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)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Raytheon Co., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Total undiscounted future operating lease payments	—	959)	1,041)	1,292)	1,150)
Discount rate¹	—	3.95%	3.87%	4.29%	4.29%

Total present value of future operating lease payments	—	842)	909)	1,086)	976)

Based on: 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), 10-K (reporting date: 2015-12-31).

¹ Weighted-average interest rate for Raytheon Co. debt

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.95%
2019	215)	2019	215)	207)
2020	181)	2020	181)	168)
2021	157)	2021	157)	140)
2022	121)	2022	121)	104)
2023	85)	2023	85)	70)
2024 and thereafter	200)	2024	85)	67)
		2025	85)	65)
		2026	30)	22)
Total:	959)		959)	842)

Based on: 10-K (reporting date: 2018-12-31).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.87%
2018	229)	2018	229)	220)
2019	188)	2019	188)	174)
2020	150)	2020	150)	134)
2021	119)	2021	119)	102)
2022	93)	2022	93)	77)
2023 and thereafter	262)	2023	93)	74)
		2024	93)	71)
		2025	76)	56)
Total:	1,041)		1,041)	909)

Based on: 10-K (reporting date: 2017-12-31).

2016 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.29%
2017	226)	2017	226)	217)
2018	196)	2018	196)	180)
2019	160)	2019	160)	141)
2020	132)	2020	132)	112)
2021	133)	2021	133)	108)
2022 and thereafter	445)	2022	133)	103)
		2023	133)	99)
		2024	133)	95)
		2025	46)	32)
Total:	1,292)		1,292)	1,086)

Based on: 10-K (reporting date: 2016-12-31).

2015 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.29%
2016	220)	2016	220)	211)
2017	190)	2017	190)	175)
2018	162)	2018	162)	143)
2019	124)	2019	124)	105)
2020	102)	2020	102)	83)
2021 and thereafter	352)	2021	102)	79)
		2022	102)	76)
		2023	102)	73)
		2024	46)	32)
Total:	1,150)		1,150)	976)

Based on: 10-K (reporting date: 2015-12-31).

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Raytheon Co., adjustments to financial statements

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported)	34,566)	31,864)	30,860)	30,052)	29,281)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	842)	909)	1,086)	976)
Total assets (adjusted)	34,566)	32,706)	31,769)	31,138)	30,257)
Adjustment to Total Debt
Total debt (as reported)	4,760)	5,055)	5,050)	5,335)	5,330)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	842)	909)	1,086)	976)
Add: Operating lease liabilities, current	213)	—)	—)	—)	—)
Add: Operating lease liabilities, noncurrent	706)	—)	—)	—)	—)
Total debt (adjusted)	5,679)	5,897)	5,959)	6,421)	6,306)

Based on: 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), 10-K (reporting date: 2015-12-31).

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

Raytheon Co., Financial Data: Reported vs. Adjusted

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Raytheon Co., adjusted financial ratios

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Total Asset Turnover¹
Reported total asset turnover	0.84	0.85	0.82	0.80	0.79
Adjusted total asset turnover	0.84	0.83	0.80	0.77	0.77
Debt to Equity²
Reported debt to equity	0.39	0.44	0.51	0.53	0.53
Adjusted debt to equity	0.46	0.51	0.60	0.64	0.62
Return on Assets³ (ROA)
Reported ROA	9.67%	9.13%	6.56%	7.36%	7.08%
Adjusted ROA	9.67%	8.89%	6.37%	7.10%	6.85%

Based on: 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), 10-K (reporting date: 2015-12-31).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Raytheon Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Raytheon Co. 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.	Raytheon Co. adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Raytheon Co., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net sales	29,176)	27,058)	25,348)	24,069)	23,247)
Total assets	34,566)	31,864)	30,860)	30,052)	29,281)
Activity Ratio
Total asset turnover¹	0.84	0.85	0.82	0.80	0.79
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales	29,176)	27,058)	25,348)	24,069)	23,247)
Adjusted total assets	34,566)	32,706)	31,769)	31,138)	30,257)
Activity Ratio
Adjusted total asset turnover²	0.84	0.83	0.80	0.77	0.77

Based on: 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), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 29,176 ÷ 34,566 = 0.84

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 29,176 ÷ 34,566 = 0.84

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Raytheon Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt	4,760)	5,055)	5,050)	5,335)	5,330)
Total Raytheon Company stockholders’ equity	12,223)	11,472)	9,963)	10,066)	10,128)
Solvency Ratio
Debt to equity¹	0.39	0.44	0.51	0.53	0.53
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	5,679)	5,897)	5,959)	6,421)	6,306)
Total Raytheon Company stockholders’ equity	12,223)	11,472)	9,963)	10,066)	10,128)
Solvency Ratio
Adjusted debt to equity²	0.46	0.51	0.60	0.64	0.62

Based on: 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), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Debt to equity = Total debt ÷ Total Raytheon Company stockholders’ equity
= 4,760 ÷ 12,223 = 0.39

² Adjusted debt to equity = Adjusted total debt ÷ Total Raytheon Company stockholders’ equity
= 5,679 ÷ 12,223 = 0.46

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

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Raytheon Company	3,343)	2,909)	2,024)	2,211)	2,074)
Total assets	34,566)	31,864)	30,860)	30,052)	29,281)
Profitability Ratio
ROA¹	9.67%	9.13%	6.56%	7.36%	7.08%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to Raytheon Company	3,343)	2,909)	2,024)	2,211)	2,074)
Adjusted total assets	34,566)	32,706)	31,769)	31,138)	30,257)
Profitability Ratio
Adjusted ROA²	9.67%	8.89%	6.37%	7.10%	6.85%

Based on: 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), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ ROA = 100 × Net income attributable to Raytheon Company ÷ Total assets
= 100 × 3,343 ÷ 34,566 = 9.67%

² Adjusted ROA = 100 × Net income attributable to Raytheon Company ÷ Adjusted total assets
= 100 × 3,343 ÷ 34,566 = 9.67%

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

Raytheon Co. (NYSE:RTN)

Analysis of Operating Leases

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

Adjustments to Financial Statements for Operating Leases

Raytheon Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Raytheon Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)