The Retired Pilots Committee is aware that there are some retirees who had not enrolled in either 2006 or 2007 for Delta coverage (hereinafter the "non-enrollees"). Under the claims methodology agreed to by the Committee, the formula would set these claims at zero ($0). The formula works this way because non-enrollees were not (and are not) paying for Delta coverage and therefore suffer no actual damage as the result of the settlement. That is, the loss of Delta insurance coverage does not result in added cost to them. Neither Delta, nor the Committee can predict whether any non-enrollees will ever enroll in Delta coverage. It is reasonable to assume, however, that non-enrollees do not use Delta coverage now because they have better and/or cheaper alternative coverage available to them.

The fact that the non-enrollees do not have any current damage, and may never suffer any damage means that they have contingent and unliquidated claims. Our attorneys have informed the Committee that contingent claims are frequently assigned a value of $0 in bankruptcy cases. In the best case, these claims are sometimes settled for a very deeply discounted figure. Our legal advisors have also pointed out that, in many cases when contingent claims are fought out, the bankruptcy judge will assign them a value of zero. In our discussion of this matter, we were also advised by Delta that the Non-Pilot Group received $0 for their non-enrolled individuals.

Notwithstanding these issues, Committee counsel explored various options for handling this issue including (1) doing nothing and letting non-enrollees' claims to be set at $0; (2) leave all non-enrollees out of the settlement and allow them to file their own claims; and (3) negotiate some settlement amount for the contingent and unliquidated claims of non-enrollees. The Committee was aware that Delta had agreed to claim formula parameters that were acceptable to the Committee's actuaries (Milliman) for 2006 and 2007 enrollees (of which there are almost 8,000). Given this fact, the Committee did not want to jeopardize the entire settlement, which focused on those actually harmed, for a much smaller group that had not actually been harmed. We also wanted to preserve the rights of those individual non-enrollees who wanted to preserve an opportunity to object to any settlement obtained by the Committee. In short, the Committee supported this settlement approach because it is the settlement that does the most constituents the most good.

Ultimately, the Committee approved the following compromise with Delta. Non-enrollees would automatically receive a 'compromise claim' amount of $2,100. Under Delta's current Plan of Reorganization this places them in Class 5 with all other retirees. In addition, and as a result of the compromise, each non-enrollee would receive notice of his or her claim amount, an opportunity to vote on Delta's plan (which they would not receive if Delta valued their claim at $0). Under this agreement, non-enrollees, many of whom may never use Delta coverage, will receive a claim. Additionally, any non-enrollee that objects to the Settlement may file an objection and assert their reasons why the $2100 settlement is not a fair solution to the dilemma of the contingent and unliquidated claims. The procedure for filing an objection is contained in the Motion for approval of the Supplemental Term Sheet and objections are due February 9, 2007. We believe that this compromise fairly balances the objectives of all of the Committee's constituents, and affords non-enrollees with important benefits that they would not have otherwise obtained.