...Debt-Like Obligations: This report illustrates Fitch Ratings' treatment of financial obligations connected with operating leases when assessing the financial profile of non-financial corporates. Fitch's core lease-adjusted leverage and coverage ratios include the debt-like features of this form of funding chosen for operational assets, and where applicable, Fitch's analysis acknowledges the financial and operational flexibility, or constraints, that operating leases can provide to a company's profile. Operational Flexibility: Operating leases can offer more flexibility than full ownership. For example, short-term leases can finance a business line that has yet to establish itself and the lease obligation exited if the new line ceases. Leasing can also afford the flexibility to reduce or increase assets in line with the business cycle. However, flexible leases often have limited elasticity in practice, while leased assets can become less relevant to a changing business model and longer-term...
