ADJUSTED NET DEBT AND DEBT LEVERAGE RATIO
We use adjusted net debt and debt leverage ratio to conduct valuation-related analysis and make capital structure-related decisions. Adjusted net debt includes long-term debt, net debt derivative assets or liabilities, short-term borrowings, and cash and cash equivalents.
1 Includes current and long-term portion of long-term debt before deferred transaction costs and discounts. See “Reconciliation of adjusted net debt” in “Non-GAAP Measures and Related Performance Measures” for the calculation of this amount. 2 For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.
3 See “Accounting Policies” for more information. 4 Adjusted net debt and adjusted EBITDA are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures and Related Performance Measures” for information about these measures, including how we calculate themand the debt leverage ratio inwhich they are used.
As a result of our adoption of IFRS 16 effective January 1, 2019, we
have modified our definition of adjusted net debt such that it now includes the total of “current portion of lease liabilities” and “lease liabilities”. We believe adding total lease liabilities to adjusted net debt is appropriate as they reflect payments to which we are contractually committed and the related payments have been removed from our calculation of adjusted EBITDA due to the accounting change.
In addition, as at December 31, 2019, we held $1,831 million of
marketable securities in publicly traded companies (2018 – $1,051 million). Our adjusted net debt increased by $3,379 million from December 31, 2018 as a result of: • the inclusion of lease liabilities in the calculation, which had a balance of $1,725 million at year-end, as discussed above; and • a net increase in our outstanding long-term debt, in part due to the 600 MHz spectrum licences we acquired for $1,731 million this year; partially offset by • an increase in our net cash position.
See “Overview of Financial Position” for more information.
Table:
 | As at December 31 | As at January 1 | As at December 31
(In millions of dollars, except ratios) | 2019 | 2019 | 2018
Long-term debt 1 | 16,130 | 14,404 | 14,404
Net debt derivative assets valued without any adjustment for credit risk 2 | (1,414) | (1,448) | (1,448)
Short-term borrowings | 2,238 | 2,255 | 2,255
Lease liabilities 3 | 1,725 | 1,545 | –
Cash and cash equivalents | (494) | (405) | (405)
Adjusted net debt 4 | 18,185 | 16,351 | 14,806
Divided by: trailing 12-month adjusted EBITDA 4 | 6,212 | 6,157 | 5,983
Debt leverage ratio 4 | 2.9 | 2.7 | 2.5


Question: Where is debt derivatives valued without adjustment for credit risk used for evaluation?
Answer: For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.