Delta Airlines 2002 Annual Report Download - page 147

The adoption of SFAS 142 decreased our operating expenses on our Consolidated
Statements of Operations by approximately $60 million, net of tax, for the year
ended December 31, 2002, due to the discontinuance of amortization of goodwill
and indefinite-lived intangible assets. The following table reconciles our
reported net income (loss) and earnings (loss) per share to adjusted net income
(loss) and earnings (loss) per share as if the non-amortization provisions of
SFAS 142 had been applied to prior year periods:
For the Years Ended December 31,
--------------------------------------
(in millions, except per share data) 2002 2001 2000
------------------------------------ --------- --------- ---------
Net income (loss) before cumulative effect of change in accounting principle $ (1,272) $ (1,216) $ 928
Net income (loss) $ (1,272) $ (1,216) $ 828
--------- --------- -------
Add back: goodwill and international route amortization, net of tax -- 60 60
--------- --------- -------
Adjusted net income (loss) before cumulative effect of change in accounting principle $ (1,272) $ (1,156) $ 988
Adjusted net income (loss) $ (1,272) $ (1,156) $ 888
--------- --------- -------
BASIC EARNINGS PER SHARE:
Net income (loss) before cumulative effect of change in accounting principle $ (10.44) $ (9.99) $ 7.39
Net income (loss) $ (10.44) $ (9.99) $ 6.58
--------- --------- -------
Add back: goodwill and international route amortization, net of tax -- 0.49 0.49
--------- --------- -------
Adjusted net income (loss) before cumulative effect of change in accounting principle $ (10.44) $ (9.50) $ 7.88
Adjusted net income (loss) $ (10.44) $ (9.50) $ 7.07
--------- --------- -------
DILUTED EARNINGS PER SHARE:
Net income (loss) before cumulative effect of change in accounting principle $ (10.44) $ (9.99) $ 7.05
Net income (loss) $ (10.44) $ (9.99) $ 6.28
--------- --------- -------
Add back: goodwill and international route amortization, net of tax -- 0.49 0.46
--------- --------- -------
Adjusted net income (loss) before cumulative effect of change in accounting principle $ (10.44) $ (9.50) $ 7.51
Adjusted net income (loss) $ (10.44) $ (9.50) $ 6.74
--------- --------- -------
During the March 2002 quarter, we completed the required initial test of
potential impairment of indefinite-lived intangible assets, other than goodwill;
that test indicated no impairment at the date of adoption of SFAS 142. The
following table presents information about our intangible assets, other than
goodwill, at December 31, 2002 and 2001:
2002 2001
------------------------------- -------------------------------
GROSS CARRYING ACCUMULATED Gross Carrying Accumulated
(in millions) AMOUNT AMORTIZATION Amount Amortization
------------- -------------- ------------ -------------- ------------
Amortized intangible assets:
Leasehold and operating rights $ 125 $ (86) $ 113 $ (81)
Other 3 (1) 2 (1)
------ ------ ------ ------
Total $ 128 $ (87) $ 115 $ (82)
====== ====== ====== ======
NET CARRYING Net Carrying
AMOUNT Amount
------------ ------------
Unamortized intangible assets:
International routes $ 60 $ 60
Other 1 1
---- ----
Total $ 61 $ 61
==== ====
During the June 2002 quarter, we completed our transitional goodwill impairment
test, which indicated no impairment at the date of adoption of SFAS 142. At
December 31, 2002, we performed the required annual impairment test of our
goodwill and indefinite-lived intangible assets, which also indicated no
impairment.
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