HP Inc. (NYSE:HPQ)

The analysis of the annual current and deferred income tax expenses over the six-year period reveals notable fluctuations and trends in the company's tax-related financial metrics.

Current Income Tax Expense

The current tax expense exhibits a declining trend from 2013 to 2017, starting at $1,807 million in 2013 and decreasing steadily each year to reach a low of $511 million in 2017. However, there is a marked reversal in 2018, with the current tax expense increasing sharply to $1,340 million. This pattern indicates a significant reduction in taxable income or tax liabilities during the middle years, followed by a substantial increase in the last reported year.

Deferred Income Tax Expense (Benefit)

Deferred income tax expense shows high volatility throughout the period. The values alternate between negative and positive, indicating fluctuations between deferred tax benefits and expenses. In 2013, the company reported a deferred tax benefit of $410 million, which declined dramatically to a mere $33 million in 2014. The deferred tax benefit deepens again in 2015 to $701 million, followed by a switch to a deferred tax expense of $403 million in 2016 and $239 million in 2017. In 2018, there is a notable change to a significant deferred tax benefit of $3,654 million. This considerable increase suggests a substantial adjustment in deferred tax assets or liabilities in 2018, possibly linked to changes in tax legislation, asset valuations, or timing differences.

Provision for (Benefit from) Taxes on Earnings

The overall provision for income taxes mirrors the fluctuations observed in current and deferred taxes. The provision remains positive from 2013 through 2017, albeit with notable variability—decreasing markedly in 2015 to $178 million, then rising to $1,095 million in 2016, and falling again to $750 million in 2017. In 2018, the provision turns negative at $2,314 million, indicating an overall tax benefit rather than an expense for the year. This negative provision corresponds with the large deferred tax benefit and the increased current tax expense, suggesting complexities in the tax position with potentially significant one-time tax benefits or adjustments impacting the total tax provision.

Overall, the data reflects a dynamic tax expense profile with a declining current tax expense mid-period, significant swings in deferred taxes, and a pronounced tax benefit recognition in 2018. These fluctuations might be indicative of changing tax strategies, tax rate impacts, adjustments in deferred tax assets and liabilities, or the influence of external tax reforms during the period.

U.S. Federal Statutory Income Tax Rate

The U.S. federal statutory income tax rate remained constant at 35% from 2013 through 2017. In 2018, there was a significant reduction to 23.3%, reflecting a notable tax rate change during that period.

State Income Taxes, Net of Federal Tax Benefit

State income taxes, net of federal benefits, showed minor fluctuations overall. Starting at 0.1% in 2013, the rate increased slightly to 0.4% in 2014, dipped to -4.6% in 2015, then hovered near zero with small positive values between 1.1% and 1.4% in 2016 and 2017, and finally settled back to 0.5% in 2018.

Lower Rates in Other Jurisdictions, Net

This item exhibited consistent negative adjustments across all years, ranging from -24.5% in 2013 to approximately -10.9% in 2018. Though fluctuating, it indicates a steady impact of lower tax rates applied in jurisdictions outside the U.S., with some moderation in the later years.

U.S. Tax Reform Impacts

There were no recorded values for this category until 2018, where a sharp decrease of -35.8% was reported, signaling the influence of U.S. tax reform in that year.

Research and Development (R&D) Credit

R&D credit impact was mildly negative over the years with values of -0.7% in 2013, absence in 2014, followed by increasing negative values of -2.4% in 2016 and small decreases thereafter, reflecting some benefit from R&D tax credits variably claimed.

Valuation Allowances

Valuation allowances showed considerable volatility. Starting positive at 3.8% in 2013 and 1.7% in 2014, a significant negative adjustment of -23.4% occurred in 2015. Subsequently, the values stabilized in a negative range around -1.2% to -9.3% from 2016 through 2018, indicating fluctuating but generally improving asset valuation considerations.

Uncertain Tax Positions and Audit Settlements

This category exhibited large variability. It moved from a positive 4.1% in 2013 to negative -2.3% in 2014, rose sharply to 10.1% and 11.7% in 2015 and 2016, then decreased markedly to 0.4% in 2017 and a substantial negative value of -50.3% in 2018, suggesting heightened changes due to tax audits or settlement outcomes.

Indemnification Related Items

Data for indemnification related items appeared only from 2015 onward, showing a negative impact of -4.1% in 2015, minimal impact near zero in 2016, and a positive 5.2% effect in 2018, reflecting sporadic indemnification adjustments affecting tax rates.

Other, Net

The 'Other, Net' category displayed relatively minor fluctuations with positive values ranging between 1.2% and 3.7%, except for a negative value of -1.7% in 2016. Overall, it represented a small consistent positive contribution to the effective tax rate.

HP’s Effective Tax Rate

The effective tax rate showed significant variability. It started at 21.5% in 2013, rose slightly to 23.5% in 2014, dropped sharply to 3.8% in 2015, increased again to 29.1% in 2016, and then moderated to 22.9% in 2017. Notably, 2018 exhibits a dramatic negative effective tax rate of -76.8%, likely influenced by the combined impact of U.S. tax reforms and substantial adjustments from uncertain tax positions.

Loss and credit carryforwards

The loss and credit carryforwards showed a declining trend from 14,068 million USD in 2013 to 8,204 million USD in 2018, with a notable decrease between 2014 and 2016, followed by a slight increase in 2017 before continuing the downward trajectory in 2018.

Intercompany transactions, profit in inventory

This item showed a steady increase from 125 million USD in 2013 to 147 million USD in 2015, after which data is unavailable, indicating either discontinuation or unreported figures.

Intercompany transactions, excluding inventory

There was a significant increase from 1,923 million USD in 2013 to a peak of 6,952 million USD in 2015, followed by a sharp decline in the subsequent years, dropping to 994 million USD in 2018, which could suggest changes in intercompany trading activities or accounting treatments.

Fixed assets

Fixed assets consistently decreased over the period, from 289 million USD in 2013 down to 151 million USD in 2018, indicating possible asset disposals, depreciation, or reduced investment in property and equipment.

Warranty

Warranty obligations declined steadily from 622 million USD in 2013 to 194 million USD in 2018, suggesting either improved product reliability or changes in warranty policies.

Employee and retiree benefits

This item experienced a sharp decrease from 2,350 million USD in 2013 to 401 million USD in 2018, with the most pronounced reduction occurring between 2015 and 2016, implying a substantial change in benefit plans or actuarial assumptions.

Deferred revenue

Deferred revenue rose slightly from 1,119 million USD in 2013 to 1,235 million USD in 2015 but then dropped significantly to 164 million USD by 2018, indicating changes in revenue recognition or contract terms.

Other (assets and liabilities)

The 'Other' category showed high values around 2,320-2,784 million USD through 2015, with a pronounced decrease thereafter down to 422 million USD in 2018, pointing to reduced miscellaneous deferred assets or financial instruments.

Gross deferred tax assets

These assets remained relatively stable around 22,816 to 23,722 million USD from 2013 to 2014, then gradually declined to 10,530 million USD by 2018, reflecting adjustments in future tax benefits.

Valuation allowances

Valuation allowances were negative throughout and decreased in magnitude from -11,390 million USD in 2013 to -7,906 million USD in 2018, suggesting a reduction in the estimated realizability risk of deferred tax assets.

Deferred tax assets

Deferred tax assets increased to a peak of 13,240 million USD in 2015 but then declined sharply to 2,624 million USD by 2018, indicating narrowing expectations of tax asset realization.

Unremitted earnings of foreign subsidiaries

There was a consistent negative balance, with the unremitted earnings decreasing in absolute value from -7,469 million USD in 2013 to just -31 million USD in 2018, implying repatriation or reclassification of foreign earnings.

Accounts receivable allowance

Remained constant at -1 million USD in the earlier years with no data from 2016 onwards, likely reflecting immaterial or fully provisioned balances.

Intangible assets

Intangible assets showed decreasing negative values from -886 million USD in 2013 to -229 million USD in 2018, with a significant reduction between 2014 and 2016 indicating disposals or amortization.

Deferred revenue (negative)

Negative deferred revenue amounts decreased in magnitude from -19 million USD in 2013 to nil after 2015, suggesting classification changes or eliminations.

Other (negative)

Other negative entries showed a decrease in absolute value, from -855 million USD in 2013 to -33 million USD in 2018, likely reflecting lower liabilities or reductions in miscellaneous obligations.

Deferred tax liabilities

These liabilities decreased significantly from -9,230 million USD in 2013 to -293 million USD in 2018, with the most considerable drop occurring between 2015 and 2018, indicating lower future tax obligations.

Net deferred tax assets and liabilities

The net position exhibited volatility; initially positive at 2,196 million USD in 2013, it turned negative in 2016 and 2017 at -862 million USD and -1,068 million USD respectively, before recovering to a positive 2,331 million USD in 2018, denoting fluctuating tax asset and liability balances over the years.

Current Deferred Tax Assets

The current deferred tax assets showed a decreasing trend from 2013 to 2015, falling from $3,893 million in 2013 to $2,242 million in 2015. Data for the years 2016 onward is unavailable, which limits the ability to assess further developments in this category.

Current Deferred Tax Liabilities

Similarly, current deferred tax liabilities declined consistently over the three years with data available, from $375 million in 2013 down to $168 million in 2015. Data beyond 2015 is missing, thus impeding analysis of subsequent changes.

Long-Term Deferred Tax Assets

The long-term deferred tax assets experienced a sharp decrease from $1,346 million in 2013 to $254 million in 2016, indicating a significant reduction during this period. However, from 2016 onwards, there was a recovery trend, with assets increasing to $342 million in 2017 and a substantial rise to $2,431 million in 2018, surpassing the initial 2013 value.

Long-Term Deferred Tax Liabilities

The long-term deferred tax liabilities displayed a volatile pattern. From a high of $2,668 million in 2013, these liabilities declined dramatically to $295 million in 2015, followed by a notable increase to $1,116 million in 2016 and further growth to $1,410 million in 2017. The liabilities then decreased sharply to $100 million in 2018. This fluctuation suggests significant adjustments or changes in deferred tax positions over the years.

Current Assets

The reported current assets remained relatively stable from 2013 to 2015, fluctuating slightly around the $50 billion mark. However, in 2016, there was a significant decline to approximately $18.5 billion, followed by modest increases in 2017 and a slight decline again in 2018. The adjusted current assets followed a similar trend but started at a slightly lower baseline, indicating adjustments that reduced asset values consistently over the initial years before mirroring the sharp drop and subsequent minor fluctuations from 2016 onwards.

Total Assets

The reported total assets showed stability between 2013 and 2015, maintaining a range just above $100 billion. In 2016, reported total assets dropped sharply to about $29 billion and then increased moderately in 2017 and 2018. Adjusted total assets trends parallel the reported values closely but are consistently lower, demonstrating reductions primarily due to adjustments prior to 2016. After 2016, the adjusted total assets increased more slowly than the reported figures, especially noticeable in 2018.

Current Liabilities

Both reported and adjusted current liabilities slightly decreased from 2013 through 2015, moving from about $45 billion to approximately $42 billion. In 2016, current liabilities rose sharply to around $18.8 billion, aligning with the drop in current assets. This increase continued into 2017 and 2018, peaking at about $25 billion. Adjusted current liabilities track closely with reported figures throughout all years, indicating minimal impact from income tax adjustments on short-term obligations.

Total Liabilities

The reported total liabilities experienced moderate fluctuations but remained within the $75 billion to $79 billion range during the first three years. A substantial rise occurred in 2016, jumping to nearly $33 billion, followed by an increase in 2017 to approximately $36 billion and a slight decrease in 2018. Adjusted total liabilities mirror the reported trends but are generally lower, especially before 2016, reflecting adjustments that decrease liability figures. Post-2016, the adjustments appear to have a diminished effect on liability totals.

Stockholders’ Equity (Deficit)

The reported stockholders’ equity displayed modest decreases between 2013 and 2015, hovering around $27 billion. A sharp transition occurred in 2016, turning the equity into a deficit of approximately $3.9 billion, which slightly improved in 2017 and 2018, with the deficit reducing to around $0.6 billion by 2018. Adjusted equity values follow a similar pattern but show a lower baseline and smaller deficits from 2016 onward, suggesting that tax adjustments somewhat mitigate the magnitude of the equity deficit. Overall, this trend indicates increasing financial strain or restructuring impacting shareholders' equity starting in 2016.

Net Earnings

Reported net earnings exhibited a gradual decline from about $5.1 billion in 2013 to $4.55 billion in 2015, followed by a significant drop in 2016 to approximately $2.5 billion. Earnings stabilized somewhat in 2017, increasing slightly, and then surged markedly in 2018 to over $5.3 billion. Adjusted net earnings also declined from 2013 to 2015, with a sharper drop in 2015 to $3.85 billion. From 2016 onwards, adjusted earnings show less variation and a steady decrease through 2018, contrasting with the rise in reported earnings. This divergence implies that adjustments related to deferred income taxes or other factors reduce the reported profitability in the later years, highlighting a discrepancy between reported performance and adjusted financial results.

The analysis of the financial data over the six-year period reveals several notable trends and fluctuations across the key metrics reported and adjusted for deferred income tax.

Current Ratio

The reported current ratio shows a moderate decline from 1.11 in 2013 to 0.85 in 2018, indicating a decrease in short-term liquidity. A similar pattern is observed in the adjusted current ratio, which starts slightly lower at 1.03 in 2013 and also declines steadily, reaching 0.85 by 2018. The drop below 1.0 in the later years signals potential liquidity concerns.

Net Profit Margin

Reported net profit margin remains relatively stable between 2013 and 2017, fluctuating around 4.4% to 5.2%, before a sharp increase to 9.11% in 2018. In contrast, the adjusted net profit margin starts slightly lower and shows a decreasing trend from 2013 (4.19%) to 2015 (3.73%), followed by a peak at 6.01% in 2016 and a subsequent decline to 2.86% in 2018. These divergent trends suggest that adjustments related to income tax timing impact the apparent profitability, particularly in the final year.

Total Asset Turnover

The reported total asset turnover remains fairly consistent from 2013 through 2015 (around 1.0 to 1.08), then increases markedly to above 1.5 in 2016 and maintains that elevated level through 2018, peaking at 1.69. The adjusted figures mirror this trend, but with slightly higher turnover ratios consistently, culminating at 1.82 in 2018. This indicates improved efficiency in asset utilization in the latter years.

Financial Leverage

Data on financial leverage is only available up to 2015, showing a stable reported leverage ratio slightly below 4.0 throughout. Adjusted financial leverage is marginally higher and increases slightly from 4.01 in 2013 to 4.13 in 2015. The lack of data beyond 2015 limits further analysis, but up to that point, leverage remains steady with a minor upward trend on an adjusted basis.

Return on Equity (ROE)

The reported ROE is stable at 18.75% for 2013 and 2014, but declines to 16.4% in 2015, with no data available thereafter. Adjusted ROE peaks at 20.21% in 2014 before falling to 15.34% in 2015. This indicates a peak in shareholder returns in 2014 followed by a reduction in 2015, with adjustments potentially affecting the magnitude of returns recognized.

Return on Assets (ROA)

The reported ROA follows a mixed trajectory, starting at 4.84% in 2013, stable until 2015, then rising sharply to 8.6% in 2016 and continuing to increase to 15.39% in 2018. Adjusted ROA shows a somewhat different pattern, declining through 2015 to 3.71%, rising to a peak of 10.08% in 2016, then falling again to 5.2% in 2018. The divergence in later years between reported and adjusted ROA suggests some volatility in asset returns when excluding deferred tax effects.

Overall, the data indicate a decline in liquidity as seen in the diminishing current ratios. Profitability measures display variability, with some recent improvement in reported margins but less consistency in adjusted figures. Asset turnover shows a positive upward trend, reflecting enhanced operational efficiency. Leverage is stable in the early years, while returns to equity and assets indicate some peaks around 2014-2016 followed by declines, particularly in the adjusted measures. These patterns suggest the company experienced periods of improved operational performance and profitability, while liquidity and adjusted profitability warrant attention in the recent years reported.

The data reveals notable fluctuations in both reported and adjusted current assets and liabilities over the six-year period, affecting the liquidity position of the entity.

Current Assets

Reported current assets remained relatively stable from 2013 through 2015, fluctuating mildly between approximately 50,000 million and 51,800 million US dollars. However, there is a significant decline starting in 2016, dropping sharply to around 18,468 million US dollars and then exhibiting a modest increase in 2017 and a slight decrease again in 2018.

The adjusted current assets follow a similar trend, though consistently slightly lower than reported values through 2015, indicating certain adjustments reduced asset values. From 2016 onward, the adjusted values mirror the reported figures exactly, highlighting a convergence between the reported and adjusted asset base in this later period.

Current Liabilities

Both reported and adjusted current liabilities show a gradual decrease from 2013 to 2015, declining from around 45,521 million to roughly 42,191 million for reported liabilities and from approximately 45,146 million to 42,023 million for the adjusted figures. In 2016, both reported and adjusted liabilities drop sharply to about 18,808 million US dollars. Subsequently, there is an upward trend in liabilities in 2017 and 2018, concluding with the highest observed liabilities at approximately 25,131 million US dollars in 2018.

Current Ratios

Reported current ratios indicate a strengthening liquidity position from 2013 (1.11) to 2015 (1.23), reflecting improved ability to cover short-term obligations. Starting in 2016, the ratio falls below one, reaching 0.98, and dips further to 0.85 by 2018, signaling a worsening liquidity profile where current liabilities outstrip current assets.

Adjusted current ratios show a similar pattern to reported ratios but are slightly lower across 2013 to 2015, consistent with the adjusted lower asset values. From 2016 onward, adjusted and reported ratios are identical, reinforcing the observed sharp decline in liquidity beginning in 2016.

Overall, the data illustrates a period of relative liquidity stability and gradual improvement until 2015, followed by a sharp decline in current assets and liabilities in 2016, and then a moderate recovery in liabilities but continued weakness in asset levels through 2018. The contraction in current ratios below unity from 2016 suggests increased short-term financial pressure or changes in working capital management that could warrant further investigation.

Reported Net Earnings

The reported net earnings show a fluctuating pattern over the six-year period. Starting at 5113 million US dollars in 2013, there is a slight decrease in 2014 and 2015, reaching 4554 million. A more significant decline occurs in 2016, dropping to 2496 million, followed by a modest increase in 2017 to 2526 million. In 2018, reported net earnings sharply increase to 5327 million, marking the highest value in the period under review.

Adjusted Net Earnings

Adjusted net earnings follow a somewhat similar trend to reported net earnings but display greater volatility. Beginning at 4703 million US dollars in 2013, the value slightly decreases in 2014 and then more substantially in 2015 to 3853 million. Despite a rebound in 2016 to 2899 million, the trend reverses again with a drop in 2017 to 2765 million, continuing with a more pronounced decline to 1673 million in 2018, the lowest value within the timeframe.

Reported Net Profit Margin

The reported net profit margin maintains a relatively stable range between 4.41% and 5.17% from 2013 to 2017, with a small dip in 2015 (4.41%) and a peak in 2016 (5.17%). However, in 2018, the margin experiences a notable increase to 9.11%, indicating substantial improvement in profitability relative to revenue in that year.

Adjusted Net Profit Margin

Adjusted net profit margin demonstrates more variability compared to the reported margin. It starts at 4.19% in 2013, remains close to that level in 2014, and then declines to 3.73% in 2015. In 2016, there is a significant increase to 6.01%, followed by a decrease to 5.31% in 2017. By 2018, the margin drops sharply to 2.86%, marking the lowest point in the period, which contrasts with the reported margin's rise.

Summary of Trends and Insights

Reported net earnings and reported net profit margin both show a marked improvement in 2018 after years of relative volatility and declines, suggesting strong operational performance or one-time favorable factors influencing results. Conversely, adjusted net earnings and adjusted net profit margins decline in 2018, indicating that adjustments made for deferred income taxes or other factors have a considerable negative impact on adjusted profitability metrics for that year. The divergence in 2018 between reported and adjusted figures may reflect significant non-recurring or tax-related effects that substantially alter the adjusted financial performance portrayal. Overall, the data reveal a complex financial scenario with contrasting signals from reported and adjusted data points, emphasizing the importance of considering both views to gain a comprehensive understanding of financial health.

The analysis of the annual financial data reveals several notable trends in the reported and adjusted total assets, as well as corresponding asset turnover ratios over the period from 2013 to 2018.

Total Assets (Reported and Adjusted)

Reported total assets display a relatively stable pattern around the 105,000 million US$ mark for the years 2013 through 2015. This is followed by a significant decline in 2016 to approximately 29,000 million US$, and a subsequent modest increase through 2017 and 2018 to around 34,600 million US$.

Adjusted total assets mirror a similar trend, maintaining a close range near 100,000 million US$ from 2013 to 2015. A sharp decrease occurs in 2016 and continues through 2018, dropping to a level slightly less than reported total assets by 2018, approximately 32,200 million US$.

This sharp reduction after 2015 likely indicates a fundamental change in asset structure or reporting methodology.

Total Asset Turnover (Reported and Adjusted)

The reported total asset turnover ratio is relatively consistent around 1.06 to 1.08 from 2013 to 2014 but declines to 0.97 in 2015. Following 2015, there is a marked increase, peaking at 1.66 in 2016, slightly tapering to 1.58 in 2017, and rising again to 1.69 in 2018.

Adjusted total asset turnover shows a similar trajectory but maintains slightly higher values throughout the period, starting at 1.12 in 2013-2014, decreasing to 1.00 in 2015, then substantially increasing to 1.68 in 2016, decreasing slightly to 1.60 in 2017, and reaching a peak of 1.82 in 2018.

The increase in asset turnover post-2015 suggests improved efficiency in the use of assets to generate revenue following the significant asset base reduction. The adjusted figures being marginally higher than reported figures indicate the adjustment possibly accounts for deferred tax or other financial items to more accurately reflect operational efficiency.

The financial data reveals notable changes and trends in key metrics over the six-year period ending October 31, 2018.

Total Assets

Reported total assets remained relatively stable from 2013 through 2015, fluctuating slightly around the 103 billion to 106 billion US dollars range. However, there is a sharp decline beginning in 2016, with assets dropping substantially to approximately 29 billion US dollars and then increasing modestly through 2018 to about 35 billion US dollars. The adjusted total assets closely mirror this trend, displaying a similar pattern of relative stability followed by a steep fall and modest recovery, indicating that the adjustments have a limited impact on the overall asset base.

Stockholders’ Equity (Deficit)

Stockholders’ equity, both reported and adjusted, shows a decrease over the years. Initially, from 2013 to 2015, reported equity exhibits a slight upward movement followed by a significant drop into negative territory starting 2016. The deficit worsens somewhat by 2018, although there appears to be a slight recovery relative to the peak negative point in 2016. Adjusted equity follows the same trajectory but with marginally lower absolute values, indicating that adjustments consistently reduce the equity base. The extension from positive equity to a sustained deficit may indicate financial challenges impacting the company's net worth during this period.

Financial Leverage

Data on financial leverage is available only for the years 2013 to 2015 and indicates a gradual increase. Reported financial leverage ratios move slightly downward, from 3.88 in 2013 to 3.85 in 2015, suggesting minor improvement. Contrastingly, the adjusted financial leverage shows an increasing trend from 4.01 to 4.13 over the same period, highlighting a growing reliance on debt or liabilities relative to equity after adjustments. No data is provided for the years beyond 2015, limiting further trend analysis.

The financial data reflects notable fluctuations and trends over the six-year period ending in 2018, specifically in net earnings, equity, and returns on equity.

Net Earnings

Reported net earnings started at 5,113 million USD in 2013 and showed a slight decline to 4,554 million USD by 2015. A sharp drop is apparent in 2016 to 2,496 million USD, followed by marginal improvement in 2017 at 2,526 million USD, and a significant recovery to 5,327 million USD in 2018. Adjusted net earnings also decreased from 4,703 million USD in 2013 to 3,853 million USD in 2015, experienced a milder decline than the reported figure in 2016 at 2,899 million USD, and then deteriorated further to 1,673 million USD in 2018, contrary to the recovery seen in reported earnings.

Total Stockholders’ Equity

Reported total stockholders’ equity was relatively stable and positive during the first three years, ranging from approximately 26,731 to 27,768 million USD. However, there was a marked shift in 2016, with equity turning negative to -3,889 million USD, followed by a slight improvement but remaining negative through 2018 at -639 million USD. Adjusted equity followed a similar trajectory but consistently appeared lower than reported equity, declining from 25,073 million USD in 2013 to -2,970 million USD in 2018. The negative equity values from 2016 onward indicate financial strain or the impact of adjustments related to deferred income taxes or other accounting treatments during this period.

Return on Equity (ROE)

ROE available only until 2015 shows a downward trend. The reported ROE remained steady at 18.75% in 2013 and 2014 but decreased to 16.4% in 2015. The adjusted ROE reveals a similar pattern with a peak in 2014 at 20.21% and a decline to 15.34% in 2015. The absence of ROE data beyond 2015 may be linked to the negative equity positions starting in 2016, which would complicate or invalidate ROE calculations.

Overall, the data suggests a period of financial deterioration beginning in 2016, with reported net earnings and equity showing initial severe impacts followed by partial recoveries in reported net earnings but continued weakness in adjusted figures and equity. The adjustments linked to deferred income taxes substantially affect equity values, pushing them into negative territory and complicating profitability ratios. The divergence between reported and adjusted net earnings and equity highlights the significant impact of non-operational factors and accounting adjustments on the company’s financial condition during the latter part of the analyzed period.

Analysis of the financial data reveals notable trends in net earnings, total assets, and return on assets (ROA) over the observed periods.

Net Earnings

Reported net earnings show a declining trend from 2013 to 2016, decreasing from 5113 million US dollars to 2496 million US dollars. After this period, the earnings stabilize and then sharply increase in 2018 to 5327 million US dollars, surpassing the 2013 level.

Adjusted net earnings also follow a downward trend from 2013 through 2018, dropping from 4703 million US dollars to 1673 million US dollars. Unlike the reported figures, adjusted earnings do not show a recovery in the later years, indicating persistent underlying challenges when adjustments are considered.

Total Assets

Reported total assets remain relatively stable between 2013 and 2015, fluctuating slightly around 105 billion US dollars. A significant decrease is observed in 2016, dropping sharply to approximately 29 billion US dollars. From 2016 onward, total assets experience a moderate increase to 34.6 billion US dollars by 2018, but still remain substantially lower than prior to 2016.

Adjusted total assets follow a similar pattern, with slight decreases between 2013 and 2015, a sharp drop in 2016, and a small recovery thereafter. However, adjusted assets remain consistently lower than reported values, indicating adjustments that reduce asset valuations.

Return on Assets (ROA)

Reported ROA is fairly stable from 2013 to 2015, ranging between 4.26% and 4.86%. In 2016, it increases markedly to 8.6%, followed by a small decline to 7.67% in 2017, and then a substantial jump to 15.39% in 2018. This spike reflects an improved efficiency in generating earnings from assets, possibly due to the reduced asset base.

Adjusted ROA exhibits less consistency. It starts around 4.68% in 2013, peaks at 4.99% in 2014, and then declines to 3.71% in 2015. A notable increase to 10.08% occurs in 2016, followed by a decrease to 8.49% and then a steep drop to 5.2% in 2018. This volatility indicates differing impacts of adjustments on asset profitability over time.

Overall, the data suggest a significant structural change around 2016, where both total assets and earnings decreased sharply, followed by a recovery in reported figures but continued weakness in adjusted earnings. The rise in ROA, especially on the reported basis, points to greater asset utilization efficiency post-2016, likely aided by the reduced asset base. The divergence between reported and adjusted metrics highlights the impact of accounting adjustments on the interpretation of the company's financial performance and position.