Analysis of Debt
Total Debt (Carrying Amount)
Walgreens Boots Alliance Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
Between August 31, 2014, and August 31, 2019, total borrowings exhibited a significant upward trajectory, increasing from US$ 4,510 million to US$ 16,836 million. The period was characterized by substantial volatility, with total debt peaking in 2016 before experiencing a correction and a subsequent increase toward the end of the period.
- Long-Term Debt Trends
- Long-term debt experienced a rapid escalation between 2014 and 2016, rising from US$ 3,736 million to a peak of US$ 18,705 million. Following this peak, a consistent downward trend was observed, with the balance reducing to US$ 11,098 million by August 31, 2019. This indicates a strategic shift or a period of debt repayment regarding long-term obligations after the 2016 high.
- Short-Term Debt Dynamics
- Short-term debt remained relatively low and stable between 2014 and 2017, reaching a minimum of US$ 251 million in 2017. However, a sharp acceleration occurred in the final two years of the period, with debt climbing to US$ 1,966 million in 2018 and surging to US$ 5,738 million by August 31, 2019. This represents a significant increase in near-term liquidity requirements.
- Total Borrowings Composition
- The composition of total debt shifted notably over the five-year span. While total borrowings in 2016 were dominated almost entirely by long-term debt, the 2019 figures show a more diversified debt structure. By August 31, 2019, short-term debt constituted approximately 34% of the total borrowing amount, compared to a negligible percentage in earlier years, suggesting an increased reliance on short-term financing instruments.
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Total Debt (Fair Value)
| Aug 31, 2019 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Short-term borrowings | 4,488) |
| Unsecured Pound Sterling variable rate term loan due 2019 | —) |
| $6 Billion Note Issuance | 2,600) |
| $8 Billion Note Issuance | 6,800) |
| £700 Million Note Issuance | 900) |
| €750 Million Note Issuance | 900) |
| $4 Billion Note Issuance | 1,700) |
| $1 Billion Note Issuance | —) |
| Other | 25) |
| Total borrowings (fair value) | 17,413) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.03 |
Based on: 10-K (reporting date: 2019-08-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 3.49%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 3.45% | 1,890) | 65) | |
| 4.65% | 591) | 27) | |
| 3.30% | 1,247) | 41) | |
| 3.80% | 1,992) | 76) | |
| 4.50% | 495) | 22) | |
| 4.80% | 1,492) | 72) | |
| 2.88% | 488) | 14) | |
| 3.60% | 365) | 13) | |
| 2.13% | 824) | 18) | |
| 3.10% | 1,197) | 37) | |
| 4.40% | 493) | 22) | |
| 3.07% | 2,400) | 74) | |
| 2.70% | 1,250) | 34) | |
| Total | 14,724) | 514) | |
| 3.49% | |||
Based on: 10-K (reporting date: 2019-08-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 514 ÷ 14,724 = 3.49%