Case Study: Delta Air Lines 2003 Annual Report
The Sarbanes-Oxley Act of 2002, and the rules and regulations that have been subsequently issued by the Securities and Exchange Commission to implement it, have changed the way many public companies today are approaching the annual report. To reduce costs, adapt to accelerated filing deadlines and meet financial disclosure requirements, some companies are opting to produce 10-K wraps rather than traditional annuals.
Atlanta-based Delta Air Lines, like many other large airline carriers, continues to stay focused on cost-cutting measures in order to return the airline to profitability following 9/11. While trimming Delta's traditional annual report to a 10-K wrap seemed on the surface to be a logical step in reducing costs, the company also wanted to ensure that a wide range of stakeholders – from airline employees to analysts and portfolio managers – would continue to find the entire annual report highly readable and of value.
The year 2004 also marked Delta's 75th anniversary. The company realized that its 2003 annual report (which shipped in March 2004) represented an important opportunity to celebrate Delta's heritage and strengths. A 10-K wrap seemed like the wrong format to use for what should be a distinctive publication for Delta.
Our Solution: Produce a Summary Annual Report
see see eye recommended that Delta consider producing a summary annual report instead of a traditional annual or 10-K wrap. First introduced over 20 years ago as an alternate annual report format, summary annuals typically include a narrative section (CEO letter and top-line product and marketing information) followed by key financial statements – such as Statements of Operations, Balance Sheets and Cash Flows Statements.
The narrative section of the Delta 2003 annual begins with a "Delta Through the Decades" tribute, featuring archival photos and short stories about the airline's beginnings as a crop dusting operation and continuing on to its vital role today as a major international passenger airline with a route network that covers 47 states and 84 countries.
An executive team letter is followed by a look at Delta's corporate governance; safety, health and environment; and community affairs activities – areas where Delta continues to demonstrate impressive leadership within its industry.
A 10-K wrapped in a graphically coordinated cover was mailed along with the summary annual report. The end result? Significant cost savings, but not at the expense of providing a wide range of shareholders with complete information about Delta's past, present performance and future opportunities.
|
