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- Statement of Comprehensive Income
- 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
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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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).
The analysis of the reported debt data over the five-year period reveals notable fluctuations and trends across various debt categories. The overall trajectory indicates a general increase in total debt and finance lease liabilities, accompanied by shifting compositions between short-term and long-term obligations.
- Short-term debt
- Initially, short-term debt decreased substantially from US$3,251 million at the end of 2020 to US$1,163 million by the end of 2021. However, it then increased sharply, reaching a peak of US$4,713 million in 2023, before slightly declining to US$4,223 million in 2024. This pattern suggests heightened short-term borrowing in the last three years, possibly to meet immediate funding needs or capitalize on market conditions.
- Current portion of long-term debt
- This component grew significantly from US$751 million in 2020 to US$1,709 million in 2021, followed by a slight decrease to US$1,599 million in 2022 and further decline to US$1,263 million in 2023. A considerable increase occurred again in 2024, reaching US$2,057 million. These fluctuations indicate periodic maturities of long-term debt moving into the current liability category, with the 2024 increase suggesting a higher volume of long-term debt coming due within the year.
- Current finance lease liabilities
- Current finance lease liabilities demonstrated minor year-on-year variation with a modest upward trend, growing from US$38 million in 2020 to US$54 million in 2024. The steady, although small, increases suggest stable or slightly expanded lease obligations classified as current liabilities.
- Long-term debt, excluding current portion
- Long-term debt, excluding current portions, showed a moderate decline from US$12,152 million in 2020 to US$11,335 million in 2021. It then increased consistently to US$15,343 million by 2024. The upward trend over the latter three years reflects either new long-term borrowing or refinancing activity leading to an accumulation of long-term liabilities at carrying value.
- Long-term finance lease liabilities
- Long-term finance lease liabilities remained relatively stable, fluctuating slightly between US$125 million and US$150 million during the period. This stability indicates consistent leasing arrangements classified as long-term liabilities without major expansions or reductions.
- Total debt and finance lease liabilities (carrying amount)
- The aggregate total debt and finance lease liabilities exhibit a dynamic pattern with an initial decrease from US$16,317 million in 2020 to US$14,383 million in 2021. Following this, the total increased markedly, reaching US$21,827 million by the end of 2024. This overall growth evidences a strategic increase in leverage or financing requirements over the recent years, driven by rises in both short-term and long-term debt components.
In summary, the data indicates that after a brief reduction in total debt levels in 2021, the company has steadily increased its borrowing, especially long-term debt and short-term debt from 2022 through 2024. The fluctuations in current portions of long-term debt highlight varying debt maturity structures across the years. Finance lease liabilities have remained relatively stable, reflecting consistent lease-related commitments. The overall upward trend in total debt points to increased financial leverage or capital needs in the recent years.
Total Debt (Fair Value)
Dec 31, 2024 | |
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Selected Financial Data (US$ in millions) | |
Short-term debt | |
Long-term debt, including current portion | |
Finance lease liabilities | |
Total debt and finance lease liabilities (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 on debt and finance lease liabilities:
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
12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Interest expense | |||||||||||
Interest capitalized | |||||||||||
Interest incurred on debt |
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).
- Interest Expense
- The interest expense initially decreased from US$170 million in 2020 to US$117 million in 2021. However, starting from 2022, there is a marked upward trajectory, with the interest expense rising sharply to US$180 million, then more than doubling in 2023 to US$397 million, and further increasing to US$484 million in 2024. This indicates a significant growth in interest costs over the latter part of the period.
- Interest Capitalized
- Interest capitalized shows a consistent growth trend over the five-year span. It increased from US$38 million in 2020 to US$57 million in 2021, followed by gradual increases to US$62 million in 2022, US$67 million in 2023, and reaching US$68 million in 2024. The steady increase suggests ongoing capital projects or investments being financed that allow interest costs to be capitalized rather than expensed immediately.
- Interest Incurred on Debt
- Interest incurred on debt combines both interest expense and interest capitalized, and it reveals a similar pattern to the interest expense but at higher absolute values. After a decrease from US$208 million in 2020 to US$174 million in 2021, there is a substantial increase to US$242 million in 2022, followed by a significant jump to US$464 million in 2023 and further to US$552 million in 2024. This data suggests that the overall interest burden related to debt is rising considerably, reflecting potential increases in borrowing or higher interest rates impacting the cost of debt financing.
- Overall Observations
- The interest-related costs have generally increased over the period, particularly from 2022 onwards. The sharp rises in interest expense and interest incurred on debt imply a heightened financial cost environment, which may be due to larger debt levels, increased interest rates, or both. Meanwhile, the gradual rise in interest capitalized points to continued capital investments whose interest costs are deferred in the accounting records. The divergence between the trends in interest expense and interest capitalized highlights a mix of immediate financing costs and deferred capital-related expenditures.
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 incurred on debt
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio exhibited significant fluctuations over the analyzed periods. It increased sharply from 21.41 in 2020 to 45.6 in 2021, indicating a strengthened ability to cover interest expenses during that year. However, following this peak, the ratio declined progressively to 32.75 in 2022, 21.54 in 2023, and further down to 19.06 in 2024. This downward trend suggests a decreasing capacity to cover interest obligations in the most recent years, although the ratio remains above 19, which may still signify reasonable coverage.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio, accounting for capitalized interest, followed a similar pattern to the unadjusted ratio but consistently displayed lower values. It rose from 17.5 in 2020 to 30.66 in 2021, reflecting enhanced coverage during this period. Subsequently, it decreased steadily to 24.36 in 2022, 18.43 in 2023, and 16.71 in 2024. This mirrors the trend in the unadjusted ratio but indicates a slightly weaker interest coverage when capitalized interest is considered.
- Overall Trends and Insights
- Both interest coverage ratios peaked in 2021, suggesting that the company's ability to meet interest payments was strongest at that time. The consistent decline from 2022 through 2024 in both ratios may indicate increasing interest expenses, lower earnings before interest and taxes, or a combination of factors leading to reduced coverage. The adjusted ratio being lower than the unadjusted ratio reflects the impact of capitalized interest on the company's financial obligations. Despite the downward trend, the ratios remain in a range that typically suggests manageable interest expenses, but the declining trend warrants monitoring for potential financial risk.