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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Pioneer Natural Resources Co., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	5,533)	9,759)	2,831)	(149)	1,075)
Cost of capital²	14.86%	14.52%	14.22%	14.40%	14.65%
Invested capital³	33,333)	32,194)	32,653)	17,004)	16,681)

Economic profit⁴	580)	5,086)	(1,811)	(2,597)	(1,370)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 5,533 – 14.86% × 33,333 = 580

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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.	Pioneer Natural Resources Co. economic profit increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Pioneer Natural Resources Co., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss) attributable to common stockholders	4,894)	7,845)	2,118)	(200)	756)
Deferred income tax expense (benefit)¹	506)	1,807)	583)	(52)	236)
Increase (decrease) in employee-related obligations²	—)	(1)	(2)	(3)	(21)
Increase (decrease) in equity equivalents³	506)	1,806)	581)	(55)	215)
Interest expense	153)	128)	161)	129)	121)
Interest expense, operating lease liability⁴	15)	9)	7)	5)	10)
Adjusted interest expense	168)	137)	168)	134)	131)
Tax benefit of interest expense⁵	(35)	(29)	(35)	(28)	(28)
Adjusted interest expense, after taxes⁶	133)	108)	132)	106)	104)
Net operating profit after taxes (NOPAT)	5,533)	9,759)	2,831)	(149)	1,075)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in employee-related obligations.

³ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to common stockholders.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 423 × 3.60% = 15

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 168 × 21.00% = 35

⁶ Addition of after taxes interest expense to net income (loss) attributable to common stockholders.

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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.	Pioneer Natural Resources Co. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Pioneer Natural Resources Co., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax provision (benefit)	1,353)	2,106)	628)	(61)	231)
Less: Deferred income tax expense (benefit)	506)	1,807)	583)	(52)	236)
Add: Tax savings from interest expense	35)	29)	35)	28)	28)
Cash operating taxes	882)	328)	80)	19)	23)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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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.	Pioneer Natural Resources Co. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Pioneer Natural Resources Co., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current portion of debt	28)	779)	244)	140)	450)
Finance lease liability, current	21)	20)	18)	17)	16)
Long-term debt, excluding current portion	4,807)	4,125)	6,688)	3,160)	1,839)
Finance lease liability, noncurrent	481)	501)	521)	539)	556)
Operating lease liability¹	423)	361)	364)	210)	306)
Total reported debt & leases	5,760)	5,786)	7,835)	4,066)	3,167)
Equity	23,171)	22,541)	22,837)	11,569)	12,119)
Net deferred tax (assets) liabilities²	4,402)	3,867)	2,038)	1,366)	1,389)
Employee-related obligations³	—)	—)	1)	3)	6)
Equity equivalents⁴	4,402)	3,867)	2,039)	1,369)	1,395)
Accumulated other comprehensive (income) loss, net of tax⁵	—)	—)	—)	—)	—)
Adjusted equity	27,573)	26,408)	24,876)	12,938)	13,514)
Short-term investment⁶	—)	—)	(58)	—)	—)
Invested capital	33,333)	32,194)	32,653)	17,004)	16,681)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of employee-related obligations.

⁴ Addition of equity equivalents to equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of short-term investment.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Pioneer Natural Resources Co. invested capital decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Pioneer Natural Resources Co., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	54,649)	54,649)	÷	60,862)	=	0.90	0.90	×	16.29%	=	14.63%
Long-term debt and finance lease liability, including current portion³	5,790)	5,790)	÷	60,862)	=	0.10	0.10	×	2.76% × (1 – 21.00%)	=	0.21%
Operating lease liability⁴	423)	423)	÷	60,862)	=	0.01	0.01	×	3.60% × (1 – 21.00%)	=	0.02%
Total:	60,862)					1.00					14.86%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liability, including current portion. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	48,190)	48,190)	÷	54,759)	=	0.88	0.88	×	16.29%	=	14.34%
Long-term debt and finance lease liability, including current portion³	6,208)	6,208)	÷	54,759)	=	0.11	0.11	×	1.82% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	361)	361)	÷	54,759)	=	0.01	0.01	×	2.50% × (1 – 21.00%)	=	0.01%
Total:	54,759)					1.00					14.52%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liability, including current portion. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	54,212)	54,212)	÷	63,111)	=	0.86	0.86	×	16.29%	=	14.00%
Long-term debt and finance lease liability, including current portion³	8,535)	8,535)	÷	63,111)	=	0.14	0.14	×	1.99% × (1 – 21.00%)	=	0.21%
Operating lease liability⁴	364)	364)	÷	63,111)	=	0.01	0.01	×	1.80% × (1 – 21.00%)	=	0.01%
Total:	63,111)					1.00					14.22%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liability, including current portion. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	32,156)	32,156)	÷	37,048)	=	0.87	0.87	×	16.29%	=	14.14%
Long-term debt and finance lease liability, including current portion³	4,682)	4,682)	÷	37,048)	=	0.13	0.13	×	2.43% × (1 – 21.00%)	=	0.24%
Operating lease liability⁴	210)	210)	÷	37,048)	=	0.01	0.01	×	2.50% × (1 – 21.00%)	=	0.01%
Total:	37,048)					1.00					14.40%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liability, including current portion. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	22,532)	22,532)	÷	25,856)	=	0.87	0.87	×	16.29%	=	14.20%
Long-term debt and finance lease liability, including current portion³	3,018)	3,018)	÷	25,856)	=	0.12	0.12	×	4.60% × (1 – 21.00%)	=	0.42%
Operating lease liability⁴	306)	306)	÷	25,856)	=	0.01	0.01	×	3.30% × (1 – 21.00%)	=	0.03%
Total:	25,856)					1.00					14.65%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liability, including current portion. See details »

⁴ Operating lease liability. See details »

Pioneer Natural Resources Co., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	580)	5,086)	(1,811)	(2,597)	(1,370)
Invested capital²	33,333)	32,194)	32,653)	17,004)	16,681)
Performance Ratio
Economic spread ratio³	1.74%	15.80%	-5.55%	-15.27%	-8.21%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	-4.54%	5.96%	-3.12%	-17.30%	-12.56%
ConocoPhillips	1.05%	13.67%	-0.29%	-18.96%	-0.31%
Exxon Mobil Corp.	0.09%	8.82%	0.39%	-22.87%	-5.69%
Marathon Petroleum Corp.	3.36%	12.37%	-2.20%	-26.24%	-3.02%
Occidental Petroleum Corp.	-4.68%	7.74%	-4.44%	-33.49%	-10.57%
Valero Energy Corp.	0.25%	11.88%	-0.93%	-16.77%	-3.07%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 580 ÷ 33,333 = 1.74%

⁴ Click competitor name to see calculations.

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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.	Pioneer Natural Resources Co. economic spread ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Pioneer Natural Resources Co., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	580)	5,086)	(1,811)	(2,597)	(1,370)
Revenue from contracts with purchasers	19,374)	24,384)	17,870)	7,024)	9,671)
Performance Ratio
Economic profit margin²	3.00%	20.86%	-10.13%	-36.97%	-14.17%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	-4.89%	5.37%	-3.88%	-36.13%	-17.58%
ConocoPhillips	1.52%	13.15%	-0.49%	-51.34%	-0.55%
Exxon Mobil Corp.	0.08%	6.57%	0.39%	-35.07%	-6.75%
Marathon Petroleum Corp.	1.45%	4.85%	-1.17%	-26.39%	-2.00%
Occidental Petroleum Corp.	-9.42%	11.90%	-9.93%	-118.99%	-43.65%
Valero Energy Corp.	0.09%	3.35%	-0.36%	-10.58%	-1.16%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue from contracts with purchasers
= 100 × 580 ÷ 19,374 = 3.00%

³ Click competitor name to see calculations.

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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.	Pioneer Natural Resources Co. economic profit margin improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Pioneer Natural Resources Co. (NYSE:PXD)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin