Expand Energy Corp. (NASDAQ:EXE)

Debt Ratios

Over the observed period, the debt to equity ratio exhibits a downward trend from 0.4 in 2021 to a low of 0.19 in 2023, before rising again to 0.32 in 2024. This pattern is mirrored when considering operating lease liabilities, where the ratio moves similarly but slightly higher in absolute terms by the end of 2024.

The debt to capital ratio declines steadily from 0.29 in 2021 to 0.16 in 2023 and then increases to 0.24 in 2024. This trend is consistent with the debt to equity ratio and also holds when including operating lease liabilities, maintaining a close margin between the two measures.

Debt to assets declines from 0.21 in 2021 to 0.14 in 2023, before increasing back to 0.2 in 2024. Including operating lease liabilities, the values are slightly elevated but follow the same trajectory.

Financial Leverage

There is a clear decline in financial leverage from 1.94 in 2021 to 1.34 in 2023, indicating reduced reliance on debt financing relative to equity. However, the metric increases in 2024 to 1.59, suggesting a partial reversal of deleveraging observed in previous years.

Interest and Fixed Charge Coverage

Interest coverage shows substantial fluctuation, starting at a high 75.07 in 2021, dropping sharply to 23.82 in 2022 and then slightly rising to 30.97 in 2023. A significant decline to a negative -5.84 ratio occurs in 2024, which signals a serious deterioration in the company's ability to meet interest expenses from operating earnings.

Fixed charge coverage follows a similar declining trend, moving from 52.85 in 2021 to 13.06 in 2022, then to 15.77 in 2023, before plummeting to -2.99 in 2024. The negative value again emphasizes increasing difficulties covering fixed financial obligations.

Summary of Trends

Initially, the company demonstrates a pattern of deleveraging from 2021 through 2023, with multiple debt ratios decreasing, financial leverage easing, and coverage ratios remaining positive albeit declining. However, the year 2024 shows a reversal with increased leverage ratios and sharply negative coverage ratios that raise concerns about financial resilience and profitability, potentially indicating operational or financial stress.

Total Debt

The total debt of the company showed a fluctuating pattern over the observed periods. Initially, it increased from 2,278 million US dollars at the end of 2021 to 3,093 million US dollars by the end of 2022. This was followed by a notable decline to 2,028 million US dollars in 2023. However, there was a significant increase in total debt in 2024, reaching 5,680 million US dollars, the highest level in the examined timeframe.

Stockholders’ Equity

Stockholders’ equity demonstrated a consistent and substantial upward trend throughout the periods. Starting at 5,671 million US dollars at the end of 2021, it rose to 9,124 million in 2022 and continued to increase to 10,729 million in 2023. The growth trend was even more pronounced in 2024, with equity reaching 17,565 million US dollars.

Debt to Equity Ratio

The debt to equity ratio showed a decreasing trend from 0.4 in 2021 to 0.34 in 2022, and further decreased to 0.19 in 2023. This indicates an improving capital structure with relatively lower leverage during this period. However, in 2024, the ratio rose to 0.32, reflecting the significant increase in debt outpacing the rise in equity during that year.

Total Debt (including operating lease liability)

The total debt showed a significant increase from 2,316 million USD at the end of 2021 to 3,212 million USD at the end of 2022, indicating a rise in the company's leverage. In 2023, there was a notable decrease to 2,127 million USD, suggesting a reduction in debt levels. However, by the end of 2024, the total debt escalated sharply to 5,825 million USD, reflecting a substantial increase in the company's financial obligations within that year.

Stockholders’ Equity

Stockholders’ equity exhibited consistent growth throughout the period, rising from 5,671 million USD in 2021 to 9,124 million USD in 2022. This upward trend continued in 2023 with equity reaching 10,729 million USD, and further expanded significantly to 17,565 million USD by the end of 2024. This consistent increase points to an accumulation of retained earnings or capital infusion, strengthening the company's net worth over time.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio declined from 0.41 in 2021 to 0.35 in 2022, implying an improvement in financial leverage with equity growing faster than debt. In 2023, the ratio further decreased markedly to 0.2, indicating a very conservative capital structure with low leverage. However, in 2024, the ratio increased to 0.33, reflecting the substantial rise in total debt relative to equity observed that year, though it remains below the 2021 level.

Summary

Overall, the data reveals a pattern of increasing equity and fluctuating debt levels over the four-year span. While equity consistently expanded, the total debt experienced both reductions and significant growth, especially notable in 2024. The debt to equity ratio trends suggest the company moved towards lower leverage by 2023 but took on additional debt relative to equity in 2024, possibly indicating increased investment or financing activity during that year.

The financial data reveals notable fluctuations in the company’s debt levels, total capital, and debt-to-capital ratio over the four-year period from the end of 2021 through the end of 2024.

Total Debt

The total debt experienced significant variation. It initially increased from 2,278 million US dollars in 2021 to 3,093 million in 2022, representing a substantial rise. Subsequently, there was a marked decline in 2023 to 2,028 million, indicating a reduction in debt obligations. However, in 2024, total debt sharply increased to 5,680 million, exceeding previous years and more than doubling from the 2023 level. This suggests a sizable borrowing event or accumulation of liabilities in the most recent year.

Total Capital

Total capital consistently increased over the observed period. Beginning at 7,949 million US dollars in 2021, it rose substantially to 12,217 million in 2022, followed by a modest increase to 12,757 million in 2023. The most pronounced growth occurred in 2024, where total capital nearly doubled to 23,245 million. This upward trend indicates strengthening equity and liabilities combined, reflecting capital expansion which may be linked to funding growth initiatives or balancing the increased debt levels noted.

Debt to Capital Ratio

The debt-to-capital ratio displays a fluctuating trend rather than a linear progression. Starting at 0.29 in 2021, the ratio declined to 0.25 in 2022 and then further dropped sharply to 0.16 in 2023, signifying a reduction in financial leverage relative to total capital. However, in 2024, the ratio rose again to 0.24, indicating an increasing proportion of debt in the capital structure despite the overall capital growth. This reflects the substantial jump in debt during the same year and points to a strategic decision to utilize more debt financing.

Overall, the data indicates a strategic shift in the company's capital structure over the examined period, with considerable growth in total capital accompanied by volatile movements in debt levels. Particularly, the significant spike in total debt and the partial rebound in the debt-to-capital ratio in 2024 merit attention as they could affect financial risk and cost of capital moving forward.

Total Debt (including operating lease liability)

The total debt experienced fluctuations over the observed periods. Initially, there was a notable increase from 2,316 million US dollars in 2021 to 3,212 million US dollars in 2022. This was followed by a significant decline to 2,127 million US dollars in 2023. However, in 2024, total debt rose sharply to 5,825 million US dollars, reaching the highest level in the period analyzed.

Total Capital (including operating lease liability)

Total capital showed an overall upward trend throughout the periods. From 7,987 million US dollars at the end of 2021, it increased substantially to 12,336 million in 2022 and saw a slight increase to 12,856 million in 2023. A marked increase occurred again in 2024, reaching 23,390 million US dollars, nearly doubling the previous year's figure.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio exhibited variability with a general downward trend until 2023, decreasing from 0.29 in 2021 to a low of 0.17 in 2023. This indicates a reduction in leverage relative to capital. In 2024, the ratio increased again to 0.25, reflecting a relative rise in debt compared to capital, though still below the initial 2021 level.

Total Debt

The total debt experienced fluctuations over the observed period. Initially, there was a significant increase from US$2,278 million in 2021 to US$3,093 million in 2022. This was followed by a notable decrease to US$2,028 million in 2023. However, in 2024, total debt surged sharply to US$5,680 million, marking the highest level within the four years.

Total Assets

Total assets exhibited a general upward trend throughout the period. Starting at US$11,009 million in 2021, assets increased substantially to US$15,468 million in 2022 before declining slightly to US$14,376 million in 2023. In 2024, total assets nearly doubled compared to the previous year, reaching US$27,894 million.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable but demonstrated some variation. It started at 0.21 in 2021 and slightly decreased to 0.20 in 2022, indicating a marginal reduction in leverage relative to asset growth. In 2023, the ratio declined further to 0.14, suggesting a lower proportion of debt financing relative to assets. However, in 2024, the ratio increased back to 0.20, reflecting a rise in leverage that aligns with the significant increase in total debt and total assets during that year.

Overall Insights

The financial data reveals a pattern of increasing asset base with periods of variable debt levels. The company's leverage, as indicated by the debt to assets ratio, has generally remained within a narrow range around 0.20, despite fluctuations in absolute figures of debt and assets. The sharp rise in both total debt and total assets in 2024 suggests an aggressive expansion or investment phase, supported by increased borrowing. The lower ratio in 2023 indicates a conservative financial stance that year, possibly involving debt reduction or asset consolidation. Overall, the company appears to manage its leverage prudently while pursuing growth in asset size.

The financial data of the company reveals notable fluctuations in the reported figures over the four-year period ending in 2024.

Total debt (including operating lease liability)

The total debt exhibited variability, initially increasing from 2,316 million USD in 2021 to 3,212 million USD in 2022. This was followed by a significant reduction to 2,127 million USD in 2023, with a subsequent substantial rise to 5,825 million USD in 2024. This pattern suggests varying leverage strategies or potential refinancing activities impacting debt levels across the years.

Total assets

Total assets showed an overall increasing trend, rising sharply from 11,009 million USD in 2021 to 15,468 million USD in 2022. A slight decline to 14,376 million USD was noted in 2023 before a marked increase to 27,894 million USD in 2024. This pattern indicates periods of asset growth potentially linked to acquisitions or capital investments, especially in the final year.

Debt to assets ratio (including operating lease liability)

The debt-to-assets ratio remained relatively stable at approximately 0.21 in 2021 and 2022, declined to 0.15 in 2023, and returned to 0.21 in 2024. This trend reflects a temporary improvement in leverage position during 2023, due to lower relative debt or higher asset base, followed by a return to previous leverage levels in 2024 aligned with increased debt and asset figures.

In summary, the company experienced significant fluctuations in total debt with a general trend of asset growth over the four-year period. The leverage ratio remained mostly stable, except for a notable dip in 2023. The data suggests active management of the capital structure and investment in asset growth, culminating in considerable expansion by the end of the period.

Total Assets

The total assets show a significant upward trend over the four-year period. Starting from US$11,009 million at the end of 2021, there was an increase to US$15,468 million in 2022. This was followed by a slight decrease in 2023 to US$14,376 million, before rising sharply to US$27,894 million by the end of 2024. This pattern indicates a strong asset growth overall, with a temporary contraction during 2023.

Stockholders’ Equity

Stockholders’ equity demonstrates consistent growth throughout the period. The value increased from US$5,671 million in 2021 to US$9,124 million in 2022, further rising to US$10,729 million in 2023, and reaching US$17,565 million in 2024. The steady increase indicates strengthening financial foundation and increased retained earnings or capital contributions over time.

Financial Leverage

The financial leverage ratio, defined as total assets divided by stockholders’ equity, declined from 1.94 in 2021 to 1.7 in 2022, and further dropped to 1.34 in 2023. However, it then rose to 1.59 in 2024. This decline through 2023 suggests a reduction in reliance on debt or external financing relative to equity, followed by a moderate increase in leverage in 2024. The overall leverage remains moderate, with fluctuations reflecting changes in asset and equity composition.

The analysis of the financial data over the four-year period reveals several notable trends regarding the company's profitability and financial costs.

Earnings Before Interest and Tax (EBIT):

EBIT demonstrates a significant downward trend from 2021 through 2024. Starting at a high of US$6,306 million in 2021, EBIT decreased sharply to US$3,811 million in 2022, and then further to US$3,221 million in 2023. The decline culminates in a negative EBIT of US$-718 million in 2024, indicating the company faced operating losses before considering interest and tax expenses in the most recent year.

Interest Expense:

Interest expense showed volatility across the years. It almost doubled from US$84 million in 2021 to US$160 million in 2022, then decreased markedly to US$104 million in 2023. In 2024, it rose again to US$123 million. While interest costs fluctuate, the 2022 peak and the subsequent varied pattern suggest changes in debt levels or cost of borrowing.

Interest Coverage Ratio:

The interest coverage ratio, calculated as EBIT divided by interest expense, declined significantly over the period. It started at an extremely strong 75.07 ratio in 2021, indicating the company's EBIT was highly sufficient to cover interest payments. However, the ratio dropped to 23.82 in 2022, a substantial reduction but still healthy. In 2023, it slightly improved to 30.97. The most dramatic change occurred in 2024 when the ratio turned negative (-5.84), reflecting the negative EBIT causing an inability to cover interest expenses. This signals a critical weakening in the company's operational profitability relative to its interest obligations.

Overall, the financial data illustrate a deteriorating profitability profile, with EBIT declining to the point of operating losses by 2024. Interest expenses have fluctuated but do not explain the deterioration alone. The sharp fall and negative turn in the interest coverage ratio by the end of 2024 highlight increased financial risk and potential liquidity concerns if operating results do not improve.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibited a significant downward trend over the four-year period. Starting at 6,342 million US dollars in 2021, this figure decreased sharply to 3,862 million in 2022, followed by a further decline to 3,328 million in 2023. By 2024, the company reported a negative value of -630 million, indicating a substantial financial deterioration and potential operational challenges.

Fixed charges

Fixed charges increased from 120 million US dollars in 2021 to 296 million in 2022, demonstrating a notable rise in financial obligations. In 2023, fixed charges decreased to 211 million and then remained stable at 211 million in 2024. The initial increase followed by stabilization suggests fluctuating financial costs with a peak in 2022.

Fixed charge coverage ratio

The fixed charge coverage ratio, which indicates the ability to cover fixed financial obligations, showed a marked decline. From an exceptionally high ratio of 52.85 in 2021, it dropped to 13.06 in 2022 and improved slightly to 15.77 in 2023. However, in 2024, the ratio turned negative at -2.99, reflecting the company's inability to meet fixed charges from earnings, primarily due to the negative earnings before fixed charges and tax. This trend signifies increasing financial strain and heightened risk associated with fixed obligations.