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

EOG Resources Inc., economic profit calculation

US$ in thousands

	12 months ended	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	EOG Resources Inc.’s economic profit increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

EOG Resources Inc., NOPAT calculation

US$ in thousands

	12 months ended	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net income (loss)
	Deferred income tax expense (benefit)¹
	Increase (decrease) in equity equivalents²
	Net interest expense
	Interest expense, operating lease liability³
	Adjusted net interest expense
	Tax benefit of net interest expense⁴
	Adjusted net interest expense, after taxes⁵
	Net operating profit after taxes (NOPAT)

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in equity equivalents to net income (loss).

³ 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

⁴ 2019 Calculation
Tax benefit of net interest expense = Adjusted net interest expense × Statutory income tax rate
= × 21.00% =

⁵ Addition of after taxes interest expense to net income (loss).

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	EOG Resources Inc.’s NOPAT increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

EOG Resources Inc., cash operating taxes calculation

US$ in thousands

	12 months ended	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Income tax provision (benefit)
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from net interest expense
	Cash operating taxes

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	EOG Resources Inc.’s cash operating taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

EOG Resources Inc., invested capital calculation (financing approach)

US$ in thousands

		Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Operating lease liability¹
	Total reported debt & leases
	Stockholders’ equity
	Net deferred tax (assets) liabilities²
	Equity equivalents³
	Accumulated other comprehensive (income) loss, net of tax⁴
	Adjusted stockholders’ equity
	Invested capital

¹ Addition of capitalized operating leases.

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

³ Addition of equity equivalents to stockholders’ equity.

⁴ Removal of accumulated other comprehensive income.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	EOG Resources Inc.’s invested capital increased from 2017 to 2018 and from 2018 to 2019.

EOG Resources Inc., cost of capital calculations


Equity²	÷	=	×		=
Long-term debt and finance leases³	÷	=	×	× (1 – 21.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 21.00%)	=
Total:

¹ US$ in thousands