Table of Contents Index to Financial Statements Cargo Delta Cargo is the largest cargo carrier among the U. S.  passenger airlines, based on revenue.
Through the strength of our global network, we are able to connect all of the world’s major freight gateways.
We generate cargo revenues in domestic and international markets primarily through the use of cargo space on regularly scheduled passenger aircraft.
Additionally, we have a limited, focused network of freighters that tie together the key freight markets in Asia and connect to three gateways in the U. S.  Delta Cargo is a member of SkyTeam Cargo, the world’s largest global airline cargo alliance.
The alliance, whose other members are Aeromexico Cargo, Air France Cargo, Alitalia Cargo, CSA Czech Airlines Cargo, KLM Cargo and Korean Air Cargo, offers a global network with over 16,000 daily flights spanning 6 continents.
This alliance offers cargo customers a consistent international product line, and the partners work to jointly improve their efficiency and effectiveness in the marketplace.
MRO Our maintenance, repair and overhaul (“MRO”) operations known as Delta TechOps is the largest airline MRO in North America with state-of-the-art facilities worldwide.
In addition to providing maintenance and engineering support for the combined Delta and NWA fleets of nearly 800 aircraft, Delta TechOps serves more than 125 aviation and airline customers from around the world.
Delta TechOps employs approximately 8,500 maintenance professionals and is one of the most experienced MRO providers in the world.
Among the key services we offer are: ?
Airframe Maintenance—aircraft overhaul for both widebody and narrowbody craft; ?
Component Maintenance—repair, overhaul, and test facilities for electromechanical components and avionics; ?
Engine Maintenance—full overhaul, repair, and support capabilities for engine parts and components; ?
Line Maintenance—a full range of ground services including deicing and aircraft parking; ?
Support Services—logistics, fleet engineering, engine leasing, and more; and ?
Technical Operations Training—technical training for a wide variety of aircraft types.
Fuel Our results of operations are significantly impacted by changes in the price and availability of aircraft fuel.
The following table shows our aircraft fuel consumption and costs for 2006 through 2008.
## Table 0 ##
(1) Includes Northwest operations for the period from October 30 to December 31, 2008.
(2) Includes the operations under contract carrier agreements with regional air carriers.
(3) Net of fuel hedge (losses) gains under our fuel hedging program of ($65) million, $51 million and ($108) million for 2008, 2007 and 2006, (4) Total operating expense for 2008 reflects a $7.3 billion non-cash charge from an impairment of goodwill and other intangible assets and $1.1 billion in primarily non-cash merger-related charges.
Including these charges, fuel costs accounted for 28% of total operating expense.
Our aircraft fuel purchase contracts do not provide material protection against price increases or assure the availability of our fuel supplies.
We purchase most of our aircraft fuel under contracts that establish the price based on various market indices.
We also purchase aircraft fuel on the spot market, from off-shore sources and under contracts that permit the refiners to set the price.
We use derivative instruments, which are comprised of crude oil, heating oil and jet fuel swap, collar and call option contracts, in an effort to manage our exposure to changes in aircraft fuel prices.
Table of Contents Index to Financial Statements Our purchase commitments (firm orders) for aircraft, as well as options to purchase additional aircraft, as of December 31, 2008 are shown in the following tables:
## Table 1 ##
(1) Includes 31 aircraft, which we have entered into definitive agreements to sell to third parties immediately following delivery of these aircraft to us by the manufacturer.
(2) Includes 2 aircraft orders we assigned to a regional air carrier.
(3) We have excluded from the table above our order of 18 B-787-8 aircraft.
The Boeing Company (“Boeing”) has informed us that Boeing will be unable to meet the contractual delivery schedule for these aircraft.
We are in discussions with Boeing regarding this situation.
## Table 2 ##
(1) Aircraft options have scheduled delivery slots, while rolling options replace options and are assigned delivery slots as options expire or are exercised.
Ground Facilities We lease most of the land and buildings that we occupy.
Delta’s largest aircraft maintenance base, various computer, cargo, flight kitchen and training facilities and most of its principal offices are located at or near the Atlanta Airport, on land leased from the City of Atlanta generally under long-term leases.
Delta owns a portion of its principal offices, its Atlanta reservations center and other real property in Atlanta.
NWA owns its primary offices, which are located near the Minneapolis/St.
Paul International Airport, including its corporate offices located on a 160-acre site east of the airport.
Other NWA owned facilities include reservations centers in Baltimore, Maryland, Tampa, Florida, Minot, North Dakota and Chisholm, Minnesota, and a data processing center in Eagan, Minnesota.
NWA also owns property in Tokyo, including a 1.3-acre site in downtown Tokyo and a 33-acre land parcel, 512-room hotel and flight kitchen located near Tokyo’s Narita International Airport.
We lease ticket counter and other terminal space, operating areas and air cargo facilities in most of the airports that we serve.
At most airports, we have entered into use agreements which provide for the non-exclusive use of runways, taxiways, and other improvements and facilities; landing fees under these agreements normally are based on the number of landings and weight of aircraft.
These leases and use agreements generally run for
The Company entered into agreements with various governmental entities in the states of Kentucky, Georgia and Tennessee to implement tax abatement plans related to its distribution center in Franklin, Kentucky (Simpson County), its distribution center in Macon, Georgia (Bibb County), and its Store Support Center in Brentwood, Tennessee (Williamson County).
The tax abatement plans provide for reduction of real property taxes for specified time frames by legally transferring title to its real property in exchange for industrial revenue bonds.
This property was then leased back to the Company.
No cash was exchanged.
The lease payments are equal to the amount of the payments on the bonds.
The tax abatement period extends through the term of the lease, which coincides with the maturity date of the bonds.
At any time, the Company has the option to purchase the real property by paying off the bonds, plus $1.
The terms and amounts authorized and drawn under each industrial revenue bond agreement are outlined as follows, as of December 30, 2017:
## Table 3 ##
Due to the form of these transactions, the Company has not recorded the bonds or the lease obligation associated with the sale lease-back transaction.
The original cost of the Company’s property and equipment is recorded on the balance sheet and is being depreciated over its estimated useful life.
Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to five years.
Computer software consists of software developed for internal use and third-party software purchased for internal use.
A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software’s functionality or extends its useful life.
These costs are included in computer software and hardware in the accompanying Consolidated Balance Sheets.
Certain software costs not meeting the criteria for capitalization are expensed as incurred.
Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those that are under-performing.
The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes.
Store closing costs were not significant to the results of operations for any of the fiscal years presented.
Leases Assets under capital leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter, and the related charge to operations is included in depreciation expense in the Consolidated Statements of Income.
Certain operating leases include rent increases during the lease term.
For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the expense charged to operations and amounts paid as a deferred rent liability.
The Company occasionally receives reimbursements from landlords to be used towards improving the related store to be leased.
Leasehold improvements are recorded at their gross costs, including items reimbursed by landlords.
Related reimbursements are deferred and amortized on a straight-line basis as a reduction of rent expense over the applicable lease term.
Note 2 - Share-Based Compensation: Share-based compensation includes stock option and restricted stock unit awards and certain transactions under the Company’s ESPP.
Share-based compensation expense is recognized based on the grant date fair value of all stock option and restricted stock unit awards plus a discount on shares purchased by employees as a part of the ESPP.
The discount under the ESPPrepresents the difference between the purchase date market value and the employee’s purchase price.

<table><tr><td> Year</td><td> Gallons Consumed<sup>-2 </sup>(Millions)</td><td> Cost<sup>-2 (3) </sup>(Millions)</td><td> Average Price Per Gallon<sup>-2 (3)</sup></td><td> Percentage of Total Operating Expense<sup>-2</sup></td><td></td></tr><tr><td>2008<sup>-1</sup></td><td>2,740</td><td>$8,686</td><td>$3.16</td><td>38<sup></sup></td><td>%<sup>-4</sup></td></tr><tr><td>2007</td><td>2,534</td><td>5,676</td><td>2.24</td><td>31%</td><td></td></tr><tr><td>2006</td><td>2,480</td><td>5,250</td><td>2.12</td><td>30%</td><td></td></tr></table>
<table><tr><td></td><td colspan="6"> Delivery in Calendar Years Ending</td><td></td></tr><tr><td> Aircraft on Firm Order<sup>-3</sup></td><td> 2009</td><td> 2010</td><td> 2011</td><td> 2012</td><td> After 2012</td><td> Total</td><td></td></tr><tr><td>B-737-700</td><td>5</td><td>—</td><td>—</td><td>—</td><td>—</td><td>5</td><td></td></tr><tr><td>B-737-800</td><td>11</td><td>21</td><td>1</td><td>—</td><td>—</td><td>33<sup></sup></td><td><sup>-1</sup></td></tr><tr><td>B-777-200LR</td><td>6</td><td>2</td><td>—</td><td>—</td><td>—</td><td>8</td><td></td></tr><tr><td>A319-100</td><td>—</td><td>—</td><td>—</td><td>—</td><td>5</td><td>5</td><td></td></tr><tr><td>A320-200</td><td>—</td><td>—</td><td>—</td><td>2</td><td>—</td><td>2</td><td></td></tr><tr><td>CRJ-900</td><td>10</td><td>—</td><td>—</td><td>—</td><td>—</td><td>10<sup></sup></td><td><sup>-2</sup></td></tr><tr><td>Total</td><td>32</td><td>23</td><td>1</td><td>2</td><td>5</td><td>63</td><td></td></tr></table>
<table><tr><td></td><td colspan="7"> Delivery in Calendar Years Ending</td></tr><tr><td> Aircraft on Option<sup>-1</sup></td><td> 2010</td><td> 2011</td><td> 2012</td><td> 2013</td><td> After 2013</td><td> Total</td><td> Rolling Options</td></tr><tr><td>B-737-800</td><td>10</td><td>24</td><td>22</td><td>4</td><td>—</td><td>60</td><td>116</td></tr><tr><td>B-767-300ER</td><td>1</td><td>—</td><td>—</td><td>1</td><td>4</td><td>6</td><td>—</td></tr><tr><td>B-767-400</td><td>1</td><td>1</td><td>1</td><td>2</td><td>7</td><td>12</td><td>—</td></tr><tr><td>B-777-200LR</td><td>2</td><td>6</td><td>6</td><td>4</td><td>9</td><td>27</td><td>10</td></tr><tr><td>B-787-8</td><td>—</td><td>—</td><td>—</td><td>6</td><td>12</td><td>18</td><td>18</td></tr><tr><td>CRJ-200</td><td>4</td><td>—</td><td>—</td><td>—</td><td>—</td><td>4</td><td>—</td></tr><tr><td>CRJ-700</td><td>5</td><td>—</td><td>—</td><td>—</td><td>—</td><td>5</td><td>—</td></tr><tr><td>CRJ-900</td><td>25</td><td>1</td><td>—</td><td>—</td><td>—</td><td>26</td><td>—</td></tr><tr><td>EMB 175</td><td>4</td><td>18</td><td>14</td><td>—</td><td>—</td><td>36</td><td>64</td></tr><tr><td>Total</td><td>52</td><td>50</td><td>43</td><td>17</td><td>32</td><td>194</td><td>208</td></tr></table>
<table><tr><td></td><td>Bond Term</td><td>Bond Authorized Amount(in millions)</td><td>Amount Drawn(in millions)</td></tr><tr><td>Franklin, Kentucky Distribution Center</td><td>30 years</td><td>$54.0</td><td>$51.8</td></tr><tr><td>Macon, Georgia Distribution Center</td><td>15 years</td><td>$58.0</td><td>$49.9</td></tr><tr><td>Brentwood, Tennessee Store Support Center</td><td>10 years</td><td>$78.0</td><td>$75.3</td></tr></table>

Question: In which section the sum of Aircraft on Firm Order has the highest value?
Answer: B-737-800