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Microsoft Excel LibreOffice Calc


Analysis of Debt

Difficulty: Advanced


Debt Accounting Policy

Capitalized Interest

Interest from external borrowings is capitalized on major projects with an expected construction period of one year or longer. Capitalized interest is added to the cost of the underlying asset and is amortized over the useful lives of the assets in the same manner as the underlying assets.

Source: 10-K (filing date: 2018-02-20).


Total Debt (Carrying Amount)

ConocoPhillips, Statement of Financial Position, Debt

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Short-term debt hidden hidden hidden hidden hidden
Long-term debt hidden hidden hidden hidden hidden
Total debt, including capital leases (carrying amount) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

Item Description The company
Total debt, including capital leases (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. ConocoPhillips's total debt increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Total Debt (Fair Value)

Microsoft Excel LibreOffice Calc
Dec 31, 2017
Selected Financial Data (USD $ in millions)
Debt, excluding capital leases hidden
Capitalized leases hidden
Total debt, including capital leases (fair value) hidden
Ratio
Debt, fair value to carrying amount hidden

Based on: 10-K (filing date: 2018-02-20).


Weighted-average Interest Rate on Debt

Before-tax incremental borrowing rate: hidden

Interest Rate Debt Amount1 Interest Rate × Debt Amount Weighted-average Interest Rate2
hidden hidden hidden
Total hidden hidden hidden

Based on: 10-K (filing date: 2018-02-20).

1 USD $ in millions

2 Weighted-average interest rate = 100 × hidden ÷ hidden = hidden


Interest Costs Incurred

ConocoPhillips

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Interest expensed hidden hidden hidden hidden hidden
Interest capitalized hidden hidden hidden hidden hidden
Interest incurred hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

Item Description The company
Interest expensed Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. ConocoPhillips's interest expensed increased from 2015 to 2016 but then slightly declined from 2016 to 2017.
Interest capitalized The amount of interest that was capitalized during the period. ConocoPhillips's interest capitalized declined from 2015 to 2016 and from 2016 to 2017.
Interest incurred Total interest costs incurred during the period and either capitalized or charged against earnings. ConocoPhillips's interest incurred increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.

Adjusted Interest Coverage Ratio

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income (loss) attributable to ConocoPhillips hidden hidden hidden hidden hidden
Add: Net income attributable to noncontrolling interest hidden hidden hidden hidden hidden
Less: Income from discontinued operations hidden hidden hidden hidden hidden
Add: Income tax expense hidden hidden hidden hidden hidden
Add: Interest and debt expense hidden hidden hidden hidden hidden
Earnings before interest and tax (EBIT) hidden hidden hidden hidden hidden
 
Interest incurred hidden hidden hidden hidden hidden
Ratio With and Without Capitalized Interest
Interest coverage ratio (excluding capitalized interest)1 hidden hidden hidden hidden hidden
Adjusted interest coverage ratio (including capitalized interest)2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

2017 Calculations

1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest and debt expense
= hidden ÷ hidden = hidden

2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest incurred
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). ConocoPhillips's adjusted interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017.