Raytheon Co. (NYSE:RTN)

Current Income Tax Expense

The current income tax expense exhibited variability throughout the analyzed periods. Starting at US$789 million in 2015, it experienced a slight decline to US$748 million in 2016, followed by an increase to US$862 million in 2017. In 2018, there was a significant drop to US$288 million, but the figure rebounded to US$686 million in 2019. The overall trend shows fluctuations with a notable dip in 2018, suggesting changes in taxable income or tax rates impacting current tax liabilities.

Deferred Income Tax Expense (Benefit)

The deferred income tax expense (benefit) fluctuated between positive and negative values over the years, indicating varying recognition of deferred tax assets and liabilities. In 2015, there was a benefit of US$56 million, which turned into an expense of US$109 million in 2016 and increased further to US$252 million in 2017. Subsequently, the deferred tax shifted back to a benefit, with values of -US$24 million in 2018 and -US$28 million in 2019. These swings suggest changes in temporary differences related to income recognition, tax law adjustments, or changes in expectations about future tax positions.

Provision for Federal and Foreign Income Taxes

The provision for federal and foreign income taxes mirrored the patterns seen in both current and deferred tax figures. It increased from US$733 million in 2015 to US$857 million in 2016 and peaked at US$1,114 million in 2017. Following this peak, the provision dropped significantly to US$264 million in 2018 before rising again to US$658 million in 2019. This volatility reflects the combined impact of current and deferred tax expense changes and may be influenced by shifts in the geographic mix of income, tax rates, or adjustments in tax planning strategies.

Statutory Tax Rate

The statutory tax rate remained steady at 35% for the years 2015 through 2017 before decreasing significantly to 21% in 2018 and maintaining that rate in 2019. This reflects a major tax policy change occurring between 2017 and 2018.

Foreign Derived Intangible Income (FDII)

This component was not applicable or zero until 2017, when it appeared as a negative impact of -4.2% and slightly decreased in magnitude to -3.3% in 2019, indicating a consistent reduction related to intangible income benefits overseas during these years.

Research and Development Tax Credit

The R&D tax credit showed a deepening negative percentage effect, moving from -1.2% in 2015 to a peak impact of -2.4% in 2018, followed by a marginal decrease to -2.3% in 2019, suggesting increasing utilization or value of R&D tax credits over the period.

Equity Compensation

Equity compensation effects emerged in 2016 at -1.6%, steadily lessening in negative impact to -0.3% by 2019. This trend denotes a declining influence of equity compensation on the tax rate.

Foreign Income Tax Rate Differential

The foreign income tax rate differential fluctuated, showing a negative effect of -1.4% in 2015, a slight positive 0.2% in 2017, rising to 1.3% in 2018, then reducing slightly to 0.8% in 2019. The variation suggests shifting foreign tax dynamics impacting the overall tax rate.

Prior Year True-Up

This factor was neutral through 2016, contributed a minor positive 0.1% in 2017, dropped to -1.1% in 2018 indicating a charge or adjustment, and then recovered to a positive 0.4% in 2019, reflecting volatility in prior year tax corrections.

Tax Benefit Related to Discretionary Pension Contributions

Recorded only for 2018 with a notable reduction of -3%, indicating discrete discretionary pension tax benefits impacting that year's rate.

R&D Tax Credit Claims Related to 2014-2017 Tax Years

Reported only in 2018 as a -2.1% effect, suggesting adjustments or claims related to prior periods affecting the effective tax rate in that year.

Irish Restructuring

Impacted the effective tax rate by -2% in 2018, indicating a tax benefit or cost reduction tied to Irish corporate restructuring during that period.

Change in Valuation Allowance

Only present in 2019 as a 2% positive impact, signaling a reversal or increase in valuation allowances that increased the overall tax rate.

Domestic Manufacturing Deduction Benefit

This benefit decreased in magnitude from -3.1% in 2015 to -2.5% in 2017 before disappearing from 2018 onwards, reflecting the winding down or elimination of the domestic manufacturing deduction component over time.

Remeasurement of Deferred Taxes

Occurred in 2018 as a positive 3.2% effect, indicating an upward adjustment of deferred tax liabilities or assets influencing that year's effective tax rate.

One-Time Transition Tax on Previously Undistributed Foreign Earnings

Also recorded in 2018, contributing a 2.3% increase to the effective tax rate, likely due to transitional tax rules on accumulated foreign earnings triggered in that fiscal year.

TRS Tax-Free Gain

Presented only in 2016 with a negative effect of -1.8%, indicating a tax-free gain that reduced the effective tax rate that year.

Tax Settlements and Refund Claims

Recorded in 2015 with a substantial negative effect of -3.2%, representing tax settlements or refunds that lowered the tax burden for that year.

Other Items, Net

These minor items fluctuated slightly but remained close to zero throughout the period, implying limited impact on overall tax rate fluctuations.

Effective Tax Rate

The effective tax rate followed a clear declining trend, decreasing from 26.3% in 2015 to a low of 8.4% in 2018, before rising again to 16.5% in 2019. This movement reflects the combined effects of statutory tax rate reductions, tax benefits, credits, and one-time tax adjustments during the period.

Accrued employee compensation and benefits

The amount shows a decreasing trend from 322 million US$ in 2015 to 202 million US$ in 2017, followed by a slight recovery to 246 million US$ by 2019.

Other accrued expenses and reserves

This item exhibits a steady decline over the period, decreasing from 133 million US$ in 2015 to -21 million US$ in 2019, indicating a possible reduction in accrued liabilities or a reclassification.

Contract balances and inventories

The negative values reflect a liability or deficit position that decreases from -841 million US$ in 2015 to a low of -494 million US$ in 2018, then worsens again to -611 million US$ in 2019. The overall pattern suggests volatility with some improvement in the middle years.

Pension benefits

This liability decreased significantly from 2,355 million US$ in 2015 to 1,306 million US$ in 2018, before increasing again to 1,701 million US$ in 2019, indicating variability likely due to changes in actuarial assumptions or funding status.

Other retiree benefits

The values remain fairly stable, near 67-68 million US$, after a starting point of 109 million US$ in 2015 and 2016, showing consistency in these obligations over time.

Operating lease right-of-use assets and liabilities

No data is available prior to 2019, where right-of-use assets and corresponding liabilities are recognized at -204 million US$ and 214 million US$ respectively, reflecting adoption of new lease accounting standards.

Net operating loss and tax credit carryforwards

This tax asset declines from 115 million US$ in 2015 to 83 million US$ in 2018, before sharply increasing to 405 million US$ in 2019, suggesting an accumulation of tax benefits or updated valuations.

Depreciation and amortization

Depreciation and amortization expense decreases considerably from -1,385 million US$ in 2015 to -827 million US$ in 2018, followed by a modest increase to -921 million US$ in 2019, indicating changes in asset base or amortization methods.

Partnership outside basis difference

The balance shifts from a positive 6 million US$ in 2015 to negative values around -25 million US$ by 2019, demonstrating a decline and potential impact on tax positions.

Other

This category shows a decline from 75 million US$ in 2015 to 21 million US$ by 2017, remaining stable thereafter, indicating a reduction and stabilization of miscellaneous balances.

Valuation allowance

The valuation allowance increases substantially from a slight negative -2 million US$ in 2015 to -360 million US$ in 2019, signifying greater reservations against deferred tax assets due to uncertainty in realizability.

Noncurrent deferred tax assets (liabilities)

There is a downward trend from 887 million US$ in 2015 to 329 million US$ in 2018, followed by an increase to 513 million US$ in 2019, reflecting fluctuations in deferred tax positions over time.

The data reveals a consistent upward trend in both reported and adjusted total assets over the five-year period. Reported total assets increased from approximately 29.3 billion USD in 2015 to about 34.6 billion USD in 2019, reflecting moderate growth each year. Adjusted total assets follow a similar pattern, starting slightly below the reported figures and reaching 34.0 billion USD by 2019, indicating minimal adjustments to asset values over time.

Regarding stockholders’ equity, both reported and adjusted figures show a slight decline from 2015 to 2017, followed by a noticeable recovery and growth through 2019. Reported equity decreased from around 10.1 billion USD in 2015 to roughly 10.0 billion USD in 2017 before climbing to approximately 12.2 billion USD in 2019. Adjusted equity follows a nearly identical trend, with values ranging from 9.2 billion USD in 2015 to 11.7 billion USD in 2019, showing similar recovery and growth patterns after 2017.

Net income attributable to the company demonstrates some volatility but overall strong growth over the period. Reported net income rose from approximately 2.1 billion USD in 2015 to about 3.3 billion USD in 2019, with a slight dip in 2017 before accelerating in the subsequent years. Adjusted net income shows a similar trend, starting lower in 2015 at just over 2.0 billion USD, increasing steadily to around 3.3 billion USD by 2019. The adjustments appear to smooth some fluctuations, particularly in the earlier years, with adjusted net income generally exceeding reported figures except in 2015.

In summary, asset growth is steady and slightly higher in reported terms compared to adjusted totals. Stockholders’ equity experienced a minor downturn at mid-period but recovered and grew strongly by 2019 in both reported and adjusted forms. Net income exhibited growth overall, with adjusted figures indicating a somewhat higher profitability level across the years, suggesting deferred tax adjustments contribute positively to earnings measures. The data implies improving financial strength and profitability over the analyzed timeframe.

Net Profit Margin

The reported net profit margin showed a moderate upward trend from 8.92% in 2015 to 11.46% in 2019, with a slight dip in 2017. The adjusted net profit margin followed a similar pattern, consistently remaining close to the reported figures but slightly higher in most years. This indicates improving profitability over the five-year period, with tax adjustments having a marginal positive impact on the margin.

Total Asset Turnover

The reported total asset turnover ratio increased steadily from 0.79 in 2015 to a peak of 0.85 in 2018, before a minor decline to 0.84 in 2019. Adjusted ratios consistently exceeded reported figures slightly and showed a smooth upward trend from 0.82 to 0.86 over the period. This suggests enhanced efficiency in utilizing assets to generate revenues, with adjustments reflecting more favorable asset turnover performance.

Financial Leverage

The reported financial leverage ratio increased from 2.89 in 2015 to a high of 3.10 in 2017, followed by a notable decrease to 2.78 in 2018 and a small recovery to 2.83 in 2019. The adjusted financial leverage mirrors this pattern but at slightly higher levels, ranging from 3.07 to 3.22 before dropping to 2.83 and increasing marginally to 2.91. This indicates a decreasing reliance on debt after 2017, with deferred tax adjustments reflecting somewhat higher leverage, potentially related to the treatment of tax liabilities and assets.

Return on Equity (ROE)

The reported ROE showed a positive trend, rising from 20.48% in 2015 to 27.35% in 2019, with a temporary dip in 2017. The adjusted ROE figures consistently outperformed the reported ones, increasing from 21.84% to 28.31% over the same period. This improvement reflects enhanced profitability and efficient use of equity, with tax adjustments further highlighting stronger returns for shareholders.

Return on Assets (ROA)

Reported ROA increased from 7.08% in 2015 to 9.67% in 2019, despite a decline in 2017. Adjusted ROA remained slightly higher throughout, rising from 7.11% to 9.74%. This suggests improved asset profitability, with tax-related adjustments positively influencing asset returns. The consistency between reported and adjusted ROA indicates stable operational performance.

The financial data indicates several noteworthy trends in income and profitability over the five-year period ending December 31, 2019.

Net Income Trends

Both reported and adjusted net income attributable to the company have generally increased throughout the period. Reported net income rose from $2,074 million in 2015 to $3,343 million in 2019, marking a substantial increase. Similarly, adjusted net income showed growth from $2,018 million to $3,315 million over the same period. The adjusted figures are consistently slightly lower than the reported ones, with the gap narrowing over time, signifying a convergence between reported earnings and adjusted figures.

Profit Margin Analysis

The reported net profit margin reflects a positive trend, improving from 8.92% in 2015 to 11.46% in 2019. There was a slight dip in 2017 to 7.98%, but margins recovered strongly in the subsequent years. Adjusted net profit margins also follow a similar trajectory, starting at 8.68% in 2015, experiencing a slight peak at 9.64% in 2016, a dip in 2017 to 8.98%, then rising steadily to 11.36% in 2019. The adjusted net profit margins are marginally lower than the reported margins each year but closely aligned, indicating that adjustments related to deferred income tax did not significantly distort profit margin measurements.

Overall Observations

The upward movement in both net income and profit margins suggests improving operational efficiency or favorable market conditions. The temporary decline in 2017 across all metrics points to a potential short-term challenge during that year. However, recovery in following years was swift and robust. The close alignment between reported and adjusted figures implies consistency in accounting practices concerning income tax adjustments, providing reliability to the financial results presented.

The data reveals a general upward trend in both reported and adjusted total assets over the five-year period. Reported total assets increased steadily from 29,281 million US dollars at the end of 2015 to 34,566 million US dollars by the end of 2019. Similarly, adjusted total assets rose from 28,375 million US dollars to 34,032 million US dollars during the same timeframe. This indicates consistent growth in the asset base of the company when accounting for reported and adjusted values.

Regarding asset turnover, both reported and adjusted ratios exhibit a modest but steady improvement over the years. Reported total asset turnover increased from 0.79 in 2015 to a peak of 0.85 in 2018, followed by a slight decrease to 0.84 in 2019. Adjusted total asset turnover showed an upward trend from 0.82 to 0.86 across the five years, maintaining a relatively stable increase with no decline observed.

The higher values in adjusted total asset turnover compared to reported figures each year suggest that adjustments for income tax effects contribute to a more efficient utilization measurement of total assets. The gradual improvement in asset turnover ratios signals enhanced operational efficiency in generating revenue from the asset base, particularly under the adjusted measures.

In summary, the data indicates solid asset growth accompanied by improving asset utilization efficiency over the analyzed period, with adjusted figures consistently presenting slightly more favorable performance metrics than reported data.

The financial data over the five-year period from 2015 to 2019 reveals several notable trends in the reported and adjusted figures related to assets, equity, and financial leverage.

Total Assets

Both reported and adjusted total assets demonstrate a continuous upward trend throughout the period. Reported total assets increased from US$29,281 million in 2015 to US$34,566 million in 2019, while adjusted total assets rose from US$28,375 million to US$34,032 million in the same timeframe. The growth in assets appears steady, with no significant fluctuations year-over-year, indicating consistent asset expansion.

Stockholders’ Equity

Stockholders’ equity also follows an increasing trend but with slight variations between reported and adjusted values. Reported equity started at US$10,128 million in 2015, declined marginally through 2017 to US$9,963 million, then increased notably to US$12,223 million by 2019. Adjusted equity displayed a similar pattern, beginning at US$9,241 million in 2015, remaining relatively stable through 2017, and then showing a marked improvement to US$11,710 million in 2019. This suggests underlying adjustments related to income taxes or other factors influencing equity recognition, especially from 2017 onward, leading to stronger equity positions.

Financial Leverage

Financial leverage ratios, both reported and adjusted, reveal subtle shifts over the observed periods. The reported financial leverage ratio increased from 2.89 in 2015 to 3.10 in 2017, followed by a decline to 2.83 in 2019. Adjusted leverage was slightly higher than reported leverage across all years, starting at 3.07 in 2015, peaking at 3.22 in 2017, and then decreasing to 2.91 in 2019. The peak leverage levels in 2017 coincide with the lowest equity values, indicating the company might have utilized more debt relative to equity during that year. Subsequent decreases suggest a reduction of leverage through increased equity or a relative decrease in debt.

Overall, the data reflects a consistent increase in asset base, a recovery and strengthening of equity after an initial decline, and a peak followed by a reduction in leverage ratios. Adjusted figures tend to depict a slightly more conservative financial posture, with higher leverage and lower equity in initial years, converging closer to reported figures by the end of the period. This pattern may highlight the impact of tax-related adjustments on financial statements and the company's evolving capital structure management.

The financial data reveals several notable trends over the five-year period ending December 31, 2019. Both reported and adjusted net incomes exhibited a positive trajectory, with reported net income increasing from $2,074 million in 2015 to $3,343 million in 2019, and adjusted net income rising from $2,018 million to $3,315 million during the same period. This consistent growth indicates improving profitability over the years.

Total stockholders’ equity showed relatively modest fluctuation initially but demonstrated a clear upward trend from 2017 onward. Reported stockholders’ equity declined slightly from $10,128 million in 2015 to $9,963 million in 2017, before increasing to $12,223 million by 2019. Adjusted equity followed a similar pattern, with a decline from $9,241 million in 2015 to $9,431 million in 2017, followed by growth to $11,710 million in 2019. This recovery and growth in equity suggest strengthening financial position and retained earnings accumulation during later years.

Return on equity (ROE), both reported and adjusted, generally increased throughout the period. Reported ROE rose from 20.48% in 2015 to 27.35% in 2019, while adjusted ROE increased from 21.84% to 28.31%. Notably, adjusted ROE consistently exceeded reported ROE each year, reflecting the impact of deferred income tax adjustments and other accounting considerations on profitability metrics. The upward trend in ROE highlights improving efficiency in generating earnings relative to shareholders’ equity.

Overall, the data indicates an enhanced profitability and return profile, supported by steady growth in net income and equity base after an initial period of stability or slight decline in equity. The adjusted measures provide a slightly more favorable view of financial performance, likely reflecting the exclusion of certain tax-related or accounting effects. This suggests that the underlying operational performance strengthened over time, culminating in higher returns for shareholders by the end of the analyzed period.

The financial data reveals several notable trends over the period from 2015 to 2019 in terms of income, asset base, and profitability metrics adjusted for annual reported and deferred income tax impacts.

Net Income

Both reported and adjusted net income attributable to the company exhibit a generally increasing trend during the five-year period. Reported net income rose from 2074 million US dollars in 2015 to 3343 million in 2019, representing a significant increase. Similarly, adjusted net income increased from 2018 million to 3315 million US dollars over the same timeframe. The adjustment made to net income slightly reduced values compared to the reported figures in earlier years but converged closely by 2019, indicating a narrowing divergence between reported and adjusted measures over time.

Total Assets

Reported total assets and adjusted total assets both show a steady upward trajectory. Reported total assets increased from 29281 million US dollars in 2015 to 34566 million in 2019, while adjusted total assets moved from 28375 million to 34032 million US dollars. The adjustments consistently result in slightly lower asset values compared to reported totals, but the margins diminish over the years, suggesting improved alignment between reported and adjusted asset bases.

Return on Assets (ROA)

The reported ROA percentage fluctuated somewhat but trended upwards overall, starting at 7.08% in 2015 and increasing to 9.67% in 2019. The adjusted ROA followed a similar pattern with slightly higher values in several years, beginning at 7.11% and ending at 9.74%. Both metrics peaked in 2019, reflecting improved profitability relative to asset base. The rise in ROA indicates more efficient utilization of assets to generate net income over time.

In summary, the data points to consistent growth in net income and asset base, accompanied by steady improvements in profitability ratios. Adjusted figures focusing on tax impacts closely mirror reported figures and show a convergence trend, suggesting that tax-related adjustments have had a decreasing effect on financial measures during this period. Overall, the company demonstrates strengthened financial performance and asset efficiency from 2015 to 2019.