Delta Airlines 2009 Annual Report Download - page 41
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Table of Contents
Operating Expense
Increase (Decrease) due to:
Predecessor + Northwest
GAAP Successor Operations
Year Ended Year Ended October 30 to Restructuring
December 31, December 31, Increase December 31, and merger- Fuel
(in millions) 2008 2007 (Decrease) 2008 related items Impairments Expense Other
Operating Expense:
Aircraft fuel and related taxes $7,346 $4,686 $2,660 $718 $— $— $1,942 $—
Salaries and related costs 4,329 3,759 570 504 — — — 66
Contract carrier arrangements 3,766 3,275 491 144 — — 303 44
Depreciation and amortization 1,266 1,164 102 91 — — — 11
Aircraft maintenance materials and outside repairs 1,169 983 186 113 — — — 73
Contracted services 1,062 910 152 128 — — — 24
Passenger commissions and other selling expenses 1,030 933 97 130 — — — (33)
Landing fees and other rents 787 725 62 106 — — — (44)
Passenger service 440 338 102 35 — — — 67
Aircraft rent 307 246 61 40 — — — 21
Profit sharing — 158 (158) — — — — (158)
Impairment of goodwill and other intangible assets 7,296 — 7,296 — — 7,296 — —
Restructuring and merger-related items(1) 1,131 — 1,131 — 1,131 — — —
Other 1,082 881 201 88 — — — 113
Total operating expense $ 31,011 $ 18,058 $ 12,953 $ 2,097 $ 1,131 $ 7,296 $ 2,245 $184
(1) Restructuring and merger-related items include $333 million in one-time merger-related charges, as discussed below related to Northwest for the period
from October 30 to December 31, 2008.
Northwest Operations. As a result of the Merger, our results of operations under GAAP for 2008 include Northwest's operations for the period from
October 30 to December 31, 2008, which increased operating expense by $2.1 billion in 2008 compared to the 2007 Predecessor plus Successor results. The
addition of Northwest for that period increased capacity 10% for the full year.
Restructuring and merger-related items. Restructuring and merger-related items totaled a $1.1 billion charge, primarily consisting of the following:
• Merger-related charges. $978 million in one-time primarily non-cash charges relating to the issuance or vesting of employee equity awards in
connection with the Merger.
• Severance and related costs. $114 million in restructuring and related charges in connection with two voluntary workforce reduction programs for
U.S. non-pilot employees announced in March 2008 in which approximately 4,200 employees elected to participate.
• Facilities and other. $25 million in facilities charges primarily related to accruals for future lease obligations for previously announced plans to close
operations in Concourse C at the Cincinnati/Northern Kentucky International Airport (the "Cincinnati Airport").
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