Expand Energy Corp. (NASDAQ:EXE)

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Expand Energy Corp., effective income tax rate (EITR) reconciliation

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Federal statutory tax rate	21.00%	21.00%	21.00%	21.00%
State income taxes (net of federal income tax benefit)	0.60%	2.50%	1.20%	0.00%
Deferred remeasurement due to state rate changes	-5.60%	-0.60%	0.80%	0.00%
Change in valuation allowance due to acquisitions	-1.70%	0.00%	0.50%	0.00%
Change in valuation allowance excluding impact of acquisitions	2.10%	-1.10%	-58.80%	0.00%
Research and development tax credits	3.70%	-0.10%	-0.50%	0.00%
Transaction costs	-2.60%	0.00%	0.10%	0.00%
Compensation costs related to acquired company	-1.20%	0.00%	0.00%	0.00%
Other	-1.20%	0.70%	0.50%	-22.70%
Effective tax rate	15.10%	22.40%	-35.20%	-1.70%

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).

The effective income tax rate (EITR) for the period between 2021 and 2024 exhibited extreme volatility, transitioning from significant tax benefits to positive tax expenses. While the federal statutory tax rate remained constant at 21.00%, the actual tax burden fluctuated significantly due to various temporary and permanent adjustments.

Effective Tax Rate Trends: A dramatic swing in the EITR is observed, starting at -1.70% in 2021 and dropping to a low of -35.20% in 2022. This trend reversed sharply in 2023, with the rate climbing to 22.40%, slightly exceeding the statutory rate, before moderating to 15.10% in 2024.
Impact of Valuation Allowances: Changes in valuation allowances served as the primary driver of EITR volatility in the early part of the period. In 2022, a substantial reduction in the valuation allowance excluding acquisitions decreased the EITR by 58.80%, contributing heavily to the negative tax rate for that year. By 2024, this trend reversed, with the valuation allowance increasing the EITR by 2.10%.
State and Regulatory Adjustments: State income taxes provided a consistent upward pressure on the EITR, peaking at 2.50% in 2023. Conversely, deferred remeasurements due to state rate changes became an increasingly significant factor in reducing the EITR, moving from a 0.80% increase in 2022 to a 5.60% decrease in 2024.
Operational and Transactional Impacts: Research and development tax credits had a negligible effect from 2021 to 2023 but shifted to a 3.70% increase in the EITR by 2024. Additionally, 2024 saw several new downward pressures on the tax rate, including transaction costs (-2.60%) and compensation costs related to acquired companies (-1.20%).
Analysis of Other Adjustments: The "Other" category exerted a massive downward influence in 2021 at -22.70%, which effectively neutralized the statutory rate during that fiscal year. In subsequent years, this item became relatively immaterial, fluctuating between -1.20% and 0.70%.

Overall, the transition from 2021 to 2024 indicates a shift from a period dominated by large, non-recurring valuation allowance adjustments and miscellaneous benefits toward a tax profile more closely aligned with, though still below, the federal statutory rate.

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Expand Energy Corp., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Property, plant and equipment	(1,730)	(295)	(253)	—)
Derivative instruments	—)	(166)	—)	—)
Right of use lease asset	(36)	(25)	—)	—)
Other	(3)	(4)	(5)	(3)
Deferred tax liabilities	(1,769)	(490)	(258)	(3)
Property, plant and equipment	—)	—)	—)	340)
Net operating loss carryforwards	1,258)	848)	870)	784)
Carrying value of debt	4)	25)	29)	31)
Excess business interest expense carryforward	777)	646)	665)	684)
Capital loss carryforwards	103)	78)	101)	—)
Tax credit carryforwards	53)	15)	—)	—)
Contract liabilities	261)	—)	—)	—)
Asset retirement obligations	123)	65)	91)	86)
Investments	—)	1)	11)	66)
Future lease payments	36)	25)	—)	—)
Accrued liabilities	39)	15)	21)	38)
Derivative instruments	13)	—)	137)	289)
Other	24)	17)	29)	68)
Deferred tax assets	2,691)	1,735)	1,954)	2,386)
Valuation allowance	(343)	(312)	(345)	(2,383)
Deferred tax assets after valuation allowance	2,348)	1,423)	1,609)	3)
Net deferred tax asset (liability)	579)	933)	1,351)	—)

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).

The company's deferred tax position has undergone a significant transformation between 2021 and 2024, characterized by a substantial increase in both gross deferred tax assets and deferred tax liabilities, while the net deferred tax asset position has trended downward since 2022.

Deferred Tax Liabilities Trends: Total deferred tax liabilities expanded aggressively from 3 million US dollars in 2021 to 1,769 million US dollars by the end of 2024. This growth is primarily driven by property, plant and equipment, which evolved from a liability of 253 million US dollars in 2022 to 1,730 million US dollars in 2024. This pattern typically indicates accelerated tax depreciation relative to book depreciation resulting from significant capital expenditures.
Deferred Tax Asset Composition: Gross deferred tax assets fluctuated, declining from 2,386 million US dollars in 2021 to 1,735 million US dollars in 2023 before rebounding to 2,691 million US dollars in 2024. Key contributors to these assets include net operating loss carryforwards, which rose to 1,258 million US dollars in 2024, and excess business interest expense carryforwards, which reached 777 million US dollars in the same period. Additionally, a new component for contract liabilities emerged in 2024, contributing 261 million US dollars to the assets.
Valuation Allowance Analysis: A critical shift occurred in the valuation allowance, which dropped from 2,383 million US dollars in 2021 to a range between 312 million and 345 million US dollars from 2022 through 2024. The drastic reduction in this allowance suggests a significant increase in management's confidence regarding the realization of deferred tax assets through future taxable income.
Net Deferred Tax Position: The net deferred tax asset decreased from 1,351 million US dollars in 2022 to 579 million US dollars in 2024. Although deferred tax assets after valuation allowance increased to 2,348 million US dollars in 2024, the simultaneous surge in deferred tax liabilities related to capital assets has compressed the net asset position over the most recent three-year period.

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Expand Energy Corp., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
	Deferred income tax assets	589)	933)	1,351)	—)
	Deferred income tax liabilities	(10)	—)	—)	—)

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).

A consistent reduction in deferred income tax assets is evident over the three-year period ending December 31, 2024. This contraction reflects a substantial decrease in the future tax benefits available to the organization.

Deferred Income Tax Asset Trend: Deferred income tax assets declined from US$ 1,351 million in 2022 to US$ 933 million in 2023, and further dropped to US$ 589 million by December 31, 2024. This represents a cumulative decrease of approximately 56.4% over the observed timeframe, indicating a steady utilization of tax credits or the reversal of temporary differences.
Deferred Income Tax Liability Position: While no deferred income tax liabilities were recorded between 2021 and 2023, a liability of US$ 10 million emerged by the end of 2024. This transition, although minor in magnitude relative to the assets, marks a shift in the tax timing profile of the operations.

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Expand Energy Corp., Financial Data: Reported vs. Adjusted

Expand Energy Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Adjustment to Total Assets
Total assets (as reported)	27,894)	14,376)	15,468)	11,009)
Less: Noncurrent deferred tax assets, net	589)	933)	1,351)	—)
Total assets (adjusted)	27,305)	13,443)	14,117)	11,009)
Adjustment to Total Liabilities
Total liabilities (as reported)	10,329)	3,647)	6,344)	5,338)
Less: Noncurrent deferred tax liabilities, net	(10)	—)	—)	—)
Total liabilities (adjusted)	10,339)	3,647)	6,344)	5,338)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	17,565)	10,729)	9,124)	5,671)
Less: Net deferred tax assets (liabilities)	579)	933)	1,351)	—)
Stockholders’ equity (adjusted)	16,986)	9,796)	7,773)	5,671)
Adjustment to Net Income (loss)
Net income (loss) (as reported)	(714)	2,419)	4,936)	6,328)
Add: Deferred income tax expense (benefit)	(123)	428)	(1,332)	(106)
Net income (loss) (adjusted)	(837)	2,847)	3,604)	6,222)

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).

The financial position of Expand Energy Corp. is characterized by significant growth in total assets and stockholders' equity, contrasted by a consistent decline in net income culminating in a loss by the end of the observed period. The removal of deferred taxes results in a consistent reduction of reported total assets and stockholders' equity from 2022 through 2024.

Asset and Equity Adjustments: Reported total assets grew from 11,009 million in 2021 to 27,894 million in 2024. The adjusted total assets remain lower than reported figures starting in 2022, with the discrepancy reaching 1,351 million in 2022 and 933 million in 2023. This downward adjustment is mirrored in stockholders' equity, where reported equity rose to 17,565 million by 2024, while adjusted equity was lower at 16,986 million. These patterns indicate that deferred tax assets contribute significantly to the reported book value.
Net Income Trends: A sharp downward trend in profitability is evident, with reported net income falling from 6,328 million in 2021 to a reported loss of 714 million in 2024. The removal of deferred tax effects altered these results variably across the period: adjusted net income was lower than reported income in 2022 and 2024, but higher in 2023. In 2024, the adjustment increased the net loss to 837 million, suggesting that tax-related adjustments further strained the bottom line during the period of loss.
Liability Analysis: Total liabilities exhibited volatility, decreasing to 3,647 million in 2023 before surging to 10,329 million in 2024. Until 2024, reported and adjusted liabilities remained identical. However, in 2024, adjusted liabilities increased slightly to 10,339 million, indicating a minor adjustment related to the removal of deferred tax liabilities.

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Expand Energy Corp., Financial Ratios: Reported vs. Adjusted

Expand Energy Corp., adjusted financial ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Net Profit Margin
Reported net profit margin	-16.76%	40.00%	34.95%	86.67%
Adjusted net profit margin	-19.65%	47.08%	25.52%	85.22%
Total Asset Turnover
Reported total asset turnover	0.15	0.42	0.91	0.66
Adjusted total asset turnover	0.16	0.45	1.00	0.66
Financial Leverage
Reported financial leverage	1.59	1.34	1.70	1.94
Adjusted financial leverage	1.61	1.37	1.82	1.94
Return on Equity (ROE)
Reported ROE	-4.06%	22.55%	54.10%	111.59%
Adjusted ROE	-4.93%	29.06%	46.37%	109.72%
Return on Assets (ROA)
Reported ROA	-2.56%	16.83%	31.91%	57.48%
Adjusted ROA	-3.07%	21.18%	25.53%	56.52%

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).

The financial performance of Expand Energy Corp. between 2021 and 2024 is characterized by a severe contraction in profitability and a marked decline in asset utilization efficiency. A transition from exceptionally high returns in 2021 to negative returns by 2024 is observed across all primary performance indicators.

Profitability Margins and Returns: Net profit margins exhibit extreme volatility, beginning at 86.67% in 2021 and ending at -16.76% in 2024. This decline is mirrored in the Return on Equity (ROE) and Return on Assets (ROA), both of which shifted from high double- or triple-digit percentages to negative values by the end of the period. The reported ROE decreased from 111.59% to -4.06%, while the reported ROA fell from 57.48% to -2.56%.
Asset Utilization Efficiency: Total asset turnover shows a sharp deterioration after 2022. The reported ratio increased from 0.66 in 2021 to 0.91 in 2022, but subsequently crashed to 0.42 in 2023 and 0.15 in 2024, suggesting a substantial decrease in the ability to generate revenue from the asset base.
Financial Leverage: Financial leverage remained relatively stable compared to profitability metrics, though a fluctuating trend is noted. The reported leverage ratio declined from 1.94 in 2021 to a low of 1.34 in 2023, before rebounding to 1.59 in 2024. Adjusted leverage figures remained consistently close to reported figures, showing a slight increase in 2022 and 2024.
Impact of Deferred Tax Adjustments: The removal of deferred taxes reveals significant variances between reported and adjusted financial health. In 2023, the adjustment led to an increase in the net profit margin from 40.00% to 47.08% and an increase in ROA from 16.83% to 21.18%, indicating that deferred tax expenses weighed down reported results. Conversely, in 2024, the adjusted net profit margin (-19.65%) and adjusted ROA (-3.07%) were both lower than their reported counterparts, suggesting that deferred tax benefits may have partially masked the depth of the losses.

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	(714)	2,419)	4,936)	6,328)
Revenues	4,259)	6,047)	14,123)	7,301)
Profitability Ratio
Net profit margin¹	-16.76%	40.00%	34.95%	86.67%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	(837)	2,847)	3,604)	6,222)
Revenues	4,259)	6,047)	14,123)	7,301)
Profitability Ratio
Adjusted net profit margin²	-19.65%	47.08%	25.52%	85.22%

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).

2024 Calculations

¹ Net profit margin = 100 × Net income (loss) ÷ Revenues
= 100 × -714 ÷ 4,259 = -16.76%

² Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Revenues
= 100 × -837 ÷ 4,259 = -19.65%

The financial performance of Expand Energy Corp. between 2021 and 2024 is characterized by a substantial contraction in both absolute profitability and profit margins. A consistent downward trajectory in net income is evident, culminating in a net loss by the end of the 2024 fiscal year.

Net Income Trends: Reported net income declined from US$ 6,328 million in 2021 to a loss of US$ 714 million by December 31, 2024. Adjusted net income followed a similar downward path, falling from US$ 6,222 million in 2021 to a loss of US$ 837 million in 2024. The shift from significant positive earnings to negative territory indicates a severe deterioration in the bottom line over the four-year period.
Adjusted Net Profit Margin Analysis: The adjusted net profit margin exhibited high volatility and a general decline. Starting at a peak of 85.22% in 2021, the margin experienced a sharp contraction to 25.52% in 2022. Although a partial recovery occurred in 2023, with the margin rising to 47.08%, this trend reversed sharply in 2024, resulting in a negative margin of -19.65%.
Comparative Margin Divergence: A notable variance between reported and adjusted profit margins is observed. In 2022, the adjusted net profit margin was approximately 9.43 percentage points lower than the reported margin. Conversely, in 2023, the adjusted margin exceeded the reported margin by 7.08 percentage points. By 2024, both metrics converged into negative values, with the adjusted net profit margin reflecting a more significant loss than the reported figure.

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
As Reported
Selected Financial Data (US$ in millions)
Revenues	4,259)	6,047)	14,123)	7,301)
Total assets	27,894)	14,376)	15,468)	11,009)
Activity Ratio
Total asset turnover¹	0.15	0.42	0.91	0.66
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues	4,259)	6,047)	14,123)	7,301)
Adjusted total assets	27,305)	13,443)	14,117)	11,009)
Activity Ratio
Adjusted total asset turnover²	0.16	0.45	1.00	0.66

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).

2024 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 4,259 ÷ 27,894 = 0.15

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 4,259 ÷ 27,305 = 0.16

An analysis of the asset utilization metrics reveals a significant divergence between asset growth and revenue-generating efficiency over the four-year period ending December 31, 2024.

Asset Base Expansion: Adjusted total assets demonstrated a substantial upward trajectory, increasing from US$ 11,009 million in 2021 to US$ 27,305 million in 2024. A particularly aggressive expansion occurred between 2023 and 2024, during which the adjusted asset base more than doubled, suggesting a period of significant capital investment or acquisition activity.
Adjusted Total Asset Turnover Trend: The adjusted total asset turnover ratio exhibited a sharp decline following a peak in 2022. The ratio rose from 0.66 in 2021 to 1.00 in 2022, before dropping precipitously to 0.45 in 2023 and further collapsing to 0.16 by December 31, 2024. This downward trend indicates that the rapid increase in total assets has not been accompanied by a proportional increase in revenue, leading to a marked decrease in asset productivity.
Comparison of Reported and Adjusted Metrics: A consistent variance is observed between reported and adjusted figures starting in 2022. The adjusted total asset turnover is marginally higher than the reported turnover in 2022, 2023, and 2024. This suggests that the adjustments to the asset base remove certain items that would otherwise further depress the turnover ratio, although these adjustments do not offset the overall decline in efficiency observed across both metrics.

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
As Reported
Selected Financial Data (US$ in millions)
Total assets	27,894)	14,376)	15,468)	11,009)
Stockholders’ equity	17,565)	10,729)	9,124)	5,671)
Solvency Ratio
Financial leverage¹	1.59	1.34	1.70	1.94
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	27,305)	13,443)	14,117)	11,009)
Adjusted stockholders’ equity	16,986)	9,796)	7,773)	5,671)
Solvency Ratio
Adjusted financial leverage²	1.61	1.37	1.82	1.94

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).

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 27,894 ÷ 17,565 = 1.59

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 27,305 ÷ 16,986 = 1.61

A significant expansion in the balance sheet is observed between 2021 and 2024. Reported total assets increased from US$ 11,009 million to US$ 27,894 million, while reported stockholders’ equity grew from US$ 5,671 million to US$ 17,565 million. The most substantial growth occurred in 2024, where assets and equity nearly doubled compared to the previous year.

Asset and Equity Adjustments: Beginning in 2022, a divergence emerged between reported and adjusted values. Adjusted total assets and adjusted stockholders’ equity remained consistently lower than their reported counterparts. For instance, by December 31, 2024, adjusted total assets were US$ 27,305 million compared to reported assets of US$ 27,894 million, and adjusted equity was US$ 16,986 million compared to reported equity of US$ 17,565 million. These adjustments suggest the removal of specific balance sheet items, likely related to tax positions, which reduces the perceived capital base.
Financial Leverage Trends: The financial leverage ratio exhibited a downward trend from 2021 through 2023 before increasing in 2024. Reported financial leverage declined from 1.94 in 2021 to a low of 1.34 in 2023, before rising to 1.59 in 2024. A similar pattern is observed in the adjusted financial leverage, which moved from 1.94 in 2021 to 1.37 in 2023, then increased to 1.61 in 2024.
Comparative Analysis of Leverage Ratios: The adjusted financial leverage ratio is consistently higher than the reported ratio from 2022 onward. This indicates that the adjustments to assets and equity have a proportionally larger reductive effect on equity than on assets, thereby increasing the calculated leverage. The gap between reported and adjusted leverage remained relatively stable between 2022 and 2024, ranging from 0.02 to 0.12 points.

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	(714)	2,419)	4,936)	6,328)
Stockholders’ equity	17,565)	10,729)	9,124)	5,671)
Profitability Ratio
ROE¹	-4.06%	22.55%	54.10%	111.59%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	(837)	2,847)	3,604)	6,222)
Adjusted stockholders’ equity	16,986)	9,796)	7,773)	5,671)
Profitability Ratio
Adjusted ROE²	-4.93%	29.06%	46.37%	109.72%

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).

2024 Calculations

¹ ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × -714 ÷ 17,565 = -4.06%

² Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted stockholders’ equity
= 100 × -837 ÷ 16,986 = -4.93%

A significant deterioration in profitability and return on equity is observed between 2021 and 2024. While the equity base expanded substantially over the four-year period, net income experienced a steady decline, eventually shifting to a net loss in the final year.

Net Income Trends: Reported net income decreased from 6,328 million US$ in 2021 to a loss of 714 million US$ in 2024. Adjusted net income followed a nearly identical trajectory, falling from 6,222 million US$ to a loss of 837 million US$. This represents a consistent erosion of earnings capacity over the analyzed period.
Stockholders' Equity Expansion: A strong upward trend is evident in the company's capital position. Reported stockholders' equity grew from 5,671 million US$ in 2021 to 17,565 million US$ by the end of 2024. Adjusted stockholders' equity showed similar growth, increasing from 5,671 million US$ to 16,986 million US$. This indicates a significant increase in the equity base despite the declining profitability.
Return on Equity (ROE) Dynamics: The convergence of declining net income and an expanding equity base resulted in a sharp contraction of ROE. Reported ROE fell from 111.59% in 2021 to -4.06% in 2024. Adjusted ROE experienced a similar decline, moving from 109.72% in 2021 to -4.93% in 2024. The most pronounced decline occurred between 2021 and 2022, after which the ratio continued to trend downward toward negative territory.

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	(714)	2,419)	4,936)	6,328)
Total assets	27,894)	14,376)	15,468)	11,009)
Profitability Ratio
ROA¹	-2.56%	16.83%	31.91%	57.48%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	(837)	2,847)	3,604)	6,222)
Adjusted total assets	27,305)	13,443)	14,117)	11,009)
Profitability Ratio
Adjusted ROA²	-3.07%	21.18%	25.53%	56.52%

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).

2024 Calculations

¹ ROA = 100 × Net income (loss) ÷ Total assets
= 100 × -714 ÷ 27,894 = -2.56%

² Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × -837 ÷ 27,305 = -3.07%

A significant deterioration in profitability is evident between 2021 and 2024, characterized by a transition from substantial net income to a net loss. This decline in earnings is compounded by a sharp increase in the asset base, resulting in a precipitous collapse in both reported and adjusted return on assets (ROA).

Profitability Trends: Reported net income experienced a consistent downward trajectory, falling from US$ 6,328 million in 2021 to a net loss of US$ 714 million in 2024. Adjusted net income mirrored this decline, decreasing from US$ 6,222 million in 2021 to a loss of US$ 837 million in 2024. The convergence toward negative territory suggests a severe contraction in the company's ability to generate profit over the analyzed period.
Asset Base Evolution: The asset base expanded significantly, particularly in the final year of the analysis. Reported total assets grew from US$ 11,009 million in 2021 to US$ 27,894 million in 2024, representing a substantial increase. Adjusted total assets followed a similar pattern, increasing to US$ 27,305 million by the end of 2024. The sharp spike in assets between 2023 and 2024 indicates a major capital investment or acquisition event.
Return on Assets (ROA) Analysis: A severe contraction in asset efficiency is observed. Reported ROA plummeted from 57.48% in 2021 to -2.56% in 2024. Similarly, adjusted ROA fell from 56.52% in 2021 to -3.07% in 2024. This decline is driven by the dual impact of shrinking net income and a rapidly expanding asset denominator, indicating that the recent increase in assets has not yet yielded positive returns.
Reported vs. Adjusted Metrics: Discrepancies between reported and adjusted figures fluctuate over time. While reported ROA was higher than adjusted ROA in 2022 and 2024, the adjusted ROA was notably higher in 2023 (21.18% compared to 16.83%). These variances suggest the presence of non-recurring items or accounting adjustments that periodically impact the reported bottom line differently than the adjusted figures.

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