Stock Analysis on Net
Stock Analysis on Net

Reynolds American Inc. (NYSE:RAI)

$22.49

This company has been moved to the archive! The financial data has not been updated since May 3, 2017.

Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Reynolds American Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Federal
State and other
Current
Federal
State and other
Deferred
Provision for income taxes

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Reynolds American Inc. current increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Reynolds American Inc. deferred decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reynolds American Inc. provision for income taxes increased from 2014 to 2015 and from 2015 to 2016.

Effective Income Tax Rate (EITR)

Reynolds American Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
U.S. federal income tax rate
Effective tax rate

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reynolds American Inc. effective tax rate increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level.

Components of Deferred Tax Assets and Liabilities

Reynolds American Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Pension and other postretirement liabilities
Tobacco settlement accruals
Other accrued liabilities
Other noncurrent liabilities
Deferred tax assets
Valuation allowance
Deferred tax assets, less valuation allowance
LIFO inventories
Property and equipment
Trademarks and other intangibles
Other
Deferred tax liabilities
Net deferred tax asset (liability)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Reynolds American Inc. deferred tax assets increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level.
Deferred tax assets, less valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Reynolds American Inc. deferred tax assets, less valuation allowance increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Reynolds American Inc. net deferred tax asset (liability) decreased from 2014 to 2015 and from 2015 to 2016.

Deferred Tax Assets and Liabilities, Classification

Reynolds American Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Current deferred tax assets
Noncurrent deferred tax assets
Noncurrent deferred tax liabilities

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Reynolds American Inc. noncurrent deferred tax liabilities increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.

Adjustments to Financial Statements: Removal of Deferred Taxes

Reynolds American Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Adjustment to Current Assets
Current assets (as reported)
Less: Current deferred tax assets, net
Current assets (adjusted)
Adjustment to Total Assets
Total assets (as reported)
Less: Current deferred tax assets, net
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Shareholders’ equity (adjusted)
Adjustment to Net Income
Net income (as reported)
Add: Deferred income tax expense (benefit)
Net income (adjusted)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Reynolds American Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Reynolds American Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Current Ratio
Reported current ratio
Adjusted current ratio
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Reynolds American Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets
Current liabilities
Liquidity Ratio
Adjusted current ratio2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Net sales, includes excise taxes
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Net sales, includes excise taxes
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Net profit margin = 100 × Net income ÷ Net sales, includes excise taxes
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales, includes excise taxes
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net sales, includes excise taxes
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales, includes excise taxes
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Total asset turnover = Net sales, includes excise taxes ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Net sales, includes excise taxes ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Total assets
Shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.