Delta Airlines 2002 Annual Report Download - page 156

Notes to the Consolidated Financial Statements
We believe that our insurance coverage would cover most, but not all, of such
liabilities and related indemnities associated with the types of lease and
financing agreements described above, including real estate leases.
Certain of our aircraft and other financing transactions also often include
provisions which require us to make payments to the lenders to preserve an
expected economic return to the lenders if that economic return is diminished
due to certain changes in law or regulations. In certain of these financing
transactions, we also bear the risk of certain changes in tax laws that would
subject payments to non-U.S. lenders to withholding taxes.
We cannot reasonably estimate our potential future payments under the
indemnities and related provisions described above.
EMPLOYEES UNDER COLLECTIVE BARGAINING AGREEMENTS
At December 31, 2002, Delta, ASA and Comair had a total of approximately 75,100
full-time equivalent employees. Approximately 18% of these employees, including
all of our pilots, are represented by labor unions. Approximately 3% of our
total full-time equivalent employees are covered under collective bargaining
agreements that are either in negotiations or will become amendable by December
31, 2003. ASA is currently in collective bargaining negotiations with the Air
Line Pilots Association, International, which represents ASA's approximately
1,520 pilots. This contract became amendable in September 2002. The outcome of
these collective bargaining negotiations cannot presently be determined. In
addition, ASA's contract with the Association of Flight Attendants, which
represents ASA's approximately 775 flight attendants, becomes amendable in
September 2003.
Note 10. Income Taxes
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and income tax purposes. See Note 1 for information about our
accounting policy for income taxes. At December 31, 2002, we had $349 million of
federal alternative minimum tax (AMT) credit carryforward, which does not
expire. We also had federal and state pretax net operating loss carryforwards of
approximately $3.3 billion at December 31, 2002, substantially all of which will
not expire until 2022. The following table shows significant components of our
deferred tax assets and liabilities at December 31, 2002 and 2001:
(in millions) 2002 2001
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DEFERRED TAX ASSETS:
Net operating loss carryforwards $ 1,256 $ 911
Additional minimum pension liability (see Note 14) 972 --
Postretirement benefits 909 1,025
Other employee benefits 404 254
AMT credit carryforward 349 23
Gains on sale and leaseback transactions, net 217 239
Rent expense 215 220
Other 508 455
Valuation allowance (16) (16)
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Total deferred tax assets $ 4,814 $ 3,111
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DEFERRED TAX LIABILITIES:
Depreciation and amortization $ 3,639 $ 2,696
Other 332 362
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Total deferred tax liabilities $ 3,971 $ 3,058
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The following table shows the current and noncurrent deferred tax assets
(liabilities) recorded on our Consolidated Balance Sheets at December 31, 2002
and 2001:
(in millions) 2002 2001
---- -----
Current deferred tax assets, net $668 $ 518
Noncurrent deferred tax assets (liabilities), net 175 (465)
---- -----
Total deferred tax assets, net $843 $ 53
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