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
EQT Corp., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The solvency profile reveals a gradual increase in capital leverage accompanied by a significant deterioration in debt service capacity. While the company maintained relatively stable leverage ratios, the coverage metrics indicate a severe shift in the ability to meet financial obligations starting in 2018.
- Capital Structure and Leverage
- A steady upward trend is observed in the debt to equity ratio, which rose from 0.45 in 2017 to 0.55 by 2021. Similarly, the debt to capital ratio increased from 0.31 to 0.35 over the same period. The inclusion of operating lease liabilities had a negligible impact on these ratios, suggesting that leased assets are not a primary contributor to the overall debt burden. Debt to assets peaked at 0.28 in 2019 before moderating to 0.25 in 2021.
- Financial Leverage Trends
- Financial leverage exhibited volatility, declining from 2.22 in 2017 to a low of 1.89 in 2018, before trending upward to reach 2.15 by the end of 2021. This suggests a fluctuating balance between total assets and shareholder equity over the five-year window.
- Debt Service Coverage
- A critical decline occurred in the ability to service debt. The interest coverage ratio shifted from a positive 2.18 in 2017 to a deep negative -12.44 in 2018, remaining negative throughout the rest of the period and ending at -4.14 in 2021. Fixed charge coverage followed an identical pattern, falling from 1.87 in 2017 to -3.83 in 2021. These negative values indicate that operating income was insufficient to cover interest and fixed charges for four consecutive years.
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Debt to Equity
EQT Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Common shareholders’ equity | 10,029,527) | 9,255,240) | 9,803,588) | 10,958,229) | 13,319,618) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.55 | 0.53 | 0.54 | 0.50 | 0.45 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.23 | — | — | — | — | |
| ConocoPhillips | 0.44 | — | — | — | — | |
| Exxon Mobil Corp. | 0.28 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.28 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.31 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Common shareholders’ equity
= 5,485,002 ÷ 10,029,527 = 0.55
2 Click competitor name to see calculations.
An analysis of the solvency position reveals a gradual increase in financial leverage over the five-year period ending December 31, 2021. Although nominal debt levels fluctuated, the debt-to-equity ratio exhibited a general upward trend, rising from 0.45 in 2017 to 0.55 in 2021.
- Total Debt Trends
- Total debt experienced a steady decline between 2017 and 2020, decreasing from approximately 5.99 billion USD to 4.93 billion USD. This downward trajectory was reversed in 2021, as total debt increased to 5.49 billion USD.
- Shareholders' Equity Trends
- Common shareholders' equity showed a more pronounced decrease than total debt during the initial phase of the period. Equity fell from 13.32 billion USD in 2017 to a low of 9.26 billion USD in 2020. A recovery occurred in 2021, with equity rising to 10.03 billion USD.
- Debt to Equity Ratio Interpretation
- The debt-to-equity ratio climbed from 0.45 in 2017 to 0.54 by 2019. This increase occurred despite the simultaneous reduction in total debt, indicating that the contraction of the equity base outweighed the reduction in liabilities. The ratio remained relatively stable in 2020 at 0.53 before reaching a period peak of 0.55 in 2021, reflecting a simultaneous increase in both debt and equity levels.
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Debt to Equity (including Operating Lease Liability)
EQT Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Current portion of lease liabilities | 27,972) | 25,004) | 29,036) | —) | —) | |
| Noncurrent portions of lease liabilities (recorded in Other liabilities and credits) | 24,740) | 24,909) | 29,949) | —) | —) | |
| Total debt (including operating lease liability) | 5,537,714) | 4,975,379) | 5,351,964) | 5,497,381) | 5,997,329) | |
| Common shareholders’ equity | 10,029,527) | 9,255,240) | 9,803,588) | 10,958,229) | 13,319,618) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.55 | 0.54 | 0.55 | 0.50 | 0.45 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.25 | — | — | — | — | |
| ConocoPhillips | 0.45 | — | — | — | — | |
| Exxon Mobil Corp. | 0.31 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.31 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.34 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Common shareholders’ equity
= 5,537,714 ÷ 10,029,527 = 0.55
2 Click competitor name to see calculations.
The solvency profile from 2017 through 2021 indicates a gradual increase in financial leverage. While total debt obligations remained relatively stable or declined for the majority of the period, a simultaneous reduction in common shareholders' equity resulted in a higher overall debt-to-equity ratio.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a general downward trend from 2017 to 2020, falling from 5,997,329 thousand USD to a low of 4,975,379 thousand USD. This trend reversed in 2021, with debt levels increasing to 5,537,714 thousand USD.
- Shareholders' Equity Trends
- Common shareholders' equity experienced a consistent decline between 2017 and 2020, decreasing from 13,319,618 thousand USD to 9,255,240 thousand USD. A partial recovery occurred in 2021, as equity increased to 10,029,527 thousand USD.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio rose from 0.45 in 2017 to 0.55 by 2019, maintaining a plateau of 0.54 and 0.55 through 2020 and 2021. The increase in leverage during the early part of the period was primarily driven by the contraction of the equity base rather than an expansion of liabilities, as total debt was decreasing during the same window in which the ratio was rising.
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Debt to Capital
EQT Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Common shareholders’ equity | 10,029,527) | 9,255,240) | 9,803,588) | 10,958,229) | 13,319,618) | |
| Total capital | 15,514,529) | 14,180,706) | 15,096,567) | 16,455,610) | 19,316,947) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.35 | 0.35 | 0.35 | 0.33 | 0.31 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.18 | — | — | — | — | |
| ConocoPhillips | 0.31 | — | — | — | — | |
| Exxon Mobil Corp. | 0.22 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.22 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.24 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,485,002 ÷ 15,514,529 = 0.35
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2017 to 2021 reveals a period of capital contraction followed by a moderate recovery, with a stabilizing debt-to-capital ratio.
- Total Debt Trends
- A consistent downward trajectory in total debt was observed from 2017 through 2020, with obligations decreasing from $5,997,329 thousand to a period low of $4,925,466 thousand. This trend reversed in 2021, as total debt increased to $5,485,002 thousand.
- Total Capital Trends
- Total capital experienced a significant and steady decline between 2017 and 2020, falling from $19,316,947 thousand to $14,180,706 thousand. Similar to the debt trend, total capital showed a recovery in 2021, rising to $15,514,529 thousand.
- Debt to Capital Ratio Analysis
- The debt to capital ratio exhibited a gradual increase from 0.31 in 2017 to 0.35 in 2019, after which it remained stagnant at 0.35 through 2021. The increase in this ratio during a period of declining absolute debt suggests that total capital decreased at a faster rate than the reduction of debt obligations, thereby increasing the proportion of debt within the capital structure.
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Debt to Capital (including Operating Lease Liability)
EQT Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Current portion of lease liabilities | 27,972) | 25,004) | 29,036) | —) | —) | |
| Noncurrent portions of lease liabilities (recorded in Other liabilities and credits) | 24,740) | 24,909) | 29,949) | —) | —) | |
| Total debt (including operating lease liability) | 5,537,714) | 4,975,379) | 5,351,964) | 5,497,381) | 5,997,329) | |
| Common shareholders’ equity | 10,029,527) | 9,255,240) | 9,803,588) | 10,958,229) | 13,319,618) | |
| Total capital (including operating lease liability) | 15,567,241) | 14,230,619) | 15,155,552) | 16,455,610) | 19,316,947) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.36 | 0.35 | 0.35 | 0.33 | 0.31 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.20 | — | — | — | — | |
| ConocoPhillips | 0.31 | — | — | — | — | |
| Exxon Mobil Corp. | 0.24 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.23 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.25 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 5,537,714 ÷ 15,567,241 = 0.36
2 Click competitor name to see calculations.
The solvency profile from 2017 to 2021 exhibits a gradual increase in leverage relative to total capital, despite fluctuating absolute debt levels. While the company successfully reduced its total debt obligations for the first four years of the period, the proportion of debt within the overall capital structure rose steadily.
- Total Debt Analysis
- A consistent downward trend in total debt, including operating lease liabilities, was observed between 2017 and 2020, with balances falling from approximately 5.99 billion USD to 4.98 billion USD. This period of deleveraging was interrupted in 2021, when total debt increased to 5.54 billion USD.
- Total Capital Trends
- Total capital experienced a more pronounced decline than total debt between 2017 and 2020, dropping from 19.32 billion USD to 14.23 billion USD. Similar to the debt trend, total capital saw a reversal in 2021, increasing to 15.57 billion USD.
- Debt to Capital Ratio Interpretation
- The debt to capital ratio increased progressively from 0.31 in 2017 to 0.36 by 2021. The rise in this ratio from 2017 to 2020, occurring despite the reduction in absolute debt, indicates that the total capital base contracted at a faster rate than the debt was repaid. The continued increase to 0.36 in 2021 suggests that the addition of new debt outpaced the growth in total capital during that fiscal year.
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Debt to Assets
EQT Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Total assets | 21,607,388) | 18,113,469) | 18,809,227) | 20,721,344) | 29,522,604) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.25 | 0.27 | 0.28 | 0.27 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.13 | — | — | — | — | |
| ConocoPhillips | 0.22 | — | — | — | — | |
| Exxon Mobil Corp. | 0.14 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.15 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.16 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,485,002 ÷ 21,607,388 = 0.25
2 Click competitor name to see calculations.
The solvency profile from 2017 to 2021 demonstrates a period of adjusting leverage, where the debt-to-assets ratio was influenced more significantly by shifts in the asset base than by changes in total debt obligations.
- Debt to Assets Ratio
- An initial increase in the ratio is observed, rising from 0.20 in 2017 to a peak of 0.28 in 2019. This increase persisted despite a reduction in total debt, signaling that assets decreased more rapidly than liabilities during this period. A subsequent downward trend is noted from 2019 to 2021, with the ratio settling at 0.25.
- Total Debt Evolution
- Total debt exhibited a consistent decline from 2017 through 2020, moving from 5,997,329 thousand US dollars to a low of 4,925,466 thousand US dollars. This period of deleveraging was interrupted in 2021, as total debt rose to 5,485,002 thousand US dollars.
- Total Asset Dynamics
- A significant contraction in total assets occurred between 2017 and 2020, with values dropping from 29,522,604 thousand US dollars to 18,113,469 thousand US dollars. This contraction reversed in 2021, as total assets increased to 21,607,388 thousand US dollars, which served as a primary driver for the reduction in the debt-to-assets ratio during the final year of the period.
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Debt to Assets (including Operating Lease Liability)
EQT Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 954,900) | 154,161) | 16,204) | 704,390) | 12,406) | |
| Credit facility borrowings | —) | 300,000) | 294,000) | 800,000) | 1,295,000) | |
| Term Loan Facility borrowings | —) | —) | 999,353) | —) | —) | |
| Senior notes | 4,435,782) | 4,371,467) | 3,878,366) | 3,882,932) | 4,575,203) | |
| Note payable to EQM Midstream Partners, LP | 94,320) | 99,838) | 105,056) | 110,059) | 114,720) | |
| Total debt | 5,485,002) | 4,925,466) | 5,292,979) | 5,497,381) | 5,997,329) | |
| Current portion of lease liabilities | 27,972) | 25,004) | 29,036) | —) | —) | |
| Noncurrent portions of lease liabilities (recorded in Other liabilities and credits) | 24,740) | 24,909) | 29,949) | —) | —) | |
| Total debt (including operating lease liability) | 5,537,714) | 4,975,379) | 5,351,964) | 5,497,381) | 5,997,329) | |
| Total assets | 21,607,388) | 18,113,469) | 18,809,227) | 20,721,344) | 29,522,604) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.26 | 0.27 | 0.28 | 0.27 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.15 | — | — | — | — | |
| ConocoPhillips | 0.23 | — | — | — | — | |
| Exxon Mobil Corp. | 0.16 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.16 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.17 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 5,537,714 ÷ 21,607,388 = 0.26
2 Click competitor name to see calculations.
The solvency position of the entity experienced a period of volatility between 2017 and 2021, characterized by a significant contraction in the asset base and a subsequent stabilization of the debt-to-assets ratio. While total debt generally decreased for the majority of the period, the simultaneous reduction in total assets led to an initial increase in the overall leverage ratio.
- Total Debt Trends
- Total debt, inclusive of operating lease liabilities, followed a downward trajectory from 2017 through 2020, falling from US$ 5,997,329 thousand to US$ 4,975,379 thousand. This period of debt reduction was interrupted in 2021, when total debt increased to US$ 5,537,714 thousand.
- Total Asset Trends
- A substantial decline in total assets was observed between 2017 and 2020, with the value dropping from US$ 29,522,604 thousand to US$ 18,113,469 thousand. This downward trend reversed in 2021, as assets grew to US$ 21,607,388 thousand.
- Debt to Assets Ratio Interpretation
- The debt-to-assets ratio increased from 0.20 in 2017 to a peak of 0.28 in 2019. This upward movement indicates that the reduction in total assets occurred at a faster rate than the reduction in total debt during those years. Following the 2019 peak, the ratio showed a slight corrective downward trend, ending at 0.26 in 2021, suggesting a stabilization of the company's solvency profile.
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Financial Leverage
EQT Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 21,607,388) | 18,113,469) | 18,809,227) | 20,721,344) | 29,522,604) | |
| Common shareholders’ equity | 10,029,527) | 9,255,240) | 9,803,588) | 10,958,229) | 13,319,618) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.15 | 1.96 | 1.92 | 1.89 | 2.22 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.72 | — | — | — | — | |
| ConocoPhillips | 2.00 | — | — | — | — | |
| Exxon Mobil Corp. | 2.01 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.90 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.93 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Common shareholders’ equity
= 21,607,388 ÷ 10,029,527 = 2.15
2 Click competitor name to see calculations.
The balance sheet characteristics between 2017 and 2021 demonstrate a cycle of contraction followed by a period of moderate growth. Total asset values and shareholders' equity both experienced a downward trajectory from 2017 through 2020, with a reversal of this trend occurring in 2021.
- Asset and Equity Trends
- Total assets decreased significantly from US$ 29.5 billion in 2017 to a low of US$ 18.1 billion in 2020, before recovering to US$ 21.6 billion in 2021. Parallel to this, common shareholders' equity declined from US$ 13.3 billion in 2017 to US$ 9.3 billion in 2020, with a recovery to US$ 10.0 billion by the end of 2021. The simultaneous decline in both assets and equity suggests a period of balance sheet contraction during the initial four-year window.
- Financial Leverage Ratio
- The financial leverage ratio exhibited a notable decrease from 2.22 in 2017 to 1.89 in 2018, indicating a shift toward a more conservative capital structure. Following this decline, a consistent upward trend was observed from 2018 to 2021, with the ratio rising to 1.92 in 2019, 1.96 in 2020, and reaching 2.15 in 2021. This gradual increase suggests a growing reliance on debt relative to equity over the latter three years of the observed period, nearly returning to the leverage levels seen in 2017.
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Interest Coverage
EQT Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) attributable to EQT Corporation | (1,155,759) | (967,166) | (1,221,695) | (2,244,568) | 1,508,529) | |
| Add: Net income attributable to noncontrolling interest | 1,246) | (10) | —) | 237,410) | 349,613) | |
| Less: Income from discontinued operations, net of tax | —) | —) | —) | 373,762) | 471,113) | |
| Add: Income tax expense | (434,175) | (298,858) | (375,776) | (696,511) | (1,188,416) | |
| Add: Interest expense | 308,903) | 271,200) | 199,851) | 228,958) | 167,971) | |
| Earnings before interest and tax (EBIT) | (1,279,785) | (994,834) | (1,397,620) | (2,848,473) | 366,584) | |
| Solvency Ratio | ||||||
| Interest coverage1 | -4.14 | -3.67 | -6.99 | -12.44 | 2.18 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 31.39 | — | — | — | — | |
| ConocoPhillips | 15.38 | — | — | — | — | |
| Exxon Mobil Corp. | 33.98 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 26.79 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Energy | 23.05 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= -1,279,785 ÷ 308,903 = -4.14
2 Click competitor name to see calculations.
The solvency profile exhibits a significant deterioration between 2017 and 2021, characterized by a transition from positive operating profitability to sustained losses. This shift has rendered the entity unable to cover its interest obligations from operating earnings for four consecutive years.
- Earnings Before Interest and Tax (EBIT)
- A sharp decline in operating performance occurred in 2018, with EBIT dropping from a positive 366,584 thousand US$ to a deficit of 2,848,473 thousand US$. Although losses narrowed periodically through 2020, reaching 994,834 thousand US$, the trend reversed in 2021 as EBIT fell again to 1,279,785 thousand US$.
- Interest Expense
- Interest obligations demonstrated a general upward trajectory over the five-year period. Expenses rose from 167,971 thousand US$ in 2017 to 308,903 thousand US$ in 2021, representing a substantial increase in the cost of debt servicing despite the ongoing operating losses.
- Interest Coverage Ratio
- The interest coverage ratio plummeted from a positive 2.18 in 2017 to -12.44 in 2018. While the ratio improved slightly to -3.67 by 2020 as losses decreased, it remained negative throughout the period, ending at -4.14 in 2021. This persistent negative coverage indicates that operating profits were insufficient to meet interest payments, necessitating the use of cash reserves or additional borrowing to maintain solvency.
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Fixed Charge Coverage
EQT Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) attributable to EQT Corporation | (1,155,759) | (967,166) | (1,221,695) | (2,244,568) | 1,508,529) | |
| Add: Net income attributable to noncontrolling interest | 1,246) | (10) | —) | 237,410) | 349,613) | |
| Less: Income from discontinued operations, net of tax | —) | —) | —) | 373,762) | 471,113) | |
| Add: Income tax expense | (434,175) | (298,858) | (375,776) | (696,511) | (1,188,416) | |
| Add: Interest expense | 308,903) | 271,200) | 199,851) | 228,958) | 167,971) | |
| Earnings before interest and tax (EBIT) | (1,279,785) | (994,834) | (1,397,620) | (2,848,473) | 366,584) | |
| Add: Operating and finance lease costs | 19,826) | 28,286) | 57,517) | 117,400) | 60,800) | |
| Earnings before fixed charges and tax | (1,259,959) | (966,548) | (1,340,103) | (2,731,073) | 427,384) | |
| Interest expense | 308,903) | 271,200) | 199,851) | 228,958) | 167,971) | |
| Operating and finance lease costs | 19,826) | 28,286) | 57,517) | 117,400) | 60,800) | |
| Fixed charges | 328,729) | 299,486) | 257,368) | 346,358) | 228,771) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | -3.83 | -3.23 | -5.21 | -7.89 | 1.87 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Chevron Corp. | 8.43 | — | — | — | — | |
| ConocoPhillips | 11.94 | — | — | — | — | |
| Exxon Mobil Corp. | 13.55 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 10.99 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 9.19 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= -1,259,959 ÷ 328,729 = -3.83
2 Click competitor name to see calculations.
The solvency profile experienced a sharp decline starting in 2018, transitioning from a state of coverage to a period of sustained negative fixed charge coverage. While the organization maintained a positive capacity to meet its fixed obligations in 2017, subsequent years were marked by significant earnings deficits that undermined the ability to service fixed charges through operational income.
- Earnings Before Fixed Charges and Tax
- A substantial reversal is noted between 2017 and 2018, where earnings shifted from a positive 427.38 million USD to a loss of 2.73 billion USD. Although these losses narrowed to 966.55 million USD by 2020, they widened again to 1.26 billion USD in 2021, indicating persistent operational challenges.
- Fixed Charges Obligations
- Fixed charges exhibited a general upward trajectory over the analyzed period, increasing from 228.77 million USD in 2017 to 328.73 million USD by 2021. This increase in mandatory financial obligations occurred simultaneously with declining earnings, thereby intensifying the solvency pressure.
- Fixed Charge Coverage Ratio
- The coverage ratio collapsed from 1.87 in 2017 to -7.89 in 2018. While a moderate recovery trend was observed reaching -3.23 in 2020, the ratio deteriorated again to -3.83 in 2021. The consistent negative values from 2018 through 2021 signify that operational earnings were insufficient to cover fixed charges throughout this four-year window.
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