Stock Analysis on Net

ConocoPhillips (NYSE:COP)

$24.99

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

ConocoPhillips, economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =


Net Operating Profit After Taxes (NOPAT)
The NOPAT exhibited significant volatility over the observed periods. It started at a negative value of -2991 million US dollars in 2020, followed by a marked increase to 10273 million US dollars in 2021. This upward trend continued more robustly into 2022, reaching a peak of 21159 million US dollars. However, the subsequent two years showed a decline, with NOPAT falling to 12357 million US dollars in 2023 and further to 9976 million US dollars in 2024. Despite the decrease in the last two years, the profitability remained positive compared to the initial negative position in 2020.
Cost of Capital
The cost of capital presented a generally increasing trend from 2020 through 2022, rising from 13.71% to 15.14%. It then slightly decreased in the following years, moving to 14.93% in 2023 and 14.51% in 2024. This suggests that while the overall cost environment became more expensive initially, there was some easing in the latter years of the period analyzed.
Invested Capital
Invested capital showed a mostly upward trajectory during the period. Beginning at 50870 million US dollars in 2020, it experienced a substantial increase to 76355 million US dollars in 2021. The value slightly decreased to 75520 million US dollars in 2022 but then resumed growth, reaching 81278 million US dollars in 2023 and a significant jump to 106371 million US dollars in 2024. This indicates a considerable expansion in the investment base, especially notable in the final year.
Economic Profit
Economic profit was negative for the initial years, starting at -9967 million US dollars in 2020 and improving significantly to -791 million US dollars in 2021. The company then achieved a positive economic profit of 9726 million US dollars in 2022, which sharply declined to 226 million US dollars in 2023. The trend reversed again in 2024, with economic profit turning negative at -5461 million US dollars. This fluctuation suggests challenges in consistently generating returns exceeding the cost of capital despite intermittent periods of economic value creation.

Net Operating Profit after Taxes (NOPAT)

ConocoPhillips, NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income (loss) attributable to ConocoPhillips
Deferred income tax expense (benefit)1
Increase (decrease) in allowance2
Increase (decrease) in LIFO reserve3
Increase (decrease) in equity equivalents4
Interest and debt expense
Interest expense, operating lease liability5
Adjusted interest and debt expense
Tax benefit of interest and debt expense6
Adjusted interest and debt expense, after taxes7
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance.

3 Addition of increase (decrease) in LIFO reserve. See details »

4 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to ConocoPhillips.

5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2024 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= × 21.00% =

7 Addition of after taxes interest expense to net income (loss) attributable to ConocoPhillips.

8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 Elimination of after taxes investment income.


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.


Cash Operating Taxes

ConocoPhillips, cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Income tax provision (benefit)
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest and debt expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


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.

Invested Capital

ConocoPhillips, invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Short-term debt
Long-term debt
Operating lease liability1
Total reported debt & leases
Common stockholders’ equity
Net deferred tax (assets) liabilities2
Allowance3
LIFO reserve4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Noncontrolling interests
Adjusted common stockholders’ equity
Marketable securities7
Invested capital

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of LIFO reserve. See details »

5 Addition of equity equivalents to common stockholders’ equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of marketable securities.


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.

Cost of Capital

ConocoPhillips, cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt, including finance leases3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2024-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt, including finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt, including finance leases3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt, including finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt, including finance leases3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt, including finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt, including finance leases3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt, including finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt, including finance leases3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt, including finance leases. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

ConocoPhillips, economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Chevron Corp.
Exxon Mobil Corp.
Occidental Petroleum Corp.

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.


The financial data presents a fluctuating pattern in economic profit over the observed periods. Initially, there is a large negative economic profit of -9967 million US dollars in 2020, which improves considerably to -791 million in 2021. In 2022, the company reports a significant turnaround with a positive economic profit of 9726 million, followed by a sharp decline to 226 million in 2023 and a return to negative territory at -5461 million in 2024.

Invested capital shows an overall upward trend throughout the five years. It increased from 50,870 million US dollars at the end of 2020 to 106,371 million by the end of 2024. This indicates a consistent increase in the capital base used for the company's operations, with a slight dip in 2022 but continuing growth afterward.

The economic spread ratio mirrors the fluctuations observed in economic profit. Starting with a deeply negative ratio of -19.59% in 2020, it moves closer to neutral at -1.04% in 2021 and peaks positively at 12.88% in 2022. Subsequently, it falls sharply to 0.28% in 2023 and further dips to -5.13% in 2024, reflecting variability in the company's profitability relative to the cost of capital.

Economic Profit
Shows significant volatility, with a major loss in 2020 turning into substantial profit in 2022, but declining again afterward, signaling unstable profitability.
Invested Capital
Demonstrates steady growth, implying ongoing investment and expansion efforts, which might suggest strategic asset accumulation despite fluctuations in profit.
Economic Spread Ratio
Indicates the company’s return on invested capital relative to its cost. The ratio’s fluctuations reflect changes in operational efficiency and profitability, with a notable peak in 2022 and deterioration by 2024.

Economic Profit Margin

ConocoPhillips, economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1
Sales and other operating revenues
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Chevron Corp.
Exxon Mobil Corp.
Occidental Petroleum Corp.

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales and other operating revenues
= 100 × ÷ =

3 Click competitor name to see calculations.


The financial data reveals significant fluctuations in the economic profit and revenue metrics over the five-year period.

Economic Profit
The economic profit shows notable volatility, starting with a substantial negative figure of -9967 million US dollars at the end of 2020. In 2021, the loss narrows considerably to -791 million US dollars, indicating an improving trend. By the end of 2022, the company achieves positive economic profit of 9726 million US dollars, representing a strong recovery. However, this profit sharply declines to 226 million in 2023 and then returns to a negative position of -5461 million US dollars in 2024. This pattern suggests inconsistency in generating value exceeding the cost of capital across the years.
Sales and Other Operating Revenues
The sales and other operating revenues increase significantly from 18784 million US dollars in 2020 to a peak of 78494 million US dollars in 2022, reflecting substantial growth in the company’s top line. However, there is a considerable decrease to 56141 million US dollars in 2023, followed by a slight decline to 54745 million in 2024. These fluctuations indicate variability in revenue generation, possibly influenced by market conditions or operational factors.
Economic Profit Margin
The economic profit margin follows a pattern consistent with the economic profit values. It starts extremely negative at -53.06% in 2020, improving close to break-even at -1.73% in 2021, and turning positive at 12.39% in 2022. The margin then contracts sharply to 0.4% in 2023 and turns negative again at -9.97% in 2024. This trend implies challenges in maintaining profitability relative to revenues and capital costs in the latter years.

Overall, the data indicates periods of recovery and growth, particularly visible in 2022, followed by a decline in both profit and margins in subsequent years despite relatively higher revenue levels compared to the start of the period. The inconsistency in economic profit and margins suggests potential issues in cost management, capital efficiency, or external market pressures affecting profitability even with higher revenues.