T-Mobile US Inc. (NASDAQ:TMUS)

Current tax expense trends

The current tax expense shows variability over the five-year period. It increased from 77 million US dollars in 2020 to 130 million in 2021, demonstrating a notable rise. However, it then decreased significantly to 64 million in 2022 before climbing again to 82 million in 2023. The most substantial increase occurred in 2024, where current tax expense surged to 253 million, exceeding previous years by a considerable margin.

Deferred tax expense trends

The deferred tax expense exhibits a fluctuating but overall increasing trend, particularly pronounced in the later years. Starting at a relatively high value of 709 million in 2020, it dropped sharply to 197 million in 2021. It rebounded substantially in 2022 to 492 million, followed by a dramatic increase to 2,600 million in 2023. This growth accelerated further in 2024, reaching 3,120 million, indicating significant deferred tax liability recognition or adjustments during these years.

Total income tax expense trends

The total income tax expense, which combines current and deferred tax expenses, reflects the pattern of its components with rising volatility and magnitude. From 786 million in 2020, it dropped to 327 million in 2021 and then increased to 556 million in 2022. A pronounced escalation occurred in 2023, with income tax expense rising to 2,682 million, followed by a further increase to 3,373 million in 2024. This trend suggests intensified tax-related impacts, primarily driven by deferred tax expense changes.

Summary insights

Across the period, the deferred tax expense appears to be the primary factor driving the volatility and growth in total income tax expense. While current tax expense fluctuates moderately, deferred tax expense asymmetrically increases with sharp rises in the last two years. This pattern could indicate substantial changes in timing differences, tax asset valuations, or regulatory environment affecting deferred tax calculations. The substantial increases in total income tax expense in 2023 and 2024 should be closely monitored for their implications on financial performance and tax planning.

The analysis of the annual data relating to statutory and effective income tax rates over the five-year period reveals several notable trends and fluctuations. The federal statutory income tax rate remained consistently stable at 21% each year, indicating no significant legislative changes at the federal tax level during this timeframe.

State taxes, net of federal benefit

There is a clear downward trend observed in state tax rates, decreasing steadily from 4.8% in 2020 to 3.3% in 2024. This decline may reflect changes in state tax regulations or effective tax planning measures reducing the overall state tax burden.

Effect of law and rate changes

This factor exhibits volatility, with notable negative impacts especially in 2022 (-5.3%) and reduced influence in other years, culminating in a minor positive effect in 2024 (0.1%). This suggests occasional legislative or regulatory adjustments affecting tax liabilities during the period.

Change in valuation allowance

The valuation allowance shows significant negative percentages in 2020 (-2.6%) and more pronouncedly in 2021 (-10.7%), then stabilizes near zero in subsequent years. This pattern indicates a substantial utilization or reversal of valuation allowances early in the period, possibly due to reassessments of deferred tax assets.

Foreign taxes

This component remains relatively low and stable, fluctuating between 0.1% and 0.7%, likely reflecting consistent foreign tax exposures without major changes across years.

Permanent differences

These are minor and irregular, oscillating slightly above and below zero without clear directional trend, suggesting limited impact on taxable income from permanent tax differences.

Federal tax credits

Negative values across all years indicate consistent tax credit benefits. The peak credit effect is noted in 2021 (-2.5%), with a somewhat reduced but steady benefit afterward. This points to ongoing utilization of federal tax credits to offset tax liability.

Equity-based compensation

A decreasing negative effect from -2.5% in 2020 to -0.3% in 2024 reveals a reduction in the impact of equity compensation deductions on the effective tax rate, suggesting a potential shift in compensation structure or tax treatment.

Non-deductible compensation

Starting at 2.3% in 2020 and declining to slightly negative (-0.1%) in 2024, this factor shows a diminishing impact on increasing the effective tax rate, indicating improved deductibility or changes in compensation practices.

Other, net

Minor fluctuations near zero with no consistent direction, implying negligible overall effect.

Effective income tax rate

The effective income tax rate demonstrates notable variability: it declines sharply from 22.3% in 2020 to 9.8% in 2021, recovers partially to 17.7% in 2022, peaks at 24.4% in 2023, and slightly decreases to 22.9% in 2024. This variability primarily reflects changes in valuation allowances, law effects, tax credits, and state taxes.

In summary, the effective tax rate trends are influenced primarily by fluctuations in valuation allowances, law and rate changes, and tax credits, alongside a steady reduction in state tax burden. The federal statutory tax rate remains constant, while other components such as equity-based and non-deductible compensation show decreasing influence over time, contributing to the observed effective tax rate dynamics.

Loss Carryforwards

The loss carryforwards initially decreased slightly from 4,540 million USD in 2020 to 4,414 million USD in 2021. A significant increase occurred in 2022, reaching 6,641 million USD, followed by a moderate decline in 2023 to 6,227 million USD and a sharper decrease to 3,844 million USD in 2024. This pattern indicates variability, with a peak in 2022 and subsequent years exhibiting reductions.

Lease Liabilities

Lease liabilities showed a decrease from 8,031 million USD in 2020 to 7,717 million USD in 2021. A recovery took place in 2022, climbing to 8,837 million USD, before gradually declining in the following years, with 8,355 million USD in 2023 and 7,781 million USD in 2024. This suggests fluctuations with an overall downward trend from the 2022 peak.

Property and Equipment (Initial and Later Entries)

The initial recorded value for property and equipment shows 90 million USD in 2020 but is missing for 2021. Subsequently, a distinct property and equipment line shows negative values starting from 2021: -380 million USD, then sharply increasing in magnitude to -5,147 million USD in 2022, -6,142 million USD in 2023, and slightly decreasing in absolute terms to -5,874 million USD in 2024. This negative reporting could reflect depreciation, disposals, or impairments significantly increasing from 2022 onward.

Reserves and Accruals

Reserves and accruals declined from 1,348 million USD in 2020 to 1,280 million USD in 2021. Thereafter, the value increased to 1,526 million USD in 2022, then progressively decreased to 1,177 million USD in 2023 and 958 million USD in 2024. The data show a peak in 2022 followed by a downward adjustment in subsequent years.

Other Assets

Other assets increased steadily from 3,076 million USD in 2020 to 3,292 million USD in 2021, followed by a more pronounced rise to 4,722 million USD in 2022. The values then declined gradually to 4,459 million USD in 2023 and 3,959 million USD in 2024. This suggests growth until 2022 with a moderate reduction afterwards.

Deferred Tax Assets, Gross

The gross deferred tax assets show a decreasing trend from 17,085 million USD in 2020 to 16,703 million USD in 2021, followed by a marked increase to 21,726 million USD in 2022. Thereafter, a decline occurs with values at 20,218 million USD in 2023 and 16,542 million USD in 2024, indicating volatility and a peak at 2022.

Valuation Allowance

The valuation allowance steadily decreased in magnitude from -878 million USD in 2020 to -259 million USD in 2024. This progressive reduction suggests an improving outlook on the realizability of deferred tax assets over the analyzed period.

Deferred Tax Assets, Net

Net deferred tax assets increased slightly from 16,207 million USD in 2020 to 16,268 million USD in 2021, followed by a significant rise to 21,351 million USD in 2022. Subsequently, there was a decline to 19,912 million USD in 2023 and a further drop to 16,283 million USD in 2024, mirroring the trends observed in gross deferred tax assets but moderated by the valuation allowance.

Spectrum Licenses

Spectrum licenses are reported as negative values, indicating either amortization or impairment. These values decreased from -17,518 million USD in 2020 to -19,527 million USD in 2024, with a consistent incremental decrease each year. This reflects ongoing charge-offs or usage of spectrum assets.

Lease Right-of-Use Assets

The lease right-of-use assets also display negative values, diminishing from -7,239 million USD in 2020 to -6,508 million USD in 2024. Although values generally remain negative, there is a slight improvement over time, suggesting amortization or payments reducing the lease asset balances.

Other Deferred Tax Liabilities

Other deferred tax liabilities declined in magnitude from -1,416 million USD in 2020 to -1,074 million USD in 2024. This decline indicates a reduction in certain deferred tax liabilities, potentially through settlements or changes in tax positions.

Deferred Tax Liabilities, Total

Total deferred tax liabilities expanded from -26,173 million USD in 2020 to a peak of -33,370 million USD in 2023, then slightly decreased to -32,983 million USD in 2024. This overall increase suggests growing deferred tax obligations, largely driven by factors such as the reported negative balances in spectrum licenses and property and equipment.

Net Deferred Tax Assets (Liabilities)

The net deferred tax position shows a consistent deterioration, with net deferred tax liabilities increasing from -9,966 million USD in 2020 to -16,700 million USD in 2024. This expanding deficit indicates rising tax liabilities exceeding deferred tax assets more significantly over time, highlighting an increasing net tax burden in deferred terms.

The data reveals a consistent upward trend in deferred tax liabilities for the company over the five-year period ending in 2024. Specifically, the deferred tax liabilities increased steadily each year without any decline or plateau.

Trend Analysis

Deferred tax liabilities grew from US$ 9,966 million in 2020 to US$ 16,700 million in 2024, representing an approximate 67% increase over the period.

The annual increments show an accelerating growth pattern, with the biggest annual increase occurring between 2023 and 2024.

Implications

The rising deferred tax liabilities may indicate the company is recognizing temporary differences that could result in future tax obligations.

This accumulation suggests ongoing investment, asset acquisitions, or utilization of tax planning strategies affecting taxable income recognition.

Overall, the data suggests a strengthening of deferred tax obligations over time, reflecting potential long-term fiscal planning and accounting considerations by the company.

The financial data from the given periods reveals distinct trends in the reported versus adjusted figures, reflecting the impact of annual reported and deferred income tax adjustments.

Total Liabilities

Reported total liabilities show a consistent upward trajectory from $134,818 million in 2020 to $146,294 million in 2024, indicating a gradual increase in the company's obligations. In contrast, adjusted total liabilities, which account for tax effects, also rise but at a more moderate pace, increasing from $124,852 million in 2020 to $129,594 million in 2024. Notably, adjusted liabilities slightly decreased between 2022 and 2023 before inching up again, suggesting adjustments help smooth liability growth.

Stockholders’ Equity

Reported stockholders' equity displays a peak in 2022 at $69,656 million, followed by a notable decline to $61,741 million in 2024. This downward trend post-2022 may be indicative of shareholder value erosion or increased distributions. Conversely, adjusted stockholders’ equity, which integrates deferred tax considerations, reveals a more stable and upward progression from $75,310 million in 2020 to $78,441 million in 2024, with only a modest dip after 2022. This stability suggests that tax adjustments positively influence the perceived equity position.

Net Income

Reported net income exhibits variability, initially declining from $3,064 million in 2020 to $2,590 million in 2022, then sharply increasing to $11,339 million in 2024. Adjusted net income mirrors this pattern but remains consistently higher, growing from $3,773 million in 2020 to a peak of $14,459 million in 2024. The adjusted figures demonstrate a smoother growth profile, highlighting the effect of deferred tax adjustments that mitigate fluctuations and improve profitability presentation.

Overall, the adjusted financial data depict a more stable and generally upward trend in equity and net income, with moderated growth in liabilities compared to the reported figures. This emphasizes the significance of accounting for deferred income taxes in providing a more consistent financial performance and position over time.

Net Profit Margin Trends

The reported net profit margin exhibits a declining trend from 4.48% in 2020 to 3.25% in 2022, followed by a notable increase to 10.59% in 2023 and further to 13.93% in 2024. The adjusted net profit margin follows a similar pattern but at slightly higher levels, decreasing from 5.52% in 2020 to 3.87% in 2022, then rising significantly to 13.9% in 2023 and 17.76% in 2024. This indicates an improved profitability after adjustments, particularly in the most recent two years.

Financial Leverage Trends

Reported financial leverage remained relatively stable from 2020 through 2022, fluctuating around 3.0, before increasing to 3.21 in 2023 and 3.37 in 2024. Conversely, adjusted financial leverage remained quite steady and lower than the reported figures, hovering around 2.6 throughout the period. This suggests that adjustments lead to recognition of lower leverage, with stable debt or equity structure when adjusted for tax items.

Return on Equity (ROE) Trends

Reported ROE decreased from 4.69% in 2020 to 3.72% in 2022, then sharply increased to 12.85% in 2023 and 18.37% in 2024. Adjusted ROE exhibits a similar pattern with marginally lower levels in the earlier years but converging closely in later years, moving from 5.01% in 2020 to 3.83% in 2022, then elevating to 13.97% in 2023 and 18.43% in 2024. This pattern reflects improved equity efficiency especially in recent years after accounting for income tax adjustments.

Return on Assets (ROA) Trends

Reported ROA declined from 1.53% in 2020 to 1.23% in 2022, followed by a strong improvement to 4.00% in 2023 and further increase to 5.45% in 2024. Adjusted ROA mirrors this trend but remains consistently higher, beginning at 1.88% in 2020, slightly dipping to 1.46% in 2022, then rising significantly to 5.26% in 2023 and 6.95% in 2024. These figures suggest improved asset utilization and profitability after the adjustments impacting tax expenses.

Overall Insights

The periods from 2020 to 2022 show a declining or stable low profitability landscape across all metrics. Starting 2023, there is a pronounced improvement in profitability ratios: net profit margin, ROE, and ROA all increase substantially both on reported and adjusted bases. The adjustments related to income tax appear to provide a consistently higher performance view, especially evident in the net profit margins and returns. Meanwhile, financial leverage remains relatively stable when adjusted, indicating consistent capital structure, whereas reported leverage slightly rises, perhaps indicating some increase in debt or revaluation effects. The enhanced profitability in the latter years suggests either operational improvements, beneficial tax treatment, or both.

The analyzed financial data reveals significant trends in reported and adjusted net income and corresponding net profit margins over the period from 2020 through 2024.

Net Income Trends

The reported net income figures demonstrate a decline from 3,064 million USD in 2020 to 2,590 million USD in 2022, followed by a pronounced increase, reaching 8,317 million USD in 2023 and further rising to 11,339 million USD in 2024. The adjusted net income follows a similar trajectory but with consistently higher values compared to reported net income, starting at 3,773 million USD in 2020, decreasing to 3,082 million USD in 2022, and then sharply increasing to 10,917 million USD in 2023 and 14,459 million USD in 2024.

Profit Margin Trends

The reported net profit margin reflects a downward trend during the first three years, dropping from 4.48% in 2020 to 3.25% in 2022. Subsequently, there is a marked improvement in profitability, with margins increasing significantly to 10.59% in 2023 and 13.93% in 2024. The adjusted net profit margin mirrors this pattern but at higher levels, starting at 5.52% in 2020, dipping slightly to 3.87% in 2022, and then escalating to 13.9% in 2023 and 17.76% in 2024.

Analytical Insights

The data indicate an initial period of contraction or challenge, evidenced by declines in both income and margin through 2022. The subsequent rebound suggests operational improvements, favorable market conditions, or beneficial tax impacts, as reflected in substantially higher adjusted income and margins. The gap between reported and adjusted figures also signifies the material effect of tax adjustments on the overall profitability profile, enhancing the understanding of the company's core earnings capacity.

The data presents a comparison between reported and adjusted financial metrics over a five-year period, highlighting trends in stockholders' equity and financial leverage ratios.

Stockholders’ Equity Trends

Reported stockholders’ equity shows a moderate increase from 65,344 million USD in 2020 to a peak of 69,656 million USD in 2022. Subsequently, it declines to 61,741 million USD by 2024, indicating some erosion in equity during the latter years. In contrast, adjusted stockholders’ equity consistently exceeds the reported figures by a significant margin throughout the period. It rises steadily from 75,310 million USD in 2020 to 80,540 million USD in 2022, then experiences a slight decline to 78,441 million USD by 2024. Overall, the adjusted equity remains relatively stable and higher than the reported equity, suggesting that deferred tax adjustments or similar factors materially improve the equity base when considered.

Financial Leverage Trends

Reported financial leverage starts at a ratio of 3.06 in 2020, declines slightly to 2.99 in 2021, and rises again to 3.37 by 2024. This indicates an increasing reliance on debt relative to equity in the most recent years, consistent with the declining reported equity values. In contrast, adjusted financial leverage is consistently lower than reported leverage and remains relatively stable, fluctuating narrowly around 2.6 to 2.66 over the entire period. This suggests that when adjusted equity is used, the company's leverage profile appears more conservative and stable, reflecting the mitigating impact of deferred income tax and related adjustments on risk assessments.

Overall Insights

The divergence between reported and adjusted equity and leverage highlights the importance of tax adjustments in portraying the company's financial health. The adjusted figures suggest stronger equity positions and lower leverage ratios than the reported numbers indicate. The decline in reported equity and corresponding rise in reported leverage in recent years may reflect operational or financial challenges not fully captured in adjusted metrics. However, the adjusted data implies that the company's underlying financial leverage risk has remained controlled and stable.

Net Income Trends

The reported net income demonstrated a decline from 3064 million in 2020 to 2590 million in 2022, followed by a pronounced increase to 8317 million in 2023, and further to 11339 million in 2024. The adjusted net income followed a similar trajectory but with consistently higher values, decreasing from 3773 million in 2020 to 3082 million in 2022, and then sharply rising to 10917 million in 2023 and 14459 million in 2024. This pattern indicates a period of contraction followed by significant recovery and growth in profitability.

Stockholders’ Equity Trends

Reported stockholders’ equity showed slight growth from 65344 million in 2020 to 69656 million in 2022, then declined to 64715 million in 2023 and further to 61741 million in 2024. Conversely, the adjusted stockholders’ equity consistently increased from 75310 million in 2020 to 80540 million in 2022, experienced a minor decrease to 78173 million in 2023, and remained relatively stable at 78441 million in 2024. This divergence suggests adjustments related to deferred or other tax items have a notable effect on equity reporting, smoothing the declines seen in the reported figures.

Return on Equity (ROE) Analysis

The reported ROE declined from 4.69% in 2020 to 3.72% in 2022, then sharply improved to 12.85% in 2023 and further to 18.37% in 2024. Adjusted ROE shows a slightly different trend with a decrease from 5.01% in 2020 to 3.83% in 2022, then a more pronounced increase to 13.97% in 2023, rising further to 18.43% in 2024. This reflects the net income and equity changes, with adjusted figures delivering a more enhanced return measure throughout most periods.

Overall Insights

The data reveals a period of relative profit pressure and equity growth stagnation in the early years, with both reported and adjusted net income and ROE peaking significantly in the later years, particularly from 2023 onwards. Adjusted measures consistently present more favorable outcomes relative to reported figures, highlighting the importance of tax adjustments in portraying financial performance. The divergence between reported and adjusted equity suggests the presence of deferred or non-operational impacts influencing the book value of equity. The trend indicates strengthening profitability and improved efficiency in capital utilization in recent periods.

The financial data reveals significant trends in both reported and adjusted income figures along with respective returns on assets (ROA) over a five-year period.

Net Income Trends

Both reported and adjusted net income display an overall increasing trend from 2020 through 2024. Reported net income starts at $3,064 million in 2020, slightly decreases over the next two years to $2,590 million in 2022, then rises sharply to $8,317 million in 2023 and further to $11,339 million in 2024. Adjusted net income follows a similar trajectory but remains consistently higher than reported figures. It begins at $3,773 million in 2020, fluctuates modestly downward to $3,082 million in 2022, then climbs markedly to $10,917 million in 2023 and subsequently to $14,459 million in 2024.

Return on Assets (ROA) Trends

Both reported and adjusted ROA reflect an initial decrease followed by substantial increases towards the end of the period. Reported ROA declines from 1.53% in 2020 to 1.23% in 2022 before rising significantly to 4.00% in 2023 and 5.45% in 2024. Adjusted ROA exhibits a similar pattern with a decline from 1.88% in 2020 to 1.46% in 2022, then climbs more sharply to 5.26% in 2023 and peaks at 6.95% in 2024.

Relationship Between Reported and Adjusted Figures

The adjusted net income and ROA consistently exceed the reported figures, reflecting the impact of adjustments such as deferred income tax. The gap between adjusted and reported values narrows slightly during the downward trend years (2021-2022) before widening substantially in the recovery phase (2023-2024), suggesting increased adjustments or favorable tax-related impacts in recent years.

Overall Insight

The data indicates a period of suppressed net income and returns during 2021-2022, potentially due to operational or market challenges. However, a strong recovery and significant improvement in profitability and asset returns have been realized in the last two years, particularly evident in 2023 and 2024. The persistent higher levels in adjusted figures imply the importance of tax adjustments in financial performance assessment, highlighting improved economic efficiency and possibly beneficial tax treatments or deferred tax asset realizations in the latter part of the timeline.