Marathon Petroleum Corp. (NYSE:MPC)

The financial data reveals several notable trends in the intangible assets of the company over the five-year period from 2019 to 2023.

Goodwill

Goodwill experiences a significant decline from $20,040 million in 2019 to $8,256 million by 2020, after which it remains relatively stable around $8,244 million through 2023. This sharp drop indicates a substantial write-down or impairment occurring between 2019 and 2020, with no further major adjustments in subsequent years.

Customer Contracts and Relationships

This category shows a steady increase over the years, rising from $3,273 million in 2019 to $3,838 million in 2023. This gradual growth suggests continued investment or acquisition of customer-related intangible assets that could provide future revenue streams.

Brand Rights and Tradenames

Brand rights and tradenames decline slightly from $155 million in 2019 to $100 million by 2020 and remain stable until a marginal increase to $101 million in 2023. The stability following the initial drop indicates little additional brand asset acquisition or impairment during the latter period.

Royalty Agreements

Royalty agreements show a modest increase, from $133 million in 2019 to $173 million in 2023. This upward trend reflects either new royalty agreements or reassessment of existing ones, potentially enhancing revenue from licensing or franchising arrangements.

Other Intangible Assets

The "Other" category drops sharply from $147 million in 2019 to $36 million in 2020 and remains steady around $36 to $41 million thereafter, indicating a one-time loss or reclassification in 2020 with minor adjustments after.

Definite Lived Intangible Assets, Gross

The gross amount of definite lived intangible assets shows a consistent increase from $3,708 million in 2019 to $4,153 million in 2023, reflecting ongoing acquisitions or capital expenditures in tangible rights or contracts with finite useful lives.

Accumulated Amortization

Accumulated amortization for definite lived intangibles increases substantially in magnitude from -$780 million in 2019 to -$2,388 million in 2023, indicating continuous amortization expense recognition aligned with the growth of gross definite lived intangibles.

Definite Lived Intangible Assets, Net

Despite the growth in gross value, the net definite lived intangible assets decline from $2,928 million in 2019 to $1,765 million in 2023 due to increasing amortization. This suggests that amortization outpaces additions, continuing to reduce the net book value.

Emission Allowance Credits and Indefinite Lived Intangible Assets

Both categories maintain relatively low and stable values, with values decreasing from $94 million in 2019 to $71 million from 2020 onwards, remaining flat through 2023. This implies no significant new changes or impairments in these asset classes.

Total Intangible Assets and Goodwill and Intangibles Combined

Total intangible assets decrease from $3,022 million in 2019 to $1,836 million in 2023, consistent with overall declines in net definite lived assets. The sum of goodwill and intangible assets drops sharply from $23,062 million in 2019 to approximately $10,080 million in 2023, predominantly influenced by the large goodwill impairment in 2020 and gradual amortization effects over time.

In summary, the company's intangible asset portfolio reflects a major goodwill impairment in 2020 followed by stability, alongside gradual growth in customer contracts and royalty agreements. Definite lived intangible assets show growth in gross value but decline in net value due to rising amortization. Other intangible asset categories remain mostly stable with minor fluctuations. Overall, the total carrying value of goodwill and intangible assets has halved over the five-year period, signaling significant reevaluation of asset values and ongoing amortization impacts.

The financial data reveals several notable trends and variations over the five-year period.

Total Assets

The reported total assets decreased from 98,556 million US dollars in 2019 to 85,987 million in 2023, showing some volatility with a low point in 2020 at 85,158 million followed by a modest recovery in 2022 to 89,904 million before declining again in 2023. Adjusted total assets, which exclude goodwill, follow a similar pattern but consistently remain lower than reported assets, ranging from 78,516 million in 2019 down to 77,743 million in 2023, indicating the impact of goodwill adjustments on asset valuation.

Stockholders’ Equity

The reported total stockholders’ equity exhibits a substantial decline between 2019 and 2020, from 33,694 million to 22,199 million US dollars, followed by a partial recovery through 2022 at 27,715 million before declining to 24,404 million in 2023. Adjusted stockholders’ equity presents an even more pronounced downward adjustment overall, beginning at 13,654 million in 2019 peaking somewhat at 19,471 million in 2022, and then decreasing to 16,160 million in 2023. The overall trend suggests diminished equity base after accounting for goodwill, with significant volatility and a partial recovery phase after 2020.

Net Income

Reported net income attributable to the company shows negative results in 2020, with a notable loss of 9,826 million US dollars, contrasting with profits in other years ranging from 2,637 million in 2019 up to 14,516 million in 2022, then declining to 9,681 million in 2023. Adjusted net income mirrors this pattern but indicates much smaller losses in 2020 (-2,432 million), reflecting the effect of goodwill adjustment in reducing net loss magnitude. Post-2020, net income recovers strongly, peaking in 2022 and declining afterwards.

Overall, the data indicates a period of considerable financial stress in 2020, with large losses and declines in equity and assets. Recovery is evident in subsequent years, especially in 2021 and 2022, with asset and equity bases improving and net income rebounding significantly. However, 2023 shows some retrenchment or softening in these gains. The adjusted figures, which remove goodwill, highlight the impact of asset valuation on reported equity and profitability, providing a more conservative perspective on financial health. This underscores goodwill's substantial role and volatility in the company’s balance sheet and income statement assessments during the studied timeframe.

Net Profit Margin

The reported net profit margin displayed considerable volatility, starting at a modest positive level of 2.13% in 2019, plunging sharply to a significant negative margin of -14.08% in 2020, before recovering to positive margins above 6.5% in subsequent years through 2023. The adjusted net profit margin, which accounts for goodwill, followed a similar pattern but exhibited less extreme fluctuation, with a less severe decline in 2020 at -3.49% and stabilizing at the same level as the reported margin in the later years. This indicates that goodwill adjustments mitigate some of the negative impact observed in 2020 but overall profitability trends closely align between reported and adjusted figures in later periods.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios demonstrated an overall upward trajectory from 2019 to 2022, reflecting improving efficiency in the use of assets to generate revenue. The reported metric increased from 1.26 to a peak of 1.97 in 2022, before slightly declining to 1.73 in 2023. Adjusted turnover ratios were consistently higher than reported values, rising from 1.58 in 2019 to 2.17 in 2022, then easing to 1.91 in 2023. The pattern suggests robust asset utilization improvements over time, although a minor contraction occurred in the final year analyzed.

Financial Leverage

Financial leverage ratios indicated a general tendency towards elevated leverage, with reported leverage rising from 2.93 in 2019 to a higher level of 3.84 in 2020, dipping slightly thereafter, and increasing again to 3.52 in 2023. The adjusted leverage ratios were substantially higher, starting at 5.75 in 2019, slightly decreasing to 5.52 in 2020, and then trending downward to 4.19 by 2022 before rising again to 4.81 in 2023. This pattern shows a company carrying significant leverage, with adjustments for goodwill amplifying the leverage effect, although there is some moderation in the leverage after 2020 before a slight increase at the end of the period.

Return on Equity (ROE)

Reported ROE experienced extreme variability, starting moderately at 7.83% in 2019, plunging into a deeply negative figure of -44.26% in 2020, then rebounding strongly to exceed 50% by 2022 before declining to 39.67% in 2023. Adjusted ROE followed a similar but less volatile path, maintaining positive territory in 2019 at 28.08%, decreasing to a less negative -17.44% in 2020, then escalating sharply to peak at 74.55% in 2022 and easing to 59.91% in 2023. The adjusted figures suggest a stronger and more stable equity return than reported, with goodwill adjustments dampening the negative impact in downturn periods and magnifying the positive performance in recovery years.

Return on Assets (ROA)

Returned on assets, both reported and adjusted, mirrored profit margin trends, showing significant decline during 2020 with reported ROA falling from 2.68% in 2019 to -11.54%, then recovering gradually to 16.15% in 2022 and finishing at 11.26% in 2023. Adjusted ROA plotted a less pronounced negative dip to -3.16% in 2020, followed by consistent improvement to 17.78% in 2022, tapering to 12.45% in 2023. This indicates that asset profitability suffered in 2020 but steadily improved thereafter, with goodwill adjustments providing a cushion against the volatility seen in the reported figures.

Net Income Trends

The reported net income attributable to the company experienced significant volatility over the five-year period. Beginning with a positive net income of $2,637 million in 2019, it sharply declined to a substantial loss of $9,826 million in 2020. This negative outcome was followed by a strong recovery in 2021, with reported net income rising to $9,738 million, further increasing to $14,516 million in 2022, before decreasing to $9,681 million in 2023.

The adjusted net income follows a similar pattern but with smaller magnitudes in the negative period. Adjusted net income was $3,834 million in 2019, turned negative to a loss of $2,432 million in 2020, then recovered to $9,738 million in 2021, maintained an increase to $14,516 million in 2022, and decreased to $9,681 million in 2023. This adjustment appears to mitigate some of the reported losses seen in 2020, reflecting potential goodwill or one-time impacts influencing the reported figures.

Net Profit Margin Trends

Reported net profit margin similarly exhibits notable fluctuation. The margin was a modest positive 2.13% in 2019, sharply deteriorated to -14.08% in 2020, then rebounded to 8.12% in 2021, slightly increased to 8.18% in 2022, and decreased to 6.52% in 2023. This reflects a turbulent financial performance with a loss-making year in 2020, followed by stable profitability in subsequent years, though with some decline in margin in the latest year.

The adjusted net profit margin presents a less severe negative impact in 2020, at -3.49% compared to the reported -14.08%. In all other years, the adjusted and reported margins are identical, indicating the adjustment primarily affects the anomalous 2020 period. The improved adjusted margin in 2020 suggests adjustments were made to exclude significant non-recurring losses, providing a clearer underlying profitability picture.

Overall Insights

The data illustrates substantial volatility in financial performance in 2020, likely due to extraordinary events or impairments impacting reported results. The adjustments made for goodwill or other factors reduce the severity of losses in that year but do not affect other periods. The company showed strong recovery in profitability beginning in 2021 and maintaining through 2022, with a slight decline observed in 2023. Both net income and net profit margins indicate the company's resilience following a difficult year, although the lower profitability in 2023 could merit further investigation for emerging challenges or industry conditions.

The analysis of the annual reported and goodwill adjusted financial data for the period from 2019 to 2023 demonstrates notable shifts in both asset values and efficiency ratios.

Total Assets

Reported total assets decreased from US$ 98,556 million in 2019 to US$ 85,987 million in 2023, showing a general downward trend with a slight recovery noted in 2022. Specifically, there was a significant drop from 2019 to 2020 followed by minimal fluctuations through 2023.

Adjusted total assets, which exclude goodwill, followed a similar downward trend, falling from US$ 78,516 million in 2019 to US$ 77,743 million in 2023. The adjusted asset base also exhibited a decrease in 2020 and a gradual increase in 2022 before declining again in 2023.

Total Asset Turnover Ratios

The reported total asset turnover ratio showed considerable variability, starting at 1.26 in 2019, declining sharply to 0.82 in 2020, then increasing significantly to peak at 1.97 in 2022 before dropping to 1.73 in 2023. This pattern suggests initial decreased efficiency in asset utilization during 2020, followed by substantial improvements in the subsequent two years.

Adjusted total asset turnover ratios mirrored this trend but consistently stayed higher than the reported ratios, indicating that excluding goodwill assets reflects greater asset utilization efficiency. Adjusted ratios moved from 1.58 in 2019 down to 0.91 in 2020, rose sharply to 2.17 in 2022, and then slightly declined to 1.91 in 2023.

Overall, the data suggests a contraction in asset base over the period with a partial recovery in 2022, coupled with fluctuations in asset turnover indicating changes in operational efficiency. The sharper decline and subsequent improvement in turnover ratios during this period could reflect underlying market and operational conditions impacting the company's asset utilization. The adjusted figures consistently show higher turnover ratios, underscoring the influence of goodwill on asset measurements and the importance of considering goodwill-free metrics for evaluating asset efficiency.

Total Assets

The reported total assets decreased significantly from 98,556 million US dollars in 2019 to 85,158 million in 2020, then remained relatively stable with a slight upward trend reaching 89,904 million in 2022 before decreasing again to 85,987 million in 2023. The adjusted total assets follow a similar pattern but at consistently lower values, starting at 78,516 million in 2019, declining to 76,902 million in 2020, and then showing a gradual increase to 81,660 million in 2022 before declining to 77,743 million in 2023. Overall, both reported and adjusted total assets display a general decline over the period with some fluctuations.

Stockholders' Equity

The reported stockholders' equity shows a sharp decline from 33,694 million in 2019 to 22,199 million in 2020, followed by a recovery trend through 2022, peaking at 27,715 million before dropping to 24,404 million in 2023. The adjusted stockholders' equity, which likely excludes goodwill or intangible adjustments, remains significantly lower throughout and follows a similar pattern: a slight increase from 13,654 million in 2019 to 13,943 million in 2020, then a steady increase until 2022 (19,471 million) before falling to 16,160 million in 2023. The adjusted figures suggest reduced equity base relative to reported values, with notable growth until 2022 followed by a decline.

Financial Leverage

Reported financial leverage increased markedly from 2.93 in 2019 to 3.84 in 2020, indicating higher reliance on debt relative to equity. It then decreased to around 3.26 and 3.24 in 2021 and 2022 respectively, before increasing again to 3.52 in 2023. Adjusted financial leverage, consistently higher than the reported leverage, declines from 5.75 in 2019 to 5.52 in 2020 and further down to 4.3 and 4.19 in 2021 and 2022. However, it shows an increase to 4.81 in 2023. The elevated adjusted leverage compared to reported implies that when goodwill or intangible assets are removed, the company appears more leveraged, with a general trend of decreasing leverage until 2022 and a subsequent uptick in 2023.

Summary Insights

Overall, the data indicates a period of significant volatility and adjustment in asset base and equity between 2019 and 2023. There was an initial sharp decline in both reported assets and equity in 2020, potentially reflecting economic impacts or company-specific challenges. Both reported and adjusted financial measures show some recovery through 2021 and 2022, followed by a tapering or reversal in 2023. The persistence of higher adjusted leverage versus reported leverage highlights the impact of goodwill and similar adjustments on the company's financial structure, suggesting a higher risk profile when intangible assets are excluded. The fluctuations in leverage ratio also reflect changing capital structure dynamics, with increased leverage in 2020 and again in 2023 pointing to periods of increased borrowing or reduced equity.

The financial data indicate notable fluctuations and recovery trends in the profitability and equity measures over the five-year period.

Net Income

The reported net income shows significant volatility, starting with a positive value in 2019, followed by a substantial loss in 2020. Subsequently, there is a strong recovery with positive and increasing net income in 2021 and 2022, though it declines somewhat in 2023. The adjusted net income follows a similar pattern but with less severe loss in 2020 and identical positive values from 2021 onward, reflecting adjustments presumably related to goodwill or one-time items that improve the underlying profitability assessment.

Stockholders’ Equity

The reported total stockholders’ equity declined sharply in 2020, consistent with the net loss that year, before gradually recovering through 2023, but not reaching the 2019 level. The adjusted total equity, which likely excludes goodwill impacts, presents a much lower baseline but displays a steady increase from 2019 through 2022 followed by a decline in 2023. This suggests that goodwill adjustments significantly affect the equity base and that the company’s core equity value strengthened before facing some softening in the most recent year.

Return on Equity (ROE)

The reported ROE shows a dramatic negative value in 2020, reflecting the net loss and equity decline during that year. It then improves substantially in 2021 and peaks in 2022, indicating high profitability relative to equity, before moderating in 2023. The adjusted ROE mirrors this trend but remains consistently higher than the reported figures, highlighting the effect of removing goodwill-related adjustments in presenting a more favorable profitability metric on an equity basis.

Overall, the company experienced a significant downturn in 2020 with losses impacting both income and equity metrics. Recovery in subsequent years is robust, with strong profitability and improving returns on equity, though some indicators suggest a slight weakening or correction in 2023. The goodwill adjustments appear to smooth volatility and provide a more consistent portrayal of financial performance and equity strength over time.

Over the observed five-year period, the company experienced considerable fluctuations in both income and asset metrics. The reported net income attributable to the company revealed a significant loss in the year ending 2020, dropping sharply from a positive 2,637 million USD in 2019 to a substantial loss of 9,826 million USD. However, this was followed by a strong recovery in 2021 with net income rising to 9,738 million USD and peaking at 14,516 million USD in 2022, then subsequently decreasing to 9,681 million USD in 2023.

Adjusted net income, which likely removes certain non-recurring or goodwill-related impacts, shows a similar trend but with less volatility, particularly in 2020 where the loss was less severe at 2,432 million USD. After 2020, the adjusted net income aligns exactly with reported figures, indicating a normalization of adjustments during this period.

Regarding asset reported values, total assets decreased notably in 2020 to 85,158 million USD from 98,556 million USD in 2019 and then remained relatively stable with minor fluctuations through 2023. Adjusted total assets follow a similar downward trend from 78,516 million USD in 2019 to a low of 76,902 million USD in 2020, with a modest increase to 81,660 million USD in 2022 before declining again to 77,743 million USD in 2023. The adjusted asset values are consistently lower than reported values, reflecting adjustments likely related to goodwill or other intangible asset considerations.

Return on assets (ROA) calculated on reported figures shows a substantial negative impact in 2020 (-11.54%), corresponding with the significant net loss in that year. The ROA recovered strongly thereafter, reaching a peak of 16.15% in 2022 before slipping to 11.26% in 2023. Adjusted ROA follows a similar shape but with reduced negative deviation in 2020 (-3.16%) and higher peaks in subsequent years, peaking at 17.78% in 2022 and ending at 12.45% in 2023. This suggests that adjustments have a smoothing effect on profitability metrics, particularly in adverse conditions.

Overall, the financial data indicate that while the company faced severe earnings challenges in 2020, both net income and profitability metrics recovered strongly in the following years. Asset base fluctuations were less pronounced, though a downward trend from 2019 to 2023 is evident. Adjustments related to goodwill and other factors appear to significantly mitigate reported losses and volatility, especially in challenging periods, providing a clearer view of underlying operational performance.

Net Income Trends

Severe loss in 2020 with a strong rebound in 2021 and 2022 followed by a decline in 2023.

Adjusted net income smooths losses and aligns with reported income post-2020.

Asset Base

Reported and adjusted total assets declined sharply from 2019 to 2020 and remained relatively stable thereafter with minor fluctuations.

Adjusted total assets remain consistently below reported values, showing the impact of goodwill and other intangible asset adjustments.

Profitability (ROA)

Reported ROA negative in 2020 reflecting losses, with strong recovery thereafter but trending downward in 2023.

Adjusted ROA exhibits reduced negative impact in 2020 and higher peaks post-recovery, indicating smoother profitability trends.