Item 1. Condensed Consolidated Financial Statements

83K characters. Original on sec.gov · Markdown

Item 1. Condensed Consolidated Financial Statements

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in millions, except per share data)June 30, 2026December 31, 2025
Assets
Current assets:
Cash and cash equivalents$663$616
Restricted cash10180
Accounts receivable, net1,0981,599
Derivative assets602264
Other current assets378357
Total current assets2,8422,916
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties28,09226,606
Unproved properties5,5015,478
Other property and equipment547509
Total property and equipment34,14032,593
Less: accumulated depreciation, depletion and amortization(9,690)(8,278)
Property and equipment held for sale, net—40
Total property and equipment, net24,45024,355
Long-term derivative assets11347
Deferred income tax assets—168
Other long-term assets625801
Total assets$28,030$28,287
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$942$753
Accrued interest78100
Derivative liabilities13
Other current liabilities1,9442,045
Total current liabilities2,9652,901
Long-term debt, net3,6855,009
Long-term derivative liabilities—1
Asset retirement obligations, net of current portion723688
Long-term contract liabilities835975
Other long-term liabilities412135
Total liabilities8,6209,709
Contingencies and commitments (Note 5)
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized: 234,349,727 and 239,249,874 shares issued22
Additional paid-in capital13,77413,746
Retained earnings5,6344,830
Total stockholders' equity19,41018,578
Total liabilities and stockholders' equity$28,030$28,287

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
($ in millions, except per share data)2026202520262025
Revenues and other:
Natural gas, oil and NGL$1,830$2,021$5,145$4,321
Marketing6817881,8931,698
Gains (losses) on derivatives449877320(137)
Gains (losses) on sales of assets—4(1)4
Total revenues and other2,9603,6907,3575,886
Operating expenses:
Production168151353298
Gathering, processing and transportation6345631,3241,126
Severance and ad valorem taxes604912097
Exploration16203027
Marketing6497911,7701,710
General and administrative504011387
Separation and other termination costs——9—
Depreciation, depletion and amortization7227691,4331,480
Other operating expense, net—381360
Total operating expenses2,2992,4215,1654,885
Income from operations6611,2692,1921,001
Other income (expense):
Interest expense(43)(60)(102)(119)
Gains on purchases, exchanges or extinguishments of debt373373
Other income, net17163424
Total other income (expense)11(41)(31)(92)
Income before income taxes6721,2282,161909
Income tax expense150260480190
Net income$522$968$1,681$719
Earnings per common share:
Basic$2.19$4.07$7.03$3.04
Diluted$2.19$4.02$7.02$2.99
Weighted average common shares outstanding (in thousands):
Basic238,224237,973239,058236,213
Diluted238,357240,560239,559240,628

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six Months Ended June 30,
($ in millions)20262025
Cash flows from operating activities:
Net income$1,681$719
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization1,4331,480
Deferred income tax expense465134
Derivative (gains) losses, net(320)137
Cash payments on derivative settlements, net(92)(29)
Share-based compensation2222
(Gains) losses on sales of assets1(4)
Contract amortization(98)(124)
Gains on purchases, exchanges or extinguishments of debt(37)(3)
Other3416
Changes in assets and liabilities40970
Net cash provided by operating activities3,4982,418
Cash flows from investing activities:
Capital expenditures(1,460)(1,220)
Property acquisitions(7)—
Receipts of deferred consideration116116
Contributions to investments(1)(9)
Distributions from investments10—
Proceeds from divestitures of property and equipment4315
Net cash used in investing activities(1,299)(1,098)
Cash flows from financing activities:
Proceeds from credit facility—825
Payments on credit facility—(825)
Proceeds from warrant exercise1522
Cash paid to repurchase and retire common stock(580)(99)
Cash paid to purchase debt(1,287)(553)
Cash paid for common stock dividends(279)(279)
Net cash used in financing activities(2,131)(909)
Net increase in cash, cash equivalents and restricted cash68411
Cash, cash equivalents and restricted cash, beginning of period696395
Cash, cash equivalents and restricted cash, end of period$764$806
Cash and cash equivalents$663$731
Restricted cash10175
Total cash, cash equivalents and restricted cash$764$806

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Common Stock
($ in millions)SharesAmountAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
Balance as of December 31, 2024231,769,886$2$13,687$3,876$17,565
Share-based compensation386,025—(8)—(8)
Issuance of common stock for warrant exercise5,320,216—21—21
Net loss———(249)(249)
Dividends on common stock———(138)(138)
Balance as of March 31, 2025237,476,127$2$13,700$3,489$17,191
Share-based compensation100,820—15—15
Issuance of common stock for warrant exercise711,937—1—1
Repurchase and retirement of common stock(851,661)——(100)(100)
Net income———968968
Dividends on common stock———(138)(138)
Balance as of June 30, 2025237,437,223$2$13,716$4,219$17,937
Balance as of December 31, 2025239,249,874$2$13,746$4,830$18,578
Share-based compensation333,423—(2)—(2)
Issuance of common stock for warrant exercise1,122,179—15—15
Issuance of reserved common stock and warrants2,554————
Repurchase and retirement of common stock(622,458)——(66)(66)
Net income———1,1591,159
Dividends on common stock———(138)(138)
Balance as of March 31, 2026240,085,572$2$13,759$5,785$19,546
Share-based compensation16,200—15—15
Repurchase and retirement of common stock(5,752,045)——(535)(535)
Net income———522522
Dividends on common stock———(138)(138)
Balance as of June 30, 2026234,349,727$2$13,774$5,634$19,410

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Basis of Presentation and Summary of Significant Accounting Policies

Description of Company

Expand Energy Corporation (“Expand Energy,” “we,” “our,” “us” or the “Company”) is the largest natural gas producer in the U.S., based on net daily production, and is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all. We have operations in Louisiana, Texas, Pennsylvania, West Virginia and Ohio, with all of our operations located onshore in the United States.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Expand Energy were prepared in accordance with GAAP and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to our financial position as of June 30, 2026 and December 31, 2025, and our results of operations for the three months ended June 30, 2026 (“Current Quarter”), the six months ended June 30, 2026 (“Current Period”), the three months ended June 30, 2025 (“Prior Quarter”) and the six months ended June 30, 2025 (“Prior Period”). This Form 10-Q should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been eliminated. For the time periods covered by this Form 10-Q, we did not have any changes or items impacting other comprehensive income.

Restricted Cash

As of June 30, 2026, we had restricted cash of $101 million. Our restricted cash primarily represents funds restricted for payment of certain royalties pending the outcome of competing ownership claims for certain minerals.

Recently Issued Accounting Standards

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. Additionally, ASU 2025-11 includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the impact this ASU will have on our disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 expands disclosures about specific costs and expenses presented on the face of the income statement. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the impact this ASU will have on our disclosures.

We consider the applicability and impact of all ASUs. ASUs not listed above were evaluated and determined to either be not applicable, already adopted and disclosed or not material upon adoption.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

2.Natural Gas and Oil Property Transactions

Eagle Ford Divestitures

During 2023, we divested our Eagle Ford assets through three separate transactions (“the Eagle Ford divestiture transactions”). In each of these transactions, we received a portion of the purchase price upon closing, subject to customary post-closing adjustments, with the remainder of the purchase price recorded as deferred consideration and treated as a non-interest-bearing note to be paid in installments in up to the following four years following the close of the transaction. The deferred consideration is recorded at fair value with an imputed rate of interest as a Level 2 input, and approximately $95 million and $114 million of the deferred consideration is reflected within other current assets on the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively, and approximately $91 million of the deferred consideration is reflected within other long-term assets on the condensed consolidated balance sheets as of December 31, 2025. These installment payments are recorded as receipts of deferred consideration in our condensed consolidated statements of cash flows.

3.Earnings Per Share

Basic earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated in the same manner but includes the impact of potentially dilutive securities utilizing the treasury stock method. Potentially dilutive securities consists of issuable shares related to warrants, unvested restricted stock units (“RSUs”), and unvested performance share units (“PSUs”).

The reconciliations between basic and diluted earnings per share are as follows:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Numerator
Net income, basic and diluted$522$968$1,681$719
Denominator (in thousands)
Weighted average common shares outstanding, basic238,224237,973239,058236,213
Effect of potentially dilutive securities
Warrants—2,2832243,974
Restricted stock units133304277364
Performance share units———77
Weighted average common shares outstanding, diluted238,357240,560239,559240,628
Earnings per common share:
Basic$2.19$4.07$7.03$3.04
Diluted$2.19$4.02$7.02$2.99

During the Current Quarter and Current Period, the diluted earnings per share calculation excludes the effect of 10,837 reserved shares of common stock related to the settlement of General Unsecured Claims associated with the Chapter 11 Cases, as all necessary conditions had not been met for such shares to be considered dilutive shares.

During the Prior Quarter and Prior Period, the diluted earnings per share calculation excludes the effect of 308,646 reserved shares of common stock and 582,109 reserved Class C Warrants related to the settlement of General Unsecured Claims associated with the Chapter 11 Cases, as all necessary conditions had not been met for

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

such shares to be considered dilutive shares. On February 9, 2026, the Warrants, including the Class C Warrants, expired. For additional information on the Warrants, see Note 9.

4.Debt

Our long-term debt consisted of the following as of June 30, 2026 and December 31, 2025:

June 30, 2026December 31, 2025
Carrying AmountFair Value**(a)**Carrying AmountFair Value**(a)**
Credit Facility$—$—$—$—
5.375% senior notes due 2029638638638639
5.875% senior notes due 2029(b)——440441
6.75% senior notes due 2029(b)——847852
5.375% senior notes due 20301,2001,2041,2001,218
4.75% senior notes due 20321,1501,1201,1501,137
5.70% senior notes due 2035750757750776
Discounts on senior notes, net(47)—(8)—
Debt issuance costs(6)—(8)—
Total long-term debt, net$3,685$3,719$5,009$5,063

(a)The carrying value of borrowings under our Credit Facility approximates fair value as the interest rates are based on prevailing market rates and are a Level 1 fair value measurement. For all other debt, a market approach, based upon quotes from major financial institutions, which are Level 2 inputs, is used to measure the fair value.

(b)These notes were redeemed during the Current Period, see additional information below.

Credit Facility. On September 30, 2025, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) that, as amended, has a maturity date of September 30, 2030 (the “Credit Facility”), with the lenders and issuing banks party thereto from time to time (the “Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent. The maturity date for the Credit Facility has two one-year extension options available, each subject to the Lenders’ consent. The Credit Facility provides for aggregate commitments of $3.5 billion, with incremental capacity for additional commitments in an amount up to $1.0 billion, subject to the receipt of commitments thereto and certain customary conditions. Under the Credit Facility, the sublimit available for the issuance of letters of credit is $1.0 billion and the sublimit available for swingline loans is $100 million. As of June 30, 2026, we had approximately $3.5 billion available for borrowings under the Credit Facility.

The Credit Agreement contains restrictive covenants that, subject to exceptions customary to investment-grade credit facilities, limit Expand Energy and its subsidiaries’ ability to, among other things: (i) incur priority indebtedness, (ii) enter into mergers; (iii) make or declare dividends; (iv) incur liens; (v) sell all or substantially all of their assets; and (vi) engage in certain transactions with affiliates. The Credit Agreement requires our compliance with an indebtedness to capitalization ratio, which is the ratio of the Company’s total indebtedness to the sum of total indebtedness plus stockholders’ equity (the “Debt to Capitalization Ratio”), not to exceed 65%, tested at the end of each quarter. As of June 30, 2026, we were in compliance with the Debt to Capitalization Ratio.

Borrowings under the Credit Agreement may be alternate base rate loans or term SOFR loans, at our election. Interest is payable quarterly for alternate base rate loans and at the end of the applicable interest period for term SOFR loans. Term SOFR loans bear interest at term SOFR plus an applicable rate ranging from 112.5 to 200 basis points per annum, depending on the Company’s unsecured debt ratings. Alternate base rate loans bear interest at a rate per annum equal to the greatest of: (i) the prime rate; (ii) the federal funds effective rate plus 50 basis points; and (iii) the term SOFR rate for a one-month interest period plus 100 basis points, plus an applicable margin ranging from 12.5 to 100 basis points per annum, depending on the Company’s unsecured debt ratings. Expand Energy also pays a commitment fee on unused commitment amounts under the Credit Facility ranging from 12.5 to 32.5 basis points per annum, depending on the Company’s unsecured debt ratings.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The Credit Facility is subject to customary events of default, remedies, and cure periods for investment-grade credit facilities of this nature.

The Company had no secured debt as of June 30, 2026.

Senior Notes Repayment

During the Prior Period, the $389 million aggregate principal of 4.95% Senior Notes due 2025 (the “2025 Notes”) was repaid and terminated with cash on hand and borrowings on the Company’s reserve-based credit facility entered into on December 9, 2022, which was subsequently terminated in connection with the entry into the Credit Facility. The borrowings on the prior credit facility were subsequently repaid during the Prior Period. Additionally, we redeemed the remaining $47 million aggregate principal of the 5.50% Senior Notes due 2026 (the “2026 Notes”), approximately $84 million of our 6.75% Senior Notes due 2029 and approximately $31 million of our 5.875% Senior Notes due 2029 with cash on hand.

During the Current Period, we redeemed the $847 million aggregate principal of 6.75% Senior Notes due 2029 for approximately $875 million, which included accrued interest of $28 million. Additionally, we redeemed the $440 million aggregate principal of 5.875% Senior Notes due 2029 for approximately $446 million, which included accrued interest of $6 million. Upon redemption of the 6.75% Senior Notes due 2029 and the 5.875% Senior Notes due 2029, we recognized a gain of $37 million during the Current Period primarily related to the derecognition of the unamortized premiums for these notes. We utilized cash on hand for the redemption of the 6.75% Senior Notes due 2029 and the 5.875% Senior Notes due 2029.

5.Contingencies and Commitments

Contingencies

Business Operations and Litigation and Regulatory Proceedings

We are involved in, and expect to continue to be involved in, various lawsuits and disputes incidental to our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. We are also party to the consolidated Chapter 11 Cases pending for the Debtors in the Bankruptcy Court.

Our total accrued liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates. While it is not possible at this time to estimate the amount of any additional loss, or range of loss that is reasonably possible, based on the nature of the claims, management believes that current litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on our financial position, results of operations or cash flows. Many of these matters are in early stages and are all subject to inherent uncertainties. Therefore, management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of our final liabilities being materially different.

The majority of Chesapeake’s pre-petition legal proceedings were settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court, together with actions seeking to collect pre-petition indebtedness or to exercise control over the property of Chesapeake’s bankruptcy estates. Any allowed claim related to such litigation will be treated in accordance with the Plan. The Plan in the Chapter 11 Cases, which became effective on February 9, 2021, provided for the treatment of claims against Chesapeake’s bankruptcy estates, including pre-petition liabilities that had not been satisfied or addressed during the Chapter 11 Cases. Many of these proceedings were in early stages as of the Petition Date, and many of them sought damages and penalties, the amount of which is indeterminate. Any legal proceeding pending against Southwestern and assumed by us in connection with the Southwestern Merger is not subject to discharge or resolution as part of the Chapter 11 Cases.

Environmental Contingencies

The nature of the natural gas and oil business carries with it certain environmental risks for us and our subsidiaries. We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks. We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property.

Commitments

Gathering, Processing and Transportation Agreements

We have contractual commitments with midstream service companies and pipeline carriers for future gathering, processing and transportation of natural gas, oil and NGL to move certain of our production to market. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Generally, commitments related to gathering, processing and transportation agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets, however, as part of the Southwestern Merger, we assumed gathering, processing and transportation contracts, certain of which were deemed to be above or below current market rates. We recognized assets and liabilities for the difference in the contractual and market rates of these contracts, as of the date of the Southwestern Merger.

The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below:

June 30, 2026
Remainder of 2026$791
20271,473
20281,357
20291,011
2030923
Thereafter3,422
Total$8,977

In addition, we have long-term agreements for certain natural gas gathering and related services within specified acreage dedication areas in exchange for cost-of-service based fees redetermined annually, or tiered fees based on volumes delivered relative to scheduled volumes. Future gathering fees may vary with the applicable agreement.

Sales and Purchase Agreements

In April 2026, the Company entered into a 20-year LNG sales and purchase agreement with Delfin FLNG 1 LLC (“Delfin”) to purchase approximately 1.15 MTPA of LNG. As of June 30, 2026, all conditions precedent under the agreement have been satisfied and the agreement is effective. Commercial deliveries are expected to commence in 2031. Based on the fixed and determinable components of the contractual pricing provisions, the Company estimates future commitments associated with such components to be approximately $2.9 billion over the term of the agreement. Actual amounts paid under the agreement may vary based on commodity prices, inflation adjustments and other contractual terms.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Other Commitments

As part of our normal course of business, we enter into various agreements providing, or otherwise arranging for, financial or performance assurances to third parties on behalf of our wholly owned guarantor subsidiaries. These agreements may include future payment obligations or commitments regarding operational performance that effectively guarantee our subsidiaries’ future performance.

In connection with acquisitions and divestitures, our purchase and sale agreements generally provide indemnification to the counterparty for liabilities incurred as a result of a breach of a representation or warranty by the indemnifying party and/or other specified matters. These indemnifications generally have a discrete term and are intended to protect the parties against risks that are difficult to predict or cannot be quantified at the time of entering into or consummating a particular transaction. For divestitures of natural gas and oil properties, our purchase and sale agreements may require the return of a portion of the proceeds we receive as a result of uncured title or environmental defects.

While executing our strategic priorities, we have incurred certain cash charges, including contract termination charges, financing extinguishment costs and charges for unused natural gas transportation and gathering capacity.

6.Other Current Liabilities

Other current liabilities as of June 30, 2026 and December 31, 2025 are detailed below:

June 30, 2026December 31, 2025
Revenues and royalties due to others$875$972
Accrued drilling and production costs377350
Contract liabilities250253
Accrued compensation and benefits67107
Taxes payable185157
Operating leases4351
Joint interest prepayments received1511
Other132144
Total other current liabilities$1,944$2,045
7.Revenue

The following tables show revenue disaggregated by operating area and product type:

Three Months Ended June 30, 2026
Natural GasOilNGLTotal
Haynesville$762$—$—$762
Northeast Appalachia513——513
Southwest Appalachia244112199555
Natural gas, oil and NGL revenue$1,519$112$199$1,830
Marketing revenue$591$49$41$681

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Three Months Ended June 30, 2025
Natural GasOilNGLTotal
Haynesville$845$—$—$845
Northeast Appalachia643——643
Southwest Appalachia27186176533
Natural gas, oil and NGL revenue$1,759$86$176$2,021
Marketing revenue$719$33$36$788
Six Months Ended June 30, 2026
Natural GasOilNGLTotal
Haynesville$2,007$—$—$2,007
Northeast Appalachia1,941——1,941
Southwest Appalachia6331993651,197
Natural gas, oil and NGL revenue$4,581$199$365$5,145
Marketing revenue$1,725$87$81$1,893
Six Months Ended June 30, 2025
Natural GasOilNGLTotal
Haynesville$1,666$—$—$1,666
Northeast Appalachia1,543——1,543
Southwest Appalachia5651643831,112
Natural gas, oil and NGL revenue$3,774$164$383$4,321
Marketing revenue$1,556$67$75$1,698

Accounts Receivable

Our accounts receivable are primarily from purchasers of natural gas, oil and NGL and from exploration and production companies that own interests in properties we operate. This industry concentration could affect our overall exposure to credit risk, either positively or negatively, because our purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We monitor the creditworthiness of all our counterparties, and we generally require letters of credit or parent guarantees for receivables from parties deemed to have sub-standard credit, unless the credit risk can otherwise be mitigated. We utilize an allowance method in accounting for bad debt based on historical trends in addition to specifically identifying receivables that we believe may be uncollectible.

Accounts receivable as of June 30, 2026 and December 31, 2025 are detailed below:

June 30, 2026December 31, 2025
Natural gas, oil and NGL sales$857$1,363
Joint interest254232
Other118
Allowance for doubtful accounts(14)(14)
Total accounts receivable, net$1,098$1,599

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

8.Income Taxes

The table below presents a comparison of the Current Period and Prior Period’s income tax expense and actual year-to-date effective tax rates.

Six Months Ended June 30,
20262025
Income before income taxes$2,161$909
Current tax expense150.7%566.2%
Deferred tax expense46521.5%13414.7%
Income tax expense$48022.2%$19020.9%

An estimated annual effective tax rate (“EAETR”) is used in recording our interim year-to-date income tax provision. The EAETR is determined based on analysis of year-to-date and projected financial results of our operations. Our EAETR during the Current Period was 22.2%, compared to 21.2% in the Prior Period. The actual year-to-date effective tax rate and EAETR can differ as a result of certain discrete items, which are recorded in the period. Common examples of such items include, but are not limited to, certain equity-based compensation, true-ups resulting from differences between tax returns filed and estimated accruals, and tax effects of enacted laws.

As a result of projecting federal and state income taxes, a portion of our EAETR represents the estimated provision for current taxes. Due to the book income in the Current Period and Prior Period, a current tax expense of $15 million and $56 million, respectively, was recorded.

As of December 31, 2025, we were in a net deferred tax asset position and we anticipate being in a net deferred tax liability position as of December 31, 2026. Based on all available positive and negative evidence, including projections of future taxable income, we believe it is more likely than not that some of our deferred tax assets will not be realized. As such, a partial valuation allowance was recorded for federal and state purposes as of June 30, 2026 and December 31, 2025. As of June 30, 2026, we were in a net deferred tax liability position for all jurisdictions.

On July 4, 2025, the current Presidential Administration signed into law the One Big Beautiful Bill Act (the “OBBBA”). This bill restores 100% bonus depreciation for property acquired and placed into service after January 19, 2025, restores the immediate expensing of research expenditures, and provides for parity between the treatment of intangible drilling costs and depreciation for purposes of the CAMT. The enactment of the OBBBA and its provisions contributed to a reduction in the Company’s expected current tax expense with an offsetting increase to the Company’s expected deferred tax expense.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

9.Equity

Dividends

The table below presents dividends during the Current Period and Prior Period.

BaseVariableRate Per ShareTotal
2026:
First Quarter$0.575$—$0.575$138
Second Quarter$0.575$—$0.575$138
2025:
First Quarter$0.575$—$0.575$138
Second Quarter$0.575$—$0.575$138

On July 28, 2026, we declared a base quarterly dividend payable of $0.575 per share, which will be paid on September 3, 2026 to stockholders of record at the close of business on August 13, 2026.

Share Repurchases

On October 22, 2024, our Board of Directors authorized repurchases of up to $1.0 billion, in aggregate, of the Company’s common stock and/or warrants under a share repurchase program. On July 24, 2026, our Board of Directors authorized an expansion of the share repurchase program by $1.0 billion, bringing the total authorized share repurchase amount to $2.0 billion for our common stock. During the Current Period, we repurchased 6.4 million shares for an aggregate price of $601 million, which includes the impact of the 1% excise tax on share repurchases. During the Prior Period, we repurchased 0.9 million shares for an aggregate price of $100 million. The shares of common stock repurchased during the Current Period and Prior Period were retired and recorded as a reduction to common stock and retained earnings.

Subsequent to the Current Period, we have repurchased approximately 2.8 million shares for an aggregate price of $254 million through July 24, 2026.

Warrants

As of December 31, 2025, there were 15,705 Class A Warrants, 48,801 Class B Warrants and 1,244,008 Class C Warrants outstanding. On February 9, 2026, all of the outstanding Warrants that had not been previously exercised expired. As a result of these Warrant exercises, we issued 1,122,179 common shares and no longer have any outstanding Warrants.

10.Share-Based Compensation

Our long-term incentive plan, as amended and adopted by our Board of Directors (the “LTIP”), provides for the grant of RSUs, restricted stock awards, stock options, stock appreciation rights, performance awards and other stock awards to the Company’s employees and non-employee directors and has a share reserve equal to 6,800,000 shares of common stock.

Restricted Stock Units. During the Current Period, we granted RSUs to employees and non-employee directors under the LTIP, which will vest over a three-year period and one-year period, respectively. The fair value of RSUs is based on the closing sales price of our common stock on the date of grant, and compensation expense is recognized ratably over the requisite service period. A summary of the changes in unvested RSUs is presented below:

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Unvested Restricted Stock UnitsWeighted Average Grant Date Fair Value Per Share
(in thousands)
Unvested as of December 31, 2025957$94.61
Granted556$106.21
Vested(392)$89.67
Forfeited(78)$102.21
Unvested as of June 30, 20261,043$102.08

The aggregate intrinsic value of RSUs that vested during the Current Period was approximately $44 million based on the stock price at the time of vesting.

As of June 30, 2026, there was approximately $87 million of total unrecognized compensation expense related to unvested RSUs. The expense is expected to be recognized over a weighted average period of approximately 2.2 years.

Performance Share Units. During the Current Period, we granted PSUs to senior management and certain employees under the LTIP, which will generally vest over a three-year period and will be settled in shares. The performance criteria include total shareholder return (“TSR”) and relative TSR (“rTSR”) and could result in a total payout between 0% - 200% of the target units. The fair value of the PSUs was measured on the grant date using a Monte Carlo simulation, and compensation expense is recognized ratably over the requisite service period because these awards depend on a combination of service and market criteria.

The following table presents the assumptions used in the valuation of the PSUs granted during the Current Period.

AssumptionTSR, rTSR
Risk-free interest rate3.74%
Volatility28.50%

A summary of the changes in unvested PSUs is presented below:

Unvested Performance Share UnitsWeighted Average Grant Date Fair Value Per Share
(in thousands)
Unvested as of December 31, 2025464$106.14
Granted123$79.75
Vested(133)$80.53
Forfeited(37)$125.64
Unvested as of June 30, 2026417$104.80

The aggregate intrinsic value of PSUs that vested during the Current Period was approximately $11 million based on the stock price at the time of vesting.

As of June 30, 2026, there was approximately $22 million of total unrecognized compensation expense related to unvested PSUs. The expense is expected to be recognized over a weighted average period of approximately 2.04 years.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

RSU and PSU Compensation.

We recognized the following compensation costs, net of actual forfeitures, related to RSUs and PSUs for the periods presented:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
General and administrative expenses$9$10$18$18
Natural gas and oil properties3354
Production expense2132
Separation and other termination costs——3—
Marketing expense1112
Other operating expense, net—1—3
Total RSU and PSU compensation$15$16$30$29
Related income tax benefit$2$4$6$8
11.Derivative and Hedging Activities

We use derivative instruments to reduce our exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. These commodity contract derivative financial instruments primarily includes financial price instruments, collars, call options, put options and basis protection instruments. All of our commodity contract derivative instruments are net settled based on the difference between the fixed-price payment and the floating-price payment, resulting in a net amount due to or from the counterparty. Additionally, we enter into exchange traded derivative instruments with brokers or the clearing houses of certain exchanges. We have elected not to designate any of our derivative instruments for hedge accounting treatment.

The estimated fair values of our natural gas, oil and NGL derivative instrument assets (liabilities) as of June 30, 2026 and December 31, 2025 are provided below:

June 30, 2026December 31, 2025
Notional VolumeFair ValueNotional VolumeFair Value
Natural gas (Bcf):
Fixed-price instruments(a)827$325756$128
Two-way collars6442311,143212
Three-way collars65117517532
Put options (purchased)(a)30———
Call options (sold)(a)37—73(1)
Basis protection instruments(a)582(28)337(66)
Total natural gas2,7717032,484305
Oil (MMBbls):
Two-way collars1$9—$—
Three-way collars———2
Total oil19—2
NGLs (MMBbls):
Fixed-price instruments2$2—$—
Total NGL22——
Total estimated fair value$714$307

(a)Notional volumes are presented net of short and long positions.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 on a gross basis and after same-counterparty netting:

Gross Fair Value**(a)**Amounts Netted in the Condensed Consolidated Balance SheetsNet Fair Value Presented in the Condensed Consolidated Balance Sheets
As of June 30, 2026
Commodity Contracts:
Short-term derivative asset$698$(96)$602
Long-term derivative asset120(7)113
Short-term derivative liability(97)96(1)
Long-term derivative liability(7)7—
Total derivatives$714$—$714
As of December 31, 2025
Commodity Contracts:
Short-term derivative asset$340$(76)$264
Long-term derivative asset66(19)47
Short-term derivative liability(79)76(3)
Long-term derivative liability(20)19(1)
Total derivatives$307$—$307

(a)These financial assets (liabilities) are measured at fair value on a recurring basis utilizing significant other observable inputs; see further discussion on fair value measurements below.

Fair Value

The fair value of our commodity derivatives is based on third-party pricing models, which utilize inputs that are either readily available in the public market, such as natural gas, oil and NGL forward curves and discount rates, or can be corroborated from active markets or broker quotes, and, as such, are classified as Level 2. These values are compared to the values given by our counterparties for reasonableness. Derivatives are also subject to the risk that either party to a contract will be unable to meet its obligations. We factor non-performance risk into the valuation of our derivatives using current published credit default swap rates. To date, this has not had a material impact on the values of our derivatives.

Credit Risk Considerations

Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we only enter into commodity contracts derivatives with counterparties that are highly rated or deemed by us to have acceptable credit strength and deemed by management to be competent and competitive market-makers, and we attempt to limit our exposure to non-performance by any single counterparty. As of June 30, 2026, our commodity contracts derivative instruments were spread among 21 counterparties.

Hedging Arrangements

Certain of our hedging arrangements are with counterparties that are also Lenders (or affiliates of Lenders) under our Credit Facility. We do not expect to post cash or letters of credit to secure our obligations under these hedging arrangements while we have our investment grade ratings. The obligations under these contracts must be secured by cash or letters of credit to the extent that any mark-to-market amounts exceed defined thresholds. As of June 30, 2026, we did not have any cash or letters of credit posted as collateral for our commodity derivatives. We

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

maintain accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and associated margin requirements, we may be required to deposit cash into these accounts. As of June 30, 2026, the cash held within these broker margin accounts was $13 million, and is included within other current assets within our condensed consolidated balance sheets.

12.Investments

Momentum Sustainable Ventures LLC. During the fourth quarter of 2022, the Company entered into an agreement with Momentum Sustainable Ventures LLC (“Momentum”) to build a new natural gas gathering pipeline and carbon capture project, which gathers and treats natural gas produced in the Haynesville Shale for delivery to Gulf Coast markets, including LNG export, the New Generation Gas Gathering LLC (“NG3”) operated pipeline (the “NG3 pipeline”). The NG3 pipeline was placed in service and began gathering operations on October 1, 2025. Under a CO2 services agreement with ExxonMobil Low Carbon Solutions Onshore Storage, LLC (“Exxon”), NG3 began delivering CO2 to Exxon for capture and sequestration in February 2026. We have a 35% interest in the joint venture entity and classify our investment with Momentum in the NG3 pipeline as a related party.

We have accounted for this investment as an equity method investment, and its carrying value, which is reflected within other long-term assets on the condensed consolidated balance sheets, was $300 million and $313 million as of June 30, 2026 and December 31, 2025, respectively. We recognize our proportionate share of income (loss) related to our investment with Momentum in other income, net within our condensed consolidated statements of operations. Our proportionate share of income (loss) related to our investment with Momentum is recognized on a three-month lag. During the Current Quarter and Prior Quarter, as well as the Current Period and Prior Period, our proportionate share of income (loss) related to our investment in the NG3 pipeline did not have a material impact to our financial statements. We periodically review our investment with Momentum to determine if a loss in value, which is other than a temporary decline, has occurred. If an other than temporary decline has occurred, we recognize an impairment on our investment. Through June 30, 2026, we have not recognized any impairments related to our investment with Momentum.

The NG3 pipeline provides to us certain gathering, processing and transportation services. We have a gathering agreement in which approximately 900 MMcf per day, on average, of natural gas are to be gathered and processed by the NG3 pipeline over the course of the next 12 years. During the Current Quarter and Current Period, approximately $21 million and $39 million of our gathering, processing and transportation expenses were related to services provided by the NG3 pipeline, respectively, and is reflected within our consolidated statements of operations. Additionally, approximately $15 million and $12 million of our accounts payable balance as of June 30, 2026 and December 31, 2025, respectively, was related to gathering, processing and transportation services rendered to us by the NG3 pipeline.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

13.Supplemental Cash Flow Information

Supplemental disclosures to the condensed consolidated statements of cash flows are presented below.

Six Months Ended June 30,
20262025
Changes in assets and liabilities
Accounts receivable$498$165
Accounts payable102(87)
Other current assets(41)(30)
Other current liabilities(150)22
Total$409$70
Supplemental cash flow information:
Interest paid, net of capitalized interest$122$110
Income taxes paid (refunds received), net$13$82
Supplemental disclosure of significant non-cash investing and financing activities:
Change in accrued drilling and completion costs$64$160
Operating lease obligations recognized$9$26
14.Segment Information

Operating segments are defined as components of an enterprise that engage in activities from which it may earn revenues and incur expenses for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker (“CODM”), who is our Chief Executive Officer, for the purpose of allocating an enterprise’s resources and assessing its operating performance. Our revenues are derived from the production, marketing and sale of natural gas, oil and NGL. Additional information on our revenues, including the disaggregation of our revenues, is found in Note 7. As of June 30, 2026, we considered each of our operating areas as operating segments, however, we have aggregated those operating segments into one reportable segment due to the similar nature of the exploration and production business across Expand Energy and its consolidated subsidiaries and the fact that our marketing activities are ancillary to our operations.

Our CODM uses consolidated net income (loss), for purposes of allocating resources and in assessing Expand Energy’s operating performance, which also includes analyzing results to forecasted information. Additionally, our CODM is regularly provided information on production expense, gathering, processing and transportation expense, severance and ad valorem taxes and general and administrative expense, which are our significant segment expenses. Other segment items primarily consist of depreciation, depletion and amortization, marketing expense, interest expense and income tax expense (benefit). Our significant segment expenses and other segment items are derived from, and can be found within the condensed consolidated statements of operations.

The measure of segment assets is total assets as reported on our condensed consolidated balance sheets, and as of June 30, 2026 and as of December 31, 2025 our total assets were $28,030 million and $28,287 million, respectively. Additionally, in analyzing company performance, our CODM reviews capital expenditures. During the Current Quarter and Prior Quarter, our capital expenditures were $851 million and $727 million, respectively. During the Current Period and Prior Period, our capital expenditures were $1,567 million and $1,389 million, respectively. During the Current Quarter, Current Period, Prior Quarter and Prior Period we did not make any contributions to equity method investments. Our interest revenue during the Current Quarter and Prior Quarter was $8 million and $5 million, respectively. Our interest revenue during the Current Period and Prior Period was $16 million and $7 million, respectively.

Table of Contents

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

15.Subsequent Event

On July 24, 2026, we entered into an agreement and plan of merger with Twin Eagle Holdings N.A., LLC (“Twin Eagle”), a provider of natural gas marketing and logistics services, and one of our wholly owned subsidiaries whereby we will acquire Twin Eagle Holdings N.A., LLC (the “Twin Eagle Acquisition”). The transaction is subject to customary closing conditions, including certain regulatory approvals, and is expected to close in the third quarter of 2026. The purchase price is approximately $1.25 billion, subject to typical purchase price adjustments, including for working capital. The Company expects to fund the transaction through a combination of cash on hand and borrowings under our Credit Facility.

Table of Contents

Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations