Wednesday, October 9, 2019
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Wednesday, October 9, 2019
Tracking  Pension Data in Calcbench

Friday, October 4, 2019
In Depth: Leasing Costs in Retail Sector

Thursday, September 19, 2019
Alibaba and Cloud Computing

Monday, September 16, 2019
Introducing Critical Audit Matters

Wednesday, September 11, 2019
Our Fireside Chat on Goodwill Assets

Friday, September 6, 2019
Pulling Forward Share Buybacks

Saturday, August 31, 2019
A Quick Catch-Up on VMWare

Friday, August 23, 2019
By the Numbers: Restructuring Costs Over Time

Wednesday, August 21, 2019
WeWork Liabilities, Part II

Tuesday, August 20, 2019
WeWork’s Liabilities in Perspective

Wednesday, August 14, 2019
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Wednesday, August 7, 2019
Leasing’s Effect on Retail Balance Sheets

Thursday, August 1, 2019
Using Calcbench to Find China Exposure

Tuesday, July 30, 2019
Leasing Details: The Comcast Example

Monday, July 29, 2019
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Monday, July 22, 2019
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Wednesday, July 17, 2019
Downshifting in the Trucking World

Tuesday, July 16, 2019
New Report: Adoption of New Lease Accounting Standard

Friday, July 5, 2019
More Consequences of Lease Accounting

Archive  |  Search:
Early Look at 2017 Leasing Costs
Tuesday, January 16, 2018

Already we have written several times this year about the new accounting standard for operating leases that will go into effect at the end of this year — and the upheaval it could bring to many balance sheets, as companies suddenly start reporting their lease costs there.

So we decided to review companies that have already filed their Form 10-K reports for 2017, and see what their leasing costs are relative to total liabilities.

We found 36 companies, from Accenture and Apple to West Rock and Whole Foods, that have already filed 2017 reports and included leasing information. We examined “minimum future payments due.” That’s the amount these companies must pay, no matter what, because they’ve already assumed the lease liability. (They could always sign more leases in the future, too.)

Then we compared those lease liabilities, which are currently kept off the balance sheet, to total liabilities listed on the balance sheet. Which companies had the highest ratio? That is, which ones have gobs of operating lease liabilities, that might even exceed all other liabilities currently reported on the balance sheet?

The top 10, ranked by largest ratio, were as follows:

No surprise that retailers like Whole Foods, Starbucks, and Walgreens top the list; their commercial real estate needs are considerable.

We should also note that while Whole Foods tops this list, and the ratio rapidly declines from there (21 of the 26 companies we examined had ratios below 4 percent) — analysts should expect many more companies closer to Whole Foods’ situation in the future, as more 2017 reports arrive.

Calcbench has been keeping a close eye on operating leases for a while. In the more in-depth report we published last summer, we found numerous fast food chains, retailers, and related businesses whose operating leases exceeded total liabilities.

Calcbench subscribers can do your own quick-and-dirty research on our Multi-Company page. Just select the group of companies you want to research, and then look at that “Themes” pull-down menu on the right-hand side of the screen above the results. One of the menu options is “Operating Leases.”

Select that, and see what comes up: data!

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