Delta Airlines 2015 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2015 Delta Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 191

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191

TableofContents
Non-OperatingResults
YearEndedDecember31,
Favorable(Unfavorable)
(inmillions) 2015 2014 2013
2015vs.2014 2014vs.2013
Interestexpense,net $ (481) $ (650) $ (852)
$ 169 $ 202
Miscellaneous,net (164) (484) (21)
320 (463)
Totalnon-operatingexpense,net $ (645) $ (1,134) $ (873)
$ 489 $ (261)
Thedeclineininterestexpense,netresultsfromreducedlevelsofdebtandunamortizeddebtdiscountsandfromtherefinancingofdebtobligationsatlower
interestrates.Theprincipalamountofdebtandcapitalleaseshasdeclinedfrom$13.2billionatthebeginningof2013to$8.5billionatDecember31,2015.
Miscellaneous,netisfavorableprimarilyduetoareductionindebtextinguishmentlossescomparedto2014.Thedebtextinguishmentlossesprimarilyrelated
tounamortizeddebtdiscountsresultingfromfairvalueadjustmentsrecordedinthe2008purchaseaccountingofNorthwestAirlines.Wedidnotearlyextinguish
anydebtin2013.AlsocontributingtotheincreaseisourproportionateshareofearningsfromourequityinvestmentinVirginAtlantic.ThegainfromVirgin
Atlanticprimarilyresultsfromyear-over-yearprofitandimprovementsinMTMadjustmentsonfuelhedges.
IncomeTaxes
Oureffectivetaxratefor2015was36.8%.Weexpectourannualeffectivetaxratetobebetween35%and36%for2016.Theexpectedreductioninourrate
fromprioryearsisprimarilyrelatedtodifferencesinourglobaltaxrates.Incertainperiodswemayhaveadjustmentstoourdeferredtaxassetsasaresultof
changesinprioryearestimatesandtaxlawsenactedduringtheperiod,whichwillimpacttheeffectivetaxrateforthatperiod.AtDecember31,2015,wehad
approximately$9.5billionofU.S.federalpre-taxnetoperatinglosscarryforwards,whichdonotbegintoexpireuntil2024.Accordingly,webelievewewillnot
payanycashfederalincometaxesbefore2018.SeeNote11oftheNotestotheConsolidatedFinancialStatementsformoreinformation.
WereleasedsubstantiallyallofourvaluationallowanceagainstournetdeferredtaxassetsonDecember31,2013.Thereleaseoftheallowanceprimarily
resultedinanettaxbenefitof$8.0billionthatwasrecordedinincometax(provision)benefitinourConsolidatedStatementofOperations.
RefinerySegment
Therefineryprimarilyproducesgasoline,dieselandjetfuel.Monroeexchangessubstantiallyallthenon-jetfuelproductstherefineryproduceswiththird
partiesforjetfuelconsumedinourairlineoperations.Thejetfuelproducedandprocuredthroughexchanginggasolineanddieselfuelproducedbytherefinery
providedapproximately171,000barrels(approximatelysevenmilliongallons)perdayforuseinourairlineoperationsduring2015.Webelievethattheincrease
injetfuelsupplyduetotherefinery'soperationhasreducedtheoverallmarketpriceofjetfuel,andthusloweredourcostofjetfuel.
ArefineryissubjecttoannualEPArequirementstoblendrenewablefuelsintothegasolineandon-roaddieselfuelitproduces.Alternatively,arefinerymay
purchaserenewableenergycredits,calledRINs,fromthirdpartiesinthesecondarymarket.BecausetherefineryoperatedbyMonroedoesnotblendrenewable
fuels,itmustpurchaseitsentireRINsrequirementinthesecondarymarketorobtainawaiverfromtheEPA.Werecognized$75million,$111millionand$64
millionofexpenserelatedtotheRINsrequirementin2015,2014and2013,respectively.WeareinpossessionoftheRINsneededtosatisfyour2013obligation
andaportionofour2014and2015obligations.
Therefineryrecordedaprofitof$290millionin2015,comparedto$96millionin2014andalossof$116millionrecordedin2013.Therefinery's
profitabilityimprovedyear-over-yeardespitelowerrevenuesresultingfromadeclineinrefinedfuelmarketprices.Therefinery’sincreaseinprofitswas
attributabletohigherproductcrackspreadsandhigherthroughputasaresultofenhancedoperationalreliability,logisticalimprovementsandutilizationof
intermediates(partiallyrefinedfuels).Formoreinformationregardingtherefinery’sresults,seeNote14oftheNotestotheConsolidatedFinancialStatements.
35