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NVIDIA Corp. (NVDA)


Analysis of Operating Leases

Advanced level


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

NVIDIA Corp., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
Total undiscounted future operating lease payments 683  246  140  264  241  292 
Discount rate1 2.84% 2.87% 3.06% 3.19% 3.22% 3.24%
 
Total present value of future operating lease payments 600  228  129  243  222  266 

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

1 Weighted-average interest rate for NVIDIA Corp.’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.84%
2020 100  2020 100  97 
2021 97  2021 97  92 
2022 90  2022 90  83 
2023 77  2023 77  69 
2024 54  2024 54  47 
2025 and thereafter 265  2025 54  46 
2026 54  44 
2027 54  43 
2028 54  42 
2029 49  37 
Total: 683  683  600 

Based on: 10-K (filing date: 2019-02-21).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.87%
2019 63  2019 63  61 
2020 53  2020 53  50 
2021 50  2021 50  46 
2022 44  2022 44  39 
2023 25  2023 25  22 
2024 11  2024 11 
Total: 246  246  228 

Based on: 10-K (filing date: 2018-02-28).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.06%
2018 42  2018 42  41 
2019 36  2019 36  34 
2020 20  2020 20  18 
2021 17  2021 17  15 
2022 12  2022 12  10 
2023 and thereafter 13  2023 12  10 
2024
Total: 140  140  129 

Based on: 10-K (filing date: 2017-03-01).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.19%
2017 75  2017 75  73 
2018 65  2018 65  61 
2019 58  2019 58  53 
2020 35  2020 35  31 
2021 11  2021 11 
2022 and thereafter 20  2022 11 
2023
Total: 264  264  243 

Based on: 10-K (filing date: 2016-03-17).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.22%
2016 77  2016 77  74 
2017 66  2017 66  62 
2018 34  2018 34  31 
2019 27  2019 27  24 
2020 10  2020 10 
2021 and thereafter 27  2021 10 
2022 10 
2023
Total: 241  241  222 

Based on: 10-K (filing date: 2015-03-12).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.24%
2015 74  2015 74  72 
2016 71  2016 71  66 
2017 61  2017 61  55 
2018 29  2018 29  26 
2019 22  2019 22  19 
2020 and thereafter 35  2020 22  18 
2021 12  10 
Total: 292  292  266 

Based on: 10-K (filing date: 2014-03-13).


Adjustments to Financial Statements for Operating Leases

NVIDIA Corp., adjustments to financial statements

US$ in millions

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
Adjustment to Total Assets
Total assets (as reported) 13,292  11,241  9,841  7,370  7,201  7,251 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 600  228  129  243  222  266 
Total assets (adjusted) 13,892  11,469  9,970  7,613  7,423  7,517 
Adjustment to Total Debt
Total debt (as reported) 1,988  2,000  2,785  1,423  1,398  1,374 
Add: Operating lease liability (before adoption of FASB Topic 842)2 600  228  129  243  222  266 
Total debt (adjusted) 2,588  2,228  2,914  1,666  1,620  1,640 

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

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


NVIDIA Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

NVIDIA Corp., adjusted financial ratios

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
Total Asset Turnover1
Reported total asset turnover 0.88 0.86 0.70 0.68 0.65 0.57
Adjusted total asset turnover 0.84 0.85 0.69 0.66 0.63 0.55
Debt to Equity2
Reported debt to equity 0.21 0.27 0.48 0.32 0.32 0.31
Adjusted debt to equity 0.28 0.30 0.51 0.37 0.37 0.37
Return on Assets3 (ROA)
Reported ROA 31.15% 27.11% 16.93% 8.33% 8.76% 6.07%
Adjusted ROA 29.81% 26.57% 16.71% 8.07% 8.49% 5.85%

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. NVIDIA Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. NVIDIA Corp.’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. NVIDIA Corp.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

NVIDIA Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
As Reported
Selected Financial Data (US$ in millions)
Revenue 11,716  9,714  6,910  5,010  4,682  4,130 
Total assets 13,292  11,241  9,841  7,370  7,201  7,251 
Activity Ratio
Total asset turnover1 0.88 0.86 0.70 0.68 0.65 0.57
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenue 11,716  9,714  6,910  5,010  4,682  4,130 
Adjusted total assets 13,892  11,469  9,970  7,613  7,423  7,517 
Activity Ratio
Adjusted total asset turnover2 0.84 0.85 0.69 0.66 0.63 0.55

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

2019 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 11,716 ÷ 13,292 = 0.88

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 11,716 ÷ 13,892 = 0.84

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. NVIDIA Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Adjusted Debt to Equity

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
As Reported
Selected Financial Data (US$ in millions)
Total debt 1,988  2,000  2,785  1,423  1,398  1,374 
Shareholders’ equity 9,342  7,471  5,762  4,469  4,418  4,456 
Solvency Ratio
Debt to equity1 0.21 0.27 0.48 0.32 0.32 0.31
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 2,588  2,228  2,914  1,666  1,620  1,640 
Shareholders’ equity 9,342  7,471  5,762  4,469  4,418  4,456 
Solvency Ratio
Adjusted debt to equity2 0.28 0.30 0.51 0.37 0.37 0.37

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

2019 Calculations

1 Debt to equity = Total debt ÷ Shareholders’ equity
= 1,988 ÷ 9,342 = 0.21

2 Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity
= 2,588 ÷ 9,342 = 0.28

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

Adjusted Return on Assets (ROA)

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Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015 Jan 26, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 4,141  3,047  1,666  614  631  440 
Total assets 13,292  11,241  9,841  7,370  7,201  7,251 
Profitability Ratio
ROA1 31.15% 27.11% 16.93% 8.33% 8.76% 6.07%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income 4,141  3,047  1,666  614  631  440 
Adjusted total assets 13,892  11,469  9,970  7,613  7,423  7,517 
Profitability Ratio
Adjusted ROA2 29.81% 26.57% 16.71% 8.07% 8.49% 5.85%

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 4,141 ÷ 13,292 = 31.15%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 4,141 ÷ 13,892 = 29.81%

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