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

Gilead Sciences Inc. (NASDAQ:GILD)

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)

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

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total undiscounted future operating lease payments — 574  519  369  317 
Discount rate1 — 3.77% 3.70% 3.77% 3.85%
 
Total present value of future operating lease payments — 484  437  322  279 

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

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

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.77%
2019 89  2019 89  86 
2020 78  2020 78  72 
2021 66  2021 66  59 
2022 60  2022 60  52 
2023 52  2023 52  43 
2024 and thereafter 229  2024 52  42 
2025 52  40 
2026 52  39 
2027 52  37 
2028 21  15 
Total: 574  574  484 

Based on: 10-K (filing date: 2019-02-26).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.70%
2018 77  2018 77  74 
2019 71  2019 71  66 
2020 61  2020 61  55 
2021 49  2021 49  42 
2022 46  2022 46  38 
2023 and thereafter 215  2023 46  37 
2024 46  36 
2025 46  34 
2026 46  33 
2027 31  22 
Total: 519  519  437 

Based on: 10-K (filing date: 2018-02-27).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.77%
2017 75  2017 75  72 
2018 67  2018 67  62 
2019 53  2019 53  47 
2020 38  2020 38  33 
2021 34  2021 34  28 
2022 and thereafter 102  2022 34  27 
2023 34  26 
2024 34  25 
Total: 369  369  322 

Based on: 10-K (filing date: 2017-02-27).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.85%
2016 66  2016 66  64 
2017 63  2017 63  58 
2018 51  2018 51  46 
2019 43  2019 43  37 
2020 31  2020 31  26 
2021 and thereafter 63  2021 31  25 
2022 31  24 
2023 1  1 
Total: 317  317  279 

Based on: 10-K (filing date: 2016-02-24).

Adjustments to Financial Statements for Operating Leases

Gilead Sciences Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 61,627  63,675  70,283  56,977  51,839 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  484  437  322  279 
Total assets (adjusted) 61,627  64,159  70,720  57,299  52,118 
Adjustment to Total Debt
Total debt (as reported) 24,593  27,322  33,542  26,346  22,178 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  484  437  322  279 
Add: Operating lease liabilities, current (classified in Other accrued liabilities) 99  —  —  —  — 
Add: Operating lease liabilities, noncurrent (classified in Other long-term obligations) 626  —  —  —  — 
Total debt (adjusted) 25,318  27,806  33,979  26,668  22,457 

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

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

Gilead Sciences Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Gilead Sciences Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover1
Reported total asset turnover 0.36 0.34 0.37 0.53 0.62
Adjusted total asset turnover 0.36 0.34 0.36 0.52 0.62
Debt to Equity2
Reported debt to equity 1.09 1.28 1.64 1.39 1.20
Adjusted debt to equity 1.12 1.30 1.66 1.41 1.21
Return on Assets3 (ROA)
Reported ROA 8.74% 8.57% 6.58% 23.70% 34.93%
Adjusted ROA 8.74% 8.50% 6.54% 23.56% 34.74%

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

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. Gilead Sciences Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then improved 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. Gilead Sciences Inc.’s adjusted debt to equity ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Gilead Sciences Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Gilead Sciences Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Product sales 22,119  21,677  25,662  29,953  32,151 
Total assets 61,627  63,675  70,283  56,977  51,839 
Activity Ratio
Total asset turnover1 0.36 0.34 0.37 0.53 0.62
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Product sales 22,119  21,677  25,662  29,953  32,151 
Adjusted total assets 61,627  64,159  70,720  57,299  52,118 
Activity Ratio
Adjusted total asset turnover2 0.36 0.34 0.36 0.52 0.62

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Total asset turnover = Product sales ÷ Total assets
= 22,119 ÷ 61,627 = 0.36

2 Adjusted total asset turnover = Product sales ÷ Adjusted total assets
= 22,119 ÷ 61,627 = 0.36

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Gilead Sciences Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt 24,593  27,322  33,542  26,346  22,178 
Total Gilead stockholders’ equity 22,525  21,387  20,442  18,887  18,534 
Solvency Ratio
Debt to equity1 1.09 1.28 1.64 1.39 1.20
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 25,318  27,806  33,979  26,668  22,457 
Total Gilead stockholders’ equity 22,525  21,387  20,442  18,887  18,534 
Solvency Ratio
Adjusted debt to equity2 1.12 1.30 1.66 1.41 1.21

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Debt to equity = Total debt ÷ Total Gilead stockholders’ equity
= 24,593 ÷ 22,525 = 1.09

2 Adjusted debt to equity = Adjusted total debt ÷ Total Gilead stockholders’ equity
= 25,318 ÷ 22,525 = 1.12

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Gilead Sciences Inc.’s adjusted debt-to-equity ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Gilead 5,386  5,455  4,628  13,501  18,108 
Total assets 61,627  63,675  70,283  56,977  51,839 
Profitability Ratio
ROA1 8.74% 8.57% 6.58% 23.70% 34.93%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to Gilead 5,386  5,455  4,628  13,501  18,108 
Adjusted total assets 61,627  64,159  70,720  57,299  52,118 
Profitability Ratio
Adjusted ROA2 8.74% 8.50% 6.54% 23.56% 34.74%

Based on: 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24).

2019 Calculations

1 ROA = 100 × Net income attributable to Gilead ÷ Total assets
= 100 × 5,386 ÷ 61,627 = 8.74%

2 Adjusted ROA = 100 × Net income attributable to Gilead ÷ Adjusted total assets
= 100 × 5,386 ÷ 61,627 = 8.74%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Gilead Sciences Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.