What is Midcoast Energy Partners LP Long-Term Debt & Capital Lease Obligation?
Long-Term Debt & Capital Lease Obligation is the debt and capital lease obligation due more than 12 months in the future. Midcoast Energy Partners LP's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2016 was $819 Mil.
LT-Debt-to-Total-Asset is a measurement representing the percentage of a corporation's assets that are financed with loans and financial obligations lasting more than one year. The ratio provides a general measure of the financial position of a company, including its ability to meet financial requirements for outstanding loans. It is calculated as a company's Long-Term Debt & Capital Lease Obligation divides by its Total Assets. Midcoast Energy Partners LP's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2016 was $819 Mil. Midcoast Energy Partners LP's Total Assets for the quarter that ended in Dec. 2016 was $4,916 Mil. Midcoast Energy Partners LP's LT-Debt-to-Total-Asset for the quarter that ended in Dec. 2016 was 0.17.
Midcoast Energy Partners LP Long-Term Debt & Capital Lease Obligation Historical Data
The historical data trend for Midcoast Energy Partners LP's Long-Term Debt & Capital Lease Obligation can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
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Midcoast Energy Partners LP Long-Term Debt & Capital Lease Obligation Chart
Midcoast Energy Partners LP Long-Term Debt & Capital Lease Obligation Calculation
Long-Term Debt is the debt due more than 12 months in the future. The debt can be owed to banks or bondholders. Some companies issue bonds to investors and pay interest on the bonds.
Long-Term Capital Lease Obligation represents the total liability for long-term leases lasting over one year. It's amount equal to the present value (the principal) at the beginning of the lease term less lease payments during the lease term.
The interest paid on companies' debt is reflected in the income statement as interest expense. If a company has too much debt and it cannot serve the interest payment on the debt or repay the matured debt, the company risks bankruptcy. Peter Lynch famously said: A company that does not have debt cannot go bankrupt.
A company's long term debt may have different dates of maturity and interest rates, depending on the terms.
Usually a company issues long term debt to pay for its capital expenditures. Borrowing allows the company to do things that otherwise cannot be done with only the capital it has. But debt can be risky.
Midcoast Energy Partners LP (NYSE:MEP) Long-Term Debt & Capital Lease Obligation Explanation
LT-Debt-to-Total-Asset is a measurement representing the percentage of a corporation's assets that are financed with loans and financial obligations lasting more than one year. The ratio provides a general measure of the financial position of a company, including its ability to meet financial requirements for outstanding loans. A year-over-year decrease in this metric would suggest the company is progressively becoming less dependent on debt to grow their business.
Midcoast Energy Partners LP's LT-Debt-to-Total-Asset ratio for the quarter that ended in Dec. 2016 is calculated as:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Buffett says that durable competitive advantages carry little to no long-term debt because the company is so profitable that even expansions or acquisitions are self financed.
We are interested in long term debt load for the last ten years. If the ten years of operation show little to no long term debt, then the company has some kind of strong competitive advantage.
Warren Buffett's historic purchases indicate that on any given year, the company should have sufficient yearly net earnings to pay all long term within 3 or 4 year earnings period. (e.g. Coke + Moody's = 1yr)
Companies with enough earning power to pay long term debt in less than 3 or 4 years is a good candidate in our search for long term competitive advantage.
BUT, these companies are targets for leveraged buy outs, which saddles the business with long term debt.
If all else indicates the company has a moat, but it has ton of debt, a leveraged buyout may have created the debt. In these cases the company's bonds offer the better bet, in that the companys earnings power is focused on paying off the debt and not growth.
Important: little or no long term debt often means a Good Long Term Bet
Midcoast Energy Partners LP Long-Term Debt & Capital Lease Obligation Related Terms
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Midcoast Energy Partners LP (Midcoast Energy Partners LP) Business Description
Midcoast Energy Partners LP is a Delaware limited partnership formed in 2013 to serve as Enbridge Energy Partners, L.P's primary vehicle for owning and growing its natural gas and NGL midstream business in the United States. Its business consists of gathering unprocessed and untreated natural gas from wellhead locations and other receipt points on its systems, processing the natural gas to remove NGLs and impurities at its processing and treating facilities and transporting the processed natural gas and NGLs to intrastate and interstate pipelines for transportation to various customers and market outlets. In addition it also provides marketing services of natural gas and NGLs to wholesale customers. It conducts business through two distinct reporting segments: Gathering, Processing and Transportation and Logistics and Marketing. Its gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, condensate stabilizers and an NGL fractionation facility. It gathers natural gas from the wellhead and central receipt points on its systems, deliver it to facilities for processing and treating and deliver the residue gas to intrastate or interstate pipelines for transmission to wholesale customers such as power plants, industrial customers and local distribution companies. It delivers the NGLs produced at its processing and fractionation facilities to intrastate and interstate pipelines for transportation to the NGL market hubs in Mont Belvieu, Texas and Conway, Kansas. In addition, it delivers NGLs from certain of its facilities to the Texas Express NGL system for transportation on the Texas Express NGL mainline to Mont Belvieu, Texas. The primary role of its logistics and marketing business is to provide marketing services of natural gas, NGLs and condensate received from its gathering, processing and transportation business. It purchases and receives natural gas, NGLs and other products from pipeline systems and processing plants and sell and deliver them to wholesale customers, such as distributors, refiners, fractionators, chemical facilities, various third parties and end users. A majority of the natural gas and NGLs purchased are produced in Texas markets where it has intrastate deliverability alternatives over the past several years. It uses this connectivity to interstate pipelines to improve value for the producers by delivering natural gas into premium markets and NGLs to primary markets where it sells them to customers. It faces competition in the gathering, processing and transportation business, as well as in the marketing and logistics business. The Company's transmission and gathering pipelines, storage and processing facilities, and trucking and railcar operations are subject to extensive environmental, operational and safety regulation at federal and state levels.
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