Stock Analysis on Net
Stock Analysis on Net

Eli Lilly & Co. (NYSE:LLY)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Eli Lilly & Co., income tax expense (benefit), continuing operations

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 3,017,900 2,153,600 938,500 567,600 280,200
Foreign 613,000 547,700 466,000 650,400 299,800
State 24,300 45,500 (28,400) (47,300) (14,400)
Current tax expense 3,655,200 2,746,800 1,376,100 1,170,700 565,600
Federal (2,369,000) (1,992,400) (977,500) (97,400) 141,300
Foreign 34,200 (78,200) 174,600 (16,600) (24,100)
State (6,200) (114,600) 600 (20,500) (54,800)
Deferred tax expense (benefit) (2,341,000) (2,185,200) (802,300) (134,500) 62,400
Income taxes 1,314,200 561,600 573,800 1,036,200 628,000

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Eli Lilly & Co. current tax expense increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Eli Lilly & Co. deferred tax expense (benefit) decreased from 2021 to 2022 and from 2022 to 2023.
Income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Eli Lilly & Co. income taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Effective Income Tax Rate (EITR)

Eli Lilly & Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. federal statutory tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Effective income tax rate 20.05% 8.25% 9.32% 14.33% 11.93%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Eli Lilly & Co. effective income tax rate decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Components of Deferred Tax Assets and Liabilities

Eli Lilly & Co., components of deferred tax assets and liabilities

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Capitalized research and development 2,997,500 1,615,400 275,100 135,200 75,700
Purchases of intangible assets 1,981,900 2,071,300 2,347,400 2,560,600 2,512,400
Sales rebates and discounts 1,632,500 1,312,900 832,300 461,300 197,300
Correlative tax adjustments 1,031,300 752,500 560,800 404,200 219,100
Tax credit carryforwards 577,000 477,600 463,700 523,500 455,800
Tax loss and other tax carryforwards 527,200 626,000 645,400 488,300 318,800
Compensation and benefits 521,400 427,900 634,700 1,045,600 934,300
Foreign tax redeterminations 323,700 267,800 274,900 242,800 156,800
Operating lease liabilities 253,300 147,500 150,000 150,700 140,600
Other 463,400 361,000 477,900 605,800 595,700
Gross deferred tax assets 10,309,200 8,059,900 6,662,200 6,618,000 5,606,500
Valuation allowances (913,500) (775,100) (875,600) (816,300) (616,500)
Deferred tax assets 9,395,700 7,284,800 5,786,600 5,801,700 4,990,000
Intangibles (1,338,200) (1,387,900) (1,516,100) (1,465,700) (1,298,000)
Earnings of foreign subsidiaries (796,600) (1,226,000) (1,583,300) (1,905,300) (1,776,400)
Inventories (619,500) (639,500) (596,400) (623,700) (686,400)
Property and equipment (495,200) (433,500) (338,700) (315,200) (274,100)
Prepaid employee benefits (460,600) (546,500) (560,600) (410,100) (305,900)
Operating lease assets (237,100) (130,700) (132,600) (134,300) (124,700)
Financial instruments (75,100) (215,000) (303,000) (216,900) (139,400)
Deferred tax liabilities (4,022,300) (4,579,100) (5,030,700) (5,071,200) (4,604,900)
Deferred tax assets (liabilities), net 5,373,400 2,705,700 755,900 730,500 385,100

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Eli Lilly & Co. gross deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Eli Lilly & Co. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets (liabilities), net Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Eli Lilly & Co. deferred tax assets (liabilities), net increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Eli Lilly & Co., deferred tax assets and liabilities, classification

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax assets 5,477,300 2,792,900 2,489,300 2,830,400 2,572,600
Deferred tax liabilities 103,900 87,300 1,733,700 2,099,900 2,187,500

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax assets 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. Eli Lilly & Co. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Eli Lilly & Co. deferred tax liabilities decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Eli Lilly & Co., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Less: Noncurrent deferred tax assets, net 5,477,300 2,792,900 2,489,300 2,830,400 2,572,600
Total assets (adjusted) 58,529,000 46,696,900 46,316,700 43,802,700 36,713,500
Adjustment to Total Liabilities
Total liabilities (as reported) 53,142,600 38,714,400 39,651,200 40,807,900 36,587,000
Less: Noncurrent deferred tax liabilities, net 103,900 87,300 1,733,700 2,099,900 2,187,500
Total liabilities (adjusted) 53,038,700 38,627,100 37,917,500 38,708,000 34,399,500
Adjustment to Total Eli Lilly And Company Shareholders’ Equity
Total Eli Lilly and Company shareholders’ equity (as reported) 10,771,900 10,649,800 8,979,200 5,641,600 2,606,900
Less: Net deferred tax assets (liabilities) 5,373,400 2,705,700 755,900 730,500 385,100
Total Eli Lilly and Company shareholders’ equity (adjusted) 5,398,500 7,944,100 8,223,300 4,911,100 2,221,800
Adjustment to Net Income
Net income (as reported) 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Add: Deferred income tax expense (benefit) (2,341,000) (2,185,200) (802,300) (134,500) 62,400
Net income (adjusted) 2,899,400 4,059,600 4,779,400 6,059,200 8,380,800

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Eli Lilly & Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Eli Lilly & Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 15.36% 21.88% 19.71% 25.24% 37.27%
Adjusted net profit margin 8.50% 14.22% 16.88% 24.69% 37.55%
Total Asset Turnover
Reported total asset turnover 0.53 0.58 0.58 0.53 0.57
Adjusted total asset turnover 0.58 0.61 0.61 0.56 0.61
Financial Leverage
Reported financial leverage 5.94 4.65 5.44 8.27 15.07
Adjusted financial leverage 10.84 5.88 5.63 8.92 16.52
Return on Equity (ROE)
Reported ROE 48.65% 58.64% 62.16% 109.79% 319.09%
Adjusted ROE 53.71% 51.10% 58.12% 123.38% 377.21%
Return on Assets (ROA)
Reported ROA 8.19% 12.62% 11.44% 13.28% 21.17%
Adjusted ROA 4.95% 8.69% 10.32% 13.83% 22.83%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Eli Lilly & Co. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
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.		 Eli Lilly & Co. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Eli Lilly & Co. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Eli Lilly & Co. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Eli Lilly & Co., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Profitability Ratio
Net profit margin1 15.36% 21.88% 19.71% 25.24% 37.27%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,899,400 4,059,600 4,779,400 6,059,200 8,380,800
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Profitability Ratio
Adjusted net profit margin2 8.50% 14.22% 16.88% 24.69% 37.55%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 5,240,400 ÷ 34,124,100 = 15.36%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 2,899,400 ÷ 34,124,100 = 8.50%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Eli Lilly & Co. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Activity Ratio
Total asset turnover1 0.53 0.58 0.58 0.53 0.57
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Adjusted total assets 58,529,000 46,696,900 46,316,700 43,802,700 36,713,500
Activity Ratio
Adjusted total asset turnover2 0.58 0.61 0.61 0.56 0.61

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 34,124,100 ÷ 64,006,300 = 0.53

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 34,124,100 ÷ 58,529,000 = 0.58

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Total Eli Lilly and Company shareholders’ equity 10,771,900 10,649,800 8,979,200 5,641,600 2,606,900
Solvency Ratio
Financial leverage1 5.94 4.65 5.44 8.27 15.07
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets 58,529,000 46,696,900 46,316,700 43,802,700 36,713,500
Adjusted total Eli Lilly and Company shareholders’ equity 5,398,500 7,944,100 8,223,300 4,911,100 2,221,800
Solvency Ratio
Adjusted financial leverage2 10.84 5.88 5.63 8.92 16.52

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Total Eli Lilly and Company shareholders’ equity
= 64,006,300 ÷ 10,771,900 = 5.94

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Eli Lilly and Company shareholders’ equity
= 58,529,000 ÷ 5,398,500 = 10.84

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.		 Eli Lilly & Co. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Total Eli Lilly and Company shareholders’ equity 10,771,900 10,649,800 8,979,200 5,641,600 2,606,900
Profitability Ratio
ROE1 48.65% 58.64% 62.16% 109.79% 319.09%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,899,400 4,059,600 4,779,400 6,059,200 8,380,800
Adjusted total Eli Lilly and Company shareholders’ equity 5,398,500 7,944,100 8,223,300 4,911,100 2,221,800
Profitability Ratio
Adjusted ROE2 53.71% 51.10% 58.12% 123.38% 377.21%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income ÷ Total Eli Lilly and Company shareholders’ equity
= 100 × 5,240,400 ÷ 10,771,900 = 48.65%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted total Eli Lilly and Company shareholders’ equity
= 100 × 2,899,400 ÷ 5,398,500 = 53.71%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Eli Lilly & Co. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Profitability Ratio
ROA1 8.19% 12.62% 11.44% 13.28% 21.17%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,899,400 4,059,600 4,779,400 6,059,200 8,380,800
Adjusted total assets 58,529,000 46,696,900 46,316,700 43,802,700 36,713,500
Profitability Ratio
Adjusted ROA2 4.95% 8.69% 10.32% 13.83% 22.83%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 5,240,400 ÷ 64,006,300 = 8.19%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 2,899,400 ÷ 58,529,000 = 4.95%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Eli Lilly & Co. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.