Delta Airlines 2004 Annual Report Download - page 69

Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
of 2003 ("Medicare Act") introduces a federal subsidy to sponsors of healthcare benefit plans in certain circumstances and a prescription drug benefit to
eligible participants under Medicare. We have determined that the federal subsidy to be provided under the Medicare Act will not have an impact on our
postretirement benefit plans. We believe, however, that the new prescription drug benefit that will be provided under Medicare will reduce our future claims
costs under our postretirement benefit plans. See Note 10 for additional information about the impact of FSP 106-1.
In September 2004, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue 04-08, "The Effect of Contingently Convertible Debt on
Diluted Earnings per Share" ("EITF 04-08"). This EITF requires shares of common stock issuable upon conversion of contingently convertible debt
instruments to be included in the calculation of diluted earnings per share whether or not the contingent conditions for conversion have been met, unless the
inclusion of these shares is anti-dilutive. Previously, shares of common stock issuable upon conversion of contingently convertible debt securities were
excluded from the calculation of diluted earnings per share. See Note 17 for additional information about the impact of EITF 04-08 on our Consolidated
Financial Statements.
During 2003, we adopted the following accounting standards:
• SFAS No. 132 (revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits, an amendment of FASB
Statements No. 87, 88, and 106" ("SFAS 132R") (see Note 10 for disclosures required under SFAS 132R).
• EITF Issue 01-08, "Determining Whether an Arrangement Contains a Lease".
• SFAS No. 143, "Accounting for Asset Retirement Obligations;" SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments
and Hedging Activities;" SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity;"
and FASB Interpretation No. ("FIN") 46, "Consolidation of Variable Interest Entities."
Our adoption of these standards did not have a material impact on our Consolidated Financial Statements.
During 2002, we adopted the following accounting standards:
• SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") (see our goodwill and other intangible assets policy and related
information in this Note and in Note 5, respectively).
• SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") (see our long-lived assets policy in this
Note).
• SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections" (see
Note 6 for additional information).
• SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"). SFAS 146 impacts the timing of the
recognition of liabilities related to future exit or disposal activities.
• SFAS No. 148, "Accounting for Stock-Based Compensation — Transition and Disclosure — an Amendment to FASB Statement No. 123"
("SFAS 148") (see our stock-based compensation policy in this Note).
• FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others"
("FIN 45") (see Note 8 for our disclosures required under FIN 45).
Cash and Cash Equivalents
We classify short-term, highly liquid investments with maturities of three months or less when purchased as cash and cash equivalents. These investments
are recorded at cost, which approximates fair value. F-12