Permian Resources Corporation (PR)

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 1,845,600 2,007,036 1,527,468 1,273,164 1,212,857 937,251 1,185,566 1,220,877 965,777 862,102 510,436 252,924 200,032 -46,192 -131,817 -101,159 -701,131 -603,609 -556,872 -538,290
Interest expense (ttm) US$ in thousands 301,414 291,505 252,153 213,527 179,248 153,543 141,768 119,268 94,153 68,726 53,561 54,417 58,393 62,144 66,220 66,874 66,858 65,324 62,069 59,895
Interest coverage 6.12 6.89 6.06 5.96 6.77 6.10 8.36 10.24 10.26 12.54 9.53 4.65 3.43 -0.74 -1.99 -1.51 -10.49 -9.24 -8.97 -8.99

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,845,600K ÷ $301,414K
= 6.12

Permian Resources Corporation's interest coverage ratio experienced significant fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio, which indicates the company's ability to cover interest expenses with its operating income, started at negative levels, indicating that the company's earnings were insufficient to cover its interest obligations during the initial period.

From March 31, 2021, to September 30, 2022, the interest coverage ratio remained negative, suggesting ongoing challenges in meeting interest payments with operating profits. However, there was a notable improvement in the ratio from December 31, 2021, onwards. The interest coverage ratio turned positive, indicating that the company's operating income exceeded its interest expenses during this period.

The positive trend in the interest coverage ratio was particularly evident from June 30, 2022, to December 31, 2024, where the ratio consistently remained above 5. This indicates a healthier financial position for Permian Resources Corporation, with sufficient operating income to comfortably cover interest costs.

Overall, the improvement in Permian Resources Corporation's interest coverage ratio over the period reflects enhanced financial stability and ability to meet its interest payment obligations, signaling a positive trajectory for the company's financial health.