Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Broadcom Inc. (NASDAQ:AVGO)

Analysis of Operating Leases

Advanced level


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

Broadcom Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
Total undiscounted future operating lease payments 800  650  745  446  167  135 
Discount rate1 3.70% 3.38% 3.38% 3.15% 4.15% 4.01%
 
Total present value of future operating lease payments 649  512  591  410  140  112 

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

1 Weighted-average interest rate for Broadcom Inc.’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.70%
2020 115  2020 115  111 
2021 99  2021 99  92 
2022 80  2022 80  72 
2023 69  2023 69  60 
2024 47  2024 47  39 
2025 and thereafter 390  2025 47  38 
2026 47  36 
2027 47  35 
2028 47  34 
2029 47  33 
2030 47  32 
2031 47  30 
2032 47  29 
2033 14 
Total: 800  800  649 

Based on: 10-K (filing date: 2019-12-20).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.38%
2019 75  2019 75  73 
2020 62  2020 62  58 
2021 51  2021 51  46 
2022 39  2022 39  34 
2023 36  2023 36  30 
2024 and thereafter 387  2024 36  29 
2025 36  29 
2026 36  28 
2027 36  27 
2028 36  26 
2029 36  25 
2030 36  24 
2031 36  23 
2032 36  23 
2033 36  22 
2034 27  16 
Total: 650  650  512 

Based on: 10-K (filing date: 2018-12-21).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.38%
2018 119  2018 119  115 
2019 75  2019 75  70 
2020 51  2020 51  46 
2021 42  2021 42  37 
2022 37  2022 37  31 
2023 and thereafter 421  2023 37  30 
2024 37  29 
2025 37  28 
2026 37  27 
2027 37  27 
2028 37  26 
2029 37  25 
2030 37  24 
2031 37  23 
2032 37  22 
2033 37  22 
2034 14 
Total: 745  745  591 

Based on: 10-K (filing date: 2017-12-21).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.15%
2017 144  2017 144  140 
2018 116  2018 116  109 
2019 69  2019 69  63 
2020 43  2020 43  38 
2021 18  2021 18  15 
2022 and thereafter 56  2022 18  15 
2023 18  14 
2024 18  14 
2025
Total: 446  446  410 

Based on: 10-K (filing date: 2016-12-23).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.15%
2016 31  2016 31  30 
2017 25  2017 25  23 
2018 22  2018 22  19 
2019 17  2019 17  14 
2020 12  2020 12  10 
2021 and thereafter 60  2021 12 
2022 12 
2023 12 
2024 12 
2025 12 
Total: 167  167  140 

Based on: 10-K (filing date: 2015-12-17).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.01%
2015 27  2015 27  26 
2016 19  2016 19  18 
2017 14  2017 14  12 
2018 12  2018 12  10 
2019 2019
2020 and thereafter 54  2020
2021
2022
2023
2024
2025
Total: 135  135  112 

Based on: 10-K (filing date: 2014-12-29).


Adjustments to Financial Statements for Operating Leases

Broadcom Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
Adjustment to Total Assets
Total assets (as reported) 67,493  50,124  54,418  49,966  10,592  10,491 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 649  512  591  410  140  112 
Total assets (adjusted) 68,142  50,636  55,009  50,376  10,732  10,603 
Adjustment to Total Debt
Total debt (as reported) 32,798  17,493  17,548  13,642  3,949  5,509 
Add: Operating lease liability (before adoption of FASB Topic 842)2 649  512  591  410  140  112 
Total debt (adjusted) 33,447  18,005  18,139  14,052  4,089  5,621 

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

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


Broadcom Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Broadcom Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
Total Asset Turnover1
Reported total asset turnover 0.33 0.42 0.32 0.26 0.64 0.41
Adjusted total asset turnover 0.33 0.41 0.32 0.26 0.64 0.40
Debt to Equity2
Reported debt to equity 1.32 0.66 0.87 0.72 0.84 1.70
Adjusted debt to equity 1.34 0.68 0.89 0.74 0.87 1.73
Return on Assets3 (ROA)
Reported ROA 4.04% 24.46% 3.11% -3.48% 12.88% 2.51%
Adjusted ROA 4.00% 24.21% 3.08% -3.45% 12.71% 2.48%

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Broadcom 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. Broadcom Inc.’s adjusted debt to equity ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Broadcom Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Broadcom Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
As Reported
Selected Financial Data (US$ in millions)
Net revenue 22,597  20,848  17,636  13,240  6,824  4,269 
Total assets 67,493  50,124  54,418  49,966  10,592  10,491 
Activity Ratio
Total asset turnover1 0.33 0.42 0.32 0.26 0.64 0.41
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net revenue 22,597  20,848  17,636  13,240  6,824  4,269 
Adjusted total assets 68,142  50,636  55,009  50,376  10,732  10,603 
Activity Ratio
Adjusted total asset turnover2 0.33 0.41 0.32 0.26 0.64 0.40

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

2019 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 22,597 ÷ 67,493 = 0.33

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 22,597 ÷ 68,142 = 0.33

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Broadcom 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

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
As Reported
Selected Financial Data (US$ in millions)
Total debt 32,798  17,493  17,548  13,642  3,949  5,509 
Total Broadcom Inc. stockholders’ equity 24,941  26,657  20,285  18,892  4,714  3,243 
Solvency Ratio
Debt to equity1 1.32 0.66 0.87 0.72 0.84 1.70
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 33,447  18,005  18,139  14,052  4,089  5,621 
Total Broadcom Inc. stockholders’ equity 24,941  26,657  20,285  18,892  4,714  3,243 
Solvency Ratio
Adjusted debt to equity2 1.34 0.68 0.89 0.74 0.87 1.73

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

2019 Calculations

1 Debt to equity = Total debt ÷ Total Broadcom Inc. stockholders’ equity
= 32,798 ÷ 24,941 = 1.32

2 Adjusted debt to equity = Adjusted total debt ÷ Total Broadcom Inc. stockholders’ equity
= 33,447 ÷ 24,941 = 1.34

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Broadcom Inc.’s adjusted debt-to-equity ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Nov 3, 2019 Nov 4, 2018 Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Broadcom Inc. stockholders 2,724  12,259  1,692  (1,739) 1,364  263 
Total assets 67,493  50,124  54,418  49,966  10,592  10,491 
Profitability Ratio
ROA1 4.04% 24.46% 3.11% -3.48% 12.88% 2.51%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Broadcom Inc. stockholders 2,724  12,259  1,692  (1,739) 1,364  263 
Adjusted total assets 68,142  50,636  55,009  50,376  10,732  10,603 
Profitability Ratio
Adjusted ROA2 4.00% 24.21% 3.08% -3.45% 12.71% 2.48%

Based on: 10-K (filing date: 2019-12-20), 10-K (filing date: 2018-12-21), 10-K (filing date: 2017-12-21), 10-K (filing date: 2016-12-23), 10-K (filing date: 2015-12-17), 10-K (filing date: 2014-12-29).

2019 Calculations

1 ROA = 100 × Net income (loss) attributable to Broadcom Inc. stockholders ÷ Total assets
= 100 × 2,724 ÷ 67,493 = 4.04%

2 Adjusted ROA = 100 × Net income (loss) attributable to Broadcom Inc. stockholders ÷ Adjusted total assets
= 100 × 2,724 ÷ 68,142 = 4.00%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Broadcom Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.