Fitch Criteria Report: Operating Leases and Implications for Lessee's Credit.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has published an updated report on its approach to evaluating the credit implications for an issuer's operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. . In order to compare the financial condition of companies that fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. with different mixes of debt, capital leases and operating leases, it is Fitch's procedure to adjust the financial ratios of corporate lessees (e.g., nonfinancial corporations, such as retailers, manufacturers, telecommunication companies and utilities) to capitalize operating lease liabilities as debt-like obligations. The methods used to capitalize lessees' operating lease obligations in going concerns are applying a multiple times the rental expense in the most recent year and calculating the present value of future rental payments. When financial ratios adjusted for operating leases are presented in Fitch reports, the basis for valuing the lease obligations is explained. Some executory contracts that are like operating leases may be evaluated by Fitch in a like manner. The approach described in Fitch's report is generally not applied to banks, finance companies or lessors. The full report 'Operating Leases: Updated Implications for Lessees' Credit' can be found on the Fitch Ratings' web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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