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WestJet Annual Report 2015 | 59
Return on invested capital
($ in thousands)
December 31
2015
December 31
2014
Change
Earnings before income taxes (trailing twelve months) 520,258 390,307 129,951
Special item(i)
―
45,459
(45,459)
Adjusted earnings before income taxes (trailing twelve
months)
520,258 435,766 84,492
Add:
Finance costs
53,665
51,838
1,827
Implicit interest in operating leases
(ii)
91,397 95,786 (4,389)
Return
665,320
583,390
81,930
Invested capital:
Average long-term debt
(iii)
1,181,748 1,033,529 148,219
Average shareholders' equity
1,868,748
1,683,671
185,077
Off-balance-sheet aircraft leases
(iv)
1,305,668 1,368,375 (62,707)
Invested capital
4,356,164
4,085,575
270,589
Return on invested capital
15.3%
14.3%
1.0 pts.
(i) Pre-tax non-cash loss of $45.5 million recorded in the third quarter of 2014 associated with the sale of 10 aircraft to Southwest.
(ii) Interest implicit in operating leases is equal to 7.0 per cent of 7.5 times the trailing 12 months of aircraft lease expense. 7.0 per cent is a proxy and does not
necessarily represent actual for any given period.
(iii) Average long-term debt includes the current portion and long-term portion.
(iv) Off-balance-sheet aircraft operating leases are calculated by multiplying the trailing 12 months of aircraft leasing expense by 7.5. At December 31, 2015, the
trailing 12 months of aircraft leasing expenses totaled $174,089 (December 31, 2014 – $182,450).
Adjusted net earnings/Adjusted diluted earnings per share
Twelve months ended December 31
($ in thousands, except share and per share data) 2015 2014 Change
Net earnings
367,530
283,957
83,573
Adjusted for:
Special item(i)
―
33,231
(33,231)
Adjusted net earnings 367,530 317,188 50,342
Weighted average number of shares outstanding - diluted 125,964,541 129,142,940 (3,178,399)
Adjusted diluted earnings per share 2.92 2.46 18.7%
(i) After-tax non-cash loss of $33.2 million recorded in the third quarter of 2014 associated with the sale of 10 aircraft to Southwest.