Phillips 66 (NYSE:PSX)

Trade names and trademarks

The value of trade names and trademarks remained constant at 503 million US dollars throughout the five-year period, indicating stable valuation with no impairment or additional acquisitions.

Refinery air and operating permits

There is a gradual decline in the value of refinery air and operating permits, decreasing from 266 million US dollars in 2015 to 249 million US dollars in 2019. This trend suggests a consistent reduction in the carrying amount, potentially due to amortization or impairment.

Other intangible assets

The 'Other' category maintains a minimal and mostly stable value of 1 million US dollars for 2015 through 2017, with no data reported for 2018 and 2019, signifying either disposal, reclassification, or immaterial values in the later years.

Indefinite-lived intangible assets

There is a slight but steady decrease in indefinite-lived intangible assets from 770 million US dollars in 2015 to 752 million US dollars in 2019. This small decline could be attributed to minor impairments or adjustments.

Amortized intangible asset balance

The amortized intangible asset balance demonstrates a consistent downward trend from 136 million US dollars in 2015 to 117 million US dollars in 2019, indicating systematic amortization over time with a minor stabilization between 2018 and 2019.

Total intangible assets

Total intangible assets decreased from 906 million US dollars in 2015 to 869 million US dollars in 2019, reflecting the combined effect of amortization and slight decreases in other intangible categories.

Goodwill

Goodwill values remained stable at approximately 3.27 billion US dollars throughout the period, with no impairments or acquisitions noted.

Goodwill and intangibles combined

The combined balance of goodwill and intangible assets slightly decreased from 4.181 billion US dollars in 2015 to 4.139 billion US dollars in 2019. This reduction aligns with the decrease in intangible assets, while goodwill remained unchanged.

The analysis of the financial data for the reviewed period reveals several noteworthy trends and adjustments related to asset and equity figures.

Total Assets (Reported vs. Adjusted):

The reported total assets demonstrate a general upward trajectory over the five-year span, rising from 48,580 million US dollars at the end of 2015 to 58,720 million US dollars by the end of 2019. This represents an overall increase of approximately 21%. The adjusted total assets, which exclude goodwill, follow a parallel trend but with consistently lower values. The increase here is from 45,305 million US dollars in 2015 to 55,450 million US dollars in 2019, marking a growth of approximately 22%. This suggests that while goodwill constitutes a significant portion of total assets, the underlying asset base without goodwill has also exhibited solid expansion.

Stockholders’ Equity (Reported vs. Adjusted):

The reported stockholders' equity shows fluctuations during the period. Starting at 23,100 million US dollars in 2015, it decreases to 22,390 million in 2016 before rebounding to a peak of 25,085 million in 2017. Subsequently, it declines slightly in 2018 and 2019, finishing at 24,910 million. This reflects a moderate net increase over the five years but with variability in the interim. The adjusted stockholders’ equity, reflecting removal of goodwill, traces a similar path but at lower absolute levels, starting at 19,825 million in 2015, dipping to 19,120 million in 2016, climbing to 21,815 million in 2017, and then easing down to 21,640 million in 2019. The comparative lesser values indicate a significant portion of equity is attributable to goodwill, and the fluctuations suggest some variability in recorded goodwill or adjustments over the years.

Insights:

The consistent gap between reported and adjusted values underlines the material impact of goodwill on the balance sheet composition. The steady growth in adjusted total assets signals expansion in tangible and other intangible assets exclusive of goodwill. The more volatile equity figures may point to changes in asset valuation, impairments, or other equity adjustments involving goodwill. Overall, the data suggests a trend of asset base growth with some variability in equity quality as reflected by the goodwill adjustments.

Total Asset Turnover

The reported total asset turnover exhibited a decline from 2.04 in 2015 to 1.63 in 2016, followed by a recovery to 1.88 in 2017 and further improvement to 2.05 in 2018. However, it decreased again to 1.83 in 2019. The adjusted total asset turnover followed a similar pattern but consistently remained higher than the reported figures, moving from 2.18 in 2015 to 1.74 in 2016, increasing to a peak of 2.18 in 2018, and settling at 1.93 in 2019.

Financial Leverage

Reported financial leverage showed an upward trend overall, rising from 2.1 in 2015 to 2.36 in 2019, despite minor fluctuations with a low point at 2.17 in 2017. The adjusted financial leverage was consistently higher than the reported figures, increasing from 2.29 in 2015 to 2.56 in 2019, suggesting a gradual increase in the use of debt or financial obligations relative to equity over the period.

Return on Equity (ROE)

Reported ROE exhibited volatility, dropping sharply from 18.3% in 2015 to 6.95% in 2016, then sharply rising to a high of 22.7% in 2018 before declining to 12.35% in 2019. The adjusted ROE displayed a similar trajectory but at higher levels throughout, moving from 21.32% in 2015 to a low of 8.13% in 2016, peaking at 26.17% in 2018, and decreasing to 14.21% in 2019. This indicates that goodwill adjustment impacts profitability metrics positively and that the company experienced significant fluctuations in equity returns.

Return on Assets (ROA)

The reported ROA followed a pattern of decline in 2016 to 3.01% from 8.7% in 2015, followed by recovery and growth to 10.3% in 2018, before decreasing to 5.24% in 2019. The adjusted ROA was consistently higher but maintained the same trend, from 9.33% in 2015 down to 3.21% in 2016, rising to 10.96% in 2018 and decreasing to 5.55% in 2019. These movements reflect the underlying asset efficiency and profitability impacted by both operational performance and goodwill adjustments.

The financial data over the period from December 31, 2015, to December 31, 2019, displays notable trends in assets and asset turnover ratios.

Total Assets

Reported total assets exhibit a generally upward trajectory, increasing from US$48,580 million in 2015 to US$58,720 million in 2019. This represents a growth of approximately 20.9% over the five-year span. Adjusted total assets, which presumably remove goodwill effects, show a similar pattern, rising from US$45,305 million in 2015 to US$55,450 million in 2019. The narrower base of adjusted assets compared to reported assets consistently reflects the impact of goodwill adjustments.

Total Asset Turnover Ratios

The reported total asset turnover ratio demonstrates volatility over the period. It starts at 2.04 in 2015, declines to 1.63 in 2016 — indicating reduced efficiency in using assets to generate revenue — then recovers to 1.88 in 2017 and improves to 2.05 in 2018, the highest point in the series. However, this ratio dips to 1.83 in 2019, reflecting some loss in turnover efficiency compared to the prior year.

The adjusted total asset turnover ratio, which excludes goodwill, follows a similar but slightly stronger pattern. It begins at 2.18 in 2015, drops to 1.74 in 2016, and then increases to peak at 2.18 again in 2018 before declining slightly to 1.93 in 2019. Throughout the period, the adjusted turnover ratios are consistently higher than the reported ones, implying that excluding goodwill assets tends to present a more favorable view of asset utilization.

Overall, the data indicates an expanding asset base with fluctuations in asset efficiency. The period from 2016 to 2018 saw recovery and improvement in asset turnover ratios, suggesting enhanced operational effectiveness after a dip in 2016. However, the dip in 2019 in both reported and adjusted turnover ratios indicates a potential challenge in maintaining asset utilization at the previous peak levels. The consistent premium of adjusted turnover ratios over reported ones highlights the significance of goodwill on the balance sheet and its impact on efficiency metrics.

The financial data reveals a general upward trend in both reported and adjusted total assets over the five-year period. Reported total assets increased from US$48,580 million in 2015 to US$58,720 million in 2019, representing steady growth despite a slight dip in 2018. Adjusted total assets followed a similar pattern, rising from US$45,305 million in 2015 to US$55,450 million in 2019, with a comparable minor decrease in 2018.

Stockholders’ equity, both reported and adjusted, exhibited fluctuations but with an overall rising tendency across the years. Reported stockholders’ equity initially declined slightly from US$23,100 million in 2015 to US$22,390 million in 2016 but then rose to US$24,910 million by 2019. Adjusted stockholders’ equity mirrored this trend, dropping from US$19,825 million in 2015 to US$19,120 million in 2016, before increasing to US$21,640 million by 2019. The lower adjusted equity figures relative to reported figures indicate the impact of goodwill adjustments over time.

Financial leverage ratios, both reported and adjusted, indicate a rising leverage trend throughout the period. Reported financial leverage increased from 2.10 in 2015 to 2.36 in 2019, with some volatility as it decreased in 2017 before rising again. Adjusted financial leverage is consistently higher than the reported ratio, starting at 2.29 in 2015 and climbing to 2.56 by 2019, suggesting that the exclusion of goodwill increases the leverage ratio. This upward movement in leverage ratios may reflect increasing reliance on debt or other liabilities relative to equity over time.

Total Assets

Both reported and adjusted total assets grew steadily over five years, highlighting asset base expansion despite minor volatility around 2018.

Stockholders’ Equity

Reported and adjusted stockholders’ equity showed initial declines followed by a recovery and gradual increase, with adjusted figures consistently lower after excluding goodwill.

Financial Leverage

Financial leverage increased on both reported and adjusted bases, with adjusted leverage reflecting higher ratios due to goodwill adjustment, signaling heightened financial risk or increased use of liabilities relative to equity.

The data reveals several notable trends in both reported and goodwill-adjusted financial measures over the five-year period ending in 2019.

Stockholders’ Equity

Reported stockholders' equity exhibited a modest fluctuation, starting at $23,100 million in 2015, decreasing slightly to $22,390 million in 2016, then increasing to a peak of $25,085 million in 2017, followed by a slight decline to $24,653 million in 2018, and marginally increasing to $24,910 million by 2019. The adjusted stockholders’ equity, which accounts for goodwill, follows a similar trajectory but at consistently lower levels, beginning at $19,825 million in 2015 and ending at $21,640 million in 2019, indicating the presence of substantial goodwill assets that reduce the net equity base when adjusted.

Return on Equity (ROE)

Both reported and adjusted ROE show dynamic variations across the timeline. The reported ROE starts at a relatively high 18.3% in 2015, sharply declines to 6.95% in 2016, rebounds strongly to 20.35% in 2017 and further to 22.7% in 2018, but then experiences a significant drop to 12.35% in 2019. The adjusted ROE mirrors this pattern but with generally higher percentages, commencing at 21.32% in 2015, falling to 8.13% in 2016, rising substantially to 23.41% in 2017 and 26.17% in 2018, before decreasing to 14.21% in 2019. The adjusted figures reflect a more pronounced return relative to the adjusted equity base, suggesting that goodwill adjustments enhance the apparent efficiency in generating returns on the tangible equity portion.

Over the five-year period, total assets, both reported and adjusted for goodwill, have shown a general upward trend. Reported total assets increased from 48,580 million US dollars in 2015 to 58,720 million US dollars in 2019. Similarly, adjusted total assets rose from 45,305 million US dollars to 55,450 million US dollars in the same period. The increases suggest ongoing asset accumulation or revaluation, with the adjusted figures consistently lower, attributable to the exclusion of goodwill.

Return on assets (ROA), both reported and adjusted, exhibited significant variability across the years. The reported ROA started at 8.7% in 2015, experienced a marked decline to 3.01% in 2016, then rebounded to peak at 10.3% in 2018 before falling back to 5.24% in 2019. The adjusted ROA mirrors this pattern, starting at 9.33%, dipping to 3.21% in 2016, peaking at 10.96% in 2018, and subsequently decreasing to 5.55% in 2019. The close alignment between reported and adjusted ROA percentages suggests that goodwill adjustments have a relatively modest impact on profitability ratios.

Assets Trend

Steady increase in both reported and adjusted total assets, with reported figures consistently higher due to goodwill inclusion.

ROA Trend

Volatile ROA values indicating fluctuations in asset profitability, with a pronounced dip in 2016 and a peak in 2018.

Goodwill Impact

Minimal difference between reported and adjusted ROA, implying goodwill does not significantly distort profitability analysis.