Delta Airlines 2003 Annual Report Download - page 44

Table of Contents
Restructuring, asset writedowns, pension settlements and related items, net totaled $268 million in 2003 compared to $439 million in 2002. Our 2003
charge consists of (1) $212 million related to settlements under the pilots' defined benefit pension plans; (2) $43 million related to a net curtailment loss for
the cost of pension and postretirement obligations for participants under our 2002 workforce reduction programs; and (3) $41 million associated with the
planned sale of 11 B-737-800 aircraft. This charge was partially offset by a $28 million reduction to operating expenses from revised estimates of remaining
costs associated with our restructuring activities. Our 2002 charge consists of (1) $251 million in asset writedowns; (2) $127 million related to our 2002
workforce reduction programs; (3) $93 million for the temporary carrying cost of surplus pilots and grounded aircraft; (4) $30 million due to the deferred
delivery of certain Boeing aircraft; (5) $14 million for the closure of certain leased facilities; and (6) $3 million related to other items. This charge was
partially offset by (1) the reversal of a $56 million reserve for future lease payments related to nine B-737-300 leased aircraft as a result of a decision in 2002
to return these aircraft to service and (2) a $23 million adjustment of certain prior year restructuring reserves based on revised estimates of remaining costs.
For additional information on these restructuring, asset writedowns, pension settlements and related items, net, see Note 15 of the Notes to the Consolidated
Financial Statements.
Appropriations Act reimbursements totaled $398 million in 2003, representing reimbursements from the U.S. government to air carriers for certain
passenger and air carrier security fees paid to the Transportation Security Administration ("TSA"). We recorded these amounts as a reduction to operating
expenses in our Consolidated Statement of Operations. For additional information about the Appropriations Act, see Note 19 of the Notes to the Consolidated
Financial Statements.
Stabilization Act compensation totaled $34 million in 2002, representing amounts we recognized as compensation in the applicable period under the Air
Transportation Safety and System Stabilization Act ("Stabilization Act"). We recorded these amounts as a reduction to operating expenses in our Consolidated
Statement of Operations. For additional information about the Stabilization Act, see Note 19 of the Notes to the Consolidated Financial Statements.
Other operating expenses fell 14%, primarily reflecting a 9% decrease due to lower insurance rates under U.S. government-provided insurance policies and
lower volume-related insurance premiums due to decreased capacity and traffic, as well as a 3% decline due to lower communication and supplies expenses.
Operating Loss and Operating Margin. We incurred an operating loss of $786 million in 2003, compared to an operating loss of $1.3 billion in 2002.
Operating margin was (6%) and (10%) for 2003 and 2002, respectively.
Other Income (Expense). Other expense, net totaled $403 million during 2003, compared to other expense, net of $693 million in 2002. Included in these
results are the following:
• An $86 million increase in interest expense in 2003 compared to 2002 primarily due to higher levels of outstanding debt in 2003.
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