Delta Airlines 2009 Annual Report Download - page 47

Table of Contents
(8) In addition to the contractual obligations included in the table, we have significant cash obligations that are not included in the table. For example, we
will pay wages required under collective bargaining agreements, purchase capacity under contract carrier arrangements (as discussed below), settle tax
contingency reserves (as discussed below), pay credit card processing fees and pay fees for other goods and services, including those related to fuel,
maintenance and commissions. While we are parties to legally binding contracts regarding these goods and services, the actual commitment is
contingent on certain factors such as volume and/or variable rates that are uncertain or unknown at this time. Therefore, these items are not included in
the table. In addition, purchase orders made in the ordinary course of business are excluded from the table and any amounts which we are liable for
under the purchase orders are included in current liabilities on our Consolidated Balance Sheets. Payments under our profit-sharing plan or pursuant to
our 2007 Performance Compensation Plan are contingent on factors unknown at this time and, therefore, are not included in this table.
Pension Obligations. We sponsor a defined benefit pension plan for eligible non-pilot Delta employees and retirees (the "Delta Non-Pilot Plan") and
defined benefit pension plans for eligible Northwest employees and retirees (the "Northwest Pension Plans"), all of which have been frozen for future benefit
accruals. Our funding obligations for these plans are governed by the Employee Retirement Income Security Act.
The Pension Protection Act of 2006 allows commercial airlines to elect alternative funding rules ("Alternative Funding Rules") for defined benefit plans
that are frozen. Under the Alternative Funding Rules, the unfunded liability for a frozen defined benefit plan may be funded over a fixed 17-year period. The
unfunded liability is defined as the actuarial liability and is calculated using an 8.85% interest rate. Delta elected the Alternative Funding Rules for the Delta
Non-Pilot Plan, effective April 1, 2007; and Northwest elected the Alternative Funding Rules for the Northwest Pension Plans, effective October 1, 2006. We
estimate that the funding requirements under these plans will be approximately $720 million in 2010.
While this legislation makes our funding obligations for these plans more predictable, factors outside our control continue to have an impact on the funding
requirements. Estimates of future funding requirements are based on various assumptions and can vary materially from actual funding requirements.
Assumptions include, among other things, the actual and projected market performance of assets; statutory requirements; and demographic data for
participants.
The following items are not included in the table above:
Contract Carrier Agreements. During the year ended December 31, 2009, six regional air carriers ("Contract Carriers") operated for us (in addition to our
wholly-owned subsidiaries, Comair, Compass Airlines, Inc. ("Compass") and Mesaba Aviation, Inc. ("Mesaba")) pursuant to capacity purchase agreements.
Under these agreements, the regional air carriers operate some or all of their aircraft using our flight designator codes, and we control the scheduling, pricing,
reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with those flights. We pay those airlines an amount, as defined
in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates
for those services.
The above table shows our minimum fixed obligations under these capacity purchase agreements (excluding Comair, Compass and Mesaba). The
obligations set forth in the table contemplate minimum levels of flying by the Contract Carriers under the respective agreements and also reflect assumptions
regarding certain costs associated with the minimum levels of flying such as for fuel, labor, maintenance, insurance, catering, property tax and landing fees.
Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table above.
For information regarding payments we may be required to make in connection with certain terminations of our capacity purchase agreements with
Chautauqua Airlines, Inc. and Shuttle America Corporation, see "Contingencies Related to Termination of Contract Carrier Agreements" in Note 8 of the
Notes to the Consolidated Financial Statements.
Uncertain Tax Positions. The total amount of unrecognized tax benefits on the Consolidated Balance Sheet at December 31, 2009 is $66 million. We are
currently under audit by the Internal Revenue Service (the "IRS") for the 2008 and 2009 tax years.
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