Delta Airlines 2013 Annual Report Download - page 121

Company’s performance is compared against the Composite Performance of the Industry Composite Group.
(B) Committee’s Authority.
In determining the Average Annual Operating Income Margin for Delta and
each member of the Industry Composite Group and the Return on Invested Capital for Delta, the Committee shall
make such adjustments with respect to any subject company as is necessary to ensure the results are comparable,
including, without limitation, differences in accounting policies, practices, guidelines, reclassifications or
restatements (for example, fuel hedging, purchase accounting adjustments associated with mergers, acquisitions or
divestures, or fresh start accounting as a result of emergence from bankruptcy). Without limiting the generality of
the forgoing, the Committee shall (i) make such determinations based on financial data filed by the subject
company with the U.S. Department of Transportation or otherwise and (ii) exclude from any calculation any item
of gain, loss, or expense to be extraordinary or unusual in nature or infrequent in occurrence.
(C) Impact of Certain Events.
A company shall be automatically removed from the Industry Composite
Group in the event that any of the following occur during or with respect to the Performance Period: (i) such
company ceases to maintain or does not timely prepare publicly available statements of operations prepared in
accordance with GAAP; (ii) such company is not the surviving entity in any merger, consolidation, or other non-
bankruptcy reorganization (or survives only as a subsidiary of an entity other than a previously wholly owned
subsidiary of such company); (iii) such company sells, leases, or exchanges all or substantially all of its assets to
any other person or entity (other than a previously wholly owned subsidiary of such company); (iv) such company
is dissolved and liquidated; or (v) more than 20% of such company's revenues (determined on a consolidated basis
based on the regularly prepared and publicly available statements of operations of such company prepared in
accordance with GAAP) for any fiscal year of such company are attributable to the operation of businesses other
than such company's airline business and such company does not provide publicly available statements of
operations with respect to its airline business that are separate from the statements of operations provided with
respect to its other businesses.
(D) Transactions Between Airlines.
To the extent reasonably practicable, in the event of a merger,
consolidation, or similar transaction during the Performance Period between Delta and any other airline, including
a member of the Industry Composite Group, or between any member of the Industry Composite Group and any
other airline, including another member of the Industry Composite Group (an “ Airline Merger ”),
Average
Annual Operating Income Margin for any such company involved in an Airline Merger will be calculated on a
combined basis as if the Airline Merger had occurred on January 1, 2014, removing the effects of purchase
accounting-
related adjustments. Furthermore, to the extent reasonably practicable, in the event of an acquisition or
divestiture, or similar transaction during the Performance Period between Delta and any regional carrier or between
any member of the Industry Composite Group and any regional carrier (a “ Regional Carrier Transaction ”
),
Average Annual Operating Income Margin and, as applicable, Return on Invested Capital for any such company
involved in a Regional Carrier Transaction will be calculated to remove the impact of any reclassifications of costs
from (or to) such company’
s presentation of contract carrier expense to (or from) the other expense line items on
the statement of operations (determined based on the regularly prepared and publicly available statements of
operations of such company prepared in accordance with GAAP).
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