Analysis of Debt
Total Debt (Carrying Amount)
Monsanto Co., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
The total debt carrying amount exhibited a period of relative stability followed by a sharp escalation and a subsequent moderate decline. From August 31, 2012, to August 31, 2013, total debt remained nearly constant. However, a significant expansion occurred in 2014, with total obligations increasing by approximately 267%. Debt levels reached a peak in August 2015 at 9,044 million US$, maintaining a similar level into 2016 before decreasing to 8,124 million US$ by August 31, 2017.
- Total Debt Trajectory
- The total carrying amount of debt shifted from a baseline of approximately 2.1 billion US$ between 2012 and 2013 to a high exceeding 9 billion US$ in 2015 and 2016, representing a substantial increase in total leverage over the five-year period.
- Long-Term Debt Dynamics
- Long-term debt served as the primary driver of the total debt profile. A marked increase is observed between 2013 and 2014, where obligations rose from 2,061 million US$ to 7,528 million US$. This component reached its maximum value in 2015 at 8,429 million US$ before experiencing a gradual downward trend over the subsequent two years.
- Short-Term Debt Fluctuations
- Short-term debt, including the current portion of long-term debt, remained minimal until 2014. A period of rapid growth followed, culminating in a peak of 1,587 million US$ in 2016, which represents a significant increase from the 36 million US$ reported in 2012. A subsequent reduction to 870 million US$ was recorded by August 31, 2017.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Total Debt (Fair Value)
| Aug 31, 2017 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Short-term debt, including current portion of long-term debt | 877) |
| Long-term debt, excluding current portion | 7,603) |
| Total debt (fair value) | 8,480) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.04 |
Based on: 10-K (reporting date: 2017-08-31).
Weighted-average Interest Rate on Debt
Weighted average interest rate on debt: 3.88%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 1.85% | 299) | 6) | |
| 2.13% | 498) | 11) | |
| 2.75% | 497) | 14) | |
| 2.20% | 249) | 5) | |
| 3.38% | 745) | 25) | |
| 2.85% | 297) | 8) | |
| 5.50% | 292) | 16) | |
| 4.20% | 493) | 21) | |
| 5.50% | 393) | 22) | |
| 5.88% | 246) | 14) | |
| 3.60% | 248) | 9) | |
| 4.65% | 297) | 14) | |
| 4.40% | 983) | 43) | |
| 4.30% | 361) | 16) | |
| 3.95% | 494) | 20) | |
| 4.70% | 735) | 35) | |
| 3.00% | 64) | 2) | |
| Total | 7,191) | 279) | |
| 3.88% | |||
Based on: 10-K (reporting date: 2017-08-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 279 ÷ 7,191 = 3.88%
Interest Costs Incurred
Monsanto Co., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
The total interest cost incurred exhibits a significant upward trajectory over the six-year period from 2012 to 2017. Following a marginal decline between 2012 and 2013, total costs grew from 195 million USD to 496 million USD, representing a substantial increase in the aggregate cost of borrowing.
- Total Interest Cost Trends
- A marked acceleration in spending is observed beginning in 2014, with the most pronounced increase occurring between 2014 and 2015, where costs rose from 275 million USD to 460 million USD. This growth continued through 2017, resulting in a total increase of approximately 134% from the 2013 low.
- Analysis of Interest Expense
- Interest expense serves as the primary driver of total costs. After a slight dip in 2013 to 172 million USD, the expense surged to 433 million USD by 2015. The subsequent years show a stabilization phase, with a gradual increase to 452 million USD by August 31, 2017.
- Capitalized Interest Patterns
- Interest capitalized on construction demonstrates a consistent and steady upward trend. Starting at 21 million USD in 2012, the amount grew incrementally each year, peaking at 44 million USD in 2017. This indicates a sustained increase in the capitalization of borrowing costs related to long-term asset development.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
2017 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 3,338 ÷ 452 = 7.38
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest cost incurred
= 3,338 ÷ 496 = 6.73
A general downward trend in the ability to cover interest obligations is observed between 2013 and 2016, followed by a modest recovery in 2017. The most significant decline in coverage occurred during the 2014 to 2016 period, during which the ratios dropped substantially from their peak levels.
- Interest Coverage Ratio (without capitalized interest)
- The ratio peaked in August 2013 at 20.94 before entering a period of contraction. A sharp decline is noted between August 2014 (16.43) and August 2015 (8.30), with the ratio reaching its lowest point of 5.57 in August 2016. A slight upward correction to 7.38 occurred by August 2017.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted ratio follows a trajectory nearly identical to the non-adjusted metric, peaking at 18.47 in August 2013. Similar to the primary ratio, a precipitous drop is evident between August 2014 (14.82) and August 2015 (7.81), bottoming out at 5.19 in August 2016 before rising to 6.73 in August 2017.
- Comparative Analysis of Capitalization Impact
- The adjusted interest coverage ratio remains consistently lower than the ratio without capitalized interest across all reporting periods. This variance indicates that the inclusion of capitalized interest increases the total interest burden, thereby reducing the coverage margin. Despite this difference in absolute values, the correlation between the two metrics is absolute, as both reflect the same underlying trend of weakening coverage capacity through 2016.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?