DEFINED BENEFIT RETIREMENT PLAN

12 Months Ended

Dec. 29, 2012

DEFINED BENEFIT RETIREMENT PLAN

DEFINED BENEFIT RETIREMENT PLAN

(16) DEFINED BENEFIT RETIREMENT PLAN

        Delta provides defined benefit retirement income to eligible employees in the United Kingdom and is the plan sponsor. Pension retirement benefits to qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. This Plan has no active employees as members at December 29, 2012.

Funded Status

        The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases (if applicable) and inflation. Plan assets are measured at fair value. Because the pension plan is denominated in British pounds sterling, the Company used exchange rates of $1.5425/£ and $1.6121/£ to translate the net pension liability into U.S. dollars at December 31, 2011 and December 29, 2012, respectively.

        Projected Benefit Obligation and Fair Value of Plan Assets—The accumulated benefit obligation (ABO) is the present value of benefits earned to date, assuming no future compensation growth. As there are no active employees in the plan, the ABO is equal to the PBO. The underfunded ABO represents the difference between the PBO and the fair value of plan assets. Changes in the PBO and fair value of plan assets for the pension plan for the period from December 25, 2010 to December 31, 2011 were as follows:

	Projected Benefit Obligation			Plan Assets			Funded status
Fair value at December 25, 2010	$	463,807		$	359,636		$	(104,171	)
Employer contributions		—			11,860
Interest cost		25,643			—
Actual return on plan assets		—			67,474
Benefits paid		(11,539	)		(11,539	)
Actuarial loss		16,187			—
Currency translation		(1,579	)		(2,936	)
Fair Value at December 31, 2011	$	492,519		$	424,495		$	(68,024	)

        Changes in the PBO and fair value of plan assets for the pension plan for the period from December 31, 2011 to December 29, 2012 were as follows:

	Projected Benefit Obligation			Plan Assets			Funded status
Fair Value at December 31, 2011	$	492,519		$	424,495		$	(68,024	)
Employer contributions		—			11,591
Interest cost		23,445			—
Actual return on plan assets		—			41,345
Benefits paid		(11,722	)		(11,722	)
Actuarial loss		69,859			—
Currency translation		23,666			20,015
Fair Value at December 29, 2012	$	597,767		$	485,724		$	(112,043	)

        Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 29, 2012 and December 31, 2011 consisted of actuarial gains (losses):

Balance December 25, 2010	$	28,952
Actuarial gain		31,093
Currency translation loss		(31	)
Balance December 31, 2011		60,014
Actuarial loss		(48,524	)
Currency translation gain		1,127
Balance December 29, 2012	$	12,617

        The estimated amount to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2013 is $0.

        Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at December 29, 2012 and December 31, 2011 were as follows:

Percentages	2012			2011
Discount rate		4.60	%		4.80	%
Salary increase		N/A			N/A
Inflation		2.70	%		2.30	%

Expense

        Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to the fair value of plan assets. Differences in actual experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense.

        The components of the net periodic pension expense for the fiscal years ended December 31, 2011 and December 29, 2012 were as follows:

	2012			2011
Net Periodic Benefit Cost:
Interest cost		23,445			25,643
Expected return on plan assets		(19,168	)		(20,194	)
Net periodic benefit expense	$	4,277		$	5,449

        Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2012 and 2011:

Percentages	2012			2011
Discount rate		4.80	%		5.50	%
Expected return on plan assets		4.40	%		5.40	%
Salary increase		N/A			N/A
Inflation		3.20	%		3.50	%

        The discount rate is based on the yields of AA-rated corporate bonds with durational periods similar to that of the pension liabilities. The expected return on plan assets is based on our asset allocation mix and our historical return, taking into account current and expected market conditions. Inflation is based on expected changes in the consumer price index or the retail price index in the U.K. depending on the relevant plan provisions.

Cash Contributions

        The Company has not yet completed negotiations with Plan trustees on the future annual funding for the Plan, which should be completed by June 30, 2013. At this point, the estimated annual contributions into the Plan are $16,121 (£10,000) per annum as part of the Plan's recovery plan, along with a contribution to cover the administrative costs of the Plan of approximately $1,612 (£1,000) per annum.

Benefit Payments

        The following table details expected pension benefit payments for the years 2013 through 2022:

2013	$	12,413
2014		12,736
2015		13,058
2016		13,380
2017		13,703
Years 2018 - 2022		73,512

Asset Allocation Strategy

        The investment strategy for pension plan assets is to maintain a diversified portfolio mainly in long-term fixed-income securities that are investment grade or government-backed in nature. The plan, as required by U.K. law, has an independent trustee that sets investment policy and consults with representatives of the plan sponsor and independent advisors regularly on such matters.

        The pension plan investments are held in a trust. Most of the pension plan assets are invested in fixed income securities. The debt portfolio is also broadly diversified and invested primarily in U.K. Treasury and corporate securities. The weighted-average maturity of the debt portfolio was 12 years at December 29, 2012.

Fair Value Measurements

        The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

        Index-linked gilts—Index-linked gilts are U.K. government-backed securities consisting of bills, notes, bonds, and other fixed income securities issued directly by the U.K. Treasury or by government-sponsored enterprises.

        Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations.

        Corporate Stock—This investment category consists of common and preferred stock issued by U.K. and non-U.K. corporations.

        These assets are pooled investment funds whereby the underlying investments can be valued using quoted market prices. As the fair values of the pooled investment funds themselves are not publicly quoted, they are classified as Level 2 investments.

        At December 29, 2012 and December 31, 2011, the pension plan assets measured at fair value on a recurring basis were as follows:

December 29, 2012	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan net assets:
Temporary cash investments	$	—	$	12,091	$	—	$	12,091
Index-linked gilts		—		107,366		—		107,366
Corporate bonds		—		347,083		—		347,083
Corporate stock		—		19,184		—		19,184
Other investments		—		—		—		—
Total plan net assets at fair value	$	—	$	485,724	$	—	$	485,724

December 31, 2011	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan net assets:
Temporary cash investments	$	—	$	1,556	$	—	$	1,556
Index-linked gilts		—		97,422		—		97,422
Corporate bonds		—		309,206		—		309,206
Corporate stock		—		16,276		—		16,276
Other investments		—		35		—		35
Total plan net assets at fair value	$	—	$	424,495	$	—	$	424,495