Key Trends in Anadarko Petroleum’s Net Debt
Anadarko’s net debt
In a previous series, we looked at Anadarko Petroleum’s (APC) key strategies, goals, and expectations for this year. In this series, we’ll look at Anadarko’s key fundamentals and stock price movement.
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Anadarko’s net-debt-to-adjusted-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple has declined significantly since last year. As we can see in the graph above, its net-debt-to-adjusted-EBITDA multiple has been mirroring movements in its net debt, which has also fallen since it peaked in 1Q16. In 1Q16, its net-debt-to-adjusted-EBITDA multiple was ~10.0x, and its net debt was ~$16 billion.
On the other hand, Anadarko’s adjusted EBITDA have increased considerably since last year, which contributed to the decrease in its net-debt-to-adjusted-EBITDA multiple. Anadarko’s 1Q17 net debt was ~$9.5 billion, compared with ~$15.8 billion in 1Q16. Its net debt in 4Q16 was $12 billion. Its trailing-12-month adjusted EBITDA as of 1Q17 was ~$3.7 billion, compared with ~$931 million in 1Q16.
Anadarko’s net debt rose sharply between 3Q15 and 1Q16 as its EBITDA fell, resulting in its net-debt-to-adjusted-EBITDA multiple rising significantly. However, since 2Q16, Anadarko’s adjusted EBITDA have risen and its debt levels have fallen, explaining the decline in its net-debt-to-adjusted-EBITDA multiple since 2Q16.
Peers, liquidity, and financial position
Anadarko noted that it had $5.8 billion in cash and cash equivalents on March 31, 2017. According to its annual report, Anadarko has a $3 billion five-year revolving credit facility that will mature in January 2021. It also has a $2 billion 364-day credit facility. In January this year, Anadarko announced that it had extended the maturity date of the credit facility to January 2018.