EOG Resources Inc. (NYSE:EOG)

Net Operating Profit After Taxes (NOPAT)

There is a clear upward trend in net operating profit after taxes over the five-year period. The company moved from significant negative NOPAT in 2015 and 2016, with the largest loss recorded in 2015, to positive values starting in 2017. The peak is observed in 2018, followed by a slight decline in 2019, although NOPAT remains considerably positive compared to the initial years.

Cost of Capital

The cost of capital shows a relatively stable pattern, fluctuating modestly between 16.73% and 17.72%. The highest cost was in 2017, after which there is a minor downward trend through 2019. These changes are marginal, indicating consistent capital costs throughout the period.

Invested Capital

Invested capital demonstrates a steady increase each year. Starting from approximately 24.4 billion in 2015, it rises progressively to over 32.6 billion by 2019. This trend indicates ongoing investments and expansion of the company’s asset base.

Economic Profit

Economic profit exhibits negative values across all years, though the magnitude of losses decreases significantly over time. The highest economic loss occurs in 2015, with improvements seen each subsequent year. By 2018, economic losses are minimal compared to earlier years, but there is a slight increase in losses again in 2019, indicating some deterioration but still markedly better than the start of the period.

The financial data reveals significant fluctuations in the company's profitability and operating performance over the five-year period.

Net Income (Loss)

There is a marked improvement from a substantial loss of approximately $4.52 billion in 2015 to a more moderate loss of about $1.10 billion in 2016. This negative trend reverses in 2017 when the company reports a net income of roughly $2.58 billion. The upward trajectory continues through 2018 and 2019, with net income increasing to approximately $3.42 billion and then slightly declining to about $2.73 billion, respectively. This pattern indicates a recovery and stabilization of net profitability after the initial losses in 2015 and 2016.

Net Operating Profit After Taxes (NOPAT)

The NOPAT data exhibits a similar trend to net income, with significant losses recorded in 2015 and 2016, amounting to approximately $6.84 billion and $1.42 billion, respectively. The company moves into positive territory in 2017 with a NOPAT of about $784 million, which then substantially increases to around $4.67 billion in 2018. There is a slight decrease in NOPAT to approximately $3.77 billion in 2019. These changes suggest improvements in core operational efficiency and profitability through the period, particularly from 2017 onwards.

Overall, the data indicates a transition from heavy losses to consistent profitability, reflecting either operational improvements, favorable market conditions, or other strategic adjustments that significantly enhanced financial performance starting in 2017. Both net income and NOPAT trends are aligned, reinforcing the conclusion of a robust turnaround in the company’s financial health over the observed years.

The financial data reveals several notable trends and changes over the examined periods.

Income Tax Provision (Benefit)

This item shows significant volatility throughout the years. In 2015 and 2016, the figures reflect substantial tax benefits, with values of approximately -2.4 billion and -460.8 million respectively, indicating periods of considerable tax relief or deferred tax benefits. The benefit peaked again in 2017 at nearly -1.9 billion, before reversing sharply in 2018 and 2019 to positive figures of 822 million and 810 million respectively. This shift from benefit to provision suggests a change in taxable income or tax obligations, possibly due to improved profitability or changes in tax regulations.

Cash Operating Taxes

Cash operating taxes presented a more stable but fluctuating pattern across the years. From 2015 to 2017, this expense remained positive, ranging between approximately 157.8 thousand and 173.4 thousand, indicating ongoing tax payments related to operations. Contrastingly, 2018 and 2019 show negative values of -165.6 thousand and -15.3 thousand, respectively, which could imply tax refunds, credits, or adjustments exceeding tax payments during these periods. The sharp decline and transition from positive to negative cash operating taxes in 2018 particularly highlight a notable operational or fiscal event impacting tax cash outflows.

The financial data reveals several notable trends in the company's capital structure over the five-year period ending December 31, 2019.

Total reported debt & leases

The total reported debt and leases show a consistent decline from 7,023,659 thousand US dollars in 2015 to 5,974,808 thousand US dollars in 2019. This represents a reduction of approximately 15% over the period, indicating a strategic effort to decrease debt obligations.

Stockholders’ equity

Stockholders’ equity demonstrates a steady and significant increase each year, rising from 12,943,035 thousand US dollars in 2015 to 21,640,716 thousand US dollars by the end of 2019. This growth, approximately 67% over five years, suggests retained earnings accumulation and possible additional equity issuances, strengthening the company's financial base.

Invested capital

Invested capital shows an upward trend throughout the period, increasing from 24,433,279 thousand US dollars in 2015 to 32,663,914 thousand US dollars at the end of 2019, marking a growth of about 34%. This trend indicates ongoing investments in assets, supporting the company's expansion or operational needs.

Overall, the combination of decreasing debt levels alongside increasing equity and invested capital suggests a strengthening of the capital structure with a shift towards greater equity financing. This could enhance the company's financial stability and capacity for future investment.

Economic Profit

The economic profit shows a consistent improvement from 2015 to 2018, moving from a significant negative value toward a much smaller loss. Specifically, the negative value decreases from approximately -10.9 billion in 2015 to around -0.7 billion in 2018. However, there is a reversal in 2019, where economic profit worsens again to approximately -1.74 billion, indicating a decline after the prior years' trend of improvement.

Invested Capital

Invested capital demonstrates steady growth throughout the period. Beginning at roughly 24.4 billion at the end of 2015, it increases consistently each year, reaching about 32.7 billion by the end of 2019. This upward trend suggests ongoing investment in the company's assets or operations during the analyzed years.

Economic Spread Ratio

The economic spread ratio moves from a deeply negative position in 2015 (-44.73%) toward a less negative but still unfavorable territory by 2019 (-5.34%). This ratio shows significant improvement through 2018, reaching a low negative spread of approximately -2.28%, before slightly declining again in 2019. The persistent negative values indicate that the company's returns have been below its cost of capital, though the gap narrowed considerably over most of the period.

Operating Revenues and Other

Over the five-year period, operating revenues exhibited a generally upward trajectory. Starting at 8.76 billion, the revenues experienced a decline in the following year but then increased substantially in the subsequent years, peaking at approximately 17.38 billion by the end of the period. This pattern indicates a strong growth trend in the company's core operations particularly from 2017 onwards.

Economic Profit

The economic profit showed a consistent negative trend throughout the period, indicating that the company was not generating profit exceeding the cost of capital. However, this negative economic profit improved significantly from -10.93 billion in 2015 to -0.69 billion in 2018, suggesting enhanced efficiency or reduced costs. In 2019, the economic profit again declined to -1.74 billion, signaling a reversal in this improvement trend.

Economic Profit Margin

Reflecting the trend in economic profit, the economic profit margin started very low at -124.81% in 2015, with a marked improvement up to -4% in 2018. This indicates that the company was moving closer to economic breakeven by this year. However, by 2019 the margin again deteriorated to -10.03%, showing some erosion in profitability relative to revenues.

Summary

The company experienced significant revenue growth over the period, especially after 2016. Despite this, economic profitability remained negative throughout, though there was a notable trend of improvement until 2018. The setback in 2019 in both economic profit and its margin suggests emerging challenges that may need further investigation or management attention to restore positive economic returns.