Delta Airlines 2010 Annual Report Download - page 36

Table of Contents
Passenger commissions and other selling expenses. Passenger commissions and other selling expenses decreased $362 million primarily in connection
with the passenger revenue decrease.
Impairment of goodwill and other intangible assets. During 2008, we experienced a significant decline in market capitalization primarily from record high
fuel prices and overall airline industry conditions. In addition, the announcement of our intention to merge with Northwest established a stock exchange ratio
based on the relative valuation of Delta and Northwest. We determined goodwill was impaired and recorded a non-cash charge of $10.2 billion on a combined
basis. We also recorded a non-cash charge of $955 million on a combined basis to reduce the carrying value of certain intangible assets based on their revised
estimated fair values.
Restructuring and merger-related items. Restructuring and merger-related items decreased $949 million, primarily due to the following:
• During 2009, we recorded a $288 million charge for merger-related items.
• For 2009, we recorded a $119 million charge in connection with employee workforce reduction programs.
• During 2008, we recorded $1.2 billion primarily in non-cash, merger-related charges related to the issuance or vesting of employee equity awards in
connection with the Merger and $114 million in restructuring and related charges in connection with voluntary workforce reduction programs. In
addition, we recorded charges of $25 million related to the closure of certain facilities and $14 million associated with the early termination of
certain contract carrier arrangements.
Other (Expense) Income
GAAP 2008
Year Ended GAAP Northwest Combined
December 31, Year Ended January 1 to Year Ended Favorable
(in millions) 2009 December 31 October 29 December 31 (Unfavorable)
Interest expense $ (1,278) $ (705) $ (373) $ (1,078) $ (200)
Interest income 27 92 86 178 (151)
Loss on extinguishment of debt (83) — — — (83)
Miscellaneous, net 77 (114) (230) (344) 421
Total other expense, net $ (1,257) $ (727) $ (517) $ (1,244) $ (13)
Other expense, net for 2009 was $1.3 billion, compared to $1.2 billion for 2008 on a combined basis. This change is primarily attributable to (1) a
$200 million increase in interest expense from increased amortization of debt discount, (2) a $151 million decrease in interest income primarily from
significantly reduced short-term interest rates, (3) an $83 million non-cash loss for the write-off of the unamortized discount on the extinguishment of certain
Northwest debt and (4) a $421 million favorable change in miscellaneous, net due to the following:
Favorable (Unfavorable)
2009 GAAP vs.
(in millions) 2008 Combined
Miscellaneous, net
Impairment in 2008 of minority ownership interest $ 213
Foreign currency exchange rates 99
Mark-to-market adjustments on the ineffective portion of fuel hedge contracts 77
Loss on investments in 2008 41
Other (9)
Total miscellaneous, net $ 421
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