Anadarko Petroleum Corp. (NYSE:APC)

Current Income Tax Expense

The current income tax expense fluctuated over the five-year period. It increased from 961 million USD in 2012 to a peak of 1764 million USD in 2014, indicating rising taxable income or changes in tax liabilities during this time. However, in 2015, there was a sharp decline to 300 million USD, followed by a slight decrease to 237 million USD in 2016. This significant decrease suggests a reduction in taxable income or other factors such as tax credits or adjustments affecting current taxes payable.

Deferred Income Tax Expense (Benefit)

The deferred income tax expense exhibited a contrasting trend compared to the current tax expense. It started positive at 159 million USD in 2012 but gradually decreased to 137 million USD in 2013. In 2014, the deferred taxes turned negative at -147 million USD, which continued to decline substantially to -3177 million USD in 2015, before moderating somewhat to -1258 million USD in 2016. The negative deferred tax expense values indicate the recognition of deferred tax benefits, possibly due to deductible temporary differences or losses carried forward. The substantial magnitude of the negative amounts in 2015 and 2016 suggests significant adjustments or reversals in deferred tax liabilities.

Total Income Tax Expense (Benefit)

The total income tax expense, comprising current and deferred components, increased steadily from 1120 million USD in 2012 to 1617 million USD in 2014. Subsequently, it reversed sharply into negative territory, reporting a tax benefit of -2877 million USD in 2015 and -1021 million USD in 2016. This shift reflects the combined impact of declining current tax expenses and the emergence of large deferred tax benefits. Such a swing indicates substantial changes in the company’s tax position, potentially driven by operational losses, tax planning strategies, or adjustments in tax accounting standards during this period.

U.S. Federal Statutory Tax Rate

The U.S. federal statutory tax rate remained constant at 35% throughout the period from 2012 to 2016.

Effective Tax Rate

The effective tax rate exhibited significant volatility over the analyzed years. It started at 31% in 2012, slightly below the statutory rate, indicating the presence of tax benefits or deductions.
In 2013, the effective tax rate increased markedly to 55%, surpassing the statutory rate and suggesting the company experienced higher tax liabilities or fewer tax advantages.
A dramatic anomaly occurred in 2014, where the effective tax rate spiked to an extremely high 2994%, an outlier figure likely due to exceptional items, potentially including large tax adjustments, write-offs, or one-time charges affecting tax expense disproportionately.
Following this unusual spike, the effective tax rate returned to more typical levels in 2015 and 2016, at 30% and 27% respectively, both below the statutory rate. This suggests a return to a more normalized tax environment with possible tax planning benefits or lower taxable income in these years.

The financial data exhibits several notable trends in deferred tax assets and liabilities over the five-year period ending December 31, 2016.

Deferred Tax Assets

Foreign and state net operating loss carryforwards demonstrate a steady increase, rising from $477 million in 2012 to $648 million in 2016, indicating a growing ability to offset future taxable income.

U.S. foreign tax credit carryforwards fluctuate in the early years, beginning at $450 million in 2012 and declining to $166 million by 2014, followed by a substantial rise to $1,834 million by 2016. This suggests an increased accumulation of foreign tax credits potentially linked to higher foreign earnings or tax strategy adjustments in later years.

Compensation and benefit plans were not reported before 2014 but show modest variations thereafter, with values around $600–700 million, implying establishment and maintenance of related deferred tax assets during those years.

Mark to market on derivatives appears from 2014, peaking at $441 million in 2015 before declining to $324 million in 2016, which may reflect changes in derivative valuations and their tax implications.

The settlement agreement related to the Tronox Adversary Proceeding is recorded only in 2014 at $590 million, indicating a one-time recognition impacting deferred taxes during that year.

Other deferred tax assets show a consistent downward trend, from $2,102 million in 2012 to $588 million in 2016, signaling either utilization or revaluation of miscellaneous asset categories.

Overall gross deferred tax assets increased from $3,029 million in 2012 to $4,066 million in 2016, reflecting growth in total recognized deferred tax benefits.

However, valuation allowances on deferred tax assets, representing the portion not expected to be realized, grew significantly in magnitude from -$922 million in 2012 to -$1,755 million in 2016, suggesting greater caution or deteriorating assurance around future tax benefit realizations.

Net deferred tax assets remain relatively stable, fluctuating around $2,100 to $2,300 million, indicating that despite the increase in gross assets and allowances, the net amount recognized is fairly consistent.

Deferred Tax Liabilities

Deferred tax liabilities related to oil and gas exploration and development operations show a notable reduction, decreasing from -$8,683 million in 2012 to -$5,054 million in 2016. This decline may reflect asset impairments, changes in tax basis, or operational shifts impacting deferred taxes.

Similarly, midstream and other depreciable properties liabilities decrease from -$1,295 million in 2012 to -$870 million in 2016, consistent with the overall trend of lowering deferred tax liabilities in property categories.

Liabilities from mineral operations increase slightly in absolute terms from -$408 million to -$550 million, indicating a growing deferred tax obligation in this segment.

The category labeled “Other” within liabilities fluctuates, reaching a peak liability of -$499 million in 2013 before falling sharply to -$147 million in 2016, indicating volatility or reclassification effects within miscellaneous liabilities.

Total gross deferred tax liabilities decline progressively from -$10,538 million in 2012 to -$6,621 million in 2016, signifying an overall reduction in future tax obligations.

The aggregate deferred taxes shown decrease correspondingly, from -$8,431 million in 2012 to -$4,310 million in 2016, reinforcing the pattern of reducing deferred liabilities over the period.

Overall Observations

The data reflect a strengthening of net deferred tax asset positions due to increasing gross deferred tax assets and decreasing gross deferred tax liabilities. However, the rising valuation allowances indicate heightened uncertainty about the realizability of some deferred tax assets.

The company appears to have taken a more conservative stance on valuation allowances while managing its deferred tax asset portfolio actively in response to tax credit fluctuations and settlement effects.

Significant declines in deferred tax liabilities related to core operational assets suggest possible impairments, tax basis reductions, or favorable tax planning initiatives implemented during the five-year span.

The financial data reflects changes in deferred tax positions over a five-year period.

Net current deferred tax assets

These assets showed a consistent increase from 328 million US dollars in 2012 to 722 million US dollars by the end of 2014. However, the data for 2015 and 2016 are not available, making it impossible to ascertain whether this upward trend continued or reversed during those years.

Net long-term deferred tax liabilities

Long-term deferred tax liabilities started at 8,759 million US dollars in 2012 and saw a gradual increase, peaking slightly at 9,249 million US dollars in 2014. From 2015 onwards, there was a marked decrease, dropping to 5,400 million US dollars in 2015 and further reducing to 4,324 million US dollars by the end of 2016. This indicates a significant reduction in long-term deferred tax liabilities in the last two reported years.

Overall, the data indicates growth in current deferred tax assets through 2014, while long-term deferred tax liabilities remained relatively stable initially before experiencing a substantial decline starting in 2015. These trends may suggest strategic transitions affecting deferred tax positions, such as changes in tax regulations, asset valuations, or corporate tax planning activities.

The financial data reveals several notable trends and shifts across the reported and deferred income tax adjusted figures from 2012 through 2016. Observing asset values, current assets initially increased from 6,795 million USD in 2012 to a peak of 11,221 million USD in 2014, followed by a significant decline to 3,982 million USD in 2015, and a moderate recovery to 5,266 million USD in 2016. This pattern is consistent between reported and adjusted current assets, with adjusted figures slightly lower but closely tracking the same trend.

Total assets showed a gradual increase from 52,589 million USD in 2012 to a peak of 61,689 million USD in 2014. Subsequently, there was a pronounced drop in total assets to 46,414 million USD in 2015, which remained relatively stable into 2016 at 45,564 million USD. The adjusted total asset values closely mirror the reported totals, indicating limited impact from income tax-related adjustments on asset valuation.

Liabilities also display distinct movements. Reported total liabilities rose steadily from 30,707 million USD in 2012 to a high of 39,371 million USD in 2014, then decreased sharply to 30,957 million USD in 2015 and slightly declined further to 30,067 million USD in 2016. Adjusted total liabilities reflect a lower base overall, starting at 21,948 million USD in 2012 and increasing to 30,122 million USD in 2014 but then trending downward to 25,557 million USD in 2015 and stabilizing near 25,743 million USD in 2016. The adjusted liabilities consistently remain substantially lower than reported liabilities, indicating the impact of deferred tax adjustments in reducing recorded liabilities.

Stockholders’ equity presents contrasting perspectives between reported and adjusted data. Reported equity decreased steadily from 20,629 million USD in 2012 to 12,212 million USD in 2016, with a notable acceleration in the decline after 2013. Conversely, adjusted stockholders’ equity figures are higher, starting at 29,060 million USD in 2012, with a peak in 2013 at 30,742 million USD, followed by declines to 18,219 million USD in 2015 and further to 16,522 million USD in 2016. Despite the decrease over time, the adjusted equity remains significantly above the reported equity, reflecting the influence of deferred tax adjustments in positively impacting equity values.

Net income attributable to common stockholders shows a clear deteriorating trend. Reported net income falls from a positive 2,391 million USD in 2012 to a loss of 3,071 million USD in 2016. The worst loss was incurred in 2015 at 6,692 million USD. Adjusted net income exhibits a similar trajectory but with greater volatility and more pronounced losses, declining from 2,550 million USD in 2012 to a loss of 4,329 million USD in 2016, with the deepest loss reaching 9,869 million USD in 2015. This pattern highlights worsening profitability, with deferred tax adjustments amplifying the reported net losses, particularly evident during 2014 and 2015.

Overall, the data indicates a peak in asset and liability amounts in 2014, followed by a contraction phase through 2016. The adjusted figures generally show lower liabilities and higher equity compared to reported figures, illustrating the significant effect of deferred taxes on financial positioning. Profitability deteriorated markedly during the period, with losses intensifying after 2013, which has had a substantial impact on equity reductions.

The analyzed data reveals several significant trends and fluctuations in the financial performance and stability metrics over the five-year period.

Current Ratio

Both reported and adjusted current ratios exhibit a declining trend from 2012 to 2015, falling from 1.7 to 0.95 for the reported and 1.62 to 0.95 for the adjusted figures, indicating a weakening liquidity position. However, a recovery is evident in 2016, where the ratios rebound to 1.58, suggesting an improvement in short-term liquidity by the end of the period.

Net Profit Margin

The company experienced a marked deterioration in profitability. Reported net profit margin decreases drastically from a healthy 17.97% in 2012 to a substantial loss of -36.36% in 2016. The adjusted figures follow a similar pattern with more extreme losses, dropping from 19.16% to -51.25%. This trend highlights increasing challenges in generating profit despite the adjustments for reported versus deferred tax.

Total Asset Turnover

Total asset turnover remains relatively stable across both reported and adjusted data until 2014 at 0.25-0.27 but then declines to 0.19-0.20 by 2016. This decrease suggests reduced efficiency in the utilization of assets to generate sales over time.

Financial Leverage

Financial leverage increases consistently throughout the period. Reported leverage grows from 2.55 in 2012 to 3.73 in 2016, while adjusted figures rise from 1.8 to 2.76. The higher reported leverage figures likely reflect the impact of deferred tax effects. The upward trend indicates an increasing reliance on debt financing, which could heighten financial risk.

Return on Equity (ROE)

ROE demonstrates significant volatility and decline. Reported ROE drops from a positive 11.59% in 2012 to a negative 25.15% in 2016, with adjusted ROE similarly falling from 8.77% to -26.2%. This decline points to worsening shareholder returns, exacerbated by sharp losses in profitability and increased leverage.

Return on Assets (ROA)

ROA also trends negatively, moving from a positive 4.55% (reported) and 4.88% (adjusted) in 2012 to negative values in subsequent years, reaching -6.74% and -9.5% respectively by 2016. The adjusted ROA shows a sharper decline, reflecting the adverse impact of deferred income tax adjustments on asset profitability.

Overall, the data reveals a company facing increasing financial stress over the period analyzed. Liquidity, efficiency, profitability, and returns all deteriorate after 2012, with some recovery in liquidity by 2016. The trends accompanied by increasing financial leverage suggest heightened risk exposure alongside operational challenges reflected in negative profitability and returns.

Reported Current Assets

The reported current assets initially increased from 6,795 million US dollars in 2012 to 7,108 million in 2013, followed by a significant rise to 11,221 million in 2014. However, there was a marked decline in 2015, dropping to 3,982 million, before experiencing a partial recovery to 5,266 million in 2016. This pattern indicates considerable volatility in the company's reported liquidity position over the five-year period.

Adjusted Current Assets

The adjusted current assets closely track the reported values, displaying similar trends. Starting at 6,467 million in 2012, the values increased steadily to 10,499 million in 2014, then sharply decreased to 3,982 million in 2015, and subsequently rose to 5,266 million in 2016. The adjustments slightly reduce the asset values compared to reported figures, but the overall pattern remains consistent, highlighting adjustments having a moderate effect on the asset base.

Reported Current Ratio

The reported current ratio shows a declining trend from 1.7 in 2012 to 1.25 in 2013, continuing the reduction to 1.1 in 2014 and bottoming out at 0.95 in 2015. In 2016, this ratio reverses course, increasing to 1.58. This decline over several years below 1.0 in 2015 signals potential liquidity concerns, indicating that current liabilities may have exceeded current assets in that year. The rebound in 2016 suggests an improvement in short-term financial stability.

Adjusted Current Ratio

The adjusted current ratio follows a similar trajectory as the reported ratio, starting at 1.62 in 2012 and decreasing steadily to 1.18 in 2013, then to 1.03 in 2014, and reaching 0.95 in 2015. The ratio then recovers to 1.58 in 2016, mirroring the reported ratio exactly at this point. This suggests that the adjustments for deferred and reported income taxes have a consistent impact on the liquidity assessment but do not materially alter the overall view on the company's short-term financial health.

The financial data indicates a marked deterioration in profitability over the five-year period ending December 31, 2016. Both reported and adjusted net income figures demonstrate a downward trend with increasing losses as the years progress.

Net Income Trends

Reported net income attributable to common stockholders began at a positive level of US$2,391 million in 2012, sharply declining to US$801 million in 2013. Subsequently, the company experienced net losses: -US$1,750 million in 2014, -US$6,692 million in 2015, and -US$3,071 million in 2016. Adjusted net income follows a similar pattern but shows slightly more severe losses, starting at US$2,550 million in 2012, falling to US$938 million in 2013, and reaching -US$4,329 million by 2016, with the largest loss of -US$9,869 million occurring in 2015.

Net Profit Margin Analysis

Reported net profit margin started at a healthy 17.97% in 2012, falling significantly to 5.39% in 2013, then plunging into negative territory with -10.69% in 2014, -70.55% in 2015, and -36.36% in 2016. Adjusted net profit margin exhibits an even more pronounced decline, starting at 19.16% in 2012 and turning deeply negative thereafter, reaching -104.04% in 2015 and -51.25% in 2016. This indicates that adjusted measures reflect additional charges or adjustments that exacerbate the apparent losses.

Overall, the data reveals a stark contraction in the company's earnings and profitability margins, with a peak negative impact in 2015. The consistent negative adjusted margins from 2014 onward suggest structural or exceptional challenges impacting core profitability beyond reported figures.

Asset Base and Adjusted Assets

There is an initial upward trend in both reported and adjusted total assets from December 31, 2012, through December 31, 2014, with the figures increasing from approximately $52.6 billion to about $61.0 billion. However, a significant decline occurs in the two subsequent years, with the total assets decreasing to roughly $46.4 billion by the end of 2015 and further slightly down to approximately $45.6 billion by December 31, 2016. Notably, the adjusted total assets closely mirror the reported values, indicating minimal adjustments affecting the total asset figures.

Asset Turnover Ratios

The reported and adjusted total asset turnover ratios remain consistent with each other across all periods. The ratios presence a modest increase from 0.25 in 2012 to 0.27 in 2013 and 2014, suggesting a slight improvement in asset utilization during this period. This trend reverses in the following years, with turnover ratios decreasing to 0.20 in 2015 and further to 0.19 in 2016, indicating reduced efficiency in generating revenue from the asset base. This decline corresponds temporally with the notable reduction in asset values.

Overall Observations

The data reveals a cycle where asset growth and improving asset turnover performance occur early in the period, followed by a noticeable contraction in the asset base and declining asset turnover in the latter years. The parallel trends in reported and adjusted figures suggest stable accounting adjustments and reliable comparability. The decline in asset turnover alongside shrinking assets could imply operational challenges or strategic asset divestitures during the 2015 to 2016 timeframe, necessitating further investigation into underlying business activities affecting these financial metrics.

The analysis focuses on the trends in reported and deferred income tax adjusted financial data over a five-year period ending December 31, 2016.

Total Assets

Reported total assets increased from 52,589 million US dollars in 2012 to a peak of 61,689 million in 2014, followed by a significant decline to 46,414 million in 2015 and a slight further decrease to 45,564 million in 2016. Adjusted total assets show a closely similar trend, rising from 52,261 million in 2012 to 60,967 million in 2014, then dropping sharply to 46,414 million in 2015 and stabilizing around 45,564 million in 2016.

Stockholders’ Equity

Reported stockholders’ equity grew moderately from 20,629 million in 2012 to a high of 21,857 million in 2013, but then declined steadily over the next three years to 12,212 million by 2016. The adjusted stockholders’ equity figures are consistently higher than the reported ones, starting at 29,060 million in 2012, peaking at 30,742 million in 2013, and subsequently decreasing to 16,522 million by 2016. This decline is more pronounced when adjustments are considered.

Financial Leverage

Reported financial leverage remained stable at 2.55 in both 2012 and 2013, then increased notably to 3.13 in 2014, continuing upward to 3.62 and 3.73 in 2015 and 2016 respectively, indicating increased use of debt relative to equity over the last three years. The adjusted financial leverage, although consistently lower than the reported figures, follows a similar pattern with an increase from 1.8 in 2012 and 2013 to 2.16 in 2014, and further rising to 2.55 and 2.76 in 2015 and 2016, reflecting a rising financial risk profile after adjustments.

Overall, both reported and adjusted total assets and stockholders’ equity experienced growth until 2013-2014, followed by marked declines. Meanwhile, financial leverage has increased steadily, indicating a growing reliance on debt financing. The consistent difference between reported and adjusted figures suggests that deferred income tax adjustments notably affect the firm's financial position, particularly in the equity and leverage metrics.

Net Income Trends

The reported net income attributable to common stockholders shows a significant decline over the five-year period. Beginning with a substantial profit of 2,391 million USD in 2012, the company experiences a steep decrease in 2013 to 801 million USD, followed by losses in subsequent years, with the largest loss of 6,692 million USD in 2015 and continuing loss of 3,071 million USD in 2016. The adjusted net income exhibits a similar pattern, starting at 2,550 million USD in 2012 and declining to a loss of 4,329 million USD in 2016. The adjusted figures reflect consistently more negative outcomes than reported figures, indicating adjustments contribute further to the assessment of financial performance deterioration over time.

Stockholders’ Equity Trends

Reported stockholders’ equity fluctuates with a rising trend from 20,629 million USD in 2012 to a peak of 21,857 million USD in 2013 but then exhibits a steady decline to 12,212 million USD by 2016. The adjusted stockholders’ equity maintains a higher valuation in comparison to reported equity and similarly declines after peaking at 30,742 million USD in 2013 to 16,522 million USD in 2016. This downward trend reflects a diminishing equity base, which aligns with the negative profitability trends over the examined period.

Return on Equity (ROE) Analysis

The reported ROE decreases markedly from a positive 11.59% in 2012 to negative values starting 2014, hitting a nadir of -52.2% in 2015 and improving slightly but remaining negative at -25.15% in 2016. The adjusted ROE follows a very similar trajectory, starting lower at 8.77% in 2012 and becoming deeply negative by 2015 at -54.17%, with a slight recovery to -26.2% in 2016. The ROE trend corroborates the net income results, underscoring the severe drop in profitability and the erosion of returns to shareholders.

Overall Financial Insights

There is a consistent pattern of financial deterioration from 2012 through 2016 across all key metrics. Both reported and adjusted financial data reveal escalating losses and declining equity levels, leading to highly negative returns on equity. The adjusted data consistently present a more cautious view than the reported figures, implying that non-recurring or deferred tax adjustments contribute to a less favorable assessment of financial health. The negative trajectory suggests significant operational and/or financial challenges within the company during this timeframe.

Reported and Adjusted Net Income (Loss) Attributable to Common Stockholders

The reported net income exhibits a declining trend over the observed period, starting from a positive figure of 2,391 million USD in 2012 and turning negative in subsequent years. The loss deepened significantly in 2015, reaching -6,692 million USD, before partially recovering to a -3,071 million USD loss by 2016. The adjusted net income shows a similar pattern, with values slightly more negative than the reported figures in each year except 2012 and 2013, indicating that adjustments likely increased the magnitude of losses. The adjusted losses peak in 2015 at -9,869 million USD and reduce to -4,329 million USD in 2016.

Reported and Adjusted Total Assets

The total assets reported grow from 52,589 million USD in 2012 to a peak of 61,689 million USD in 2014. Afterward, there is a material contraction, with assets declining to 46,414 million USD by the end of 2015 and marginally decreasing further to 45,564 million USD in 2016. The adjusted total assets closely mirror the reported values throughout the period, differing only slightly in 2013 and 2014, illustrating consistency between reported and adjusted asset bases.

Reported and Adjusted Return on Assets (ROA)

Return on assets metrics reveal a significant deterioration in profitability over the five years. The reported ROA drops from 4.55% in 2012 to negative returns beginning in 2014, reaching a low of -14.42% in 2015 before recovering somewhat to -6.74% in 2016. The adjusted ROA follows the same trend but shows more pronounced negative returns, with a steep decline to -21.26% in 2015 and a less severe loss of -9.5% in 2016. These figures imply worsening asset efficiency and profitability during the period, with adjustments intensifying this perspective.

Overall Financial Trends and Insights

The data suggest a challenging financial environment post-2012, characterized by substantial losses and asset reductions beginning notably after 2014. The increased negative adjusted income and ROA indicate that accounting adjustments related to reported and deferred income taxes exacerbate the apparent financial distress. Asset base downsizing following a peak in 2014 may reflect divestitures, impairments, or other strategic adjustments in response to financial pressures. Despite some improvement from the lowest points in 2015, profitability remains negative and asset levels below earlier peaks, highlighting ongoing operational or market challenges.