Antero Resources Corp (AR)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	460	453,130	2,573,900	23,860	-953,447
Interest expense	US$ in thousands	4,000	4,000	4,000	7,000	8,000
Interest coverage		0.12	113.28	643.48	3.41	-119.18

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $460K ÷ $4,000K
= 0.12

Based on the provided data, the interest coverage ratio of Antero Resources Corp has fluctuated significantly over the past five years.

As of December 31, 2020, the interest coverage ratio was -119.18, indicating that the company may have had difficulty covering its interest expenses with its operating income during that period.

By December 31, 2021, the interest coverage ratio improved significantly to 3.41, suggesting that the company's operating income was now more comfortably covering its interest obligations.

The ratio continued to strengthen over the following years, reaching 643.48 by December 31, 2022, indicating a substantial increase in the company's ability to cover its interest expenses multiple times over with its operating income.

Despite a slight drop in the ratio to 113.28 by December 31, 2023, it remained at a healthy level, indicating that the company's operating income still significantly exceeded its interest payments.

However, by December 31, 2024, the interest coverage ratio dropped significantly to 0.12, suggesting potentially strained financial conditions where the company's operating income may no longer be sufficient to cover its interest expenses adequately.

Overall, while the trend in the interest coverage ratio of Antero Resources Corp has shown significant fluctuations, it is crucial for the company to maintain a sufficient level of operating income to cover its interest payments effectively and sustain its financial health.