billion between 2020 and 2021, then declined over the following years to a low of approximately 5.4 billion in 2023 before rising modestly to 6.3 billion in 2024. This divergence between reported and adjusted equity suggests significant adjustments impacting equity under the deferred income tax accounting treatments.

Financial Leverage

The reported financial leverage ratio decreased from a high of 8.27 in 2020 to as low as 4.65 in 2022, indicating a reduction in the use of debt relative to equity during this period. However, it rose again to 5.94 in 2023 before slightly declining to 5.55 in 2024. Adjusted financial leverage presented a markedly different trend, starting higher at 8.92 in 2020 and showing a modest decline in 2021 and 2022 to 5.63 and 5.88, respectively. Thereafter, it sharply increased to 10.84 in 2023 and further to 11.29 in 2024. The increasing adjusted leverage ratios suggest a growing reliance on debt or reduced adjusted equity in recent years when accounting for deferred tax adjustments.

In summary, asset growth is evident and consistent regardless of adjustment; however, equity and leverage ratios reflect varying effects when adjusted for deferred income taxes, with the adjusted data showing more volatility and indicating potential underlying tax-related impacts on capital structure and financial risk exposure over time.

The data displays trends in reported and adjusted financial performance and equity over a five-year period.

Net Income

Reported net income exhibited fluctuation: it decreased from 6.19 billion in 2020 to 5.58 billion in 2021, rose again to 6.24 billion in 2022, then declined to 5.24 billion in 2023, before a sharp increase to 10.59 billion in 2024. Adjusted net income showed a consistent downward trend from 6.06 billion in 2020 to 2.90 billion in 2023, followed by a significant recovery to 7.91 billion in 2024. This pattern suggests volatility in earnings, with notable improvement in the most recent year despite previous declines.

Shareholders’ Equity

Reported shareholders' equity steadily increased each year, starting at 5.64 billion in 2020 and reaching 14.19 billion in 2024, indicating growth in the company's net assets. In contrast, adjusted shareholders' equity increased from 4.91 billion in 2020 to 8.22 billion in 2021, then declined for two consecutive years to 5.40 billion in 2023 before a moderate rise to 6.27 billion in 2024. The divergence between reported and adjusted equity suggests the effects of non-recurring items or accounting adjustments impacting equity figures.

Return on Equity (ROE)

Reported ROE showed a clear downward trend from an exceptionally high 109.79% in 2020 to 48.65% in 2023, before rebounding to 74.62% in 2024. The adjusted ROE mirrored this pattern but was more volatile: starting at 123.38% in 2020, decreasing steadily to 51.1% in 2022, then slightly increasing to 53.71% in 2023, and surging sharply to 126.2% in 2024. These ROE figures indicate fluctuating profitability relative to equity, with particularly high returns in 2020 and 2024 the notable peaks.

The financial data reveals several notable trends in income and asset performance over the five-year period from 2020 to 2024.

Net Income Trends

Reported net income shows moderate fluctuations, beginning at approximately 6.19 billion in 2020, declining in 2021, recovering slightly in 2022, dipping again in 2023, then sharply increasing to over 10.59 billion in 2024. Adjusted net income, which accounts for income tax adjustments, follows a somewhat similar but more pronounced downward trend from 6.06 billion in 2020 to 2.90 billion in 2023, before sharply rising to nearly 7.91 billion by 2024. This indicates a significant recovery in profitability by the final year, albeit adjusted figures remain below the reported amounts across all periods.

Total Assets Trends

Reported total assets have steadily increased each year, starting at approximately 46.63 billion in 2020 and rising to about 78.71 billion in 2024. Adjusted total assets also show consistent growth, from about 43.80 billion in 2020 to 70.71 billion in 2024. The gap between reported and adjusted assets remains relatively constant, reflecting consistent adjustments related to deferred income taxes or other factors.

Return on Assets (ROA) Trends

Reported ROA declines from 13.28% in 2020 to 11.44% in 2021, briefly recovers to 12.62% in 2022, then drops significantly to 8.19% in 2023 before rising again to 13.45% in 2024. Adjusted ROA exhibits a more pronounced decline from 13.83% in 2020 to a low of 4.95% in 2023, before improving to 11.18% in 2024. The adjusted ROA trend suggests a more cautious view of asset profitability when tax adjustments are considered, with a particularly weak performance in the intermediate years followed by notable recovery.

Overall, the data suggests a period of volatility in income and profitability adjusted for income taxes, contrasting with steady growth in asset bases. The notable improvements in net income and ROA in 2024 suggest that the company may have experienced favorable conditions or operational improvements in that year, reversing earlier downward trends. The lower adjusted figures compared to reported ones point to the material impact of deferred income taxes and other adjustments on financial performance metrics.