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:
Comair Savings and Investment Plan
Comair Holdings, Inc.
Cincinnati/Northern Kentucky International Airport
Cincinnati, Ohio 45275
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
COMAIR SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT 1
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 2002 3
Notes to Financial Statements 4
Schedule I--Assets Held for Investment (Schedule H, Part IV, Line 4i of Form 5500)
As of December 31, 2002 8
Supplemental schedules required by the Rules and Regulations of the Department
of Labor, other than those listed above, are not presented because of the
absence of conditions under which they are required.
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' REPORT
Plan Administrator
Comair Savings and Investment Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Comair Savings and Investment Plan (the "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 audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the 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, such financial statements 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 net assets available for benefits for the year
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets Held
for Investment Purposes as of December 31, 2002 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audit of the basic 2002
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ Deloitte & Touche LLP
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May 30, 2003
COMAIR SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
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2002 2001
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ASSETS:
Investments:
Collective fund $ 33,077,716 $ 30,847,887
Mutual funds 58,769,630 69,705,703
Participant loan fund 4,831,635 4,422,677
Corporate stock, common 9,035,191 2,023,885
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Total investments 105,714,172 107,000,152
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Receivables:
Employer contributions 7,046,028 5,046,075
Pending investment transactions 50,596 108,152
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Total receivables 7,096,624 5,154,227
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Total assets 112,810,796 112,154,379
LIABILITIES:
Payables - Pending investment transactions (80,197) (146,185)
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 112,730,599 $ 112,008,194
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The accompanying notes are an integral part of these financial statements.
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COMAIR SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2002
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ADDITIONS:
Interest income 356,363
Dividend income 2,237,523
Contributions:
Participant 11,548,995
Employer, net of forfeitures 9,934,426
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Total additions 24,077,307
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DEDUCTIONS:
Realized and unrealized investment gain/(loss), net (18,786,100)
Distributions to participants (4,568,802)
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Total deductions (23,354,902)
NET INCREASE IN NET ASSETS DURING THE YEAR 722,405
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 112,008,194
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End of year $ 112,730,599
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The accompanying notes are an integral part of these financial statements.
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COMAIR SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
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1. PLAN DESCRIPTION
The following description of the Comair Savings and Investment Plan
(the "Plan") provides only general information. Participants should
refer to the Plan Agreement for a more complete description of the
Plan's provisions.
GENERAL--The Plan is a defined contribution plan covering all
employees meeting certain minimum age and service requirements; it is
subject to the provisions of the Employee Retirement Income Security
Act (ERISA), as amended.
CONTRIBUTIONS--Under the Plan, participating employees of Comair
Holdings, Inc. (the "Company") and certain of its wholly-owned
subsidiaries may defer up to 15% of their compensation, as defined in
the Plan. The Company makes a matching contribution equal to 50% of
each participant's before-tax contribution for the first 5% of the
compensation deferred by non-collective bargaining employees and
certain employees covered by collective bargaining agreements and 25%
of each participant's before-tax contribution for the first 10% of the
compensation deferred by certain employees represented by other
collective bargaining agreements until July of the 2002 Plan year. As
of July 2002, all eligible employees receive a Company match equal to
50% of each participant's before-tax contribution for the first 5% of
the compensation deferred by all employees. Eligible participants also
receive an annual retirement plan contribution into their Retirement
Plan Contribution Account based on vested years of service with the
Company and annual earnings, as defined by the Plan. Participants
direct the investment of both participant and Company contributions
into various investment options offered by the Plan. As of December 31,
2002 the Plan offered eleven mutual funds, an investment contract
collective fund and Delta Air Lines, Inc. common stock as investment
options for participants. Contributions are subject to certain
limitations.
PARTICIPANT ACCOUNTS--Each participant's account is credited with
the participant's contribution and allocations of (a) the Company's
contribution and (b) Plan earnings. Allocations are based on
participant earnings or actual balances as defined. The benefit to
which a participant is entitled is the benefit that can be provided
from the participant's vested account.
VESTING--Participants vest immediately in participant
contributions. Participants vest 100% in the Company matching
contributions after two years of service. Participants vest 100% in
their Retirement Plan Contribution Account after five years of service.
Participant forfeitures are used to reduce Company matching
contributions. Forfeitures were $43,512 in the year ended December 31,
2002.
PAYMENT OF BENEFITS--On termination of Service due to death,
disability, or retirement, a participant receives a lump sum amount
equal to the value of the participant's vested interest in his or her
account.
PARTICIPANT LOANS--The Plan provides for borrowing by participants,
subject to certain limitations, using their vested account balance as
collateral. The maximum loan amount available to an eligible
participant is the lesser of $50,000 or 50% of the vested and
nonforfeitable portion of the participant's account balance. Loans must
be repaid within five years except that any loan used to acquire a
dwelling must be repaid within fifteen years. Loans outstanding at
December 31, 2001 and December 31, 2002 bear a fixed rate of interest
of the prime rate plus one percent at the time of borrowing.
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ADMINISTRATIVE EXPENSES OF THE PLAN--Administrative expenses of the
Plan may be paid by the Plan. However, the Company paid all expenses
incurred during the year ended December 31, 2002, and, accordingly, the
accompanying statement of changes in net assets available for plan
benefits does not include such expenses.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING--The accompanying financial statements are
prepared on the accrual basis of accounting.
USE OF ESTIMATES--The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and changes
therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION--Investments in common
stock and mutual funds are stated at market value as determined by the
Trustee by reference to published market data or at fair value as
determined by the Trustee. The collective investment fund (see Note 3
below) is valued at the contract value of the underlying investment
contracts. Participant loans are valued at cost, which approximates
fair market value. Unrealized valuation gains and losses are reflected
currently in the statement of changes in net assets available for plan
benefits. Transfers of assets within the Plan are valued at market
value on the date of the transfer and may occur only as a result of
changes in the participant's designation.
BENEFITS--Benefits are recorded when paid.
3. INVESTMENTS
The Plan provides for investments in various securities and these
investment securities, in general, are exposed to various risks, such
as interest rate, credit and overall market volatility risks. Due to
the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially
affect the amounts reported in the statement of net assets available
for benefits.
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Investments which are greater than 5% of Plan Assets at December 31,
2002 and December 31, 2001 consist of the following:
DECEMBER 31, DECEMBER 31,
2002 2001
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Capital Preservation Fund, 33,060,208 and 30,806,073 shares,
respectively $ 33,060,208 $ 30,806,073
Janus Overseas Fund Inc., 508,509 and 572,816 shares,
respectively 7,775,105 11,628,168
Franklin Small Cap Growth Fund Inc., 379,323 and 400,383
shares, respectively 8,326,133 12,479,934
Dreyfus Laurel Funds Trust S&P 500 Index Fund Inc.,
603,083 and 568,924 shares, respectively 11,036,411 13,597,275
Dreyfus Appreciation Fund Inc., 397,687 and 362,634
shares, respectively 12,407,850 13,787,348
Dreyfus New Leaders Fund Inc., 310,162 and 319,264
shares, respectively 10,837,077 12,623,704
Delta Air Lines, Inc. Common Stock, 746,710 and 69,169
shares, respectively 9,035,191 2,023,885
During the year ended December 31, 2002, the Plan's investments
(including gains and losses on investments bought and sold, as well as
held during the year) depreciated in value by $18,786,100, as follows:
Common stock $ (4,607,178)
Mutual funds (14,182,963)
Common Collective Trust 4,041
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$(18,786,100)
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4. PARTY-IN INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the
Plan's trustee, Dreyfus Investment Services. The Plan also invests in
the common stock of Delta Air Lines, Inc. Delta Air Lines, Inc. is the
parent company of the Plan Sponsor. These transactions qualify as
party-in-interest transactions.
5. PLAN TERMINATION
The Company expects to continue the Plan indefinitely but it reserves
the right to amend or terminate the Plan at any time subject to the
provisions of ERISA. Should the Plan be terminated, all participants
will become 100% vested. No amendment shall retroactively reduce the
rights of participants or permit the return to the Company of any part
of the assets held by the Trustee, or permit their use or diversion for
any purpose other than the exclusive benefit of the participants or
their beneficiaries.
6. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated August 15, 2002, that the Plan as amended through August
7, 2002 and related Trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). Although the Plan has been
amended
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since receiving the determination letter, the Plan administrator
believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
7. PLAN AMENDMENT
During 2001, the Company amended the Retirement Plan Contribution
Account to include two additional vesting levels for employees who have
earned credit for reaching fifteen and twenty years of service,
respectively. The Company makes contributions to this account based on
the participant's years of service. At December 31, 2002 and 2001, the
Plan had a receivable of $7,046,028 and $5,046,075, respectively,
related to Company contributions to the Retirement Plan Contribution
Account.
Effective December 3, 2001, Delta Air Lines, Inc. common stock was
added to the Plan as an investment option for participants.
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SCHEDULE I
COMAIR SAVINGS AND INVESTMENT PLAN
ASSETS HELD FOR INVESTMENT (SCHEDULE H, PART IV, LINE 4i OF FORM 5500)
AS OF DECEMBER 31, 2002
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IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, CURRENT
LESSOR OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE VALUE
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COMMON/COLLECTIVE TRUST FUND:
LaSalle National Trust, N.A. Capital Preservation Fund $ 33,060,208
LaSalle National Trust, N.A. TBC Pooled Employee Funds - daily liquidity 17,508
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Total Common/Collective Trust Fund 33,077,716
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REGISTERED INVESTMENT COMPANIES:
*Dreyfus Dreyfus Short-Intermediate Government Fund Inc. 2,242,472
*Dreyfus Dreyfus Appreciation Fund Inc. 12,407,850
*Dreyfus Dreyfus New Leaders Fund Inc. 10,837,077
*Dreyfus Dreyfus Premier Balanced Fund Inc. 1,323,375
*Dreyfus Dreyfus Laurel Funds Trust S&P 500 Index Fund Inc. 11,036,411
PIMCO PIMCO Return Fund Inc. 3,550,280
Franklin Franklin Small Cap Growth Fund Inc. 8,326,133
Janus Janus Overseas Fund Inc. 7,775,105
Harris Oakmark Equity and Income Fund 721,155
Loomis Sayles Loomis Sayles Small Cap Value Fund 99,468
Lord Abbet Lord Abbet Mid Cap Value Fund 450,304
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Total Registered Investment Companies 58,769,630
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COMMON STOCK - CORPORATE -
*Delta Air Lines, Inc. Delta Air Lines, Inc. Common Stock 9,035,191
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PARTICIPANT LOANS -
*Participant Loans Interest at 5.25% to 10.5%, maturing January 2003 to January 2018 4,831,635
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$ 105,714,172
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*Party-in-interest transaction
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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.
COMAIR HOLDINGS, INC. SAVINGS AND INVESTMENT PLAN
/s/ Brian L. McDonald
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By: Brian L. McDonald
Plan Administrative Committee Number
Date: June 27, 2003
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EXHIBIT INDEX
EX-23 Consent of Independent Auditors Deloitte & Touche LLP
EX-99 Section 906 Certification
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