Analysis of Debt
Total Debt (Carrying Amount)
First Solar Inc., balance sheet: debt
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The total debt and finance lease liabilities exhibited a U-shaped trajectory over the five-year period ending December 31, 2023. An initial period of consistent deleveraging from 2019 through 2022 was followed by a substantial increase in the total carrying amount in 2023, reaching the highest level observed during the analyzed timeframe.
- Deleveraging Trend (2019-2022)
- Between 2019 and 2022, total debt decreased from $471,697 thousand to $184,349 thousand. This represents a cumulative reduction of approximately 61%, driven primarily by a steady decline in the noncurrent portion of long-term debt, which fell from $454,187 thousand to $184,349 thousand over the same period.
- Debt Surge in 2023
- A sharp reversal in the debt trend occurred in 2023, with total carrying amounts rising to $577,420 thousand. This increase was fueled by a significant rise in long-term noncurrent debt to $464,068 thousand and a substantial spike in the current portion of debt to $96,238 thousand.
- Current vs. Noncurrent Obligations
- The composition of debt remained heavily weighted toward noncurrent liabilities throughout the period. However, the current portion of debt showed notable volatility, fluctuating from a low of zero or negligible amounts in 2022 to $96,238 thousand by the end of 2023, indicating an increased short-term debt servicing requirement.
- Emergence of Finance Lease Liabilities
- Finance lease liabilities were not present in the financial records from 2019 through 2022. In 2023, these liabilities were introduced, totaling $17,114 thousand, comprised of $51 thousand in current obligations and $17,063 thousand in noncurrent obligations.
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Total Debt (Fair Value)
| Dec 31, 2023 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| India Credit Facility | 453,015) |
| India Working Capital Facility | 60,827) |
| Finance lease liabilities | 17,114) |
| Total debt and finance lease liabilities (fair value) | 530,956) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.92 |
Based on: 10-K (reporting date: 2023-12-31).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt: 6.04%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 5.40% | 17,114) | 924) | |
| 5.72% | 500,000) | 28,600) | |
| 8.87% | 60,827) | 5,395) | |
| Total | 577,941) | 34,920) | |
| 6.04% | |||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in thousands
2 Weighted-average interest rate = 100 × 34,920 ÷ 577,941 = 6.04%