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)
Kimberly-Clark Corp., 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: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 Weighted-average interest rate for Kimberly-Clark Corp. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.28% |
|---|---|---|---|---|
| 2019 | 160) | 2019 | 160) | 155) |
| 2020 | 123) | 2020 | 123) | 115) |
| 2021 | 85) | 2021 | 85) | 77) |
| 2022 | 57) | 2022 | 57) | 50) |
| 2023 | 41) | 2023 | 41) | 35) |
| 2024 and thereafter | 72) | 2024 | 41) | 34) |
| 2025 | 31) | 25) | ||
| Total: | 538) | 538) | 491) |
Based on: 10-K (reporting date: 2018-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 3.64% |
|---|---|---|---|---|
| 2018 | 170) | 2018 | 170) | 164) |
| 2019 | 130) | 2019 | 130) | 121) |
| 2020 | 99) | 2020 | 99) | 89) |
| 2021 | 65) | 2021 | 65) | 56) |
| 2022 | 48) | 2022 | 48) | 40) |
| 2023 and thereafter | 98) | 2023 | 48) | 39) |
| 2024 | 48) | 37) | ||
| 2025 | 2) | 2) | ||
| Total: | 610) | 610) | 548) |
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 4.16% |
|---|---|---|---|---|
| 2017 | 187) | 2017 | 187) | 180) |
| 2018 | 137) | 2018 | 137) | 126) |
| 2019 | 94) | 2019 | 94) | 83) |
| 2020 | 67) | 2020 | 67) | 57) |
| 2021 | 39) | 2021 | 39) | 32) |
| 2022 and thereafter | 73) | 2022 | 39) | 31) |
| 2023 | 34) | 26) | ||
| Total: | 597) | 597) | 534) |
Based on: 10-K (reporting date: 2016-12-31).
Adjustments to Financial Statements for Operating Leases
Kimberly-Clark Corp., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 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.
Kimberly-Clark Corp., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Kimberly-Clark Corp., adjusted financial ratios
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 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. | Kimberly-Clark Corp. adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Kimberly-Clark Corp. adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020. |
Kimberly-Clark Corp., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= 19,140 ÷ 17,523 = 1.09
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 19,140 ÷ 17,523 = 1.09
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Kimberly-Clark Corp. adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 Debt to equity = Total debt ÷ Total Kimberly-Clark Corporation stockholders’ equity
= 8,364 ÷ 626 = 13.36
2 Adjusted debt to equity = Adjusted total debt ÷ Total Kimberly-Clark Corporation stockholders’ equity
= 8,920 ÷ 626 = 14.25
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2020 Calculations
1 ROA = 100 × Net income attributable to Kimberly-Clark Corporation ÷ Total assets
= 100 × 2,352 ÷ 17,523 = 13.42%
2 Adjusted ROA = 100 × Net income attributable to Kimberly-Clark Corporation ÷ Adjusted total assets
= 100 × 2,352 ÷ 17,523 = 13.42%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Kimberly-Clark Corp. adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020. |