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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
- Analyst Adjustments for Operating Leases
- Adjusted Ratios for Operating Leases (Summary)
- Adjusted Total Asset Turnover
- Adjusted Debt to Equity
- Adjusted Return on Assets (ROA)
- Adjusted Interest Coverage
- Estimation of Depreciation Expense, Operating Leased Assets
- Estimation of Interest Expense, Operating Lease Obligations
- Present Value of Operating Lease Payments, at Beginning of Year
Present Value of Future Operating Lease Payments
Chevron Corp., future operating lease payments
1 Source: Chevron Corp. Annual Reports
2 Internal rate of return on capital leases
| Year | Future operating lease payments (as reported)1 | Year | Future operating lease payments (estimated) | Present value at % |
|---|---|---|---|---|
| 2018 | |
2018 | |
|
| 2019 | |
2019 | |
|
| 2020 | |
2020 | |
|
| 2021 | |
2021 | |
|
| 2022 | |
2022 | |
|
| 2023 and thereafter | |
2023 | |
|
| 2024 | |
|
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| 2025 | |
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| Total: | |
|
|
1 Source: Chevron Corp. Annual Reports
| Year | Future operating lease payments (as reported)1 | Year | Future operating lease payments (estimated) | Present value at % |
|---|---|---|---|---|
| 2017 | |
2017 | |
|
| 2018 | |
2018 | |
|
| 2019 | |
2019 | |
|
| 2020 | |
2020 | |
|
| 2021 | |
2021 | |
|
| 2022 and thereafter | |
2022 | |
|
| 2023 | |
|
||
| Total: | |
|
|
1 Source: Chevron Corp. Annual Reports
| Year | Future operating lease payments (as reported)1 | Year | Future operating lease payments (estimated) | Present value at % |
|---|---|---|---|---|
| 2016 | |
2016 | |
|
| 2017 | |
2017 | |
|
| 2018 | |
2018 | |
|
| 2019 | |
2019 | |
|
| 2020 | |
2020 | |
|
| 2021 and thereafter | |
2021 | |
|
| 2022 | |
|
||
| Total: | |
|
|
1 Source: Chevron Corp. Annual Reports
| Year | Future operating lease payments (as reported)1 | Year | Future operating lease payments (estimated) | Present value at % |
|---|---|---|---|---|
| 2015 | |
2015 | |
|
| 2016 | |
2016 | |
|
| 2017 | |
2017 | |
|
| 2018 | |
2018 | |
|
| 2019 | |
2019 | |
|
| 2020 and thereafter | |
2020 | |
|
| 2021 | |
|
||
| 2022 | |
|
||
| Total: | |
|
|
1 Source: Chevron Corp. Annual Reports
| Year | Future operating lease payments (as reported)1 | Year | Future operating lease payments (estimated) | Present value at % |
|---|---|---|---|---|
| 2014 | |
2014 | |
|
| 2015 | |
2015 | |
|
| 2016 | |
2016 | |
|
| 2017 | |
2017 | |
|
| 2018 | |
2018 | |
|
| 2019 and thereafter | |
2019 | |
|
| 2020 | |
|
||
| 2021 | |
|
||
| Total: | |
|
|
1 Source: Chevron Corp. Annual Reports
Analyst Adjustments for Operating Leases
Chevron Corp., adjustments to financial data
USD $ in millions
1, 2 Equal to total present value of future operating lease payments. See Details »
4 Source: Chevron Corp. Annual Reports
Adjusted Ratios for Operating Leases (Summary)
Chevron Corp., adjusted ratios
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Chevron Corp.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders' equity. | Chevron Corp.'s adjusted debt-to-equity deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Chevron Corp.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted interest coverage | A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments. | Chevron Corp.'s adjusted interest coverage deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
Adjusted Total Asset Turnover
2017 Calculations
1 Total asset turnover = Sales and other operating revenues ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Sales and other operating revenues ÷ Adjusted total assets
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Chevron Corp.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Debt to Equity
2017 Calculations
1 Debt to equity = Total debt ÷ Total Chevron Corporation stockholders' equity
= ÷ =
2 Adjusted debt to equity = Adjusted total debt ÷ Total Chevron Corporation stockholders' equity
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders' equity. | Chevron Corp.'s adjusted debt-to-equity deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
Adjusted Return on Assets (ROA)
2017 Calculations
1 ROA = 100 × Net income (loss) attributable to Chevron Corporation ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Net income (loss) attributable to Chevron Corporation ÷ Adjusted total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Chevron Corp.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Interest Coverage
2017 Calculations
2 Interest coverage = EBIT ÷ Interest and debt expense
= ÷ =
3 Adjusted interest coverage = Adjusted EBIT ÷ Adjusted interest and debt expense
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted interest coverage ratio | A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments. | Chevron Corp.'s adjusted interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
Estimation of Depreciation Expense, Operating Leased Assets
USD $ in millions
1 Source: Chevron Corp., Annual Reports
Estimation of Interest Expense, Operating Lease Obligations
2 Internal rate of return on capital leases
2017 Calculations
3 Estimated interest expense, operating lease obligations = Operating leased assets, at beginning of year × Discount rate
= × =
Present Value of Operating Lease Payments, at Beginning of Year
1 Equal to total present value of future operating lease payments. See Details »
2 Source: Chevron Corp., Annual Reports
3 Internal rate of return on capital leases
2017 Calculations
4 Total present value of operating lease payments, at beginning of year = (Total present value of future operating lease payments + Rental expenses incurred for operating leases) ÷ (1 + Discount rate)
= ( + ) ÷ (1 + %) =
