Delta Airlines 2015 Annual Report Download - page 52
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ThefollowingtableshowsareconciliationofROIC.WepresentROICasmanagementbelievesthismetricishelpfultoinvestorsinassessingourabilityto
generatereturnsusingitsinvestedcapital.ROICisoperatingincome,adjusted,dividedbyadjustedaverageinvestedcapital.WeadjustoperatingincomeforMTM
adjustmentsandsettlementsandrestructuringandotherforthesamereasonsdiscussedaboveforpre-taxincome.AlladjustmentstocalculateROICareintendedto
provideamoremeaningfulcomparisonofourresultstotheairlineindustryandotherhigh-qualityindustrialcompanies.
YearEndedDecember31,
(inmillions,except%ofreturn)
2015
2014
Operatingincome
$ 7,802
$ 2,206
Adjustedfor:
MTMadjustmentsandsettlements
(1,301)
2,346
Restructuringandother
35
716
7xannualinterestexpenseincludedinaircraftrent
172
149
Amortizationofretirementactuarialloss
230
112
Operatingincome,adjusted
$ 6,938
$ 5,529
Adjustedbookvalueofequity
$ 17,564
$ 18,518
Averageadjustednetdebt
6,970
8,215
Adjustedaverageinvestedcapital(1)
$ 24,534
$ 26,733
ROIC
28.3%
20.7%
(1) Adjustedaverageinvestedcapitalrepresentsthesumoftheaveragebookvalueofequityattheendofthelastfivequarters,adjustedforpensionandfuelhedgeimpactswithinother
comprehensiveincome.Averageadjustednetdebtiscalculatedusingamountsasoftheendofthelastfivequarters.
Thefollowingtableshowsareconciliationofadjustednetdebt.Weuseadjustedtotaldebt,includingaircraftrent,inadditiontolong-termadjusteddebtand
capitalleases,topresentestimatedfinancialobligations.Wereduceadjusteddebtbycash,cashequivalentsandshort-terminvestmentsandhedgemargin
receivable,resultinginadjustednetdebt,topresenttheamountofassetsneededtosatisfythedebt.Managementbelievesthismetricishelpfultoinvestorsin
assessingthecompany’soveralldebtprofile.Managementhasreducedadjusteddebtbytheamountofhedgemarginreceivable,whichreflectscashpostedto
counterparties,aswebelievethisremovestheimpactofcurrentmarketvolatilityonourunsettledhedgesandisabetterrepresentationofthecontinuedprogress
wehavemadeonourdebtinitiatives.
(inmillions)
December31,2015
December31,2009
Debtandcapitalleaseobligations
$ 8,329
$ 17,198
Plus:unamortizeddiscount,netanddebtissuancecosts
152
1,123
Adjusteddebtandcapitalleaseobligations
$ 8,481
$ 18,321
Plus:7xlasttwelvemonths'aircraftrent
1,750
3,360
Adjustedtotaldebt
10,231
21,681
Less:cash,cashequivalentsandshort-terminvestments
(3,437)
(4,678)
Less:hedgemargin(receivable)payable
(119)
10
Adjustednetdebt
$ 6,675
$ 17,013
48