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)

Microchip Technology Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Total undiscounted future operating lease payments	—	—	—	167,100)	69,900)	87,399)
Discount rate¹	—	—	—	5.69%	6.18%	6.25%

Total present value of future operating lease payments	—	—	—	142,998)	61,468)	74,830)

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

¹ Weighted-average interest rate for Microchip Technology Inc. debt

2019 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 5.69%
2020	49,000)	2020	49,000)	46,362)
2021	38,200)	2021	38,200)	34,198)
2022	30,200)	2022	30,200)	25,580)
2023	18,000)	2023	18,000)	14,426)
2024	9,100)	2024	9,100)	6,900)
2025 and thereafter	22,600)	2025	9,100)	6,529)
		2026	9,100)	6,177)
		2027	4,400)	2,826)
Total:	167,100)		167,100)	142,998)

Based on: 10-K (reporting date: 2019-03-31).

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.18%
2019	26,000)	2019	26,000)	24,487)
2020	18,700)	2020	18,700)	16,587)
2021	13,300)	2021	13,300)	11,110)
2022	10,200)	2022	10,200)	8,025)
2023	1,700)	2023	1,700)	1,260)
Total:	69,900)		69,900)	61,468)

Based on: 10-K (reporting date: 2018-03-31).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.25%
2018	26,259)	2018	26,259)	24,714)
2019	21,114)	2019	21,114)	18,703)
2020	14,920)	2020	14,920)	12,439)
2021	11,645)	2021	11,645)	9,137)
2022	11,038)	2022	11,038)	8,152)
2023	2,423)	2023	2,423)	1,684)
Total:	87,399)		87,399)	74,830)

Based on: 10-K (reporting date: 2017-03-31).

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Microchip Technology Inc., adjustments to financial statements

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Adjustment to Total Assets
Total assets (as reported)	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	142,998)	61,468)	74,830)
Total assets (adjusted)	16,199,500)	16,478,800)	17,426,100)	18,492,998)	8,318,668)	7,761,711)
Adjustment to Total Debt
Total debt (as reported)	7,687,400)	8,904,100)	9,482,200)	10,307,000)	3,068,300)	2,950,476)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	142,998)	61,468)	74,830)
Add: Current portion of operating lease liabilities	33,800)	39,800)	44,500)	—)	—)	—)
Add: Non-current portion of operating lease liabilities (included in Other long-term liabilities)	128,900)	125,400)	94,700)	—)	—)	—)
Total debt (adjusted)	7,850,100)	9,069,300)	9,621,400)	10,449,998)	3,129,768)	3,025,306)

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

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

Microchip Technology Inc., Financial Data: Reported vs. Adjusted

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Microchip Technology Inc., adjusted financial ratios

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Total Asset Turnover¹
Reported total asset turnover	0.42	0.33	0.30	0.29	0.48	0.44
Adjusted total asset turnover	0.42	0.33	0.30	0.29	0.48	0.44
Debt to Equity²
Reported debt to equity	1.30	1.67	1.70	1.95	0.94	0.90
Adjusted debt to equity	1.33	1.70	1.72	1.98	0.95	0.92
Return on Assets³ (ROA)
Reported ROA	7.94%	2.12%	3.27%	1.94%	3.09%	2.14%
Adjusted ROA	7.94%	2.12%	3.27%	1.92%	3.07%	2.12%

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

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.	Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Microchip Technology Inc. adjusted debt to equity ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Microchip Technology Inc., Financial Ratios: Reported vs. Adjusted

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	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	6,820,900)	5,438,400)	5,274,200)	5,349,500)	3,980,800)	3,407,807)
Total assets	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Activity Ratio
Total asset turnover¹	0.42	0.33	0.30	0.29	0.48	0.44
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net sales	6,820,900)	5,438,400)	5,274,200)	5,349,500)	3,980,800)	3,407,807)
Adjusted total assets	16,199,500)	16,478,800)	17,426,100)	18,492,998)	8,318,668)	7,761,711)
Activity Ratio
Adjusted total asset turnover²	0.42	0.33	0.30	0.29	0.48	0.44

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 6,820,900 ÷ 16,199,500 = 0.42

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 6,820,900 ÷ 16,199,500 = 0.42

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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.	Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total debt	7,687,400)	8,904,100)	9,482,200)	10,307,000)	3,068,300)	2,950,476)
Stockholders’ equity	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Solvency Ratio
Debt to equity¹	1.30	1.67	1.70	1.95	0.94	0.90
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	7,850,100)	9,069,300)	9,621,400)	10,449,998)	3,129,768)	3,025,306)
Stockholders’ equity	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Solvency Ratio
Adjusted debt to equity²	1.33	1.70	1.72	1.98	0.95	0.92

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity
= 7,687,400 ÷ 5,894,800 = 1.30

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 7,850,100 ÷ 5,894,800 = 1.33

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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.	Microchip Technology Inc. adjusted debt-to-equity ratio improved from 2020 to 2021 and from 2021 to 2022.

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Total assets	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Profitability Ratio
ROA¹	7.94%	2.12%	3.27%	1.94%	3.09%	2.14%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Adjusted total assets	16,199,500)	16,478,800)	17,426,100)	18,492,998)	8,318,668)	7,761,711)
Profitability Ratio
Adjusted ROA²	7.94%	2.12%	3.27%	1.92%	3.07%	2.12%

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 1,285,500 ÷ 16,199,500 = 7.94%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,285,500 ÷ 16,199,500 = 7.94%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Microchip Technology Inc. (NASDAQ:MCHP)

Analysis of Operating Leases

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

Adjustments to Financial Statements for Operating Leases

Microchip Technology Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Microchip Technology Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)