Delta Airlines 2003 Annual Report Download - page 82

Table of Contents
establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003; otherwise, this statement, as it applies to our financial statements, is effective July 1, 2003.
The adoption of SFAS 150 had no impact on our Consolidated Financial Statements.
The FASB issued FASB Staff Position SFAS No. 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003" (FSP 106-1) in January 2004. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare
Act) introduced a prescription drug benefit under Medicare and a federal subsidy to sponsors of health care benefit plans in certain circumstances. FSP 106-1
permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the
Medicare Act. It also requires certain disclosures regarding the Medicare Act and is effective for financial statements issued after December 7, 2003. Our
2003 Consolidated Financial Statements were not impacted by the Medicare Act because our September 30 measurement date for our postretirement plans
was prior to the enactment of the Medicare Act. We are evaluating the impact of the Medicare Act on our 2004 Consolidated Financial Statements (see Note
11 for additional information).
The FASB issued FASB Interpretation No. (FIN) 46, "Consolidation of Variable Interest Entities" (FIN 46) in February 2003. FIN 46 addresses how to
identify variable interest entities (VIEs) and the criteria that require a company to consolidate such entities in its financial statements. FIN 46, as revised by
FIN 46R, was effective on February 1, 2003 for new transactions and is effective for reporting periods ending after March 15, 2004 for transactions entered
into prior to February 1, 2003. We have not entered into any new transactions subject to FIN 46 since February 1, 2003.
We completed an evaluation of our transactions entered into prior to February 1, 2003 that may be impacted by FIN 46, including (1) contract carrier
arrangements; (2) aircraft operating leases; and (3) fuel consortiums. While we determined that some of these arrangements are VIEs, we neither hold a
significant variable interest in, nor are the primary beneficiary of, any of these arrangements. The adoption of FIN 46 will not have a material impact on our
Consolidated Financial Statements.
The Emerging Issues Task Force (EITF) reached a consensus on EITF Issue 01-08, "Determining Whether an Arrangement Contains a Lease" (EITF 01-08)
in May 2003. This EITF provides guidance on how to determine whether an arrangement contains a lease that is within the scope of SFAS No. 13,
"Accounting for Leases" (SFAS 13). The guidance should be applied to arrangements agreed to or modified after June 30, 2003. If our contract carrier
arrangements are modified in the future, we will likely have to account for these arrangements as operating or capital leases in accordance with SFAS 13. See
our accounting policy for our contract carrier arrangements in this Note.
F-12