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)
Time Warner Cable Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 Weighted-average interest rate for Time Warner Cable Inc. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 6.22% |
|---|---|---|---|---|
| 2016 | 170) | 2016 | 170) | 160) |
| 2017 | 144) | 2017 | 144) | 128) |
| 2018 | 125) | 2018 | 125) | 104) |
| 2019 | 99) | 2019 | 99) | 78) |
| 2020 | 71) | 2020 | 71) | 53) |
| 2021 and thereafter | 245) | 2021 | 71) | 49) |
| 2022 | 71) | 47) | ||
| 2023 | 71) | 44) | ||
| 2024 | 32) | 19) | ||
| Total: | 854) | 854) | 681) |
Based on: 10-K (reporting date: 2015-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 5.95% |
|---|---|---|---|---|
| 2015 | 162) | 2015 | 162) | 153) |
| 2016 | 156) | 2016 | 156) | 139) |
| 2017 | 127) | 2017 | 127) | 107) |
| 2018 | 108) | 2018 | 108) | 86) |
| 2019 | 84) | 2019 | 84) | 63) |
| 2020 and thereafter | 293) | 2020 | 84) | 59) |
| 2021 | 84) | 56) | ||
| 2022 | 84) | 53) | ||
| 2023 | 41) | 24) | ||
| Total: | 930) | 930) | 740) |
Based on: 10-K (reporting date: 2014-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 5.88% |
|---|---|---|---|---|
| 2014 | 149) | 2014 | 149) | 141) |
| 2015 | 141) | 2015 | 141) | 126) |
| 2016 | 131) | 2016 | 131) | 110) |
| 2017 | 102) | 2017 | 102) | 81) |
| 2018 | 89) | 2018 | 89) | 67) |
| 2019 and thereafter | 300) | 2019 | 89) | 63) |
| 2020 | 89) | 60) | ||
| 2021 | 89) | 56) | ||
| 2022 | 33) | 20) | ||
| Total: | 912) | 912) | 724) |
Based on: 10-K (reporting date: 2013-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 5.89% |
|---|---|---|---|---|
| 2013 | 138) | 2013 | 138) | 130) |
| 2014 | 130) | 2014 | 130) | 116) |
| 2015 | 116) | 2015 | 116) | 98) |
| 2016 | 108) | 2016 | 108) | 86) |
| 2017 | 83) | 2017 | 83) | 62) |
| 2018 and thereafter | 299) | 2018 | 83) | 59) |
| 2019 | 83) | 56) | ||
| 2020 | 83) | 53) | ||
| 2021 | 50) | 30) | ||
| Total: | 874) | 874) | 689) |
Based on: 10-K (reporting date: 2012-12-31).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 6.04% |
|---|---|---|---|---|
| 2012 | 127) | 2012 | 127) | 120) |
| 2013 | 119) | 2013 | 119) | 106) |
| 2014 | 112) | 2014 | 112) | 94) |
| 2015 | 103) | 2015 | 103) | 81) |
| 2016 | 95) | 2016 | 95) | 71) |
| 2017 and thereafter | 345) | 2017 | 95) | 67) |
| 2018 | 95) | 63) | ||
| 2019 | 95) | 59) | ||
| 2020 | 60) | 35) | ||
| Total: | 901) | 901) | 696) |
Based on: 10-K (reporting date: 2011-12-31).
Adjustments to Financial Statements for Operating Leases
Time Warner Cable Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1, 2 Equal to total present value of future operating lease payments.
Time Warner Cable Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Time Warner Cable Inc., adjusted financial ratios
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Time Warner Cable Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Time Warner Cable Inc. adjusted debt to equity ratio improved from 2013 to 2014 and from 2014 to 2015. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Time Warner Cable Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |
Time Warner Cable Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 Total asset turnover = Revenue ÷ Total assets
= 23,697 ÷ 49,277 = 0.48
2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 23,697 ÷ 49,958 = 0.47
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Time Warner Cable Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 Debt to equity = Total debt ÷ Total TWC shareholders’ equity
= 22,502 ÷ 8,995 = 2.50
2 Adjusted debt to equity = Adjusted total debt ÷ Total TWC shareholders’ equity
= 23,183 ÷ 8,995 = 2.58
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Time Warner Cable Inc. adjusted debt-to-equity ratio improved from 2013 to 2014 and from 2014 to 2015. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 ROA = 100 × Net income attributable to TWC shareholders ÷ Total assets
= 100 × 1,844 ÷ 49,277 = 3.74%
2 Adjusted ROA = 100 × Net income attributable to TWC shareholders ÷ Adjusted total assets
= 100 × 1,844 ÷ 49,958 = 3.69%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Time Warner Cable Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |