Stock Analysis on Net

ConocoPhillips (NYSE:COP)

$19.99

Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

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Income Tax Expense (Benefit)

ConocoPhillips, income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Federal
Foreign
State and local
Current
Federal
Foreign
State and local
Deferred
Income tax provision (benefit)

Based on: 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), 10-K (reporting date: 2016-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. ConocoPhillips current decreased from 2018 to 2019 and from 2019 to 2020.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. ConocoPhillips deferred decreased from 2018 to 2019 and from 2019 to 2020.
Income tax provision (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. ConocoPhillips income tax provision (benefit) decreased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

ConocoPhillips, effective income tax rate (EITR) reconciliation

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Federal statutory income tax rate
Non-U.S. effective tax rates
Australia disposition
Canada disposition
U.K. disposition
Recovery of outside basis
Adjustment to tax reserves
Adjustment to valuation allowance
APLNG impairment
State income tax
Malaysia Deepwater Incentive
Enhanced oil recovery credit
U.K. rate change
Other
Effective income tax rate, before Tax Legislation
Tax Legislation
Effective income tax rate

Based on: 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), 10-K (reporting date: 2016-12-31).

Item Description The company
Effective income tax rate, before Tax Legislation Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. ConocoPhillips effective income tax rate, before Tax Legislation decreased from 2018 to 2019 and from 2019 to 2020.

Components of Deferred Tax Assets and Liabilities

ConocoPhillips, components of deferred tax assets and liabilities

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Benefit plan accruals
Asset retirement obligations and accrued environmental costs
Investments in joint ventures
Other financial accruals and deferrals
Loss and credit carryforwards
Other
Deferred tax assets
Valuation allowance
Deferred tax assets net of valuation allowance
PP&E and intangibles
Investment in joint ventures
Inventory
Deferred state income tax
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

Based on: 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), 10-K (reporting date: 2016-12-31).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. ConocoPhillips deferred tax assets increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.
Deferred tax assets net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. ConocoPhillips deferred tax assets net of valuation allowance increased from 2018 to 2019 and from 2019 to 2020.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. ConocoPhillips net deferred tax assets (liabilities) increased from 2018 to 2019 and from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

ConocoPhillips, deferred tax assets and liabilities, classification

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Deferred tax assets
Deferred tax liabilities

Based on: 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), 10-K (reporting date: 2016-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. ConocoPhillips deferred tax assets decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. ConocoPhillips deferred tax liabilities decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

ConocoPhillips, adjustments to financial statements

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Common Stockholders’ Equity
Common stockholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Common stockholders’ equity (adjusted)
Adjustment to Net Income (loss) Attributable To ConocoPhillips
Net income (loss) attributable to ConocoPhillips (as reported)
Add: Deferred income tax expense (benefit)
Net income (loss) attributable to ConocoPhillips (adjusted)

Based on: 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), 10-K (reporting date: 2016-12-31).


ConocoPhillips, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

ConocoPhillips, adjusted financial ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 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), 10-K (reporting date: 2016-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. ConocoPhillips adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. ConocoPhillips adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
ConocoPhillips adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. ConocoPhillips adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. ConocoPhillips adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

ConocoPhillips, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to ConocoPhillips
Sales and other operating revenues
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to ConocoPhillips
Sales and other operating revenues
Profitability Ratio
Adjusted net profit margin2

Based on: 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), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to ConocoPhillips ÷ Sales and other operating revenues
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to ConocoPhillips ÷ Sales and other operating revenues
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. ConocoPhillips adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Total Asset Turnover

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Sales and other operating revenues
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales and other operating revenues
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 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), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 Total asset turnover = Sales and other operating revenues ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Sales and other operating revenues ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. ConocoPhillips adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets
Common stockholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted common stockholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 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), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 Financial leverage = Total assets ÷ Common stockholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted common stockholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
ConocoPhillips adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.

Adjusted Return on Equity (ROE)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to ConocoPhillips
Common stockholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to ConocoPhillips
Adjusted common stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 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), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 ROE = 100 × Net income (loss) attributable to ConocoPhillips ÷ Common stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to ConocoPhillips ÷ Adjusted common stockholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. ConocoPhillips adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to ConocoPhillips
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to ConocoPhillips
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 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), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 ROA = 100 × Net income (loss) attributable to ConocoPhillips ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to ConocoPhillips ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. ConocoPhillips adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.