AT&T Inc. (NYSE:T)

Current Income Tax Expense

The current income tax expense exhibits a significant upward trend over the analyzed period. Starting with a negative value of -280 million USD in 2020, indicating a tax benefit or credit, it sharply increases to a positive 3696 million USD by 2024. There is a marked fluctuation between 2020 and 2022, moving from negative to positive, with a substantial jump from 706 million USD in 2022 to 3696 million USD in 2024, which suggests increasing taxable income or changes in tax liabilities during this timeframe.

Deferred Income Tax Expense

Deferred income tax expense displays a declining trend after peaking in 2021. The value rose notably to 5504 million USD in 2021 from 1245 million USD in 2020, followed by a continuous decrease to 749 million USD in 2024. This downward trajectory indicates a gradual reduction in deferred tax obligations or a reversal of previously recognized deferred tax assets or liabilities.

Total Income Tax Expense

The total income tax expense, which is the sum of current and deferred components, increases overall from 965 million USD in 2020 to 4445 million USD in 2024. There is a sharp rise from 965 million USD in 2020 to 5468 million USD in 2021, largely driven by the spike in deferred tax expense. Subsequent years show more moderate fluctuations, with the total tax expense stabilizing at a higher level relative to 2020.

Summary and Insights

In summary, the data reflects that current tax expenses have progressively increased, contributing more significantly to the total tax expense in recent years. Meanwhile, deferred tax expenses peaked in 2021 before steadily declining, suggesting a changing profile in deferred tax assets and liabilities. The total tax expense has increased substantially over the five-year period, indicating growth in taxable income or changes in tax regulations or accounting treatments affecting deferred tax balances. The interplay between rising current tax expenses and decreasing deferred tax expenses reveals shifting tax dynamics within the fiscal periods analyzed.

Statutory federal income tax rate

The statutory federal income tax rate remained constant at 21% throughout the analyzed five-year period. This stability indicates no changes in federal tax legislation impacting the statutory rate during this timeframe.

Effective tax rate

The effective tax rate exhibits significant volatility over the five years. In 2020, the rate was notably negative at -33.8%, which suggests the presence of tax benefits, credits, or losses exceeding taxable income in that year. The rate sharply improved to 20.3% in 2021, aligning more closely with the statutory rate, signifying a normalization in tax expenses relative to income.

In 2022, the effective rate plunged dramatically to -122.2%, an extreme negative figure that implies extraordinary tax benefits or adjustments, potentially from deferred tax assets or significant non-recurring tax items.

The subsequent years, 2023 and 2024, show a return to positive effective tax rates of 21.3% and 26.6%, respectively. The 2023 figure again approximates the statutory rate, indicating standard tax expense recognition. The increase to 26.6% in 2024 suggests either higher tax liabilities relative to pre-tax income or reduced tax benefits compared to prior years.

Overall, the effective tax rate's erratic pattern contrasts with the stable statutory rate and indicates the influence of various tax adjustments, credits, and potentially significant timing differences or one-time events impacting the company's tax expense. The transition from negative to positive rates over the period reflects fluctuating tax scenarios rather than changes in tax legislation.

Depreciation and amortization

There is a general downward trend in depreciation and amortization expenses from 2020 through 2024, with values decreasing from approximately -46,952 million USD in 2020 to around -36,531 million USD in 2024. This suggests reduced amortization or asset base changes over the years.

Licenses and nonamortizable intangibles

This category shows a consistent increase in negative values over the period, moving from -13,930 million USD in 2020 to -20,660 million USD in 2024, indicating increased intangible asset impairments or revaluations that are not subject to amortization.

Lease right-of-use assets

Starting from 2022, lease right-of-use assets are reported with values declining slightly from -5,322 million USD to around -5,103 million USD by 2024, pointing to a marginal reduction in leased asset values or amortization thereof.

Lease liabilities

Lease liabilities, recorded from 2022 onward, also show a slight decrease from 5,417 million USD in 2022 to 5,107 million USD in 2024, potentially reflecting repayments or lease agreements adjustments.

Employee benefits

Employee benefits expenses have steadily declined from 5,279 million USD in 2020 to a low of 2,251 million USD in 2022, but subsequently show a mild recovery reaching 3,017 million USD in 2024. This may indicate workforce adjustments or changes in benefit plans during the period.

Deferred fulfillment costs

Deferred fulfillment costs remain consistently negative but relatively stable, fluctuating around -1,700 to -2,000 million USD across the years, suggesting steady spending or amortization of fulfillment-related costs.

Equity in partnership

Equity in partnerships data starts appearing from 2021 with negative values that decrease in magnitude from -3,285 million USD to -2,716 million USD in 2024, indicating a reduction in equity losses or a divestment in partnership interests.

Net operating loss and other carryforwards

There is a downward trend in net operating loss carryforwards from 7,355 million USD in 2020 down to 5,619 million USD in 2024, with a slight rebound in 2023. This reduction could reflect utilization of such tax assets or changes in tax position.

Other, net

The "Other, net" category shows significant variability, shifting from sizeable negative values in 2020 and 2021 (-4,562 million USD and -2,308 million USD respectively) to a positive value of 248 million USD in 2022, and then reverting back to negative territory by 2024. This indicates fluctuating one-time or miscellaneous items impacting the financials.

Subtotal

The subtotal figures, aggregating various categories, are consistently negative and exhibit a slight improvement from -60,358 million USD in 2021 to around -54,521 million USD in 2024 after a peak reduction in 2022. This suggests some reduction in overall negative impacts captured by these line items over time.

Deferred tax assets valuation allowance

The valuation allowance for deferred tax assets fluctuates moderately, with values between approximately -4,175 million USD and -4,773 million USD, indicating a relatively stable estimation of potential tax asset recoverability risks.

Net deferred tax assets (liabilities)

Net deferred tax assets (liabilities) remain consistently negative, decreasing from -60,274 million USD in 2020 to a slight recovery near -58,859 million USD in 2024. This trend suggests a gradual reduction in deferred tax liabilities or increase in deferred tax assets, though the net position remains substantially negative.

Noncurrent deferred tax assets

There is a marked decline in noncurrent deferred tax assets over the examined period. Starting at 198 million US dollars in 2020, the value increased to 230 million in 2021 but then experienced a significant decrease to 86 million in 2022. This downward trend continued, albeit at a slower pace, with amounts reaching 83 million in 2023 and 80 million in 2024. Overall, the asset balance at the end of the period is considerably lower than at the beginning.

Noncurrent deferred tax liabilities

The noncurrent deferred tax liabilities exhibit fluctuations throughout the timeframe. The liabilities rose from 60,472 million US dollars in 2020 to a peak of 65,226 million in 2021. Subsequently, there was a noticeable reduction to 57,032 million in 2022. Following this decline, the liabilities increased again, reaching 58,666 million in 2023 and slightly rising further to 58,939 million in 2024. Despite variability, the overall liability balance remains substantial and relatively stable towards the end of the period.

Summary

The data reflects a decreasing trend in deferred tax assets alongside a more volatile pattern in deferred tax liabilities. The considerable reduction in assets may reflect changes in tax positions or realizability assumptions, while the fluctuations in liabilities suggest alterations in temporary differences or tax planning strategies. Both items remain significant, indicating ongoing tax-related accounting considerations that could impact future financial performance.

The analysis of the adjusted and reported financial data over the five-year period reveals several notable trends in assets, liabilities, equity, and net income figures.

Total Assets

The total assets, both reported and adjusted, peaked in 2021 at approximately $551 billion and then experienced a significant decline through to 2024, ending just below $395 billion. The adjusted figures closely follow the reported values with minimal deviations, indicating consistent asset valuation adjustments related to income tax impacts.

Total Liabilities

Reported total liabilities declined steadily from about $347 billion in 2020 to approximately $275 billion in 2024. Adjusted total liabilities were consistently lower than the reported ones, starting at $286 billion in 2020 and falling to about $216 billion in 2024. This suggests the deferred income tax adjustments had a substantial impact on reducing the recognized liabilities over the period, enhancing the company's financial leverage position.

Stockholders’ Equity Attributable to AT&T

Reported equity showed a decline from around $162 billion in 2020 to a low of $97.5 billion in 2022, followed by a modest recovery to roughly $104 billion in 2024. The adjusted equity figures present a higher valuation throughout, starting at about $222 billion in 2020, declining to $154 billion in 2022, and then increasing to $163 billion by 2024. The adjustments appear to significantly boost equity values, potentially reflecting the capitalization of deferred tax assets or revaluation effects.

Net Income (Loss) Attributable to AT&T

Reported net income figures fluctuated considerably, with a loss of approximately $5.2 billion in 2020, a strong profit of $20 billion in 2021, a return to losses of about $8.5 billion in 2022, and then gains of $14.4 billion and $11 billion in 2023 and 2024, respectively. Adjusted net income figures show a similar pattern but with less volatility: the losses and gains are moderated, ranging from a loss of $3.9 billion in 2020 to profits peaking at about $25.6 billion in 2021, then stabilizing around $11.7 billion in 2024. This moderation suggests that tax-related adjustments have a smoothing effect on reported earnings.

Overall, the deferred income tax adjustments have consistently reduced total liabilities while increasing stockholders’ equity and moderating net income volatility. The period saw a clear decline in asset base and liabilities, with equity experiencing a trough in 2022 followed by gradual improvement. The net income patterns indicate operational fluctuations, but adjusted figures provide a less volatile and more stable view of profitability.

The analysis of the financial data over the five-year period reveals several key trends and insights regarding profitability, efficiency, leverage, and returns.

Net Profit Margin

The reported net profit margin demonstrates considerable volatility, with negative margins in 2020 and 2022, contrasting with positive margins in 2021, 2023, and 2024. The adjusted net profit margin follows a similar pattern but exhibits less negative impact and higher positive values, indicating that adjustments for reported and deferred income taxes improve the reflection of profitability. The highest adjusted net profit margin occurs in 2021 at 15.15%, with a subsequent decline but remaining positive through 2024.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios remain relatively stable throughout the period, fluctuating only slightly between 0.33 and 0.30. This stability suggests consistent asset utilization efficiency without significant improvement or deterioration across the years.

Financial Leverage

Financial leverage shows a marked difference between reported and adjusted figures. Reported financial leverage rises from 3.25 in 2020 to a peak of 4.13 in 2022, then declines to 3.78 in 2024. Meanwhile, adjusted financial leverage remains lower throughout and increases modestly from 2.37 in 2020 to 2.61 in 2022 before decreasing to 2.42 by 2024. The higher reported leverage ratio compared to adjusted suggests that tax adjustments affect the effective leverage measurement, and the peak in 2022 indicates increased reliance on debt or liabilities during that year.

Return on Equity (ROE)

The reported ROE experiences significant fluctuations, moving from a negative value in 2020 (-3.20%) to a strong positive performance in 2021 (12.07%), then dipping again in 2022 (-8.74%). It rises sharply in 2023 (13.94%) before declining to 10.49% in 2024. Adjusted ROE follows a similar trend but with less extreme variations and overall lower values, indicating that deferred tax adjustments moderate the ROE volatility. The recurring negative adjusted ROE in 2020 and 2022 highlights periods of underperformance despite generally positive outcomes in other years.

Return on Assets (ROA)

Reported ROA mirrors the pattern observed in profitability and ROE, with negative returns in 2020 and 2022 and positive returns in 2021, 2023, and 2024. Adjusted ROA values are consistently better than the reported ones, though also reflect the same cyclical nature. The adjusted figures show a peak in 2021 at 4.64%, followed by a decline to 2.96% in 2024, suggesting some erosion of operational efficiency or profitability relative to asset base.

In summary, the data shows an overall pattern of cyclical profitability and return metrics with marked improvements in most years except 2020 and 2022, which appear to be challenging periods. Adjusted metrics generally reflect less volatility and higher profitability and returns, indicating the significant effect of tax adjustments. Asset efficiency remains stable, while financial leverage peaks in 2022 before receding, corresponding with fluctuations in return measures. These dynamics suggest the company faced fluctuations in operational and financial performance, moderated but not eliminated by adjustments to income tax treatment.

Net Income Trends

The reported net income attributable to the company exhibits significant volatility over the analyzed period. It started with a substantial loss of $5,176 million at the end of 2020, shifted to a strong profit of $20,081 million in 2021, then declined sharply to a loss of $8,524 million in 2022. Following this, the net income recovered to $14,400 million in 2023 and slightly decreased to $10,948 million in 2024. The adjusted net income shows a similar pattern but with reduced magnitude in losses and gains, indicating adjustments that mitigate some of the fluctuations in reported earnings. Adjusted net income ranges from a loss of $3,931 million in 2020 to a peak profit of $25,585 million in 2021, followed by a decline to a loss of $5,450 million in 2022, and then positive figures of $15,856 million and $11,697 million in 2023 and 2024, respectively.

Profit Margin Dynamics

The reported net profit margin closely reflects the trends seen in net income, starting at a negative 3.01% in 2020, improving significantly to 11.89% in 2021, then dropping back into the negative territory at -7.06% in 2022. It recovered to 11.76% in 2023 before decreasing slightly to 8.95% in 2024. The adjusted net profit margin presents a similar progression but consistently reports higher margins than the reported figures, ranging from -2.29% in 2020 to a peak of 15.15% in 2021. The adjustment appears to cushion the declines, as margins only fall to -4.51% in 2022 and then improve to 12.95% and 9.56% in 2023 and 2024, respectively.

Overall Analysis

The data reveals a company experiencing considerable fluctuations in profitability over the five-year period, with notable swings between losses and profits. The adjustments applied to income and profit margins indicate efforts to smooth the reported figures, possibly by excluding non-recurring items or tax-related effects. Despite volatility, both reported and adjusted figures show a recovery trend post-2022 losses, though profitability in 2024 remains below the peak levels observed in 2021. The adjusted metrics consistently demonstrate better financial performance than reported numbers, suggesting the impact of reported tax or one-time items that adversely affected net income and margins in certain years.

Reported and Adjusted Total Assets

The total assets show a declining trend from 2021 onwards. Starting at approximately 551.6 billion US dollars at the end of 2021, the reported total assets decreased significantly to about 402.9 billion US dollars in 2022 and remained relatively stable afterward, with slight decreases to 407.1 billion in 2023 and 394.8 billion in 2024. The adjusted total assets mirror this pattern closely, with values marginally lower but effectively tracking the same trend and magnitude of change.

Reported and Adjusted Total Asset Turnover

Total asset turnover ratios remained fairly consistent across the years, with a slight decrease from 0.33 in 2020 to 0.31 in 2021. The ratio continued to decline modestly to 0.30 in 2022 and 2023 before returning to 0.31 in 2024. Both reported and adjusted turnover ratios are identical, indicating no adjustments impacted this metric in the analyzed periods.

Overall Trends and Insights

The data reflects a notable reduction in the asset base starting from 2022, suggesting possible asset disposals, impairment, or restructuring. Despite the decline in total assets, the total asset turnover ratio remains relatively stable, indicating the company managed to maintain operational efficiency and revenue generation relative to its asset base. The close alignment between reported and adjusted figures points to minimal impact from deferred income tax adjustments on reported assets and turnover ratios over the period analyzed.

Reported Total Assets

The reported total assets exhibited an initial increase from $525,761 million in 2020 to $551,622 million in 2021, followed by a significant decline to $402,853 million in 2022. Assets then remained relatively stable with slight decreases in 2023 and 2024, finishing at $394,795 million.

Adjusted Total Assets

Adjusted total assets followed a similar pattern to reported total assets, increasing from $525,563 million in 2020 to $551,392 million in 2021, then dropping sharply to $402,767 million in 2022. Afterward, the figures remained nearly constant through 2023 and 2024, ending at $394,715 million.

Reported Stockholders' Equity Attributable to AT&T

Reported stockholders’ equity showed stable growth from $161,673 million in 2020 to $166,332 million in 2021. However, there was a marked decrease to $97,500 million in 2022. Following this decline, equity showed a modest upward trend through 2023 and 2024, reaching $104,372 million.

Adjusted Stockholders' Equity Attributable to AT&T

The adjusted stockholders’ equity figures were consistently higher than the reported amounts. They increased from $221,947 million in 2020 to $231,328 million in 2021, then dropped significantly to $154,446 million in 2022. Similar to the reported equity, adjusted equity rose slightly in the subsequent two years, reaching $163,231 million in 2024.

Reported Financial Leverage

Reported financial leverage increased from 3.25 in 2020 to 3.32 in 2021, then rose further to a peak of 4.13 in 2022, indicating increased debt relative to equity. Thereafter, leverage decreased gradually to 3.94 in 2023 and 3.78 in 2024, although it remained higher than pre-2022 levels.

Adjusted Financial Leverage

Adjusted financial leverage was consistently lower than reported leverage throughout the period. It remained relatively steady from 2.37 in 2020 to 2.38 in 2021, increased modestly to 2.61 in 2022, and then decreased to 2.51 in 2023 and 2.42 in 2024. These changes reflect a less pronounced increase in leverage compared to reported figures.

Summary of Trends

The data demonstrates a notable shift in the company’s asset base and equity in 2022, with substantial decreases in both reported and adjusted total assets and equity. This shift is accompanied by a peak in financial leverage, indicating reliance on debt financing during that period. Post-2022, both assets and equity stabilized at lower levels, and financial leverage showed a declining trend but did not return to pre-2022 levels. Adjusted figures consistently present a more conservative picture of equity and leverage compared to reported values, suggesting accounting adjustments that impact the assessment of financial stability and risk.

The financial data reveals fluctuating profitability and equity performance over the five-year period. Reported net income shows significant volatility, with a substantial loss in 2020, a strong recovery in 2021, another loss in 2022, followed by positive results in 2023 and 2024. Adjusted net income exhibits a similar pattern but with less extreme fluctuations, indicating that adjustments mitigate some of the underlying volatility.

Reported stockholders’ equity declines markedly from 2021 to 2022, dropping nearly 40%, and then increases slightly in subsequent years, though it remains well below the earlier levels. Adjusted stockholders' equity extends to higher values overall and follows a comparable trend of decline in 2022 with a gradual increase afterward. The adjusted equity figures suggest a more stable financial base after accounting for deferred income tax and other adjustments.

Return on equity (ROE) indicators corroborate the income trends. Reported ROE turns negative in 2020 and 2022, reflecting losses, but is positive and relatively strong in 2021, 2023, and 2024, with peaks in 2023. Adjusted ROE presents smoother fluctuations, remaining closer to positive territory, although it never achieves the same peak levels as the reported ROE. The adjusted measure suggests moderated profitability when non-recurring or tax-related effects are excluded.

Overall, the data indicates periods of financial strain interspersed with recovery phases. The adjustments for deferred income tax and related items appear to provide a more consistent measure of ongoing operational profitability and capital base, less affected by irregular income and tax events. The recovery in both net income and equity beginning in 2023 points to an improving financial position, although levels have not yet reached those seen in the initial years of the period.

The financial data reveals notable fluctuations in the net income figures over the analyzed period. Reported net income exhibited significant volatility, with a substantial loss of approximately $5.18 billion in 2020, followed by a strong recovery to a positive $20.08 billion in 2021. Subsequently, the company faced another loss in 2022 amounting to around $8.52 billion before reverting to profitability in 2023 and 2024, with net incomes of $14.4 billion and $10.95 billion, respectively. Adjusted net income mirrored this pattern but with less pronounced losses and higher gains, indicating that adjustments removed some volatility from the reported results. Adjusted figures show a loss of about $3.93 billion in 2020, a peak income of $25.59 billion in 2021, a smaller loss of $5.45 billion in 2022, and profitability in 2023 and 2024 at $15.86 billion and $11.7 billion, respectively.

Total assets, both reported and adjusted, followed a declining trend after peaking in 2021. Reported total assets increased moderately from approximately $525.76 billion in 2020 to $551.62 billion in 2021, then markedly decreased to about $402.85 billion in 2022 and slightly declined further over the next two years, ending near $394.8 billion in 2024. Adjusted total assets reflected a virtually identical pattern, confirming consistency in asset base evaluation post-adjustments.

Return on assets (ROA) reflected the volatility seen in net income but showed positive signs of recovery after 2022. The reported ROA was negative in 2020 at -0.98%, rose significantly to 3.64% in 2021, dropped back to -2.12% in 2022, then rebounded to positive 3.54% and 2.77% in the subsequent years. Adjusted ROA figures maintained a higher level of positivity, starting at -0.75% in 2020, peaking at 4.64% in 2021, dipping to -1.35% in 2022, then improving to 3.9% in 2023 and slightly declining to 2.96% in 2024.

Overall, the data reveals a cyclical pattern of profitability with significant losses in 2020 and 2022 offset by strong gains in 2021, 2023, and 2024. Asset base contracted notably after 2021, which may suggest divestitures, impairments, or restructuring activities. Adjusted results generally portray improved performance and less volatility compared to reported figures, indicating that the adjustments serve to smooth the financial results. The recovery in ROA after 2022 points toward operational improvements or more efficient asset utilization in later periods.