and Hedging Activities.” The standard requires enhanced disclosures about (1) how and why an entity uses derivative instruments, (2) how derivative instruments and related hedged items are accounted for and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This standard is effective for interim and annual periods. We adopted this standard on January 1, 2009.



     In December 2007, the FASB issued “Business Combinations (revised 2007).” The standard provides guidance for recognizing and measuring goodwill acquired in a business combination and requires disclosure of information regarding the nature and financial effects of a business combination. It also revises the treatment of valuation allowance adjustments related to income tax benefits in existence prior to a business combination or prior to the adoption of fresh start reporting. Under the original standard, any reduction in the valuation allowance from the recognition of deferred tax assets is adjusted through goodwill, followed by other indefinite-lived intangible assets until the net carrying costs of these assets is zero. In contrast, this revised standard requires that any reduction in this valuation allowance be reflected through the income tax provision. This standard is effective for fiscal years beginning on January 1, 2009.

Supplemental Information

     Under GAAP, we do not include in our Consolidated Financial Statements the results of Northwest on or before the Closing Date. Accordingly, our financial results under GAAP for the year ended December 31, 2008, include the results of Northwest only for the period from October 30 to December 31, 2008. This impacts the comparability of our financial statements under GAAP for the years ended December 31, 2009 and 2008. Financial results on a combined basis for the year ended December 31, 2008 include the financial results for both Delta and Northwest beginning January 1, 2008. We believe presenting the 2008 financial information on a combined basis provides useful information for comparing our financial performance in 2009 and 2008.



     We present CASM excluding fuel expense and related taxes because management believes the volatility in fuel prices impacts the comparability of year-over-year financial performance. In addition, we exclude special items because management believes the exclusion of these items is helpful to investors to evaluate the company’s recurring operational performance.

     CASM and Combined CASM exclude ancillary businesses which are not associated with the generation of a seat mile. These businesses include aircraft maintenance and staffing services which we provide to third parties, our dedicated freighter operations and our vacation wholesale operationsю

Glossary of Defined Terms

      ASM —Available Seat Mile. A measure of capacity. ASMs equal the total number of seats available for transporting passengers during a reporting period multiplied by the total number of miles flown during that period.

      CASM —(Operating) Cost per Available Seat Mile. The amount of operating cost incurred per ASM during a