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Microsoft Excel LibreOffice Calc


Analysis of Operating Leases

Difficulty: Advanced

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee statement of financial position, 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

Caterpillar Inc., future operating lease payments

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Total undiscounted future operating lease payments (USD $ in millions) hidden hidden hidden hidden hidden
Discount rate1 hidden hidden hidden hidden hidden
Total present value of future operating lease payments (USD $ in millions) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

1 Weighted-average interest rate for Caterpillar Inc.'s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at hidden
2018 hidden 2018 hidden hidden
2019 hidden 2019 hidden hidden
2020 hidden 2020 hidden hidden
2021 hidden 2021 hidden hidden
2022 hidden 2022 hidden hidden
2023 and thereafter hidden 2023 hidden hidden
2024 hidden hidden
2025 hidden hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at hidden
2017 hidden 2017 hidden hidden
2018 hidden 2018 hidden hidden
2019 hidden 2019 hidden hidden
2020 hidden 2020 hidden hidden
2021 hidden 2021 hidden hidden
2022 and thereafter hidden 2022 hidden hidden
2023 hidden hidden
2024 hidden hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2017-02-15).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at hidden
2016 hidden 2016 hidden hidden
2017 hidden 2017 hidden hidden
2018 hidden 2018 hidden hidden
2019 hidden 2019 hidden hidden
2020 hidden 2020 hidden hidden
2021 and thereafter hidden 2021 hidden hidden
2022 hidden hidden
2023 hidden hidden
2024 hidden hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2016-02-16).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at hidden
2015 hidden 2015 hidden hidden
2016 hidden 2016 hidden hidden
2017 hidden 2017 hidden hidden
2018 hidden 2018 hidden hidden
2019 hidden 2019 hidden hidden
2020 and thereafter hidden 2020 hidden hidden
2021 hidden hidden
2022 hidden hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2015-02-17).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at hidden
2014 hidden 2014 hidden hidden
2015 hidden 2015 hidden hidden
2016 hidden 2016 hidden hidden
2017 hidden 2017 hidden hidden
2018 hidden 2018 hidden hidden
2019 and thereafter hidden 2019 hidden hidden
2020 hidden hidden
2021 hidden hidden
2022 hidden hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2014-02-18).


Analyst Adjustments for Operating Leases

Caterpillar Inc., adjustments to financial data

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Adjustment to Total Assets
Total assets (as reported) hidden hidden hidden hidden hidden
Add: Operating leased assets1 hidden hidden hidden hidden hidden
Total assets (adjusted) hidden hidden hidden hidden hidden
Adjustment to Total Debt
Total debt (as reported) hidden hidden hidden hidden hidden
Add: Operating lease obligations2 hidden hidden hidden hidden hidden
Total debt (adjusted) hidden hidden hidden hidden hidden
Adjustment to Earnings before Interest and Tax (EBIT)
EBIT3 (as reported) hidden hidden hidden hidden hidden
Add-back: Rental expense for operating leases hidden hidden hidden hidden hidden
Less: Depreciation expense, operating leased assets4 hidden hidden hidden hidden hidden
EBIT (adjusted) hidden hidden hidden hidden hidden
Adjustment to Interest Expense Excluding Financial Products
Interest expense excluding Financial Products (as reported) hidden hidden hidden hidden hidden
Add: Interest expense, operating lease obligations5 hidden hidden hidden hidden hidden
Interest expense excluding Financial Products (adjusted) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

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

3 See Details »

4 See Details »

5 See Details »


Adjusted Ratios for Operating Leases (Summary)

Caterpillar Inc., adjusted ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Total Asset Turnover1
Reported total asset turnover hidden hidden hidden hidden hidden
Adjusted total asset turnover hidden hidden hidden hidden hidden
Debt to Equity2
Reported debt to equity hidden hidden hidden hidden hidden
Adjusted debt to equity hidden hidden hidden hidden hidden
Return on Assets3 (ROA)
Reported ROA hidden hidden hidden hidden hidden
Adjusted ROA hidden hidden hidden hidden hidden
Interest Coverage4
Reported interest coverage hidden hidden hidden hidden hidden
Adjusted interest coverage hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Caterpillar Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders' equity. Caterpillar Inc.'s adjusted debt-to-equity 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. Caterpillar Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Adjusted interest coverage A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments. Caterpillar Inc.'s adjusted interest coverage deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Sales of Machinery, Energy & Transportation (USD $ in millions) hidden hidden hidden hidden hidden
Total assets (USD $ in millions) hidden hidden hidden hidden hidden
Total asset turnover1 hidden hidden hidden hidden hidden
Adjusted for Operating Leases
Sales of Machinery, Energy & Transportation (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted total assets (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted total asset turnover2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

2017 Calculations

1 Total asset turnover = Sales of Machinery, Energy & Transportation ÷ Total assets
= hidden ÷ hidden = hidden

2 Adjusted total asset turnover = Sales of Machinery, Energy & Transportation ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Caterpillar Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Total debt (USD $ in millions) hidden hidden hidden hidden hidden
Equity attributable to common stockholders (USD $ in millions) hidden hidden hidden hidden hidden
Debt to equity1 hidden hidden hidden hidden hidden
Adjusted for Operating Leases
Adjusted total debt (USD $ in millions) hidden hidden hidden hidden hidden
Equity attributable to common stockholders (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted debt to equity2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

2017 Calculations

1 Debt to equity = Total debt ÷ Equity attributable to common stockholders
= hidden ÷ hidden = hidden

2 Adjusted debt to equity = Adjusted total debt ÷ Equity attributable to common stockholders
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders' equity. Caterpillar Inc.'s adjusted debt-to-equity deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Profit (loss) attributable to common stockholders (USD $ in millions) hidden hidden hidden hidden hidden
Total assets (USD $ in millions) hidden hidden hidden hidden hidden
ROA1 hidden hidden hidden hidden hidden
Adjusted for Operating Leases
Profit (loss) attributable to common stockholders (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted total assets (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted ROA2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

2017 Calculations

1 ROA = 100 × Profit (loss) attributable to common stockholders ÷ Total assets
= 100 × hidden ÷ hidden = hidden

2 Adjusted ROA = 100 × Profit (loss) attributable to common stockholders ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Caterpillar Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

Adjusted Interest Coverage

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Earnings before interest and tax1 (EBIT) (USD $ in millions) hidden hidden hidden hidden hidden
Interest expense excluding Financial Products (USD $ in millions) hidden hidden hidden hidden hidden
Interest coverage2 hidden hidden hidden hidden hidden
Adjusted for Operating Leases
Adjusted EBIT (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted interest expense excluding Financial Products (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted interest coverage3 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

1 See Details »

2017 Calculations

2 Interest coverage = EBIT ÷ Interest expense excluding Financial Products
= hidden ÷ hidden = hidden

3 Adjusted interest coverage = Adjusted EBIT ÷ Adjusted interest expense excluding Financial Products
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments. Caterpillar Inc.'s adjusted interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Estimation of Depreciation Expense, Operating Leased Assets

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Rental expense for operating leases hidden hidden hidden hidden hidden
Less: Estimated interest expense, operating lease obligations1 hidden hidden hidden hidden hidden
Estimated depreciation expense, operating leased assets hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).


Estimation of Interest Expense, Operating Lease Obligations

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Operating leased assets, at beginning of year1 (USD $ in millions) hidden hidden hidden hidden hidden
Discount rate2 hidden hidden hidden hidden hidden
Estimated interest expense, operating lease obligations3 (USD $ in millions) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

1 See Details »

2 Weighted-average interest rate for Caterpillar Inc.'s debt

2017 Calculations

3 Estimated interest expense, operating lease obligations = Operating leased assets, at beginning of year × Discount rate
= hidden × hidden = hidden


Present Value of Operating Lease Payments, at Beginning of Year

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Total present value of future operating lease payments1 (USD $ in millions) hidden hidden hidden hidden hidden
Rental expense for operating leases (USD $ in millions) hidden hidden hidden hidden hidden
Discount rate2 hidden hidden hidden hidden hidden
Total present value of operating lease payments, at beginning of year3 (USD $ in millions) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17), 10-K (filing date: 2014-02-18).

1 Equal to total present value of future operating lease payments. See Details »

2 Weighted-average interest rate for Caterpillar Inc.'s debt

2017 Calculations

3 Total present value of operating lease payments, at beginning of year = (Total present value of future operating lease payments + Rental expense for operating leases) ÷ (1 + Discount rate)
= (hidden + hidden) ÷ (1 + hidden) = hidden