Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

EOG Resources Inc., consolidated cash flow statement

US$ in thousands

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)
Depreciation, depletion and amortization	3,749,704)	3,435,408)	3,409,387)	3,553,417)	3,313,644)
Impairments	517,896)	347,021)	479,240)	620,267)	6,613,546)
Stock-based compensation expenses	174,738)	155,337)	133,849)	128,090)	130,577)
Deferred income taxes	631,658)	894,156)	(1,473,872)	(515,206)	(2,482,307)
(Gains) losses on asset dispositions, net	(123,613)	(174,562)	99,096)	(205,835)	8,798)
Other, net	4,496)	7,066)	6,546)	61,690)	11,896)
Items not requiring (providing) cash	4,954,879)	4,664,426)	2,654,246)	3,642,423)	7,596,154)
Dry hole costs	28,001)	5,405)	4,609)	10,657)	14,746)
Total (gains) losses	(180,275)	165,640)	(19,828)	99,608)	(61,924)
Net cash received from (payments for) settlements of commodity derivative contracts	231,229)	(258,906)	7,438)	(22,219)	730,114)
Mark-to-market commodity derivative contracts	50,954)	(93,266)	(12,390)	77,389)	668,190)
Excess tax benefits from stock-based compensation	—)	—)	—)	(29,357)	(26,058)
Other, net	962)	3,108)	1,204)	10,971)	12,532)
Accounts receivable	(91,792)	(368,180)	(392,131)	(232,799)	641,412)
Inventories	90,284)	(395,408)	(174,548)	170,694)	58,450)
Accounts payable	168,539)	439,347)	324,192)	(74,048)	(1,409,197)
Accrued taxes payable	40,122)	(92,461)	(63,937)	92,782)	11,798)
Other assets	358,001)	(125,435)	(658,609)	(40,636)	118,143)
Other liabilities	(56,619)	10,949)	(89,871)	(16,225)	(66,257)
Changes in components of working capital and other assets and liabilities	508,535)	(531,188)	(1,054,904)	(100,232)	(645,651)
Changes in components of working capital associated with investing and financing activities	(115,061)	301,083)	89,992)	(156,102)	499,767)
Net cash provided by operating activities	8,163,180)	7,768,608)	4,265,336)	2,359,063)	3,595,165)
Additions to oil and gas properties	(6,151,885)	(5,839,294)	(3,950,918)	(2,489,756)	(4,725,150)
Additions to other property, plant and equipment	(270,641)	(237,181)	(173,324)	(93,039)	(288,013)
Proceeds from sales of assets	140,292)	227,446)	226,768)	1,119,215)	192,807)
Net cash received from Yates transaction	—)	—)	—)	54,534)	—)
Other investing activities	(10,000)	(19,993)	—)	—)	—)
Changes in components of working capital associated with investing activities	115,061)	(301,140)	(89,935)	156,102)	(499,900)
Net cash used in investing activities	(6,177,173)	(6,170,162)	(3,987,409)	(1,252,944)	(5,320,256)
Net commercial paper borrowings (repayments)	—)	—)	—)	(259,718)	259,718)
Long-term debt borrowings	—)	—)	—)	991,097)	990,225)
Long-term debt repayments	(900,000)	(350,000)	(600,000)	(563,829)	(500,000)
Dividends paid	(588,200)	(438,045)	(386,531)	(372,845)	(367,005)
Excess tax benefits from stock-based compensation	—)	—)	—)	29,357)	26,058)
Treasury stock purchased	(25,152)	(63,456)	(63,408)	(82,125)	(48,791)
Proceeds from stock options exercised and employee stock purchase plan	17,946)	20,560)	20,840)	23,296)	22,690)
Debt issuance costs	(5,016)	—)	—)	(1,602)	(5,951)
Repayment of finance lease obligation	(12,899)	(8,219)	(6,555)	(6,353)	(6,156)
Changes in components of working capital associated with financing activities	—)	57)	(57)	—)	133)
Net cash provided by (used in) financing activities	(1,513,321)	(839,103)	(1,035,711)	(242,722)	370,921)
Effect of exchange rate changes on cash	(348)	(37,937)	(7,883)	17,992)	(14,537)
Increase (decrease) in cash and cash equivalents	472,338)	721,406)	(765,667)	881,389)	(1,368,707)
Cash and cash equivalents at beginning of year	1,555,634)	834,228)	1,599,895)	718,506)	2,087,213)
Cash and cash equivalents at end of year	2,027,972)	1,555,634)	834,228)	1,599,895)	718,506)

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).

Analysis of the cash flow patterns between 2015 and 2019 reveals a significant transition from a period of financial volatility and impairment to a phase of strong cash generation and capital reinvestment. Net cash provided by operating activities grew substantially over the period, rising from 3.59 billion US dollars in 2015 to 8.16 billion US dollars by 2019, indicating a robust recovery in core operational efficiency.

Operating Cash Flow and Earnings Quality: A notable divergence exists between net income and net cash provided by operating activities, particularly in the early part of the period. In 2015 and 2016, the entity reported net losses of 4.52 billion US dollars and 1.10 billion US dollars, respectively. However, operating cash flows remained positive due to significant non-cash charges. Specifically, impairment charges of 6.61 billion US dollars in 2015 and consistent annual depreciation, depletion, and amortization exceeding 3.3 billion US dollars served as primary offsets to net losses, maintaining liquidity.
Capital Expenditure and Investing Strategy: Investing activities are characterized by a consistent and increasing commitment to oil and gas property additions. Following a dip to 2.49 billion US dollars in 2016, capital expenditures on oil and gas properties trended upward, reaching 6.15 billion US dollars in 2019. This progression suggests a strategic shift toward aggressive capacity expansion and asset development. Asset disposition proceeds peaked in 2016 at 1.12 billion US dollars but settled into a lower range of 140 million to 227 million US dollars in subsequent years.
Financing Activities and Debt Management: The financing profile shifted from liquidity procurement to debt reduction and shareholder returns. While 2015 saw net commercial paper and long-term debt borrowings, the subsequent years were marked by consistent debt repayments. Long-term debt repayments totaled 900 million US dollars in 2019 alone. Simultaneously, dividends paid to shareholders exhibited a steady upward trend, increasing from 367 million US dollars in 2015 to 588 million US dollars in 2019, reflecting increased confidence in sustainable cash flow generation.
Liquidity and Cash Position: The ending cash and cash equivalents balance demonstrated a general growth trajectory, ending the period at 2.03 billion US dollars in 2019, compared to 718 million US dollars in 2016. This accumulation of cash, despite heavy capital expenditures and debt repayments, is driven by the significant expansion of operating cash flows, which grew by approximately 127% between 2016 and 2019.

Overall, the financial trajectory is defined by the ability to generate substantial operating cash flows that sufficiently fund both an expanding capital expenditure program and a disciplined debt repayment schedule, while simultaneously increasing distributions to shareholders.

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EOG Resources Inc. (NYSE:EOG)

Cash Flow Statement