LyondellBasell Industries N.V. (NYSE:LYB)

The financial data reveals several noteworthy trends in the company's intangible assets and related categories over the five-year period from 2014 to 2018.

Emission Allowances

There is a generally upward trend in emission allowances, increasing from 730 million US dollars in 2014 to 807 million US dollars in 2018, with a slight dip in 2015 and 2016 before rising again in 2017 and 2018.

Various Contracts

Values related to various contracts remain relatively stable, fluctuating narrowly around the 500-550 million US dollar range. A mild decrease is observed in 2018, dropping to 508 million from 552 million in 2017.

Customer Relationships

This item appears only in 2018, with a recorded value of 300 million US dollars, indicating a potentially new addition or reclassification in that year.

In-Process Research and Development Costs

These costs show minor fluctuations during the period, starting at 119 million in 2014, dipping to 104 million in 2015, slightly rising to 117 million in 2017, and ending at 111 million in 2018. The pattern suggests a relatively steady investment in R&D projects underway.

Trade Name and Trademarks

Recognized only in 2018, trade names and trademarks total 104 million US dollars, potentially reflecting a new recognition of these intangible assets during that year.

Know-How

Also first reported in 2018 with 84 million US dollars, indicating an addition to intangible assets focused on proprietary knowledge or expertise.

Software Costs

A declining trend is evident in software costs, decreasing steadily from 104 million in 2014 to 64 million in 2018, suggesting reduced capitalized software investments or amortization over time.

Intangible Assets, Cost

The total cost of intangible assets shows a moderate decline from 1495 million in 2014 to 1391 million in 2016, followed by increases in 2017 and a significant jump to 1978 million in 2018. This indicates new acquisitions or revaluations during the final two years.

Accumulated Amortization

Amortization accumulated on intangible assets consistently increases in magnitude (more negative), moving from -726 million in 2014 to -1013 million in 2018, reflecting ongoing amortization expense across the period.

Intangible Assets, Net

Net intangible assets decline from 769 million in 2014 to a low of 550 million in 2016, recovering to 965 million by 2018. This recovery aligns with the increase in intangible assets cost, indicating successful acquisition or capitalization of new intangible assets toward the end of the period.

Goodwill

Goodwill demonstrates relative stability from 2014 through 2017, fluctuating between 528 million and 570 million, before a substantial increase to 1814 million in 2018. This large jump suggests a major acquisition or revaluation impacting goodwill in that year.

Goodwill and Intangible Assets Combined

The combined figure of goodwill and intangible assets follows a similar pattern, declining from 1335 million in 2014 to 1078 million in 2016 and then rising steeply to 2779 million in 2018. This further underscores significant asset additions or reclassifications in the final year of the data set.

Overall, the data indicates relative stability with modest fluctuations in intangible assets and related categories until 2017, after which there is a clear increase in both goodwill and intangible assets in 2018. This pattern implies considerable acquisition activity or asset recognition in the final year, which markedly strengthens the intangible asset base of the company. The steady accumulation of amortization and the decline in software costs reflect ongoing asset amortization and potential adjustments in capitalized software investments over the period.

The reported total assets of the company demonstrated a fluctuating upward trend over the five-year period. Starting at US$24.3 billion at the end of 2014, the assets decreased slightly in 2015 to approximately US$22.8 billion before progressively increasing to reach nearly US$28.3 billion by the end of 2018. This reflects overall asset growth with a minor dip early in the period.

The adjusted total assets, which account for goodwill adjustments, followed a pattern similar to reported assets but at slightly lower levels each year. Beginning at approximately US$23.7 billion in 2014, these assets decreased in 2015 to about US$22.2 billion, then steadily increased to US$26.5 billion by the end of 2018. The persistence of the increase despite adjustments indicates a positive asset growth after accounting for goodwill.

Regarding equity, the reported total company share of stockholders’ equity showed considerable variability. It started at US$8.3 billion in 2014, declined in the subsequent two years (to about US$6.0 billion by 2016), but then rose sharply in 2017 and 2018, reaching over US$10.2 billion by the latter year. This suggests a recovery and strengthening of equity after a mid-period decline.

The adjusted company share of stockholders’ equity, which likely excludes goodwill impacts, followed a similar trajectory to the reported equity figures but remained consistently lower. Beginning at roughly US$7.7 billion in 2014, it decreased through 2015 and 2016, hitting about US$5.5 billion, then rebounded to US$8.4 billion by the end of 2018. This indicates that, even after adjustments, equity improved notably in the final two years.

Overall, the data exhibits an initial period of contraction or softening in both assets and equity between 2014 and 2016, followed by a period of solid growth and recovery from 2017 onward. The adjusted figures are consistently below the reported values, suggesting the presence of goodwill that inflates reported figures, but the aligned trends reinforce the robustness of the underlying financial expansion in recent years.

Total Asset Turnover

The reported total asset turnover exhibits a decreasing trend from 1.88 in 2014 to 1.24 in 2016, followed by a slight recovery to 1.38 in 2018. The adjusted total asset turnover mirrors this pattern, starting at 1.92 in 2014, declining to 1.27 in 2016, and then steadily increasing to 1.47 by 2018. The adjustment consistently results in marginally higher turnover ratios, indicating that goodwill adjustments have a moderate positive effect on asset efficiency metrics over the period.

Financial Leverage

Reported financial leverage increased from 2.92 in 2014 to a peak of 3.88 in 2016, before declining to 2.76 in 2018. Adjusted financial leverage follows the same trajectory but at slightly higher levels, rising from 3.06 in 2014 to 4.15 in 2016, then decreasing to 3.13 in 2018. These trends suggest heightened reliance on debt financing reaching its maximum in 2016, with subsequent deleveraging steps noted toward 2018. The goodwill adjustment consistently raises leverage ratios, which may indicate that goodwill impacts the equity base used in these calculations.

Return on Equity (ROE)

Reported ROE shows a peak in 2015 at 68.34%, dropping to 45.71% in 2018. Adjusted ROE presents a similar pattern but at higher levels, peaking at 74.43% in 2015 and decreasing to 55.53% by 2018. The elevated adjusted ROE figures imply that excluding goodwill enhances equity profitability measures. The decline in ROE from 2015 onward indicates a reduction in net income generation relative to equity, despite initial strong performance.

Return on Assets (ROA)

Reported ROA increased from 17.19% in 2014 to a high of 19.67% in 2015, then declined to 16.58% in 2018. Adjusted ROA also reaches its zenith in 2015 at 20.14%, followed by a downward trend to 17.71% by 2018. The adjustment leads to consistently higher ROA values, suggesting goodwill’s impact on asset base depreciation. The peak in 2015 and subsequent decline can be interpreted as a period of optimal asset utilization followed by modest reduction in operational efficiency.

Overall Insights

The analysis reveals that 2015 was generally the strongest year across most financial metrics, with subsequent years showing declines in turnover, leverage, and profitability measures. Goodwill adjustments systematically increase the financial ratios related to asset utilization, leverage, and profitability, indicating that excluding goodwill tends to improve the perceived financial health and performance ratios. The company appears to have moved toward lower leverage and slightly improved asset turnover in the final years observed, though profitability indicators have diminished compared to the mid-period peaks.

The analysis of the financial data reveals several notable trends in the company's asset base and efficiency over the five-year period.

Total Assets

Reported total assets increased overall from US$ 24,283 million in 2014 to US$ 28,278 million in 2018, signifying growth of approximately 16.5%. However, there was a decrease observed between 2014 and 2015, followed by modest increments in subsequent years, with a more significant rise between 2017 and 2018.

The adjusted total assets, which take goodwill into account, follow a similar trend but consistently present slightly lower values than reported total assets. The adjusted figures rose from US$ 23,717 million in 2014 to US$ 26,464 million in 2018, an increase of about 11.5%. This suggests that goodwill represents a material but stable portion of the asset base over time.

Total Asset Turnover

Reported total asset turnover declined markedly from 1.88 in 2014 to 1.24 in 2016, indicating a reduction in the efficiency with which the company generated revenues from its assets during this period. Thereafter, a recovery trend was visible, with ratios climbing to 1.32 in 2017 and 1.38 in 2018, although these levels remained below those seen in 2014.

The adjusted total asset turnover shows a similar pattern but with slightly higher ratios in all years compared to the reported figures. It decreased from 1.92 in 2014 to 1.27 in 2016, before gradually improving to 1.47 by 2018, suggesting that the adjustments made for goodwill slightly enhance the perceived asset utilization efficiency.

Overall, the data suggests that while the company expanded its asset base over time, asset turnover efficiency experienced a decline followed by gradual improvement but did not fully revert to earlier levels. The difference between reported and adjusted figures implies that goodwill has a consistent impact on the financial metrics but does not significantly alter the overall trend analysis.

Total Assets

The reported total assets increased steadily over the five-year period, rising from $24,283 million in 2014 to $28,278 million in 2018. This growth suggests an expansion in the company's asset base. The adjusted total assets, which exclude goodwill, exhibit a similar upward trend from $23,717 million to $26,464 million during the same period, indicating that asset growth is not solely driven by goodwill adjustments.

Company Share of Stockholders’ Equity

Reported stockholders’ equity shows an initial decline from $8,314 million in 2014 to $6,048 million in 2016, followed by a notable recovery to $10,257 million in 2018. This pattern indicates a period of reduced equity value which reverses in the later years. The adjusted equity figures, which exclude goodwill, follow the same trajectory but remain consistently lower, decreasing from $7,748 million in 2014 to $5,520 million in 2016, then rising to $8,443 million by 2018. This suggests that the goodwill adjustment has a material impact on the equity base but the recovery trend is consistent across both measures.

Financial Leverage

The reported financial leverage ratio increased from 2.92 in 2014 to a peak of 3.88 in 2016, indicating a rise in the use of debt relative to equity during this period. Subsequently, leverage decreased to 2.76 by 2018, reflecting a de-risking or capital structure strengthening. The adjusted financial leverage, which accounts for goodwill, follows a similar pattern but at slightly higher levels, starting at 3.06 in 2014, reaching 4.15 in 2016, and declining to 3.13 in 2018. This suggests that the inclusion of goodwill affects the leverage metrics by increasing reported leverage ratios, yet both reported and adjusted figures confirm an overall deleveraging trend after 2016.

Overall Insights

Over the analyzed period, the company expanded its asset base while experiencing volatility in equity levels and leverage. There is a clear dip in equity and increase in leverage around 2015-2016, followed by recovery and stabilization. The goodwill adjustments consistently show lower equity and higher leverage compared to reported values, implying that goodwill constitutes a significant intangible asset impacting the financial structure. The reduction in leverage after 2016 points to a strategic shift towards strengthening the balance sheet and potentially lowering financial risk.

The financial data reveals several notable trends over the five-year period ending December 31, 2018. The reported total Company share of stockholders' equity exhibits some volatility but generally demonstrates a recovery and growth after a decline. Starting at $8,314 million in 2014, equity decreased for two consecutive years, reaching $6,048 million by 2016, before increasing substantially to $10,257 million by 2018. The adjusted total Company share of stockholders' equity follows a similar pattern, decreasing from $7,748 million in 2014 to $5,520 million in 2016, then rising to $8,443 million in 2018. Notably, the adjusted figures are consistently lower than the reported ones, reflecting the impact of goodwill adjustments.

Return on Equity (ROE) values, both reported and adjusted, show a declining trend from 2014 through 2018 despite initial high levels. Reported ROE starts at a strong 50.2% in 2014, peaks at 68.34% in 2015, and then gradually declines to 45.71% by 2018. Adjusted ROE is consistently higher than the reported figures throughout the period, beginning at 53.87% in 2014, reaching 74.43% in 2015, and then decreasing to 55.53% in 2018.

The elevated ROE values, particularly in the earlier years, indicate strong profitability relative to equity, but the downward trend suggests a gradual reduction in return efficiency over time. The difference between adjusted and reported ROE implies that excluding goodwill leads to an increase in the calculated return, highlighting the potential impact of intangible assets on financial performance assessment.

Equity Trends

Both reported and adjusted equity values declined from 2014 to 2016, then reversed their direction with noticeable growth to 2018.

ROE Trends

Peak ROE occurred in 2015 for both reported and adjusted metrics, followed by a steady decrease through 2018.

Goodwill Adjustments

Adjusted figures consistently show lower equity and higher ROE than reported values, suggesting that goodwill has a significant influence on the equity base and return calculations.

The analysis of the financial data over the five-year period reveals several notable trends and patterns regarding the company's assets and return on assets (ROA), both reported and goodwill adjusted.

Total Assets

Reported total assets showed an initial decline from US$24,283 million in 2014 to US$22,757 million in 2015. Following this decrease, the assets increased consistently over the next three years, reaching US$28,278 million by the end of 2018. This represents an overall growth trend after the initial dip.

Adjusted total assets, which exclude goodwill, followed a similar pattern. They declined from US$23,717 million in 2014 to US$22,221 million in 2015 but then experienced steady growth, rising to US$26,464 million by the end of 2018. This parallel movement suggests that the changes in goodwill did not significantly distort the overall asset base trend.

Return on Assets (ROA)

The reported ROA exhibited fluctuations over the period. It started at 17.19% in 2014 and increased to a peak of 19.67% in 2015. Subsequently, ROA decreased to 16.36% in 2016, before rebounding to 18.62% in 2017 and then slightly declining to 16.58% by 2018. This pattern indicates some volatility in profitability relative to the reported asset base.

The adjusted ROA, calculated based on the asset base adjusted for goodwill, followed a similar trajectory with somewhat higher values. It began at 17.6% in 2014, rose to 20.14% in 2015, dropped to 16.74% in 2016, increased again to 19.03% in 2017, and then decreased to 17.71% in 2018. The consistently higher adjusted ROA compared to reported ROA suggests that goodwill may have a dilutive effect on the profitability ratio.

Overall Trends and Insights

Asset levels, both reported and adjusted, trended upward after a decline in 2015, indicating an expansion in the company’s asset base in the latter part of the five-year period. Meanwhile, the ROA metrics reveal volatility but generally remained robust, with adjusted ROA consistently exceeding reported ROA. This pattern implies that excluding goodwill provides a slightly more favorable view of asset efficiency and profitability.

The fluctuations in ROA might be attributed to changes in net income or variations in asset utilization efficiency, but the consistent margin between reported and adjusted ROA emphasizes the importance of considering goodwill adjustments in profitability analysis. The overall positive trajectory in assets combined with sustained profitability suggests operational stability with moderate asset growth.