-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, McNsS1nwtOnmduxhgKHy1aCvUPeqe0NwFAi9WZnJF4b1DgIrGrDBw3NUaM4nkOpZ c7yQMZJiLtT40LYP8s+ziw== 0000950144-03-008019.txt : 20030626 0000950144-03-008019.hdr.sgml : 20030626 20030626112817 ACCESSION NUMBER: 0000950144-03-008019 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030626 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA AIR LINES INC /DE/ CENTRAL INDEX KEY: 0000027904 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 580218548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05424 FILM NUMBER: 03757882 BUSINESS ADDRESS: STREET 1: HARTSFIELD ATLANTA INTL AIRPORT STREET 2: 1030 DELTA BLVD CITY: ATLANTA STATE: GA ZIP: 30354-1989 BUSINESS PHONE: 4047152600 MAIL ADDRESS: STREET 1: P.O. BOX 20706 STREET 2: DEPT 981 CITY: ATLANTA STATE: GA ZIP: 30320-6001 FORMER COMPANY: FORMER CONFORMED NAME: DELTA AIR CORP DATE OF NAME CHANGE: 19660908 11-K 1 g83497e11vk.txt DELTA AIR LINES, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended December 31, 2002 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period COMMISSION FILE NUMBER: 1-5424 A. Full title of the plan and address of the plan if different from that of the issuer named below: Atlantic Southeast Airlines, Inc. Investment Savings Plan Atlantic Southeast Airlines, Inc. 100 Hartsfield Centre Parkway, Suite 800 Atlanta, Georgia 30320 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Delta Air Lines, Inc. Hartsfield International Airport Atlanta, Georgia 30320 Atlantic Southeast Airlines, Inc. Investment Savings Plan Audited Financial Statements and Supplemental Schedule Year ended December 31, 2002 and as of December 31, 2001 CONTENTS Report of Independent Auditors...........................................................................1 Financial Statements Statements of Net Assets Available for Benefits..........................................................2 Statement of Changes in Net Assets Available for Benefits................................................3 Notes to Financial Statements............................................................................4 Supplemental Schedule Schedule of Assets (Held at End of Year).................................................................9
[LETTERHEAD OF ERNST & YOUNG] Report of Independent Auditors Plan Administrator Atlantic Southeast Airlines, Inc. Investment Savings Plan We have audited the accompanying statements of net assets available for benefits of Atlantic Southeast Airlines, Inc. Investment Savings Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002 is presented for the purposes of additional analysis and is not a required part of the financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for the Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP May 23, 2003 Atlanta, GA 1 Atlantic Southeast Airlines, Inc. Investment Savings Plan Statements of Net Assets Available for Benefits
DECEMBER 31 ---------------------------------- 2002 2001 ----------- ----------- ASSETS Investments, at fair value $51,480,220 $53,048,172 Contributions receivable: Employer 2,755,231 2,228,965 Participant 270,754 226,505 ----------- ----------- 3,025,985 2,455,470 ----------- ----------- Net assets available for benefits $54,506,205 $55,503,642 =========== ===========
See accompanying notes. 2 Atlantic Southeast Airlines, Inc. Investment Savings Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2002 Additions to net assets attributed to: Contributions: Employer $ 2,755,231 Participant 8,599,943 ------------ 11,355,174 Investment income: Dividends 668,352 Interest 100,728 ------------ 769,080 ------------ Total 12,124,254 Deductions from net assets attributed to: Net depreciation in fair value of investments (11,337,971) Distributions to participants (1,205,946) Transfers to related plan (525,032) Administrative expenses (52,742) ------------ Total (13,121,691) ------------ Net decrease in net assets available for benefits (997,437) Net assets available for benefits: Beginning of year 55,503,642 ------------ End of year $ 54,506,205 ============
See accompanying notes. 3 Atlantic Southeast Airlines, Inc. Investment Savings Plan Notes to Financial Statements December 31, 2002 1. DESCRIPTION OF PLAN The following description of the Atlantic Southeast Airlines, Inc. Investment Savings Plan (the "Plan") provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all employees of Atlantic Southeast Airlines, Inc. (the "Company"). Employees become eligible to enroll on the enrollment date following the date of completion of ninety days of continuous employment. The enrollment dates for the Plan are January 1, April 1, July 1, or October 1 of each year. Employer matching contributions are awarded to employees who work at least 1,000 hours each year and have at least one year of service. Once the length of service provision is met, the employee is eligible for matching contributions for the following Plan year, which begins on January 1. Eligible employees must be employed on December 31 to receive a matching contribution for the Plan year. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Company uses Delta Air Lines, Inc. ("Delta") common stock as an investment option in the Plan. Atlantic Southeast Airlines, Inc. is a wholly-owned subsidiary of Delta. CONTRIBUTIONS Participants are able to contribute up to 25% of pretax annual compensation, as defined by the Plan. Participants may also make rollover contributions from other qualified defined benefit or defined contribution plans. The Company may, in its sole discretion, make matching contributions up to 6% of a participant's eligible compensation, as defined by the Plan. Based on years of service for participants, matching contributions range from 20% to 75%, regardless of the date of participation. 4 Atlantic Southeast Airlines, Inc. Investment Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) FORFEITURES Forfeitures of terminated participants' nonvested accounts are used to reduce future matching contributions of the Company. The Company used approximately $15,000 of forfeitures to reduce employer matching contributions during the year ended December 31, 2002. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of the Company's contributions and Plan investment results. The allocations are based on participant earnings or account balances, as defined. A quarterly recordkeeping fee is charged to each participant's account. VESTING All participant contributions and earnings thereon are 100% vested. Company contributions to participant accounts vest on a graded basis at 10% per year for two years of service, increasing to 20% per year thereafter until fully vesting after six years of service. PAYMENT OF BENEFITS Upon termination, participants may elect lump-sum distributions or periodic distributions over either a 5 or 10-year period. The full value of benefits are payable upon normal or postponed retirement, total or permanent disability or to beneficiaries upon death of the participant. PARTICIPANTS LOANS Participants may borrow a minimum of $1,000 up to a maximum of the lesser of $25,000 or 50% of their deferred account balances. Loan terms range from 1 - 5 years. Loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined at the time of the loan. 5 Atlantic Southeast Airlines, Inc. Investment Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) PLAN TERMINATION Under the provisions of the Plan, the Company reserves the right to amend or terminate the Plan at any time provided that amendments will not divert a vested interest or permit any part of the fund to revert to the Company or to be used for any purpose other than for the exclusive benefit of participants or their beneficiaries. If the Plan is terminated, each participant's account will become fully vested. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accounting records of the Plan are presented on the accrual basis. VALUATION OF INVESTMENTS Mutual funds and common stock are stated at fair value based on the quoted market prices. Participant loans are valued at their outstanding balance, which approximates fair value. ADMINISTRATIVE EXPENSES The Company paid certain administrative expenses of the Plan. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 6 Atlantic Southeast Airlines, Inc. Investment Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS During the year ended December 31, 2002, the Plan's investments (including investments purchased, sold, as well as held during the year) depreciated in fair value as determined by quoted market prices as follows: Net depreciation in fair value of investments: Delta Air Lines, Inc. Common Stock $ 2,555,049 Mutual Funds 8,782,922 ----------- $11,337,971 ===========
The fair value of individual investments that represent 5 percent or more of the Plan's net assets is as follows:
DECEMBER 31 ---------------------------------- 2002 2001 ----------- ----------- American Century Investments: Ultra Fund $16,208,190 $20,442,311 Premium Capital Reserve Fund 7,843,676 7,586,582 International Growth Fund 3,043,475 3,514,342 Equity Income Fund 5,551,856 4,717,855 Equity Index Fund 6,621,612 7,705,755 Value Fund 2,781,075 * Delta Air Lines, Inc Common Stock 4,467,902 *
* Less than 5%. 7 Atlantic Southeast Airlines, Inc. Investment Savings Plan Notes to Financial Statements (continued) 4. TRANSACTIONS WITH PARTIES-IN-INTEREST The Plan purchased 314,446 shares of Delta common stock with a fair value of $4,918,740 during the year ended December 31, 2002. The Plan sold 39,694 shares of Delta common stock for proceeds of $660,732, resulting in a loss of $323,531 during the year ended December 31, 2002. The Plan held 369,248 and 94,496 shares of Delta common stock with a fair value of $4,467,902 and $2,764,943 as of December 31, 2002 and 2001, respectively. Certain Plan investments are mutual funds managed by American Century. American Century is the Plan's recordkeeper and therefore, these transactions qualify as party-in-interest. 5. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated May 16, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt. 6. TRANSFERS TO RELATED PLAN Participants who terminate employment with the Company to begin employment for Delta are not permitted to take a distribution of their account balance, but may elect to sell their investments in the Plan and transfer the proceeds to the Delta Family-Care Savings Plan (the "Delta Plan"). In connections with such terminations, the Plan transferred approximately $525,000 to the Delta Plan during 2002. 8 Supplemental Schedule Atlantic Southeast Airlines, Inc. Investment Savings Plan EIN: 58-1354495 Plan No.: 001 Schedule H, Line 4i Schedule of Assets (Held at End of Year) December 31, 2002
(C) (B) DESCRIPTION OF INVESTMENT INCLUDING MATURITY (E) IDENTITY OF ISSUE, BORROWER, DATE, RATE OF INTEREST, COLLATERAL, CURRENT (A) LESSOR OR SIMILAR PARTY PAR, OR MATURITY VALUE VALUE - ---------------------------------------------------------------------------------------------------------------------- * American Century Investments Premium Capital Reserve Fund $ 7,843,676 * American Century Investments Short-Term Government Fund 2,147,018 * American Century Investments Balanced Fund 1,470,465 * American Century Investments Equity Index Fund 6,621,612 * American Century Investments Equity Income Fund 5,551,856 * American Century Investments International Growth Fund 3,043,475 * American Century Investments Ultra Fund 16,208,190 * American Century Investments Value Fund 2,781,075 * Delta Air Lines, Inc. Common Stock 4,467,902 * Chase Manhattan Bank Money Market Fund 9,908 * Participant Loans Interest rates from 7.45% to 9.1% Maturing through 2008 1,335,043 ----------- $51,480,220 ===========
* Indicates a party-in-interest to the Plan. Note: Column (d) cost information is not applicable for participant directed investments. 9 Exhibit Index EX-23 Consent of Ernst & Young LLP Ex-99 Section 906 Certification pursuant to 18 U.S.C. Section 1350 SIGNATURES THE PLAN Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ATLANTIC SOUTHEAST AIRLINES, INC. INVESTMENT PLAN /s/ Charles J. Thibaudeau ---------------------------- By: Charles J. Thibaudeau Plan Administrator Date: June 25, 2003 EX-23 3 g83497exv23.txt CONSENT OF ERNST & YOUNG LLP Exhibit 23 [LETTERHEAD OF ERNST & YOUNG] CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-46904) pertaining to the Atlantic Southeast Airlines, Inc. Investment Savings Plan of our report dated May 23, 2003, with respect to the financial statements and supplemental schedule of the Atlantic Southeast Airlines, Inc. Investment Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2002. /s/ Ernst & Young LLP Atlanta, Georgia June 25, 2003 EX-99 4 g83497exv99.txt SECTION 906 CERTIFICATION EXHIBIT 99 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of the Atlantic Southeast Airlines, Inc. Investment Savings Plan (the "Plan") on Form 11-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Charles J. Thibaudeau, Chairman of the Administrative Committee of the Plan, who performs the functions equivalent to a chief executive officer and chief financial officer of the Plan, hereby certifies, that, on the date hereof: (1) such Report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. Date: June 25, 2003 /s/ Charles J. Thibaudeau ----------------- ----------------------------------- Charles J. Thibaudeau Chairman, Administrative Committee Atlantic Southeast Airlines, Inc. Investment Savings Plan A signed original of this written statement required by Section 906 has been provided to the Savings Plan and will be retained by the Savings Plan and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----