Exxon Mobil Corp. (NYSE:XOM)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited a significant recovery from a negative value of approximately -34.1 billion US dollars in 2020 to a positive figure of about 32.7 billion US dollars in 2021. This upward trend continued into 2022, reaching around 62.7 billion US dollars, which represents the peak in the observed period. However, from 2023 onwards, there was a noticeable decline, with NOPAT reducing to approximately 37.9 billion US dollars in 2023 and further down to 31.5 billion US dollars in 2024.

Cost of Capital

The cost of capital showed a rising trend over the five years analyzed. Starting at 10.89% in 2020, it steadily increased each year, ending at 12.93% in 2024. This increment suggests a progressively higher required return on invested capital, potentially reflecting increasing risk or market conditions.

Invested Capital

The invested capital remained relatively stable between 2020 and 2021, with a slight decrease from about 273.9 billion US dollars to 272.7 billion US dollars. From 2022 onwards, there was a consistent increase, rising to nearly 297 billion in 2022, then 307.2 billion in 2023, and sharply increasing to approximately 379 billion US dollars by 2024. This growth indicates substantial asset or capital investments during this period.

Economic Profit

Economic profit demonstrated considerable volatility throughout the period. A significant negative economic profit of around -63.9 billion US dollars was recorded in 2020. This loss narrowed dramatically by 2021 to almost break even at -372 million US dollars. Subsequently, there was a marked improvement in 2022, yielding a positive economic profit of roughly 24.5 billion US dollars. Nevertheless, the trend reversed in the last two years, declining to a slight negative in 2023 (-1.4 billion US dollars) and further widening to around -17.5 billion US dollars in 2024. This pattern mirrors the fluctuation in NOPAT and the rising cost of capital, impacting overall 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 demonstrated significant volatility over the analyzed five-year period. In 2020, a substantial negative economic profit of -63,917 million US dollars was recorded. This negative figure sharply decreased in magnitude by 2021, falling to -372 million US dollars, signaling an improvement. A notable turnaround occurred in 2022 with a positive economic profit of 24,526 million US dollars, indicating a period of profitable value creation. However, this trend reversed in 2023, with economic profit dropping back into negative territory at -1,439 million US dollars and further declining to -17,543 million US dollars in 2024, pointing to deteriorating performance during the last two years.

Invested Capital

Invested capital exhibited a consistent increasing trend throughout the period. Starting at 273,920 million US dollars in 2020, invested capital slightly decreased in 2021 to 272,673 million US dollars but then rose steadily to 297,049 million in 2022 and continued increasing in 2023 to 307,196 million US dollars. The most significant increase was observed in 2024, reaching 378,995 million US dollars, which represents a substantial escalation in the capital invested over the five-year span.

Economic Spread Ratio

The economic spread ratio mirrored the fluctuations seen in economic profit. It started with a strongly negative value of -23.33% in 2020, indicating that returns were far below the cost of capital. This ratio substantially improved in 2021 to nearly zero at -0.14%, and then shifted to a positive 8.26% in 2022, reflecting a period where the company generated returns above its cost of capital. Nevertheless, the ratio declined again in 2023 to -0.47% and further to -4.63% in 2024, demonstrating a weakening in value creation and an erosion of economic profitability in recent years.

Overall Insights

The data reveals a business landscape characterized by a highly cyclical performance in terms of economic profitability and economic spread. Following a strong recovery after 2020, the company achieved positive economic profit and spread in 2022 but could not sustain this positive momentum. Despite considerable growth in invested capital, the diminished economic spread and increasing negative economic profit in 2023 and 2024 suggest challenges in generating adequate returns on the expanded capital base. This pattern may indicate operational inefficiencies, market pressures, or increased costs impacting profitability during the latest periods analyzed.

Sales and Other Operating Revenue

The sales and other operating revenue experienced significant growth overall from 2020 through 2024. Starting at approximately $178.6 billion in 2020, revenue increased to nearly $276.7 billion in 2021, followed by a sharp rise to around $398.7 billion in 2022. This peak was followed by a decline in 2023 to about $334.7 billion, with a slight increase to $339.2 billion projected for 2024. The data indicates volatility in revenue after 2022, suggesting possible market fluctuations or operational challenges.

Economic Profit

The economic profit shows a pronounced shift across the periods. In 2020, the company recorded a substantial loss of $63.9 billion, which markedly improved by 2021, narrowing the loss to $372 million. The year 2022 marked a positive turnaround with an economic profit of approximately $24.5 billion. However, this improvement was not sustained, as losses reappeared in the subsequent years, with $1.4 billion lost in 2023 and a more significant loss of $17.5 billion projected for 2024. This pattern highlights challenges in maintaining profitability despite fluctuations in revenue.

Economic Profit Margin

The economic profit margin reflects the changes observed in economic profit. In 2020, the margin was deeply negative at -35.79%, nearly breaching neutrality in 2021 at -0.13%, and becoming positive at 6.15% in 2022, indicating a brief period of effective value creation. Nevertheless, this margin declined again in 2023 to -0.43% and further deteriorated to -5.17% in 2024, confirming the difficulties faced in sustaining profitable operations. The margin trend closely follows economic profit, reinforcing the sensitivity of profitability to overall economic conditions and operational performance.