Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Builders FirstSource Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal	789,465)	475,737)	66,017)	3,678)	(1,831)
State	125,460)	84,967)	11,998)	6,274)	5,572)
Current	914,925)	560,704)	78,015)	9,952)	3,741)
Federal	(73,016)	(33,803)	16,270)	45,955)	45,934)
State	(19,445)	(770)	344)	5,039)	5,889)
Deferred	(92,461)	(34,573)	16,614)	50,994)	51,823)
Income tax expense	822,464)	526,131)	94,629)	60,946)	55,564)

Based on: 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), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Builders FirstSource Inc. current increased from 2020 to 2021 and from 2021 to 2022.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Builders FirstSource Inc. deferred decreased from 2020 to 2021 and from 2021 to 2022.
Income tax expense	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Builders FirstSource Inc. income tax expense increased from 2020 to 2021 and from 2021 to 2022.

Builders FirstSource Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State income taxes, net of federal income tax	2.30%	3.20%	3.70%	2.80%	4.30%
Stock-based compensation windfall benefit	-0.50%	-0.40%	-0.50%	-0.80%	-1.60%
Permanent difference, 162(m) limitation	0.30%	0.30%	0.50%	0.40%	0.60%
Permanent difference, credits	-0.20%	-0.90%	-1.70%	-2.30%	-4.60%
Permanent difference, other	0.00%	0.20%	0.30%	0.70%	1.40%
Other	0.10%	0.00%	-0.10%	-0.20%	0.20%
Effective tax rate for continuing operations	23.00%	23.40%	23.20%	21.60%	21.30%

Based on: 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), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Effective tax rate for continuing operations	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Builders FirstSource Inc. effective tax rate for continuing operations increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Builders FirstSource Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Accrued expenses	33,146)	31,828)	19,182)	8,219)	10,019)
Insurance reserves	33,824)	32,080)	16,582)	14,277)	13,245)
Stock-based compensation expense	5,696)	5,008)	3,549)	3,325)	4,770)
Accounts receivable	16,480)	8,742)	4,726)	3,799)	3,892)
Inventories	14,965)	10,387)	6,152)	5,394)	13,348)
Operating loss and credit carryforwards	14,221)	18,356)	10,812)	13,821)	38,813)
Operating lease liabilities	119,232)	113,273)	70,216)	74,650)	—)
Other	4,751)	3,098)	3,746)	1,677)	—)
Deferred tax assets, before valuation allowance	242,315)	222,772)	134,965)	125,162)	84,087)
Valuation allowance	—)	(2,573)	(2,409)	(2,409)	(2,409)
Deferred tax assets	242,315)	220,199)	132,556)	122,753)	81,678)
Prepaid expenses	(7,953)	(8,960)	(3,914)	(2,393)	(2,845)
Goodwill and other intangible assets	(231,223)	(307,165)	(47,490)	(37,426)	(28,055)
Property, plant and equipment	(158,173)	(156,315)	(57,353)	(37,991)	(26,670)
Operating lease right-of-use assets	(114,626)	(109,880)	(68,641)	(73,171)	—)
Other	—)	—)	—)	—)	(1,342)
Deferred tax liabilities	(511,975)	(582,320)	(177,398)	(150,981)	(58,912)
Net deferred tax asset (liability)	(269,660)	(362,121)	(44,842)	(28,228)	22,766)

Based on: 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), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Deferred tax assets, before valuation allowance	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Builders FirstSource Inc. deferred tax assets, before valuation allowance increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Builders FirstSource Inc. deferred tax assets increased from 2020 to 2021 and from 2021 to 2022.
Net deferred tax asset (liability)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Builders FirstSource Inc. net deferred tax asset (liability) decreased from 2020 to 2021 but then slightly increased from 2021 to 2022.

Builders FirstSource Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Deferred tax assets	—)	—)	4,653)	8,417)	22,766)
	Deferred tax liabilities	269,660)	362,121)	49,495)	36,645)	—)

Based on: 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), 10-K (reporting date: 2018-12-31).

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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.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Builders FirstSource Inc. deferred tax liabilities increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Builders FirstSource Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	10,595,160)	10,714,343)	4,173,671)	3,249,490)	2,932,309)
Less: Noncurrent deferred tax assets, net	—)	—)	4,653)	8,417)	22,766)
Total assets (adjusted)	10,595,160)	10,714,343)	4,169,018)	3,241,073)	2,909,543)
Adjustment to Total Liabilities
Total liabilities (as reported)	5,632,594)	5,911,862)	3,020,888)	2,424,537)	2,335,971)
Less: Noncurrent deferred tax liabilities, net	269,660)	362,121)	49,495)	36,645)	—)
Total liabilities (adjusted)	5,362,934)	5,549,741)	2,971,393)	2,387,892)	2,335,971)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	4,962,566)	4,802,481)	1,152,783)	824,953)	596,338)
Less: Net deferred tax assets (liabilities)	(269,660)	(362,121)	(44,842)	(28,228)	22,766)
Stockholders’ equity (adjusted)	5,232,226)	5,164,602)	1,197,625)	853,181)	573,572)
Adjustment to Net Income
Net income (as reported)	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Add: Deferred income tax expense (benefit)	(92,461)	(34,573)	16,614)	50,994)	51,823)
Net income (adjusted)	2,656,908)	1,690,843)	330,151)	272,803)	257,014)

Based on: 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), 10-K (reporting date: 2018-12-31).

Builders FirstSource Inc., Financial Data: Reported vs. Adjusted

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Builders FirstSource Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	12.10%	8.67%	3.66%	3.05%	2.66%
Adjusted net profit margin	11.69%	8.50%	3.86%	3.75%	3.33%
Total Asset Turnover
Reported total asset turnover	2.14	1.86	2.05	2.24	2.63
Adjusted total asset turnover	2.14	1.86	2.05	2.25	2.65
Financial Leverage
Reported financial leverage	2.14	2.23	3.62	3.94	4.92
Adjusted financial leverage	2.02	2.07	3.48	3.80	5.07
Return on Equity (ROE)
Reported ROE	55.40%	35.93%	27.20%	26.89%	34.41%
Adjusted ROE	50.78%	32.74%	27.57%	31.97%	44.81%
Return on Assets (ROA)
Reported ROA	25.95%	16.10%	7.51%	6.83%	7.00%
Adjusted ROA	25.08%	15.78%	7.92%	8.42%	8.83%

Based on: 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), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Builders FirstSource Inc. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Builders FirstSource Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
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.	Builders FirstSource Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Builders FirstSource Inc. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Builders FirstSource Inc. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Builders FirstSource Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Net sales	22,726,418)	19,893,856)	8,558,874)	7,280,431)	7,724,771)
Profitability Ratio
Net profit margin¹	12.10%	8.67%	3.66%	3.05%	2.66%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,656,908)	1,690,843)	330,151)	272,803)	257,014)
Net sales	22,726,418)	19,893,856)	8,558,874)	7,280,431)	7,724,771)
Profitability Ratio
Adjusted net profit margin²	11.69%	8.50%	3.86%	3.75%	3.33%

Based on: 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), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income ÷ Net sales
= 100 × 2,749,369 ÷ 22,726,418 = 12.10%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 2,656,908 ÷ 22,726,418 = 11.69%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Builders FirstSource Inc. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net sales	22,726,418)	19,893,856)	8,558,874)	7,280,431)	7,724,771)
Total assets	10,595,160)	10,714,343)	4,173,671)	3,249,490)	2,932,309)
Activity Ratio
Total asset turnover¹	2.14	1.86	2.05	2.24	2.63
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales	22,726,418)	19,893,856)	8,558,874)	7,280,431)	7,724,771)
Adjusted total assets	10,595,160)	10,714,343)	4,169,018)	3,241,073)	2,909,543)
Activity Ratio
Adjusted total asset turnover²	2.14	1.86	2.05	2.25	2.65

Based on: 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), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 22,726,418 ÷ 10,595,160 = 2.14

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 22,726,418 ÷ 10,595,160 = 2.14

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Builders FirstSource Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	10,595,160)	10,714,343)	4,173,671)	3,249,490)	2,932,309)
Stockholders’ equity	4,962,566)	4,802,481)	1,152,783)	824,953)	596,338)
Solvency Ratio
Financial leverage¹	2.14	2.23	3.62	3.94	4.92
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	10,595,160)	10,714,343)	4,169,018)	3,241,073)	2,909,543)
Adjusted stockholders’ equity	5,232,226)	5,164,602)	1,197,625)	853,181)	573,572)
Solvency Ratio
Adjusted financial leverage²	2.02	2.07	3.48	3.80	5.07

Based on: 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), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 10,595,160 ÷ 4,962,566 = 2.14

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 10,595,160 ÷ 5,232,226 = 2.02

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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.	Builders FirstSource Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Stockholders’ equity	4,962,566)	4,802,481)	1,152,783)	824,953)	596,338)
Profitability Ratio
ROE¹	55.40%	35.93%	27.20%	26.89%	34.41%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,656,908)	1,690,843)	330,151)	272,803)	257,014)
Adjusted stockholders’ equity	5,232,226)	5,164,602)	1,197,625)	853,181)	573,572)
Profitability Ratio
Adjusted ROE²	50.78%	32.74%	27.57%	31.97%	44.81%

Based on: 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), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 2,749,369 ÷ 4,962,566 = 55.40%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 2,656,908 ÷ 5,232,226 = 50.78%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Builders FirstSource Inc. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Total assets	10,595,160)	10,714,343)	4,173,671)	3,249,490)	2,932,309)
Profitability Ratio
ROA¹	25.95%	16.10%	7.51%	6.83%	7.00%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,656,908)	1,690,843)	330,151)	272,803)	257,014)
Adjusted total assets	10,595,160)	10,714,343)	4,169,018)	3,241,073)	2,909,543)
Profitability Ratio
Adjusted ROA²	25.08%	15.78%	7.92%	8.42%	8.83%

Based on: 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), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,749,369 ÷ 10,595,160 = 25.95%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 2,656,908 ÷ 10,595,160 = 25.08%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Builders FirstSource Inc. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Builders FirstSource Inc. (NYSE:BLDR)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Builders FirstSource Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Builders FirstSource Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)