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Applied Materials Inc. (AMAT)
Analysis of Operating Leases
Advanced level
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)
Applied Materials Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
| Oct 27, 2019 | Oct 28, 2018 | Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | ||
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| Total undiscounted future operating lease payments | |
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| Discount rate1 | |
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| Total present value of future operating lease payments | |
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Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
1 Weighted-average interest rate for Applied Materials Inc.’s debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2020 | |
2020 | |
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| 2021 | |
2021 | |
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| 2022 | |
2022 | |
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| 2023 | |
2023 | |
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| 2024 | |
2024 | |
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| 2025 and thereafter | |
2025 | |
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| 2026 | |
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| Total: | |
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Based on: 10-K (filing date: 2019-12-13).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2019 | |
2019 | |
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| 2020 | |
2020 | |
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| 2021 | |
2021 | |
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| 2022 | |
2022 | |
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| 2023 | |
2023 | |
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| 2024 and thereafter | |
2024 | |
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| 2025 | |
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| Total: | |
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Based on: 10-K (filing date: 2018-12-13).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2018 | |
2018 | |
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| 2019 | |
2019 | |
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| 2020 | |
2020 | |
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| 2021 | |
2021 | |
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| 2022 | |
2022 | |
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| 2023 and thereafter | |
2023 | |
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| 2024 | |
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| Total: | |
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Based on: 10-K (filing date: 2017-12-15).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2017 | |
2017 | |
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| 2018 | |
2018 | |
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| 2019 | |
2019 | |
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| 2020 | |
2020 | |
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| 2021 | |
2021 | |
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| 2022 and thereafter | |
2022 | |
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| 2023 | |
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| 2024 | |
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| Total: | |
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Based on: 10-K (filing date: 2016-12-15).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2016 | |
2016 | |
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| 2017 | |
2017 | |
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| 2018 | |
2018 | |
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| 2019 | |
2019 | |
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| 2020 | |
2020 | |
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| 2021 and thereafter | |
2021 | |
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| 2022 | |
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| Total: | |
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Based on: 10-K (filing date: 2015-12-09).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2015 | |
2015 | |
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| 2016 | |
2016 | |
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| 2017 | |
2017 | |
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| 2018 | |
2018 | |
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| 2019 | |
2019 | |
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| 2020 and thereafter | |
2020 | |
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| 2021 | |
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| Total: | |
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Based on: 10-K (filing date: 2014-12-17).
Adjustments to Financial Statements for Operating Leases
Applied Materials Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
1, 2 Equal to total present value of future operating lease payments.
Applied Materials Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Applied Materials Inc., adjusted financial ratios
Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Applied Materials Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Applied Materials Inc.’s adjusted debt to equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Applied Materials Inc.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Applied Materials Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
2019 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Applied Materials Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
Adjusted Debt to Equity
Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
2019 Calculations
1 Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= ÷ =
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Applied Materials Inc.’s adjusted debt-to-equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level. |
Adjusted Return on Assets (ROA)
Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).
2019 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Applied Materials Inc.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |