Analysis of Operating Leases
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)
Express Scripts Holding Co., future operating lease payments (before adoption of FASB Topic 842)
US$ in thousands
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 Weighted-average interest rate for Express Scripts Holding Co. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.81% |
|---|---|---|---|---|
| 2018 | 62,200) | 2018 | 62,200) | 59,917) |
| 2019 | 50,900) | 2019 | 50,900) | 47,232) |
| 2020 | 45,600) | 2020 | 45,600) | 40,761) |
| 2021 | 37,600) | 2021 | 37,600) | 32,377) |
| 2022 | 27,800) | 2022 | 27,800) | 23,059) |
| 2023 and thereafter | 42,600) | 2023 | 27,800) | 22,213) |
| 2024 | 14,800) | 11,392) | ||
| Total: | 266,700) | 266,700) | 236,952) |
Based on: 10-K (reporting date: 2017-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.72% |
|---|---|---|---|---|
| 2017 | 59,300) | 2017 | 59,300) | 57,173) |
| 2018 | 52,800) | 2018 | 52,800) | 49,080) |
| 2019 | 39,700) | 2019 | 39,700) | 35,580) |
| 2020 | 33,500) | 2020 | 33,500) | 28,946) |
| 2021 | 28,000) | 2021 | 28,000) | 23,326) |
| 2022 and thereafter | 59,300) | 2022 | 28,000) | 22,490) |
| 2023 | 28,000) | 21,683) | ||
| 2024 | 3,300) | 2,464) | ||
| Total: | 272,600) | 272,600) | 240,743) |
Based on: 10-K (reporting date: 2016-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.25% |
|---|---|---|---|---|
| 2016 | 60,800) | 2016 | 60,800) | 58,886) |
| 2017 | 52,700) | 2017 | 52,700) | 49,435) |
| 2018 | 46,100) | 2018 | 46,100) | 41,882) |
| 2019 | 33,100) | 2019 | 33,100) | 29,125) |
| 2020 | 29,400) | 2020 | 29,400) | 25,055) |
| 2021 and thereafter | 77,700) | 2021 | 29,400) | 24,266) |
| 2022 | 29,400) | 23,503) | ||
| 2023 | 18,900) | 14,633) | ||
| Total: | 299,800) | 299,800) | 266,786) |
Based on: 10-K (reporting date: 2015-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.78% |
|---|---|---|---|---|
| 2015 | 60,700) | 2015 | 60,700) | 58,489) |
| 2016 | 58,100) | 2016 | 58,100) | 53,945) |
| 2017 | 48,600) | 2017 | 48,600) | 43,481) |
| 2018 | 44,600) | 2018 | 44,600) | 38,449) |
| 2019 | 28,700) | 2019 | 28,700) | 23,840) |
| 2020 and thereafter | 100,300) | 2020 | 28,700) | 22,972) |
| 2021 | 28,700) | 22,135) | ||
| 2022 | 28,700) | 21,329) | ||
| 2023 | 14,200) | 10,169) | ||
| Total: | 341,000) | 341,000) | 294,809) |
Based on: 10-K (reporting date: 2014-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.80% |
|---|---|---|---|---|
| 2014 | 85,000) | 2014 | 85,000) | 81,888) |
| 2015 | 61,100) | 2015 | 61,100) | 56,708) |
| 2016 | 53,500) | 2016 | 53,500) | 47,837) |
| 2017 | 42,600) | 2017 | 42,600) | 36,696) |
| 2018 | 38,400) | 2018 | 38,400) | 31,867) |
| 2019 and thereafter | 85,500) | 2019 | 38,400) | 30,701) |
| 2020 | 38,400) | 29,577) | ||
| 2021 | 8,700) | 6,456) | ||
| Total: | 366,100) | 366,100) | 321,730) |
Based on: 10-K (reporting date: 2013-12-31).
Adjustments to Financial Statements for Operating Leases
Express Scripts Holding Co., adjustments to financial statements
US$ in thousands
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1, 2 Equal to total present value of future operating lease payments.
Express Scripts Holding Co., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Express Scripts Holding Co., adjusted financial ratios
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Express Scripts Holding Co. adjusted total asset turnover ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Express Scripts Holding Co. adjusted debt to equity ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Express Scripts Holding Co. adjusted ROA improved from 2015 to 2016 and from 2016 to 2017. |
Express Scripts Holding Co., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
2017 Calculations
1 Total asset turnover = Revenues ÷ Total assets
= 100,064,600 ÷ 54,255,800 = 1.84
2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 100,064,600 ÷ 54,492,752 = 1.84
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Express Scripts Holding Co. adjusted total asset turnover ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
2017 Calculations
1 Debt to equity = Total debt ÷ Total Express Scripts stockholders’ equity
= 16,014,400 ÷ 18,119,600 = 0.88
2 Adjusted debt to equity = Adjusted total debt ÷ Total Express Scripts stockholders’ equity
= 16,251,352 ÷ 18,119,600 = 0.90
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Express Scripts Holding Co. adjusted debt-to-equity ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
2017 Calculations
1 ROA = 100 × Net income attributable to Express Scripts ÷ Total assets
= 100 × 4,517,400 ÷ 54,255,800 = 8.33%
2 Adjusted ROA = 100 × Net income attributable to Express Scripts ÷ Adjusted total assets
= 100 × 4,517,400 ÷ 54,492,752 = 8.29%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Express Scripts Holding Co. adjusted ROA improved from 2015 to 2016 and from 2016 to 2017. |