Expand Energy Corporation (EXE)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-718,000	396,000	628,000	1,443,000	3,221,000	4,694,000	5,609,000	6,419,000	3,811,000	3,002,000	1,655,000	-116,000	6,306,000	4,487,000	4,105,000	4,387,000	-9,438,000	-9,241,000	-8,406,000	-7,994,000
Interest expense (ttm)	US$ in thousands	125,000	84,000	89,000	94,000	112,000	129,000	156,000	167,000	160,000	146,000	111,000	93,000	84,000	82,000	90,000	209,000	331,000	446,000	598,000	636,000
Interest coverage		-5.74	4.71	7.06	15.35	28.76	36.39	35.96	38.44	23.82	20.56	14.91	-1.25	75.07	54.72	45.61	20.99	-28.51	-20.72	-14.06	-12.57

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-718,000K ÷ $125,000K
= -5.74

Expand Energy Corporation's interest coverage ratio has fluctuated significantly over the period from March 31, 2020, to December 31, 2024. Initially, the company had negative interest coverage ratios, indicating that its earnings were insufficient to cover its interest expenses. However, there was a positive turnaround in the ratio starting from March 31, 2021, where it reached 20.99 and continued to improve significantly in the subsequent quarters.

The interest coverage ratio peaked at 75.07 on December 31, 2021, reflecting a strong ability to cover interest payments with operating earnings. This high ratio suggests a healthy financial position and reduced financial risk related to debt servicing. However, the ratio declined in the following quarters but remained positive until December 31, 2022.

The interest coverage ratio experienced a slight drop into negative territory on March 31, 2022, which is a cause for concern as it indicates that the company may be struggling to meet its interest obligations with its operating earnings during that period. The ratio then recovered and stabilized above 15 in the subsequent quarters, indicating an improvement in the company's ability to cover interest expenses with its earnings.

Overall, Expand Energy Corporation's interest coverage ratio has shown volatility but generally demonstrated a positive trend towards the latter half of the period, with some temporary setbacks. Stakeholders should continue to monitor this ratio to ensure that the company can sustainably meet its interest obligations and maintain financial stability.