Delta Airlines 2004 Annual Report Download - page 102

Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
contributions, which are recorded as salaries and related costs in our Consolidated Statements of Operations, totaled $85 million, $81 million, and $85 million
for the years ended December 31, 2004, 2003 and 2002, 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 ESOP Preferred Stock not yet allocated to participants' accounts. We reduce the unearned compensation as
shares of ESOP Preferred Stock are allocated to participants' accounts. Dividends on unallocated shares of ESOP 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 ESOP Preferred Stock are
credited to participants' accounts and are considered dividends for financial reporting purposes. Only allocated shares of ESOP Preferred Stock are considered
outstanding when we compute diluted earnings per share. At December 31, 2004, 3,839,951 shares of ESOP Preferred Stock were allocated to participants'
accounts, and 1,577,784 shares were held by the ESOP for future allocations. See Note 11 for information about changes to our ESOP Preferred Stock
dividend and redemption policies.
Pilot Defined Contribution Plan
We have established a new defined contribution plan for Delta pilots effective January 1, 2005. Eligible pilots will receive a contribution ranging from 0%
to 19.2% of covered pay. The amount we will contribute for each pilot is based on the pilot's age and years of service on January 1, 2005. Pilots hired on or
after January 1, 2005 will receive a contribution of 10% of covered pay.
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 2004, 2003 and 2002.
Postemployment Benefits
We provide certain other welfare benefits to eligible former or inactive employees after employment but before retirement, primarily as part of the
disability and survivorship plans.
Postemployment benefit expense was $105 million, $131 million and $62 million for the years ended December 31, 2004, 2003 and 2002, respectively.
We include the amount funded in excess of the liability in other noncurrent assets on our Consolidated Balance Sheets. Future period expenses will vary based
on actual claims experience and the return on plan assets. Gains and losses occur because actual experience differs from assumed experience. Gains and losses
and prior service costs related to our disability and survivorship plans are amortized over the average future service period of employees covered by these
plans.
Note 11. Common and Preferred Stock
Stock Option and Other Stock-Based Award Plans
To more closely align the interests of directors, officers and other employees with the interests of our shareowners, we maintain certain plans which
provide for the issuance of common stock in connection with the exercise of stock options and for other stock-based awards. Stock options awarded under
these plans (1) have an exercise price equal to the fair value of the common stock on the grant date; (2) become exercisable one to five years after the grant
date; and (3) expire up to 10 years after the grant date. F-45