United States Steel Corp. (NYSE:X)

The intangible assets exhibit notable fluctuations over the analyzed period, with distinct developments observed in several components. Goodwill was not recorded until the year ending 2020, reaching a value of 4,920 million USD and subsequently decreasing to 920 million USD by the end of 2022. This indicates a significant adjustment or impairment event between 2021 and 2022.

Customer relationships show variability, starting at 132 million USD in 2018 and remaining steady through 2019, before declining sharply to 77 million USD in 2020. Subsequently, there is a strong recovery to 413 million USD in 2021 and maintaining this level in 2022, suggesting acquisitions or revaluations impacting this intangible asset category.

Patents experienced a gradual decline from 22 million USD in 2018 and 2019 to 15 million USD in 2020, followed by a slight increase to 17 million USD in both 2021 and 2022. The relatively small fluctuations indicate stable investment or amortization patterns in patent-related assets.

Energy Contract intangible assets appeared starting 2020 at 54 million USD and remained constant through the end of 2022, suggesting initiation of a new contractual asset recorded in 2020 with no subsequent changes.

The category labeled "Other" decreased from 14 million USD in 2018 and 2019 to 9 million USD in 2020, and then was no longer recorded in 2021 and 2022, implying disposal or reclassification of these assets.

The gross carrying amount of amortizable intangible assets decreased slightly from 168 million USD in 2018 and 2019 to 155 million USD in 2020, and then rose sharply to 484 million USD in 2021 and was maintained in 2022. This rise coincides with the observed increase in customer relationships and energy contracts.

Accumulated amortization initially increased from -85 million USD in 2018 to -101 million USD in 2020, indicating ongoing amortization charges. However, a significant reduction to -40 million USD was noted in 2021, followed by a rise to -81 million USD in 2022. This pattern may reflect asset impairments, revaluations, or changes in amortization methods.

Net amortizable intangible assets declined from 83 million USD in 2018 to 54 million USD in 2020, then increased markedly to 444 million USD in 2021, with a slight decrease to 403 million USD in 2022. This mirrors the gross carrying amount trend adjusted for amortization changes.

Water rights and indefinite life intangible assets remained constant at 75 million USD throughout the entire period, indicating no acquisitions, disposals, or revaluations in these categories.

Total intangible assets showed a downward trend from 158 million USD in 2018 to 129 million USD in 2020, then surged to 519 million USD in 2021 and slightly decreased to 478 million USD in 2022. The substantial increase corresponds with the acquisition or recognition of goodwill and other intangible assets observed in the same timeframe.

When combining goodwill and intangible assets, the total amounted to 150 million USD in 2019, rose modestly to 133 million USD in 2020, then experienced a substantial jump to 1,439 million USD in 2021, slightly decreasing to 1,398 million USD in 2022. This dramatic increase is primarily attributable to the recognition of significant goodwill in 2020 and its subsequent impairment or write-down by 2022.

The financial data reveals an overall growth in the company's total assets from 2018 through 2022. Specifically, the reported total assets increased steadily from $10,982 million in 2018 to $19,458 million by the end of 2022. The adjusted total assets, which exclude goodwill, show a similar upward trend, rising from $10,982 million in 2018 to $18,538 million in 2022. This indicates that the asset base expansion is not primarily driven by goodwill adjustments, although there is a noticeable divergence between reported and adjusted figures in 2021 and 2022.

Stockholders’ equity, both reported and adjusted, experienced a different trajectory over the same period. The reported equity decreased from $4,202 million in 2018 to a low of $3,786 million in 2020, before increasing significantly to $9,010 million in 2021 and further to $10,218 million in 2022. Adjusted equity followed a similar pattern, declining from $4,202 million in 2018 to $3,782 million in 2020, then rising to $8,090 million in 2021 and $9,298 million in 2022. Despite the initial decline, the sharp increase in equity in the later years suggests a substantial improvement in the company's financial position after 2020.

Assets Trend

The company's total assets consistently increased year over year, reflecting growth and potentially acquisitions or capital investments, with reported assets growing at a faster pace than adjusted assets in the last two periods.

Equity Trend

The equity showed a decline during 2019 and 2020 but rebounded strongly in 2021 and 2022, indicating improved profitability or capital injections, with adjusted equity slightly lower than reported equity, consistent with goodwill adjustments.

Goodwill Impact

The gap between reported and adjusted figures, particularly notable in 2021 and 2022, suggests an increase in goodwill or other intangible assets that affect reported totals but are excluded in adjusted figures.

Total Asset Turnover

The reported total asset turnover ratio shows a declining trend from 1.29 in 2018 to a low of 0.81 in 2020, followed by a partial recovery to 1.14 in 2022. The adjusted total asset turnover follows a similar pattern but exhibits slightly higher values in 2021 and 2022 compared to the reported figures, indicating adjustments for goodwill have improved turnover efficiency in recent years.

Financial Leverage

Both reported and adjusted financial leverage ratios increased from 2.61 in 2018 to a peak of approximately 3.19 in 2020, signaling increased use of debt or liabilities relative to equity during this period. Subsequently, leverage significantly decreased to below 2.0 in 2021 and 2022, suggesting a strategic reduction in financial risk or debt levels in the post-2020 period. Adjusted leverage remains marginally higher than reported figures in 2021 and 2022.

Return on Equity (ROE)

ROE presents substantial volatility throughout the years. Starting at a robust 26.53% in 2018, it declines sharply to negative values in 2019 (-15.4%) and 2020 (-30.77%), indicating significant profitability challenges or losses. A strong recovery occurs in 2021, reaching 46.33% reported and 51.59% adjusted, followed by a moderate decrease to 24.7% reported and 27.15% adjusted in 2022. The adjusted ROE generally exceeds the reported ROE, reflecting the impact of goodwill adjustments on profitability metrics.

Return on Assets (ROA)

ROA mirrors the trends observed in ROE, with a decline from 10.15% in 2018 to negative values in 2019 (-5.43%) and 2020 (-9.66%). A notable improvement in 2021 results in ROA increasing to 23.43% reported and 24.7% adjusted, followed by a decrease in 2022 to 12.97% reported and 13.62% adjusted. The pattern indicates fluctuating asset profitability, with adjustments for goodwill slightly enhancing the return figures during the recovery period.

Overall Observations

The data reflects significant operational and financial challenges, particularly during 2019 and 2020, as evidenced by declining asset turnover, increased leverage, and negative profitability metrics. The sharp deterioration suggests the company faced adverse conditions affecting efficiency and profitability. However, the subsequent recovery in 2021 and moderate stabilization in 2022 highlight improved asset utilization, reduced leverage, and restored profitability. Goodwill adjustments generally enhance the assessment of financial performance, providing higher turnover and return ratios in the recovery years. The reduction in financial leverage post-2020 may indicate a strategic focus on strengthening the balance sheet and lowering financial risk.

Total Assets

The total assets reported have shown a consistent upward trend over the five-year period. Beginning at $10,982 million in 2018, the value increased steadily to $19,458 million by the end of 2022. The adjusted total assets, which exclude goodwill, also followed a similar pattern, rising from $10,982 million in 2018 to $18,538 million in 2022. Notably, the difference between reported and adjusted total assets widened over time, particularly noticeable from 2021 onwards, indicating an increase in goodwill or intangible assets on the balance sheet.

Total Asset Turnover

The reported total asset turnover ratio experienced fluctuations during the period. Starting from 1.29 in 2018, it decreased to a low of 0.81 in 2020, reflecting a reduction in the efficiency of asset utilization relative to sales or revenue. A partial recovery occurred in 2021 and 2022, with ratios increasing to 1.14 and 1.08 respectively, though remaining slightly below the initial 2018 level.

The adjusted total asset turnover ratio, which excludes goodwill effects, followed a similar trend but showed slightly higher efficiency in the later years. After declining to 0.81 in 2020, it improved to 1.2 in 2021 and 1.14 in 2022. This suggests that when goodwill is excluded, the company's asset utilization is relatively more effective, particularly in recent years.

Insights

The data indicates that the company has been expanding its asset base significantly over the analyzed period. However, the decline in asset turnover in 2020 suggests challenges in converting assets into revenue, which may be associated with market conditions or operational factors during that year. The recovery in turnover ratios in subsequent years points to improved operational efficiency or higher revenue generation relative to asset levels.

The disparity between reported and adjusted asset turnover in later years highlights the impact of goodwill on asset efficiency metrics. The adjusted ratios suggest somewhat better performance than reported figures, emphasizing the importance of considering asset composition when evaluating turnover efficiency.

Total Assets

Reported total assets steadily increased over the five-year period, rising from 10,982 million USD in 2018 to 19,458 million USD in 2022. The growth was particularly substantial in 2021, where assets surged to 17,816 million USD from 12,059 million USD in 2020. Adjusted total assets followed a similar pattern, though slightly lower in 2021 and 2022, indicating the exclusion of goodwill had a moderate impact on asset valuation in those years.

Stockholders' Equity

The reported stockholders' equity declined from 4,202 million USD in 2018 to 3,786 million USD in 2020, showing a downward trend in the first three years. However, there was a notable rebound starting in 2021, with equity jumping to 9,010 million USD and further increasing to 10,218 million USD in 2022. Adjusted stockholders' equity mirrored this pattern, but with somewhat lower values in 2021 and 2022, again reflecting the impact of goodwill adjustments.

Financial Leverage Ratio

Financial leverage increased from 2.61 in 2018 to a peak of 3.19 in 2020, indicating the company became more leveraged during this period. Subsequently, leverage decreased significantly, falling to 1.98 in 2021 and slightly further to 1.90 in 2022. The adjusted financial leverage ratios were consistently marginally higher than the reported ratios in 2021 and 2022, suggesting that adjusting for goodwill results in a slightly more conservative leverage assessment.

Summary of Trends

Overall, the data reveals initial contraction in equity and rising leverage through 2020, followed by rapid asset growth, equity strengthening, and deleveraging from 2021 onwards. The adjustments for goodwill consistently reduce asset and equity values, particularly in the later years, lending a more conservative perspective on financial position and leverage. The substantial improvements in equity and decline in leverage after 2020 indicate enhanced capitalization and potentially reduced financial risk in recent years.

The financial data presents a comprehensive view of the equity and return on equity (ROE) trends over a five-year period.

Total Stockholders’ Equity

The reported total stockholders' equity showed a gradual decline from 2018 to 2020, moving from $4.2 billion to approximately $3.8 billion. However, a significant increase occurred in 2021, with equity more than doubling to $9.0 billion, followed by a further increase to over $10.2 billion in 2022.

Similar trends are observed in the adjusted total stockholders' equity. The adjusted equity remained relatively close to the reported figures, with a slight divergence in 2021 and 2022, where adjusted equity is lower by roughly $920 million and $920 million respectively. This suggests adjustments, likely related to goodwill, impacted the equity values moderately in these latter years.

Return on Equity (ROE)

The reported ROE exhibited considerable volatility throughout the period. Initially, it was strong at 26.53% in 2018, then sharply declined to negative values in 2019 (-15.4%) and further deteriorated to -30.77% in 2020. A dramatic recovery occurred in 2021 with reported ROE rising to 46.33%, though it moderated to 24.7% in 2022.

The adjusted ROE mirrors these fluctuations, with very close figures to the reported ROE. Notably, the adjusted ROE in 2021 reached an even higher peak of 51.59%, before declining to 27.15% in 2022. The adjustment hence slightly enhanced the perceived profitability return in the most recent profitable years.

Overall, the data depicts a company facing significant financial challenges and negative profitability in 2019 and 2020, with a marked recovery starting in 2021. The increase in equity alongside improved ROE in recent years demonstrates strengthened financial health. Adjustments for goodwill had a moderate downward effect on equity but slightly increased ROE profitability ratios in the latter years, suggesting that excluding goodwill may present a more optimistic return profile during periods of recovery.

Total Assets

Both reported and adjusted total assets demonstrate a steady increase over the five-year period. Reported total assets rose from $10,982 million in 2018 to $19,458 million in 2022. Adjusted total assets show a similar upward trend, increasing from $10,982 million to $18,538 million during the same timeframe. The adjusted figures are consistently slightly lower than the reported values from 2021 onwards, indicating an adjustment related to goodwill or other intangible assets.

Return on Assets (ROA)

The reported ROA exhibits significant volatility throughout the period. It starts at a positive 10.15% in 2018, declines sharply to negative values in 2019 (-5.43%) and 2020 (-9.66%), before rebounding strongly to 23.43% in 2021 and settling at 12.97% in 2022. The adjusted ROA follows an identical pattern but with slightly higher values in the last two years, recording 24.7% in 2021 and 13.62% in 2022. This suggests that after removing goodwill, the profitability on asset base improves marginally, particularly in the recent years.

Insights

The asset base has nearly doubled over the five years, indicating possible expansion or increased investments. The period from 2019 to 2020 was characterized by loss-making operations, as seen in negative ROA figures, which could be attributed to operational challenges or market conditions affecting the company's profitability. The sharp recovery and positive returns in 2021 and 2022 suggest a turnaround or improved efficiency.

The difference between reported and adjusted figures underscores the impact of goodwill on asset valuation and profitability metrics. Adjusted ROA being higher than reported ROA in the later years indicates that goodwill adjustments provide a clearer view of operational asset performance.