ConocoPhillips (NYSE:COP)

The financial data reveal fluctuating operational performance and capital efficiency over the five-year period analyzed.

Net Operating Profit After Taxes (NOPAT)

NOPAT experienced a significant turnaround from a loss of approximately $2.99 billion in 2020 to a peak profit of $21.16 billion in 2022. However, subsequent years show a decline, with profits decreasing to roughly $12.36 billion in 2023 and further to about $9.98 billion in 2024. This indicates a recovery phase followed by a moderation in profitability.

Cost of Capital

The cost of capital exhibited a gradual increase from 14.03% in 2020 to a high of 15.51% in 2022. After peaking, it slightly decreased but remained relatively elevated at 14.86% in 2024. This suggests rising capital costs over the earlier years, which could increase the hurdle rate for investment returns.

Invested Capital

Invested capital showed consistent growth, rising from approximately $50.87 billion in 2020 to a value exceeding $106 billion in 2024. The steady increase indicates ongoing capital deployment, potentially to support expanded operations or asset acquisition.

Economic Profit

Economic profit was negative in multiple years, reflecting value destruction beyond the cost of capital. It improved from a deep loss of over $10 billion in 2020 to a near breakeven level in 2021 and turned positive in 2022 with nearly $9.45 billion. However, the following years reverted to negative economic profit, reaching approximately -$5.83 billion in 2024. This pattern denotes challenges in generating returns exceeding the company's cost of capital despite growing invested capital.

Overall, the data suggest the company experienced volatile profitability and economic value generation. While operational profits improved significantly in the middle of the period, increased capital costs and rising invested capital contributed to diminished economic profit in later years. These trends highlight the need to focus on improving return on capital and managing cost structure effectively.

Net Income (Loss) Attributable to ConocoPhillips

The net income attributable to the company demonstrated significant volatility over the analyzed period. In 2020, the figure was a substantial loss of 2,701 million US dollars, indicating a challenging financial year. However, a dramatic recovery occurred in 2021, with net income rising to 8,079 million US dollars, reflecting a strong turnaround.

The upward trend continued in 2022, with net income reaching a peak of 18,680 million US dollars, more than doubling the previous year's performance. Despite a notable decline in 2023 to 10,957 million US dollars, net income remained robust and significantly positive. In 2024, the figure further declined to 9,245 million US dollars, representing a tapering off of profitability but maintaining a solid profit level relative to earlier years.

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes followed a pattern similar to net income, though with some differences in magnitude. The company recorded a negative NOPAT of 2,991 million US dollars in 2020, aligning with the overall loss experienced that year.

A sharp improvement occurred in 2021, with NOPAT rising to 10,273 million US dollars. This growth trend accelerated in 2022, reaching a peak at 21,159 million US dollars, which was the highest point in the observed period. Subsequently, NOPAT decreased to 12,357 million US dollars in 2023 and then to 9,976 million US dollars in 2024.

Despite these declines in the last two years, NOPAT remained significantly positive, indicating continued operational profitability post-tax, though at a lower level than the peak in 2022.

Overall Trend Summary

The financial results demonstrate a recovery from significant losses in 2020 to strong profitability in subsequent years. Both net income and NOPAT peaked in 2022, followed by decreases in the later years of 2023 and 2024, suggesting a potential moderation in earnings after a period of exceptional growth.

The alignment in trends between net income and NOPAT suggests consistent operational performance after tax impacts are considered. The decline after the peak year may indicate changing market conditions, operational challenges, or strategic shifts impacting profitability, but the company remains financially robust relative to 2020 lows.

Income Tax Provision (Benefit)

The income tax provision exhibited significant volatility over the five-year period. In 2020, the provision was a benefit amounting to -485 million USD, indicating a tax credit or refund. This trend reversed dramatically in 2021 with a substantial increase to 4633 million USD, followed by further escalation in 2022 reaching 9548 million USD. Thereafter, the provision declined notably in 2023 to 5331 million USD and continued to decrease in 2024 to 4427 million USD. This pattern suggests a shift from a net tax benefit to considerable tax expenses, peaking in 2022 before trending downward in subsequent years.

Cash Operating Taxes

Cash operating taxes demonstrated an overall upward trajectory from 2020 through 2022, increasing from 502 million USD in 2020 to 7594 million USD in 2022. However, after this peak, the amount decreased significantly to 4270 million USD in 2023 and saw a slight further reduction to 4150 million USD in 2024. This indicates that while the company’s cash tax payments rose sharply in the initial years, they moderated in the most recent periods.

Comparative Insights

Both the income tax provision and cash operating taxes followed similar trends with increases up to 2022 and subsequent declines. The notable spike in 2022 for both metrics may reflect higher taxable income or changes in tax rates or structures influencing the tax liabilities. The subsequent decline may indicate improved tax planning, tax rate reductions, or decreased taxable income in the latter years.

Total Reported Debt & Leases

The total reported debt and leases exhibit a fluctuating yet overall increasing trend from 2020 through 2024. The debt rose significantly from 16,154 million in 2020 to a peak of 20,601 million in 2021, followed by a decline to 17,188 million in 2022. Subsequently, the debt increased again, reaching 19,634 million in 2023 and further escalating to 25,348 million by the end of 2024. This pattern indicates periods of both deleveraging and increased borrowing or lease obligations, with a notable surge in the final reported year.

Common Stockholders’ Equity

Common stockholders’ equity demonstrates a consistent upward trajectory across all years presented. Starting at 29,849 million in 2020, equity grew substantially each year, reaching 45,406 million in 2021, 48,003 million in 2022, and 49,279 million in 2023. The growth accelerates notably in 2024 with equity rising to 64,796 million. This steady increase reflects a strengthening equity base, likely supported by retained earnings growth and possibly additional equity issuance or valuation gains.

Invested Capital

Invested capital shows an overall growth trend with slight volatility. Beginning at 50,870 million in 2020, it increased sharply to 76,355 million in 2021 but then edged down marginally to 75,520 million in 2022. Afterwards, invested capital resumed growth, climbing to 81,278 million in 2023 and making a more pronounced leap to 106,371 million in 2024. The upward movement in invested capital corresponds with the increases in both equity and debt, indicating expanding asset bases or capital expenditures that may be financed through both debt and equity.

Economic Profit

The economic profit demonstrates significant volatility over the analyzed periods. In 2020, the figure was deeply negative at -10,130 million USD, indicating substantial losses. This loss narrowed considerably in 2021 to -1,056 million USD, showing some improvement. In 2022, the company achieved a notable positive economic profit of 9,447 million USD, reflecting a strong turnaround. However, in 2023, the profit again fell near zero at -68 million USD, and in 2024, it declined further to -5,832 million USD, indicating a return to sizeable economic losses.

Invested Capital

Invested capital rose steadily throughout the five-year period. Starting at 50,870 million USD in 2020, it increased markedly to 76,355 million USD in 2021. After a slight decrease to 75,520 million USD in 2022, it resumed growth with 81,278 million USD in 2023 and then jumped significantly to 106,371 million USD in 2024. This consistent upward trend indicates continued capital deployment in the business, with the largest increase occurring in the latest reported year.

Economic Spread Ratio

The economic spread ratio largely mirrors the economic profit trends, beginning with a negative spread of -19.91% in 2020. It improved substantially to -1.38% in 2021 and turned positive at 12.51% in 2022, corresponding with the positive economic profit that year. The ratio then declined sharply to -0.08% in 2023 and further decreased to -5.48% in 2024. These changes suggest fluctuating returns relative to the cost of capital, with the company failing to maintain positive spreads after 2022.

Overall, the financial data exhibit a pattern of considerable instability in economic profit and spread ratio, with a temporary recovery in 2022 followed by renewed declines. Meanwhile, invested capital shows a consistent growth trajectory, suggesting increasing financial commitments despite fluctuating profitability.

The financial data reveals notable fluctuations in economic profit, revenues, and economic profit margins over the five-year period ending December 31, 2024.

Economic Profit

The economic profit experienced a significant recovery from a large negative value in 2020 ($-10,130 million) to a near breakeven in 2021 ($-1,056 million), followed by a substantial positive peak in 2022 ($9,447 million). Subsequently, the economic profit declined sharply back into negative territory in 2023 ($-68 million) and further decreased in 2024 to ($-5,832 million). This pattern indicates a period of operational or financial challenges both prior to and following 2022, with 2022 representing a temporary period of strong economic profitability.

Sales and Other Operating Revenues

Sales and other operating revenues showed strong growth from 2020 ($18,784 million) through 2022 ($78,494 million), peaking in 2022. However, revenues decreased substantially in 2023 ($56,141 million) and remained relatively stable but slightly lower in 2024 ($54,745 million). Despite the revenue decline after 2022, levels in 2023 and 2024 were still significantly higher than in 2020 and 2021, suggesting some recovery or market expansion compared to the initial years.

Economic Profit Margin

The economic profit margin followed a similar pattern to economic profit, starting with a large negative margin in 2020 (-53.93%), improving greatly in 2021 (-2.3%), before turning positive in 2022 (12.03%). After this peak, the margin dropped close to zero in 2023 (-0.12%) and declined further in 2024 (-10.65%). The decline in margin after 2022 amid still relatively high revenues suggests rising costs, decreased operational efficiency, or other financial pressures impacting profitability.

In summary, the data shows a volatile profitability trajectory over the period, with a peak in economic profit and margins in 2022, which was not sustained. Although revenues increased significantly from 2020 to 2022, followed by a decrease in subsequent years, profitability margins deteriorated rapidly after 2022, indicating challenges in converting revenues into economic profit during the latter years.