Delta Airlines 2002 Annual Report Download - page 159

obligation, which totaled $333 million at December 31, 2002. The remaining
portion of the additional minimum pension liability totaling $1.6 billion, net
of tax, was recorded in accumulated other comprehensive income (loss) on our
Consolidated Balance Sheets (see Note 14).
The ABO and the fair value of plan assets for the plans with an ABO in excess of
plan assets were $10.1 billion and $6.8 billion, respectively, as of September
30, 2002, and $303 million and zero, respectively, as of September 30, 2001.
DEFINED CONTRIBUTION PENSION PLANS
DELTA PILOTS MONEY PURCHASE PENSION PLAN (MPPP)
We contribute 5% of covered pay to the MPPP for each eligible Delta pilot. The
MPPP is related to the Delta Pilots Retirement Plan. The defined benefit pension
payable to a pilot is reduced by the actuarial equivalent of the accumulated
account balance in the MPPP. During the years ended December 31, 2002, 2001 and
2000, we recognized expense of $71 million, $69 million and $63 million,
respectively, for this plan.
DELTA FAMILY-CARE SAVINGS PLAN
Our Savings Plan includes an employee stock ownership plan (ESOP) feature.
Eligible employees may contribute a portion of their covered pay to the Savings
Plan.
Prior to July 1, 2001, we matched 50% of employee contributions with a maximum
employer contribution of 2% of a participant's covered pay for all participants.
Effective July 1, 2001, the Savings Plan was amended to provide all eligible
Delta pilots with an employer contribution of 3% of their covered pay to replace
their former matching contribution. We make our contributions for non-pilots and
pilots by allocating Series B ESOP Convertible Preferred Stock (ESOP Preferred
Stock), common stock or cash to the Savings Plan. Our contributions, which are
recorded as salaries and related costs in the accompanying Consolidated
Statements of Operations, totaled $85 million, $83 million and $69 million for
the years ended December 31, 2002, 2001 and 2000, respectively.
When we adopted the ESOP in 1989, we sold 6,944,450 shares of ESOP Preferred
Stock to the Savings Plan for $500 million. We have recorded unearned
compensation equal to the value of the shares of preferred stock not yet
allocated to participants' accounts. We reduce the unearned compensation as
shares of preferred stock are allocated to participants' accounts. Dividends on
unallocated shares of preferred stock are used for debt service on the Savings
Plan's ESOP Notes and are not considered dividends for financial reporting
purposes. Dividends on allocated shares of preferred stock are credited to
participants' accounts and are considered dividends for financial reporting
purposes. Only allocated shares of preferred stock are considered outstanding
when we compute diluted earnings per share. At December 31, 2002, 3,666,639
shares of ESOP Preferred Stock were allocated to participants' accounts and
2,398,850 shares were held by the ESOP for future allocations.
OTHER PLANS
ASA, Comair and DAL Global Services, Inc., three of our wholly owned
subsidiaries, sponsor defined contribution retirement plans for eligible
employees. These plans did not have a material impact on our Consolidated
Financial Statements in 2002, 2001 and 2000.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Our medical plans provide medical and dental benefits to substantially all Delta
retirees and their eligible dependents. Benefits are funded from our general
assets on a current basis. Plan benefits are subject to copayments, deductibles
and other limits as described in the plans.
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