An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

EMC Corp., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Total undiscounted future operating lease payments	2,008)	1,938)	1,612)	1,676)	1,501)
Discount rate¹	2.34%	2.54%	3.25%	5.60%	5.60%

Total present value of future operating lease payments	1,788)	1,704)	1,371)	1,290)	1,145)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ Weighted-average interest rate for EMC Corp. debt

2015 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.34%
2016	338)	2016	338)	330)
2017	287)	2017	287)	274)
2018	223)	2018	223)	208)
2019	172)	2019	172)	157)
2020	136)	2020	136)	121)
2021 and thereafter	852)	2021	136)	118)
		2022	136)	116)
		2023	136)	113)
		2024	136)	110)
		2025	136)	108)
		2026	136)	105)
		2027	36)	27)
Total:	2,008)		2,008)	1,788)

Based on: 10-K (reporting date: 2015-12-31).

2014 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.54%
2015	328)	2015	328)	320)
2016	281)	2016	281)	267)
2017	224)	2017	224)	208)
2018	162)	2018	162)	147)
2019	117)	2019	117)	103)
2020 and thereafter	826)	2020	117)	101)
		2021	117)	98)
		2022	117)	96)
		2023	117)	93)
		2024	117)	91)
		2025	117)	89)
		2026	117)	87)
		2027	7)	5)
Total:	1,938)		1,938)	1,704)

Based on: 10-K (reporting date: 2014-12-31).

2013 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.25%
2014	294)	2014	294)	285)
2015	235)	2015	235)	220)
2016	176)	2016	176)	160)
2017	134)	2017	134)	118)
2018	94)	2018	94)	80)
2019 and thereafter	679)	2019	94)	78)
		2020	94)	75)
		2021	94)	73)
		2022	94)	70)
		2023	94)	68)
		2024	94)	66)
		2025	94)	64)
		2026	21)	14)
Total:	1,612)		1,612)	1,371)

Based on: 10-K (reporting date: 2013-12-31).

2012 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 5.60%
2013	285)	2013	285)	269)
2014	254)	2014	254)	228)
2015	194)	2015	194)	165)
2016	141)	2016	141)	114)
2017	106)	2017	106)	81)
2018 and thereafter	695)	2018	106)	77)
		2019	106)	73)
		2020	106)	69)
		2021	106)	65)
		2022	106)	62)
		2023	106)	58)
		2024	57)	30)
Total:	1,676)		1,676)	1,290)

Based on: 10-K (reporting date: 2012-12-31).

2011 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 5.60%
2012	255)	2012	255)	241)
2013	215)	2013	215)	193)
2014	170)	2014	170)	145)
2015	129)	2015	129)	104)
2016	90)	2016	90)	69)
2017 and thereafter	641)	2017	90)	65)
		2018	90)	61)
		2019	90)	58)
		2020	90)	55)
		2021	90)	52)
		2022	90)	49)
		2023	90)	47)
		2024	11)	5)
Total:	1,501)		1,501)	1,145)

Based on: 10-K (reporting date: 2011-12-31).

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EMC Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Adjustment to Total Assets
Total assets (as reported)	46,612)	45,885)	45,849)	38,069)	34,268)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	1,788)	1,704)	1,371)	1,290)	1,145)
Total assets (adjusted)	48,400)	47,589)	47,220)	39,358)	35,413)
Adjustment to Total Debt
Total debt (as reported)	6,774)	5,495)	7,159)	1,652)	3,305)
Add: Operating lease liability (before adoption of FASB Topic 842)²	1,788)	1,704)	1,371)	1,290)	1,145)
Total debt (adjusted)	8,562)	7,199)	8,530)	2,942)	4,450)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

^{1, 2} Equal to total present value of future operating lease payments.

EMC Corp., Financial Data: Reported vs. Adjusted

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EMC Corp., adjusted financial ratios

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Total Asset Turnover¹
Reported total asset turnover	0.53	0.53	0.51	0.57	0.58
Adjusted total asset turnover	0.51	0.51	0.49	0.55	0.56
Debt to Equity²
Reported debt to equity	0.32	0.25	0.32	0.07	0.17
Adjusted debt to equity	0.41	0.33	0.38	0.13	0.23
Return on Assets³ (ROA)
Reported ROA	4.27%	5.91%	6.30%	7.18%	7.18%
Adjusted ROA	4.11%	5.70%	6.12%	6.94%	6.95%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	EMC Corp. adjusted total asset turnover ratio improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	EMC Corp. adjusted debt to equity ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	EMC Corp. adjusted ROA deteriorated from 2013 to 2014 and from 2014 to 2015.

EMC Corp., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenues	24,704)	24,440)	23,222)	21,714)	20,008)
Total assets	46,612)	45,885)	45,849)	38,069)	34,268)
Activity Ratio
Total asset turnover¹	0.53	0.53	0.51	0.57	0.58
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenues	24,704)	24,440)	23,222)	21,714)	20,008)
Adjusted total assets	48,400)	47,589)	47,220)	39,358)	35,413)
Activity Ratio
Adjusted total asset turnover²	0.51	0.51	0.49	0.55	0.56

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 24,704 ÷ 46,612 = 0.53

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 24,704 ÷ 48,400 = 0.51

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	EMC Corp. adjusted total asset turnover ratio improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total debt	6,774)	5,495)	7,159)	1,652)	3,305)
Total EMC Corporation’s shareholders’ equity	21,140)	21,896)	22,301)	22,357)	18,959)
Solvency Ratio
Debt to equity¹	0.32	0.25	0.32	0.07	0.17
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	8,562)	7,199)	8,530)	2,942)	4,450)
Total EMC Corporation’s shareholders’ equity	21,140)	21,896)	22,301)	22,357)	18,959)
Solvency Ratio
Adjusted debt to equity²	0.41	0.33	0.38	0.13	0.23

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ Debt to equity = Total debt ÷ Total EMC Corporation’s shareholders’ equity
= 6,774 ÷ 21,140 = 0.32

² Adjusted debt to equity = Adjusted total debt ÷ Total EMC Corporation’s shareholders’ equity
= 8,562 ÷ 21,140 = 0.41

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	EMC Corp. adjusted debt-to-equity ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation	1,990)	2,714)	2,889)	2,733)	2,461)
Total assets	46,612)	45,885)	45,849)	38,069)	34,268)
Profitability Ratio
ROA¹	4.27%	5.91%	6.30%	7.18%	7.18%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation	1,990)	2,714)	2,889)	2,733)	2,461)
Adjusted total assets	48,400)	47,589)	47,220)	39,358)	35,413)
Profitability Ratio
Adjusted ROA²	4.11%	5.70%	6.12%	6.94%	6.95%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

¹ ROA = 100 × Net income attributable to EMC Corporation ÷ Total assets
= 100 × 1,990 ÷ 46,612 = 4.27%

² Adjusted ROA = 100 × Net income attributable to EMC Corporation ÷ Adjusted total assets
= 100 × 1,990 ÷ 48,400 = 4.11%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	EMC Corp. adjusted ROA deteriorated from 2013 to 2014 and from 2014 to 2015.

EMC Corp. (NYSE:EMC)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

EMC Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

EMC Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)