Company Profile

ConocoPhillips is one of the largest American multinational energy Corporations engaged in the exploration, production, transportation and marketing of crude oil, gas, petroleum  and other products. ConocoPhillip is a public company traded as NYSE: COP. The company was founded in 1875 by Frank Phillips, headquartered in Houston Energy Corridor, Houston Texas, USA.

 

ConocoPhillips (COP) Extended Graph Analysis

1. COP CASH FLOW

	2015	2016	2017	2018	2019	TTM
Net cash flow provided by operating activites	7,572,000,000	4,403,000,000	7,077,000,000	12,934,000,000	11,104,000,000	11,104,000,000
Net cash used for investing activities	-8,655,000,000	-3,859,000,000	7,762,000,000	-3,843,000,000	-6,618,000,000	-6,618,000,000
Net cash provided by (used for) financing activities	-1,429,000,000	764,000,000	-12,356,000,000	-9,359,000,000	-5,229,000,000	-5,229,000,000
Capital expenditure	-10,050,000,000	-4,869,000,000	-4,591,000,000	-6,750,000,000	-6,636,000,000	-6,636,000,000
Free cash flow	-2,478,000,000	-466,000,000	2,486,000,000	6,184,000,000	4,468,000,000	4,468,000,000
Working Capital	-467,000,000	1,700,000,000	7,115,000,000	5,879,000,000	9,870,000,000	9,870,000,000

Facts:

• Cash provided by operating activities was $11.104 billion in the trailing twelve months.
• Cash used for investing activities were -$6.6 billion in the trailing twelve months.
• Net cash used for financing activities were -$5 billion in the trailing twelve months.
• Capital expenditures were -$6.6 billion in the trailing twelve months.
• Free cash flow was $4.5 billion in the trailing twelve months.
• Working capital was $9.87 billion in the trailing twelve months.

Explanation:

• Cash provided by operating activities is erratic in movement in the last five years. It has a negative growth of 14% from 2018.
• Cash used for investment activities are investment in property, plant and equipment.
• Cash provided by financing activities are debt repayment, common stock repurchased and dividends paid.
• Capital expenditures are investment in property, plant and equipment.
• Free cash flow was erratic in movement in the last five years and has a negative growth of 28% from 2018.
• Working capital grew 68% in the last five years.

Interpretation

The cash flow statements were stable although there was negative growth within five years period. The company has the ability to provide cash from operations in five years and has not seen any negative cash from operations in five years.

 

2. COP BALANCE SHEET

	2015	2016	2017	2018	2019
Total cash	2,368,000,000	3,660,000,000	10,097,000,000	7,625,000,000	10,227,000,000
Current Assets	8,789,000,000	8,609,000,000	16,512,000,000	13,274,000,000	16,913,000,000
Net property, plant and equipment	66,446,000,000	58,331,000,000	45,683,000,000	45,698,000,000	42,269,000,000
Total non-current assets	88,695,000,000	81,163,000,000	56,850,000,000	56,706,000,000	53,601,000,000
Total assets	97,484,000,000	89,772,000,000	73,362,000,000	69,980,000,000	70,514,000,000
Current liabilities	9,256,000,000	6,909,000,000	9,397,000,000	7,395,000,000	7,043,000,000
Non-current liabilities	48,466,000,000	47,889,000,000	33,358,000,000	30,646,000,000	28,490,000,000
Total liabilities	57,722,000,000	54,798,000,000	42,755,000,000	38,041,000,000	35,533,000,000
Retained earnings	36,414,000,000	31,548,000,000	29,391,000,000	34,010,000,000	39,742,000,000
Stockholders equity	39,762,000,000	34,974,000,000	30,607,000,000	31,939,000,000	34,981,000,000

Facts:

• Cash was $10 billion in 2019.
• Current assets were $16.9 billion in 2019.
• Net property, plant and equipment was $42 billion in 2019.
• Non-current assets were $53.6 billion in 2019.
• Total assets were $70.5 billion in 2019.
• Current liabilities were $7 billion in 2019.
• Non-current liabilities $28 billion in 2019.
• Total liabilities were $35.5 billion in 2019.
• Retained earnings were $39.7 billion in 2019.
• Stockholders equity was $35 billion in 2019.

Explanation

• Cash represents 15% of total assets.
• Current assets represent 24% of total assets.
• Net property, plant and equipment represent 60% of total assets.
• Non-current assets represent 76% of total assets.
• Total assets grew 0.76% in one year, 2018 to 2019.
• Current liabilities represent 20% of the total liabilities.
• Non-current liabilities represent 80% of the total liabilities.
• Total liabilities represents 50% of the total liabilities and stockholders equity.
• Stockholders equity represents 50% of the total liabilities and equity.

Interpretation

The company is liquid and financially healthy. The balance sheet is strong and stable.

 

3. COP INCOME AND MARKET

	2015	2016	2017	2018	2019	TTM
Revenue	29,564,000,000	23,693,000,000	29,106,000,000	36,417,000,000	32,567,000,000	32,567,000,000
EBIT	-5,440,000,000	-4,634,000,000	2,360,000,000	8,859,000,000	7,278,000,000	7,278,000,000
Net Income	-4,428,000,000	-3,615,000,000	-855,000,000	6,257,000,000	7,189,000,000	7,189,000,000
EBITDA	2,794,000,000	4,777,000,000	5,328,000,000	16,664,000,000	16,392,000,000	16,392,000,000
Market Capitalization	57,709,000,000	62,125,000,000	65,622,000,000	70,976,000,000	70,549,000,000	52,348,000,000
Intrinsic Value	106,536,316,910	184,383,385,632	323,869,764,451	218,122,508,960	115,498,848,453	167,935,607,654

Facts:

• Revenue was $33 billion in the trailing twelve months.
• EBIT was $7 billion in the trailing twelve months.
• Net income was $7 billion the trailing twelve months.
• EBITDA was $16 billion in the trailing twelve months.
• Market capitalization was $52.348 billion in the trailing twelve months.
• Intrinsic value was $168 billion in the trailing twelve months.

Explanation

• Revenue was down by 11% from 2018 to 2019.
• EBIT represents 22% of revenue.
• Net income represents 22% of revenue.
• EBITDA represents 50% of revenue.
• Market capitalization was down 28% from 2019 to the trailing twelve months.
• Intrinsic value was up by more than 200% of the market capitalization.

Interpretation

The earnings of the company shows improvements in the last three years. Bottomline was impressive.

 

4. COP FINANCIAL RATIOS

	2015	2016	2017	2018	2019	TTM
Asset turnover (average)	0.28	0.25	0.36	0.51	0.46	0.46
Return on assets %	-4.14	-3.86	-1.05	8.73	10.23	10.23
Return on equity %	-9.66	-9.67	-2.61	20.01	21.49	21.49
Debt/Equity	0.59	0.75	0.56	0.47	0.42	0.42
Return on invested capital %	-5.61	-4.49	-0.47	13.7	15.82	15.82
Interest coverage	-6.87	-3.44	-1.38	14.57	13.24	13.24

Facts:

• Asset turnover was averaging 0.46 in the trailing twelve months.
• Return on assets was 10.23% in the trailing twelve months.
• Return on equity was 21.49% in the trailing twelve months
• Debt/Equity was 0.42 in the trailing twelve months.
• Return on invested capital was 15.82% in the trailing twelve months.
• Interest coverage was 13.24 in the trailing twelve months.

Explanation

• Asset turnover indicates that for every $1 invested in assets, COP generated 46 cents of sales.
• Return on assets indicates that every $1 invested in assets, the company produced 10.23 cents of net income.
• Return on equity indicates that for every $1 invested in equity, it generated 21.49 cents of earnings.
• Debt/Equity means that for every dollar in equity COP has 42 cents in leverage. 
• Return on invested capital means the percent of return on the invested capital.
• Interest coverage means the company has the ability to pay its current interest in cash 13 times more on due date.

Interpretation

The company’s financial ratios were impressive. The company is healthy and profitable.

 

5. COP KEY EXECUTIVE COMPENSATION

	2014	2015	2016	2017	2018
Key Executive Compensation
Salary	5,653,527	5,671,032	5,818,782	5,868,032	6,046,315
Bonus	0	0	0	0	200,000
Annual other income	0	0	0	0	0
Restricted Stock Award	15,271,390	15,906,476	15,850,148	17,274,323	30,769,372
Securities options	13,426,434	13,892,148	10,602,130	11,492,442	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	8,992,090	6,457,004	6+904518	12,568,554	12,679,435
Other compensation	1,021,157	798,083	590,167	853,753	4,097,176
Total	60,785,066	49,678,375	48,458,456	55,612,133	67,594,977
Ryan M. Lance/Chairman of the Board and CEO
Salary	1,700,000	1,700,000	1,700,000	1,700,000	1,700,000
Bonus	0	0	0	0	0
Annual other income	0	0	0	0	0
Restricted Stock Award	6,116,797	6,630,693	6,607,217	6,993,660	11,006,296
Securities options	5,790,798	5,790,780	4,419,261	4,652,424	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	3,568,640	2,524,160	2,638,400	4,596,800	4,868,800
Other compensation	467,776	301,786	245,437	327,393	372,815
Total	27,577,071	21,339,719	19,212,038	21,848,930	23,405,270
Don E Wallette/Executive VP and CFO
Salary	874,000	874,000	939,550	961,400	985,444
Bonus	0	0	0	0	1
Annual other income	0	0	0	0	0
Restricted Stock Award	1,800,494	1,951,740	1,944,837	2,264,449	3,563,725
Securities options	1,704,492	1,704,798	1,301,146	1,506,438	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	1,102,988	811,072	911,364	1,720,906	1,763,945
Other compensation	1,333,181	85,414	61,530	109,606	109,403
Total	7,878,314	6,518,635	7,406,824	9,498,081	10,272,497
Alan Hirshberg/EVP, Production Drilling & Projects
Salary	1,085,667	1,096,000	1,178,200	1,205,600	1,205,600
Bonus	0	0	0	0	0
Annual other income	0	0	0	0	0
Restricted Stock Award	3,219,979	2,761,283	2,751,504	3,203,706	5,040,839
Securities options	2,016,711	2,411,712	1,840,685	2,131,596	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	1,602,444	1,169,651	1,314,282	2,481,728	2,343,084
Other compensation	146,230	159,072	121,457	170,957	156,827
Total	11,747,432	8,787,738	9,468,653	9,632,808	12,970,551
Matthew J. Fox/EVP and COO
Salary	1,241,000	1,241,000	1,241,000	1,241,000	1,241,000
Bonus	0	0	0	0	0
Annual other income	0	0	0	0	0
Restricted Stock Award	2,884,300	3,126,619	3,115,552	3,297,776	5,189,837
Securities options	2,730,645	2,730,348	2,083,774	2,194,020	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	1,872,421	1,324,395	1,384,336	2,625,956	2,554,599
Other compensation	177,039	159,327	91,371	149,519	150,731
Total	9,323,404	8,707,373	8,330,391	9,946,434	9,394,458
Janet L Carrig/Former Senior VP, Legal General Counsel & Corporate ecretary
Salary	752,860	760,032	760,032	760,032	672,333
Bonus	0	0	0	0	0
Annual other income	0	0	0	0	0
Restricted Stock Award	1,249,820	1,436,141	1,431,038	1,514,732	2,383,843
Securities options	1,183,788	1,254,510	957,264	1,007,964	0
LTIP Payout	0	0	0	0	0
Non-Equity Compensation	845,597	627,726	656,136	1,143,164	806,641
Other compensation	96,931	92,484	70,372	96,278	3,281,368
Total	4,258,845	4,324,910	4,040,550	4,685,880	7,144,185
Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary
Salary					241,938
Bonus					200,000
Annual other income					0
Restricted Stock Award					3,583,832
Securities options					0
LTIP Payout					0
Non-Equity Compensation					342,366
Other compensation					26,031
Total					4,407,016

Facts:

• The total key executive compensation was $67.594,977 in 2018.
• Ryan M. Lance, Chairman of the Board and CEO compensation was $23,405,270 in 2018.
• Don E. Wallette, EVP and CFO compensation was $10,292,497 in 2018.
• Alan Hirshberg, EVP Production Drilling and Project compensation was $12,970,551 in 2018.
• Mathew J. Fox, EVP and COO compensation was $9,394,458 in 2018.
• Janet L. Carrig, Former Senior VP, Legal General Counsel & Corporate Secretary compensation was $7,144,185 in 2018.
• Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary compensation was $4,407,016 in 2018.

Explanation

• The total key executive compensation represents 0.94% of the net income.
• CEO compensation represents 35% of the total key executive compensation.
• CFO compensation represents 15% of the total key executive compensation.
• EVP Production Drilling and Project compensation represents 19% of the total key executive compensation.
• EVP and COO compensation represents 14% of the total key executive compensation.
• Former Senior VP, Legal General Counsel & Corporate Secretary compensation represents 11% of the total key executive compensation.
• Senior VP, Legal General Counsel & Corporate Secretary compensation represents 7% of the total key executive compensation.

Interpretation

The key executive compensation was  less than 1 percent which is fair enough for the compensation of the executives.

 

6. COP LOBBYING AND CONTRIBUTIONS

Period	Amount	Period	Amount
2020	1,473,459	2008	8,459,053
2019	4,870,000	2007	4,089,568
2018	3,080,000	2006	2,038,291
2017	3,010,000	2005	5,218,084
2016	2,498,000	2004	2,670,438
2015	3,135,583	2003	1,380,000
2014	3,969,840	2002	1,157,000
2013	4,242,353	2001	878,639
2012	3,863,736	2000	1,235,159
2011	20,557,043	1999	1,340,812
2010	19,626,382	1998	10,000
2009	18,069,858

Explanation

ConocoPhillips has been spending annual lobbying and contributions since 1998. The amount varies annually. A Note from OpenSecrets is quoted as follows:

“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”

Source: OpenSecret.org Center for Responsive Politics

 

7. COP FINANCIAL STRENGTH

DATA

Working capital	9,870,000,000
Total assets	70,514,000,000
Sales	32,567,000,000
EBIT	7,278,000,000
Market value of equity	$52,348,000,000
Book value of total liabilities	35,533,000,000
Retained earnings	39,742,000,000

CALCULATION

	Ratio	Score	Result
A – Working Capital / Total Assets	0.1400	1.20	0.17
B – Retained Earnings / Total Assets	0.56	1.40	0.79
C – EBIT / Total Assets	0.10	3.30	0.34
D – Market Value of Equity / Book Value of Total Liabilities	1.47	0.60	0.88
E – Sales / Total Assets	0.46	1.0	0.46
Z-Score			2.64

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The Z-Score of COP was 2.64.  According to Dr. Edward Altman a grading scale of 1.8 – 3.0 is more likely to declare bankruptcy. The figures used above are based on the latest financial reports. The Altman score weights different profitability and liquidity metrics to arrive at the overall score. This measurement is not calculated for the purpose of estimating the company will declare bankruptcy but it helps in comparing other companies that have become insolvent.

Hence, this measurement categorized the profitability or return on investment, liquidity, leverage and the efficiency in operating.

Conclusion

ConocoPhillips has been in the industry for more than a century and has been managed successfully. The company is stable and has a strong balance sheet and is  profitable. 

CITATION

http://www.conocophillips.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000000303

https://www.morningstar.com/stocks/xnys/cop/quote

Researched and written by Criselda