Pfizer Inc. (NYSE:PFE)

The analysis of annual current and deferred income tax expenses over the examined periods reveals distinct trends in each category, as well as their combined effect on the provision for taxes on income.

Current Income Taxes

The current income tax expense exhibits significant fluctuation across the periods. Initially, it increases sharply from 1,945 million US dollars in 2020 to a peak of 7,092 million in 2022. Following this peak, there is a pronounced decline to 2,328 million in 2023 and a further slight decrease to 2,074 million in 2024. This pattern suggests heightened taxable income or tax rates around 2021 and 2022, followed by a substantial reduction in taxable income or strategic tax adjustments in subsequent years.

Deferred Income Taxes

Deferred income taxes remain consistently negative throughout the periods, indicating a deferred tax benefit rather than expense. The magnitude of the deferred tax benefit intensifies markedly from -1,468 million in 2020 to -4,293 million in 2021. Thereafter, the benefit decreases gradually in absolute value to -2,102 million in 2024. This trend indicates that the company experienced significant deferred tax liabilities reversing or timing differences favoring tax benefit recognition particularly in 2021, with these benefits diminishing progressively in later years.

Provision (Benefit) for Taxes on Income

The provision for taxes on income reflects the net effect of current and deferred tax amounts. It rises steeply from 477 million in 2020 to 3,328 million in 2022, mirroring the increase in current taxes despite the offsetting deferred tax benefits. Thereafter, the provision turns negative, showing a benefit of -1,115 million in 2023 and stabilizing near neutral at -28 million in 2024. This transition suggests a shift from overall tax expenses to tax benefits, implying changes in profitability, tax planning strategies, or valuation allowances influencing taxable income and deferred tax assets/liabilities.

Overall, the data indicates a dynamic tax position with significant variability in the components of income tax expense. The year 2022 marks the peak of tax expense before a transition to tax benefit recognition in 2023 and 2024, reflecting possibly changing economic conditions or tax strategies impacting current and deferred tax calculations.

The data presents a detailed overview of tax-related figures expressed as percentages over a five-year period. Several noteworthy trends and fluctuations emerge from the dataset.

U.S. statutory income tax rate

Remains constant at 21% throughout the observed period, indicating no statutory changes in the U.S. tax rate during these years.

Taxation of non-U.S. operations

Shows variability with moderate negative percentages from 2020 to 2022, suggesting tax benefits or credits outside the U.S. However, a sharp decline occurs in 2023 with a significant negative value (-21.1%), followed by a partial recovery to -7.9% in 2024.

Transition Tax liability

Only appears in 2024 with a value of -6%, indicating a specific tax liability arising in that year likely linked to tax reforms or one-off adjustments.

Tax settlements and resolution of certain tax positions

The values fluctuate but display an extreme negative spike in 2023 at -40.3%, which may indicate the impact of large tax settlements or adjustments. Other years show smaller negative effects, generally under -3%.

Foreign-Derived Intangible Income deduction

Data starts from 2021, showing an increasing negative effect from -0.6% to -1.9% in 2022, followed by a substantial rise in the negative impact in 2023 to -33.1%, before moderating sharply to -1.2% in 2024.

State & local taxes

Sporadic data with notable negative value in 2023 (-22.4%), otherwise minimal presence; negative values tend to suggest tax benefits.

Charitable contributions

Represented negatively with a mild presence in early years (-0.5% to -0.6%) and a more pronounced effect in 2023 (-7.3%), then reducing significantly in 2024 (-1.7%).

Certain Consumer Healthcare JV initiatives

Only recorded in 2021 as -6%, absent for other years.

U.S. Healthcare Legislation

Represents a slight positive effect (0.1%) in 2020 and is otherwise absent.

U.S. R&D tax credit

Consistently negative but relatively small impact in early years (-1.3% to -0.5% range), then a major increase in negative effect in 2023 (-15.8%) before returning to a reduced negative value (-1.8%) in 2024.

Interest

Generally low positive or near zero in the first three years (1.1%, 0.4%, 0.2%), spikes sharply to 13.5% in 2023, then drops to a lower but positive 2.2% in 2024.

All other, net

Values are small and negative in the initial years, turn slightly positive (0.1%) in 2023, and nearly neutral (-0.1%) in 2024.

Effective tax rate for income from continuing operations

Starts low at 6.4% in 2020 and gradually increases, reaching 9.6% in 2022. However, it experiences an anomalous and extreme negative value in 2023 (-105.4%), suggesting a substantial tax benefit or loss carryback, and improves dramatically to near neutral at -0.4% in 2024.

Overall, the tax-related data reveal a consistent statutory tax rate with significant variability in other components affecting the effective tax rate, particularly in 2023. This includes drastic negative impacts from various deductions, settlements, and credits, resulting in an exceptionally low effective tax rate for that year. The subsequent year shows a reversion towards more typical levels, though still below the statutory rate. Such fluctuations indicate one-time items or special circumstances affecting tax expenses, and by extension, reported profitability in these years.

This financial data reveals several notable trends in asset composition, tax positions, and operational investments over the five-year period.

Prepaid and Deferred Items

The gross prepaid and deferred items decreased significantly from $3,094 million in 2020 to a low of $1,673 million in 2022, before recovering to $2,988 million by 2024. Corresponding deferred tax assets related to these items showed increasing negative values, indicating growing deferred tax liabilities or amortization effects in this category over time.

Accrued and Deferred Royalties and Revenues

Accrued/deferred royalties emerged in 2021 at $777 million, sharply increased to $2,127 million in 2022, then steadily declined to $1,306 million by 2024. Deferred revenues appeared from 2022 onward, peaking at $471 million in 2023 before reducing to $300 million in 2024, suggesting shifting revenue recognition patterns and royalty accrual fluctuations.

Inventories

Inventories almost quadrupled from $276 million in 2020 to a peak of $1,210 million in 2023, followed by a decline to $992 million in 2024. The allowance related to inventories saw a large increase in negative values, particularly in 2023, indicating either increasing obsolescence or impairment risk assessments linked to inventory holdings.

Intangible Assets

Intangible assets rose sharply from $793 million in 2020 to a high point of $1,542 million in 2021, then fluctuated but remained elevated near $1,400-$1,500 million in subsequent years. Corresponding deferred tax valuation allowances declined notably in 2023 before rebounding in 2024, which may suggest changes in the expectation of recoverability of these assets for tax purposes.

Property, Plant and Equipment (PP&E)

PP&E values decreased during 2020-2022, reaching a low of $112 million in 2022, before rising again to $265 million in 2024. The related deferred tax assets steadily increased in absolute negative terms, indicating growing deferred tax liabilities associated with PP&E over the period.

Employee Benefits and Associated Tax Effects

Employee benefits assets showed a clear declining trend from $1,981 million in 2020 to $1,002 million in 2024. The related deferred tax assets also became more negative, consistent with diminishing recognized benefits or actuarial impacts.

Restructurings, Legal, and Product Liability Reserves

Charges related to restructurings and other costs increased significantly, nearly doubling from around $300 million in the early years to $537 million in 2023, before slightly decreasing in 2024. Legal and product liability reserves remained relatively stable, fluctuating between $370-$430 million.

Research and Development (R&D)

R&D expenses exhibited a strong upward trajectory, starting at $1,656 million in 2021 and escalating to $7,635 million by 2024. This pronounced increase suggests a strategic emphasis on innovation and product pipeline development over the recent years.

Net Operating Loss and Tax Credit Carryforwards

Net operating loss and tax credit carryforwards fluctuated, starting at $1,761 million in 2020, dipping to $1,431 million in 2021, then peaking at $2,708 million in 2023 before a reduction in 2024. This variability indicates changes in tax planning, utilization of tax attributes, or recognition of tax assets.

Investments and Other Assets

Investments showed inconsistent figures, initially declining steeply from $128 million in 2020 to $70 million in 2021, modestly increasing afterward but remaining below earlier levels. The related deferred tax assets mirrored these fluctuations, without a clear directional trend.

Deferred Tax Assets and Liabilities

Gross deferred tax assets increased markedly from $9,189 million in 2020 to $19,112 million in 2024, reflecting greater recognition of future tax benefits. Valuation allowances fluctuated mildly but remained negative, indicating ongoing conservatism in asset recoverability estimates. Deferred tax liabilities showed volatility, decreasing sharply from a negative $10,726 million in 2020 to a lower absolute value in 2021, then rising again significantly in 2023 before lowering in 2024. The net deferred tax asset (liability) position improved substantially from a negative $3,123 million in 2020 to a positive $4,451 million by 2024, signaling an overall strengthening tax asset position.

Noncurrent deferred tax assets

The noncurrent deferred tax assets exhibit a fluctuating pattern over the five-year period. Starting at 940 million USD at the end of 2020, there is a notable increase to 1,618 million USD in 2021. This is followed by a significant surge to 4,769 million USD in 2022. However, in 2023, the value declines sharply to 1,768 million USD. By the end of 2024, it rebounds significantly to 6,573 million USD, reaching the highest value observed in the timeframe.

Noncurrent deferred tax liabilities

The noncurrent deferred tax liabilities demonstrate a generally volatile downward trend initially, followed by some increases. The value starts at 4,063 million USD at the end of 2020 and drops substantially to 349 million USD in 2021. It then increases to 1,023 million USD in 2022 before decreasing again to 640 million USD in 2023. In 2024, the liabilities increase markedly to 2,122 million USD, though this remains below the initial balance reported in 2020.

Overall insights

Both noncurrent deferred tax assets and liabilities exhibit significant variability during the period analyzed. The deferred tax assets show a strong rebound in 2024 after a dip in 2023, suggesting changes that may be related to adjustments in tax positions or timing differences. The deferred tax liabilities, while more erratic, show an initial sharp decrease followed by moderate recoveries. The overall patterns point to dynamic tax-related accounting activities impacting the company’s deferred tax balances across these years.

Total Assets

The reported total assets showed a consistent upward trend from 2020 to 2023, increasing from 154,229 million US dollars to 226,501 million US dollars. However, in 2024, there is a decline to 213,396 million US dollars. Adjusted total assets follow a similar pattern, rising steadily until 2023 at 224,733 million US dollars, then decreasing to 206,823 million US dollars in 2024. This indicates growth over four years followed by a contraction in the most recent period.

Total Liabilities

Reported total liabilities increased from 90,756 million US dollars in 2020 to 104,013 million US dollars in 2021, then showed a slight decrease in 2022 to 101,288 million US dollars before a significant rise to 137,213 million US dollars in 2023. In 2024, liabilities declined to 124,899 million US dollars. Adjusted liabilities mirror this trend with increases from 86,693 million to 103,664 million and a slight decrease to 100,265 million, followed by a sharp rise to 136,573 million and a decline to 122,777 million. The liability profile indicates a generally increasing trend with volatility around 2022 and a notable peak in 2023.

Shareholders’ Equity

Reported shareholders’ equity increased substantially from 63,238 million US dollars in 2020 to a peak of 95,661 million US dollars in 2022, before declining to 89,014 million in 2023 and further to 88,203 million in 2024. Adjusted shareholders’ equity follows a comparable trend, growing from 66,361 million to 91,915 million by 2022 and then decreasing to 87,886 million in 2023 and 83,752 million in 2024. This suggests that equity growth occurred predominantly until 2022, after which there was a downturn.

Net Income

Reported net income attributable to common shareholders exhibited significant growth from 9,616 million US dollars in 2020 to 31,372 million in 2022, followed by a steep decline to 2,119 million in 2023 and a partial recovery to 8,031 million in 2024. Adjusted net income demonstrates a similar pattern but with a more severe contraction; income grew from 8,148 million in 2020 to 27,608 million in 2022, turned negative to -1,324 million in 2023, and rebounded to 5,929 million in 2024. The figures reveal strong earnings performance until 2022, a significant deterioration in 2023, and modest improvement in 2024, with adjustments indicating higher volatility and more pronounced losses in 2023.

Net Profit Margin

The reported net profit margin showed a strong upward trend from 22.53% in 2020 to a peak of 31.01% in 2022, followed by a significant decline to 3.56% in 2023 and a partial recovery to 12.62% in 2024. The adjusted net profit margin mirrored this pattern, increasing from 19.09% in 2020 to 27.29% in 2022, then dropping sharply into negative territory at -2.22% in 2023 before rebounding to 9.32% in 2024. This indicates volatility in profitability, with a notable setback in 2023 before some improvement.

Total Asset Turnover

Both reported and adjusted total asset turnover rose steadily from 0.28 in 2020 to reach a high point in 2022 at approximately 0.51 and 0.53 respectively. However, there was a decline in 2023 to 0.26, followed by a slight recovery in 2024 to around 0.30-0.31. This suggests an initial improvement in asset utilization efficiency, which weakened significantly in 2023 but showed early signs of recovery the following year.

Financial Leverage

Reported financial leverage decreased consistently from 2.44 in 2020 to 2.06 in 2022, indicating a reduction in reliance on debt or financial obligations, before rising sharply to 2.54 in 2023 and slightly decreasing to 2.42 in 2024. Adjusted financial leverage followed a similar trend, decreasing at first then increasing to 2.56 in 2023 and moderating to 2.47 in 2024. The increase in leverage after 2022 coincides with the period of profitability decline, suggesting a shift in capital structure or financial risk during that time.

Return on Equity (ROE)

The reported ROE showed a strong improvement from 15.21% in 2020 to a high of 32.79% in 2022, followed by a steep decline to 2.38% in 2023 and a moderate recovery to 9.11% in 2024. Adjusted ROE reflected a similar trajectory, rising to 30.04% in 2022 before falling to -1.51% in 2023 and then increasing to 7.08% in 2024. This pattern highlights significant fluctuations in shareholder returns, with 2023 representing a year of substantial underperformance relative to previous levels.

Return on Assets (ROA)

Reported ROA steadily improved from 6.23% in 2020 to 15.91% in 2022, followed by a sharp decrease to 0.94% in 2023 and then a partial rebound to 3.76% in 2024. Adjusted ROA showed a comparable trend, rising to 14.35% in 2022, dropping to negative -0.59% in 2023, and recovering slightly to 2.87% in 2024. The data reveal a marked deterioration in asset profitability during 2023, with some recovery in the subsequent year.

Overall Insights

The data depict a cycle of improvement in profitability, efficiency, and returns through 2022, followed by a pronounced downturn in 2023 across all key financial ratios, including net profit margin, asset turnover, leverage, ROE, and ROA. The downturn impacted both reported and adjusted figures, indicating effects beyond tax-related adjustments. The year 2024 shows an initial recovery in most areas, though the levels remain below the peak performance observed in 2022. Increased financial leverage during the downturn suggests a possible strategy to manage capital or increased risk exposure during challenging conditions.

Reported Net Income Attributable to Pfizer Inc. Common Shareholders

The reported net income shows a significant increase from 9,616 million US dollars in 2020 to a peak of 31,372 million in 2022. However, there is a sharp decline in 2023 to 2,119 million, followed by a partial recovery to 8,031 million in 2024. This trend indicates substantial volatility, with extraordinary increases in earlier years and a notable downturn before some improvement.

Adjusted Net Income Attributable to Pfizer Inc. Common Shareholders

The adjusted net income also exhibits growth from 8,148 million in 2020 to 27,608 million in 2022, mirroring the reported net income trend but at slightly lower values. In contrast to reported net income, adjusted net income turns negative in 2023, recording a loss of 1,324 million, before recovering to 5,929 million in 2024. The negative value in 2023 suggests the impact of adjustments related to income tax and other factors, emphasizing the volatility in that year.

Reported Net Profit Margin

The reported net profit margin increased steadily from 22.53% in 2020 to a high of 31.01% in 2022, reflecting strong profitability. This was followed by a precipitous drop to 3.56% in 2023, indicating a dramatic reduction in profitability. The margin rose again to 12.62% in 2024, signaling a moderate recovery but remaining well below the earlier peak.

Adjusted Net Profit Margin

The adjusted net profit margin follows a similar pattern, rising from 19.09% in 2020 to 27.29% in 2022. It then falls into negative territory, at -2.22% in 2023, consistent with the adjusted net income loss. By 2024, the margin rebounds to 9.32%, showing improvement but not returning to the levels seen in previous years. The negative margin in 2023 highlights an atypical loss period after accounting for adjustments.

Summary of Insights

Overall, the data reveal that the company experienced a period of strong financial performance up to 2022, with significant growth in income and profitability margins. The subsequent year, 2023, shows stark declines in both reported and adjusted results, with the adjusted figures reflecting a net loss and negative profit margin, pointing to extraordinary or non-recurring items impacting the financial statements. The partial recovery in 2024 suggests some stabilization but not a full return to the previous peak performance levels. The fluctuations across reported and adjusted metrics emphasize the importance of considering both figures for a comprehensive understanding of the company’s financial health over this period.

The financial data reveals several noteworthy trends for the periods ending from 2020 through 2024. Total assets, both reported and adjusted for deferred income tax, show an overall increasing trajectory from 2020 to 2023, followed by a decline in 2024. Specifically, reported total assets increased from approximately 154.2 billion US dollars in 2020 to a peak of around 226.5 billion in 2023, before falling to about 213.4 billion in 2024. Similarly, adjusted total assets rose consistently from about 153.3 billion in 2020 to 224.7 billion in 2023, then decreased to approximately 206.8 billion in 2024.

Total Asset Turnover Ratios

The reported total asset turnover ratio experienced growth from 0.28 in 2020 to 0.51 in 2022. However, this upward trend was followed by a sharp decline to 0.26 in 2023, with a modest recovery to 0.30 in 2024. The adjusted total asset turnover ratio mirrors this pattern, increasing from 0.28 in 2020 to 0.53 in 2022, then dropping to 0.26 in 2023, and slightly improving to 0.31 in 2024.

Insights on Asset Utilization

The initial rise in total asset turnover ratios through 2022 suggests an improvement in the efficiency with which the company's assets were used to generate revenue. However, the significant decline in 2023 indicates a reduced asset utilization effectiveness during that year, which only partially reversed in 2024. This could suggest challenges in maintaining revenue growth relative to the asset base or potential impacts from external factors affecting operational performance.

Impact of Deferred Income Tax Adjustments

The differences between reported and adjusted total assets are minor but consistent, with adjusted figures generally slightly lower. The total asset turnover ratios adjusted for deferred income tax align closely with the reported figures, indicating that deferred income tax adjustments have limited impact on the overall trends in asset utilization metrics.

The financial data over the period from December 31, 2020 through December 31, 2024 indicates various trends in the company's assets, equity, and leverage ratios, both in reported and tax-adjusted terms.

Total Assets

Reported total assets increased steadily from 154,229 million USD in 2020 to a peak of 226,501 million USD in 2023, representing significant asset growth. However, by 2024, reported total assets declined to 213,396 million USD, reflecting a contraction after the prior year's increase.

Adjusted total assets follow a similar pattern but show slightly lower values compared to the reported figures, starting at 153,289 million USD in 2020, rising to 224,733 million USD in 2023, and decreasing to 206,823 million USD in 2024. The adjustment narrows the asset base modestly but does not alter the overall growth and decline trend observed.

Shareholders’ Equity

Reported shareholders’ equity rose markedly from 63,238 million USD in 2020 to a peak of 95,661 million USD in 2022. This was followed by a decrease to 89,014 million USD in 2023 and a further slight decline to 88,203 million USD in 2024, indicating some erosion in equity after substantial growth.

Adjusted shareholders’ equity similarly grew from 66,361 million USD in 2020 to 91,915 million USD in 2022. Subsequently, it declined to 87,886 million USD in 2023 and further to 83,752 million USD in 2024. These figures are slightly lower than reported equity in most years post-2020, reinforcing the trend of equity diminution after peaking.

Financial Leverage

Reported financial leverage ratios exhibit fluctuation, starting at 2.44 in 2020 and decreasing to 2.06 in 2022, suggesting a reduction in leverage and possibly conservative capital structure management during this period. However, leverage rises again significantly to 2.54 in 2023 before declining slightly to 2.42 in 2024, indicating increased reliance on debt or liabilities in recent years.

Adjusted financial leverage ratios present a comparable trend, with values close to reported figures: 2.31 in 2020, a decrease to 2.09 in 2022, an increase to 2.56 in 2023, and a modest decrease to 2.47 in 2024. The slight differences reflect the impact of deferred tax adjustments but maintain the overall leverage pattern.

In summary, the company experienced asset growth through 2023 followed by a contraction in 2024, alongside a peak and subsequent decline in shareholders’ equity after 2022. Leverage ratios decreased initially, reflecting a strengthening equity base or deleveraging, but increased again in the latter period, suggesting changes in the financing structure with potentially higher debt levels. Adjusted figures consistently show somewhat lower asset and equity levels but do not materially alter the observed trends.

Net Income Trends

The reported net income attributable to Pfizer Inc. common shareholders increased significantly from 9,616 million US dollars in 2020 to a peak of 31,372 million US dollars in 2022. However, in the subsequent years, there was a sharp decline to 2,119 million in 2023, followed by a partial recovery to 8,031 million in 2024. The adjusted net income follows a similar pattern, rising from 8,148 million in 2020 to 27,608 million in 2022, then turning negative to -1,324 million in 2023 before recovering to 5,929 million in 2024. This indicates a period of strong profitability followed by a significant downturn and partial rebound.

Shareholders’ Equity Trends

Reported total shareholders’ equity increased steadily from 63,238 million US dollars in 2020 to 95,661 million in 2022, suggesting growth and accumulation of equity. After 2022, equity declined slightly to 89,014 million in 2023 and further to 88,203 million in 2024. Adjusted shareholders’ equity shows a consistent upward movement from 66,361 million in 2020 to 91,915 million in 2022, with decreases in subsequent years to 87,886 million in 2023 and 83,752 million in 2024. These trends reflect overall strengthening of the equity base up to 2022, followed by modest reductions.

Return on Equity (ROE) Analysis

Reported ROE displayed a strong upward trend from 15.21% in 2020 to a high of 32.79% in 2022, consistent with increasing net income levels. In 2023, ROE collapsed to 2.38%, with a slight recovery to 9.11% in 2024. Adjusted ROE mirrors this trend, increasing from 12.28% in 2020 to 30.04% in 2022, turning negative at -1.51% in 2023, and recovering somewhat to 7.08% in 2024. The volatility in ROE aligns with fluctuations in net income, signaling that profitability pressure significantly impacted shareholder returns after 2022.

Overall Insights

The data reveals a pronounced growth phase for the company culminating in 2022, characterized by rising net income, equity growth, and robust returns on equity. The subsequent years show a marked deterioration in financial performance, with net income and ROE falling sharply, even turning negative on an adjusted basis in 2023. Despite this downturn, there is an observable recovery trend in 2024, although profitability and ROE remain below peak levels reported in 2022. Shareholders’ equity trends suggest the company maintained a relatively strong capital base despite earnings volatility. The adjustments made for deferred income taxes appear to amplify the impact on net income and ROE, especially in 2023, indicating notable tax-related effects during this period.

The financial data reveals several notable trends in the reported and adjusted income and asset figures over the five-year period. Reported net income exhibits significant volatility, with a sharp increase from 9,616 million USD in 2020 to a peak of 31,372 million USD in 2022, followed by a steep decline to 2,119 million USD in 2023, and a partial recovery to 8,031 million USD in 2024. Adjusted net income follows a similar pattern but at consistently lower levels, peaking at 27,608 million USD in 2022, then dropping to a negative value of -1,324 million USD in 2023, before recovering to 5,929 million USD in 2024.

Total assets, both reported and adjusted, demonstrate a generally upward trend from 2020 through 2023, with reported total assets increasing from 154,229 million USD to 226,501 million USD, and adjusted total assets rising from 153,289 million USD to 224,733 million USD. However, in 2024, both reported and adjusted total assets decline to 213,396 million USD and 206,823 million USD, respectively.

Return on assets (ROA) exhibits a trend broadly consistent with net income figures. Reported ROA increases steadily from 6.23% in 2020 to a peak of 15.91% in 2022, then decreases sharply to 0.94% in 2023 before slightly recovering to 3.76% in 2024. Adjusted ROA mirrors this pattern but remains lower overall, climbing from 5.32% to 14.35% through 2022, turning negative at -0.59% in 2023, and rebounding to 2.87% in 2024.

Overall, the data indicates a period of significant profitability growth up to the year 2022, followed by a marked downturn in 2023 with partial recovery in 2024. The decline in assets in 2024 may suggest divestitures, asset impairment, or other adjustments. The adjusted figures, which account for reported and deferred income tax effects, highlight a more pronounced impact on net income and returns during the downturn, especially evident in the negative adjusted net income and ROA in 2023. This disparity underscores the influence of tax adjustments on the company’s financial performance during this period.