Modeling for Operating Leases
Hey all. This is my first post. I am an incoming SA at a MM IB. I have been practicing my modeling for this summer and have run into an issue regarding operating leases. GAAP and FASB have effectively begun to list them as debt on the BS... I get that the correct conceptual trading comp would be EV( Including operating lease liabilities) to EBITDAR.. Here is the issue as of today. Rent expense( Or sum of all lease costs) is available for most recent 10k and 10q (FY and current stub); however some companies proved nothing for the prior stub period.. What would you do in this case with no info?? Could you include operating lease in EV and still use adjusted ebitda( Not ebitdar in the denominator).. Also, can you include operating lease liabilities in your equity bridge in a DCF if you don't adjust ebit accordingly( i.e. Sum of NPV of TV/FCF - debt- operating lease+ cash). Thanks in advance!
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