National Grid (National Grid) Long-Term Debt & Capital Lease Obligation

: $52,111 Mil (As of Sep. 2023)

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Long-Term Debt & Capital Lease Obligation is the debt and capital lease obligation due more than 12 months in the future. National Grid's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2023 was $52,111 Mil.

Warning Sign:

National Grid PLC keeps issuing new debt. Over the past 3 years, it issued GBP 10.1 billion of debt.

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. National Grid's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2023 was $52,111 Mil. National Grid's Total Assets for the quarter that ended in Sep. 2023 was $116,642 Mil. National Grid's LT-Debt-to-Total-Asset for the quarter that ended in Sep. 2023 was 0.45.

National Grid's LT-Debt-to-Total-Asset increased from Sep. 2022 (0.39) to Sep. 2023 (0.45). It may suggest that National Grid is progressively becoming more dependent on debt to grow their business.

National Grid Long-Term Debt & Capital Lease Obligation Historical Data

The historical data trend for National Grid'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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National Grid Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Long-Term Debt & Capital Lease Obligation

31,960.47

33,071.78

38,117.89

43,931.49

48,580.10

National Grid Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Long-Term Debt & Capital Lease Obligation																45,537.09	43,931.49	44,605.89	48,580.10	52,111.39

National Grid 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.

National Grid (NYSE:NGG) Long-Term Debt & Capital Lease Obligation Explanation

National Grid's LT-Debt-to-Total-Asset ratio for the quarter that ended in Sep. 2023 is calculated as:

LT-Debt-to-Total-Asset (Q: Sep. 2023 )	=	Long-Term Debt & Capital Lease Obligation (Q: Sep. 2023 )	/	Total Assets (Q: Sep. 2023 )
	=	52111.386	/	116642.327
	=	0.45

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

National Grid Long-Term Debt & Capital Lease Obligation Related Terms

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National Grid (National Grid) Business Description

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Address

1-3 Strand, London, GBR, WC2N 5EH

Website

https://www.nationalgrid.com

National Grid owns and operates the electric transmission system in England and Wales. It sold the bulk of its U.K. gas transmission business in fiscal 2023 to fund the acquisition of PPL's U.K. power distribution assets. In the Northeastern United States, it serves electricity and gas customers combined in three states. It also owns regulated transmission and electricity generation in the United States, metering services, merchant transmission lines in the U.K., and the Grain (U.K.) liquefied natural gas facility.