Cool City is a retailer of stereos and televisions. Its EBIT is $150 million after operating lease expenses of $50 million. The appropriate interest rate is 10% and the tax rate is 30%. The firms operating lease commitments for the next 5 years are as follows.

Year Operating lease commitment

year 1 55 million

year 2 60 million

year 3 60 million

year 4 55 million

year 5 50 million

Estimate the effect of the adjustment for operating leases on the companys balance sheet.