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Diamondback Energy Inc. (NASDAQ:FANG)

This company has been moved to the archive! The financial data has not been updated since November 8, 2022.

Common-Size Income Statement

Diamondback Energy Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Oil sales 79.98 87.45 91.43 88.21 88.01
Natural gas sales 8.43 3.88 1.70 2.87 4.40
Natural gas liquid sales 11.59 8.67 6.87 8.93 7.59
Revenue from contracts with customers 100.00% 100.00% 100.00% 100.00% 100.00%
Midstream services 0.67 1.81 1.65 1.61 0.60
Other operating income 0.07 0.25 0.33 0.57 0.99
Revenues 100.74% 102.07% 101.98% 102.18% 101.59%
Lease operating expenses -8.37 -15.42 -12.61 -9.62 -10.67
Production and ad valorem taxes -6.30 -7.08 -6.38 -6.23 -6.20
Gathering and transportation -3.14 -5.08 -2.26 -1.23 -1.08
Midstream services expense -1.32 -3.81 -2.34 -3.37 -0.88
Depreciation, depletion, amortization and accretion -18.90 -47.57 -37.41 -29.35 -27.66
Impairment of oil and natural gas properties 0.00 -218.47 -20.32 0.00 0.00
General and administrative expenses -2.16 -3.19 -2.68 -3.03 -4.10
Merger and integration expense -1.16 0.00 0.00 -1.73 0.00
Other operating expense -0.09 -0.15 -0.10 -0.15 0.00
Costs and expenses -41.44% -300.76% -84.10% -54.72% -50.59%
Income (loss) from operations 59.30% -198.69% 17.88% 47.46% 51.00%
Interest expense, less capitalized interest -2.80 -7.08 -4.35 -3.64 -3.25
Other fees and expenses -0.16 -0.22 -0.10 -0.49 -0.18
Interest income 0.01 0.15 0.03 0.03 0.02
Interest expense, net -2.95% -7.15% -4.43% -4.10% -3.42%
Other income (expense), net -0.15 -0.25 0.23 4.15 0.86
Gain (loss) on derivative instruments, net -12.57 -2.94 -2.78 4.76 -6.53
Gain on sale of equity method investments 0.34 0.00 0.00 0.00 0.00
Loss on extinguishment of debt -1.11 -0.18 -1.44 0.00 0.00
Income (loss) from equity investments 0.22 -0.36 -0.15 0.00 0.00
Other income (expense), net -16.21% -10.89% -8.57% 4.81% -9.09%
Income (loss) before income taxes 43.09% -209.58% 9.31% 52.27% 41.91%
(Provision for) benefit from income taxes -9.35 40.06 -1.21 -7.91 1.65
Net income (loss) 33.73% -169.52% 8.10% 44.37% 43.56%
Net (income) loss attributable to non-controlling interest -1.39 5.62 -1.93 -4.66 -2.91
Net income (loss) attributable to Diamondback Energy, Inc. 32.34% -163.90% 6.17% 39.71% 40.65%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The common-size income statement reveals a period of significant volatility in profitability and cost structure, characterized by a severe contraction in 2020 followed by a strong recovery in 2021. Revenue remained heavily concentrated in oil sales for most of the period, although a shift toward a more diversified product mix became evident by the end of the analyzed timeframe.

Revenue Composition Trends
Oil sales dominated revenue from 2017 through 2020, peaking at 91.43% in 2019. However, a notable shift occurred in 2021, with oil sales decreasing to 79.98%, while natural gas sales and natural gas liquid sales increased to 8.43% and 11.59%, respectively. This indicates a diversification of the revenue stream toward gaseous hydrocarbons in the final year.
Operating Expense Analysis
Operating costs remained relatively stable as a percentage of revenue between 2017 and 2018, but rose significantly in 2019 and 2020. Lease operating expenses peaked at -15.42% in 2020 before receding to -8.37% in 2021. The most significant impact on the cost structure was the impairment of oil and natural gas properties, which caused an extraordinary expense of -218.47% in 2020, fundamentally distorting the operating results for that year.
Depreciation, Depletion, Amortization, and Accretion (DD&A)
DD&A expenses showed a consistent upward trend from -27.66% in 2017 to a peak of -47.57% in 2020. This trend was abruptly reversed in 2021, with the ratio dropping to -18.90%, suggesting either a significant increase in revenue or a change in the asset base and depreciation schedules.
Operating and Net Profitability
Income from operations remained strong in 2017 and 2018, at 51.00% and 47.46% respectively, before declining to 17.88% in 2019. The 2020 fiscal year saw a collapse to -198.69% due to the aforementioned impairment charges. A sharp recovery was observed in 2021, with operating income rising to 59.30%. Net income attributable to the company followed a similar trajectory, moving from 40.65% in 2017 to a deficit of -163.90% in 2020, before returning to 32.34% in 2021.
Non-Operating Items and Financial Costs
Interest expense, net, showed a gradual increase from -3.42% in 2017 to a peak of -7.15% in 2020, before decreasing to -2.95% in 2021. The impact of derivative instruments was highly volatile, fluctuating from a gain of 4.76% in 2018 to a significant loss of -12.57% in 2021, adding a layer of non-operational volatility to the bottom line.

Overall, the financial data depicts a company that maintained high margins during stable periods but was acutely sensitive to asset impairments and market volatility in 2020. The 2021 results suggest a successful operational rebound, characterized by improved operating margins and a shift in the commodity revenue mix.

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