EOG Resources Inc. (NYSE:EOG)

The financial data reveals notable variations in the key performance metrics over the five-year period from 2015 to 2019.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant improvement over the period. In 2015, the company reported a substantial loss of approximately $6.84 billion. However, by 2017, this position reversed to a positive NOPAT of around $784 thousand. The upward trend continued with a peak in 2018 at approximately $4.67 billion, followed by a slight decline in 2019 to roughly $3.77 billion. This indicates a successful turnaround in operational profitability during these years.

Cost of Capital

The cost of capital displayed a relatively stable trend, fluctuating mildly between 16.41% and 17.39% throughout the period. It peaked in 2017 at 17.39%, remained fairly steady in 2018 at 17.33%, and slightly declined to 16.58% in 2019. This stability suggests consistent financing costs and risk profile perceptions during these years.

Invested Capital

Invested capital showed a sustained growth trend, increasing steadily from $24.43 billion in 2015 to approximately $32.66 billion in 2019. This reflects ongoing investments or asset growth within the company, expanding the capital base by about 33.6% over five years.

Economic Profit

Economic profit remained negative throughout the period, although there was a marked improvement. The largest loss was recorded in 2015 at approximately $10.85 billion, followed by a reduction in losses by 2019 to around $1.64 billion. Despite operational profitability improvements, the company did not generate a positive economic profit, indicating that returns did not fully cover the cost of capital.

Overall, the company demonstrated a strong recovery in operational results with increasing NOPAT and significant invested capital growth. Despite this, persistent negative economic profit suggests that while operational performance improved, value creation for shareholders remained insufficient in covering the capital costs during these years.

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 a significant negative value of -10,853,449 thousand US dollars in 2015 to -1,640,608 thousand US dollars in 2019. This indicates a reduction in economic losses over the five-year period. Despite this improvement, the economic profit remains negative throughout, suggesting continued challenges in generating returns above the cost of capital.

Invested Capital

The invested capital exhibits a steady upward trend, increasing from 24,433,279 thousand US dollars in 2015 to 32,663,914 thousand US dollars in 2019. This growth suggests ongoing capital investment and expansion in the company’s operations over the years.

Economic Spread Ratio

The economic spread ratio, which measures the spread between return on invested capital and cost of capital, improves annually from a highly negative -44.42% in 2015 to a less negative -5.02% in 2019. The ratio indicates that while the company is moving towards achieving a positive spread, it remains below the breakeven point, reflecting that returns have not yet surpassed capital costs.

The financial data reveals notable trends in the company's economic profit, operating revenues, and economic profit margin over the five-year period ending in 2019.

Economic Profit

The company exhibited a significant negative economic profit throughout the period, indicating losses that exceeded the cost of capital. However, the losses showed a consistent improvement from a steep deficit of approximately -10.85 billion US dollars in 2015 to a much smaller negative figure of about -0.59 billion in 2018. This positive trend reversed slightly in 2019, with losses increasing to around -1.64 billion US dollars, though still substantially lower than the initial years.

Operating Revenues and Other

Operating revenues and other income displayed an overall growth trend, starting at approximately 8.76 billion US dollars in 2015 and rising to a peak of nearly 17.38 billion US dollars in 2019. The increase was steady year over year, with particularly notable growth between 2017 and 2018, where revenues surged from around 11.21 billion to 17.28 billion US dollars.

Economic Profit Margin

The economic profit margin, which measures economic profit as a percentage of revenues, also exhibited significant improvement over time. Starting from a highly negative margin of nearly -124% in 2015, the margin improved consistently to reach a low negative margin of about -3.42% in 2018. However, there was a slight decline in 2019 when the margin decreased to approximately -9.44%, indicating that while the company remained unprofitable on an economic basis, the magnitude of losses relative to revenue had lessened substantially compared to earlier years.

Overall, the data indicates that over the five-year period the company made considerable progress in reducing economic losses and growing its operating revenues. The improvement in economic profit margin suggests enhanced operational efficiency or cost management, although the persistence of negative economic profit highlights ongoing challenges in profitability and capital cost coverage. The slight reversal observed in 2019 warrants further investigation to determine underlying causes and potential risks to continued improvement.