Elevance Health Inc. (NYSE:ELV)

Current Tax Expense

The current tax expense showed a declining trend from 2,192 million USD in 2020 to 1,650 million USD in 2021, representing a significant decrease. This was followed by a moderate increase to 1,746 million USD in 2022. Subsequently, there was a notable rise to 2,414 million USD in 2023, before it slightly decreased to 2,294 million USD in 2024. Overall, the current tax expense demonstrates fluctuations with a recovery and growth phase after the initial drop in 2021.

Deferred Tax Expense (Benefit)

The deferred tax expense exhibited considerable volatility across the years. In 2020, it was a benefit of 526 million USD (negative value). This swung to an expense of 180 million USD in 2021 and almost neutralized to 4 million USD in 2022, indicating minimal deferred tax impact that year. The deferred tax returned strongly to benefit territory with -690 million USD in 2023, reducing the total tax expense burden. In 2024, it remained a benefit but at a lower magnitude of -361 million USD. This pattern indicates fluctuating tax timing differences or changes in tax-related assumptions or temporary differences over time.

Total Income Tax Expense

Total income tax expense increased gradually from 1,666 million USD in 2020 to 1,830 million USD in 2021. It then remained relatively stable at 1,750 million USD in 2022 and slightly decreased to 1,724 million USD in 2023, before rising again to 1,933 million USD in 2024. Despite the variability in current and deferred components, the overall income tax expense remained fairly consistent with a moderate upward trend towards the end of the period.

Summary of Patterns

Analysis indicates that while the current tax expense experienced fluctuations with a trough in 2021 and a peak in 2023, the deferred tax expense showed significant variability including large benefits in 2020 and 2023. The interplay between these components contributed to a total income tax expense that was comparatively steady with slight growth observed by 2024. The large deferred tax benefits in 2020 and 2023 suggest significant adjustments or reversals in deferred tax liabilities or assets during these periods.

The analysis of the tax-related financial metrics over the periods from December 31, 2020, to December 31, 2024, reveals several noteworthy trends and fluctuations.

Statutory federal income tax rate

This rate remained stable at 21% throughout the entire period, indicating no changes in the baseline federal tax policies affecting the company.

State and local income taxes net of federal tax expense/benefit

There is a clear declining trend from 3.8% in 2020 to a low of 1.6% in 2023, followed by a rebound to 2.7% in 2024. This fluctuation suggests variability in the company's state and local tax obligations or adjustments in state tax credits or benefits over time.

Tax exempt interest and dividends received deduction

This deduction showed a consistent, modest decreasing trend in its magnitude (less negative), moving from -0.4% in 2020 to -0.1% in 2024, indicating a gradual reduction in tax benefits derived from exempt interest and dividends.

Change in valuation allowance

Data for this item is missing in the early years but appears in 2023 and 2024 with positive values of 1.1% and 0.6%, respectively. This implies an increasing adjustment relating to valuation allowances during these latest years, which could reflect changes in deferred tax assets or anticipated realizability.

HIP fee

This fee was present only in 2020 at 5.3% and absent thereafter, indicating a one-time or discontinued charge that had a notable impact on tax expenses initially.

Basis adjustments from recent acquisitions

Appearing only in 2020 at -1.8%, this adjustment indicates an acquisition-related tax impact during that year, with no similar adjustments in subsequent years.

Other, net

The "Other, net" category fluctuated between negative values in most years (-1.2%, -0.9%, -1.3%, -1.2%) until it turned positive at 0.3% in 2024, suggesting some shift in miscellaneous tax items that contributed positively to the effective tax rate in the latest year.

Effective income tax rate

The effective tax rate shows a downward trend from 26.7% in 2020 to a low of 22.3% in 2023, followed by an increase to 24.5% in 2024. This trend mirrors some of the movements seen in state and local taxes and other adjustments, reflecting overall tax planning and structural variability over the period.

In summary, the company's effective income tax rate experienced a general decline over the initial years analyzed, driven primarily by reductions in state and local taxes and the disappearance of the HIP fee and acquisition-related basis adjustments. However, the rate increased in 2024, likely influenced by the rise in state and local taxes and the cessation of favorable adjustments in the "Other, net" category. The emergence of positive valuation allowance changes in the later years also indicates evolving deferred tax asset considerations.

Accrued Expenses

The accrued expenses show a fluctuating trend, decreasing from 588 million in 2020 to 379 million in 2022, followed by an increase to 826 million by 2024, indicating variability in short-term liabilities.

Bad Debt Reserves

Bad debt reserves have steadily increased from 143 million in 2020 to 434 million in 2024, suggesting growing concerns or provisions related to uncollectible receivables.

Insurance Reserves

Insurance reserves show minor fluctuations, decreasing from 187 million in 2020 to 147 million in 2022, then rising again to 192 million in 2024, indicating relatively stable but slightly increasing insurance-related obligations.

Lease Liabilities

Lease liabilities display a gradual decrease over the period, from 204 million in 2020 to 170 million in 2024, possibly reflecting lease terminations or payments exceeding new lease obligations.

Retirement Liabilities

Retirement liabilities decline steadily from 205 million in 2020 to 126 million in 2024, indicating improving pension obligations or enhanced funding status.

Deferred Compensation

Deferred compensation shows a mild upward trend, moving from 31 million in 2020 to 45 million in 2024, suggesting slight increases in amounts payable to employees in future periods.

Federal and State Carryforwards

Federal and state carryforwards decrease initially from 274 million in 2020 to 201 million in 2021, then increase substantially to 455 million in 2023 before minor decline to 428 million in 2024, highlighting variability in tax asset utilization or recognition.

Foreign Carryforwards

Foreign carryforwards appear only in 2024 with a value of 90 million, representing a new recognition or adjustment of foreign tax assets.

Investment Basis

The investment basis data shows irregular entries, absent for several years, with a notable value of 340 million in 2022 and a minimal value in 2024, suggesting inconsistent capitalization or accounting for investments.

Other

The category labeled "Other" grows from 113 million in 2020 to a peak of 267 million in 2022, then declines to 100 million in 2024, reflecting fluctuating miscellaneous liabilities or provisions.

Deferred Income Tax Assets (Before Valuation Allowance)

Deferred income tax assets before valuation allowance increase from 1745 million in 2020 to 2411 million in 2024, showing a steady growth in recognized temporary differences that will result in future tax benefits.

Valuation Allowance

Valuation allowance becomes more negative over time, from -84 million in 2020 to -294 million in 2024, indicating increased assessment of the uncollectibility of deferred tax assets.

Deferred Income Tax Assets

Net deferred income tax assets rise from 1661 million in 2020 to 2117 million in 2024, reflecting the net effect of gross deferred tax assets adjusted by the valuation allowance.

U.S. Federal and State Intangible Assets

These intangible assets consistently show negative values, increasing in magnitude from -2073 million in 2020 to -2584 million in 2024, representing accumulated amortization or impairment of these assets.

Foreign Intangible Assets

Foreign intangible assets, present from 2021 onwards, reduce in negative magnitude from -452 million to -194 million by 2024, indicating gradual amortization or revaluation.

Capitalized Software

Capitalized software has negative values throughout, peaking at -777 million in 2021 before decreasing to around -513 million in 2024, suggesting amortization or impairment reversal trends.

Depreciation and Amortization

Depreciation and amortization show variability, increasing in expense from -37 million in 2020 to -62 million in 2022, then decreasing sharply to -38 million in 2024.

Retirement Assets

Retirement assets are negative and show a consistent increase in magnitude, from -260 million in 2020 to -330 million in 2024, implying growing asset balances related to retirement plans.

Lease Right-of-Use Assets

These assets decrease modestly from -131 million in 2020 to -114 million in 2024, reflecting amortization or reductions in lease asset values.

Prepaid Expenses

Prepaid expenses increase in amount over the period, moving from -102 million in 2020 to -275 million in 2024, signifying higher advance payments for goods or services.

Deferred Income Tax Liabilities

Deferred income tax liabilities fluctuate but generally increase in magnitude from -3680 million in 2020 to -4059 million in 2024, indicating growing future tax obligations.

Net Deferred Income Tax Assets (Liabilities)

Net deferred income tax assets (liabilities) remain negative each year, fluctuating from -2019 million in 2020 to -1942 million in 2024, showing a persistent net deferred tax liability position with some variability.

Deferred Tax Asset

The deferred tax asset increased from 103 million USD at the end of 2021 to 137 million USD at the end of 2022, showing a positive growth trend. This upward movement accelerated in 2023, reaching 228 million USD. However, there was a slight decline in 2024 to 206 million USD, indicating some reversal in the previous year’s gain. Overall, the deferred tax asset demonstrates growth over the four-year period starting from 2021, except for a minor reduction in the last year.

Deferred Tax Liabilities, Net

The deferred tax liabilities saw a significant jump from 2019 million USD in 2020 to 2805 million USD in 2021, representing a considerable increase. This was followed by a notable decline in 2022 to 2034 million USD and a further small decrease in 2023 to 1970 million USD. However, in 2024, the liabilities rose again to 2148 million USD. The data indicates volatile movement in deferred tax liabilities over the documented period, with an initial spike, subsequent decreases, and a modest recovery towards the end.

The analysis of the financial data over the five-year period reveals several notable trends and patterns in the company’s asset base, liabilities, equity, and net income when considering both reported and adjusted figures.

Total Assets

Reported total assets show a consistent upward trajectory, increasing from US$86,615 million in 2020 to US$116,889 million in 2024. The adjusted total assets closely mirror this trend but are marginally lower in certain years, indicating minor accounting adjustments primarily related to tax considerations. The steady growth in total assets suggests ongoing expansion or asset acquisitions.

Total Liabilities

Both reported and adjusted total liabilities exhibit a continuous increase over the period. Reported liabilities rise from US$53,416 million in 2020 to US$75,463 million in 2024, while adjusted liabilities follow a similar pattern but remain somewhat lower, indicating the impact of deferred tax and other adjustments. The increasing liabilities correspond with the asset growth and may reflect increased borrowing or obligations.

Shareholders’ Equity

Reported shareholders’ equity grows steadily from US$33,199 million in 2020 to US$41,315 million in 2024, showing a general enhancement in net worth. The adjusted equity values are consistently higher than the reported figures, suggesting upward adjustments possibly due to the revaluation of deferred tax assets or liabilities. The equity growth trend supports a solid financial position, though the rate of increase is moderate relative to assets and liabilities.

Shareholders’ Net Income

The reported net income shows growth from US$4,572 million in 2020 to a peak in 2021 at US$6,104 million, followed by a slight decline and stabilization around US$5,980 million by 2024. Adjusted net income presents a different pattern: it increases sharply in 2021, surpassing the reported figure, but then declines more noticeably in 2023 before recovering modestly in 2024. This volatility in adjusted net income suggests the effects of tax adjustments and possibly fluctuating deferred tax expenses or benefits impacting reported profitability.

Overall, the company demonstrates growth in its asset base and equity while managing increasing liabilities. The adjusted figures provide insight into deferred tax impacts that moderate the reported financial results, particularly affecting net income variability. These trends indicate steady expansion with consistent profitability, albeit with some underlying tax-related adjustments influencing reported performance.

Net Profit Margin

The reported net profit margin exhibits a slight downward trend from 3.78% in 2020 to 3.41% in 2024, peaking at 4.46% in 2021. The adjusted net profit margin generally follows a similar pattern but shows a less consistent decline, rising to 4.59% in 2021 before decreasing to 3.11% in 2023 and slightly recovering to 3.21% in 2024. This indicates some volatility in profitability after accounting for annual and deferred income tax adjustments.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show a positive trend, increasing from approximately 1.39 in 2020 to about 1.5 in 2024. The adjusted figures are nearly identical to the reported values, suggesting asset utilization efficiency has improved steadily over the five years and that tax adjustments have minimal impact on this metric.

Financial Leverage

Reported financial leverage increased from 2.61 in 2020 to 2.83 in 2024, with a slight dip in 2023. Adjusted financial leverage follows a similar upward trajectory, starting at 2.46 in 2020 and rising to 2.7 in 2024. This implies a gradual increase in the company's use of debt relative to equity, with adjustments reflecting somewhat lower leverage but the same general trend.

Return on Equity (ROE)

Reported ROE rose sharply from 13.77% in 2020 to a peak of 16.93% in 2021, then steadily declined to 14.47% in 2024. Adjusted ROE trends similarly, increasing to 16.21% in 2021 before decreasing more sharply to 12.9% in 2023 and slightly rising to 12.99% in 2024. The adjusted ROE is consistently below the reported figure, indicating that deferred and annual tax effects reduce equity returns over time.

Return on Assets (ROA)

Reported ROA improves from 5.28% in 2020 to a peak of 6.26% in 2021, followed by a gradual decline to 5.12% in 2024. Adjusted ROA rises slightly higher than the reported figure in 2021 at 6.45%, but then decreases more significantly to 4.82% in 2024. These patterns suggest that asset profitability was strongest in 2021 but weakened thereafter, with tax adjustments amplifying the decline in asset efficiency returns.

Reported shareholders’ net income

The reported shareholders’ net income exhibited an overall upward trend from 2020 through 2021, increasing from 4572 million USD to 6104 million USD. However, from 2021 onwards, there was a gradual decline, with net income decreasing slightly to 6025 million USD in 2022, then to 5987 million USD in 2023, and further marginally down to 5980 million USD in 2024. This indicates that the peak in net income was reached in 2021, after which the company experienced a mild but consistent decrease over the following three years.

Adjusted shareholders’ net income

The adjusted shareholders’ net income shows a more volatile pattern compared to the reported figures. After a significant increase from 4046 million USD in 2020 to 6284 million USD in 2021, it stabilized somewhat in 2022 at 6029 million USD. Thereafter, the adjusted net income declined considerably to 5297 million USD in 2023 but rebounded to 5619 million USD in 2024. This pattern suggests that adjustments related to reported and deferred income taxes, or other factors, have impacted the adjusted earnings more markedly than the reported net income, leading to greater fluctuations.

Reported net profit margin

The reported net profit margin rose from 3.78% in 2020 to a peak of 4.46% in 2021, reflecting improved profitability during that year. Subsequently, it declined over the next three years, dropping to 3.87% in 2022, then to 3.52% in 2023, and reaching 3.41% in 2024. The downward trend from 2021 onward is consistent with the pattern observed in reported net income, indicating reduced profitability margins over time post-2021.

Adjusted net profit margin

The adjusted net profit margin showed a similar initial increase, from 3.35% in 2020 to 4.59% in 2021. This margin then declined more sharply than the reported margin to 3.87% in 2022, followed by a further drop to 3.11% in 2023. Interestingly, there was a slight recovery in 2024 to 3.21%. The sharper decline and partial recovery suggest that the adjustments affecting net income had a stronger impact on profitability in these years, revealing more variability in adjusted profitability than in reported figures.

Total Assets

Over the observed five-year period, total assets demonstrated a consistent upward trend. Reported total assets increased from 86,615 million USD in 2020 to 116,889 million USD in 2024, reflecting steady asset growth. Adjusted total assets closely mirrored this pattern, rising from 86,615 million USD to 116,683 million USD, indicating minimal differences between reported and adjusted figures.

Total Asset Turnover

The total asset turnover ratio exhibited an overall positive trajectory from 2020 through 2024, with minor fluctuations in the later years. Reported total asset turnover improved from 1.39 in 2020 to a peak of 1.56 in 2023 before slightly decreasing to 1.50 in 2024. Adjusted total asset turnover values followed a similar pattern, increasing from 1.39 in 2020 to a high of 1.57 in 2023 and then declining to 1.50 in 2024. This suggests enhanced efficiency in utilizing assets over the period until a modest pullback in the final year.

Overall Analysis

The simultaneous growth in total assets and increase in total asset turnover ratios through 2023 imply that asset base expansion was effectively leveraged to generate revenue growth. The slight decrease in turnover ratios in 2024, despite continued asset growth, may warrant further examination to understand any changes in operational efficiency or market conditions during that year. The close alignment between reported and adjusted figures throughout the timeframe indicates consistency in accounting treatments related to income tax adjustments without significant impact on asset measurements or turnover performance.

The analysis of the financial data from 2020 to 2024 reveals several noteworthy trends in the company's asset base, equity position, and leverage ratios when both reported and deferred income tax adjustments are considered.

Total Assets

Reported total assets increased steadily each year, growing from approximately $86.6 billion in 2020 to $116.9 billion in 2024, reflecting a compound growth pattern. Adjusted total assets followed a similar trajectory but consistently registered slightly lower values than reported figures, indicating that deferred income tax adjustments moderately decreased the asset base across the periods. The gap between reported and adjusted total assets remained relatively stable.

Shareholders’ Equity

Reported shareholders’ equity also showed consistent growth, rising from roughly $33.2 billion in 2020 to $41.3 billion in 2024. Adjusted shareholders’ equity was higher than reported equity each year, beginning at $35.2 billion in 2020 and reaching $43.3 billion by 2024. This divergence suggests that tax adjustments contributed positively to the equity base, increasing the company’s net worth relative to reported figures. The overall increase in equity indicates improved capitalization over the analyzed period.

Financial Leverage Ratios

Both reported and adjusted financial leverage ratios exhibited an increasing trend from 2020 through 2022. Reported financial leverage rose from 2.61 to a peak of 2.83 in 2022, then decreased slightly in 2023 before returning to 2.83 in 2024. Adjusted leverage followed a similar pattern, increasing from 2.46 in 2020 to 2.69 in 2022, dipping in 2023, and then rising again to 2.7 in 2024. These ratios indicate an overall increase in financial leverage during the middle periods, reflecting a higher proportion of assets financed through debt. The modest decline in 2023 suggests a temporary deleveraging before leverage was restored in 2024.

In summary, the company demonstrated steady asset and equity growth throughout the period, with deferred tax adjustments affecting the reported equity positively and the asset base moderately. The financial leverage exhibited a rising trend with a slight mid-period reduction, indicating dynamic management of capital structure and financing strategies over time.

Shareholders’ Net Income

The reported shareholders’ net income demonstrated an overall upward trend from 2020 to 2021, rising significantly from 4,572 million USD to 6,104 million USD. It slightly declined thereafter, maintaining figures just above 5,980 million USD through 2024, with a peak in 2021. The adjusted net income followed a similar pattern but with more volatility, peaking in 2021 at 6,284 million USD, dropping to 5,297 million USD in 2023, and partially recovering to 5,619 million USD by 2024.

Shareholders’ Equity

Reported shareholders’ equity showed consistent growth from 33,199 million USD at the end of 2020 to 41,315 million USD by the end of 2024. Adjusted shareholders’ equity reflected a comparable rising trend, starting at 35,218 million USD in 2020 and increasing steadily to 43,257 million USD in 2024. This indicates strengthening equity bases in both reported and adjusted figures.

Return on Equity (ROE)

The reported ROE increased from 13.77% in 2020 to a peak of 16.93% in 2021, followed by a gradual decline to 14.47% by 2024. Adjusted ROE followed a similar trajectory but experienced a more pronounced decrease after 2021, falling from 16.21% to around 12.9% in 2023, and then slightly improving to 12.99% in 2024. This reflects a reduction in profitability on both a reported and adjusted basis, despite the overall growth in equity.

Overall Insights

The data reveals robust growth in equity from 2020 through 2024, supporting an expanding capital base. While reported net income peaked earlier and stabilized at slightly lower levels, adjusted net income exhibited more variability, suggesting adjustments related to income tax or other accounting treatments influence net earnings. The decline in ROE, particularly adjusted ROE, despite growing equity, may signify pressures on income generation efficiency or changes in business conditions impacting profitability. The partial recovery in adjusted net income and ROE in the final year may indicate some stabilization or improvement in operational performance or tax adjustments.

Reported shareholders’ net income

The reported net income demonstrated an increasing trend from 2020 to 2021, rising from 4572 million USD to 6104 million USD. Following this peak, it slightly declined and stabilized around the 6000 million USD mark from 2022 to 2024, indicating a plateau in profitability after the initial growth.

Adjusted shareholders’ net income

Adjusted net income rose sharply from 4046 million USD in 2020 to 6284 million USD in 2021, exceeding the reported figure for the same year. This was followed by a decline in 2023, dropping to 5297 million USD, before increasing again in 2024 to 5619 million USD. This pattern suggests greater volatility and adjustments impacting reported results significantly in recent years.

Reported total assets

Total assets exhibited steady growth over the five-year period, increasing from 86615 million USD in 2020 to 116889 million USD in 2024. The consistent upward trajectory reflects ongoing expansion or asset accumulation by the company year over year.

Adjusted total assets

The adjusted total assets closely mirror the reported figures, indicating minimal difference between adjusted and reported asset values. Both datasets reveal a similar steady increase from 86615 million USD in 2020 to 116683 million USD in 2024, confirming consistent asset growth under both measurement bases.

Reported Return on Assets (ROA)

The reported ROA increased from 5.28% in 2020 to a peak of 6.26% in 2021, followed by a gradual decline reaching 5.12% in 2024. This suggests that asset profitability improved notably initially but has been tapering off in recent years, despite the increasing asset base.

Adjusted Return on Assets (ROA)

The adjusted ROA showed a similar pattern with a rise to 6.45% in 2021, the highest point observed, then a steady fall to 4.82% by 2024. The adjusted ROA remains consistently below the reported ROA after 2021, highlighting the impact of adjustments on profitability measures that consider deferred taxes and other factors.