elta Airlines provides scheduled air transportation for passengers and cargo throughout the United States and globally a fleet of more than 900 aircraft. Information for its 2015 annual report follows.

December 31,

($ in millions) 2015 2014

Asset

Flight and ground equipment under capital leases $1,112 $1,141

Less accumulated amortization 782 767

$ 330 $ 374

Total Assets $53,134 $54,005

Liabilities

Current Liabilities

Current obligation under capital leases $ 148 $ 107

Obligations under capital leases, less current obligations $ 235 $ 291

Total liabilities $42,284 $45,192

NOTE 7. LEASE OBLIGATIONS

We lease aircraft, airport terminals, maintenance facilities, ticket offices and other property and equipment from third parties. Rental expense for operation leases, which is recorded on a straight-line basis over the life of the lease term, totaled $1.2 billion for the years ended December 31, 2015 and 2014 and $1.1 billion for the year ended December 31, 2013. Amounts due under capital leases are recorded as liabilities, while assets acquired under capital leases are recorded as property and equipment. Amortization of assets recorded under capital leases is included in depreciation and amortization expense. Our airport terminal leases include contingent rents, which vary based upon facility usage, enplanements, aircraft weight and other factors. Many of our aircraft, facility, and equipment leases include rental escalation clauses and/or renewal options. Our leases do not include residual value guarantees and we are not the primary beneficiary in or have other forms of variable interest with the lessor of the leased assets. As a result, we have not consolidated any of the entities that lease to us.

The following tables summarize our minimum rental commitments under capital leases and noncancelable operating leases (including certain aircraft flown by regional carriers) with initial or remaining terms in excess of one year for the years succeeding December 31, 2015 (in millions):

Year Ending December 31 Capital Leases Operating Leases

2016 $183 $1,583

2017 114 1,440

2018 56 1,307

2019 41 1,158

2020 29 1,053

Thereafter 39 6,220

A $12,761

Less amount representing interest C

Present value of net minimum lease payments B

7. What is the present value of operating lease payments? Assume an 11% discount rate.

8. What entry would be made to convert the operating leases to ASU 2016-02 (ASC 842)? Do not make an entry to reclassify long-term liabilities to current liabilities.

9. Recompute the Total debt to Total assets ratio after making the entry in requirement 8. What is the percentage change from the ratio computed in requirement 4?