Delta Airlines 2007 Annual Report Download - page 125

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Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the years ended December 31, 2006 and 2005, we excluded from our loss per share calculations all common stock equivalents because their effect
on earnings per share was anti-dilutive. These common stock equivalents include (1) stock options and our ESOP Preferred Stock through the dates of their
cancellation and conversion, respectively (for additional information, see Notes 2 and 12), and (2) shares of common stock issuable upon conversion of our
8.0% Convertible Senior Notes due 2023 and our 2 7/8% Convertible Senior Notes due 2024, respectively (collectively, the "Convertible Senior Notes").
These common stock equivalents totaled 36.4 million and 143.2 million shares for the year ended December 31, 2006 and 2005, respectively.
Upon emergence from bankruptcy, we discharged our liabilities subject to compromise, which included the Convertible Senior Notes. As a result, we
recognized a gain of $216 million for the four months ended April 30, 2007. In connection with this discharge, 36.4 million shares of common stock were
assumed issued for purposes of calculating diluted earnings per share. For additional information regarding the discharge of our liabilities subject to
compromise, see Note 1.
For the eight months ended December 31, 2007, we excluded from our earnings per share calculations options to purchase approximately three million
shares of common stock as their effect was anti-dilutive.
Note 17. Valuation and Qualifying Accounts
The following table shows our valuation and qualifying accounts for the eight months ended December 31, 2007, the four months ended April 30, 2007
and the years ended 2006 and 2005, and the associated activity for the years then ended:
Allowance for:
(in millions)
Restructuring
and Other
Charges(1)
Uncollectible
Accounts
Receivable(2)
Obsolescence of
Expendable
Parts &
Supplies
Inventory
Deferred
Tax
Assets
Balance at January 1, 2005 (Predecessor) $ 80 $ 38 $ 184 $ 2,400(3)
Additional costs and expenses 57 18 26 1,746
Payments and deductions (53) (15) (9) (192)
Balance at December 31, 2005 (Predecessor) 84 41 201 3,954(4)
Additional costs and expenses 32 16 12 2,749
Payments and deductions (111) (36) (52) (1,534)
Balance at December 31, 2006 (Predecessor) 5 21 161 5,169(5)
Additional costs and expenses 1 5 13 1,092
Payments and deductions (2) (5) (43) (1,201)
Balance at April 30, 2007 (Predecessor) 4 21 131 5,060(5)
Valuation adjustment — — (131) (230)
Additional costs and expenses — 15 11 669
Payments and deductions (1) (10) — (656)
Balance at December 31, 2007 (Successor) $ 3 $ 26 $ 11 $ 4,843(6)
(1) For additional information related to leased aircraft and restructuring and other charges, see Note 7.
(2) The payments and deductions related to the allowance for uncollectible accounts receivable represent the write-off of accounts considered to be uncollectible, less recoveries.
(3) $29 million of this amount is recorded as a debit in accumulated other comprehensive loss on our Consolidated Balance Sheet at January 1, 2005 (see Note 13).
F-65