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)
Kraft Foods Group Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 Weighted-average interest rate for Kraft Foods Group Inc. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 4.62% |
|---|---|---|---|---|
| 2015 | 106) | 2015 | 106) | 101) |
| 2016 | 85) | 2016 | 85) | 78) |
| 2017 | 62) | 2017 | 62) | 54) |
| 2018 | 49) | 2018 | 49) | 41) |
| 2019 | 41) | 2019 | 41) | 33) |
| 2020 and thereafter | 84) | 2020 | 41) | 31) |
| 2021 | 41) | 30) | ||
| 2022 | 2) | 1) | ||
| Total: | 427) | 427) | 369) |
Based on: 10-K (reporting date: 2014-12-27).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 4.62% |
|---|---|---|---|---|
| 2014 | 109) | 2014 | 109) | 104) |
| 2015 | 85) | 2015 | 85) | 78) |
| 2016 | 71) | 2016 | 71) | 62) |
| 2017 | 56) | 2017 | 56) | 47) |
| 2018 | 49) | 2018 | 49) | 39) |
| 2019 and thereafter | 126) | 2019 | 49) | 37) |
| 2020 | 49) | 36) | ||
| 2021 | 28) | 20) | ||
| Total: | 496) | 496) | 422) |
Based on: 10-K (reporting date: 2013-12-28).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 4.62% |
|---|---|---|---|---|
| 2013 | 115) | 2013 | 115) | 110) |
| 2014 | 93) | 2014 | 93) | 85) |
| 2015 | 59) | 2015 | 59) | 52) |
| 2016 | 47) | 2016 | 47) | 39) |
| 2017 | 38) | 2017 | 38) | 30) |
| 2018 and thereafter | 90) | 2018 | 38) | 29) |
| 2019 | 38) | 28) | ||
| 2020 | 14) | 10) | ||
| Total: | 442) | 442) | 382) |
Based on: 10-K (reporting date: 2012-12-29).
Adjustments to Financial Statements for Operating Leases
Kraft Foods Group Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1, 2 Equal to total present value of future operating lease payments.
Kraft Foods Group Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Kraft Foods Group Inc., adjusted financial ratios
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Kraft Foods Group Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Kraft Foods Group Inc. adjusted debt to equity ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Kraft Foods Group Inc. adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Kraft Foods Group Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
2014 Calculations
1 Total asset turnover = Net revenues ÷ Total assets
= 18,205 ÷ 22,947 = 0.79
2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 18,205 ÷ 23,316 = 0.78
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Kraft Foods Group Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
2014 Calculations
1 Debt to equity = Total debt ÷ Equity
= 10,032 ÷ 4,365 = 2.30
2 Adjusted debt to equity = Adjusted total debt ÷ Equity
= 10,401 ÷ 4,365 = 2.38
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Kraft Foods Group Inc. adjusted debt-to-equity ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
2014 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 1,043 ÷ 22,947 = 4.55%
2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 1,043 ÷ 23,316 = 4.47%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Kraft Foods Group Inc. adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |