Altria Group Inc. (NYSE:MO)

The analysis of the annual current and deferred income tax expenses over the five-year period reveals several notable trends and fluctuations.

Current Income Tax Expense

The current income tax expense demonstrates an overall increasing trend from 2019 to 2023. Starting at $2,159 million in 2019, the expense rose to $2,600 million in 2020, showing a pronounced increase of approximately 20.5%. In 2021, a slight decrease to $2,509 million occurred, followed by a moderate recovery to $2,572 million in 2022. The year 2023 registered the highest current income tax expense in the period at $3,028 million, signaling a substantial increase of about 17.7% compared to the previous year. These movements indicate growing tax obligations with occasional minor fluctuations.

Deferred Income Tax Expense (Benefit)

The deferred income tax figures consistently reflect a tax benefit, as indicated by the negative values throughout the period. Beginning at a benefit of $95 million in 2019, this amount increased in magnitude significantly to $164 million in 2020. The most marked change occurred in 2021, where the deferred tax benefit surged to $1,160 million, representing a substantial deepening of the benefit. This was followed by a somewhat reduced benefit of $947 million in 2022 and a sharp decline to $230 million in 2023. The large deferred tax benefit in 2021 and 2022 may point to considerable timing differences or adjustments in accounting estimates, whereas the steep decrease in 2023 suggests a reversal or reduction in such deferred tax benefits.

Total Provision (Benefit) for Income Taxes

The combined provision for income taxes, which integrates current and deferred amounts, exhibits variability but an overall increasing trajectory. The provision rose from $2,064 million in 2019 to $2,436 million in 2020, then experienced a notable decline to $1,349 million in 2021, largely influenced by the significant deferred tax benefit that year. In 2022, the provision modestly increased again to $1,625 million. The year 2023 saw a sharp rise to $2,798 million, which is the highest total in the series. This pattern indicates that although deferred tax benefits have at times mitigated the total tax expense, in the most recent year, the provision has increased substantially, primarily driven by increased current tax liabilities and a reduced deferred tax benefit.

The analysis of the annual financial data reveals several important trends and fluctuations in the tax-related metrics over the examined periods.

U.S. federal statutory tax rate

This rate remained stable at 21% throughout the entire period, indicating no changes in the federal statutory tax framework impacting the company.

State and local income taxes, net of federal tax benefit

There is a notable decline from 46.5% in 2019 to 4.2% in 2023, showing a significant reduction in these taxes' impact relative to federal tax benefits. The most substantial drop occurs between 2019 and 2020, followed by smaller decreases through 2023.

Tax basis in foreign investments

This percentage remains very low across all years, fluctuating marginally between 0.1% and 1.1%, indicating that foreign investments have a minimal effect on tax basis.

Uncertain tax positions

Values range around zero, including slight negative and positive variations, with a missing value in 2022. This suggests minor impacts from uncertain tax positions without a clear trend over time.

Investment in ABI

This item shows predominantly negative percentages, close to zero from 2020 onward, indicating a consistently small adverse effect related to this investment.

Investment in JUUL

There is a dramatic decrease from 236% in 2019 to values below 5% in subsequent years, reflecting a sharp reduction in tax impact associated with this investment after 2019.

Investment in Cronos

This metric shifts from a negative 8.6% in 2019 to modest positive values thereafter, peaking at 3.3% in 2021 and decreasing to 0.1% by 2023, indicating a diminishing but variable tax effect from this investment over time.

Valuation allowance releases

Negative values are recorded in 2020, 2021, and 2022 with a notable release of -9% in 2022, while 2019 and 2023 show missing or no data. This suggests a significant reversal of previous valuation allowances particularly in 2022, which may have influenced tax expense.

Other

The values remain close to zero with slight negative variations in most years, suggesting minimal influence from other components on the overall tax rate.

Effective tax rate

The effective tax rate exhibits a sharp drop from an exceptionally high 269.5% in 2019 to around 35% in 2020 and 2021, followed by a further reduction to 22% in 2022. In 2023, it increases slightly to 25.6%, remaining well below the 2019 peak but still above the statutory rate, implying variability in tax expense driven by the components analyzed previously.

In summary, the company's tax-related financial metrics show stability in the federal statutory tax rate, significant reductions in state and local tax rates net of federal benefits, and diminishing impact from investments in JUUL and Cronos over time. The effective tax rate has normalized substantially after an extreme level in 2019 but remains sensitive to other tax components such as valuation allowance releases and state/local tax dynamics.

Accrued Postretirement and Postemployment Benefits

The balance showed a consistent decrease from 2019 to 2023, declining from $491 million to $302 million, indicating a reduction in these obligations over the period.

Settlement Charges

Settlement charges declined steadily from $833 million in 2019 to $644 million in 2023, suggesting a reduction in one-time or non-recurring costs related to settlements.

Accrued Pension Costs

Data was incomplete, but the values shown for 2019 and 2020 increased slightly, followed by negative values starting in 2021 reaching -$81 million by 2023, potentially reflecting changes in pension accounting or funding status.

JUUL Related Losses

Losses peaked in 2022 at $3.001 billion, after gradual increases from 2019. In 2023, losses significantly decreased to $2.028 billion, indicating some mitigation of losses associated with JUUL.

Investment in Cronos

Investment values fluctuated, decreasing from $197 million in 2019 to $128 million in 2020, then increasing to $403 million in 2021 and stabilizing around $400 million through 2023, revealing renewed investment or valuation changes in Cronos.

IQOS Deferred Gain

This item appeared only in 2023 with a value of $691 million, representing a new recognized gain related to IQOS, a significant recent development.

Net Operating Losses and Tax Credit Carryforwards

There was a decline from $92 million in 2019 to $31 million in 2022, followed by a sharp increase to $217 million in 2023, suggesting changes in tax attributes that could impact future tax liabilities.

Other Deferred Income Tax Items

A value of $125 million appeared in 2023, indicating new or reclassified deferred tax assets not previously present.

Deferred Income Tax Assets, Gross

These assets increased from $3.791 billion in 2019 to a peak of approximately $4.471 billion in 2022, before a slight decline in 2023 to $4.404 billion, showing overall growth in tax benefits expected to be realized.

Valuation Allowances

Valuation allowances increased (became more negative) from -$2.324 billion in 2019 to -$3.097 billion in 2021, then decreased to -$2.256 billion by 2023, indicating adjustments in the estimated realizability of deferred tax assets.

Deferred Income Tax Assets, Net

The net deferred income tax assets fluctuated, decreasing to $1.226 billion in 2021 before rising again to $2.148 billion by 2023, reflecting changes in tax positions and valuation allowances.

Property, Plant and Equipment

Negative values increased slightly from -$255 million in 2019 to -$237 million in 2023, suggesting ongoing depreciation or disposals affecting net property assets.

Intangible Assets

Negative balances deepened steadily from -$2.758 billion in 2019 to -$3.210 billion in 2023, indicative of amortization or impairments decreasing intangible asset values.

Investment in ABI

Negative figures decreased in magnitude from -$3.115 billion in 2019 to -$1.226 billion in 2022, before a slight increase to -$1.391 billion in 2023, showing divestitures or valuation changes affecting this investment.

Finance Assets, Net

The net finance assets declined from -$204 million in 2019 to near zero by 2021 and were absent afterward, implying disposal or full write-off of these assets.

Other Non-specified Items (Negative Values)

These varied widely with a significant increase from -$158 million in 2019 to -$115 million in 2022, with some missing data thereafter, indicating miscellaneous adjustments or allocations in assets or liabilities.

Deferred Income Tax Liabilities

There was a consistent reduction in deferred income tax liabilities from -$6.490 billion in 2019 to -$4.493 billion in 2022, then a slight uptick to -$4.919 billion in 2023, showing ongoing changes in tax obligations.

Net Deferred Income Tax Assets (Liabilities)

The net deferred tax position improved from -$5.023 billion in 2019 to -$2.771 billion in 2023, reflecting overall reductions in net tax liabilities or improved asset recognition.

Deferred Income Tax Assets

The deferred income tax assets exhibited notable fluctuations over the five-year period. Beginning at 60 million US dollars in 2019, the value increased significantly to 99 million in 2020. A sharp decline followed in 2021, with the figure dropping to 27 million, then rising again to 75 million in 2022 before decreasing to 28 million in 2023. The pattern indicates volatility without a clear upward or downward trend, suggesting variable timing differences affecting deferred tax assets during these years.

Deferred Income Tax Liabilities

The deferred income tax liabilities consistently declined throughout the period. Starting at 5,083 million US dollars in 2019, there was a steady reduction each year, dropping to 4,532 million in 2020, then 3,692 million in 2021, followed by 2,897 million in 2022, and reaching 2,799 million in 2023. This sustained downward trend may reflect amortization of deferred tax liabilities or changes in tax planning and accounting strategies reducing the overall liability burden.

Total Assets

The reported total assets exhibited a declining trend from 49,271 million USD at the end of 2019 to 36,954 million USD by the end of 2022, followed by a slight recovery to 38,570 million USD in 2023. Adjusted total assets mirrored this pattern closely, starting at 49,211 million USD in 2019, decreasing to 36,879 million USD in 2022, and then increasing to 38,542 million USD in 2023. This suggests a contraction in the asset base over the initial years with some stabilization or growth occurring recently.

Total Liabilities

Reported total liabilities increased from 42,914 million USD in 2019 to 44,449 million USD in 2020, then declined to 41,129 million USD in 2021, followed by a relatively stable period around 40,877 million USD in 2022 and an increase to 42,060 million USD in 2023. Adjusted liabilities started significantly lower at 37,831 million USD in 2019, rose consistently through the periods to 39,261 million USD in 2023. The diverging trends between reported and adjusted liabilities reflect adjustments related to deferred income tax considerations, with adjusted figures indicating a general upward trend in underlying liabilities.

Stockholders’ Equity (Deficit) Attributable to Altria

Reported stockholders’ equity showed a pronounced deterioration from a positive 6,222 million USD in 2019 to a negative position by 2021 (-1,606 million USD), worsening further to -3,973 million USD in 2022 and slightly improving to -3,540 million USD in 2023. In contrast, adjusted equity figures started higher at 11,245 million USD in 2019, declined to 7,272 million USD in 2020, improved to a positive 2,059 million USD in 2021, but then turned negative across 2022 and 2023, though these deficits were less severe (-1,151 million USD and -769 million USD respectively). This indicates that adjustments for deferred income taxes have a material impact, somewhat mitigating the negative equity effect, and that equity position has generally weakened over the five-year span.

Net Earnings (Losses) Attributable to Altria

Reported net earnings displayed strong volatility with a loss of -1,293 million USD in 2019, followed by a significant positive turnaround to 4,467 million USD in 2020. Earnings then decreased to 2,475 million USD in 2021 but rebounded sharply to 5,764 million USD in 2022 and further to 8,130 million USD in 2023. Adjusted net earnings followed a similar pattern with slightly lower magnitudes, starting with a loss of -1,388 million USD in 2019, rising to 4,303 million USD in 2020, reducing to 1,315 million USD in 2021, and then increasing robustly to 4,817 million USD in 2022 and 7,900 million USD in 2023. The data reflects a recovery from an initial loss to sustained profitability in recent years. Adjustments related to deferred taxes generally reduce reported earnings but do not alter the overall positive improvement trend.

The financial data adjusted for reported and deferred income tax reflects notable fluctuations and trends over the five-year period ending December 31, 2023. Key profitability, efficiency, and leverage metrics demonstrate a combination of recovery and growth after an initial downturn.

Net Profit Margin

Both reported and adjusted net profit margins illustrate a significant recovery following negative values in 2019. The reported net profit margin improved from -5.15% in 2019 to a peak of 33.21% in 2023. Similarly, the adjusted net profit margin rose from -5.53% to 32.27% during the same period. Although the adjusted margin dipped slightly more in 2021 relative to the reported figure, both measures show strong upward trends from 2020 onwards.

Total Asset Turnover

The total asset turnover ratios reveal an overall improvement in asset utilization efficiency. Starting at 0.51 in 2019 for both reported and adjusted data, the turnover ratio increased steadily, reaching 0.68 by 2022 before a slight decline to around 0.63 to 0.64 in 2023. This pattern indicates generally enhanced efficiency in generating sales from assets, despite a minor recent reduction.

Financial Leverage

Financial leverage shows considerable variability with incomplete data for some years. Reported leverage doubled from 7.92 in 2019 to 16.7 in 2020, with later years unavailable. Adjusted leverage increased from 4.38 in 2019 to a high of 19.18 in 2021, after which data is missing. This suggests a substantial increase in leverage over the early years, which may reflect elevated debt levels or changes in equity structure that require further scrutiny.

Return on Equity (ROE)

Reported ROE showed extreme volatility, plunging to -20.78% in 2019 and surging to 157.34% in 2020, with no data afterward. Adjusted ROE moved from -12.34% in 2019 to double-digit positive returns, peaking at 63.87% in 2021 before data ceases. The recovery and strength in ROE post-2019 highlight improved profitability and capital efficiency, although the absence of continuous data limits comprehensive trend interpretation.

Return on Assets (ROA)

ROA metrics indicate a consistent improvement in asset profitability. Reported ROA increased from a negative -2.62% in 2019 to 21.08% in 2023. Adjusted ROA also improved from -2.82% to 20.5% over the same period, despite a notably lower margin in 2021. The gradual rise in ROA aligns with gains in net margins and asset turnover, demonstrating enhanced overall asset utilization and profit generation capability.

In summary, the data suggests a strong financial turnaround beginning in 2020 with improvements in profitability, asset efficiency, and returns. The leverage metrics indicate increased reliance on debt or equity adjustments in the initial years but lack complete data for recent years. Fluctuations in adjusted figures relative to reported ones reflect the impact of tax adjustments on financial items, particularly visible in net profit margins and ROE. Overall, the trend is indicative of recovering and strengthening financial performance across major metrics through 2023.

Reported Net Earnings (Losses) Attributable to Altria

The reported net earnings experienced a significant turnaround between 2019 and 2020, moving from a loss of $1,293 million to a positive $4,467 million. After a dip in 2021 to $2,475 million, the earnings showed a strong upward trend with notable increases in 2022 and 2023, reaching $5,764 million and $8,130 million respectively.

Adjusted Net Earnings (Losses) Attributable to Altria

Similar to reported earnings, adjusted net earnings also reversed from a loss of $1,388 million in 2019 to a profit of $4,303 million in 2020. However, the adjusted earnings exhibited a more pronounced decline in 2021 compared to the reported figures, dropping to $1,315 million. Thereafter, they rebounded significantly in 2022 to $4,817 million and further increased to $7,900 million in 2023.

Reported Net Profit Margin

The reported net profit margin mirrored the pattern observed in reported earnings. It improved sharply from a negative margin of -5.15% in 2019 to a positive 17.08% in 2020, then decreased to 9.51% in 2021, before rising again to 22.97% in 2022 and reaching a peak of 33.21% in 2023. This reflects a strong enhancement in profitability, particularly in the last two years.

Adjusted Net Profit Margin

Adjusted net profit margin followed a trend similar to the adjusted net earnings. It moved from a negative margin of -5.53% in 2019 to 16.45% in 2020, decreased sharply to 5.06% in 2021, and then recovered to 19.19% in 2022 and 32.27% in 2023. The margins indicate the company’s adjusted profitability improved notably after the 2021 decline, showing a consistent upward trajectory subsequently.

Summary of Trends

Both reported and adjusted earnings and margins reflect a period of volatility with initial losses in 2019, followed by a steep recovery and growth phase beginning in 2020. A decline in 2021 is evident, more pronounced in adjusted figures, suggesting the impact of certain adjustments or one-time events on profitability. From 2022 through 2023, all measures show strong improvement, with earnings and profit margins reaching their highest levels in the period analyzed. This overall pattern indicates enhanced financial performance and profitability over the latter years.

The analysis of the annual financial data reveals notable trends in the company's asset base and efficiency in asset utilization over the observed five-year period.

Asset Size

The reported total assets exhibited a downward trend from 49,271 million US dollars at the end of 2019 to a low of 36,954 million US dollars in 2022, reflecting a decrease of approximately 25%. In 2023, there was a modest recovery, with reported total assets increasing to 38,570 million US dollars. Adjusted total assets mirrored this pattern closely, with values marginally lower than the reported figures but following the same overall trajectory from 49,211 million US dollars in 2019 to 38,542 million US dollars in 2023.

Asset Turnover

The reported total asset turnover ratio showed an improving trend from 0.51 in 2019 to a peak of 0.68 in 2022, indicating enhanced efficiency in generating revenue from asset investments. However, this ratio slightly declined to 0.63 in 2023. The adjusted total asset turnover ratio aligned closely with the reported figures, increasing from 0.51 to 0.68 between 2019 and 2022, before a slight decrease to 0.64 in 2023.

Insights

The trends suggest the company managed to improve its operational efficiency over the years, particularly as asset turnover increased despite a declining asset base. The decrease in total assets could imply divestitures, asset write-downs, or operational contractions, while the increasing turnover ratios indicate better utilization of remaining assets to generate revenue. The slight dips in turnover ratios in 2023 might reflect either asset additions not yet fully contributing to revenue or a moderation in operational efficiency.

The data shows a clear trend of declining total assets over the observed periods, both in reported and adjusted terms. Reported total assets decreased steadily from approximately $49.3 billion in 2019 to about $38.6 billion in 2023. Adjusted total assets closely mirror this trend, decreasing from about $49.2 billion to $38.5 billion over the same timeframe, indicating consistent asset base contraction regardless of tax adjustments.

Stockholders' equity exhibits a more volatile pattern. The reported stockholders' equity attributable to Altria declined sharply from $6.2 billion in 2019 to a deficit position of $3.5 billion in 2023. This transition from positive equity to considerable deficit suggests increasing liabilities or sustained losses impacting the company's net worth. The adjusted stockholders' equity shows a somewhat different trajectory: it started higher at $11.2 billion in 2019 but also declined to a negative figure by 2023, though the deficit amount is less severe than in the reported figures. The adjustment for deferred income taxes appears to moderate the negative equity impact, as seen by the smaller deficit in the final years compared to the reported figures.

Financial leverage data, provided for both reported and adjusted values, indicates fluctuating leverage ratios. Reported financial leverage significantly rose from 7.92 in 2019 to 16.7 in 2020, with no further data available beyond 2020. This sharp increase suggests a notable rise in liabilities relative to equity within a single year, consistent with the decline in stockholders’ equity. Adjusted financial leverage increased steadily from 4.38 in 2019, to 6.51 in 2020, and surged to 19.18 in 2021, illustrating growing leverage when accounting for tax adjustments. The absence of data in later years limits the ability to evaluate more recent leverage trends conclusively.

Overall, the data suggests that the company has experienced a contraction in its asset base, accompanied by a deteriorating equity position transitioning into a deficit. This deterioration correlates with rising financial leverage, indicating increased reliance on debt financing or other liabilities. The adjustments for deferred income taxes have some mitigating effect on equity and leverage metrics but do not alter the overall negative trajectory. The trends raise potential concerns about the company’s financial stability and capacity to maintain adequate equity cushions against its liabilities going forward.

Total Assets

Declined steadily from about $49 billion to $38 billion over five years in both reported and adjusted figures.

Stockholders’ Equity

Shifted from positive to negative equity, with reported figures showing a more pronounced deficit than adjusted figures.

Financial Leverage

Increased markedly in the initial years, indicating higher debt or liabilities relative to equity; data is incomplete in later years.

Impact of Adjustments

Deferred income tax adjustments reduce the severity of equity deficits and lower leverage ratios compared to reported values but confirm the worsening trend.

Net Earnings Trends

The reported net earnings attributable to the company exhibited significant volatility over the reviewed period. In 2019, there was a substantial loss. However, a strong recovery occurred in 2020, reaching 4,467 million USD, followed by a decline in 2021 to 2,475 million USD. The upward trajectory resumed in 2022 and continued into 2023, with earnings increasing to 5,764 million and then to 8,130 million USD respectively. Adjusted net earnings followed a somewhat similar pattern, showing a loss in 2019, a recovery in 2020, a marked decrease in 2021, and steady increases in 2022 and 2023. This suggests that while adjusted figures smooth some volatility, core earnings performance improved notably post-2020.

Stockholders' Equity Trends

Reported stockholders’ equity presented a deteriorating trend from 2019 through 2023. Starting at a positive 6,222 million USD, the equity declined sharply to 2,839 million in 2020 and further moved into negative territory by 2021 (-1,606 million USD), with continued negative values in 2022 and 2023, though with a slight improvement in the latter year. Adjusted stockholders’ equity, which likely incorporates deferred tax adjustments, started higher at 11,245 million USD in 2019, but also showed a consistent downward trend, turning positive but much reduced by 2021 and slipping into negative territory again in 2022 and 2023, albeit less severely than the reported values. This pattern indicates considerable challenges in equity maintenance, potentially due to losses or balance sheet adjustments related to taxes.

Return on Equity (ROE) Patterns

Reported ROE displayed extreme variability, with a significant negative value in 2019 and an unusually high positive percentage in 2020. Data for subsequent years are not provided, limiting evaluation beyond this point. Adjusted ROE also started negatively in 2019 but recovered substantially to positive levels in 2020 and 2021 (59.17% and 63.87% respectively). Data after 2021 are not available. These adjusted ROE figures indicate improved profitability relative to equity in the middle years of the period analyzed, despite the overall negative trends observed in equity balances.

Summary and Insights

The company experienced considerable financial fluctuations across the period, with profitability improving strongly after 2019 losses and adjusted figures smoothing some of the volatility seen in reported numbers. However, stockholders' equity demonstrated a persistent downward trend, moving into negative territory and suggesting underlying issues potentially connected with liabilities or asset write-downs. The asymmetric trends between earnings improvement and declining equity warrant further investigation into the nature of the adjustments and balance sheet components. ROE data indicates profitability gains within certain years but is limited by incomplete reporting in later periods.

Net Earnings Attributable to Altria

The reported net earnings showed significant volatility between 2019 and 2023. A notable loss of -1293 million US dollars occurred in 2019, followed by a strong recovery in 2020, reaching 4467 million. Subsequently, earnings decreased to 2475 million in 2021 before increasing sharply in 2022 to 5764 million, and further to 8130 million in 2023. Adjusted net earnings followed a similar pattern, although values were slightly lower throughout the period. The adjusted figures also showed the deepest loss in 2019 at -1388 million, then rising to 4303 million in 2020, dropping to 1315 million in 2021, and increasing steadily to 4817 million in 2022 and 7900 million in 2023.

Total Assets

Both reported and adjusted total assets displayed a downward trend from 2019 to 2022, with reported assets declining from 49,271 million to 36,954 million and adjusted assets from 49,211 million to 36,879 million. In 2023, however, a slight recovery was observed, with reported total assets rising to 38,570 million and adjusted assets increasing marginally to 38,542 million.

Return on Assets (ROA)

Return on assets, both reported and adjusted, mirrored the net earnings trend. Reported ROA was negative in 2019 at -2.62%, improving markedly to 9.42% in 2020. It then slightly decreased to 6.26% in 2021 but rebounded strongly in 2022 and 2023 to 15.6% and 21.08%, respectively. Adjusted ROA values were consistently lower than reported ROA but followed a similar trajectory, moving from -2.82% in 2019, up to 9.09% in 2020, then dropping to 3.33% in 2021 before recovering to 13.06% in 2022 and reaching 20.5% in 2023.

Overall Insights

The data exhibits a pronounced recovery in profitability from 2019's losses to strong earnings and ROA figures by 2023. This recovery occurred despite a contraction in asset base from 2019 through 2022, suggesting improved asset efficiency or operational performance. The differences between reported and adjusted figures are noticeable, with adjusted values generally lower, reflecting the impact of tax adjustments on earnings and asset valuations. The upward trend in both net earnings and ROA in the later years signals enhanced financial health and operational success during the 2022 and 2023 periods.