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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

ConocoPhillips, economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net operating profit after taxes (NOPAT)¹	9,976)	12,357)	21,159)	10,273)	(2,991)
Cost of capital²	14.76%	15.18%	15.40%	14.74%	13.94%
Invested capital³	106,371)	81,278)	75,520)	76,355)	50,870)

Economic profit⁴	(5,724)	17)	9,528)	(979)	(10,083)

Based on: 10-K (reporting date: 2024-12-31), 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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 9,976 – 14.76% × 106,371 = -5,724

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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.	ConocoPhillips economic profit decreased from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips, NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income (loss) attributable to ConocoPhillips	9,245)	10,957)	18,680)	8,079)	(2,701)
Deferred income tax expense (benefit)¹	367)	1,144)	2,086)	1,346)	(834)
Increase (decrease) in allowance²	4)	1)	—)	(2)	(9)
Increase (decrease) in LIFO reserve³	22)	(58)	(102)	164)	(68)
Increase (decrease) in equity equivalents⁴	393)	1,087)	1,984)	1,508)	(911)
Interest and debt expense	783)	780)	805)	884)	806)
Interest expense, operating lease liability⁵	47)	29)	16)	18)	22)
Adjusted interest and debt expense	830)	809)	821)	902)	828)
Tax benefit of interest and debt expense⁶	(174)	(170)	(172)	(189)	(174)
Adjusted interest and debt expense, after taxes⁷	656)	639)	649)	712)	654)
Interest income	(402)	(412)	(195)	(33)	(100)
Investment income, before taxes	(402)	(412)	(195)	(33)	(100)
Tax expense (benefit) of investment income⁸	84)	87)	41)	7)	21)
Investment income, after taxes⁹	(318)	(325)	(154)	(26)	(79)
Net income (loss) attributable to noncontrolling interest	—)	—)	—)	—)	46)
Net operating profit after taxes (NOPAT)	9,976)	12,357)	21,159)	10,273)	(2,991)

Based on: 10-K (reporting date: 2024-12-31), 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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance.

³ Addition of increase (decrease) in LIFO reserve. See details »

⁴ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to ConocoPhillips.

⁵ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,024 × 4.62% = 47

⁶ 2024 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= 830 × 21.00% = 174

⁷ Addition of after taxes interest expense to net income (loss) attributable to ConocoPhillips.

⁸ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 402 × 21.00% = 84

⁹ Elimination of after taxes investment income.

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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.	ConocoPhillips NOPAT decreased from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips, cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Income tax provision (benefit)	4,427)	5,331)	9,548)	4,633)	(485)
Less: Deferred income tax expense (benefit)	367)	1,144)	2,086)	1,346)	(834)
Add: Tax savings from interest and debt expense	174)	170)	172)	189)	174)
Less: Tax imposed on investment income	84)	87)	41)	7)	21)
Cash operating taxes	4,150)	4,270)	7,594)	3,469)	502)

Based on: 10-K (reporting date: 2024-12-31), 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).

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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.	ConocoPhillips cash operating taxes decreased from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips, invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Short-term debt	1,035)	1,074)	417)	1,200)	619)
Long-term debt	23,289)	17,863)	16,226)	18,734)	14,750)
Operating lease liability¹	1,024)	697)	545)	667)	785)
Total reported debt & leases	25,348)	19,634)	17,188)	20,601)	16,154)
Common stockholders’ equity	64,796)	49,279)	48,003)	45,406)	29,849)
Net deferred tax (assets) liabilities²	11,196)	8,558)	7,485)	5,839)	3,384)
Allowance³	7)	3)	2)	2)	4)
LIFO reserve⁴	113)	91)	149)	251)	87)
Equity equivalents⁵	11,316)	8,652)	7,636)	6,092)	3,475)
Accumulated other comprehensive (income) loss, net of tax⁶	6,473)	5,673)	6,000)	4,950)	5,218)
Noncontrolling interests	—)	—)	—)	—)	—)
Adjusted common stockholders’ equity	82,585)	63,604)	61,639)	56,448)	38,542)
Marketable securities⁷	(1,562)	(1,960)	(3,307)	(694)	(3,826)
Invested capital	106,371)	81,278)	75,520)	76,355)	50,870)

Based on: 10-K (reporting date: 2024-12-31), 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).

¹ Addition of capitalized operating leases.

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

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of LIFO reserve. See details »

⁵ Addition of equity equivalents to common stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of marketable securities.

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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.	ConocoPhillips invested capital increased from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips, cost of capital calculations

Dec 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	123,993)	123,993)	÷	148,954)	=	0.83	0.83	×	16.93%	=	14.09%
Debt, including finance leases³	23,937)	23,937)	÷	148,954)	=	0.16	0.16	×	5.08% × (1 – 21.00%)	=	0.64%
Operating lease liability⁴	1,024)	1,024)	÷	148,954)	=	0.01	0.01	×	4.62% × (1 – 21.00%)	=	0.03%
Total:	148,954)					1.00					14.76%

Based on: 10-K (reporting date: 2024-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt, including finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	130,581)	130,581)	÷	151,028)	=	0.86	0.86	×	16.93%	=	14.64%
Debt, including finance leases³	19,750)	19,750)	÷	151,028)	=	0.13	0.13	×	5.16% × (1 – 21.00%)	=	0.53%
Operating lease liability⁴	697)	697)	÷	151,028)	=	0.00	0.00	×	4.13% × (1 – 21.00%)	=	0.02%
Total:	151,028)					1.00					15.18%

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

¹ US$ in millions

² Equity. See details »

³ Debt, including finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	132,067)	132,067)	÷	149,477)	=	0.88	0.88	×	16.93%	=	14.96%
Debt, including finance leases³	16,865)	16,865)	÷	149,477)	=	0.11	0.11	×	4.91% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	545)	545)	÷	149,477)	=	0.00	0.00	×	2.99% × (1 – 21.00%)	=	0.01%
Total:	149,477)					1.00					15.40%

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

¹ US$ in millions

² Equity. See details »

³ Debt, including finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	118,465)	118,465)	÷	142,844)	=	0.83	0.83	×	16.93%	=	14.04%
Debt, including finance leases³	23,712)	23,712)	÷	142,844)	=	0.17	0.17	×	5.26% × (1 – 21.00%)	=	0.69%
Operating lease liability⁴	667)	667)	÷	142,844)	=	0.00	0.00	×	2.66% × (1 – 21.00%)	=	0.01%
Total:	142,844)					1.00					14.74%

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

¹ US$ in millions

² Equity. See details »

³ Debt, including finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	66,179)	66,179)	÷	86,961)	=	0.76	0.76	×	16.93%	=	12.88%
Debt, including finance leases³	19,997)	19,997)	÷	86,961)	=	0.23	0.23	×	5.72% × (1 – 21.00%)	=	1.04%
Operating lease liability⁴	785)	785)	÷	86,961)	=	0.01	0.01	×	2.78% × (1 – 21.00%)	=	0.02%
Total:	86,961)					1.00					13.94%

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

¹ US$ in millions

² Equity. See details »

³ Debt, including finance leases. See details »

⁴ Operating lease liability. See details »

ConocoPhillips, economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(5,724)	17)	9,528)	(979)	(10,083)
Invested capital²	106,371)	81,278)	75,520)	76,355)	50,870)
Performance Ratio
Economic spread ratio³	-5.38%	0.02%	12.62%	-1.28%	-19.82%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	-5.22%	-5.87%	4.63%	-4.39%	-18.45%
Exxon Mobil Corp.	-4.60%	-0.44%	8.28%	-0.11%	-23.31%
Occidental Petroleum Corp.	-9.35%	-5.77%	6.64%	-5.22%	-34.09%

Based on: 10-K (reporting date: 2024-12-31), 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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -5,724 ÷ 106,371 = -5.38%

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.	ConocoPhillips economic spread ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips, economic profit margin calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(5,724)	17)	9,528)	(979)	(10,083)
Sales and other operating revenues	54,745)	56,141)	78,494)	45,828)	18,784)
Performance Ratio
Economic profit margin²	-10.46%	0.03%	12.14%	-2.14%	-53.68%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	-5.62%	-6.33%	4.17%	-5.46%	-38.53%
Exxon Mobil Corp.	-5.14%	-0.41%	6.17%	-0.11%	-35.76%
Occidental Petroleum Corp.	-23.39%	-11.60%	10.21%	-11.68%	-121.13%

Based on: 10-K (reporting date: 2024-12-31), 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).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales and other operating revenues
= 100 × -5,724 ÷ 54,745 = -10.46%

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.	ConocoPhillips economic profit margin deteriorated from 2022 to 2023 and from 2023 to 2024.

ConocoPhillips (NYSE:COP)

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