Delta Airlines 2015 Annual Report Download - page 84
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NOTE8.AMERICANEXPRESSRELATIONSHIP
General.OuragreementswithAmericanExpressprovideforjointmarketing,grantcertainbenefitstoDelta-AmericanExpressCardholdersandAmerican
ExpressMembershipRewardsProgramparticipantsandallowAmericanExpresstomarketusingourcustomerdatabase.Cardholdersearnmileagecreditsfor
makingpurchasesusingco-brandedcards,maychecktheirfirstbagforfree,aregrantedaccesstoDeltaSkyClubloungesandreceiveotherbenefitswhile
travelingonDelta.
DuringtheDecember2014quarter,weamendedouragreementswithAmericanExpressresultinginamodificationofthetermsoftheseagreements.The
multi-yearextendedagreementsbecameeffectiveJanuary1,2015.Previously,during2013,weamendedouragreementswithAmericanExpress,whichmodified
theproductsandservicesprovidedundertheagreements.TheamendmentschangedcertainmileageawardredemptionsandaccesstoSkyClubs,amongother
things.Foradescriptionofhowtheseamendmentschangedouraccounting,seeNote1underFrequentFlyerProgram.
AnnualSaleofUnrestrictedSkyMiles.InDecember2011,weamendedourAmericanExpressagreementstoselltoAmericanExpress$675millionof
unrestrictedSkyMilesineachofthefouryearsendingDecember31,2014.TheDecember2011amendmentalsoextendedtheperiodoverwhichCardholders
couldchecktheirfirstbagforfreeonDeltaflights.TheSkyMilespurchasedpursuanttotheDecember2011amendmentcouldhavebeenusedimmediatelyby
AmericanExpress.TheusageoftheseSkyMileswasnotrestrictedinanyway.TheseannualpurchasesofSkyMileswererecordedasdeferredrevenuewithin
currentliabilities.TheportionofeachpurchaseofSkyMilesrelatedtomileagecreditsredeemableforfuturetravelwasclassifiedwithinfrequentflyerdeferred
revenueandtheportionrelatedtothemarketingcomponentwasclassifiedwithinotheraccruedliabilities.TheDecember2011amendmentdidnotchangethe
numberofmilesthatweexpectedAmericanExpresstopurchasefromusoverthefour-yearperiod;itonlyimpactedthetimingofthosepurchases.
FuelCardObligation.WehaveapurchasingcardwithAmericanExpressforthepurposeofbuyingjetfuelandcrudeoil.Thecardcurrentlycarriesa
maximumcreditlimitof$612millionandmustbepaidmonthly.AtDecember31,2015andDecember31,2014,wehad$221millionand$561million,
respectively,outstandingonthispurchasingcard,whichwasclassifiedasafuelcardobligationwithinotheraccruedliabilities.
NOTE9.EMPLOYEEBENEFITPLANS
Wesponsordefinedbenefitanddefinedcontributionpensionplans,healthcareplansanddisabilityandsurvivorshipplansforeligibleemployeesandretirees
andtheireligiblefamilymembers.
DefinedBenefitPensionPlans.Wesponsordefinedbenefitpensionplansforeligibleemployeesandretirees.Theseplansareclosedtonewentrantsandfrozen
forfuturebenefitaccruals.ThePensionProtectionActof2006allowscommercialairlinestoelectalternativefundingrules(“AlternativeFundingRules”)for
definedbenefitplansthatarefrozen.DeltaelectedtheAlternativeFundingRulesunderwhichtheunfundedliabilityforafrozendefinedbenefitplanmaybe
amortizedoverafixed17-yearperiodandiscalculatedusingan8.85%discountrate.Weestimateourfundingundertheseplanswilltotalatleast$1.0billionin
2016,including$500millionofcontributionsabovetheminimumfundingrequirements.
DefinedContributionPensionPlans.Deltasponsorsseveraldefinedcontributionplans.Theseplansgenerallycoverdifferentemployeegroupsandemployer
contributionsvarybyplan.ThecostassociatedwithourdefinedcontributionpensionplansisshownintheNetPeriodicCosttablebelow.
PostretirementHealthcarePlans.Wesponsorhealthcareplansthatprovidebenefitstoeligibleretireesandtheirdependentswhoareunderage65.Wehave
generallyeliminatedcompany-paidpostage65healthcarecoverage,exceptfor(1)subsidiesavailabletoalimitedgroupofretireesandtheirdependentsand(2)a
groupofretireeswhoretiredpriorto1987.Benefitsundertheseplansarefundedfromcurrentassetsandemployeecontributions.
PostemploymentPlans.Weprovidecertainotherwelfarebenefitstoeligibleformerorinactiveemployeesafteremploymentbutbeforeretirement,primarilyas
partofthedisabilityandsurvivorshipplans.Substantiallyallemployeesareeligibleforbenefitsundertheseplansintheeventofdeathand/ordisability.
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