ConocoPhillips (NYSE:COP)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated a significant recovery from a negative position of -2,991 million US dollars in 2020 to a peak of 21,159 million US dollars in 2022. After 2022, there was a decline in NOPAT, falling to 12,357 million in 2023 and further to 9,976 million in 2024. This suggests a strong rebound post-2020 followed by a decreasing trend in profitability in the most recent years.

Cost of Capital

The cost of capital has shown a general upward trend from 13.89% in 2020 to a peak of 15.34% in 2022. It then slightly decreased but remained relatively high at 14.7% by 2024. This pattern indicates an increasing cost of financing or required return on investment over the period, with a marginal reduction toward the end.

Invested Capital

Invested capital increased notably from 50,870 million US dollars in 2020 to 76,355 million in 2021, then remained relatively stable in 2022 at 75,520 million. It increased again in 2023 to 81,278 million and showed a substantial rise to 106,371 million in 2024. The data points to greater capital deployment over time, particularly a marked increase in the latest year.

Economic Profit

Economic profit showed a severe negative value of -10,055 million US dollars in 2020, improving significantly to -934 million in 2021. A positive peak was achieved in 2022 with 9,576 million US dollars, followed by a sharp drop to a nominal positive 67 million in 2023, and then a decline back into negative territory at -5,660 million in 2024. This indicates fluctuating value creation, with strong positive performance in 2022 countered by losses in other years.

Overall Insights

The data indicates a recovery in profitability and economic value creation after 2020, with a peak in 2022 followed by declines. The increased invested capital over the years suggests strategic investment growth, although economic profit's volatility indicates challenges in maintaining value creation. The rising cost of capital potentially puts pressure on profitability and investment returns, especially in the latter years. The downward trend in both NOPAT and economic profit in 2023 and 2024 warrants close monitoring and potential strategic reassessment.

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.

The financial data reveals several noteworthy trends over the five-year period. Economic profit exhibits significant volatility, starting with a considerable negative value and improving sharply to a positive peak in the third year, followed by fluctuations back into negative territory. This pattern indicates variability in the company's value creation relative to its cost of capital, reflecting changing operational performance or market conditions.

Invested capital shows a general upward trend, nearly doubling from the initial year to the final year under review. This consistent increase suggests expansion or reinvestment into the company's asset base, potentially aimed at driving future growth or capacity enhancements.

The economic spread ratio, which measures the return on invested capital above the cost of capital as a percentage, closely mirrors the trajectory of economic profit. It moves from a substantial negative position, improving to a positive peak in the third year before declining once again. This indicates that the company's efficiency in generating returns has fluctuated, with only a brief period of strong value addition observed.

Economic Profit

Starts severely negative, improves significantly to positive in the third year, drops sharply afterwards, exhibiting high volatility.

Invested Capital

Consistently increases over the period, indicating growing investment and asset accumulation.

Economic Spread Ratio

Follows a trend similar to economic profit, shifting from negative to positive and back to negative, signifying changes in profitability relative to capital costs.

Economic Profit

An initial negative economic profit of -10,055 million US dollars in 2020 improved significantly in 2021, reaching -934 million US dollars. This trend continued positively, peaking at 9,576 million US dollars in 2022. However, the profit markedly declined thereafter, dropping to 67 million US dollars in 2023 and further into negative territory at -5,660 million US dollars by the end of 2024. The data suggests a volatility in economic profit with a strong rebound in 2022 followed by a substantial decline over the next two years.

Sales and Other Operating Revenues

Revenue figures show a pronounced upward trajectory from 18,784 million US dollars in 2020 to 78,494 million US dollars in 2022, representing significant growth. However, the revenue decreased to 56,141 million US dollars in 2023 and remained relatively stable but slightly decreased to 54,745 million US dollars in 2024. This indicates that after strong growth through 2022, sales revenue experienced a contraction in the subsequent years.

Economic Profit Margin

The profit margin began at a substantial negative value of -53.53% in 2020 and improved to nearly break-even at -2.04% in 2021. A positive margin of 12.2% was achieved in 2022, reflecting improved profitability. Nonetheless, this margin rapidly decreased to a marginal 0.12% in 2023 and then reverted to a negative margin of -10.34% by 2024. This trend mirrors the economic profit pattern, highlighting fluctuations in profitability relative to sales over the period.

Overall Insights

The analysis indicates that while sales and revenues experienced strong growth until 2022, both economic profit and profit margin showed considerable volatility. The peak performance year across economic profit and profitability metrics was 2022. The decline in economic profit and margins in 2023 and 2024, despite relatively stable revenues, suggests rising costs, deteriorating operational efficiency, or other financial pressures impacting overall profitability during these years.