Delta Airlines 2008 Annual Report Download - page 41

Table of Contents
Index to Financial Statements
Other (Expense) Income
Other expense, net for 2008 was $727 million, compared to $492 million for 2007. This change is attributable to (1) a $53 million, or 8%, increase in
interest expense primarily due to a higher level of debt outstanding, including Northwest debt for the period from October 30 to December 31, 2008 and the
borrowing of the entire amount of our $1.0 billion revolving credit facility (the "Revolving Facility"), partially offset by the repayment of our debtor-in-
possession financing facilities (the "DIP Facility") and other higher floating rate debt in connection with our emergence from Chapter 11, (2) a $36 million
decrease in interest income primarily from lower cash balances prior to the Merger and lower interest rates compared to 2007 and (3) a $146 million increase
to miscellaneous, net due to the following:
(in millions)
Increase
(Decrease)
2008 vs. 2007
Combined
Miscellaneous, net
Unfavorable foreign currency exchange rates $ 72
Impairments of our investments in The Reserve Primary Fund and insured auction rate securities 34
Mark-to-market adjustments on the ineffective portion of our fuel hedge contracts 21
Northwest non-operating expense from October 30 to December 31, 2008 12
Other 7
Total miscellaneous, net $ 146
Reorganization Items, Net
Reorganization items, net totaled a $1.2 billion gain for 2007, primarily consisting of the following:
• Emergence gain. A net $2.1 billion gain due to our emergence from bankruptcy, comprised of (1) a $4.4 billion gain related to the discharge of
liabilities subject to compromise in connection with the settlement of claims, (2) a $2.6 billion charge associated with the revaluation of our
SkyMiles frequent flyer obligation and (3) a $238 million gain from the revaluation of our remaining assets and liabilities to fair value.
• Aircraft financing renegotiations and rejections. A $440 million charge for estimated claims primarily associated with the restructuring of the
financing arrangements for 143 aircraft and adjustments to prior claims estimates.
• Contract carrier agreements. A net charge of $163 million in connection with amendments to certain contract carrier agreements.
• Emergence compensation. In accordance with Delta's Plan of Reorganization, we made $130 million in lump-sum cash payments to
approximately 39,000 eligible non-contract, non-management employees. We also recorded an additional charge of $32 million related to our
portion of payroll related taxes associated with the issuance, as contemplated by Delta's Plan of Reorganization, of approximately 14 million
shares of common stock to those employees.
• Pilot collective bargaining agreement. An $83 million allowed general, unsecured claim in connection with the agreement between Comair, Inc.,
our wholly owned subsidiary ("Comair"), and the Air Line Pilots Association ("ALPA") to reduce Comair's pilot labor costs.
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