Delta Airlines 2003 Annual Report Download - page 18

Table of Contents
We have been identified by the EPA as a potentially responsible party (a "PRP") with respect to certain Superfund Sites, and have entered into consent
decrees regarding some of these sites. Our alleged disposal volume at each of these sites is small when compared to the total contributions of all PRPs at each
site. We are aware of soil and/or ground water contamination present on our current or former leaseholds at several domestic airports. To address this
contamination, we have a program in place to investigate and, if appropriate, remediate these sites. Although the ultimate outcome of these matters cannot be
predicted with certainty, management believes that the resolution of these matters will not have a material adverse effect on our Consolidated Financial
Statements.
Frequent Flyer Program
We have a frequent flyer program, the SkyMiles® program, offering incentives to increase travel on Delta. This program allows participants to earn
mileage for travel awards by flying on Delta, Delta Connection carriers and participating airlines. Mileage credit may also be earned by using certain services
offered by program partners such as credit card companies, hotels, car rental agencies, telecommunication services and internet services. In addition, we have
programs under which individuals and companies may purchase mileage credits. We reserve the right to terminate the program with six months advance
notice, and to change the program's terms and conditions at any time without notice.
Mileage credits can be redeemed for free or upgraded air travel on Delta and participating airline partners, for membership in our Crown Room Club and
for other program partner awards. Travel awards are subject to certain transfer restrictions and capacity-controlled seating. In some cases, blackout dates may
apply. Miles earned prior to May 1, 1995 do not expire so long as we have a frequent flyer program. Miles earned or purchased on or after May 1, 1995 will
not expire as long as, at least once every three years, the participant (1) takes a qualifying flight on Delta or a Delta Connection carrier; (2) earns miles
through one of our program partners; or (3) redeems miles for any program award.
We account for our frequent flyer program obligations by recording a liability for the estimated incremental cost of travel awards we expect to be
redeemed. The estimated incremental cost associated with a travel award does not include any contribution to overhead or profit. Such incremental cost is
based on our system average cost per passenger for fuel, food and other direct passenger costs. We do not record a liability for mileage earned by participants
who have not reached the level to become eligible for a free travel award. We believe this is appropriate because the large majority of these participants are
not expected to earn a travel award. We do not record a liability for the expected redemption of miles for non-travel awards since the cost of these awards to
us is negligible.
We estimated the potential number of round-trip travel awards outstanding under our frequent flyer program to be 14.3 million, 13.7 million and 13.1
million at December 31, 2003, 2002 and 2001, respectively. Of these travel awards, we expected that approximately 10.4 million, 10.0 million and 9.6
million, respectively, would be redeemed. At December 31, 2003, 2002 and 2001, we had recorded a liability for these awards of $229 million, $228 million
and $226 million, respectively. The difference between the round-trip awards outstanding and the
12