Analysis of Debt
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Total Debt (Carrying Amount)
Apache Corp., balance sheet: debt
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Current debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt (carrying amount) |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Current Debt
- The current debt experienced significant volatility over the reported periods. Starting at 431 million US dollars at the end of 2011, it surged sharply to 990 million in 2012. This was followed by a considerable decline to 53 million in 2013. The data for 2014 is missing, while the amount in 2015 dropped further to 1 million, indicating a substantial reduction in short-term liabilities by the end of the period.
- Long-Term Debt, Excluding Current Maturities
- The long-term debt exhibited notable fluctuations during the time frame. It increased from 6,785 million US dollars in 2011 to a peak of 11,355 million in 2012. Subsequently, it declined to 9,672 million in 2013 before rising again to 11,245 million in 2014. In 2015, the figure fell to 8,777 million. Overall, the long-term debt remained relatively high with alternating increases and decreases, reflecting possible refinancing, repayments, or new borrowings.
- Total Debt (Carrying Amount)
- The total debt mirrored the patterns observed in current and long-term debt. Beginning at 7,216 million US dollars in 2011, total debt nearly doubled to 12,345 million in 2012. It then decreased to 9,725 million in 2013, regained to 11,245 million in 2014, and finally decreased again to 8,778 million in 2015. These changes suggest active management of debt levels, with a peak in 2012 followed by a general downward trend toward the later years.
- Overall Observations
- The data indicates that the entity experienced significant debt level fluctuations over the five-year span. The peak debt levels occurred around 2012-2014, followed by a reduction in 2015. The dramatic fluctuations, especially in current debt, could reflect refinancing activities, shifts in short-term borrowing strategies, or changes in liquidity management. The persistent high values of long-term debt suggest continued reliance on long-term financing, albeit with some volatility.
Total Debt (Fair Value)
| Dec 31, 2015 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total debt (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2015-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2015-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Apache Corp., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Interest Expense, Net of Capitalized Interest
- The net interest expense displayed an overall fluctuating trend over the five-year period. Beginning at 170 million USD in 2011, it increased moderately to 175 million USD in 2012, followed by a more notable rise to 197 million USD in 2013. Subsequently, a significant decrease occurred in 2014, with the expense falling to 136 million USD. However, the expense surged again in 2015, reaching the highest value recorded during the period at 259 million USD.
- Amortization of Deferred Loan Costs
- The amortization of deferred loan costs showed a generally upward trajectory. Starting at 5 million USD in 2011, it increased steadily each year, except for a minor dip in 2014. Specifically, values rose to 7 million USD in 2012, 8 million USD in 2013, slightly dropped to 6 million USD in 2014, and then peaked at 11 million USD in 2015.
- Capitalized Interest
- Capitalized interest amounts demonstrated a rising trend from 2011 through 2013, increasing from 263 million USD to 374 million USD. A slight decline occurred in 2014, bringing the capitalized interest to 363 million USD. A more pronounced decrease was observed in 2015, where the value dropped significantly to 227 million USD.
- Interest Costs Incurred
- Total interest costs incurred rose substantially from 438 million USD in 2011 to a peak of 579 million USD in 2013. A decline followed in 2014, with interest costs decreasing to 505 million USD, and a further slight reduction occurred in 2015, ending at 497 million USD. Despite the decline in the latter two years, the overall level remained elevated compared to the initial 2011 value.
- Summary of Trends
- The data indicates increasing interest costs incurred until 2013, driven by rising capitalized interest and net interest expense. After 2013, both capitalized interest and total interest costs incurred declined, while interest expense net of capitalized interest showed volatility, including a significant increase in 2015. The steady increase in amortization of deferred loan costs suggests an ongoing but variable expense related to loan financing over time. Overall, while total interest costs incurred peaked in 2013 and decreased thereafter, net interest expense and amortization costs exhibited more variability, reflecting possible shifts in financing strategies or market conditions affecting borrowing costs.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of capitalized interest
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio demonstrates a declining trend over the five-year period. Starting at a robust level of 48.61 in 2011, it decreased significantly to 28.87 in 2012 and further declined to 22.4 in 2013. This downward trajectory continued sharply, turning negative in 2014 at -20.37 and reaching an even lower negative value of -107.98 in 2015. The increasingly negative ratio in the latter years indicates a deterioration in the company's ability to cover interest expenses from its earnings, suggesting financial stress or operational challenges.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio follows a similar declining pattern as the unadjusted ratio but at lower absolute values. It began at 18.87 in 2011 and declined steadily through the years to 9.79 in 2012, 7.62 in 2013, then turned negative by 2014 at -5.49, and further decreased to -56.27 in 2015. This confirms that after accounting for capitalized interest, the company’s financial position regarding interest expense coverage deteriorated notably, reflecting increased financial leverage or reduced earnings capacity.