EOG Resources Inc. (NYSE:EOG)

Current portion of long-term debt

The current portion of long-term debt exhibited a significant increasing trend over the analyzed period. Beginning at a relatively low level of 6,579 thousand USD in 2015 and 2016, it surged dramatically to 356,235 thousand USD in 2017. The upward trajectory continued with a further increase to 913,093 thousand USD in 2018 and peaking at 1,014,524 thousand USD by the end of 2019. This sharp rise indicates a considerable amount of long-term debt was transitioning into its current portion, potentially reflecting refinancing activities or approaching maturities.

Long-term debt, excluding current portion

The long-term debt, excluding the current portion, showed a clear declining pattern throughout the period. Starting at 6,653,685 thousand USD in 2015, it slightly increased to its peak of 6,979,779 thousand USD in 2016, after which it consistently decreased year-over-year to 6,030,836 thousand USD in 2017, 5,170,169 thousand USD in 2018, and finally 4,160,919 thousand USD in 2019. This decline suggests that the company was actively reducing its long-term obligations or restructuring its debt profile during these years.

Total long-term debt and finance leases (carrying amount)

The total long-term debt and finance leases, representing the sum of both current and non-current portions, depicted a relatively moderate decreasing trend over the five-year period. It increased slightly from 6,660,264 thousand USD in 2015 to 6,986,358 thousand USD in 2016, then experienced a modest decline to 6,387,071 thousand USD in 2017, followed by further reductions to 6,083,262 thousand USD in 2018 and 5,175,443 thousand USD in 2019. This overall decrease reflects the net effect of rising current portions being outweighed by the reduction in the non-current segment, indicative of an evolving debt maturity structure with an emphasis on shorter-term liabilities.

Net Interest Expense

The net interest expense initially increased from 237,393 thousand US dollars in 2015 to a peak of 281,681 thousand US dollars in 2016. Thereafter, it showed a downward trend, declining to 274,372 thousand in 2017, then to 245,052 thousand in 2018, and further to 185,129 thousand in 2019. This indicates a gradual reduction in net interest expenses over the latter part of the period.

Interest Expense, Capitalized

Interest expense capitalized began at 41,841 thousand US dollars in 2015, decreased consistently over the next three years to 31,660 thousand in 2016, 27,429 thousand in 2017, and 24,497 thousand in 2018. However, there was a reversal of this trend in 2019, with an increase to 38,292 thousand. This suggests a reduction in capitalized interest over most of the period, followed by a notable uptick in the final year.

Interest Expense, Incurred

The total interest expense incurred followed a pattern similar to net interest expense, rising from 279,234 thousand US dollars in 2015 to 313,341 thousand in 2016. Subsequently, it declined steadily each year to 301,801 thousand in 2017, 269,549 thousand in 2018, and finally 223,421 thousand in 2019. This downward trend indicates a consistent reduction in interest costs incurred over the last three years of the period.

Overall Trend and Insights

Across the five-year period, both net interest expense and total interest expense incurred show an initial increase followed by a consistent decrease from 2016 onwards. This trend may reflect improved debt management or changes in borrowing conditions. Interest expense capitalized generally mirrors this pattern but shows a distinct increase in 2019, which could indicate an increase in capital projects or a strategic decision to capitalize more interest costs that year. The overall reduction in interest expenses in the later years suggests effective cost control or debt restructuring efforts.

The financial data reveals a marked improvement over the five-year period in the company's ability to cover interest expenses, as indicated by both the interest coverage ratio without capitalized interest and the adjusted interest coverage ratio with capitalized interest.

Interest Coverage Ratio (without capitalized interest)

This ratio showed a significant upward trend from a deeply negative value of -28.16 in 2015 to a positive ratio of 20.15 by 2019. The progression indicates a significant improvement in earnings relative to interest expenses over time. After a challenging start in 2015 and 2016, with ratios below zero signaling inability to cover interest expenses with operating income, the company transitioned into positive territory in 2017 and continued to strengthen its coverage substantially in the subsequent years.

Adjusted Interest Coverage Ratio (with capitalized interest)

The adjusted ratio followed a similar trajectory, starting at -23.94 in 2015 and increasing to 16.7 in 2019. Despite being slightly lower than the non-adjusted ratio in later years, it exhibits the same trend of recovery and growth. This suggests that when capitalized interest is taken into account, the company's earnings still experienced a strong enhancement in relation to interest obligations, reflecting improved operational performance and/or more effective cost management.

Overall, the data indicates a substantial turnaround in financial health with respect to interest coverage. The company moved from significant financial distress to a position of strong coverage capacity, demonstrating increased profitability and potentially lower financial risk by the end of the reported period.