Analysis of Debt
Paying user area
Try for free
AT&T Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to AT&T Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Total Debt (Carrying Amount)
AT&T Inc., balance sheet: debt
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Debt maturing within one year | ||||||
| Long-term debt, excluding maturing within one year | ||||||
| Total debt (carrying amount) |
Based on: 10-K (reporting date: 2024-12-31), 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).
- Debt maturing within one year
- The short-term debt outstanding exhibited significant volatility over the five-year period. Starting at $3.47 billion in 2020, it surged markedly to $24.63 billion in 2021, reflecting a substantial increase in near-term debt obligations. This figure then sharply declined over the subsequent years, falling to $7.47 billion in 2022, increasing slightly to $9.48 billion in 2023, and decreasing again to $5.09 billion by the end of 2024. This pattern suggests a substantial refinancing or restructuring event in 2021, followed by gradual repayment or reclassification of short-term liabilities.
- Long-term debt, excluding maturing within one year
- The long-term debt balance showed a consistent downward trend throughout the period under review. Commencing at approximately $153.78 billion in 2020, the amount marginally declined to $152.72 billion in 2021 before experiencing a more pronounced reduction to $128.42 billion in 2022. This downward trajectory continued with a slight decrease to $127.85 billion in 2023 and further falling to $118.44 billion in 2024. The gradual reduction indicates ongoing debt repayment or strategic efforts to deleverage the balance sheet over these years.
- Total debt (carrying amount)
- Total debt presented appreciable fluctuations influenced predominantly by changes in short-term debt. The total debt rose from $157.25 billion in 2020 to a peak of $177.35 billion in 2021, primarily driven by the sharp increase in debt maturing within one year. Thereafter, total debt declined substantially to $135.89 billion in 2022, aligning with the reduction in both short-term and long-term liabilities. From 2022 to 2024, total debt showed a relatively stable but downward movement, ending at $123.53 billion in 2024. Overall, the total debt reflects a peak in 2021 followed by a steady deleveraging trend.
- Summary of trends and insights
- The data reveals that the company experienced a pronounced increase in near-term debt obligations in 2021, likely due to refinancing activities or strategic borrowing. Beyond this anomaly, there is a clear pattern of debt reduction, particularly in the long-term component, implying efforts to strengthen the financial position and reduce leverage. The total debt levels corroborate this view, with a peak in 2021 and a subsequent steady decline through 2024. The management of maturing debt appears proactive, given the decreasing short-term debt following the 2021 spike, indicating prioritization of managing liquidity and refinancing risk effectively.
Total Debt (Fair Value)
| Dec 31, 2024 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Notes and debentures | |
| Commercial paper | |
| Finance lease obligations | |
| Total debt (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2024-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate of long-term debt portfolio, including, credit agreement borrowings and the impact of derivatives:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
AT&T Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||
| Capitalized interest | |||||||||||
| Interest expense incurred |
Based on: 10-K (reporting date: 2024-12-31), 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).
The analysis of annual interest costs incurred over the five-year period reveals several notable trends. Interest expense, measured in millions of US dollars, generally declined from 2020 to 2022, decreasing from 7,925 million in 2020 to 6,108 million in 2022. However, this downward trend reversed in 2023 and 2024, with interest expense rising to 6,704 million and 6,759 million respectively, indicating a partial recovery after two years of decline.
Capitalized interest exhibits a more volatile pattern during the same period. Starting at 123 million in 2020, it experienced a sharp increase in 2021 to 954 million and further grew to 1,294 million in 2022, the highest value within the observed timespan. Subsequently, capitalized interest decreased significantly in 2023 to 874 million and continued declining to 361 million in 2024. This suggests adjustments or fluctuations in the company's approach to capitalizing interest over time, possibly influenced by changes in investment activity or accounting practices.
When combining these two components to examine the total interest expense incurred, a different trend emerges. There was a general decrease from 8,048 million in 2020 to 7,402 million in 2022, consistent with the decline seen in interest expense alone. However, the total interest expense incurred then increased marginally to 7,578 million in 2023 before decreasing again to 7,120 million in 2024. This pattern indicates some variability in total interest costs but overall a moderate downward movement over the five-year period.
- Interest Expense
- Decreased significantly from 2020 to 2022, then experienced a slight upward trend in 2023 and 2024.
- Capitalized Interest
- Increased sharply from 2020 to 2022, reaching a peak in 2022, then declined substantially in the following two years.
- Total Interest Expense Incurred
- Showed a general decrease from 2020 to 2022, a small increase in 2023, followed by a decrease in 2024, indicating fluctuating but overall moderate reduction in total interest costs.
Overall, the data reflects a dynamic interest cost profile with notable shifts in both interest expense and capitalized interest. The reduction in capitalized interest after 2022 may indicate a shift in project financing or capitalization policies, while the fluctuations in interest expense may be related to changes in debt levels or interest rates. The combined effect leads to a somewhat stable but cautiously declining total interest expense incurred towards the end of the period.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest expense incurred
= ÷ =
- Interest coverage ratio (without capitalized interest)
- The interest coverage ratio displayed significant volatility over the analyzed period. It started at a low level of 0.64 in 2020, increased sharply to 4.91 in 2021, and then dropped markedly to 0.49 in 2022. Following this decline, the ratio recovered to 3.96 in 2023 before experiencing a slight decrease to 3.47 in 2024. This fluctuation suggests variability in the company's ability to cover interest expenses from operating earnings, indicating periods of both strong and weak coverage capacity.
- Adjusted interest coverage ratio (with capitalized interest)
- The adjusted interest coverage ratio, which accounts for capitalized interest, follows a similar pattern to the unadjusted ratio but generally remains slightly lower throughout the period. It began at 0.63 in 2020, increased to 4.32 in 2021, then decreased sharply to 0.41 in 2022. It gradually improved to 3.5 in 2023 and slightly declined to 3.29 in 2024. This trend highlights the impact of capitalized interest on coverage ability, indicating a consistently more conservative measure of interest coverage.
- Overall Insights
- The data reflects notable fluctuations in interest coverage over the five years, with peak values achieved in 2021 and subsequent declines in 2022. The gradual recovery in 2023 and 2024 suggests improvement in earnings relative to interest obligations but still below the peak levels seen earlier. The persistently low levels in 2020 and 2022 raise concerns about periods when the company's earnings were insufficient to cover its interest expenses comfortably. The adjusted ratios' consistent underperformance relative to the unadjusted ones underscores the relevance of capitalized interest in assessing true coverage levels.