Tuesday, January 8, 2019
A Look at Climate Change Disclosures

Wednesday, January 2, 2019
Quants: Point-in-Time Data for Backtesting

Friday, December 28, 2018
Now Showing: Controls & Procedures

Thursday, December 27, 2018
A Reminder on Non-GAAP Reporting Rules

Monday, December 17, 2018
Researching PG&E’s Wildfire Risk

Wednesday, December 12, 2018
Tracking Brexit Disclosures

Thursday, December 6, 2018
Campbell Soup: Looking Behind the Label

Sunday, December 2, 2018
SEC Comment Letters: The Amazon Example

Wednesday, November 28, 2018
Measuring Big Pharma’s Chemical Dependency

Monday, November 26, 2018
Analysts, Can You Relate? A True Story

Monday, November 19, 2018
Digging Up Historical Trend Data: Quest Example

Sunday, November 11, 2018
Cost of Revenue, SG&A: Q3 Update

Monday, November 5, 2018
Lease Accounting: FedEx vs. UPS

Saturday, November 3, 2018
New Email Alerting Powers

Wednesday, October 31, 2018
PTC and Two Tales of Revenue

Tuesday, October 30, 2018
10-K/Q Section Text Change Detection

Sunday, October 28, 2018
Finding Purchase Price Allocation

Sunday, October 21, 2018
Charting Netflix Growth in Three Ways

Wednesday, October 17, 2018
Interesting Data on Interest Income

Thursday, October 11, 2018
The Decline of Sears in Three Charts

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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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