EOG Resources Inc. (NYSE:EOG)

Income (loss) before income taxes

There was a significant improvement in income before income taxes over the period. In 2015, a substantial loss of approximately $6.8 billion was recorded. This loss sharply decreased in 2016 to about $1.5 billion, indicating a moving trend towards profitability. By 2017, the segment reported a positive income of around $623 thousand, which further increased in 2018 to about $4.1 billion. In 2019, the income slightly declined but remained strong at approximately $3.5 billion.

Operating revenues and other

Operating revenues exhibited a consistent upward trajectory throughout the analyzed years. Starting at about $8.3 billion in 2015, revenues dipped slightly in 2016 to approximately $7.3 billion. From 2017 onwards, revenues grew markedly, reaching over $10.8 billion in 2017, nearly $16.8 billion in 2018, and peaking at about $17.1 billion in 2019.

Segment profit margin

The segment profit margin showed a pronounced recovery and growth pattern. In 2015, the margin was deeply negative at -82.18%, reflecting the substantial loss. This negative margin shrank to -20.56% in 2016, signaling notable improvement. From 2017, the margin turned positive, measuring 5.73%, and improved further to 24.41% in 2018. In 2019, there was a slight decrease to 20.24%, although the margin remained robust and positive.

Overall Analysis

The segment experienced a dramatic turnaround from a heavy loss-making position in 2015 to sustained profitability by 2017 and beyond. This improvement was supported by steadily increasing operating revenues and an expanding profit margin, indicating enhanced operational efficiency and market conditions. Despite a minor decline in both income before taxes and profit margin in 2019, the segment maintained strong financial performance compared to earlier years.

Income (loss) before income taxes

The income before income taxes exhibited significant fluctuations over the observed period. Beginning at 183,427 thousand USD in 2015, it sharply declined to 50,072 thousand USD in 2016. Subsequently, there was a recovery in 2017 with income rising to 106,548 thousand USD, followed by a further increase reaching 151,288 thousand USD in 2018. In 2019, income decreased again to 117,203 thousand USD. Overall, the trend indicates volatility with a notable dip in 2016 and partial recovery in subsequent years, though not reaching the initial 2015 level.

Operating revenues and other

Operating revenues and other income figures started at 380,809 thousand USD in 2015. There was a substantial drop to 242,424 thousand USD in 2016, representing the lowest point in the period. Revenues then increased gradually to 284,713 thousand USD in 2017 and 309,860 thousand USD in 2018. The year 2019 saw a decrease to 271,106 thousand USD. This pattern displays a sharp decline in 2016 followed by partial recovery, but revenues did not return to the levels seen in 2015.

Segment profit margin

The segment profit margin showed a declining trend between 2015 and 2016, falling from 48.17% to 20.65%. This margin recovered to 37.42% in 2017 and peaked at 48.82% in 2018, slightly surpassing the initial level recorded in 2015. In 2019, the margin decreased to 43.23%. The margin fluctuations closely mirror income and revenue patterns, with a notable low in 2016 and a recovery phase culminating in a peak in 2018 before a moderate decline.

Income (loss) before income taxes

The income before income taxes has shown significant improvement over the observed period, though it remains negative throughout. Starting from a substantial loss of approximately $272 million at the end of 2015, the loss decreased notably to about $102 million in 2016. This decreasing trend continued through 2017 and 2018, reaching a minimum loss of approximately $10 million in 2018. However, in 2019, the loss increased again to approximately $24 million, indicating some volatility in pre-tax profitability within the segment.

Operating revenues and other

Operating revenues experienced fluctuations during the period. Revenues rose from about $62 million in 2015 to a peak of nearly $171 million in 2018, representing a substantial increase indicating a positive revenue growth trajectory until 2018. However, in 2019, revenues declined sharply to approximately $57 million, nearly returning to the 2015 level. This pattern suggests increased revenue generation capabilities by 2018 with a subsequent fall-off the following year.

Segment profit margin (%)

The segment profit margin remained negative throughout the five years, reflecting ongoing operating challenges. The margin improved dramatically from -438.22% in 2015 to -5.97% in 2018, indicating enhanced operational efficiency or reduced losses relative to revenues during these years. Despite this improvement, the margin deteriorated again to -41.79% in 2019, signaling a setback in profitability relative to revenue in the final year of the period.

The analysis of the United States reportable segment over the period from 2015 through 2019 reveals significant fluctuations and an overall improving trend in financial performance and asset base.

Income (loss) before income taxes

Starting with a substantial loss of approximately $6.8 billion in 2015, the segment's income before income taxes improved markedly over the subsequent years. In 2016, the loss narrowed significantly to about $1.5 billion. By 2017, the segment returned to profitability with an income of approximately $623 million, followed by further increases to around $4.1 billion in 2018. However, in 2019, income before income taxes decreased slightly to roughly $3.45 billion, indicating a small contraction but maintaining strong profitability compared to the earlier years.

Total assets

Total assets in the segment showed consistent growth throughout the period. They increased from approximately $25.4 billion at the end of 2015 to about $36.3 billion by the end of 2019. This upward trend suggests continuous investment and expansion within the segment, with asset growth accelerating notably between 2017 and 2019.

Segment Return on Assets (ROA)

The segment ROA mirrors the improvements observed in income before taxes. It started at a low negative level of -26.95% in 2015, improving to -5.4% in 2016. In 2017, the segment achieved a positive ROA of 2.2%, which further increased significantly to 12.36% in 2018 before decreasing to 9.52% in 2019. These figures illustrate a strong recovery in asset efficiency and profitability, despite the small decline in the final year.

In summary, the segment experienced a deep loss and negative returns in the early period but showed marked recovery and growth in earnings, asset base, and return on assets from 2016 to 2019. Although profitability and ROA slightly declined in 2019 compared to 2018, the segment maintained a solid positive performance well above the levels seen in the initial years. The overall trend indicates successful operational and financial improvements within the segment over the five-year period.

Income (loss) before income taxes

There was a notable fluctuation in income before income taxes over the five-year period. The value started at 183,427 thousand USD at the end of 2015, then sharply declined to 50,072 thousand USD in 2016. It rebounded to 106,548 thousand USD in 2017, followed by a further increase to 151,288 thousand USD in 2018, before decreasing again to 117,203 thousand USD in 2019. Overall, the trend shows significant variability with the highest income reported in 2015 and 2018.

Total assets

Total assets remained relatively stable during 2015 and 2016, at approximately 886,826 and 889,253 thousand USD respectively. There was an increase to 974,477 thousand USD in 2017, indicating asset growth during that year. However, in 2018 total assets saw a substantial decline to 629,633 thousand USD, followed by a recovery to 705,747 thousand USD in 2019. The data suggests an asset base contraction in 2018 with partial recovery thereafter.

Segment ROA (Return on Assets)

The segment return on assets exhibited variability throughout the period. Initially, it was relatively high at 20.68% in 2015 but dropped sharply to 5.63% in 2016. The ratio improved to 10.93% in 2017 and peaked at 24.03% in 2018, coinciding with a reduction in assets but higher income. In 2019, the ROA decreased to 16.61%. These fluctuations indicate changing efficiency in generating income from assets, with the highest efficiency noted in 2018.

Summary

Overall, the data reveals a dynamic performance in terms of profitability and asset management. The income before income taxes and segment ROA show a pronounced volatility, with significant decreases in 2016 and improvements in 2017 and 2018. Total assets peaked in 2017 but contracted considerably in 2018, possibly influencing the ROA increase that year. The dip in assets combined with relatively strong income suggests improved asset utilization efficiency during 2018. The decline in both income and ROA in 2019 indicates a moderation in performance after the previous peak. These trends reflect an environment of fluctuating operational outcomes and asset adjustments across the analyzed period.

Income (loss) before income taxes

The segment consistently reported losses before income taxes throughout the analyzed period. The loss narrowed significantly from -272,469 thousand US dollars in 2015 to -10,208 thousand US dollars in 2018, indicating an improvement in operational profitability. However, in 2019, the loss increased again to -23,613 thousand US dollars, suggesting a partial reversal of the previous improvement trend.

Total assets

Total assets showed a declining trend from 736,510 thousand US dollars in 2015 to 546,002 thousand US dollars in 2017. Subsequently, there was a sharp drop in 2018 to 126,108 thousand US dollars, followed by a minor increase to 143,919 thousand US dollars in 2019. The significant reduction between 2017 and 2018 may indicate divestitures, asset impairments, or reclassification of assets within the segment.

Segment Return on Assets (ROA)

Segment ROA remained negative over the entire period, reflecting ongoing challenges in generating profit relative to asset base. The ROA improved from -37.0% in 2015 to -8.1% in 2018, consistent with the reduced losses reported. However, in 2019, the ROA deteriorated to -16.4%, paralleling the increased loss before income taxes and the minor rise in assets. This suggests a weakening in asset efficiency or profitability during the final year analyzed.

The analysis of the financial data for the United States segment reveals several notable trends and changes over the five-year period ending December 31, 2019.

Operating revenues and other

Operating revenues experienced fluctuations across the years. There was a decline from 8.31 billion US dollars in 2015 to 7.32 billion in 2016, marking a downward shift. However, 2017 saw a significant rebound with revenues increasing to 10.87 billion US dollars. This upward trend continued sharply into 2018, reaching approximately 16.79 billion US dollars, and slightly increased again to 17.05 billion in 2019. Overall, the segment displayed strong revenue growth after the initial dip in 2016.

Total assets

Total assets showed consistent growth each year, increasing from about 25.35 billion US dollars in 2015 to 36.27 billion in 2019. The steady rise suggests ongoing capital investment or asset expansion within the segment, reflecting an expanding operational base or increased resource holdings over the period.

Segment asset turnover

The asset turnover ratio, which indicates the efficiency in utilizing assets to generate revenue, exhibited a mixed pattern. The ratio decreased from 0.33 in 2015 to 0.26 in 2016, corresponding with the revenue drop and asset growth. It then improved substantially to 0.38 in 2017, reflecting enhanced asset use efficiency concurrent with the revenue increase. The peak was reached in 2018 at 0.51, indicating optimal utilization of assets to generate revenues. In 2019, the ratio slightly declined to 0.47 but remained significantly higher than the early years, showing sustained asset efficiency improvement overall.

In summary, after a decline in revenues and efficiency in 2016, the segment saw progressive recovery and growth with improving asset utilization, accompanied by a continuous increase in total assets. This suggests a strengthening operational and financial position over the analyzed period.

Operating Revenues and Other

Operating revenues experienced a notable decline from 2015 to 2016, decreasing from approximately 381 million US dollars to 242 million US dollars. This was followed by a moderate recovery in the subsequent years, reaching about 285 million US dollars in 2017 and approximately 310 million US dollars in 2018. However, in 2019, the revenues declined again to around 271 million US dollars, indicating some volatility in revenues over the five-year period.

Total Assets

Total assets remained relatively stable between 2015 and 2017, increasing modestly from about 887 million US dollars to nearly 974 million US dollars. There was a significant drop in total assets in 2018, declining sharply to about 630 million US dollars. In 2019, total assets showed some recovery, rising to approximately 706 million US dollars but not reaching the levels seen in the earlier years.

Segment Asset Turnover Ratio

The segment asset turnover ratio displayed notable fluctuations over the period. It declined from 0.43 in 2015 to 0.27 in 2016, reflecting reduced efficiency in generating revenues from assets. The ratio remained relatively low in 2017 at 0.29 before improving substantially in 2018 to 0.49, suggesting enhanced asset utilization that year. In 2019, the ratio declined again to 0.38, indicating a decrease in operational efficiency compared to the previous year but still better than the low levels of 2016 and 2017.

Overall Trend Analysis

Over the five-year span, the segment showed trends of fluctuation across all key areas: revenues, assets, and asset utilization. The initial sharp decline in revenues and asset turnover in 2016 suggests operational challenges or market impacts during that year. Improvements in 2017 and particularly 2018 indicate a phase of recovery and better asset efficiency. The dip in assets in 2018 accompanied by high asset turnover might indicate asset disposal or revaluation leading to more efficient use of remaining assets. The declines in 2019 across revenues and asset turnover suggest a partial reversal of the prior year's gains. The data portrays a segment facing cyclical or market-driven volatility with intermittent improvements in efficiency and moderate recovery in asset base.

The segment data reveals notable fluctuations and trends across the five-year period analyzed.

Operating Revenues and Other

The revenues display significant variability over the years. Starting at approximately $62.2 million in 2015, there is a marked increase to about $85.0 million in 2016. This is followed by a sharp decline in 2017 to roughly $51.5 million. Subsequently, revenues surged dramatically in 2018, reaching nearly $171.0 million, before decreasing again in 2019 to approximately $56.5 million. The data suggests a pattern of volatility with a peak in 2018.

Total Assets

Total assets generally decline from 2015 through 2017. They started at about $736.5 million in 2015, fell to $663.1 million in 2016, and further decreased to approximately $546.0 million in 2017. However, a significant drop is observed in 2018, with assets reduced sharply to around $126.1 million, followed by a slight increase in 2019 to about $143.9 million. This pattern indicates an overall reduction in assets with a substantial contraction in 2018.

Segment Asset Turnover

The segment asset turnover ratio, which measures efficiency in using assets to generate revenue, exhibits considerable volatility. Initially, the ratio was low at 0.08 in 2015, increased moderately to 0.13 in 2016, then declined to 0.09 in 2017. In 2018, there was a remarkable increase to 1.36, suggesting a highly efficient use of assets that year, coinciding with the revenue peak and asset reduction. In 2019, the ratio decreased to 0.39 but remained elevated compared to prior years except 2018.

Overall, the segment experienced substantial fluctuations in revenues and asset base, with 2018 standing out as an exceptional year marked by peak revenues, dramatic asset decline, and high asset turnover efficiency. The decreases in both revenue and assets in 2019 point to a partial reversal of the 2018 anomaly, while the improved asset turnover ratio relative to earlier years suggests a sustained improvement in asset utilization efficiency compared to the pre-2018 period.

The analysis of the United States reportable segment data reveals several notable trends in capital investment and asset depreciation between 2015 and 2019.

Additions to oil and gas properties, excluding dry hole costs

This item shows fluctuations over the five-year period. Starting at approximately $4.50 billion in 2015, there was a significant increase in 2016 to about $6.22 billion. The following year, 2017, experienced a substantial decline to around $4.07 billion. In 2018 and 2019, capital expenditures rebounded to approximately $6.16 billion and $6.21 billion respectively, returning near the elevated levels observed in 2016.

Depreciation, depletion and amortization (DD&A)

Depreciation, depletion, and amortization expenses demonstrate a relatively stable but modest upward trend. Beginning at roughly $3.14 billion in 2015, the expense increased to about $3.37 billion in 2016. It then experienced slight decreases in 2017 and 2018, measuring approximately $3.27 billion and $3.30 billion respectively. In 2019, the expense rose again to nearly $3.65 billion, the highest in the period under review.

Segment capital expenditures to depreciation ratio

This ratio, which measures capital expenditures relative to depreciation expense, shows variability with an overall tendency toward higher capital investment relative to asset depletion. It started at 1.43 in 2015, peaked at 1.85 in 2016, followed by a decline to 1.24 in 2017. The ratio then increased to 1.87 in 2018 before slightly decreasing to 1.70 in 2019. The pattern indicates that in most years capital expenditures outpaced depreciation, suggesting ongoing asset base expansion or renewal.

In summary, capital expenditures demonstrate cyclical behavior with peaks occurring in even years except for 2019. Depreciation expenses have gradually increased, reflecting both the aging and usage of assets. The capital expenditures to depreciation ratio supports the observation of an expansionary capital investment strategy throughout most of the analyzed period.

Additions to oil and gas properties, excluding dry hole costs

The additions to oil and gas properties showed significant volatility over the observed period. In 2015, investments were substantial at approximately $102.4 million, followed by a decrease to $75.4 million in 2016. A marked increase occurred in 2017, reaching about $145.9 million, the highest in the five-year span. However, this was followed by a steep decline in 2018 to a minimal $1.6 million, before rebounding moderately to $53.3 million in 2019. This pattern indicates irregular capital investment activity with a notable drop in 2018.

Depreciation, depletion and amortization (DD&A)

DD&A exhibited a consistent downward trend throughout the period. Starting from approximately $154.9 million in 2015, the expense gradually decreased each year to $145.6 million in 2016, $115.3 million in 2017, $92.0 million in 2018, and reaching the lowest level of roughly $79.4 million by 2019. This decline suggests ongoing amortization of existing assets with potentially reduced asset bases or lower DD&A rates.

Segment capital expenditures to depreciation ratio

The ratio of segment capital expenditures to depreciation fluctuated notably. In 2015, the ratio stood at 0.66, indicating capital expenditures were about two-thirds of depreciation. The ratio decreased to 0.52 in 2016, suggesting lower reinvestment relative to asset consumption. In 2017, there was a significant surge to 1.27, implying capital expenditures exceeded depreciation, possibly indicating asset growth or replacement. Conversely, in 2018, the ratio plummeted drastically to 0.02, highlighting minimal capital investment relative to depreciation expense. By 2019, the ratio partially recovered to 0.67, nearing the initial levels observed in 2015.

Additions to Oil and Gas Properties, Excluding Dry Hole Costs

The additions to oil and gas properties show a marked decline over the five-year period. Beginning at a high of $112,316 thousand in 2015, the figure dropped substantially to $30,734 thousand in 2016. This downward trend continued with further reductions to $14,932 thousand in 2017. In 2018, there was a moderate recovery to $37,838 thousand, but this was followed by another decrease to $12,233 thousand in 2019, indicating an overall contraction in capital deployment toward property additions within this segment.

Depreciation, Depletion and Amortization

Depreciation, depletion, and amortization expenses display considerable volatility across the reported years. An initial amount of $18,928 thousand in 2015 rose sharply to $42,436 thousand in 2016, then decreased to $24,870 thousand in 2017. A substantial increase occurred again in 2018, reaching $46,938 thousand, before sharply falling to $18,021 thousand in 2019. These fluctuations suggest variable write-downs and asset depreciation rates, potentially reflective of changing asset bases or valuation adjustments within the segment.

Segment Capital Expenditures to Depreciation Ratio

The ratio of segment capital expenditures to depreciation reveals a significant decline from 5.93 in 2015 to below 1.0 in subsequent years, specifically 0.72 in 2016, dipping slightly further to 0.60 in 2017, increasing modestly to 0.81 in 2018, and falling again to 0.68 in 2019. This pattern indicates a substantial reduction in capital expenditure relative to the level of depreciation, which may imply reduced reinvestment in segment assets or a shift in capital allocation strategy during the period analyzed.