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The Most Debt-Laden Companies in the S&P 500

Companies with Heavy Debt Loads

In recent months, numerous firms have been bolstering their balance sheets, but during the financial crisis, overleveraging was the kiss of death for many companies. Just as companies on their books must be , a company with a relatively heavy debt load isn’t necessarily in bad shape. Some companies may carry debt as a result of acquisitions or choose to maintain liquid investments instead of paying off what it owes. Another reason for borrowing in this environment is to take advantage of low in
Photo: Getty Images

In recent months, numerous firms have been bolstering their balance sheets, but during the financial crisis, overleveraging was the kiss of death for many companies.

Just as companies with zero debt on their books must be approached with caution, a company with a relatively heavy debt load isn’t necessarily in bad shape. Some companies may carry debt as a result of acquisitions or choose to maintain liquid investments instead of paying off what it owes. Another reason for borrowing in this environment is to take advantage of low interest rates paid on corporate bonds to secure low-cost financing.

However, as you can see from the historical data in the pages that follow, high debt doesn’t necessarily translate to a drop in stock price.

With data from Capital IQ, drawn from the most recent quarterly statements from across the S&P 500, the companies displayed here have the highest total debt as a percentage of total assets. The companies presented are the ones with the highest debt loads in their sector, as firms in some parts of the economy inherently hold more debt than others.

So, which companies carry the heaviest debt loads in their sector? Click ahead for the industry outliers.

By Giovanny Moreano & Paul Toscano
Posted 13 Aug 2010

Consumer Discretionary

Total Debt as a % of Total Assets: 67.8% Sector Avg : 24.6% Total Debt: $130.1 billion Cash and ST Investments: $34.7 billion Net Debt: $95.4 billion YTD stock price performance: +31% 2009: $132.4 billion total debt, +337% share price 2008: $152.6 billion total debt, -66% share price 2007: $168.8 billion total debt, -66% share price
10-Q Filling Date: 8/6/2010 || Photo: Getty Images

Ford Motor (F)
Total Debt as a % of Total Assets: 67.8%
Sector Avg: 24.6%
Total Debt: $130.1 billion

Cash and ST Investments: $34.7 billion
Net Debt: $95.4 billion
YTD stock price performance: +31%

Historical Debt and Share Price, Per Year
2009: $132.4 bln total debt, +337% share price
2008: $152.6 bln total debt, -66% share price
2007: $168.8 bln total debt, -66% share price

Consumer Staples

Total Debt as a % of Total Assets: 63.6% Sector Avg: 33.4% Total Debt: $3 billionCash and ST Investments: $241 million Net Debt: $2.8 billion YTD stock price performance: +8% 2009: $3.2 billion total debt, +10% share price 2008: $3.5 billion total debt, -15% share price 2007: $2.0 billion total debt, +2% share price
10-Q Filling Date: 5/4/2010 || Photo: Joseph Thornton

Clorox (CLX)
Total Debt as a % of Total Assets: 63.6%
Sector Avg: 33.4%
Total Debt: $3 billion

Cash and ST Investments: $241 million
Net Debt: $2.8 billion
YTD stock price performance: +8%

Historical Debt and Share Price, Per Year
2009: $3.2 bln total debt, +10% share price
2008: $3.5 bln total debt, -15% share price
2007: $2.0 bln total debt, +2% share price

Energy

Total Debt as a % of Total Assets: 60.5% Sector Avg : 22.3% Total Debt: $14 billion Cash and ST Investments: $715 million Net Debt: $13.3 billion YTD stock price performance: +29% 2009: $13.87 billion total debt, +26% share price 2008: $13.91 billion total debt, -55% share price 2007: $12.81 billion total debt, +13% share price
10-Q Filling Date: 5/10/2010 || Photo: WhisperToMe

El Paso (EP)
Total Debt as a % of Total Assets: 60.5%
Sector Avg: 22.3%
Total Debt: $14 billion

Cash and ST Investments: $715 million
Net Debt: $13.3 billion
YTD stock price performance: +29%

Historical Debt and Share Price, Per Year
2009: $13.87 bln total debt, +26% share price
2008: $13.91 bln total debt, -55% share price
2007: $12.81 bln total debt, +13% share price

Financials

Total Debt as a % of Total Assets: 93.7% Sector Avg: 24.6% Total Debt: $194 billion Cash and ST Investments: $6.3 billion Net Debt: $188 billion YTD stock price performance: +9% 2009: $155.8 billion total debt, +27% share price 2008: $157.9 billion total debt, -56% share price 2007: $146.8 billion total debt, -59% share price
10-Q Filling Date: 8/5/2010

Sallie Mae Corp (SLM)
Total Debt as a % of Total Assets: 93.7%
Sector Avg: 24.6%
Total Debt: $194 billion

Cash and ST Investments: $6.3 billion
Net Debt: $188 billion
YTD stock price performance: +9%

Historical Debt and Share Price, Per Year
2009: $155.8 bln total debt, +27% share price
2008: $157.9 bln total debt, -56% share price
2007: $146.8 bln total debt, -59% share price

Health Care

Total Debt as a % of Total Assets: 54.6% Sector Avg : 19.7% Total Debt: $4.3 billion Cash and ST Investments: $713 million Net Debt: $3.6 billion YTD stock price performance: -16% 2009: $4.27 billion total debt, +369% share price 2008: $4.78 billion total debt, -77% share price 2007: $4.77 billion total debt, -27% share price
10-Q Filling Date: 8/3/2010 || Photo: Heath Korvola | Digital Vision | Getty Images

Tenet Healthcare (THC)
Total Debt as a % of Total Assets: 54.6%
Sector Avg: 19.7%
Total Debt: $4.3 billion

Cash and ST Investments: $713 million
Net Debt: $3.6 billion
YTD stock price performance: -16%

Historical Debt and Share Price, Per Year
2009: $4.27 bln total debt, +369% share price
2008: $4.78 bln total debt, -77% share price
2007: $4.77 bln total debt, -27% share price

Industrials

Total Debt as a % of Total Assets: 65.3% Sector Avg : 24.4% Total Debt: $489.7 billion Cash and ST Investments: $73.9 billion Net Debt: $415.9 billion YTD stock price performance: +8% 2009: $510.2 billion total debt, -7% share price 2008: $523.8 billion total debt, -56% share price 2007: $514.1 billion total debt, -0.4% share price
10-Q Filling Date: 8/2/2010 || Photo: SEBASTIEN BOZON | AFP | Getty Images

General Electric (GE)
Total Debt as a % of Total Assets: 65.3%
Sector Avg: 24.4%
Total Debt: $489.7 billion

Cash and ST Investments: $73.9 billion
Net Debt: $415.9 billion
YTD stock price performance: +8%

Historical Debt and Share Price, Per Year
2009: $510.2 bln total debt, -7% share price
2008: $523.8 bln total debt, -56% share price
2007: $514.1 bln total debt, -0.4% share price

Information Technology

Total Debt as a % of Total Assets: 80% Sector Avg : 13.3% Total Debt: $1.29 billion Cash and ST Investments: $1.02 billionNet Debt: $270.9 million YTD stock price performance: +5% 2009: $1.4 billion total debt, +38% share price 2008: $1.7 billion total debt, -31% share price 2007: $1.7 billion total debt, +5% share price
10-Q Filling Date: 5/6/2010 || Photo: Huntstock | Getty Images

Linear Technology (LLTC)
Total Debt as a % of Total Assets: 80%
Sector Avg: 13.3%
Total Debt: $1.29 billion

Cash and ST Investments: $1.02 billion
Net Debt: $270.9 million
YTD stock price performance: +5%

Historical Debt and Share Price, Per Year
2009: $1.4 bln total debt, +38% share price
2008: $1.7 bln total debt, -31% share price
2007: $1.7 bln total debt, +5% share price

Materials

Total Debt as a % of Total Assets: 41.9% Sector Avg : 26.9% Total Debt: $3.5 billionCash and ST Investments: $683 million Net Debt: $2.8 billion YTD stock price performance: -18% 2009: $3.6 billion total debt, +20% share price 2008: $3.3 billion total debt, -45% share price 2007: $3.7 billion total debt, +168% share price
10-Q Filling Date: 7/29/2010 || Photo: Alistair Berg | Digital Vision | Getty Images

Owens-Illinois (OI)
Total Debt as a % of Total Assets: 41.9%
Sector Avg: 26.9%
Total Debt: $3.5 billion

Cash and ST Investments: $683 million
Net Debt: $2.8 billion
YTD stock price performance: -18%

Historical Debt and Share Price, Per Year
2009: $3.6 bln total debt, +20% share price
2008: $3.3 bln total debt, -45% share price
2007: $3.7 bln total debt, +168% share price

Telecommunication Services

Total Debt as a % of Total Assets: 70.7% Sector Avg : 47.6% Total Debt: $4.8 billion Cash and ST Investments: $231.2 million Net Debt: $4.6 billion YTD stock price performance: -1% 2009: $4.80 billion total debt, -11% share price 2008: $4.73 billion total debt, -31% share price 2007: $4.74 billion total debt, -11% share price
10-Q Filling Date: 8/5/2010 || Photo: Thomas Belknap

Frontier Communications (FTR)
Total Debt as a % of Total Assets: 70.7%
Sector Avg: 47.6%
Total Debt: $4.8 billion

Cash and ST Investments: $231.2 million
Net Debt: $4.6 billion
YTD stock price performance: -1%

Historical Debt and Share Price, Per Year
2009: $4.80 bln total debt, -11% share price
2008: $4.73 bln total debt, -31% share price
2007: $4.74 bln total debt, -11% share price

Utilities

Total Debt as a % of Total Assets: 49.4% Sector Avg: 35.3% Total Debt: $20.1 billion Cash and ST Investments: $4.6 billion Net Debt: $15.5 billion YTD stock price performance: -17% 2009: $20.3 billion total debt, +62% share price 2008: $17.7 billion total debt, -61% share price 2007: $18.0 billion total debt, -3% share price
10-Q Filling Date: 8/6/2010 || Photo: Getty Images

AES Corp (AES)
Total Debt as a % of Total Assets: 49.4%
Sector Avg: 35.3%
Total Debt: $20.1 billion

Cash and ST Investments: $4.6 billion
Net Debt: $15.5 billion
YTD stock price performance: -17%

Historical Debt and Share Price, Per Year
2009: $20.3 bln total debt, +62% share price
2008: $17.7 bln total debt, -61% share price
2007: $18.0 bln total debt, -3% share price