Expand Energy Corp. (NASDAQ:EXE)

Current Income Taxes

The current income tax expense exhibits significant volatility over the examined periods. It was not reported in 2021, then increased sharply to 47 million US dollars in 2022. This upward trend continued in 2023, reaching a peak of 270 million US dollars. However, in 2024, current income taxes turned negative, recording a benefit of 4 million US dollars, indicating a reversal or adjustment resulting in a tax advantage.

Deferred Income Taxes

Deferred income taxes display a fluctuating pattern with notable reversals. The expense started at negative 106 million US dollars in 2021, deepening significantly to negative 1332 million US dollars in 2022, indicating a substantial deferred tax benefit. In 2023, this trend reversed sharply, producing a deferred tax expense of 428 million US dollars. The following year, in 2024, deferred income taxes again showed a tax benefit of negative 123 million US dollars, suggesting ongoing variability in the timing and recognition of tax-related items.

Total Income Tax Expense (Benefit)

The combined income tax expense, reflecting both current and deferred components, mirrors the trends seen in the separate categories. Beginning with a tax benefit of negative 106 million US dollars in 2021, the total tax expense escalated in magnitude to a negative 1285 million US dollars in 2022, driven largely by deferred tax benefits. This was followed by a substantial expense of 698 million US dollars in 2023. In 2024, the total income tax expense again shifted to a tax benefit of negative 127 million US dollars, consistent with the changes observed in the deferred tax components. These swings indicate considerable volatility in the company’s tax position over these years, influenced by both current and deferred tax factors.

Federal statutory tax rate

Remained constant at 21% throughout the four-year period from 2021 to 2024.

State income taxes (net of federal income tax benefit)

Absent in 2021, began at 1.2% in 2022, increased to 2.5% in 2023, and then decreased significantly to 0.6% in 2024, indicating fluctuating state tax obligations or benefits.

Deferred remeasurement due to state rate changes

Reported starting in 2022 at 0.8%, turning negative in 2023 at -0.6%, and declining substantially to -5.6% in 2024, suggesting notable adjustments and possibly unfavorable shifts in deferred tax assets or liabilities related to state tax rates.

Change in valuation allowance due to acquisitions

Recorded as 0.5% in 2022, absent in 2023, and negative at -1.7% in 2024, reflecting some reversal or utilization of valuation allowances associated with acquisitions in the latter period.

Change in valuation allowance excluding impact of acquisitions

Significantly negative at -58.8% in 2022, dramatically improving to -1.1% in 2023, then slightly positive at 2.1% in 2024, indicating a substantial write-down or recognition of deferred tax assets in 2022, followed by stabilization and modest recovery.

Research and development tax credits

Negative values indicating benefits claimed: -0.5% in 2022, -0.1% in 2023, but turned positive to 3.7% in 2024, which may represent a reduction in credits claimed or a reversal.

Transaction costs

Minimal impact with a small positive 0.1% in 2022, absent in 2023, and a notable negative impact of -2.6% in 2024, implying increased transaction expenses in that year.

Compensation costs related to acquired company

Only recorded in 2024 at -1.2%, indicating recognition of compensation expenses linked to acquisitions in the most recent year.

Other

Highly negative in 2021 at -22.7%, shifting to small positive values of 0.5% and 0.7% in 2022 and 2023 respectively, and again slightly negative at -1.2% in 2024, showing volatility in miscellaneous tax-related items.

Effective tax rate

Started negative at -1.7% in 2021, plunged substantially to -35.2% in 2022 indicating a significant tax benefit, then shifted abruptly to a positive rate of 22.4% in 2023, before decreasing to 15.1% in 2024, reflecting considerable fluctuations in the company's overall tax burden across the years analyzed.

Property, Plant and Equipment

The reported values for property, plant and equipment indicate significant volatility over the periods. An initial balance of 340 million US dollars is recorded for December 31, 2021. For the subsequent years, notable negative values are recorded (-253, -295, and a substantial -1,730 million US dollars by December 31, 2024), suggesting large disposals, impairments, or reclassifications in those later years.

Derivative Instruments

Derivative instruments show a fluctuating trend, with a positive 289 million US dollars at the end of 2021 dropping sharply to 137 million US dollars in 2022, then becoming negative at -166 million US dollars in 2023 before slightly recovering to 13 million US dollars in 2024. This pattern reflects changing fair values or hedge accounting impacts over the years.

Right of Use Lease Asset and Future Lease Payments

The right of use lease asset first appears in 2023 at -25 million US dollars and increases its carrying value to -36 million US dollars by 2024. Correspondingly, future lease payments are shown as 25 million US dollars in 2023 and 36 million US dollars in 2024, reflecting lease liabilities consistent with the lease asset values.

Deferred Tax Liabilities

Deferred tax liabilities rise sharply from -3 million US dollars in 2021 to -258 million in 2022 and continue increasing to -490 million in 2023, before a significant jump to -1,769 million US dollars in 2024. This upward trajectory indicates growing tax obligations or temporary differences leading to deferred tax liabilities.

Net Operating Loss Carryforwards

Net operating loss carryforwards show relatively stable values, beginning at 784 million US dollars in 2021, rising slightly to 870 million in 2022, experiencing a minor decrease to 848 million in 2023, and then a notable increase to 1,258 million in 2024. This pattern may reflect accumulated losses available for future tax offset.

Carrying Value of Debt

The carrying value of debt progressively declines from 31 million US dollars in 2021 to just 4 million US dollars by the end of 2024, suggesting debt repayment or reclassification during the period.

Excess Business Interest Expense Carryforward

This item remains fairly consistent with slight decline trends from 684 million US dollars in 2021 down to 646 million in 2023, followed by an increase to 777 million in 2024. This volatility may be influenced by varying interest expenses or tax regulations.

Capital Loss Carryforwards

Capital loss carryforwards emerge in 2022 with 101 million US dollars, dip slightly to 78 million in 2023, and increase again to 103 million in 2024. This indicates continued recognition and utilization of capital losses over time.

Tax Credit Carryforwards

Tax credit carryforwards are first noted in 2023 at 15 million US dollars and grow substantially to 53 million in 2024, reflecting increasing tax credit opportunities.

Contract Liabilities

Contract liabilities appear exclusively in 2024 with a value of 261 million US dollars, suggesting the recognition of deferred revenue or unearned income in that year.

Asset Retirement Obligations

Asset retirement obligations display moderate fluctuations, increasing slightly from 86 million US dollars in 2021 to 91 million in 2022, then dropping to 65 million in 2023, followed by a marked increase to 123 million in 2024.

Investments

Investment values decline significantly from 66 million US dollars in 2021 to 11 million in 2022, and then further down to 1 million in 2023, with no amount reported in 2024, indicating potential divestitures or write-downs.

Accrued Liabilities

Accrued liabilities decrease from 38 million US dollars in 2021 to 21 million in 2022, then further to 15 million in 2023, before rising again to 39 million in 2024. This fluctuation could imply varying short-term obligations during these periods.

Other Items

Non-specified other financial items decline from -3 million US dollars in 2021 to -5 million in 2022, then improve to -4 million in 2023 and back to -3 million in 2024. Another category of "Other" shows a downward trend from 68 million in 2021 to 17 million in 2023, with a partial recovery to 24 million in 2024.

Deferred Tax Assets

Deferred tax assets exhibit a decreasing trend from 2,386 million US dollars in 2021 to 1,735 million in 2023, followed by a substantial increase to 2,691 million in 2024, signaling potential changes in taxable temporary differences or recognition criteria.

Valuation Allowance

The valuation allowance experiences a sharp reduction from -2,383 million US dollars in 2021 to approximately -345 million in 2022 and remains relatively stable thereafter (-312 million in 2023 and -343 million in 2024), indicating increased confidence in realizability of deferred tax assets after initial adjustments.

Deferred Tax Assets after Valuation Allowance

After applying the valuation allowance, the net deferred tax assets rise markedly from 3 million US dollars in 2021 to 1,609 million in 2022, with a slight decrease to 1,423 million in 2023, and a strong recovery to 2,348 million in 2024. This pattern reflects improved expected recoverability of deferred tax assets over time.

Net Deferred Tax Asset (Liability)

The net deferred tax asset (liability) reported shows an initial value of 1,351 million US dollars in 2022, declining to 933 million in 2023 and further to 579 million in 2024, which might indicate increased deferred tax liabilities or usage of deferred tax assets.

The analysis of the deferred income tax accounts over the four-year period reveals significant changes in both deferred income tax assets and liabilities.

Deferred Income Tax Assets

Deferred income tax assets were not recorded in 2021 but increased markedly to 1,351 million US dollars by the end of 2022. Subsequently, these assets declined by approximately 31% in 2023, reaching 933 million US dollars, followed by a further reduction of around 37% in 2024 to 589 million US dollars. This trend suggests a diminishing recognition of future tax benefits over this period, potentially reflecting either the realization of deferred tax assets, changes in tax regulations, or adjustments in the company's temporary differences and tax planning strategies.

Deferred Income Tax Liabilities

Deferred income tax liabilities were not reported in the first three years (2021 through 2023). However, in 2024, a small liability of 10 million US dollars was recognized. This emergent liability may indicate changes in temporary differences related to taxable income timing or the recognition of new taxable temporary differences not previously accounted for.

Overall, the deferred income tax assets show a downward movement after peaking in 2022, indicating a potential contraction in anticipated tax benefits. Meanwhile, the appearance of a liability, albeit minor, in the latest year signals a shift in the deferred tax position, possibly related to evolving tax circumstances affecting the company.

The financial data reveals several noteworthy trends across the examined periods. Total assets, both reported and adjusted, display a significant increase over the four-year span. Reported total assets grew from approximately 11.0 billion US dollars in 2021 to nearly 27.9 billion US dollars in 2024, with adjusted figures following a similar trajectory, albeit marginally lower each year. This suggests a robust expansion in the company's asset base.

Liabilities exhibit a fluctuating pattern with a notable decline in 2023 before surging again in 2024. Specifically, reported liabilities decreased from about 6.3 billion US dollars in 2022 to 3.6 billion US dollars in 2023, then jumped sharply to over 10.3 billion US dollars in 2024. Adjusted liabilities mirror this pattern closely, indicating consistency in the adjustments made for deferred income tax effects.

Stockholders’ equity shows steady growth in both reported and adjusted figures through 2023, increasing from 5.7 billion US dollars in 2021 to approximately 10.7 billion US dollars reported in 2023. Adjusted equity remains lower than reported each year but similarly increases, implying the presence of deferred tax liabilities or other adjustments reducing equity on an adjusted basis. The equity base reaches substantially higher levels in 2024, with reported equity at 17.6 billion US dollars and adjusted at roughly 17.0 billion US dollars, corresponding with the asset growth observed.

Net income figures reveal a downward trend over the period. Reported net income declines from approximately 6.3 billion US dollars in 2021 to a loss of 714 million US dollars in 2024. Adjusted net income, which accounts for deferred taxes, presents a more pronounced decrease, falling from 6.2 billion US dollars in 2021 to an adjusted loss of 837 million US dollars in 2024. This suggests increasing financial challenges or changes in profitability, particularly evident in the final year.

Overall, the data indicates strong asset growth accompanied by volatility in liabilities and a deterioration in net income performance. The adjustments for deferred income tax impact both equity and net income, generally resulting in lower adjusted values but consistent trends. The sharp increase in assets and liabilities in the latest year may imply significant transactions, investments, or changes in capital structure occurring during that period. The shift to net losses in 2024 highlights a critical point that may warrant further investigation.

The financial data over the four-year period reveals significant fluctuations across profitability, efficiency, and leverage metrics.

Net Profit Margin

The reported net profit margin shows a strong decline from 86.67% in 2021 to a negative margin of -16.76% in 2024, indicating deteriorating profitability. The adjusted net profit margin follows a similar trend but exhibits a more pronounced volatility, with values ranging from 85.22% in 2021 down to -19.65% in 2024. After an initial decrease in 2022, the adjusted margin improves markedly in 2023 before falling sharply in the final year.

Total Asset Turnover

Reported total asset turnover demonstrates a peak in 2022 at 0.91 but subsequently declines to a low of 0.15 by 2024, signaling reduced efficiency in utilizing assets to generate revenue. The adjusted total asset turnover data mirrors this pattern, with a slightly higher peak at 1.0 in 2022 and a minor improvement over reported figures in 2023 and 2024, though overall efficiency remains on a downward trajectory throughout the period.

Financial Leverage

Financial leverage ratios, both reported and adjusted, depict a declining trend through 2023, suggesting a decrease in debt relative to equity or assets. However, in 2024, there is a reversal with leverage increasing to 1.59 reported and 1.61 adjusted, indicating a cautious rise in the use of debt financing after a period of deleveraging.

Return on Equity (ROE)

The reported ROE experiences a sharp decrease from an exceptionally high 111.59% in 2021 down to -4.06% in 2024. The adjusted ROE reflects a similar downward progression but shows slightly less volatility, with a modest rebound in 2023 before turning negative in the most recent year. This trend highlights weakening returns for shareholders and increased challenges in generating profit from equity.

Return on Assets (ROA)

The reported ROA declines steadily from 57.48% in 2021 to a negative figure of -2.56% in 2024, indicating diminishing effectiveness in asset utilization to generate earnings. The adjusted ROA shows a somewhat volatile pattern, dropping significantly in 2022, then partially recovering in 2023, before slipping below zero in 2024, consistent with the reported figures but suggesting some impact from deferred income tax adjustments.

Overall, the data indicates a marked deterioration in profitability and asset efficiency over the observed period, compounded by fluctuating leverage levels. The transition to negative returns by 2024 across multiple key indicators signals challenges in sustaining profitable operations. The adjusted metrics, accounting for deferred income tax effects, generally present more pronounced variations but align closely with the reported trends, underscoring the financial stresses faced in recent years.

Reported Net Income (Loss)

The reported net income shows a declining trend over the four-year period. It decreased from $6,328 million at the end of 2021 to $4,936 million in 2022, followed by a significant drop to $2,419 million in 2023. The year 2024 reflects a negative net income of $714 million, indicating the company faced a loss during this period.

Adjusted Net Income (Loss)

Adjusted net income also demonstrates a downward trajectory, though with some volatility. Starting at $6,222 million in 2021, it fell sharply to $3,604 million in 2022. A modest recovery occurred in 2023 when adjusted net income rose to $2,847 million, but this was followed by a reversal to a loss of $837 million in 2024, deeper than the reported net loss figure for the same year.

Reported Net Profit Margin

The reported net profit margin decreased substantially from a robust 86.67% in 2021 to 34.95% in 2022. It showed a slight improvement in 2023, increasing to 40%, but turned negative in 2024 at -16.76%, paralleling the company's transition to a net loss status.

Adjusted Net Profit Margin

The adjusted net profit margin reflects a similar pattern to the reported margin, though with wider fluctuations. Starting at 85.22% in 2021, it declined to 25.52% in 2022. In 2023, the margin improved notably to 47.08%, suggesting better operational performance after adjustments. However, it fell sharply to -19.65% in 2024, consistent with the occurrence of a net loss post-adjustment.

Overall Analysis

The financial data indicate a strong performance in 2021 with high profitability levels, followed by a marked deterioration from 2022 onwards. Both reported and adjusted figures exhibit decreasing profitability and income, culminating in losses in 2024. The adjusted figures tend to be lower than the reported ones, particularly in the years when net income declined, highlighting the impact of deferred income tax adjustments on the company’s bottom line. The loss position in the most recent year signals operational or market challenges that have significantly affected financial performance.

Total Assets

The reported total assets exhibited considerable growth over the observed period, increasing from US$11,009 million at the end of 2021 to US$27,894 million by the end of 2024. Adjusted total assets followed a similar upward trend, rising from US$11,009 million in 2021 to US$27,305 million in 2024. Notably, the adjusted figures are consistently lower than the reported ones in 2022 through 2024, indicating the impact of deferred income tax adjustments. The year-over-year growth in total assets was particularly substantial between 2023 and 2024, where reported assets nearly doubled.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show a declining trend from 2022 onward. Reported turnover increased from 0.66 in 2021 to 0.91 in 2022 but then declined sharply to 0.42 in 2023 and further to 0.15 in 2024. Adjusted turnover presents a similar pattern, starting at 0.66 in 2021, rising to 1.00 in 2022, then falling to 0.45 in 2023, and ultimately dropping to 0.16 in 2024. Despite the high level in 2022, the significant downward trajectory in subsequent years suggests decreasing efficiency in utilizing assets to generate revenue.

Insights

The data reveals a marked expansion in the company’s asset base over four years, with an almost two-and-a-half-fold increase in total assets from 2021 to 2024. Despite this growth, asset turnover ratios indicate a deterioration in asset utilization efficiency. The peak turnover in 2022 implies optimal performance in asset use that year; however, the decline in later years may signal operational challenges or slower revenue growth relative to asset expansion. Deferred income tax adjustments slightly reduce the total assets but do not alter the general upward asset trend. Overall, the company’s increased investment in assets is not proportionately reflected in revenue generation, which may warrant strategic review.

The financial data exhibits distinct trends in the company's asset base, equity position, and leverage ratios over the four-year period ending December 31, 2024. Both reported and adjusted figures are considered to understand underlying dynamics, emphasizing the impact of deferred income tax adjustments.

Total Assets

Reported total assets increased significantly from 11,009 million USD in 2021 to 27,894 million USD in 2024, more than doubling during this span. Adjusted total assets follow a similar upward trajectory but present slightly lower values each year due to deferred income tax adjustments, culminating at 27,305 million USD in 2024. Between 2022 and 2023, a mild contraction is observed in both reported and adjusted assets before the strong growth observed in 2024.

Stockholders’ Equity

Reported stockholders’ equity demonstrated a steady increase annually, rising from 5,671 million USD in 2021 to 17,565 million USD in 2024. Adjusted stockholders’ equity figures also exhibit consistent growth, albeit lower than reported values each year, indicating the impact of deferred tax adjustments on shareholders' equity. Notably, the gap between reported and adjusted equity widens in 2022 and 2023 but narrows in 2024, signaling potential changes in deferred tax positions or accounting policies.

Financial Leverage

Reported financial leverage, defined as the ratio of total assets to stockholders’ equity, declined from 1.94 in 2021 to a low of 1.34 in 2023, implying a reduction in reliance on debt financing relative to equity. However, it increased again to 1.59 in 2024, suggesting a partial reversal or increased leverage. The adjusted financial leverage ratios remain consistently higher than reported ratios for 2022 through 2024, reflecting the effects of deferred income tax adjustments which increase the proportion of liabilities or reduce equity. Adjusted leverage follows a similar pattern of decline to 1.37 in 2023 followed by an increase to 1.61 in 2024.

Overall, the trends indicate substantial growth in asset base and equity, with some fluctuations in financial leverage suggesting dynamic capital structure management. The adjustments for deferred income taxes reveal more conservative leverage measurements, underscoring the importance of tax considerations in assessing the company’s financial position. The notable asset growth in 2024 coupled with a rise in leverage ratios may warrant further analysis regarding financing strategies and tax impacts in the latest period.

The financial data reveals several notable trends and shifts in the company's performance and financial position over the four-year period.

Net Income (Loss)

Reported net income declined substantially from US$6,328 million in 2021 to a reported loss of US$714 million in 2024. The adjusted net income also followed a decreasing trend, dropping from US$6,222 million in 2021 to a loss of US$837 million in 2024. This indicates a significant deterioration in profitability over the period, with losses reported for the latest year.

Stockholders’ Equity

Reported stockholders’ equity showed steady growth, increasing from US$5,671 million in 2021 to US$17,565 million in 2024. Similarly, adjusted stockholders’ equity rose from US$5,671 million to US$16,986 million during the same period. This growth suggests strengthening of the company's capital base despite the decline in profitability.

Return on Equity (ROE)

Reported ROE dropped markedly from 111.59% in 2021 to -4.06% in 2024. Adjusted ROE exhibited a similar pattern, decreasing from 109.72% to -4.93%. The steep decline and eventual negative ROE reflect the erosion of shareholder value due to losses in the final year and reduced profitability in prior years.

Overall, the data indicates that although the company experienced consistent growth in equity, profitability pressures intensified, culminating in net losses and negative returns on equity by 2024. The adjusted figures closely mirror the reported results, confirming that the trends are not materially influenced by deferred tax considerations but rather reflect underlying operational challenges.

Net Income (Loss) Trends

The reported net income shows a declining trend over the four-year period, starting at 6,328 million US dollars in 2021 and decreasing substantially to -714 million US dollars by 2024. The adjusted net income follows a similar downward trajectory, with values decreasing from 6,222 million US dollars in 2021 to -837 million US dollars in 2024. This indicates an overall deterioration in profitability when excluding the effects of reported and deferred income taxes adjustments.

Asset Base Changes

Reported total assets experience growth from 11,009 million US dollars in 2021 to a peak of 27,894 million US dollars in 2024, despite a slight dip in 2023. Adjusted total assets also increase from 11,009 million to 27,305 million US dollars over the same period, albeit at a slightly lower level than reported totals in 2022 through 2024. The asset growth suggests significant expansion or investment activities undertaken by the company during these years.

Return on Assets (ROA) Developments

Both reported and adjusted ROA percentages reveal a marked decline through the timeline. Reported ROA drops from a high of 57.48% in 2021 to negative territory at -2.56% in 2024, indicating decreasing efficiency in generating profit from assets. Adjusted ROA mirrors this pattern, falling from 56.52% in 2021 to -3.07% in 2024. The adjusted measure, which excludes tax effects, consistently remains below the reported ROA value from 2022 onwards, reflecting the impact of deferred income tax adjustments on asset returns.

Overall Insights

The financial data reveal a company experiencing strong profitability and efficient asset utilization in the initial years followed by a significant decline culminating in losses and negative returns by 2024. Despite this, the company’s asset base expands notably, which may suggest increased investments or acquisitions that have yet to yield positive returns. The adjusted figures provide a clearer view of operational performance by filtering out tax-related distortions, confirming the downward trends in income and profitability metrics. Continuous monitoring of asset utilization and income trends is recommended to assess the sustainability of the recent asset growth.