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, 2003
[ ] 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 Holdings, Inc. Savings and Investment Plan
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
Financial Statements as of December 31, 2003
and 2002, and for the Year Ended December 31,
2003, and Supplemental Schedule as of December
31, 2003, and Report of Independent Registered
Public Accounting Firm
COMAIR SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits as of
December 31, 2003 and 2002
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 2003
Notes to Financial Statements
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H, Part IV, Line 4i -- Schedule of Assets (Held at End
of Year) as of December 31, 2003
Note: All other schedules required by Section 2320.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2003 and 2002, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2003. 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 the standards of the Public Company
Accounting Oversight Board (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 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,
2003 and 2002, and the changes in net assets available for benefits for the year
ended December 31, 2003, 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
at End of Year) as of December 31, 2003 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 2003 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
June 28, 2004
COMAIR SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2003 AND 2002
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2003 2002
ASSETS:
Investments:
Collective fund $ 40,094,180 $ 33,077,716
Mutual funds 86,034,528 58,769,630
Participant loan fund 5,878,674 4,831,635
Corporate stock -- common 12,439,768 9,035,191
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Total investments 144,447,150 105,714,172
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Receivables:
Employer contributions 8,647,286 7,046,028
Pending investment transactions 71,678 50,596
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Total receivables 8,718,964 7,096,624
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Total assets 153,166,114 112,810,796
LIABILITIES:
Payables for securities purchased (169,928) (80,197)
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $152,996,186 $112,730,599
============ ============
See notes to financial statements.
COMAIR SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 2003
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ADDITIONS:
Investment income:
Net appreciation in fair value of investments $ 17,165,218
Interest income 338,245
Dividend income 2,524,029
Contributions:
Participant 13,380,712
Employer -- net of forfeitures 12,043,204
------------
Total additions 45,451,408
------------
DEDUCTIONS:
Distributions to participants (5,185,821)
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Total deductions (5,185,821)
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INCREASE IN NET ASSETS 40,265,587
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 112,730,599
------------
End of year $152,996,186
============
See notes to financial statements.
COMAIR SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
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1. PLAN DESCRIPTION
The following description of the Comair Savings and Investment Plan (the
"Plan") is provided for general information purposes only. Participants
should refer to the Plan Document for more complete information.
GENERAL -- The Plan is a defined contribution plan covering all employees
who have one year of service. Comair Holdings, Inc. (the "Company") (which
became a LLC on January 1, 2004 and was renamed Comair Holdings, LLC)
administers the Plan. Mellon Bank serves as the trustee of the Plan. The
Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended.
CONTRIBUTIONS -- Under the Plan, participating employees of 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 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. Contributions are subject to certain
limitations.
PARTICIPANT ACCOUNTS -- Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contribution, the Company's matching contribution, and allocations of
participant forfeitures and Plan earnings, and charged with withdrawals, as
applicable, and an allocation of Plan losses. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
INVESTMENTS -- Participants direct the investment of their contributions as
well as the Company contributions into various investment options offered by
the Plan. The Plan currently offers eleven mutual funds, an investment
contract collective fund and Delta Air Lines, Inc. common stock as
investment options for participants.
VESTING -- Participants are vested immediately in their contributions plus
actual earnings thereon. 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 $97,215 in the year ended December 31, 2003.
PARTICIPANT LOANS -- The Plan provides for borrowings 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 non-forfeitable 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, 2003 and 2002 bear a fixed
rate of interest at the prime rate plus one percent at the time of
borrowing.
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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING -- The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires Plan management to make estimates and assumptions that
affect the reported amounts of net assets available for benefits and changes
therein. Actual results could differ from those estimates. The Plan provides
for investment in various investment instruments, including mutual funds and
a common/collective trust fund. Investment securities, in general, are
exposed to various risks, such as interest rate, credit, and overall market
volatility. Due to the level of risk associated with certain investment
securities, including common stock of Delta Air Lines, Inc., 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 financial statements.
Delta reported a net loss of $773 million for the year ended December 31,
2003, and an unaudited net loss of $383 million for the March 2004 quarter.
In its Form 10-Q for the Quarter Ended March 31, 2004, Delta said that
continued losses of the magnitude experienced in 2003 and the March 2004
quarter are unsustainable over the long term, and that Delta has significant
obligations due in 2005 and thereafter. Delta further said that, if it
cannot achieve a competitive cost structure, regain sustained profitability
and access the capital markets on acceptable terms, it will need to pursue
alternative courses of action intended to make it viable for the long-term,
including the possibility of seeking to restructure its costs under Chapter
11 of the U.S. Bankruptcy Code.
INVESTMENT VALUATION AND INCOME RECOGNITION -- The Plan's investments are
stated at fair value except for the common/collective trust fund, which is
valued at the underlying investments fair or contract value (Note 3). Quoted
market prices are used to value investments. Shares of mutual funds are
valued at quoted market prices, which represent the net asset value of
shares held by the Plan at year end. Participant loans are valued at the
outstanding loan balances.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
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, 2003, and, accordingly, the accompanying
statement of changes in net assets available for plan benefits does not
include such expenses.
PAYMENT OF BENEFITS -- Benefit payments to participants are recorded upon
distribution.
3. INVESTMENTS
Investments which are greater than 5% of Plan Assets at December 31, 2003
and December 31, 2002 consist of the following:
2003 2002
---- ----
Capital Preservation Fund, 39,993,173 and 33,060,208
shares, respectively $39,993,173 $33,060,208
Janus Overseas Fund, 565,532 and 508,509 shares,
respectively 11,683,881 7,775,105
Franklin Small Cap Growth Fund, 452,129 and 379,323
shares, respectively 13,663,339 8,326,133
Dreyfus Laurel Funds S&P 500 Stock Index Fund,
740,033 and 603,083 shares, respectively 17,124,360 11,036,411
Dreyfus Appreciation Fund, 447,005 and 397,687
shares, respectively 16,601,777 12,407,850
Dreyfus Premier New Leaders Fund, 307,136 and
310,162 shares, respectively 12,872,053 10,837,077
Delta Air Lines, Inc. Common Stock, 1,053,325 and
746,710 shares, respectively 12,439,768 9,035,191
During the year ended December 31, 2003, the Plan's investments (including
gains and losses on investments bought and sold, as well as held during the
year) appreciated in value, as follows:
Common stock $ 313,998
Mutual funds 16,851,220
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$17,165,218
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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 Company. These transactions qualify as party-in-interest
transactions.
5. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions set forth in ERISA. In the
event that the Plan is terminated, participants would become 100% vested in
their account.
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 and related trust were designed
in accordance with the applicable regulations of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter; however, the Plan administrator believes that the
Plan is currently designed and operated in compliance with the applicable
requirements of the Internal Revenue Code and the Plan and related trust
continue to be tax-exempt. Therefore, no provision for income taxes has
been included in the Plan's financial statements.
7. SUBSEQUENT EVENT
On January 1, 2004, the Plan was amended to account for changes of the
legal names of the Company (see Note 1) and trustee. The Plan was also
amended to change certain distribution rules.
******
SUPPLEMENTAL SCHEDULE
COMAIR SAVINGS AND INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i --
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
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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 $ 39,993,173
LaSalle National Trust, N.A. TBC Pooled Employee Funds -- daily liquidity 101,007
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Total Common/Collective Trust Fund 40,094,180
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REGISTERED INVESTMENT COMPANIES:
*Dreyfus Dreyfus Laurel Funds S&P 500 Stock Index Fund 17,124,360
*Dreyfus Dreyfus Appreciation Fund 16,601,777
*Dreyfus Dreyfus Premier New Leaders Fund 12,872,053
*Dreyfus Dreyfus Short-Intermediate Government Fund 1,720,903
*Dreyfus Dreyfus Premier Balanced Fund 1,396,823
Franklin Franklin Small Cap Growth Fund 13,663,339
Harris Oakmark Equity and Income Fund 2,735,812
Janus Janus Overseas Fund 11,683,881
Loomis Sayles Loomis Sayles Small Cap Value Fund 1,498,675
Lord A bbet Lord A bbett M id-Cap Value Fund 1,959,443
PIM CO PIM CO Total Return Fund 4,777,462
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Total Registered Investment Companies 86,034,528
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COMMON STOCK - CORPORATE --
*Delta A ir Lines, Inc. Delta A ir Lines, Inc. Common Stock 12,439,768
PARTICIPANT LOANS --
*Participant Loans Interest at 5.25% to 10.5%, maturing January 2003
to January 2018 5,878,674
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$144,447,150
============
*Party-in-interest transaction
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
----------------------------------
By: Brian L. McDonald
Plan Administrator
Date: June 28, 2004
EXHIBIT INDEX
Exhibit 23 Consent of Deloitte & Touche LLP