Common-Size Income Statement
Apache Corp., common-size consolidated income statement
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Revenue Composition
- The proportion of oil revenues within total oil and gas production revenues exhibited a gradual increase from 75.43% in 2011 to 78.32% in 2015, indicating a growing reliance on oil. Gas revenues showed a declining trend from 21.47% to 18.13% over the same period, while natural gas liquids revenues fluctuated, peaking at 4.86% in 2014 before declining to 3.56% in 2015. Overall, oil and gas production revenues remained steady at 100% each year, reflecting the composition of different revenue streams.
- Cost Structure and Profitability
- Costs related to oil and gas production demonstrated a notable increase as a percentage of production revenues. Lease operating expenses rose sharply from -15.5% in 2011 to -29.05% in 2015. Gathering and transportation costs also increased from -1.76% to -3.31%. Consequently, total cost of revenues expanded from -17.26% to -32.35%. This escalation in costs contributed to a decline in gross profit from 82.74% in 2011 to 67.65% in 2015, signaling a contraction in profitability on the production revenue base.
- Recurring and Additional Expenses
- Recurring expenses increased significantly over the period, from -22.69% in 2011 to -55.32% in 2015. Additional expenses showed extreme volatility and an alarming increase, particularly in 2015 reaching -399.77%, which appears to reflect extraordinary or non-recurring charges, likely associated with asset impairments or major write-downs.
- Asset and Depreciation Impairments
- Depreciation, depletion, and amortization expenses spiked dramatically towards the latter years, going from -25.01% in 2011 to a significant -460.16% in 2015. Similarly, oil and gas property and equipment costs showed a comparable increase in negative impact, moving from -23.34% to -455.08%. Impairments, not reported until 2014, deepened from -17.14% to -30.08% in 2015. This pattern reveals substantial asset write-downs and increased capital cost charges in the last two years, severely affecting earnings.
- Other Costs and Administrative Expenses
- Taxes other than income remained relatively stable, slightly decreasing from -5.35% to -4.42%. General and administrative expenses rose moderately, especially in 2015 where they increased to -5.91% from around -3% in earlier years. Transaction-related costs also grew from negligible percentages to -2.07% in 2015, suggesting heightened restructuring or organizational activity.
- Operating Income and Financial Performance
- Operating income experienced a sharp downturn, starting from a positive 48.62% in 2011 and turning into a substantial loss of -437.26% by 2015. This marked deterioration aligns with escalating costs, impairments, and asset write-downs.
- Financial Expenses and Income
- Interest expense and financing costs went up notably in 2015, with net interest expense increasing from approximately -1% to -4.06%, and financing costs net rising similarly to -4.68%. Amortization of deferred loan costs remained minimal but increased slightly. Interest income stayed almost constant, reflecting stable investment income.
- Net Income and Tax Effects
- Before income taxes, net income shifted dramatically from a healthy positive percentage (48.14% in 2011) to a significant loss (-442.21%) in 2015. The income tax provision turned from a consistent expense (-20.87% in 2011) to a notable tax benefit (85.68%) in 2015, likely reflecting losses and deferred tax assets. Yet, net income including noncontrolling interests mirrored operating difficulties, plunging from 27.27% in 2011 to a deep loss of -368.6% in 2015. Net income attributable to common shareholders followed the same pattern, culminating in a significant negative return.
- Additional Observations
- Net losses from discontinued operations increased in the last two years, negatively impacting overall earnings. Derivative instrument gains and losses showed some volatility but minimal impact overall. The fluctuating but growing negative values in noncontrolling interest indicate changes in ownership structure or losses impacting outside shareholders.