Delta Airlines 2015 Annual Report Download - page 39
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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.TableofContents
Non-OperatingResults
YearEndedDecember31,
Favorable(Unfavorable)
(inmillions) 2015 2014 2013
2015vs.2014 2014vs.2013
Interestexpense,net $ (481) $ (650) $ (852)
$ 169 $ 202
Miscellaneous,net (164) (484) (21)
320 (463)
Totalnon-operatingexpense,net $ (645) $ (1,134) $ (873)
$ 489 $ (261)
Thedeclineininterestexpense,netresultsfromreducedlevelsofdebtandunamortizeddebtdiscountsandfromtherefinancingofdebtobligationsatlower
interestrates.Theprincipalamountofdebtandcapitalleaseshasdeclinedfrom$13.2billionatthebeginningof2013to$8.5billionatDecember31,2015.
Miscellaneous,netisfavorableprimarilyduetoareductionindebtextinguishmentlossescomparedto2014.Thedebtextinguishmentlossesprimarilyrelated
tounamortizeddebtdiscountsresultingfromfairvalueadjustmentsrecordedinthe2008purchaseaccountingofNorthwestAirlines.Wedidnotearlyextinguish
anydebtin2013.AlsocontributingtotheincreaseisourproportionateshareofearningsfromourequityinvestmentinVirginAtlantic.ThegainfromVirgin
Atlanticprimarilyresultsfromyear-over-yearprofitandimprovementsinMTMadjustmentsonfuelhedges.
IncomeTaxes
Oureffectivetaxratefor2015was36.8%.Weexpectourannualeffectivetaxratetobebetween35%and36%for2016.Theexpectedreductioninourrate
fromprioryearsisprimarilyrelatedtodifferencesinourglobaltaxrates.Incertainperiodswemayhaveadjustmentstoourdeferredtaxassetsasaresultof
changesinprioryearestimatesandtaxlawsenactedduringtheperiod,whichwillimpacttheeffectivetaxrateforthatperiod.AtDecember31,2015,wehad
approximately$9.5billionofU.S.federalpre-taxnetoperatinglosscarryforwards,whichdonotbegintoexpireuntil2024.Accordingly,webelievewewillnot
payanycashfederalincometaxesbefore2018.SeeNote11oftheNotestotheConsolidatedFinancialStatementsformoreinformation.
WereleasedsubstantiallyallofourvaluationallowanceagainstournetdeferredtaxassetsonDecember31,2013.Thereleaseoftheallowanceprimarily
resultedinanettaxbenefitof$8.0billionthatwasrecordedinincometax(provision)benefitinourConsolidatedStatementofOperations.
RefinerySegment
Therefineryprimarilyproducesgasoline,dieselandjetfuel.Monroeexchangessubstantiallyallthenon-jetfuelproductstherefineryproduceswiththird
partiesforjetfuelconsumedinourairlineoperations.Thejetfuelproducedandprocuredthroughexchanginggasolineanddieselfuelproducedbytherefinery
providedapproximately171,000barrels(approximatelysevenmilliongallons)perdayforuseinourairlineoperationsduring2015.Webelievethattheincrease
injetfuelsupplyduetotherefinery'soperationhasreducedtheoverallmarketpriceofjetfuel,andthusloweredourcostofjetfuel.
ArefineryissubjecttoannualEPArequirementstoblendrenewablefuelsintothegasolineandon-roaddieselfuelitproduces.Alternatively,arefinerymay
purchaserenewableenergycredits,calledRINs,fromthirdpartiesinthesecondarymarket.BecausetherefineryoperatedbyMonroedoesnotblendrenewable
fuels,itmustpurchaseitsentireRINsrequirementinthesecondarymarketorobtainawaiverfromtheEPA.Werecognized$75million,$111millionand$64
millionofexpenserelatedtotheRINsrequirementin2015,2014and2013,respectively.WeareinpossessionoftheRINsneededtosatisfyour2013obligation
andaportionofour2014and2015obligations.
Therefineryrecordedaprofitof$290millionin2015,comparedto$96millionin2014andalossof$116millionrecordedin2013.Therefinery's
profitabilityimprovedyear-over-yeardespitelowerrevenuesresultingfromadeclineinrefinedfuelmarketprices.Therefinery’sincreaseinprofitswas
attributabletohigherproductcrackspreadsandhigherthroughputasaresultofenhancedoperationalreliability,logisticalimprovementsandutilizationof
intermediates(partiallyrefinedfuels).Formoreinformationregardingtherefinery’sresults,seeNote14oftheNotestotheConsolidatedFinancialStatements.
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