Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Pioneer Natural Resources Co., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The solvency profile exhibits a period of increased leverage between 2020 and 2021, followed by a sustained deleveraging trend that returned the company to a stronger capital position by 2023. Overall, the solvency ratios indicate a return to conservative debt levels and a substantial improvement in the capacity to service obligations compared to 2019 levels.
- Debt and Capitalization Ratios
- A temporary increase in leverage is evident from 2020 to 2021, where the debt to equity ratio rose from 0.24 to 0.33 and the debt to assets ratio increased from 0.15 to 0.20. This trend reversed in 2022 and 2023, with the debt to equity ratio declining to 0.23 and the debt to assets ratio stabilizing at 0.15. Debt to capital followed an identical trajectory, peaking at 0.25 in 2020 and 2021 before reverting to 0.19 by the end of the period. The inclusion of operating lease liabilities marginally increases these ratios across all years but does not alter the underlying trend of deleveraging.
- Financial Leverage
- Financial leverage remained relatively stable throughout the five-year period. A slight peak was observed in 2020 at 1.66, followed by a gradual decrease to 1.58 by December 31, 2023. This suggests a consistent approach to the overall composition of assets relative to equity.
- Coverage and Solvency Capacity
- The most significant volatility is observed in the coverage ratios. In 2020, interest coverage fell to -1.02 and fixed charge coverage dropped to 0.07, indicating severe earnings pressure and a temporary inability to cover interest expenses from operating profits. However, a robust recovery followed, with interest coverage surging to 18.06 in 2021 and peaking at 78.74 in 2022. Although these figures moderated to 41.83 for interest coverage and 19.82 for fixed charge coverage in 2023, the current capacity to meet fixed obligations remains substantially higher than the 2019 baseline.
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Debt to Equity
Pioneer Natural Resources Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.23 | 0.24 | 0.33 | 0.33 | 0.24 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.13 | 0.15 | 0.23 | — | — | |
| ConocoPhillips | 0.38 | 0.35 | 0.44 | — | — | |
| Exxon Mobil Corp. | 0.20 | 0.21 | 0.28 | — | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.20 | 0.20 | 0.28 | — | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.21 | 0.22 | 0.31 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Equity
= 5,337 ÷ 23,171 = 0.23
2 Click competitor name to see calculations.
The solvency profile exhibits a cyclical pattern characterized by a peak in leverage in 2021 followed by a steady return to baseline levels. The overall capital structure remains conservative, with equity consistently serving as the primary source of financing throughout the observed five-year period.
- Total Debt Trends
- Total debt levels rose from US$ 2,861 million in 2019 to a peak of US$ 7,471 million in 2021. This represents a significant increase in borrowed capital over a two-year window. Subsequently, a deleveraging trend occurred, with debt decreasing to US$ 5,425 million in 2022 and further settling at US$ 5,337 million by the end of 2023.
- Equity Growth
- Equity remained relatively stable between 2019 and 2020 before experiencing a substantial increase in 2021, rising from US$ 11,569 million to US$ 22,837 million. This growth was sustained through 2023, reaching US$ 23,171 million, which effectively bolstered the financial cushion and reduced overall solvency risk.
- Debt to Equity Ratio Analysis
- The debt to equity ratio increased from 0.24 in 2019 to 0.33 in 2020 and 2021, indicating a period of higher relative leverage. However, this ratio declined back to 0.24 in 2022 and reached a period low of 0.23 by December 31, 2023. The convergence of decreasing total debt and increasing total equity has resulted in a strengthened solvency position, returning the leverage ratio to levels observed at the start of the analyzed period.
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Debt to Equity (including Operating Lease Liability)
Pioneer Natural Resources Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Operating lease liability, current | 175) | 125) | 121) | 100) | 136) | |
| Operating lease liability, noncurrent | 248) | 236) | 243) | 110) | 170) | |
| Total debt (including operating lease liability) | 5,760) | 5,786) | 7,835) | 4,066) | 3,167) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.25 | 0.26 | 0.34 | 0.35 | 0.26 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.16 | 0.17 | 0.25 | — | — | |
| ConocoPhillips | 0.40 | 0.36 | 0.45 | — | — | |
| Exxon Mobil Corp. | 0.23 | 0.24 | 0.31 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.22 | 0.23 | 0.31 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.24 | 0.25 | 0.34 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Equity
= 5,760 ÷ 23,171 = 0.25
2 Click competitor name to see calculations.
The company's solvency profile over the five-year period ending December 31, 2023, is characterized by a temporary increase in leverage followed by a period of deleveraging and equity strengthening. The overall financial position has returned to a leverage level consistent with 2019, but is now supported by a substantially larger capital base.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited significant volatility, rising from US$ 3,167 million in 2019 to a peak of US$ 7,835 million in 2021. This peak represented a sharp increase in borrowing or lease obligations. A subsequent downward trend occurred in 2022, with debt reducing to US$ 5,786 million, and remaining relatively stable at US$ 5,760 million by the end of 2023.
- Equity Growth
- Equity levels experienced a marked expansion, most notably between 2020 and 2021, when the balance grew from US$ 11,569 million to US$ 22,837 million. This growth persisted through the end of the period, reaching US$ 23,171 million in 2023. The substantial increase in equity has served to offset the impact of increased debt obligations and improved the company's overall solvency.
- Debt to Equity Ratio Analysis
- The debt to equity ratio rose from 0.26 in 2019 to a peak of 0.35 in 2020. Despite the spike in total debt during 2021, the simultaneous surge in equity kept the ratio relatively stable at 0.34. A clear downward trend is observed in the final two years, with the ratio decreasing to 0.26 in 2022 and further improving to 0.25 in 2023. This progression indicates a strategic reduction in financial leverage and an enhanced ability to cover obligations through equity.
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Debt to Capital
Pioneer Natural Resources Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Total capital | 28,508) | 27,966) | 30,308) | 15,425) | 14,980) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.19 | 0.19 | 0.25 | 0.25 | 0.19 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.11 | 0.13 | 0.18 | — | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | — | — | |
| Exxon Mobil Corp. | 0.17 | 0.17 | 0.22 | — | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.16 | 0.17 | 0.22 | — | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.18 | 0.18 | 0.24 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,337 ÷ 28,508 = 0.19
2 Click competitor name to see calculations.
An analysis of solvency metrics from 2019 to 2023 reveals a period of significant capital expansion followed by a stabilization of leverage levels.
- Total Debt Trends
- Total debt experienced a substantial increase between 2019 and 2021, rising from US$ 2,861 million to a peak of US$ 7,471 million. Subsequent years saw a reduction in these liabilities, with total debt decreasing to US$ 5,425 million in 2022 and further stabilizing at US$ 5,337 million by the end of 2023.
- Total Capital Evolution
- Total capital remained relatively stable between 2019 and 2020 before nearly doubling in 2021 to reach US$ 30,308 million. This sharp increase indicates a significant expansion of the overall capital base. Following this peak, capital levels adjusted slightly downward in 2022 and ended the period at US$ 28,508 million in 2023.
- Debt to Capital Ratio Analysis
- The debt to capital ratio rose from 0.19 in 2019 to 0.25 in 2020, remaining constant at that level through 2021. This period represents a temporary increase in financial leverage relative to the capital base. By 2022, the ratio returned to 0.19 and remained unchanged through 2023, indicating a strategic return to the company's initial leverage profile despite the significantly higher absolute levels of both debt and capital compared to 2019.
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Debt to Capital (including Operating Lease Liability)
Pioneer Natural Resources Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Operating lease liability, current | 175) | 125) | 121) | 100) | 136) | |
| Operating lease liability, noncurrent | 248) | 236) | 243) | 110) | 170) | |
| Total debt (including operating lease liability) | 5,760) | 5,786) | 7,835) | 4,066) | 3,167) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Total capital (including operating lease liability) | 28,931) | 28,327) | 30,672) | 15,635) | 15,286) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.20 | 0.20 | 0.26 | 0.26 | 0.21 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.14 | 0.15 | 0.20 | — | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | — | — | |
| Exxon Mobil Corp. | 0.19 | 0.19 | 0.24 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.18 | 0.19 | 0.23 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.20 | 0.20 | 0.25 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 5,760 ÷ 28,931 = 0.20
2 Click competitor name to see calculations.
The solvency profile demonstrates a cycle of capital expansion followed by a period of deleveraging and stabilization between 2019 and 2023. A significant increase in both total debt and total capital was observed during the 2020-2021 period, which was subsequently offset by a reduction in liabilities and a consolidation of the capital structure.
- Total Debt Trends
- Total debt, including operating lease liabilities, increased from 3,167 million US dollars in 2019 to a peak of 7,835 million US dollars in 2021. Following this peak, a downward trend is observed, with debt decreasing to 5,786 million US dollars in 2022 and remaining nearly flat at 5,760 million US dollars in 2023.
- Total Capital Movements
- Total capital experienced a substantial expansion, rising from 15,286 million US dollars in 2019 to 30,672 million US dollars in 2021. This represents a significant increase in the total funding base. The capital base then underwent a slight contraction in 2022 before stabilizing at 28,931 million US dollars by the end of 2023.
- Debt to Capital Ratio Analysis
- The debt to capital ratio indicates a period of increased leverage followed by a return to a more conservative position. The ratio rose from 0.21 in 2019 to 0.26 in 2020 and 2021. Despite the surge in absolute debt during 2021, the ratio remained constant at 0.26, suggesting that the increase in debt was proportional to the growth in total capital. A subsequent decline occurred in 2022, with the ratio settling at 0.20 for both 2022 and 2023, reflecting an overall improvement in the solvency position.
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Debt to Assets
Pioneer Natural Resources Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Total assets | 36,613) | 35,740) | 36,811) | 19,229) | 19,067) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.15 | 0.15 | 0.20 | 0.20 | 0.15 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.08 | 0.09 | 0.13 | — | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.22 | — | — | |
| Exxon Mobil Corp. | 0.11 | 0.11 | 0.14 | — | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.11 | 0.11 | 0.15 | — | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.12 | 0.12 | 0.16 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,337 ÷ 36,613 = 0.15
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 is characterized by a period of significant balance sheet expansion followed by a phase of deleveraging and stabilization. While the absolute values of debt and assets experienced substantial volatility, the relative proportion of debt to assets remained within a narrow and controlled range.
- Debt to Assets Ratio Trend
- The ratio began at 0.15 in 2019, increasing to 0.20 in 2020 and maintaining that level through 2021. A subsequent decline occurred in 2022, returning the ratio to 0.15, which was maintained through the end of 2023. This indicates that the organization has successfully returned to its 2019 solvency baseline despite significant changes in the scale of its operations.
- Balance Sheet Expansion
- A significant scaling event is observed between 2020 and 2021. Total assets increased by approximately 91%, rising from US$19,229 million to US$36,811 million. Simultaneously, total debt grew from US$3,856 million to a peak of US$7,471 million. The fact that the debt to assets ratio remained stable at 0.20 during this surge suggests that the expansion was funded by a balanced combination of debt and other financing sources, such as equity.
- Deleveraging and Stability
- Following the peak in 2021, a clear downward trend in total debt is observed, with levels falling to US$5,425 million in 2022 and further to US$5,337 million by 2023. Because total assets remained relatively stable during this period, fluctuating only slightly around the US$36 billion mark, the reduction in total debt led to a direct improvement in the solvency ratio, lowering it back to 0.15.
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Debt to Assets (including Operating Lease Liability)
Pioneer Natural Resources Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 28) | 779) | 244) | 140) | 450) | |
| Finance lease liability, current | 21) | 20) | 18) | 17) | 16) | |
| Long-term debt, excluding current portion | 4,807) | 4,125) | 6,688) | 3,160) | 1,839) | |
| Finance lease liability, noncurrent | 481) | 501) | 521) | 539) | 556) | |
| Total debt | 5,337) | 5,425) | 7,471) | 3,856) | 2,861) | |
| Operating lease liability, current | 175) | 125) | 121) | 100) | 136) | |
| Operating lease liability, noncurrent | 248) | 236) | 243) | 110) | 170) | |
| Total debt (including operating lease liability) | 5,760) | 5,786) | 7,835) | 4,066) | 3,167) | |
| Total assets | 36,613) | 35,740) | 36,811) | 19,229) | 19,067) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.16 | 0.16 | 0.21 | 0.21 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.10 | 0.11 | 0.15 | — | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.23 | — | — | |
| Exxon Mobil Corp. | 0.13 | 0.13 | 0.16 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.13 | 0.13 | 0.16 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.14 | 0.14 | 0.17 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 5,760 ÷ 36,613 = 0.16
2 Click competitor name to see calculations.
The solvency profile exhibits a period of significant expansion and subsequent deleveraging between 2019 and 2023. While both total debt and total assets peaked in 2021, the company achieved a more favorable leverage position in the following two years.
- Total Debt Dynamics
- Total debt, inclusive of operating lease liabilities, experienced a sharp upward trajectory from US$ 3,167 million in 2019 to a peak of US$ 7,835 million in 2021. Following this peak, a notable reduction occurred in 2022, with debt falling to US$ 5,786 million and remaining stable at US$ 5,760 million through the end of 2023.
- Total Asset Evolution
- The asset base remained relatively constant between 2019 and 2020, staying near US$ 19 billion. A substantial increase was recorded in 2021, where total assets grew to US$ 36,811 million. This expanded asset base was maintained with minimal fluctuation through 2023, closing at US$ 36,613 million.
- Debt to Assets Ratio Analysis
- The debt to assets ratio increased from 0.17 in 2019 to 0.21 in 2020 and 2021, reflecting a higher reliance on borrowed funds to finance assets during the expansion phase. However, a corrective trend is observed from 2022 onward, with the ratio decreasing and stabilizing at 0.16. This indicates that the entity successfully reduced its leverage while maintaining the gains in its total asset base, thereby improving its overall solvency position.
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Financial Leverage
Pioneer Natural Resources Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 36,613) | 35,740) | 36,811) | 19,229) | 19,067) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.58 | 1.59 | 1.61 | 1.66 | 1.57 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.63 | 1.62 | 1.72 | — | — | |
| ConocoPhillips | 1.95 | 1.95 | 2.00 | — | — | |
| Exxon Mobil Corp. | 1.84 | 1.89 | 2.01 | — | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.77 | 1.79 | 1.90 | — | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.80 | 1.82 | 1.93 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Equity
= 36,613 ÷ 23,171 = 1.58
2 Click competitor name to see calculations.
The financial position of the company between 2019 and 2023 is characterized by a substantial expansion of the balance sheet and a consistent stabilization of financial leverage. A notable surge in both total assets and equity occurred between 2020 and 2021, effectively doubling the scale of the company's capital base.
- Asset and Equity Expansion
- Total assets grew from 19,067 million US$ in 2019 to 36,613 million US$ by 2023. The most significant increase took place in 2021, where assets rose from 19,229 million US$ to 36,811 million US$. This growth was mirrored by equity, which increased from 11,569 million US$ in 2020 to 22,837 million US$ in 2021, suggesting a capital infusion or significant retained earnings that scaled proportionally with asset growth.
- Financial Leverage Analysis
- The financial leverage ratio remained relatively stable over the five-year period, oscillating within a narrow range between 1.57 and 1.66. After reaching a peak of 1.66 in 2020, the ratio entered a period of steady decline, falling to 1.61 in 2021, 1.59 in 2022, and 1.58 in 2023. This downward trend indicates a gradual reduction in the proportion of debt used to finance assets relative to shareholder equity.
- Solvency Implications
- The alignment between the growth of total assets and equity suggests a disciplined approach to expansion. The gradual decrease in the leverage ratio following 2020 reflects an improvement in the company's solvency profile, as the reliance on leveraged financing has marginally decreased while the absolute size of the equity base has expanded significantly.
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Interest Coverage
Pioneer Natural Resources Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 4,894) | 7,845) | 2,118) | (200) | 756) | |
| Add: Income tax expense | 1,353) | 2,106) | 628) | (61) | 231) | |
| Add: Interest expense | 153) | 128) | 161) | 129) | 121) | |
| Earnings before interest and tax (EBIT) | 6,400) | 10,079) | 2,907) | (132) | 1,108) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 41.83 | 78.74 | 18.06 | -1.02 | 9.16 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 64.08 | 97.27 | 31.39 | — | — | |
| ConocoPhillips | 21.88 | 36.07 | 15.38 | — | — | |
| Exxon Mobil Corp. | 63.17 | 98.43 | 33.98 | — | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 48.02 | 74.46 | 26.79 | — | — | |
| Interest Coverage, Industry | ||||||
| Energy | 40.96 | 62.30 | 23.05 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,400 ÷ 153 = 41.83
2 Click competitor name to see calculations.
The analysis of solvency indicators between 2019 and 2023 reveals a period of significant volatility followed by a substantial strengthening of the ability to service debt. A critical trough occurred in 2020, which was succeeded by an aggressive expansion in operating earnings that peaked in 2022.
- Earnings Before Interest and Tax (EBIT)
- Operating performance exhibited extreme fluctuations. A decline from US$ 1,108 million in 2019 to a loss of US$ 132 million in 2020 represents a severe contraction in profitability. A rapid recovery followed, with EBIT ascending to US$ 2,907 million in 2021 and reaching a peak of US$ 10,079 million in 2022. Although 2023 saw a reduction to US$ 6,400 million, the earnings level remained significantly higher than pre-2022 levels.
- Interest Expense
- Interest obligations remained relatively stable throughout the five-year period. Costs fluctuated within a narrow range, starting at US$ 121 million in 2019 and ending at US$ 153 million in 2023. This stability suggests that the fluctuations in solvency metrics were driven primarily by operational earnings volatility rather than changes in debt levels or financing costs.
- Interest Coverage Ratio
- The interest coverage ratio closely mirrored the movements of the EBIT. The ratio fell to -1.02 in 2020, signaling a temporary inability to cover interest payments from operating profits. A sharp reversal occurred in 2021, with the ratio climbing to 18.06, and escalating further to a peak of 78.74 in 2022. By the end of 2023, the ratio settled at 41.83, which indicates a robust margin of safety and a strong capacity to meet interest obligations.
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Fixed Charge Coverage
Pioneer Natural Resources Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 4,894) | 7,845) | 2,118) | (200) | 756) | |
| Add: Income tax expense | 1,353) | 2,106) | 628) | (61) | 231) | |
| Add: Interest expense | 153) | 128) | 161) | 129) | 121) | |
| Earnings before interest and tax (EBIT) | 6,400) | 10,079) | 2,907) | (132) | 1,108) | |
| Add: Operating lease cost | 179) | 151) | 162) | 151) | 200) | |
| Earnings before fixed charges and tax | 6,579) | 10,230) | 3,069) | 19) | 1,308) | |
| Interest expense | 153) | 128) | 161) | 129) | 121) | |
| Operating lease cost | 179) | 151) | 162) | 151) | 200) | |
| Fixed charges | 332) | 279) | 323) | 280) | 321) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 19.82 | 36.67 | 9.50 | 0.07 | 4.07 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Chevron Corp. | 9.57 | 18.28 | 8.43 | — | — | |
| ConocoPhillips | 17.14 | 28.76 | 11.94 | — | — | |
| Exxon Mobil Corp. | 19.68 | 31.21 | 13.55 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 14.54 | 25.07 | 10.99 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 12.31 | 20.61 | 9.19 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 6,579 ÷ 332 = 19.82
2 Click competitor name to see calculations.
The analysis of solvency ratios reveals a period of extreme volatility in the ability to meet fixed obligations, characterized by a severe contraction in 2020 followed by an aggressive recovery and subsequent stabilization.
- Earnings Before Fixed Charges and Tax Trends
- A dramatic fluctuation in earnings is evident, with a sharp decline to US$ 19 million in 2020 from US$ 1,308 million in 2019. This was followed by an exponential increase, peaking at US$ 10,230 million in 2022, before moderating to US$ 6,579 million by the end of 2023.
- Fixed Charge Stability
- In contrast to earnings, fixed charges remained relatively stable throughout the five-year period, fluctuating within a narrow range between US$ 279 million and US$ 332 million. This stability indicates that the solvency variations were driven almost exclusively by operational performance rather than changes in the fixed debt or lease obligations.
- Fixed Charge Coverage Ratio Interpretation
- The coverage ratio mirrored the volatility of earnings, crashing to 0.07 in 2020, which indicates a period of critical solvency risk where earnings were nearly insufficient to cover fixed charges. A subsequent surge to 36.67 in 2022 reflects an exceptional capacity to service obligations. As of December 31, 2023, the ratio remained robust at 19.82, representing a significant improvement over the 4.07 ratio observed in 2019 and suggesting a strengthened long-term solvency position.
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