Delta Airlines 2008 Annual Report Download - page 111

Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
employees or passengers) for claims resulting from acts of terrorism, war or similar events. At the same time, aviation insurers significantly increased the
premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S. government has been providing U.S. airlines with war-
risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground damage) and the aircraft hull. The coverage
currently extends through March 31, 2009, and the Secretary of Transportation has discretion to extend coverage through May 31, 2009. The withdrawal of
government support of airline war-risk insurance would require us to obtain war-risk insurance coverage commercially, if available. Such commercial
insurance could have substantially less desirable coverage than currently provided by the U.S. government, may not be adequate to protect our risk of loss
from future acts of terrorism, may result in a material increase to our operating expense or may not be obtainable at all, resulting in an interruption to our
operations.
Other
We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract specific
equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are
contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.
NOTE 9. INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. The following table shows significant components of our deferred tax assets and liabilities at December 31, 2008 and 2007:
(in millions) 2008 2007
Deferred tax assets:
Net operating loss carryforwards $ 5,450 $ 3,461
Pension, postretirement and other benefits 4,491 1,778
AMT credit carryforward 505 346
Deferred revenue 2,339 1,273
Rent expense 291 81
Reorganization items, net 1,375 988
Fuel hedge derivatives 663 4
Other temporary differences 565 469
Valuation allowance (9,830) (4,843)
Total deferred tax assets $ 5,849 $ 3,557
Deferred tax liabilities:
Depreciation $ 4,856 $ 3,079
Debt valuation 627 —
Intangible assets 1,795 1,049
Other 151 142
Total deferred tax liabilities $ 7,429 $ 4,270
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