Delta Airlines 2014 Annual Report Download - page 424

as of December 31, 2014 associated with (1) the cumulative pension and other post-
employment
retirement benefits net balance recorded in AOCI; (2) the derivative contracts and associated items net
balance recorded in AOCI; and (3) the deferred tax asset valuation allowance balance and (ii) using the
following formula for each subsequent quarter thereafter, (A+B+C), where:
A = The Initial Value;
B = The cumulative amount starting as of January 1, 2015 and ending as of the last day of the
applicable calendar quarter of the Company’s pre-
tax income determined in accordance with GAAP, but
(i) excluding: (1) items present in the line item “restructuring and other items”
or such similar line item;
(2) mark-to-
market adjustments for fuel hedges recorded in periods other than the settlement period; and
(3) other special, unusual, or nonrecurring items which are disclosed in publicly available filings with
the SEC and (ii) including expenses due to amortization of post-
employment benefit losses in AOCI that
have occurred during the Performance Period; and
C = in the event that the Company pays a dividend or issues or repurchases additional Common
Stock for cash during the Performance Period (but excluding the exercise of any employee stock option
for cash or any other issuance of Common Stock to employees), (i) the gross cash proceeds of the equity
issuance or (ii) the gross cash payments for the equity repurchase or dividends, before adjustment for
any applicable fees or charges associated therewith.
A = Total gross long term debt and capital leases (including current maturities) that reflect
Delta’
s actual obligations to lenders or lessors, including any adjustments from the book value to reflect
premiums or discounts that may be amortizing;
B = Annual aircraft rent expense multiplied by seven; and
C = Unrestricted cash, cash equivalents and short-term investments.
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(5) “Adjusted Net Debt”
for Delta shall be calculated quarterly based on its regularly prepared internal
financial statements using the following formula (A+B-C), subject to Section 4(b)(v)(B), where: