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)
United Parcel Service Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
1 Weighted average discount rate, finance leases
Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 4.33% |
---|---|---|---|---|
2019 | 578 | 2019 | 578 | 554 |
2020 | 477 | 2020 | 477 | 438 |
2021 | 399 | 2021 | 399 | 351 |
2022 | 325 | 2022 | 325 | 274 |
2023 | 262 | 2023 | 262 | 212 |
2024 and thereafter | 926 | 2024 | 262 | 203 |
2025 | 262 | 195 | ||
2026 | 262 | 187 | ||
2027 | 140 | 96 | ||
Total: | 2,967 | 2,967 | 2,510 |
Based on: 10-K (filing date: 2019-02-21).
Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 7.43% |
---|---|---|---|---|
2018 | 398 | 2018 | 398 | 370 |
2019 | 305 | 2019 | 305 | 264 |
2020 | 239 | 2020 | 239 | 193 |
2021 | 186 | 2021 | 186 | 140 |
2022 | 138 | 2022 | 138 | 96 |
2023 and thereafter | 371 | 2023 | 138 | 90 |
2024 | 138 | 84 | ||
2025 | 95 | 54 | ||
Total: | 1,637 | 1,637 | 1,290 |
Based on: 10-K (filing date: 2018-02-21).
Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at 6.60% |
---|---|---|---|---|
2017 | 368 | 2017 | 368 | 345 |
2018 | 302 | 2018 | 302 | 266 |
2019 | 221 | 2019 | 221 | 182 |
2020 | 168 | 2020 | 168 | 130 |
2021 | 111 | 2021 | 111 | 81 |
2022 and thereafter | 300 | 2022 | 111 | 76 |
2023 | 111 | 71 | ||
2024 | 78 | 47 | ||
Total: | 1,470 | 1,470 | 1,198 |
Based on: 10-K (filing date: 2017-02-21).
Adjustments to Financial Statements for Operating Leases
United Parcel Service Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
1, 2 Equal to total present value of future operating lease payments.
United Parcel Service Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
United Parcel Service Inc., adjusted financial ratios
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
Financial ratio | Description | The company |
---|---|---|
Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | United Parcel Service Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level. |
Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | United Parcel Service Inc.’s adjusted debt to equity 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. | United Parcel Service Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020. |
United Parcel Service Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
2020 Calculations
1 Total asset turnover = Revenue ÷ Total assets
= 84,628 ÷ 62,408 = 1.36
2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 84,628 ÷ 62,408 = 1.36
Activity ratio | Description | The company |
---|---|---|
Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | United Parcel Service Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level. |
Adjusted Debt to Equity
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
2020 Calculations
1 Debt to equity = Total debt ÷ Equity for controlling interests
= 24,654 ÷ 657 = 37.53
2 Adjusted debt to equity = Adjusted total debt ÷ Equity for controlling interests
= 27,754 ÷ 657 = 42.24
Solvency ratio | Description | The company |
---|---|---|
Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | United Parcel Service Inc.’s adjusted debt-to-equity ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Adjusted Return on Assets (ROA)
Based on: 10-K (filing date: 2021-02-22), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21).
2020 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,343 ÷ 62,408 = 2.15%
2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,343 ÷ 62,408 = 2.15%
Profitability ratio | Description | The company |
---|---|---|
Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | United Parcel Service Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020. |