Delta Airlines 2003 Annual Report Download - page 126

Table of Contents
• Other
We recorded (1) a $23 million gain related to the adjustment of certain prior year restructuring reserves based on revised estimates of remaining costs;
(2) a $14 million charge associated with our decision to close certain leased facilities; and (3) a $3 million charge related to other items (see Note 16).
2001
In 2001, we recorded charges totaling $1.1 billion ($695 million net of tax, or $5.63 diluted earnings per share) in restructuring, asset writedowns, pension
settlements and related items, net on our Consolidated Statement of Operations, as follows:
• Workforce Reductions
We recorded a $566 million charge relating to our decision in 2001 to reduce staffing across all workgroups due to the capacity reductions we
implemented as a result of the September 11 terrorist attacks. We offered eligible employees several programs, including voluntary severance, leaves of
absence and early retirement. Approximately 10,000 employees elected to participate in one of the voluntary programs. Involuntary reductions were
expected to affect up to approximately 1,700 employees — up to 1,400 pilots and 300 employees from other workgroups.
The total charge includes $475 million for costs associated with the early retirement and certain voluntary leave of absence programs which are
recorded as special termination benefits under our pension and postretirement medical benefit obligations (see Note 11). The remaining $91 million
relates to severance and related costs.
• Fleet Changes
As a result of the effects of the September 11 terrorist attacks on our business and the related decline in aircraft values, we recorded $286 million in
asset writedowns. These writedowns include (1) the impairment of 16 MD-90 and eight MD-11 owned aircraft, which reflects further reductions in the
estimated future cash flows and fair values of these aircraft since our impairment review in 1999, as well as a revised schedule for retiring these aircraft;
(2) charges related to the accelerated retirement of 40 owned B-727 aircraft by 2003; and (3) the writedown to fair value of 18 owned L-1011 aircraft.
These charges are summarized in the table below:
Used in Operations (2) Held for Sale
(dollars in millions) Writedown(1) No. of Aircraft Writedown No. of Aircraft Total
MD-90 $ 98 16 $ — — $ 98
MD-11 93 8 — — 93
B-727-200 81 36 2 4 83
L-1011 — — 12 18 12
Total $ 272 $ 14 $ 286
(1)
The fair value of aircraft used in operations was determined using third party appraisals.
(2)
Reflects the classification of these aircraft at the time of the 2001 impairment analysis, which may differ from the classification at December 31, 2003.
The net book value of the aircraft held for sale is included in other noncurrent assets on our Consolidated Balance Sheet at December 31, 2001, and is
not material. F-55