Stock Analysis on Net
Stock Analysis on Net

EOG Resources Inc. (NYSE:EOG)

This company has been moved to the archive! The financial data has not been updated since February 27, 2020.

Economic Value Added (EVA)

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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

EOG Resources Inc., economic profit calculation

US$ in thousands

Microsoft Excel
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 3,773,634 4,671,245 783,732 (1,419,892) (6,843,163)
Cost of capital2 15.12% 15.80% 15.84% 15.62% 14.97%
Invested capital3 32,663,914 30,360,840 26,570,707 26,322,407 24,433,279
 
Economic profit4 (1,165,881) (126,061) (3,426,210) (5,531,369) (10,501,408)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 3,773,634 – 15.12% × 32,663,914 = -1,165,881

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. economic profit increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Net Operating Profit after Taxes (NOPAT)

EOG Resources Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) 2,734,910 3,419,040 2,582,579 (1,096,686) (4,524,515)
Deferred income tax expense (benefit)1 870,370 1,043,148 (1,987,276) (515,206) (2,482,307)
Increase (decrease) in equity equivalents2 870,370 1,043,148 (1,987,276) (515,206) (2,482,307)
Net interest expense 185,129 245,052 274,372 281,681 237,393
Interest expense, operating lease liability3 27,978 19,577 15,519 13,703 14,390
Adjusted net interest expense 213,107 264,629 289,891 295,384 251,783
Tax benefit of net interest expense4 (44,752) (55,572) (101,462) (103,385) (88,124)
Adjusted net interest expense, after taxes5 168,354 209,057 188,429 192,000 163,659
Net operating profit after taxes (NOPAT) 3,773,634 4,671,245 783,732 (1,419,892) (6,843,163)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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
= 799,365 × 3.50% = 27,978

4 2019 Calculation
Tax benefit of net interest expense = Adjusted net interest expense × Statutory income tax rate
= 213,107 × 21.00% = 44,752

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. NOPAT increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Cash Operating Taxes

EOG Resources Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Income tax provision (benefit) 810,357 821,958 (1,921,397) (460,819) (2,397,041)
Less: Deferred income tax expense (benefit) 870,370 1,043,148 (1,987,276) (515,206) (2,482,307)
Add: Tax savings from net interest expense 44,752 55,572 101,462 103,385 88,124
Cash operating taxes (15,261) (165,618) 167,341 157,772 173,390

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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. cash operating taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Invested Capital

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

US$ in thousands

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current portion of long-term debt 1,014,524 913,093 356,235 6,579 6,579
Long-term debt, excluding current portion 4,160,919 5,170,169 6,030,836 6,979,779 6,653,685
Operating lease liability1 799,365 499,411 380,358 323,191 363,395
Total reported debt & leases 5,974,808 6,582,673 6,767,429 7,309,549 7,023,659
Stockholders’ equity 21,640,716 19,364,188 16,283,273 13,981,581 12,943,035
Net deferred tax (assets) liabilities2 5,043,738 4,412,621 3,500,708 5,012,267 4,433,247
Equity equivalents3 5,043,738 4,412,621 3,500,708 5,012,267 4,433,247
Accumulated other comprehensive (income) loss, net of tax4 4,652 1,358 19,297 19,010 33,338
Adjusted stockholders’ equity 26,689,106 23,778,167 19,803,278 19,012,858 17,409,620
Invested capital 32,663,914 30,360,840 26,570,707 26,322,407 24,433,279

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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. invested capital increased from 2017 to 2018 and from 2018 to 2019.

Cost of Capital

EOG Resources Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 34,923,267 34,923,267 ÷ 41,232,532 = 0.85 0.85 × 17.34% = 14.69%
Long-term debt and finance leases3 5,509,900 5,509,900 ÷ 41,232,532 = 0.13 0.13 × 3.62% × (1 – 21.00%) = 0.38%
Operating lease liability4 799,365 799,365 ÷ 41,232,532 = 0.02 0.02 × 3.50% × (1 – 21.00%) = 0.05%
Total: 41,232,532 1.00 15.12%

Based on: 10-K (reporting date: 2019-12-31).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 54,472,798 54,472,798 ÷ 61,070,781 = 0.89 0.89 × 17.34% = 15.47%
Long-term debt and finance leases3 6,098,571 6,098,571 ÷ 61,070,781 = 0.10 0.10 × 3.92% × (1 – 21.00%) = 0.31%
Operating lease liability4 499,411 499,411 ÷ 61,070,781 = 0.01 0.01 × 3.92% × (1 – 21.00%) = 0.03%
Total: 61,070,781 1.00 15.80%

Based on: 10-K (reporting date: 2018-12-31).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 61,879,371 61,879,371 ÷ 68,893,883 = 0.90 0.90 × 17.34% = 15.57%
Long-term debt and finance leases3 6,634,155 6,634,155 ÷ 68,893,883 = 0.10 0.10 × 4.08% × (1 – 35.00%) = 0.26%
Operating lease liability4 380,358 380,358 ÷ 68,893,883 = 0.01 0.01 × 4.08% × (1 – 35.00%) = 0.01%
Total: 68,893,883 1.00 15.84%

Based on: 10-K (reporting date: 2017-12-31).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 56,477,629 56,477,629 ÷ 64,029,530 = 0.88 0.88 × 17.34% = 15.29%
Long-term debt and finance leases3 7,228,710 7,228,710 ÷ 64,029,530 = 0.11 0.11 × 4.24% × (1 – 35.00%) = 0.31%
Operating lease liability4 323,191 323,191 ÷ 64,029,530 = 0.01 0.01 × 4.24% × (1 – 35.00%) = 0.01%
Total: 64,029,530 1.00 15.62%

Based on: 10-K (reporting date: 2016-12-31).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance leases. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 37,667,012 37,667,012 ÷ 44,859,189 = 0.84 0.84 × 17.34% = 14.56%
Long-term debt and finance leases3 6,828,782 6,828,782 ÷ 44,859,189 = 0.15 0.15 × 3.96% × (1 – 35.00%) = 0.39%
Operating lease liability4 363,395 363,395 ÷ 44,859,189 = 0.01 0.01 × 3.96% × (1 – 35.00%) = 0.02%
Total: 44,859,189 1.00 14.97%

Based on: 10-K (reporting date: 2015-12-31).

1 US$ in thousands

2 Equity. See details »

3 Long-term debt and finance leases. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

EOG Resources Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in thousands)
Economic profit1 (1,165,881) (126,061) (3,426,210) (5,531,369) (10,501,408)
Invested capital2 32,663,914 30,360,840 26,570,707 26,322,407 24,433,279
Performance Ratio
Economic spread ratio3 -3.57% -0.42% -12.89% -21.01% -42.98%
Benchmarks
Economic Spread Ratio, Competitors4
Chevron Corp. -12.56% — — — —
ConocoPhillips -0.31% — — — —
Exxon Mobil Corp. -5.69% — — — —
Marathon Petroleum Corp. -3.02% — — — —
Occidental Petroleum Corp. -10.57% — — — —
Pioneer Natural Resources Co. -8.21% — — — —
Valero Energy Corp. -3.07% — — — —

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2019 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,165,881 ÷ 32,663,914 = -3.57%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. EOG Resources Inc. economic spread ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Economic Profit Margin

EOG Resources Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in thousands)
Economic profit1 (1,165,881) (126,061) (3,426,210) (5,531,369) (10,501,408)
Operating revenues and other 17,379,973 17,275,399 11,208,320 7,650,632 8,757,428
Performance Ratio
Economic profit margin2 -6.71% -0.73% -30.57% -72.30% -119.91%
Benchmarks
Economic Profit Margin, Competitors3
Chevron Corp. -17.58% — — — —
ConocoPhillips -0.55% — — — —
Exxon Mobil Corp. -6.75% — — — —
Marathon Petroleum Corp. -2.00% — — — —
Occidental Petroleum Corp. -43.65% — — — —
Pioneer Natural Resources Co. -14.17% — — — —
Valero Energy Corp. -1.16% — — — —

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 Economic profit. See details »

2 2019 Calculation
Economic profit margin = 100 × Economic profit ÷ Operating revenues and other
= 100 × -1,165,881 ÷ 17,379,973 = -6.71%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. EOG Resources Inc. economic profit margin improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.