Stock Analysis on Net
Stock Analysis on Net
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Air Products & Chemicals Inc. (NYSE:APD)

Analysis of Debt

Advanced level

Total Debt (Carrying Amount)

Air Products & Chemicals Inc., balance sheet: debt

US$ in thousands

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Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Short-term borrowings 58,200  54,300  144,000  935,800  1,494,300  1,228,700 
Current portion of long-term debt 40,400  406,600  416,400  371,300  435,600  65,300 
Long-term debt, excluding current portion 2,907,300  2,967,400  3,402,400  4,918,100  3,949,100  4,824,500 
Long-term debt, related party 320,100  384,300  —  —  —  — 
Total debt (carrying amount) 3,326,000  3,812,600  3,962,800  6,225,200  5,879,000  6,118,500 

Based on: 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24), 10-K (filing date: 2014-11-24).

Debt item Description The company
Total debt (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Air Products & Chemicals Inc.’s total debt decreased from 2017 to 2018 and from 2018 to 2019.

Total Debt (Fair Value)

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Sep 30, 2019
Selected Financial Data (US$ in thousands)
Short-term borrowings 58,200 
Long-term debt, including current portion and related party 3,350,900 
Total debt (fair value) 3,409,100 
Financial Ratio
Debt, fair value to carrying amount ratio 1.02

Based on: 10-K (filing date: 2019-11-26).

Weighted-average Interest Rate on Debt

Weighted average interest rate of debt: 2.48%

Interest Rate Debt Amount1 Interest Rate × Debt Amount Weighted-average Interest Rate2
8.75% 18,400  1,610 
7.60% 17,200  1,307 
3.00% 400,000  12,000 
2.75% 400,000  11,000 
3.35% 400,000  13,400 
1.44% 631,900  9,099 
2.00% 327,000  6,540 
0.38% 381,500  1,431 
1.00% 327,000  3,270 
2.90% 3,800  110 
5.50% 357,900  19,685 
10.30% 10,100  1,040 
3.70% 58,200  2,153 
Total 3,333,000  82,646 
2.48%

Based on: 10-K (filing date: 2019-11-26).

1 US$ in thousands

2 Weighted-average interest rate = 100 × 82,646 ÷ 3,333,000 = 2.48%

Interest Costs Incurred

Air Products & Chemicals Inc., interest costs incurred

US$ in thousands

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12 months ended: Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Interest expense 137,000  130,500  120,600  115,500  103,500  125,100 
Capitalized interest 13,500  19,500  19,000  32,900  49,100  33,000 
Interest costs incurred 150,500  150,000  139,600  148,400  152,600  158,100 

Based on: 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24), 10-K (filing date: 2014-11-24).

Debt item Description The company
Interest expense Amount of the cost of borrowed funds accounted for as interest expense for debt. Air Products & Chemicals Inc.’s interest expense increased from 2017 to 2018 and from 2018 to 2019.
Capitalized interest Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. Air Products & Chemicals Inc.’s capitalized interest increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Interest costs incurred Total interest costs incurred during the period and either capitalized or charged against earnings. Air Products & Chemicals Inc.’s interest costs incurred increased from 2017 to 2018 and from 2018 to 2019.

Adjusted Interest Coverage Ratio

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Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Selected Financial Data (US$ in thousands)
Net income attributable to Air Products 1,760,000  1,497,800  3,000,400  631,100  1,277,900  991,700 
Add: Net income attributable to noncontrolling interest 49,400  35,100  20,800  30,400  39,700  1,400 
Less: Income (loss) from discontinued operations, net of tax —  42,200  1,866,000  (884,200) —  4,600 
Add: Income tax expense 480,100  524,300  260,900  586,500  415,900  366,000 
Add: Interest expense 137,000  130,500  120,600  115,500  103,500  125,100 
Earnings before interest and tax (EBIT) 2,426,500  2,145,500  1,536,700  2,247,700  1,837,000  1,479,600 
 
Interest costs incurred 150,500  150,000  139,600  148,400  152,600  158,100 
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1 17.71 16.44 12.74 19.46 17.75 11.83
Adjusted interest coverage ratio (with capitalized interest)2 16.12 14.30 11.01 15.15 12.04 9.36

Based on: 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24), 10-K (filing date: 2014-11-24).

2019 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 2,426,500 ÷ 137,000 = 17.71

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 2,426,500 ÷ 150,500 = 16.12

Solvency ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Air Products & Chemicals Inc.’s adjusted interest coverage ratio improved from 2017 to 2018 and from 2018 to 2019.