Delta Airlines 2006 Annual Report Download - page 105

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
In addition, Comair has filed an action in the U.S. District Court for the Eastern District of Kentucky against the United States (based on the actions of the
Federal Aviation Administration (“FAA”)), the Lexington Airport Board and certain other Lexington airport defendants, seeking to apportion potential
liability for damages arising from this accident among all responsible parties.
During the September 2006 quarter, we recorded a long term liability with a corresponding long term receivable from our insurance carriers in other
noncurrent liabilities and assets, respectively, on our Consolidated Balance Sheet relating to the Comair Flight 5191 accident. These estimates may be revised
as additional information becomes available. We carry aviation risk liability insurance and believe this insurance is sufficient to cover any liability likely to
arise from this accident.
Other Contingencies
Regional Airports Improvement Corporation (“RAIC”)
We have obligations under a facilities agreement with the RAIC to pay the bond trustee amounts sufficient to pay the debt service on $47 million in
Facilities Sublease Refunding Revenue Bonds. These bonds were issued in 1996 to refinance bonds that financed the construction of certain airport and
terminal facilities we use at Los Angeles International Airport. We also provide a guarantee to the bond trustee covering payment of the debt service.
General Indemnifications
We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and
the lessor’s related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of
indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and
invitees at or in connection with the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of
the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence and their willful misconduct.
Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the
other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the condition, use or
operation of the aircraft or such other equipment.
We believe that our insurance would cover most of our exposure to such liabilities and related indemnities associated with the types of lease and
financing agreements described above, including real estate leases. However, our insurance does not typically cover environmental liabilities, although we
have certain policies in place to meet the requirements of applicable environmental laws.
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