Delta Airlines 2006 Annual Report Download - page 122

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Operating revenues are assigned to a specific geographic region based on the origin, flight path and destination of each flight segment. Our operating
revenues by geographic region for the years ended December 31, 2006, 2005 and 2004 are summarized in the following table:
(in millions) 2006 2005 2004
North America $ 12,931 $ 13,030 $ 12,389
Atlantic 2,997 2,255 2,088
Pacific 164 150 143
Latin America 1,079 756 615
Total $ 17,171 $ 16,191 $ 15,235
Our tangible assets consist primarily of flight equipment, which is mobile across geographic markets. Accordingly, assets are not allocated to specific
geographic regions.
Note 15. Restructuring
Restructuring and Other Reserves
The following table shows our restructuring and other reserve balances as of December 31, 2006, 2005 and 2004, and the activity for the years then
ended related to (1) facility closures and other costs and (2) severance and related costs under our 2005, 2004, 2002 and 2001 workforce reduction programs.
Substantially all of our restructuring and other reserves have been classified as liabilities subject to compromise on our Consolidated Balance Sheets at
December 31, 2006 and 2005.
Restructuring and Other Charges
Facilities Severance and Related Costs
and Workforce Reduction Programs
(in millions) Other 2005 2004 2002 2001
Balance at January 1, 2004 $ 47 $ — $ — $ 5 $ 1
Additional costs and expenses — — 42 — —
Payments (8) — — (2) (1)
Adjustments (1) — — (3) —
Balance at December 31, 2004 38 — 42 — —
Additional costs and expenses 6 46 5 — —
Payments (8) — (36) — —
Adjustments — — (9) — —
Balance at December 31, 2005 36 46 2 — —
Additional costs and expenses 3 29 — — —
Payments (8) (53) (2) — —
Adjustments (27) (21) — — —
Balance at December 31, 2006 $ 4 $ 1 $ — $ — $ —
The facilities and other reserve balance includes costs related primarily to (1) future lease payments on closed facilities, (2) contract termination fees and
(3) future lease payments associated with the early retirement of leased aircraft. During 2006, we reduced the facilities and other reserve by $27 million
primarily due to the rejection of certain facility leases and updated estimates concerning future lease payments. During 2005, we recorded charges of $5
million for future lease payments associated with the early retirement of leased aircraft, during the period from January 1, 2005 through the Petition Date.
The severance and related costs reserve represents future payments associated with our 2005, 2004, 2002 and 2001 workforce reduction programs.
During 2006,we recorded an additional accrual of $29 million for costs associated with our 2005 program under which we planned to reduce staffing by 7,000
to 9,000 jobs by December 2007. We also reduced the severance and related reserve associated with this program by $21 million due primarily to higher
employee attrition than previously assumed. At December 31, 2004, the $42 million balance related to the 2004 workforce reduction programs represented
severance and medical benefits for employees who qualified for the programs; this amount was paid during 2005 and 2006.
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