A Nov. 12 story,
"Delta Sees Charges on Retirements," incorrectly said
(DAL:NYSE) had offered an early-retirement package to its pilots. In fact, Delta has offered no such program; pilots are retiring at a high level in part because of ongoing labor negotiations at the airline.
regrets the error. (
Corrected Nov. 12
The corrected article appears below.
The prospect of retirement is proving very popular with
pilots as labor negotiations wear on, so much so that the company must book a $140 million charge to cover its cost in the fourth quarter.
The expense will swell Delta's expected loss in the quarter to $365 million to $415 million. It previously estimated the loss at $225 million to $275 million.
In addition, the company must record an additional $700 million noncash pension charge under an accounting standard known as SFAS 87, which covers pension plan minimums. While the charges will affect Delta's balance sheet, the carrier said, they won't impact operations.
Delta also said that it was suspending dividends on series B preferred stock, which is a part of the employee stock ownership plan. It will now pay out preferred ESOP stock in Delta shares instead of the $72, plus accrued and unpaid dividends, series B shareholders used to receive.
"To comply with Delaware law, Delta's board of directors changed the form of payment Delta will use to redeem shares of ESOP Preferred Stock when redemptions are required..." said the company, in a statement. "For the indefinite future, Delta will redeem the ESOP Preferred Stock with shares of Delta common stock rather than cash."