Item
8.01 Other Events
We
sponsor pension plans for eligible employees and retirees. Our estimated funding
of these plans for 2005 is approximately $450 million. This includes
approximately $285 million for our qualified defined benefit pension plans. In
the March 2005 quarter, we contributed approximately $190 million to our
qualified defined benefit pension plans and approximately $30 million to our
other pension plans.
Estimates
of the amount and timing of our future funding obligations under our pension
plans are based on various assumptions. These include assumptions concerning,
among other things, the actual and projected market performance of the plan
assets, future long-term corporate bond yields, statutory requirements and
demographic data for pension plan participants, including the number of
participants, their salaries and the rate of participant attrition. The amount
and timing of our future funding obligations also depend on the level of early
retirements by pilots.
Assuming
current funding rules and the continuation of the interest rate relief provided
under the Pension Funding Equity Act of 2004, we currently estimate that our
funding obligations under our pension plans for 2006, 2007 and 2008 will be
approximately $600 million, $950 million, and $1.6 billion, respectively, of
which approximately $420 million, $780 million and $1.4 billion, respectively,
relates to our qualified defined benefit pension plans. These estimated funding
obligations can vary materially from actual funding obligations because the
estimates are based on various assumptions, including those described
above.
On April
20, 2005, the Employee Pension Preservation Act of 2005 (the “Pension
Preservation Act”) was introduced in the U.S. Senate. Under the Pension
Preservation Act, an airline can extend to 25 years the time during which
payments can be made of any unfunded liability existing under its qualified
defined benefit pension plans at the date of the airline’s election to comply
with the Pension Preservation Act. Such an extension of payments can occur under
the Pension Preservation Act only if an airline elects to either (1) freeze
its qualified defined benefit pension plans, or (2) immediately fund any
future benefit accruals under its qualified defined benefit pension plans. The
Pension Preservation Act also allows an airline making such an election to
calculate the liability under its qualified defined benefit plans using long
term funding assumptions rather than the short term assumptions otherwise
required under existing law. Assuming the Pension Preservation Act is enacted as
proposed, we believe that our total pension funding obligations for 2006 through
2008 will be substantially lower than our estimates above. While we support the
Pension Preservation Act, we cannot predict whether it, or any other pension
legislation, will be enacted.
For
additional information about our qualified defined benefit pension plans
and other pension plans, see Note 10 of the Notes to the Consolidated Financial
Statements in our Annual Report on Form 10-K for the fiscal year ended December
31, 2004.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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DELTA
AIR LINES, INC. |
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By: |
/s/ Michael J.
Palumbo |
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Date: May
4, 2005 |
Michael
J. Palumbo
Executive
Vice President and
Chief Financial Officer |