HTW Inc. is a retail company that reported an operating loss of €75 million in the most recent twelve months, but this loss was after an operating lease payment of €275 million during the period. There are three more years left on the lease, with the following payments coming due each year:
Year Lease commitments (millions)
1 300
2 200
3 100
You believe that the contractual commitment should be treated as debt, and that the pretax cost of debt for HTW Inc. is 4%. If you capitalize these commitments, estimate the corrected operating income or loss for the most recent twelve months.