Exxon Mobil Corp. (NYSE:XOM)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant volatility over the five-year period. It started with a substantial negative value in 2020, indicating a large loss. This was followed by a strong recovery in 2021, reaching a positive profit of 32,736 million USD. The upward trend continued into 2022 with a peak profit of 62,749 million USD. However, 2023 saw a notable decline to 37,855 million USD, with a further decrease in 2024 to 31,476 million USD. Overall, the NOPAT demonstrates a recovery from a significant loss and then a decreasing trend after 2022.

Cost of Capital

The cost of capital increased gradually over the period. Starting at 10.73% in 2020, it rose each year to reach 12.74% in 2024. This upward trend suggests rising expense for funding or investing capital, which could impact the company’s profitability and investment decisions.

Invested Capital

Invested capital showed a consistent upward trend throughout the period. Beginning at 273,920 million USD in 2020, it remained relatively stable through 2021 but then increased sharply from 297,049 million USD in 2022 to 378,995 million USD in 2024. This significant growth in invested capital over time may indicate expansion or increased asset base, but also implies higher capital deployment requirements.

Economic Profit

Economic profit fluctuated considerably and displayed periods of both value destruction and creation. There was a large negative economic profit in 2020, aligning with the negative NOPAT of that year. In 2021, economic profit hovered near zero, indicating breakeven value creation relative to cost of capital. The value increased notably in 2022, reaching a positive 25,092 million USD, reflecting strong value creation. However, this was followed by a decline into negative territory again in 2023 and 2024, suggesting the company destroyed economic value in these later years despite positive accounting profits.

Insights

The overall financial performance indicates a recovery after 2020 losses, peaking in 2022, followed by a weakening trend in 2023 and 2024. Meanwhile, invested capital steadily increased, and the rising cost of capital imposed greater financial burden. While accounting profits remained positive in the last three years, economic profit analysis reveals the company struggled to generate returns above its cost of capital in the most recent years, signaling potential concerns about the efficiency of capital utilization and sustained value creation.

The financial data reveals significant fluctuations in the profitability metrics over the five-year period ending December 31, 2024. Both net income and net operating profit after taxes (NOPAT) demonstrate notable volatility, reflecting changing business dynamics and external factors impacting the company.

Net Income (Loss) Attributable to ExxonMobil

The company experienced a substantial net loss in the year 2020, with a figure of negative $22.44 billion. This was followed by a strong recovery in 2021, marked by a sharp turnaround to a net income of $23.04 billion. The upward trend continued robustly into 2022, reaching a peak of $55.74 billion, which represents the highest profit in the examined period. However, the subsequent years showed a moderation in profitability, with net income declining to $36.01 billion in 2023 and further to $33.68 billion in 2024. Despite these decreases, profits remained significantly positive compared to the loss in 2020.

Net Operating Profit After Taxes (NOPAT)

Similar to net income, NOPAT followed a correlated pattern. The year 2020 registered a pronounced negative figure of $34.10 billion, indicating operational challenges and tax impacts during that period. Recovery commenced in 2021 with NOPAT switching to a positive $32.74 billion, followed by a peak in 2022 at $62.75 billion, surpassing the net income peak and underscoring efficient operational performance. Afterwards, NOPAT experienced a decline to $37.86 billion in 2023 and further contraction to $31.48 billion in 2024. These trends suggest the company maintained operational profitability after taxes but faced headwinds causing reduced returns post-2022.

Overall, the data indicates that the company underwent a significant turnaround after 2020, reflecting recovery from adverse conditions that year. The peak in 2022 represents a period of considerable profitability, although the subsequent decline in the following two years points to either reduced market conditions, increased costs, or other operational challenges. Despite the decline post-2022, the company remained profitable with both net income and NOPAT well above the negative values seen in 2020.

The financial data exhibits significant fluctuations in both income tax expense (benefit) and cash operating taxes over the observed five-year period.

Income Tax Expense (Benefit)

The income tax expense started with a substantial benefit of -5,632 million USD at the end of 2020, indicating a tax advantage or credit in that year. However, this shifted markedly in 2021, changing to a positive expense of 7,636 million USD. The upward trend continued into 2022, peaking at 20,176 million USD. Although there was a decline in 2023 to 15,429 million USD, the figure remained significantly elevated compared to 2021 and 2020. By 2024, the expense decreased slightly further to 13,810 million USD, yet maintaining a higher level than in the initial years.

Cash Operating Taxes

The cash operating taxes demonstrate a strong growth trajectory from 2,695 million USD in 2020 to 7,904 million USD in 2021. This upward momentum accelerated, reaching 16,789 million USD in 2022. Following this peak, cash operating taxes slightly declined to 14,713 million USD in 2023 but rebounded modestly to 14,916 million USD in 2024. The overall pattern suggests a multi-year increase with a peak in 2022, followed by stabilization at a high level.

Overall, both tax-related metrics indicate increased tax obligations and cash outflows in the recent years, especially from 2021 onwards. The simultaneous rise in income tax expense and cash operating taxes reflects heightened tax liabilities that stabilize but remain elevated compared to 2020 levels. The initial benefit observed in 2020 may represent one-time tax credits or adjustments, followed by normalization or growth in tax expenses consistent with business conditions in the subsequent years.

Total reported debt & leases

The total reported debt and leases exhibit a significant downward trend from 2020 to 2022, decreasing from $72,802 million to $46,787 million. This reduction suggests a strategy of debt reduction or improved liability management. From 2022 onwards, the figure stabilizes, with a slight increase to $48,188 million by 2024, indicating a relatively steady level of debt in the most recent periods.

Total ExxonMobil share of equity

Shareholder equity shows a consistent upward trend over the entire period. Starting at $157,150 million in 2020, it increases steadily each year, reaching a notable $263,705 million in 2024. This growth reflects strengthening equity positions, possibly driven by retained earnings, asset appreciation, or additional capital infusion.

Invested capital

Invested capital remains relatively stable between 2020 and 2021, with a slight slight decline from $273,920 million to $272,673 million. From 2021 onwards, invested capital steadily rises, reaching $378,995 million in 2024. This upward trend may indicate increased investments in assets or expansion initiatives to support long-term operational growth.

Overall, the financial data indicates a strategic reduction and subsequent stabilization of debt, coupled with strong growth in shareholder equity. The increase in invested capital alongside equity growth suggests ongoing investment in operational capacity supported by a solid equity base, contributing to a potentially stronger financial position over the assessed period.

Economic Profit

The economic profit exhibits significant variability across the periods presented. It starts with a substantial loss in 2020, amounting to approximately -63,485 million US dollars. This is followed by a sharp improvement in 2021, reaching a marginal positive profit of 114 million US dollars. The upward trend continues robustly into 2022, with economic profit surging to 25,092 million US dollars. However, this positive trajectory reverses in 2023, where economic profit declines sharply to a slight loss of 860 million US dollars, and further deteriorates in 2024 with a larger loss of 16,819 million US dollars. This pattern indicates a period of recovery and growth culminating in 2022, followed by weakening performance in the subsequent two years.

Invested Capital

Invested capital demonstrates a generally increasing trend over the analyzed period. It starts at approximately 273,920 million US dollars in 2020, slightly decreasing to 272,673 million US dollars in 2021. From there, invested capital grows steadily each year, reaching 297,049 million US dollars in 2022, 307,196 million US dollars in 2023, and a notable increase to 378,995 million US dollars in 2024. This upward trend reflects an expansion in the company's asset base or capital deployment over time.

Economic Spread Ratio

The economic spread ratio reveals fluctuations in the company's ability to generate returns above its cost of capital. Beginning at a deeply negative level of -23.18% in 2020, the ratio moves to nearly neutral in 2021 at 0.04%. It then improves significantly in 2022, reaching 8.45%, suggesting a period where returns exceeded capital costs by a measurable margin. Nevertheless, this positive performance declines in the following years, registering slightly negative spreads of -0.28% in 2023 and -4.44% in 2024. The ratio's oscillations highlight changes in the efficiency of capital utilization and profitability across the period.

Summary of Trends

Overall, the data reflects a cycle of sharp improvement followed by deterioration in economic profit and economic spread ratio, against a backdrop of steadily increasing invested capital. The peak profitability and spread in 2022 imply a favorable operating environment or effective management of resources during that year. The subsequent declines in 2023 and 2024 suggest challenges in maintaining profitability and returns above cost of capital, despite increasing invested capital. This may indicate external market pressures, rising costs, or inefficiencies developing over the latter period. The growing invested capital levels imply either ongoing investments or asset acquisitions, which have yet to translate into sustained economic profit or positive spreads in recent years.

The financial data over the specified periods reveals several important trends and fluctuations in key performance indicators.

Economic Profit

The economic profit exhibited significant volatility across the years. It began with a substantial negative value of -63,485 million US dollars in 2020, which shifted dramatically to a marginal positive figure of 114 million in 2021. This positive momentum continued into 2022 with a peak economic profit of 25,092 million US dollars. However, the subsequent years saw a reversal, with economic profit declining to a slightly negative figure of -860 million in 2023, followed by a more pronounced negative outcome of -16,819 million in 2024. This pattern indicates considerable instability in generating returns beyond the cost of capital, with a peak performance in 2022 that was not sustained.

Sales and Other Operating Revenue

Sales and other operating revenues demonstrated a general upward trend from 2020 through 2022, rising from 178,574 million US dollars to 398,675 million US dollars, representing robust growth. A decline occurred in 2023 where revenue decreased to 334,697 million, followed by a slight recovery in 2024 to 339,247 million US dollars. The fluctuations in revenue, particularly the peak in 2022 followed by a decline, may reflect changes in market conditions or operational factors affecting the company's sales performance.

Economic Profit Margin

The economic profit margin mirrored the pattern observed in economic profit, showing a severe negative margin of -35.55% in 2020, improving to near breakeven at 0.04% in 2021, and reaching a positive margin of 6.29% in 2022. Subsequently, the margin contracted to a slight negative of -0.26% in 2023 and declined further to -4.96% in 2024. This suggests that profitability relative to revenue improved substantially up to 2022, but deteriorated in the following years, indicating challenges in maintaining efficient profitability levels.