Delta Airlines 2006 Annual Report Download - page 116

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Pension Plan Assets
The weighted-average asset allocation for our pension plans at September 30, 2006 and 2005 is as follows:
2006 2005
U.S. equity securities 34% 36%
Non-U.S. equity securities 14% 13%
High quality bonds 18% 19%
Convertible and high yield bonds 8% 8%
Private equity 17% 15%
Real estate 9% 9%
Total 100% 100%
The investment strategy for pension plan assets is to utilize a diversified mix of global public and private equity portfolios, public and private fixed
income portfolios, and private real estate and natural resource investments to earn a long-term investment return that meets or exceeds a 9% annualized return
target. The overall asset mix of the portfolio is more heavily weighted in equity-like investments, including portions of the bond portfolio, which consist of
convertible and high yield securities. Active management strategies are utilized throughout the program in an effort to realize investment returns in excess of
market indices. Also, option and currency overlay strategies are used in an effort to generate modest amounts of additional income. A bond duration extension
program utilizing fixed income derivatives is employed in an effort to better align the market value movements of a portion of the pension plan assets to the
related pension plan liabilities.
Target investment allocations for the pension plan assets are as follows:
U.S. equity securities 27-41%
Non-U.S. equity securities 12-18%
High quality bonds 15-21%
Convertible and high yield bonds 5-11%
Private equity 15%
Real estate 10%
Benefit Payments
Benefit payments in the table below are based on the same assumptions used to measure the related benefit obligations and are paid from both funded
benefit plan trusts and current assets. Actual benefit payments may vary significantly from these estimates. As the result of the Chapter 11 filing, benefits
earned under our non-qualified defined benefit plans will not be paid, and are not included in the table below. Benefits earned under our qualified pension
plans and other postemployment benefit plans are expected to be paid from funded benefit plan trusts, while our other postretirement benefits are funded from
current assets.
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