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)
Illumina Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 Weighted-average interest rate for Illumina Inc. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.38% |
|---|---|---|---|---|
| 2019 | 59) | 2019 | 59) | 57) |
| 2020 | 64) | 2020 | 64) | 60) |
| 2021 | 61) | 2021 | 61) | 55) |
| 2022 | 61) | 2022 | 61) | 53) |
| 2023 | 61) | 2023 | 61) | 52) |
| 2024 and thereafter | 439) | 2024 | 61) | 50) |
| 2025 | 61) | 48) | ||
| 2026 | 61) | 47) | ||
| 2027 | 61) | 45) | ||
| 2028 | 61) | 44) | ||
| 2029 | 61) | 42) | ||
| 2030 | 61) | 41) | ||
| 2031 | 12) | 8) | ||
| Total: | 745) | 745) | 602) |
Based on: 10-K (reporting date: 2018-12-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.17% |
|---|---|---|---|---|
| 2018 | 55) | 2018 | 55) | 53) |
| 2019 | 60) | 2019 | 60) | 56) |
| 2020 | 58) | 2020 | 58) | 53) |
| 2021 | 57) | 2021 | 57) | 50) |
| 2022 | 54) | 2022 | 54) | 46) |
| 2023 and thereafter | 468) | 2023 | 54) | 45) |
| 2024 | 54) | 43) | ||
| 2025 | 54) | 42) | ||
| 2026 | 54) | 41) | ||
| 2027 | 54) | 40) | ||
| 2028 | 54) | 38) | ||
| 2029 | 54) | 37) | ||
| 2030 | 54) | 36) | ||
| 2031 | 36) | 23) | ||
| Total: | 752) | 752) | 604) |
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 3.17% |
|---|---|---|---|---|
| 2017 | 43) | 2017 | 43) | 41) |
| 2018 | 45) | 2018 | 45) | 42) |
| 2019 | 47) | 2019 | 47) | 43) |
| 2020 | 46) | 2020 | 46) | 41) |
| 2021 | 45) | 2021 | 45) | 39) |
| 2022 and thereafter | 436) | 2022 | 45) | 38) |
| 2023 | 45) | 37) | ||
| 2024 | 45) | 35) | ||
| 2025 | 45) | 34) | ||
| 2026 | 45) | 33) | ||
| 2027 | 45) | 32) | ||
| 2028 | 45) | 31) | ||
| 2029 | 45) | 30) | ||
| 2030 | 45) | 29) | ||
| 2031 | 27) | 17) | ||
| Total: | 662) | 662) | 523) |
Based on: 10-K (reporting date: 2016-12-31).
Adjustments to Financial Statements for Operating Leases
Illumina Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1, 2 Equal to total present value of future operating lease payments.
Illumina Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Illumina Inc., adjusted financial ratios
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Illumina Inc. adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Illumina Inc. adjusted debt to equity ratio improved from 2018 to 2019 and from 2019 to 2020. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Illumina Inc. adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
Illumina Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 Total asset turnover = Revenue ÷ Total assets
= 3,239 ÷ 7,585 = 0.43
2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 3,239 ÷ 7,585 = 0.43
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Illumina Inc. adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 Debt to equity = Total debt ÷ Total Illumina stockholders’ equity
= 1,184 ÷ 4,694 = 0.25
2 Adjusted debt to equity = Adjusted total debt ÷ Total Illumina stockholders’ equity
= 1,906 ÷ 4,694 = 0.41
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Illumina Inc. adjusted debt-to-equity ratio improved from 2018 to 2019 and from 2019 to 2020. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 ROA = 100 × Net income attributable to Illumina stockholders ÷ Total assets
= 100 × 656 ÷ 7,585 = 8.65%
2 Adjusted ROA = 100 × Net income attributable to Illumina stockholders ÷ Adjusted total assets
= 100 × 656 ÷ 7,585 = 8.65%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Illumina Inc. adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |