Devon Energy Corp. (NYSE:DVN)

The analysis of the current and deferred income tax expenses over the five-year period reveals significant fluctuations and evolving tax positions.

Current Income Tax Expense (Benefit)

This item shows considerable volatility. Starting with a substantial tax benefit of $70 million in 2018, the amount decreased sharply to $5 million in 2019, followed by an even larger benefit of $219 million in 2020. However, the trend reversed in 2021, with a current income tax expense of $16 million, and surged dramatically in 2022 to an expense of $559 million. The shift from benefits to large expenses suggests changes in taxable income, tax rates, or tax planning outcomes over time.

Deferred Income Tax Expense (Benefit)

The deferred income tax expense also exhibits notable fluctuations. In 2018, there was a significant deferred tax expense of $226 million, which turned into a deferred tax benefit of $25 million in 2019. This benefit deepened in 2020 to $328 million, before reverting to an expense of $49 million in 2021. In 2022, deferred tax expense increased sharply to $1,179 million. These swings could indicate changing expectations regarding future taxable income, adjustments of deferred tax assets or liabilities, or impacts from tax law changes.

Total Income Tax Expense (Benefit)

The combined total income tax expense reflects the net effect of current and deferred taxes. It began at a positive expense of $156 million in 2018 but shifted to a tax benefit of $30 million in 2019 and then a substantially larger benefit of $547 million in 2020. In 2021, this reversed to an expense of $65 million, followed by a pronounced increase to a large expense of $1,738 million in 2022. The sharp rises and falls over this period indicate volatility in tax strategy, income recognition, or other factors impacting taxable income and deferred tax balances.

Overall, the data illustrates an erratic tax expense pattern with years of significant benefits followed by steep expenses, especially noticeable in 2022. The large deferred tax expenses in recent years likely contributed substantially to the total tax expense increase. The shifts may signal changing financial performance, tax jurisdiction impacts, or reassessments of deferred tax positions requiring scrutiny to understand underlying causes.

U.S. statutory income tax rate

The U.S. statutory income tax rate remained stable at 21% throughout the analyzed period from 2018 to 2022, indicating no changes in the fundamental federal tax rate affecting the company.

Change in tax legislation

A 4% positive impact was noted in 2020 due to changes in tax legislation, while no impacts were reported in other years, suggesting a one-time legislative adjustment affecting that year’s tax calculations.

State income taxes

State income taxes showed significant variability, peaking at 24% in 2019 before sharply declining to 1% in 2020 and remaining steady at this low level through 2022. This indicates a notable reduction in state tax burden after 2019.

Change in unrecognized tax benefits

There was a negative change in unrecognized tax benefits of -2% in 2018 and a more substantial -13% in 2019, followed by no reported changes in subsequent years. This suggests decreases in previously uncertain tax liabilities in the early period.

Audit settlements

Audit settlements contributed negatively by -2% in 2018 but shifted significantly to a 15% positive impact in 2019, with no further changes reported later. This reflects some volatility likely linked to resolution of tax audits primarily in 2019.

Other factors

The category of other tax-related factors showed fluctuations, with a negative impact of -19% in 2019, minor negative -1% in 2020, and a small positive 2% in 2021. This variability indicates a range of miscellaneous tax adjustments over time.

Deferred tax asset valuation allowance

Deferred tax asset valuation allowance was not reported until 2020 and 2021, with reductions of -7% and -22% respectively, indicating an increasing recognition of deferred tax assets and a reduced requirement for valuation allowances during these years.

Effective income tax rate

The effective income tax rate demonstrated considerable fluctuation, starting at 24% in 2018, increasing to 28% in 2019, then decreasing sharply to 18% in 2020 and further to 2% in 2021, before rising again to 22% in 2022. This volatility reflects the combined effects of the various tax components and adjustments, including legislative changes, state tax variation, and deferred tax valuation movements.

The analysis of the annual financial data reveals several notable trends in key financial metrics over the five-year period ending December 31, 2022.

Net operating loss carryforwards

These losses fluctuated significantly, starting at $287 million in 2018, increasing slightly to $306 million in 2019, dropping to $238 million in 2020, then sharply rising to a peak of $1,075 million in 2021 before falling to $526 million in 2022. This suggests considerable volatility and a substantial increase in carryforwards in 2021.

Capital loss carryforwards

Data for 2019 is missing, but the available figures show $609 million in 2018, a decrease to $547 million in 2020, followed by a modest increase to $559 million in 2021, and a slight decrease to $523 million in 2022. Overall, capital losses remained relatively stable with minor fluctuations.

Accrued liabilities

These obligations showed a rising trend from $50 million in 2018 to $262 million in 2021, peaking at this point before reducing to $209 million in 2022. The increase over the first four years could indicate growing short-term financial commitments or expenses, with some reduction in the last year.

Fair value of derivative financial instruments (liabilities)

Reported data is partial; it shows a fair value asset of $33 million in 2020 and a significant increase to $129 million in 2021. By 2022, this shifted to a negative $33 million, indicating a reversal from asset to liability position or a loss in derivative valuations.

Asset retirement obligation

This liability decreased from $300 million in 2018 to $94 million in 2020, followed by a slight increase to $119 million in 2022. The overall trend is a decline, implying reduced estimated costs related to asset retirements or more accurate liability measurements.

Investment in subsidiary

A reported investment value of $441 million appears only in 2020, with no data before or after, suggesting a possible one-time transaction or reclassification during that period.

Other, including tax credits

Values show a general decline, beginning at $131 million in 2018, slightly decreasing through 2021, and dropping significantly to $14 million in 2022, indicating reduced availability or recognition of other assets and tax credits.

Deferred tax assets before valuation allowance

The figures exhibit considerable variability, starting at $1,377 million in 2018, dipping to $569 million in 2019, then rising sharply to $2,272 million in 2021, before declining to $1,391 million in 2022. This suggests periods of strong deferred tax asset recognition juxtaposed with downward adjustments.

Valuation allowance

The allowance shows negative values throughout, with a low of -$1,355 million in 2020, indicating a large reduction in deferred tax assets due to uncertainty over realizability. This allowance lessened significantly to -$893 million in 2021, with a moderate decline to -$814 million in 2022, reflecting fluctuating expectations of asset recovery.

Net deferred tax assets

Net deferred tax assets declined from $737 million in 2018 to $229 million in 2020, surged to $1,379 million in 2021, then dropped to $577 million in 2022. This pattern mirrors the movements in gross deferred tax assets and valuation allowances, highlighting considerable variability in net tax asset positions.

Property and equipment

Consistently negative figures imply net liabilities or derecognition, decreasing in absolute terms from -$1,473 million in 2018 to -$213 million in 2020, then deteriorating again to -$1,969 million in 2022. This volatility suggests asset write-downs or significant disposals and acquisitions impacting the property, plant, and equipment balance.

Deferred tax liabilities

These increased steadily in magnitude from -$1,614 million in 2018 to -$2,040 million in 2022, indicating growing deferred tax obligations possibly related to timing differences in income recognition or temporary differences in asset valuation.

Net deferred tax asset (liability)

The net position swung from a negative $877 million in 2018 to a positive $16 million in 2020, only to revert to negative values by 2021 and further decline to -$1,463 million in 2022. This net position underscores the volatility in tax-related items and the shifting balance between deferred tax assets and liabilities.

The financial data reveals varying trends in the deferred tax assets and liabilities over the presented years. A significant observation is the scarcity of reported deferred tax assets before 2020, appearing only in 2020 and 2021 with values of 16 million and 7 million US dollars respectively, followed by a missing value in 2022.

In contrast, deferred tax liabilities demonstrate more consistent reporting across most years with an initial high of 877 million US dollars in 2018, followed by a marked decrease to 341 million in 2019. The data for 2020 is absent, then liabilities drop further to 287 million in 2021, only to surge sharply to 1463 million in 2022.

Deferred Tax Assets

The presence of deferred tax assets begins in 2020 with 16 million US dollars, nearly halving to 7 million in 2021, and then becoming unreported in 2022. This suggests a transient recognition or realization of deferred tax assets during this period.

Deferred Tax Liabilities

The deferred tax liabilities show a declining trend from 2018 to 2021, decreasing from 877 million to 287 million US dollars, indicating potential utilization or reduction in deferred liabilities. However, the large spike to 1463 million in 2022 indicates a substantial increase in obligations or revaluation of deferred items that could impact future cash flows.

Overall, the contrasting movements—reduction and then sharp increase in liabilities alongside the inconsistent recognition of assets—may reflect changes in tax regulations, asset bases, or company tax planning strategies. The anomalous jump in deferred tax liabilities in the last reported year warrants further examination to determine its underlying causes and potential implications for the entity's financial position.

The financial data reveals significant fluctuations and notable trends across the analyzed periods, covering the years 2018 through 2022.

Total assets

Reported total assets decreased substantially from 19,566 million USD in 2018 to 9,912 million USD in 2020, indicating a contraction in the asset base during this period. Subsequently, there was a marked recovery, with total assets rising sharply to 21,025 million USD in 2021 and further increasing to 23,721 million USD in 2022. The adjusted total assets follow a very similar trajectory, with marginal differences, suggesting that deferred income tax adjustments did not materially affect the asset base valuation trends.

Total liabilities

Reported total liabilities experienced a downward trend from 10,380 million USD in 2018 to 6,893 million USD in 2020. However, this was followed by an increase to 11,626 million USD in 2021 and 12,425 million USD in 2022. When adjusted for deferred income tax, liabilities show a slightly lower amount at each point compared to the reported figures, with totals of 9,503 million USD in 2018 decreasing to 6,893 million USD in 2020 and subsequently growing to 11,339 million USD in 2021 and 10,962 million USD in 2022. This suggests that deferred tax adjustments have a measurable impact on liability figures, particularly noticeable in 2022 where the adjustment reduces liabilities by over 1,400 million USD compared to reported values.

Stockholders’ equity attributable to Devon

Reported equity declines markedly from 9,186 million USD in 2018 to a low of 2,885 million USD in 2020, reflecting potential operational or market challenges during this timeframe. Following 2020, equity rebounds strongly to 9,262 million USD in 2021 and further to 11,167 million USD in 2022. The adjusted equity figures maintain a similar pattern, but with consistently higher reported equity values at each period, culminating in 12,630 million USD in 2022. The adjustments increase equity particularly during the recovery period, indicating favorable deferred tax effects contributing positively to the equity base.

Net earnings (loss) attributable to Devon

Net earnings show a high degree of volatility. In 2018, a strong positive net income of approximately 3,064 million USD is reported, followed by losses in 2019 and 2020, with net losses deepening to -2,680 million USD in 2020. The years 2021 and 2022 present a significant turnaround with net earnings returning to positive territory at 2,813 million USD and accelerating to 6,015 million USD, respectively. The adjusted net earnings mirror the reported values closely but are slightly more negative during the loss years and consistently higher during profitable years, with an adjusted peak of 7,194 million USD in 2022. This suggests deferred tax adjustments modestly enhance the reported profitability, particularly in profitable years.

Overall, the analysis indicates the company experienced considerable financial stress in the 2019-2020 period, evidenced by falling assets, liabilities, equity, and significant losses. A robust recovery is visible from 2021 onward, with improvements across all key financial metrics, reflecting either operational improvements, favorable market conditions, or both. Deferred income tax adjustments have a meaningful but not transformative impact on the reported figures, generally enhancing the valuation of equity and earnings during recovery phases.

Reported and Adjusted Net Profit Margin

The net profit margin exhibited significant volatility over the observed period. In 2018, the reported margin was robust at 28.54%, while the adjusted figure was slightly higher at 30.65%. Both margins experienced a sharp decline in 2019, turning negative (-5.71% reported and -6.11% adjusted). This negative trend intensified in 2020, with reported and adjusted margins falling drastically to -55.51% and -62.3%, respectively. A notable recovery occurred in 2021, with margins returning to positive territory (23.05% reported, 23.45% adjusted) and further improved in 2022 to 31.38% reported and 37.53% adjusted. The adjusted margins consistently track slightly below or above reported margins, reflecting the impact of deferred income tax adjustments.

Reported and Adjusted Total Asset Turnover

Total asset turnover ratios demonstrated moderate fluctuations but an overall improving trend. They started at 0.55 in 2018 for both reported and adjusted figures, declining to 0.45 in 2019 and then increasing gradually to 0.49 in 2020 and further elevated in 2021 at 0.58. The most significant improvement occurred in 2022, reaching 0.81. This indicates an increasing efficiency in asset use to generate revenue over the years, unaffected by income tax adjustments.

Reported and Adjusted Financial Leverage

Financial leverage ratios showed variability, starting at 2.13 (reported) and 1.94 (adjusted) in 2018. Both measures increased in 2019, with reported leverage rising to 2.36 and adjusted to 2.23. There was a marked peak in 2020, with reported leverage at 3.44 and adjusted at 3.45, indicating a greater reliance on debt financing or higher use of financial leverage during this year. Subsequently, leverage sharply declined to 2.27 (reported) and 2.20 (adjusted) in 2021 and further decreased to 2.12 (reported) and 1.88 (adjusted) by 2022, suggesting a reduction in financial risk and debt levels in the later periods.

Reported and Adjusted Return on Equity (ROE)

ROE reflected considerable instability, in line with the profit margin trends. In 2018, reported ROE stood at a strong 33.36%, closely matched by the adjusted 32.69%. Both reported and adjusted ROE turned negative in 2019 (-6.12% and -6.19%, respectively) and deteriorated further in 2020 to -92.89% reported and -104.84% adjusted, indicating severe losses relative to equity. Recovery took place in 2021, with ROE rebounding to 30.37% (reported) and 29.99% (adjusted), followed by a substantial increase in 2022 to 53.86% and 56.96%, respectively. Adjusted ROE figures generally reflect a slightly more conservative position than reported, especially during periods of distress.

Reported and Adjusted Return on Assets (ROA)

ROA mirrored the patterns of profitability measures, with 2018 values at 15.66% (reported) and 16.81% (adjusted). Negative returns were observed in 2019 (-2.59% reported, -2.77% adjusted), turning sharply worse in 2020 (-27.04% reported, -30.4% adjusted). Positive recovery occurred in 2021, with ROA improving to 13.38% (reported) and 13.62% (adjusted), continuing upward into 2022 at 25.36% and 30.33%, respectively. This suggests an enhanced efficiency in generating returns from assets after the downturn.

Overall Insights

The data reveals a period of significant financial stress around 2019-2020, characterized by negative profitability, low returns, and increased leverage. The subsequent years show a strong recovery trend across all key measures, with profitability and efficiency ratios surpassing initial 2018 levels by 2022. Adjusted figures, taking into account deferred income taxes, tend to be more conservative during downturns, amplifying the magnitude of losses but closely aligning with reported figures in positive performance years. Asset utilization improved steadily, and leverage was effectively reduced after the peak in 2020, indicating a strategic shift towards financial stability and operational effectiveness.

Reported net earnings (loss) attributable to Devon

The reported net earnings exhibit significant volatility over the five-year period. Beginning with a strong profit of $3,064 million in 2018, the company experienced net losses in 2019 and 2020, reaching a peak loss of $2,680 million in 2020. Subsequently, the company returned to profitability with reported earnings of $2,813 million in 2021 and increased substantially to $6,015 million in 2022.

Adjusted net earnings (loss) attributable to Devon

The adjusted net earnings closely mirror the reported earnings, confirming the volatile trend. Starting at $3,290 million in 2018, adjusted earnings turned negative in 2019 and deepened loss in 2020 to $3,008 million. A recovery is noted from 2021 onward, with adjusted profits rising to $2,862 million and then surging to $7,194 million by 2022, surpassing both reported and previous adjusted figures.

Reported net profit margin

The reported profit margin reflects the earnings trend, with a high of 28.54% in 2018 followed by negative margins of -5.71% in 2019 and an extreme low of -55.51% in 2020. The margin improved significantly to a positive 23.05% in 2021 and further expanded to 31.38% in 2022, indicating a strong recovery and improved profitability.

Adjusted net profit margin

The adjusted net profit margin follows a similar pattern but shows greater amplitude in loss years. From a peak of 30.65% in 2018, it drops to -6.11% in 2019 and suffers a sharp decline to -62.3% in 2020. A material rebound is observed in 2021 with 23.45%, followed by a notable increase to 37.53% in 2022, highlighting a strong financial turnaround after the losses.

Asset Levels

The total assets experienced a significant decline from 19,566 million USD in 2018 to a low of 9,896 million USD in 2020, representing a downward trend over these three years. However, a strong recovery is observed commencing in 2021, with total assets increasing to 21,018 million USD and further rising to 23,721 million USD in 2022. This rebound indicates a strategic asset growth or acquisition period following the contraction.

Asset Turnover

The total asset turnover ratio initially declined from 0.55 in 2018 to 0.45 in 2019, suggesting a decrease in the efficiency of asset utilization. Thereafter, it showed a modest increase to 0.49 in 2020, followed by a more notable improvement to 0.58 in 2021, and a substantial rise to 0.81 in 2022. The increasing trend post-2020 indicates enhanced operational efficiency or better revenue generation from the asset base.

Comparison of Reported and Adjusted Figures

The reported and adjusted values for both total assets and asset turnover are nearly identical throughout the periods, indicating minimal effects from deferred income tax adjustments on these metrics. This alignment suggests that tax-related accounting adjustments have limited impact on the overall asset valuation and turnover performance measures presented.

Overall Insights

The data shows a clear cyclical pattern with an asset base contraction up to 2020, accompanied by a decrease in turnover efficiency. This was followed by a phase of recovery and expansion in assets beginning in 2021, paired with improved asset turnover ratios, peaking in 2022. The improved efficiency alongside asset growth suggests operational improvements or favorable market conditions supporting higher asset productivity in recent periods.

Total Assets

The reported total assets demonstrate a significant decline from 19,566 million US dollars in 2018 to 9,912 million in 2020, followed by a substantial recovery to 21,025 million in 2021 and further growth to 23,721 million in 2022. Adjusted total assets follow a similar trajectory, with a slight difference noted in 2020 where the adjusted value is marginally lower than the reported figure. Overall, the trend indicates a notable contraction during the period 2018-2020, succeeded by a strong rebound through 2021 and 2022.

Stockholders’ Equity Attributable to Devon

Reported equity attributable to Devon mirrors the pattern of total assets, declining sharply from 9,186 million in 2018 to 2,885 million in 2020, then recovering to 9,262 million in 2021 and increasing further to 11,167 million in 2022. Adjusted equity figures are consistently higher than reported equity in all years except for 2020 where the adjusted figure is slightly lower, suggesting the presence of deferred tax adjustments impacting equity valuation. The adjusted equity also experiences a recovery pattern post-2020, surpassing reported equity notably in 2021 and 2022. This reflects improved equity position when considering tax-related adjustments.

Financial Leverage

Financial leverage ratios indicate the degree of indebtedness relative to equity. The reported financial leverage increased from 2.13 in 2018 to a peak of 3.44 in 2020, reflecting a higher reliance on debt during the downturn period. Subsequently, it decreased to 2.27 in 2021 and further to 2.12 in 2022, pointing to deleveraging consistent with asset and equity recovery. Adjusted financial leverage shows a comparable pattern but with generally lower values compared to reported leverage, indicating that after tax adjustments, the company's leverage risk is slightly reduced. The peak in 2020 matches the reported figure, suggesting that deferred tax impacts were minimal at that peak leverage point.

Overall Insights

The data portrays a company experiencing significant asset and equity contraction up to 2020, likely reflecting operational or market challenges during that period. The rebound in 2021 and 2022 is marked and robust, with both reported and adjusted balances showing improvement. Adjustments related to deferred income taxes appear to provide a more conservative or favorable view of the equity and leverage positions, indicating the importance of tax-related accounting in assessing financial health. The reduction in financial leverage post-2020 aligns with increased equity and asset recovery, suggesting a strategic response aimed at strengthening the balance sheet and reducing financial risk.

The data reveals significant fluctuations in the financial performance and position over the five-year period from 2018 to 2022.

Reported Net Earnings (Loss) Attributable to Devon

The company experienced a peak reported net earning of 3,064 million US dollars in 2018, followed by losses in 2019 and 2020, with the lowest point being a loss of 2,680 million US dollars in 2020. A recovery is evident starting in 2021, with reported earnings rising sharply to 2,813 million US dollars and continuing to increase significantly to 6,015 million US dollars in 2022.

Adjusted Net Earnings (Loss) Attributable to Devon

The adjusted net earnings closely mirror the trends seen in reported earnings but show generally slightly higher values. After peaking at 3,290 million US dollars in 2018, adjusted earnings decreased to losses in 2019 and 2020, hitting negative 3,008 million US dollars in 2020. A strong rebound occurred in 2021 with 2,862 million US dollars, followed by an even more pronounced increase to 7,194 million US dollars in 2022.

Reported Stockholders’ Equity Attributable to Devon

The reported equity demonstrates a downward trend from 2018 through 2020, falling from 9,186 million US dollars to 2,885 million US dollars. In 2021, equity nearly returned to its initial level at 9,262 million US dollars and increased further to 11,167 million US dollars in 2022, showing renewed financial strength.

Adjusted Stockholders’ Equity Attributable to Devon

Similar to reported equity, adjusted stockholders’ equity witnessed a decline between 2018 and 2020, from 10,063 million to 2,869 million US dollars. The recovery period starting in 2021 continued upwards to 9,542 million and further to 12,630 million US dollars in 2022. This indicates a more optimistic valuation after adjustments.

Reported Return on Equity (ROE)

The reported ROE followed a volatile path with high positive return of 33.36% in 2018, before dropping to negative returns of -6.12% in 2019 and a severe negative return of -92.89% in 2020. It rebounded to positive territory with 30.37% in 2021, further increasing markedly to 53.86% in 2022, indicating improved profitability relative to equity.

Adjusted Return on Equity (ROE)

The adjusted ROE trend is consistent with the reported ROE but exhibits more extreme swings. Starting at 32.69% in 2018, it slightly underperforms in 2019 at -6.19%, then sharply declines to -104.84% in 2020. Recovery begins in 2021 with a nearly 30% return and accelerates to 56.96% in 2022, demonstrating heightened adjusted performance relative to equity.

Overall, the data indicates a challenging period during 2019 and 2020 with significant declines in earnings, equity, and profitability. This period was followed by a marked recovery and strong growth in 2021 and 2022, exceeding levels achieved prior to the downturn. Adjusted figures reflect more conservative valuations during the decline and stronger recovery post-2020 compared to reported figures. The substantial rebound in both net earnings and return on equity suggests the company improved operational efficiency and capital management in the most recent years.

The financial data exhibits significant volatility in earnings and asset values over the five-year period. The reported net earnings attributable to the company show considerable fluctuations, moving from a substantial profit of US$3,064 million in 2018 to losses in 2019 and 2020, with the largest loss recorded in 2020 at US$2,680 million. Subsequently, there is a marked recovery in 2021 and 2022, with net earnings rising to US$2,813 million and US$6,015 million respectively, indicating a strong positive turnaround in profitability.

Adjusted net earnings follow a similar pattern, slightly exceeding reported figures in positive years and reflecting deeper losses in negative years, peaking in losses at US$3,008 million in 2020. The recovery trend after 2020 is more pronounced in adjusted figures, culminating in an adjusted net earning of US$7,194 million in 2022, which surpasses the reported figure and underscores potentially substantial one-time or non-recurring adjustments benefiting net income in that year.

Total assets, both reported and adjusted, reveal a decline from 2018 through 2020, with values decreasing from approximately US$19,566 million to just under US$10,000 million. However, asset levels recover sharply from 2020 onwards, reaching US$21,025 million in 2021 and further increasing to US$23,721 million in 2022. The adjusted asset values closely mirror reported figures, with only minor adjustments noted, indicating consistency in the valuation of assets with limited deferred tax impacts.

Return on assets (ROA) percentages also display considerable variation, reflecting the earnings trends. Reported ROA decreases significantly from a strong 15.66% in 2018 to negative territory in 2019 (-2.59%) and further declines to -27.04% in 2020. This loss period is followed by recovery to 13.38% in 2021 and an increase to 25.36% in 2022. Adjusted ROA metrics exaggerate this pattern, with more negative ROA in loss years (-2.77% in 2019, -30.4% in 2020) and higher positive returns in recovery years (13.62% in 2021, 30.33% in 2022), suggesting that adjustments have a significant impact on performance ratios.

Profitability Trends

Initial strong earnings in 2018 are followed by two consecutive years of losses, with a trough in 2020 before a strong recovery and growth in 2021 and 2022. Adjusted earnings indicate larger losses during downturns but higher profitability during recovery, emphasizing the effect of adjustments on earnings quality.

Asset Base Fluctuations

The asset base declined substantially from 2018 through 2020, before robustly increasing in the subsequent two years. This suggests possible asset disposals or impairments during the downturn and subsequent acquisitions or revaluation gains during recovery.

Return on Assets Performance

ROA follows earnings trends, turning negative during periods of loss and recovering to strong positive returns by 2022. The adjusted ROA magnifies these movements, indicating material impacts from deferred income taxes or other adjustments on asset efficiency metrics.

Overall, the data indicates a period of financial stress during 2019 and 2020, likely linked to external or internal challenges, followed by a sustained recovery phase. Adjustments for deferred income taxes notably influence reported earnings and returns, particularly amplifying loss periods and recovery gains, which warrants consideration when evaluating company performance across this timeframe.