Analysis of Reportable Segments
Express Scripts Holding Co. operates in 2 segments: PBM and Other Business Operations.
Segment Profit Margin
Express Scripts Holding Co., profit margin by reportable segment
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 5.68% | 5.26% | 4.31% | 3.60% | 3.44% |
| Other Business Operations | 1.81% | 0.21% | 2.76% | 2.23% | 2.25% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The segment profit margins between 2013 and 2017 reveal a divergent performance trend between the PBM and Other Business Operations segments. While the PBM segment demonstrated consistent and steady margin expansion, the Other Business Operations segment experienced significant volatility, characterized by a sharp contraction in 2016 followed by a partial recovery.
- PBM Profit Margin
- A continuous upward trajectory is observed in the PBM segment, with profit margins increasing annually from 3.44% in 2013 to 5.68% in 2017. This steady growth suggests a consistent improvement in operational efficiency or a favorable shift in the cost structure over the five-year period.
- Other Business Operations Profit Margin
- The margins for Other Business Operations remained relatively stable between 2013 and 2014, before peaking at 2.76% in 2015. A significant decline occurred in 2016, where the margin dropped to 0.21%, indicating a substantial increase in costs or a decrease in revenue for that specific period. By 2017, a recovery is noted as the margin increased to 1.81%, although it remained below the 2015 peak.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Profit Margin: PBM
Express Scripts Holding Co.; PBM; segment profit margin calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | 5,407,000) | 5,080,000) | 4,262,200) | 3,546,400) | 3,502,000) |
| Revenues | 95,260,000) | 96,509,500) | 98,960,300) | 98,379,600) | 101,885,700) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 5.68% | 5.26% | 4.31% | 3.60% | 3.44% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment profit margin = 100 × Operating income ÷ Revenues
= 100 × 5,407,000 ÷ 95,260,000 = 5.68%
The PBM segment exhibits a distinct divergence between revenue trajectories and profitability metrics from 2013 to 2017. While top-line revenues experienced a gradual decline, operating income and profit margins demonstrated consistent year-over-year growth.
- Revenue Performance
- A general downward trend in revenues is observed, decreasing from 101.89 billion USD in 2013 to 95.26 billion USD by 2017. This represents a contraction in the total volume of revenue generated by the segment over the five-year period.
- Operating Income Growth
- Despite the decline in revenues, operating income increased steadily every year, rising from 3.50 billion USD in 2013 to 5.41 billion USD in 2017. The most significant annual increase occurred between 2014 and 2016.
- Segment Profit Margin Expansion
- The segment profit margin shows a consistent upward trajectory, expanding from 3.44% in 2013 to 5.68% in 2017. The margin improved by 224 basis points over the period, indicating an increase in the efficiency of converting revenue into operating profit.
The inverse relationship between declining revenues and increasing operating income suggests a significant improvement in operational efficiency. The ability to enhance profit margins while managing a shrinking revenue base indicates a successful optimization of cost structures or a strategic shift toward higher-margin service offerings within the PBM segment.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Profit Margin: Other Business Operations
Express Scripts Holding Co.; Other Business Operations; segment profit margin calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | 87,000) | 7,800) | 77,100) | 56,000) | 49,700) |
| Revenues | 4,804,600) | 3,778,000) | 2,791,500) | 2,507,500) | 2,213,100) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 1.81% | 0.21% | 2.76% | 2.23% | 2.25% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment profit margin = 100 × Operating income ÷ Revenues
= 100 × 87,000 ÷ 4,804,600 = 1.81%
The Other Business Operations segment exhibited a pattern of consistent revenue growth coupled with significant volatility in operating income and profit margins between 2013 and 2017. While top-line expansion was steady throughout the period, profitability experienced a severe contraction in 2016 before recovering in 2017.
- Revenue Performance
- Revenues demonstrated a continuous upward trajectory, increasing from 2,213,100 thousand US dollars in 2013 to 4,804,600 thousand US dollars by 2017. This represents a sustained growth trend, with the most substantial year-over-year increases occurring between 2015 and 2017.
- Operating Income Volatility
- Operating income grew steadily from 2013 to 2015, peaking at 77,100 thousand US dollars. However, a sharp decline occurred in 2016, where income fell to 7,800 thousand US dollars. A strong recovery followed in 2017, with operating income reaching a period high of 87,000 thousand US dollars.
- Segment Profit Margin Analysis
- The segment profit margin remained relatively stable between 2.23% and 2.76% from 2013 to 2015. In 2016, the margin collapsed to 0.21%, indicating that the increase in revenue during that year was offset by a disproportionate rise in operating expenses. By 2017, the margin recovered to 1.81%, although it did not return to the peak levels observed in 2015.
The divergence between revenue growth and profitability in 2016 suggests an anomalous operational event or an increase in costs that temporarily eroded the segment's efficiency. The subsequent recovery in 2017 indicates a restoration of operational stability, though the margin remained lower than the pre-2016 average despite the highest recorded revenue levels.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Return on Assets (Segment ROA)
Express Scripts Holding Co., ROA by reportable segment
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 11.13% | 10.07% | 8.17% | 6.71% | 6.66% |
| Other Business Operations | 1.53% | 0.59% | 7.22% | 6.17% | 5.41% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The segment return on assets (ROA) exhibits divergent performance trajectories between the PBM and Other Business Operations divisions over the five-year period ending December 31, 2017.
- PBM Segment Trends
- A consistent and accelerating upward trend is observed in the PBM segment. The ROA increased steadily from 6.66% in 2013 to 11.13% in 2017. This continuous growth indicates a sustained improvement in the segment's ability to generate earnings from its asset base, with the most significant year-over-year gains occurring between 2015 and 2017.
- Other Business Operations Trends
- The Other Business Operations segment demonstrated initial growth, with ROA rising from 5.41% in 2013 to a peak of 7.22% in 2015. This was followed by a sharp decline in 2016, where the ratio fell to 0.59%. Although a slight recovery to 1.53% was recorded in 2017, the segment failed to return to its pre-2016 efficiency levels.
- Comparative Analysis
- The disparity in asset utilization efficiency between the two segments widened significantly over the analyzed period. While the segments performed with relative proximity from 2013 to 2015, the PBM segment became the dominant contributor to asset productivity by 2017, contrasting sharply with the volatility and overall decline observed in Other Business Operations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment ROA: PBM
Express Scripts Holding Co.; PBM; segment ROA calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | 5,407,000) | 5,080,000) | 4,262,200) | 3,546,400) | 3,502,000) |
| Total assets | 48,562,600) | 50,432,700) | 52,174,900) | 52,891,600) | 52,599,100) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 11.13% | 10.07% | 8.17% | 6.71% | 6.66% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × 5,407,000 ÷ 48,562,600 = 11.13%
The PBM segment demonstrates a consistent improvement in operational efficiency and profitability from 2013 through 2017. This period is characterized by a simultaneous increase in operating income and a reduction in the total asset base, resulting in a significant expansion of the Segment Return on Assets (ROA).
- Operating Income Growth
- Operating income exhibited a steady upward trajectory, rising from 3,502,000 thousand US dollars in 2013 to 5,407,000 thousand US dollars by 2017. The most pronounced growth occurred between 2014 and 2016, where income increased from 3,546,400 thousand US dollars to 5,080,000 thousand US dollars, indicating strong revenue growth or effective cost management within the segment.
- Asset Base Optimization
- Total assets remained relatively stable between 2013 and 2014, peaking at 52,891,600 thousand US dollars. Subsequently, a downward trend is observed, with assets declining to 48,562,600 thousand US dollars by the end of 2017. This contraction suggests a lean approach to asset management or a strategic reduction in capital intensity.
- Segment ROA Expansion
- The Segment ROA increased progressively every year, starting at 6.66% in 2013 and reaching 11.13% in 2017. The acceleration in ROA is the direct result of the diverging trends between rising operating income and falling total assets. This indicates that the segment became substantially more efficient at generating profit from its available asset base over the five-year period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment ROA: Other Business Operations
Express Scripts Holding Co.; Other Business Operations; segment ROA calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | 87,000) | 7,800) | 77,100) | 56,000) | 49,700) |
| Total assets | 5,693,200) | 1,312,200) | 1,068,400) | 907,300) | 918,100) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 1.53% | 0.59% | 7.22% | 6.17% | 5.41% |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × 87,000 ÷ 5,693,200 = 1.53%
The Other Business Operations segment experienced significant volatility in both profitability and asset base between 2013 and 2017, resulting in a fluctuating Return on Assets (ROA).
- Operating Income Performance
- Operating income exhibited a consistent growth trend from 2013 to 2015, increasing from US$ 49.7 million to US$ 77.1 million. This trend was sharply reversed in 2016, with income declining to US$ 7.8 million. A significant recovery occurred in 2017, where operating income reached a period high of US$ 87 million.
- Asset Base Expansion
- Total assets remained relatively stable through 2014 before entering a phase of growth. A substantial increase is observed in 2017, with total assets rising to US$ 5.69 billion from US$ 1.31 billion in the previous year. This rapid expansion indicates a significant increase in the capital employed within the segment.
- Segment ROA Interpretation
- The Segment ROA followed a positive trajectory in the early period, peaking at 7.22% in 2015. The ratio collapsed to 0.59% in 2016, directly correlating with the sharp decline in operating income. While the ROA improved to 1.53% in 2017, the recovery was muted relative to the increase in operating income; this is attributed to the massive expansion of the asset base, which diluted the overall return on assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Asset Turnover
Express Scripts Holding Co., asset turnover by reportable segment
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 1.96 | 1.91 | 1.90 | 1.86 | 1.94 |
| Other Business Operations | 0.84 | 2.88 | 2.61 | 2.76 | 2.41 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The asset turnover performance across reportable segments exhibits contrasting patterns of stability and volatility between 2013 and 2017. While the primary pharmacy benefit management segment maintained a consistent efficiency level, the other business operations segment experienced a significant decline in the final year of the observed period.
- PBM Segment Efficiency
- The PBM segment demonstrated remarkable stability in its asset utilization over the five-year period. Starting at 1.94 in 2013, the ratio experienced a slight dip to 1.86 in 2014 but subsequently recovered, reaching a peak of 1.96 by December 31, 2017. This narrow range of fluctuation suggests a highly predictable and stable relationship between the assets employed and the revenue generated by this segment.
- Other Business Operations Efficiency
- Other Business Operations initially exhibited higher asset turnover than the PBM segment, trending upward from 2.41 in 2013 to a peak of 2.88 in 2016. However, a sharp reversal occurred in 2017, where the ratio plummeted to 0.84. This substantial contraction indicates a significant decrease in asset productivity or a disproportionate increase in the asset base relative to revenue during the final year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Asset Turnover: PBM
Express Scripts Holding Co.; PBM; segment asset turnover calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenues | 95,260,000) | 96,509,500) | 98,960,300) | 98,379,600) | 101,885,700) |
| Total assets | 48,562,600) | 50,432,700) | 52,174,900) | 52,891,600) | 52,599,100) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 1.96 | 1.91 | 1.90 | 1.86 | 1.94 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment asset turnover = Revenues ÷ Total assets
= 95,260,000 ÷ 48,562,600 = 1.96
The PBM segment demonstrated a general contraction in both top-line revenue and total asset value between 2013 and 2017. Revenues declined from $101.89 billion in 2013 to $95.26 billion by the end of 2017. Concurrently, the total asset base decreased from $52.60 billion to $48.56 billion, with the most significant reductions occurring after 2015.
- Asset Turnover Ratio Analysis
- The segment asset turnover ratio exhibited a period of volatility followed by steady growth. After starting at 1.94 in 2013, the ratio dipped to a period low of 1.86 in 2014. However, a consistent upward trend followed, with the ratio increasing to 1.90 in 2015, 1.91 in 2016, and reaching a five-year peak of 1.96 by December 31, 2017.
- Resource Utilization Efficiency
- The increase in the asset turnover ratio, despite a continuous decline in total revenues, indicates an improvement in asset utilization efficiency. This pattern suggests that the reduction in total assets outpaced the decrease in revenue, resulting in a higher volume of sales generated per dollar of assets held. The data reflects a successful optimization of the asset base relative to the segment's operational scale.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Asset Turnover: Other Business Operations
Express Scripts Holding Co.; Other Business Operations; segment asset turnover calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenues | 4,804,600) | 3,778,000) | 2,791,500) | 2,507,500) | 2,213,100) |
| Total assets | 5,693,200) | 1,312,200) | 1,068,400) | 907,300) | 918,100) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.84 | 2.88 | 2.61 | 2.76 | 2.41 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment asset turnover = Revenues ÷ Total assets
= 4,804,600 ÷ 5,693,200 = 0.84
The Other Business Operations segment exhibited consistent revenue growth over the five-year period from 2013 to 2017. While operational efficiency remained stable for the majority of the period, a significant shift in the asset structure occurred in 2017, fundamentally altering the segment's asset turnover performance.
- Revenue Trajectory
- Revenues demonstrated a continuous upward trend, increasing from 2.21 billion in 2013 to 4.80 billion by the end of 2017. The most pronounced acceleration occurred between 2015 and 2016, where revenues grew by approximately 35%, followed by a further 27% increase in 2017.
- Asset Base Evolution
- Total assets remained relatively contained between 2013 and 2016, fluctuating within a range of 907 million to 1.31 billion. However, a substantial increase is observed in 2017, with assets rising to 5.69 billion. This represents a more than four-fold increase in the asset base within a single fiscal year.
- Asset Turnover Efficiency
- The segment asset turnover ratio remained strong and relatively stable from 2013 to 2016, fluctuating between 2.41 and 2.88, which indicates a consistent ability to generate revenue relative to the assets employed. In 2017, the ratio experienced a precipitous decline to 0.84. This downturn is not a result of declining revenues, but is driven by the disproportionate surge in total assets, which significantly outpaced revenue growth during that period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Capital Expenditures to Depreciation
Express Scripts Holding Co., capital expenditures to depreciation by reportable segment
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 0.14 | 0.14 | 0.12 | 0.19 | 0.17 |
| Other Business Operations | 0.60 | 0.74 | 0.88 | 0.73 | 0.42 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The analysis of capital expenditures relative to depreciation across reportable segments reveals diverging investment strategies and asset replacement cycles between the PBM and Other Business Operations segments from 2013 to 2017.
- PBM Segment
- The PBM segment consistently exhibits a low capital expenditure to depreciation ratio, indicating that annual investments in fixed assets remain significantly below the annual depreciation charge. The ratio fluctuated slightly, rising from 0.17 in 2013 to a peak of 0.19 in 2014, before dropping to 0.12 in 2015 and stabilizing at 0.14 through 2017. This pattern suggests a mature asset base with minimal requirements for expansion or aggressive replacement.
- Other Business Operations Segment
- In contrast, the Other Business Operations segment demonstrates a higher and more volatile ratio, suggesting a more intensive capital investment phase. A sharp upward trend is observed between 2013 and 2015, with the ratio increasing from 0.42 to a peak of 0.88. Following this peak, a gradual decline occurred, with the ratio receding to 0.74 in 2016 and 0.60 by the end of 2017. This trajectory reflects a period of accelerated capital deployment followed by a moderated investment pace.
Overall, the Other Business Operations segment maintains a substantially higher ratio of capital expenditure to depreciation than the PBM segment throughout the entire period. While the PBM segment operates with a conservative replacement rate, the Other Business Operations segment shows evidence of more significant strategic investment, although the intensity of this spending decreased after 2015.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Capital Expenditures to Depreciation: PBM
Express Scripts Holding Co.; PBM; segment capital expenditures to depreciation calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 248,100) | 307,900) | 269,100) | 412,300) | 411,200) |
| Depreciation and amortization expense | 1,769,700) | 2,124,100) | 2,328,700) | 2,209,500) | 2,419,100) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.14 | 0.14 | 0.12 | 0.19 | 0.17 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 248,100 ÷ 1,769,700 = 0.14
An analysis of the PBM segment reveals a consistent pattern where capital expenditures remain substantially lower than depreciation and amortization expenses throughout the period from 2013 to 2017. This disparity suggests a strategic approach characterized by minimal capital reinvestment relative to the rate of asset consumption, indicating an asset-light operational trajectory.
- Capital Expenditure Trends
- Capital expenditures remained relatively stable between 2013 and 2014, peaking at 412.3 million US dollars. A significant reduction occurred in 2015, where spending dropped to 269.1 million US dollars. Despite a moderate increase to 307.9 million US dollars in 2016, expenditures reached a period low of 248.1 million US dollars by December 31, 2017.
- Depreciation and Amortization Expense Trends
- Depreciation and amortization expenses exhibited a general downward trend over the five-year duration. The expenses declined from a high of 2.4 billion US dollars in 2013 to 1.8 billion US dollars in 2017. This overall decrease suggests a reduction in the total depreciable asset base or the completion of the amortization cycles for significant intangible assets.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation remained well below 1.0 throughout the entire period, fluctuating between 0.12 and 0.19. The ratio peaked in 2014 at 0.19 before falling to its lowest point of 0.12 in 2015. For the final two years of the analysis, the ratio stabilized at 0.14, confirming that the segment consistently invested only a small fraction of its depreciation cost back into new capital assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Segment Capital Expenditures to Depreciation: Other Business Operations
Express Scripts Holding Co.; Other Business Operations; segment capital expenditures to depreciation calculation
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 19,300) | 22,500) | 26,800) | 24,300) | 11,800) |
| Depreciation and amortization expense | 32,300) | 30,500) | 30,400) | 33,400) | 27,900) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.60 | 0.74 | 0.88 | 0.73 | 0.42 |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 19,300 ÷ 32,300 = 0.60
The investment patterns for the Other Business Operations segment between 2013 and 2017 are characterized by a significant mid-period increase in capital spending followed by a gradual decline, while depreciation expenses remained relatively stable.
- Capital Expenditure Trends
- Capital expenditures experienced substantial growth in the early part of the period, rising from 11,800 thousand US$ in 2013 to a peak of 26,800 thousand US$ in 2015. Following this peak, spending trended downward, decreasing to 22,500 thousand US$ in 2016 and further to 19,300 thousand US$ by 2017.
- Depreciation and Amortization Stability
- Depreciation and amortization expenses exhibited minimal volatility over the five-year duration. These costs fluctuated within a narrow range, starting at 27,900 thousand US$ in 2013, peaking at 33,400 thousand US$ in 2014, and ending at 32,300 thousand US$ in 2017.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation consistently remained below 1.0 throughout the analyzed period, indicating that the segment did not fully replace the depreciating value of its assets with new capital investments. The ratio increased from 0.42 in 2013 to a maximum of 0.88 in 2015, coinciding with the peak in capital spending. Subsequently, the ratio declined to 0.74 in 2016 and 0.60 in 2017, reflecting a reduction in the intensity of capital reinvestment relative to asset depreciation.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Revenues
Express Scripts Holding Co., revenues by reportable segment
US$ in thousands
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 95,260,000) | 96,509,500) | 98,960,300) | 98,379,600) | 101,885,700) |
| Other Business Operations | 4,804,600) | 3,778,000) | 2,791,500) | 2,507,500) | 2,213,100) |
| Total | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
Total revenue experienced a marginal decline over the five-year period ending December 31, 2017, decreasing from approximately $104.1 billion to $100.1 billion. This overall trend reflects a divergence in performance between the primary Pharmacy Benefit Management (PBM) segment and Other Business Operations.
- PBM Segment Performance
- A general downward trajectory is observed in the PBM segment, which declined from $101.9 billion in 2013 to $95.3 billion in 2017. Although a slight recovery occurred in 2015, the segment overall showed a contraction in revenue, indicating a reduction in the scale of the primary business driver.
- Other Business Operations Growth
- Conversely, Other Business Operations demonstrated consistent and accelerating growth throughout the period. Revenue in this segment rose from $2.2 billion in 2013 to $4.8 billion in 2017, more than doubling its contribution to the total revenue mix.
- Revenue Mix and Composition
- The analysis indicates a shift in the company's revenue composition. The contraction in the PBM segment was partially offset by the expansion of Other Business Operations. While the PBM segment continues to dominate total revenues, its relative proportion decreased as the alternative business lines grew.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Depreciation and amortization expense
Express Scripts Holding Co., depreciation and amortization expense by reportable segment
US$ in thousands
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 1,769,700) | 2,124,100) | 2,328,700) | 2,209,500) | 2,419,100) |
| Other Business Operations | 32,300) | 30,500) | 30,400) | 33,400) | 27,900) |
| Total | 1,802,000) | 2,154,600) | 2,359,100) | 2,242,900) | 2,447,000) |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
Total depreciation and amortization expenses exhibited an overall downward trajectory between 2013 and 2017, decreasing from approximately $2.45 billion to $1.80 billion. This overall decline is almost exclusively driven by the performance of the PBM segment, which represents the vast majority of the organization's depreciation and amortization costs.
- PBM Segment Analysis
- The PBM segment shows a significant net reduction in depreciation and amortization expenses over the five-year period. Starting at $2.42 billion in 2013, the expense declined to $2.21 billion in 2014, experienced a brief increase to $2.33 billion in 2015, and then fell consistently to $1.77 billion by 2017. The most substantial annual decrease occurred between 2016 and 2017, where expenses dropped by approximately 16.7%.
- Other Business Operations Analysis
- Expenses within Other Business Operations remained relatively stable and nominal in comparison to the PBM segment. The figures fluctuated within a narrow range, starting at $27.9 million in 2013 and ending at $32.3 million in 2017. These variations had a negligible impact on the total consolidated depreciation and amortization expenditure.
- Aggregate Expenditure Trends
- The total expenditure reflects a mirroring of the PBM segment's volatility and general decline. From a peak of $2.45 billion in 2013, the total decreased to $1.80 billion in 2017, representing a total reduction of approximately 26.7%. The concentration of expenses is heavily skewed toward the PBM segment, indicating that the company's overall amortization and depreciation profile is almost entirely dependent on the asset lifecycle and accounting treatments within that specific reportable segment.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Operating income
Express Scripts Holding Co., operating income by reportable segment
US$ in thousands
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 5,407,000) | 5,080,000) | 4,262,200) | 3,546,400) | 3,502,000) |
| Other Business Operations | 87,000) | 7,800) | 77,100) | 56,000) | 49,700) |
| Total | 5,494,000) | 5,087,800) | 4,339,300) | 3,602,400) | 3,551,700) |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
Total operating income demonstrated a consistent upward trajectory over the five-year period ending December 31, 2017, increasing from US$ 3,551.7 million to US$ 5,494.0 million. The growth was characterized by a steady rise in the early period followed by accelerated expansion between 2014 and 2016.
- Pharmacy Benefit Management (PBM) Segment
- The PBM segment acted as the primary catalyst for growth, with operating income rising from US$ 3,502.0 million in 2013 to US$ 5,407.0 million in 2017. Significant gains were observed starting in 2015, where income grew by approximately 20.7% over the previous year, followed by another increase of 19.2% in 2016.
- Other Business Operations Segment
- Operating income from other business operations remained marginal relative to the PBM segment and exhibited high volatility. After a period of growth between 2013 and 2015, a sharp decline occurred in 2016, with income falling to US$ 7.8 million. A strong recovery followed in 2017, with income reaching a period high of US$ 87.0 million.
- Concentration and Contribution Analysis
- The total operating income is heavily concentrated in the PBM segment, which accounted for approximately 98.6% of total operating income in 2013 and remained the dominant driver through 2017. Consequently, the overall financial trend is almost entirely dictated by the PBM segment's performance, while the fluctuations within Other Business Operations had a negligible impact on the total operating results.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Capital expenditures
Express Scripts Holding Co., capital expenditures by reportable segment
US$ in thousands
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 248,100) | 307,900) | 269,100) | 412,300) | 411,200) |
| Other Business Operations | 19,300) | 22,500) | 26,800) | 24,300) | 11,800) |
| Total | 267,400) | 330,400) | 295,900) | 436,600) | 423,000) |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
Total capital expenditures exhibited a general downward trajectory between 2013 and 2017, characterized by a peak in 2014 followed by a marked reduction in subsequent years. The overall investment profile is predominantly driven by the PBM segment, which constitutes the vast majority of the total capital allocation throughout the period.
- PBM Segment Expenditure
- A period of relative stability was observed between 2013 and 2014, with expenditures remaining near 412 million. This was followed by a substantial decrease in 2015 to 269.1 million. Despite a partial recovery to 307.9 million in 2016, the segment reached its lowest expenditure level of 248.1 million by 2017, representing a significant contraction in capital investment compared to the 2013-2014 baseline.
- Other Business Operations Expenditure
- This segment displayed a distinct trend, with an initial sharp increase from 11.8 million in 2013 to 24.3 million in 2014. Spending peaked in 2015 at 26.8 million before entering a gradual decline, ending at 19.3 million in 2017. While this segment is smaller in absolute scale, its growth between 2013 and 2015 contrasted with the later contraction seen in the PBM segment.
- Aggregate Capital Trends
- Total capital expenditures peaked in 2014 at 436.6 million and declined to 267.4 million by 2017. This overall reduction is primarily attributable to the decreased investment within the PBM segment. The volatility in PBM spending serves as the primary driver for the fluctuations observed in the total capital expenditure figures over the five-year period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Total assets
Express Scripts Holding Co., total assets by reportable segment
US$ in thousands
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|
| PBM | 48,562,600) | 50,432,700) | 52,174,900) | 52,891,600) | 52,599,100) |
| Other Business Operations | 5,693,200) | 1,312,200) | 1,068,400) | 907,300) | 918,100) |
| Discontinued operations | —) | —) | —) | —) | 31,000) |
| Total | 54,255,800) | 51,744,900) | 53,243,300) | 53,798,900) | 53,548,200) |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
Total assets remained relatively stable over the five-year period, although the internal composition of these assets underwent a significant structural shift. While the aggregate asset value ended the period higher in 2017 than in 2013, this result was driven by divergent trajectories between the primary PBM segment and Other Business Operations.
- PBM Segment Trend
- A consistent downward trend in assets is observed within the PBM segment starting after 2014. From a peak of US$ 52,891,600 thousand in 2014, assets declined steadily to US$ 48,562,600 thousand by December 31, 2017. This represents a contraction of approximately 8.2% from the 2014 peak, indicating a reduction in the asset base supporting the primary business line.
- Other Business Operations Growth
- In contrast to the PBM segment, Other Business Operations experienced substantial growth. Assets in this category remained flat between 2013 and 2014 but grew aggressively thereafter, rising from US$ 918,100 thousand in 2013 to US$ 5,693,200 thousand in 2017. The most significant acceleration occurred between 2016 and 2017, where assets increased by more than 330% in a single fiscal year.
- Aggregate Asset Volatility
- Total assets fluctuated modestly, peaking in 2014 at US$ 53,798,900 thousand before declining to a period low of US$ 51,744,900 thousand in 2016. The recovery to US$ 54,255,800 thousand in 2017 was not driven by the core PBM business, but exclusively by the expansion of Other Business Operations.
- Structural Asset Reallocation
- A notable shift in asset concentration is evident. In 2013, Other Business Operations accounted for approximately 1.7% of total assets. By 2017, this segment's share of the total asset base increased to approximately 10.5%. This indicates a strategic diversification or expansion of non-PBM activities that offset the shrinking asset base of the PBM segment.
- Discontinued Operations
- Assets associated with discontinued operations were present in 2013 at US$ 31,000 thousand but were completely removed from the balance sheet by 2014, signaling the full divestiture or write-off of those specific assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?