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Delta has contributed stock as an excess funding contribution to the Delta Retirement Plan and the Northwest Contract and Salaried pension plans, according to the airline's press release today.  This contribution is in addition to $825 million in cash that the company has already made towards pension plan funding this year.

The stock will boost the pension plan's overall funding level and provides an opportunity for its assets to grow as Delta's financial performance continues to improve.  For the year, Delta expects to contribute a total of $1.3 billion to the plans, well above the minimum required level of funding.

An independent fiduciary will make the decisions on how to manage the stock investment, such as whether to sell some or all of the shares or to hold onto them. The pension plans have total assets of about $10 billion.

Delta’s shares have steadily risen in value over the past five years.  Since 2011, Delta’s stock price has increased by more than 260 percent.

To make the contribution, the airline issued 7.85 million shares from its treasury. Delta has entered into an accelerated agreement to repurchase $350 million in stock so that the pension contribution doesn’t increase the total number of outstanding shares. That agreement is part of Delta’s existing $5 billion share repurchase authorization, and is in addition to the company’s previous guidance of $425 million of share repurchases for the March quarter.

 

Forward Looking Statements

 Statements in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the impact of rebalancing our hedge portfolio, recording mark-to-market adjustments or posting collateral in connection with our fuel hedge contracts; the availability of aircraft fuel; the effects of terrorist attacks or geopolitical conflict; the possible effects of accidents involving our aircraft; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; interruptions or disruptions in service at one of our hub or gateway airports; disruptions or security breaches of our information technology infrastructure; our dependence on technology in our operations; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at Monroe’s Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain management and key employees; competitive conditions in the airline industry; the effects of extensive government regulation on our business; the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; and the effects of the rapid spread of contagious illnesses.  

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015.  Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of Feb. 17, 2016, and which we have no current intention to update.

 

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