Marathon Oil Corp. (NYSE:MRO)

Current Income Tax Expense

The current income tax expense exhibited considerable variability over the five-year period. It began at a relatively high amount of $437 million in 2017, then decreased significantly to $279 million in 2018. In 2019, the balance shifted to a tax benefit of $54 million, marking a reversal in trend. This was followed by a minimal current tax expense of $8 million in 2020, before increasing moderately to $85 million in 2021. Overall, the current tax expense showed a pronounced decline from 2017 to 2020, with a slight recovery in 2021.

Deferred Income Tax Expense

The deferred income tax expense displayed fluctuations, alternating between expense and benefit. Starting with a benefit of $61 million in 2017, it shifted to an expense of $52 million in 2018. In 2019, the deferred tax returned to a benefit of $34 million, then decreased in magnitude to a benefit of $22 million in 2020, and finally to a smaller benefit of $27 million in 2021. The deferred tax figures remained relatively small compared to current taxes, with a general trend towards modest benefits in the latter years.

Total Income Tax Provisions (Benefits)

The total income tax provisions, which consolidate current and deferred components, mirrored the trends observed individually. Starting at a provision of $376 million in 2017, the amount slightly decreased to $331 million in 2018. It then eclipsed into a tax benefit of $88 million in 2019, showing a significant turnaround. The benefit lessened to $14 million in 2020, followed by a return to a provision of $58 million in 2021. These variations indicate a period of tax expense reduction and benefits, with partial reversals towards tax expense in the final year assessed.

Overall Observations

The data reflect a period of considerable tax expense volatility. The company experienced a notable shift from substantial current tax expenses in 2017 and 2018 to tax benefits in subsequent years, particularly 2019 and 2020. Deferred taxes have less impact but generally shifted from benefits towards smaller benefits after 2018. The aggregate tax position transitioned accordingly, indicating influence from both current operational tax outcomes and changes in deferred tax assets or liabilities. This pattern may suggest fluctuations in taxable income, timing differences in recognizing income and expenses, or changes in tax strategy and regulations over the period.

The analysis of the federal statutory and effective income tax rates over the five-year period reveals significant variability and divergence between the two measures. The federal statutory income tax rate demonstrates a distinct downward adjustment from 35% in 2017 to a stable 21% from 2018 onwards. This represents a structural change likely due to tax reform or policy adjustments affecting the statutory framework.

In contrast, the effective income tax rate exhibits pronounced volatility throughout the same timeframe. In 2017, the effective rate was markedly high at 83%, substantially exceeding the statutory rate, which indicates the presence of non-recurring items, deferred tax adjustments, or other tax impacts increasing the tax burden beyond the statutory level.

From 2018 forward, the effective tax rate fluctuates considerably, showing a sharp decline to 23% in 2018, closely aligning with the statutory rate. However, in 2019, the effective rate turns negative (-22%), suggesting that the company recognized net tax benefits, credits, or losses resulting in income tax recoveries rather than expenses. The years 2020 and 2021 show minimal effective tax rates of 1% and 6% respectively, both significantly lower than the constant statutory rate of 21%, indicating reduced tax expenses potentially attributable to favorable tax planning, changes in income composition, or deferred tax asset realizations.

Overall, the effective income tax rate's departure from the statutory average implies variability in the company's tax position influenced by episodic items, tax strategies, or income fluctuations over the years examined.

The financial data reveals several noteworthy trends and fluctuations over the five-year period.

Employee Benefits

Employee benefits expenses show a consistent decreasing trend, declining steadily from $111 million in 2017 to $66 million in 2021. This reduction suggests cost control or adjustment measures possibly related to workforce or benefit plan changes.

Operating Loss Carryforwards

Operating loss carryforwards increased from $1,030 million in 2017 to a peak of $1,966 million in 2020, followed by a decline to $1,541 million in 2021. This pattern indicates accumulating losses initially, with some utilization or expiration of losses occurring in the final year.

Capital Loss Carryforwards

Capital loss carryforwards were minimal and decreased from $3 million in 2017 to $1 million in 2019, after which no data is reported, possibly due to exhaustion or reclassification.

Foreign Tax Credits

Foreign tax credits remain constant at $611 million annually, suggesting no significant change in foreign tax activities or credits during the period.

Investments in Subsidiaries and Affiliates

Investment data is only available for 2017 at $174 million, with no subsequent values reported, which may indicate divestments or changes in accounting presentation.

Other Deferred Tax Assets

This category exhibits considerable variability: an initial drop from $69 million in 2017 to $5 million in 2018, followed by an increase to $52 million in 2021, indicating fluctuations in miscellaneous deferred tax asset components.

Deferred Tax Assets Before Valuation Allowance

There is a general upward trend in deferred tax assets before valuation allowance, rising from $1,998 million in 2017 to $2,697 million in 2020, then decreasing to $2,270 million in 2021. This trend aligns with changes in temporary differences recognized for tax purposes.

Valuation Allowance

Valuation allowance fluctuates notably, starting at a negative $926 million in 2017, improving to a lower negative $699 million in 2019, then increasing again to negative $948 million in 2020, and easing to negative $780 million in 2021. These changes reflect periodic reassessment of realizability of deferred tax assets.

Net Deferred Tax Assets

Net deferred tax assets increased from $1,072 million in 2017 to $1,749 million in 2020, followed by a decrease to $1,490 million in 2021. This suggests overall growth in deferred tax assets, tempered by adjustments in valuation allowance.

Property, Plant, and Equipment (PP&E)

PP&E balances, reported as negative values, demonstrate volatility: starting at negative $1,332 million in 2017, rising to negative $1,892 million in 2020, then recovering somewhat to negative $1,544 million in 2021. The trend suggests asset additions and disposals impacting net book value.

Accrued Revenue

Accrued revenue shows a declining trend from negative $81 million in 2017 to negative $20 million in 2020, with no data reported in 2021, indicating either improved collection processes or changes in revenue recognition policies.

Other Deferred Tax Liabilities

The "Other" category under deferred tax liabilities records minor negative balances initially, but sharply decreases to negative $82 million in 2021, reflecting increased liabilities or reclassifications in that year.

Deferred Tax Liabilities

Deferred tax liabilities follow a pattern similar to PP&E, moving from negative $1,416 million in 2017 to a peak negative $1,912 million in 2020, before reducing to negative $1,626 million in 2021. This indicates growing tax liabilities followed by partial reversal or utilization.

Net Deferred Tax Assets (Liabilities)

The net deferred tax position fluctuates around zero, moving from net liabilities of negative $344 million in 2017 to net assets of $194 million in 2018, then back to net liabilities in subsequent years, reaching negative $136 million in 2021. This volatility highlights changes in temporary differences and tax balances impacting overall tax position.

The analysis of noncurrent deferred tax assets and liabilities over the five-year span reveals distinct trends and changes in the company's deferred tax positions.

Noncurrent Deferred Tax Assets

Displayed data is available only for the years ending 2017 and 2018, showing a decrease from $489 million in 2017 to $393 million in 2018. After 2018, data is missing, preventing further trend analysis. The decline between these two years indicates a reduction in deferred tax assets categorized under other noncurrent assets.

Noncurrent Deferred Tax Liabilities

There is a clear diminishing trend in the value of noncurrent deferred tax liabilities over the five years. Starting at $833 million in 2017, the liabilities decreased substantially to $199 million in 2018, then moved slightly lower to $186 million in 2019. The downward trajectory continued with $163 million in 2020, reaching $136 million by the end of 2021. This steady decrease reflects a consistent reduction in the company's deferred tax obligations over the period.

Overall, the data indicates a notable reduction in deferred tax liabilities from 2017 through 2021. While deferred tax assets data is incomplete beyond 2018, the available information suggests a downward adjustment in those assets between 2017 and 2018. The consistent decline in deferred tax liabilities may imply improved tax position management or changes in underlying asset valuations affecting deferred tax calculations.

The financial data reveals several key trends related to assets, liabilities, stockholders' equity, and net income over the five-year period.

Total Assets

Both reported and adjusted total assets show a consistent decline from 2017 through 2021. The reported total assets decreased from $22,012 million in 2017 to $16,994 million in 2021. Adjusted total assets follow the same downward trajectory with very close values, indicating minor adjustments mainly in earlier years. This trend points to a reduction in the asset base over the period.

Total Liabilities

The company’s total liabilities also decrease steadily during the same period, with reported liabilities falling from $10,304 million in 2017 to $6,308 million in 2021 and adjusted liabilities decreasing from $9,471 million to $6,172 million. Adjusted liabilities are consistently lower than reported liabilities, reflecting accounting adjustments that reduce liabilities slightly. The overall liability reduction suggests deleveraging or payment/settlement of obligations.

Stockholders’ Equity

Stockholders’ equity exhibits relative stability with minor fluctuations. Reported equity increased slightly from $11,708 million in 2017 to $12,153 million in 2019, before declining to $10,561 million in 2020 and rebounding marginally to $10,686 million in 2021. Adjusted equity shows a similar pattern, generally marginally higher than reported figures, indicating positive adjustments impacting equity. The stability with some variation implies the company maintained a steady equity base despite underlying asset and liability changes.

Net Income (Loss)

The net income figures demonstrate significant volatility. Both reported and adjusted net income start with large losses in 2017 (-$5,723 million reported, -$5,784 million adjusted). The company turned profitable in 2018 and 2019, albeit with modest earnings. In 2020, sizeable losses reoccurred (-$1,451 million reported, -$1,473 million adjusted), possibly reflecting adverse market or operational conditions, before returning to positive net income in 2021 (reported $946 million, adjusted $919 million). Adjusted figures closely mirror reported results with slight variations, reflecting consistent treatment of income tax adjustments over time.

Overall, the company reduced its asset base and liabilities significantly over the period while managing to maintain a relatively stable equity position. Net income exhibited large fluctuations, with considerable losses in certain years offset by profits in others. Adjustments made in the financial data appear minor and do not affect the general trends, indicating stable accounting treatments related to income taxes and other adjustments. This pattern may reflect cyclical industry factors impacting profitability and balance sheet size.

Net Profit Margin

The reported net profit margin experienced significant fluctuations over the observed periods, with a deeply negative margin of -130.87% in 2017, followed by a considerable recovery to positive values in 2018 (18.57%) and 2019 (9.48%). The margin then declined sharply to -46.85% in 2020 before recovering to 16.89% in 2021. The adjusted net profit margin follows a similar pattern, showing slightly lower positive margins in 2018 and 2019 compared to the reported figures, and a marginally lower recovery in 2021.

Total Asset Turnover

Total asset turnover remained relatively stable, with a gentle increase overall. Starting from 0.20 in 2017, it rose to 0.28 in 2018, slightly decreased to 0.25 in 2019, dropped to a low of 0.17 in 2020, and then increased substantially to 0.33 in 2021. Both reported and adjusted values mirror each other closely, indicating consistency in asset utilization metrics despite the tax adjustments.

Financial Leverage

Financial leverage demonstrated a downward trend, starting at 1.88 in 2017 and gradually declining each year to reach 1.59 in 2021. The adjusted financial leverage values are slightly lower but show the same consistent decreasing trend, suggesting a gradual reduction in the use of debt relative to equity over the observed period.

Return on Equity (ROE)

Reported ROE showed significant volatility, starting with a large negative return of -48.88% in 2017, improving to positive returns in 2018 (9.04%) and 2019 (3.95%), then slipping back to a negative -13.74% in 2020 before rising again to 8.85% in 2021. Adjusted ROE values follow a similar pattern, with slightly higher positive returns in 2018 but slightly lower values in 2019 and 2021, maintaining the overall volatility and recovery trends observed in the reported data.

Return on Assets (ROA)

The ROA figures reflect similar trends of fluctuation, with a deeply negative return of -26% in 2017, improvement to modest positive returns of 5.14% and 2.37% in 2018 and 2019 respectively, a decline to -8.08% in 2020, and a recovery to 5.57% in 2021. Adjusted ROA values are consistently slightly lower than reported figures but mirror the same trajectory, emphasizing the impact of income tax adjustments on profitability metrics.

Reported Net Income (Loss)

The reported net income exhibits significant volatility over the analyzed period. In 2017, the company experienced a substantial loss of approximately -$5,723 million. This was followed by a recovery in 2018 with a positive net income of $1,096 million, and a moderate gain in 2019 of $480 million. However, the company again encountered a loss in 2020 amounting to -$1,451 million. The year 2021 showed a return to profitability with net income of $946 million.

Adjusted Net Income (Loss)

The adjusted net income follows a trend consistent with the reported figures but generally reflects slightly more pronounced losses and lower profits during gainful periods. In 2017, the adjusted loss was slightly worse at -$5,784 million compared to the reported figure. Similarly, in 2018 and 2019, adjusted incomes were marginally higher and lower respectively than reported figures, indicating adjustments that slightly reduced net income in 2019. Adjusted net income in 2020 was -$1,473 million, closely mirroring the reported loss, and in 2021, it was slightly lower than the reported figure at $919 million.

Reported Net Profit Margin

The reported net profit margin aligns with the net income performance, showing marked variability. The margin was deeply negative at -130.87% in 2017, illustrating extreme losses relative to revenue. In 2018, profitability rebounded substantially to 18.57%, followed by a decrease to 9.48% in 2019. The margin turned negative again in 2020, at -46.85%, before improving to 16.89% in 2021. These fluctuations underscore the volatile operational profitability during these years.

Adjusted Net Profit Margin

The adjusted net profit margin mirrors the pattern of the reported margin but is consistently slightly lower, indicating the impact of adjustments that generally reduce profitability metrics. It started at -132.27% in 2017, improving to 19.45% in 2018, then decreasing to 8.81% in 2019. In 2020, the margin worsened to -47.56% before recovering to 16.41% in 2021. The close correlation between reported and adjusted margins suggests that adjustments do not drastically alter the overall profitability trend but slightly accentuate the margins' extremes.

The analysis of the annual reported and deferred income tax adjusted financial data reveals several notable trends over the five-year period.

Total Assets

There is a consistent decline in both reported and adjusted total assets from 2017 to 2021. Reported total assets decreased from 22,012 million US dollars in 2017 to 16,994 million US dollars in 2021, representing a reduction of approximately 22.8%. Adjusted total assets mirror this trend closely, starting at 21,523 million US dollars in 2017 and declining to the same 16,994 million US dollars by 2021.

Total Asset Turnover

The total asset turnover ratio exhibits variability over the reviewed periods. It initially increased from 0.20 in 2017 to 0.28 in 2018, indicating improved efficiency in asset utilization during this timeframe. This ratio decreased slightly to 0.25 in 2019, followed by a significant drop to 0.17 in 2020, likely reflecting lower revenue generation relative to assets. In 2021, the ratio sharply rebounded to 0.33, surpassing previous years and suggesting a substantial improvement in asset efficiency.

Relationship between Assets and Asset Turnover

Despite the steady decline in total assets, the fluctuation of the asset turnover ratio indicates varying levels of operational efficiency. The sharp decrease in turnover in 2020, concurrent with a reduction in asset base, might reflect external challenges or operational inefficiencies during that year. However, the recovery in turnover in 2021 suggests that the company managed to enhance revenue generation relative to its asset base amid continuing asset contraction.

Adjusted versus Reported Figures

The adjusted figures for total assets and asset turnover are identical to the reported figures across all years, indicating that deferred income tax adjustments do not materially impact these specific financial metrics in this dataset.

Overall, the data shows a contraction in asset size over the period analyzed, accompanied by volatility in asset turnover that culminates in a notable improvement in the final year. Such patterns may reflect strategic asset optimization and operational adjustments in response to market or internal conditions.

Total Assets

There is a clear downward trend in reported total assets, decreasing steadily from $22,012 million in 2017 to $16,994 million in 2021. Adjusted total assets follow an almost identical pattern, beginning at $21,523 million in 2017 and also declining to $16,994 million by 2021. The consistency between reported and adjusted totals indicates minimal impact from income tax adjustments on total asset values over the period.

Stockholders’ Equity

Reported stockholders' equity shows a mild increase from $11,708 million in 2017 to $12,153 million in 2019, before declining to $10,686 million in 2021. Adjusted stockholders’ equity presents a slightly different trend, decreasing from $12,052 million in 2017 to $11,934 million in 2018, then rising to a peak of $12,339 million in 2019, followed by a decline to $10,822 million in 2021. The adjusted data tends to be higher than the reported equity in the earlier years but converges toward similar values in the final years, suggesting that deferred tax adjustments temporarily inflated equity before converging.

Financial Leverage

Reported financial leverage steadily decreases from 1.88 in 2017 to 1.59 in 2021, indicating a gradual reduction in the relative amount of debt used to finance assets. Adjusted financial leverage follows the same downward trajectory, starting at 1.79 in 2017 and declining to 1.57 in 2021. The adjustment reduces the leverage ratio slightly in each period, showing that accounting for deferred tax adjustments marginally lowers the company’s leverage over the analyzed years.

Summary of Trends

The overall downward trend in total assets suggests contraction or asset divestiture activities. The initial rise and subsequent fall in equity, particularly pronounced in the adjusted figures, may reflect a period of financial restructuring or fluctuating profitability impacting retained earnings and reserves. The consistent decline in financial leverage points to a strategic effort to reduce debt dependency, potentially enhancing financial stability. Adjustments for deferred income tax have a moderate effect on reported equity and leverage, generally leading to slightly higher equity and lower leverage ratios when compared to reported figures.

The data reveals significant fluctuations in the company's financial performance and equity over the five-year period from 2017 to 2021. The reported and adjusted net income (loss) figures show a pattern of volatility with notable swings between negative and positive values.

Net Income (Loss)

In 2017, the company experienced a substantial net loss, with reported and adjusted figures around -$5.7 billion. This was followed by a recovery in 2018, posting positive net income exceeding $1 billion on both reported and adjusted bases. However, in 2019, net income declined sharply to under $500 million, and the downward trend continued into 2020 with another significant loss close to -$1.45 billion. In 2021, profitability returned with net income approaching $900 million, although still below the peak level observed in 2018.

Stockholders’ Equity

Stockholders’ equity remained relatively stable but exhibited a mild declining trend overall. Reported equity rose slightly from approximately $11.7 billion in 2017 to $12.1 billion in 2019 before dropping to about $10.6 billion in 2020 and modestly increasing to nearly $10.7 billion in 2021. Adjusted equity followed a similar pattern, peaking slightly higher in 2019 and ending the period marginally above $10.8 billion. This trend suggests some erosion in equity, possibly reflecting the impact of net losses and other adjustments during the latter years.

Return on Equity (ROE)

The reported and adjusted ROE percentages mirror the fluctuations in net income and equity. Negative ROE was recorded in 2017 (around -48%), turned positive in 2018 (between 9% and 10%), then weakened significantly in 2019 (around 4%), and became negative again in 2020 (approximately -13.7%). In 2021, the ROE improved to near 9%. Adjusted ROE closely follows the reported figures but is slightly lower in the positive years, indicating that adjustments have a modest dampening effect on profitability metrics.

Overall, the financial data suggests the company encountered considerable challenges especially in 2017 and 2020, reflected by large losses and negative returns on equity. The recovery phases in 2018 and 2021 demonstrate partial rebounds in earnings and shareholder value. The adjusted data closely tracks the reported figures, implying the adjustments related to deferred income tax and other items do not drastically alter the underlying financial trends.

Net Income (Loss) Trends

The net income figures demonstrate significant volatility over the examined years. Reported net income shows a substantial loss in 2017 followed by positive gains in 2018 and 2019. A sharp downturn occurs again in 2020, returning to negative territory, before rebounding to a positive figure in 2021. Adjusted net income follows a similar pattern, with losses in 2017 and 2020 transitioning to profits in the other years, though the adjusted figures are slightly more conservative than the reported ones in most cases.

Total Assets Movements

The total assets trend reveals a consistent decline throughout the period. Both reported and adjusted total assets decrease year over year from 2017 to 2021. This decline suggests a possible divestiture of assets, asset impairments, depreciation effects, or reduced investment in asset growth during this timeframe. The close alignment between reported and adjusted total assets indicates minimal adjustment impact on asset valuation.

Return on Assets (ROA) Behavior

The ROA percentages mirror the net income trends with considerable fluctuations. In 2017, ROA is notably negative, turning positive in 2018 and 2019, and dropping again to negative in 2020 before improving in 2021. Adjusted ROA values are generally slightly lower than reported ROA, reflecting conservative profit adjustments. The negative ROA years correspond to the negative net income years, confirming the relationship between profitability and asset returns. The improvements in 2018, 2019, and 2021 suggest periods of better operational efficiency or profitability.

Overall Insights

The data portrays a company experiencing considerable financial instability and challenges across the five-year span, with earnings alternating between losses and profits. The declining asset base may indicate strategic shifts, asset sales, or depreciation impacts amid operational difficulties. Profitability, as seen through ROA, fluctuates substantially and aligns closely with net income trends, highlighting the influence of income volatility on returns. Adjusted financial metrics slightly temper the reported figures, indicating minor impacts from tax-related adjustments but maintaining overall trend consistency.