Delta Air Lines annual report 1969

Delta's 1969 Annual Report
has been produced in this
unconventional pocket-sized
edition for the convenience of
our stockholders. Although
small in size, the report
provides a concise and _
comprehensive review of 1969
financial and operational
results.
$3.00 -
2.50 -
2.00 -
1.50 -
1.00 -
.50 -
EARNINGS PER SHARE
RETURN ON INVESTMENT
Estimated Influence of Competitors'
Strike and Extraordinary Gain
on Disposition of Flight Equipment.
65
Highlights of the Year
- 50
- 30
- 20
10
67 69
A comparative summary of the major yardsticks
for evaluation of operations for years ended
June 30 is shown below. Dollars are expressed
in thousands, except per share figures.
Per Cent
1969 1968 Change
Operating
Revenues $516,113 $431,562 + 20%
Operating
Expenses $433,938 $363,140 + 19
Net Income $ 39,191 $ 36,134 + 8
Earnings Per
Share $2.05 $1.89 + 8
Revenue Passengers
Carried ..... 12,107,061 10,368,831 + 17
Available Seat
Miles (000) 14,768,892 11,972,737 + 23
Revenue Passenger
Miles (000) 8,249,085 7,116,095 + 16
Passenger Load
Factor 55.85% 59.44% - 6
2
REPORT TO THE STOCKHOLDERS
Fiscal 1969 was a most gratifying year for
Delta under generally difficult circumstances
for the airline industry. New highs recorded
include $516.1 million operating revenues,
8.25 billion revenue passenger miles, and
178.6 million cargo ton miles. Net earnings
of $39.2 million or $2.05 per share were 8%
above fiscal 1968 despite the full impact of
the 10% surtax and the accelerated inroads
of inflation on operating expenses.
Deliveries of additional Super DC-8 and
Super DC-9 aircraft, together with the pur-
chase of five standard DC-8 aircraft, per-
mitted a 30% expansion in jet capacity and
the virtual elimination of piston services at
year-end. The only piston services now re-
maining are to those few communities where
the expansion of airport facilities to accom-
modate DC-9 service will not be completed
until late 1969.
No substantial additions were made to the
long range equipment plans during the year.
Shortly after the close of the year, commit-
ments for the purchase of two standard DC-8
and one standard DC-9 aircraft were made
to cover requirements on new route awards.
The estimated future capital outlays for
flight equipment to be delivered through 197 5
totals $4 7 5 million. Financing will be pro-
vided from internally generated funds and
proceeds from the 1967 Bank Credit Agree-
ment which was amended during the year to
increase the total amount available from
$17 5 million to $220 million.
Further details of the year's operating
results and other significant data are con-
tained in the following sections.
800/o----------------,-------.
70 -
60
50
40
30
61
ACTUAL AND BREAK-EVIN, LOAD PACTOR
Estimated Influence of
Competitors' Strike
63 65 67 69
3
600/o- - ~ ~ - - ~ ~ ~ - - - - - - - - - -----,, 8.00
PROPORTION OF PASSENGER MILES
AT DISCOUNT FARES
50 PASSENGER MILE YIELD
40 -
30 -
20 -
10 -
4
0 L
65
I
66
Revenues and Expenses
67
Operating revenues established a new high
of $516.1 million, an increase of 20% over
1968. Other new highs were in revenue
passenger miles of 8.25 billion, passenger
revenues of $4 70.0 million and in cargo ton
miles of 178.6 million, the latter up 31 %
over the previous year.
After seven successive years of decline,
the passenger mile yield was up 2% to 5.70.
This increase resulted from the fare rounding
effective February, 1968; from the fare
increase approved by the CAB effective
February 20, 1969, estimated to add 3.8%
to industry revenues; and from a continued
stabilizing of the proportion of discount fare
travel. On June 1, 1969, the Discover America
fares were revised to require a seven-day stay,
which should improve yield by lowering
the percentage of discount fare travel.
7.50
- 6.00
- 5.50
_J 5.00
69
6.00 - - - - - - - - - - - - ~ - - ~ - ~ ~ -
4.60 -
3.60
3.00
2.60
2.00
1.60
1.00
UNIT COST PER AVAILABLE SEAT MILE
61 63 65 67
Unfortunately, the favorable impact of
these increases has been effectively offset by
subsequent substantial increases in labor,
fuel, material and other operating costs.
Recent contract wage agreements reached by
several of the major trunk carriers provide
for annual wage and salary increases ap-
proaching 10% (not including significant
changes in fringe benefits) . Further fare and
rate relief must be provided to the industry
if it is to maintain its economic viability and
regain the confidence of the investing public
and lending institutions during a critical pe-
riod of unprecedented capital requirements.
Several carriers have recently approached
the CAB for fare increases, concerning which
Oral Argument was heard September 4, 1969.
Operating expenses increased 19 % over
1968 to a total of $433.9 million, including
69
5
6
a 43 % increase in flight equipment deprecia-
tion due to the major additions to the jet
fleet. Operating capacity was up 23 % and,
because of the substantial input of the more
efficient Super DC-8 and DC-9 aircraft, unit
costs were again down to new lows. Avail-
able ton mile costs were down 4 % and avail-
able seat mile costs declined 3 % despite
the effect of accelerated inflation on all areas
of operations. Fiscal 1970 unit costs will be
very heavily influenced by the success or
failure of current efforts to reduce inflation.
Earnings and Dividends
Net earnings were $39.2 million, or $2.05
per share, an 8 % increase over the $1.89 per
share earned in fiscal 1968. The current
year earnings included a fare increase be-
ginning in February and the full impact of
the 10% surtax, while 1968 earnings were
increased 11 per share by the overhaul
reserve adjustment recorded in that year and
included only partial effectiveness of the
surtax. Both years included 1 per share net
gain on the disposition of aircraft and other
property. Aggregate dividend payments
for the year were $7,650,000 or 40 per
share on the 19,125,000 shares outstanding.
This was the twentieth consecutive year of
cash dividend payments.
Flight Equipment
During the last fiscal year, Delta accepted
delivery of five Super DC-8's, twenty-seven
Super DC-9's, and five standard DC-8's. The
standard DC-8's were purchased from Pan
American Airways primarily for the opera-
tion of interchange flights to Europe, includ-
ing a new round-trip from the Southeast to
Paris beginning in February, 1969. In July,
1969, one standard DC-9 was purchased
upon expiration of a short-term lease and
purchase commitments for two additional
standard DC-8's were made to cover require-
ments for new route awards explained in
another section of this report.
The last outstanding options were exer-
cised during the year for 1970 delivery of
five Super DC-9's. The following table shows
the pattern of deliveries for all aircraft
currently on order:
Type Fleet
Deliveries in Fiscal Years
Fleet
of Total Total
Aircraft Seats 6/30/69 '70 '71 '72 '73 '74 '75 6/30 /75
DC-8 129 5 2 7
DC-8 135 21 21
DC-8 195 10 3 13
DC-9 68 15 15
DC-9 89 49 9 58
CV-880 96 16 16
B-747 375 3 2 5
L-1011 250 5 6 6 7 24
L-100-20 Cargo 3 3
- - -
119 14 3 7 6 6 7 162
7
8
The substantial additions of Super DC-9's
permitted the retirement of most of the re-
maining piston fleet. The DC-6 phase-out
was completed in September and the aircraft
sold. A minimum of CV-440's were operat-
ing at year-end and retirement should be
completed by the end of calendar 1969.
Facilities
The expansion and improvement of ground
facilities to meet the needs of normal growth
and to accommodate the Boeing 7 4 7 and
Lockheed L-1011 aircraft continued at an
accelerated pace during the year. New air-
ports were completed and occupied at
Jacksonville and Houston. New or expanded
airport projects are underway in Atlanta,
Chicago, Cincinnati, Dallas/Ft. Worth,
Detroit, Kansas City, Memphis, New Or-
leans, New York, Philadelphia, and Tampa.
Construction or final planning of necessary
modifications is progressing at all airports
now scheduled for B-7 4 7 and L-1011 service.
Numerous other new or expanded facilities
were completed, including a second level
concourse in Jackson, a new ticketing facility
at Dallas Love Field, and reservations offices
in Jacksonville and Jackson. Construction
should be completed by late 1969 on the
new Flight Training, Communications, Flight
Control and Reservations facilities located
on a 60-acre site at Greenbriar in Atlanta.
The Flight Training facility will house the
new DC-8 and DC-9 simulators to be in-
stalled in August and includes provisions for
an L-1011 simulator now on order for
delivery in August, 1971.
9
10
Capitalization and Financing
In April, 1969 Delta amended the 1967
Bank Credit Agreement to increase the total
funds available by $45 million to $220
million and to extend the revolving period
by one year through calendar 1970 and the
subsequent term loan through 197 5. The
additional amount was required to purchase
the five standard DC-S's and to meet certain
periodic peakings of cash requirements. A
total of $185 million had been borrowed as
of June 30, 1969.
Delta's current outstanding orders for
new jet aircraft will involve probable future
capital outlays in excess of $4 7 5 million. The
amended bank credit agreement together
with normal internal cash generation from
earnings, depreciation, and deferred taxes
are currently estimated to be adequate for
the projected capital requirements.
Stockholder equity at June 30, 1969 was
$226,515,000 or $11.84 per share on the
19,125,000 shares outstanding. This repre-
sents an increase of 16% over the $10.19
per share at June 30, 1968.
Personnel
Employees at year end totaled more than
18,700. Including the added employees, total
salaries and related employee benefit costs
increased 19. 6 % to $201 million, equal to
39 cents of each revenue dollar or the same
proportion as in fiscal 1968.
Consistent with Delta's commitment to
development and promotion from within the
company, twelve new Assistant Vice Presi-
dents were named during the year. These
were J. K. Burnette, Quality Control;
J. W. Callison, Law; J. D. Dunn, Purchasing;
A. C. Ford, Long Range Planning;
E. L. Hamner, Stations; D. P. Hettermann,
Engineering; W. L. Miller, Materiel Services;
J. F. Nycum, Flight Equipment Develop-
ment; Henry Ross, Advertising & Sales
Promotion; Frank F. Rox, Law; J. H. Turner,
Maintenance; and J. A. York, Employee
Services. The experience with Delta
of these gentlemen totals 2 7 8 years or an
average of more than 23 years each.
At the annual meeting of stockholders on
October 24, 1968, two new members, both
senior officers of the Company, were added to
the Board of Directors. David C. Garrett, Jr.,
Senior Vice President-Operations, is a
twenty-two year veteran with the Company
and was first elected a Company officer in
1963. Robert Oppenlander, Senior Vice
President-Finance and Treasurer, joined
Delta in 19 5 8 and was promoted to his pres-
ent position in 1967.
11
12
Regulatory Matters
The unusually large backlog of CAB route
proceedings at the beginning of the year had
expanded even more by year-end. Several
major decisions have been recently an-
nounced and, because of the importance of
these decisions and proceedings still pending
to Delta's future, each of these are reported
in a separate section of this report.
Outlook
In our 1968 report to you, we expressed
our belief that fiscal 1969 would reflect a
reasonable earnings growth "even in the
shadows of continuing inflationary pressures
and the full impact of the 10% surtax".
Our assessment of fiscal 1970 is much the
same. Added capacity will continue at a
high rate for the first half of the fiscal year
but will moderate in the last half as deliveries
of the DC-8 and DC-9 aircraft are com-
pleted. Barring a major economic downturn,
traffic growth should be comparable to
recent experience and the decline in load
factor should begin to level in the last half.
This decline will be offset by an expected
3 % increase in yield due to the February
fare increase. The additional fare increase
proposals by several carriers, if approved,
will provide additional leverage for the
coming year. Unit costs will tend to level
because of recent increases in wage rates and
the costs of fuel and materials. Even so,
some earnings growth is expected.
You can be particularly proud of the
unique record achieved by Delta during this
most difficult period for the industry. We
gratefully acknowledge your support and
that of each of our employees whose com-
bined efforts have made it all possible.
C.H. DOLSON, President
September 8, 1969
13
The Routes of Delta Air Lines
Originally a pioneer trunkline serving the
South, Delta's growth and development,
based on the highest standard of service and
dependability, have produced a route system
which plays an increasingly important
role in the Nation's transportation network.
The map below is a graphic representation
of the major traffic flow patterns of the
Legend
- East-West
- Midwest-Southeast
- Midwest-Gulf States
- Northeast-Gulf States
Delta system. Serving the industrial centers
of the East and Midwest, the principal
growth areas of the South and Southwest,
the dynamic West Coast and the
vacation spots in Florida and the Caribbean,
Delta is prepared for full participation
in the opportunities for further growth
and development.
14 15
16
Regulatory Matters
The unusually heavy activity in CAB route
cases continued during the fiscal year, hold-
ing both the promise of system expansion
and the prospect of additional competition.
In the Gulf States and Route 81 cases, the
Board granted Delta an alternative Chicago-
New Orleans route via Nash ville and
Birmingham, terminated the Company's
Hot Springs authority, and authorized
competition in several of the Company's
markets, including Chicago-Memphis,
Chicago-New Orleans, Memphis-New
Orleans, Houston-St. Louis and Memphis-
St. Louis.
Chicago-Nashville and Chicago-
Birmingham services were inaugurated
August 1, 1969, and Nashville-New Orleans
services were inaugurated September 8, 1969.
Delta also has an application on file for
Nash ville-Detroit authority ( not yet set down
for hearing) and, in another pending case, is
seeking Nashville-Atlanta rights.
Southern Tier Cases: In four separate but
overlapping cases involving the southern tier
of states, the Board granted Delta (a) Miami-
San Francisco, (b) Miami-Houston,
and (c) Dallas-Phoenix authority (with the
right to operate Phoenix-southeast services
via Dallas) . Competition was authorized in
a number of present Delta markets, including
Atlanta-Dallas and Atlanta-Los Angeles/ San
Francisco. These new authorities are slated to
become effective September 23, 1969, subject
to reconsideration by the CAB of its decision.
~ In the United States-Caribbean-South
America Case, Delta was granted nonstop
rights between California and the Caribbean
points it serves-San Juan, Caracas and
Montego Bay (plus Maracaibo, Venezuela
which currently cannot be served). Addi-
tional competition was authorized between
San Juan and Jamaica; New Orleans/
Houston and Caracas; and, on a one-stop
basis, California and Jamaica. Subsequently,
Delta filed a Chicago-Atlanta-} amaica ap-
plication, which has not yet been processed.
17
18
CHIC
---
ALEIGH/
URHAM
In the North Carolina Points Service Investi-
gation, the Board's Bureau of Operating
Rights recommended that Delta be granted
(a) authority between New York and both
Greensboro/High Point/Winston-Salem and
Raleigh/Durham (the two areas could also
be served across the southern tier of states
through Delta's Charlotte gateway) and
(b) authority between Miami and the North
Carolina cities ( including Charlotte) . Delta
seeks Chicago-North Carolina rights as well.
The Examiner's decision has not been issued.
In the Omaha/ Des Moines Case, the
Examiner has recommended grant to Delta
of Omaha-Kansas City, Omaha-Twin Cities,
and Omaha-St. Louis authority. The case
will undoubtedly be reviewed by the Board
later this year. In a case yet to be decided by
the trial examiner, the Board's Bureau of
Operating Rights has recommended the
grant to Delta of Columbia/ Augusta-
W ashington/ N ew York authority.
In the remaining portion of the Southern
Route Realignment Case, Delta is seeking
various new authorities, including nonstop
Memphis-Miami rights; a Nashville-Atlanta
segment ( which would integrate with the
new Chicago-Nashville authority); and
Charlotte-Columbia (S. C.) authority. This
proceeding also awaits final CAB decision.
In the Kansas City-Atlanta Nonstop Inves-
tigation, Delta was the first to utilize a new
expedited CAB procedure, seeking authority
to operate nonstop in the Kansas City-
Atlanta market where Delta now carries the
bulk of the traffic ( via Memphis). The other
restricted carrier is also seeking nonstop rights,
and a hearing will be necessary but the case is
expected to move forward rapidly during 1969.
Delta's applications in the Transpacific
Route Investigation and in the Miami-
London Case were denied by the CAB.
The CAB also did not grant Delta's appli-
cations in the Reopened Pacific Northwest-
Southwest, the Twin Cities-California, or the
Bermuda Service Investigation cases.
In other pending cases, Delta also seeks
nonstop St. Louis-Minneapolis/St. Paul
authority; a route between Minneapolis/St. Paul
and Milwaukee, in the North, and southeastern
points; and authority between Seattle/
Portland and California points. The
East Coast Points-Europe Case remains
in preliminary stages.
The CAB has started a number of other
route cases in which Delta will be active
( including one to examine the Cleveland-
Atlanta, Detroit-Atlanta and Cincinnati-
Atlanta markets; an Oklahoma-Southeast
Points Case; and an Ohio/Indiana Points
Nonstop Investigqtion), but these proceedings
are still in preliminary stages. The Company
is also a party to a growing number of
rate and fare investigations before the CAB.
19
DELTA AIR LIN ES, INC.
20
Balance Sheets
June 30, 1969 and 1968
ASSETS 1969 1968
(In Thousands )
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 29,909 $ 17,972
Short-term cash investments,
at cost . . . . . . . . . .
Accounts and notes receivable
Maintenance and operating
supplies, at average cost
Prepaid expenses, etc.
Total current assets
PROPERTY AND EQUIPMENT:
Flight
Equipment Other
Cost-
1969 .. $642,159 $86,542
1968 465,450 61,919
Accumulated
depreciation-
1969 195,886 30,398
1968 ... 153,601 24,690
Advance payments for new
flight equipment
ADVANCE FOR
SST DEVELOPMENT,
being amortized
14,002 16,019
40,253 36,010
4,553 4,330
1,074 1,214
89,791 75,545
728,701
527,369
226,284
178,291
502,417 349,078
39,879 40,848
542,296 389,926
2,178
$634,265
2,778
$468,249
DELTA AIR LINES, INC.
LIABILITIES AND
STOCKHOLDER EQUITY
CURRENT LIABILITIES:
Current maturities of long-
1969 1968
(In Thousands)
term debt . $ 7,607 $ 7,794
Accounts payable and accrued
liabilities . . . ....... .
Tickets outstanding subject to
refund or use . . . . . . . . . .
Air travel plan deposits . . . .
Accrued income taxes
Total current liabilities . .
LONG-TERM DEBT (Note 1)
DEFERRED CREDITS:
Deferred Federal income taxes
Unamortized investment tax
credit (Note 3) .. .
STOCKHOLDER EQUITY:
Common stock, par value $3 .00
per share (Note 5)-
Authorized 25,000,000 shares
Outstanding 19,125,000 shares.
Capital surplus .. . ... . .. . . .
Retained earnings (Note 1)
COMMITMENTS (Note 2)
50,945 33,713
8,713 7,352
1,713 1,695
4,855 855
73,833 51,409
214,942 132,436
92,106
26,869
118,975
57,375
22,450
146,690
226,515
70,773
18,657
89,430
57,375
22,450
115,149
194,974
$634,265 $468,249
The accompanying notes are an integral part of these statements.
21
DELTA AIR LINES, INC.
22
Statements of Income
for the years ended June 30, 1969 and 1968
1969 1968
OPERATING REVENUES:
(In Thousands)
Passenger .................... $470,024 $396,793
Cargo . . . . . . . . . . . . . . . . . . . . . . . 42,536 32,141
Other . . . . . . . . . . . . . . . . 3,553 2,628
Total operating revenues .. 516,113 431,562
OPERA TING EXPENSES:
Flying operations
Maintenance ......... .
Aircraft and traffic service
Promotion and sales
Depreciation and amortization
(straight-line method) . . .
Passenger service ........ .
General and administrative . . .
Total operating expenses . .
Income from operations
before income taxes
OTHER EXPENSE (INCOME):
Interest expense ... . . ........ .
Less-Interest capitalized on
advances for flight equipment .
Interest income, etc.
Gain on disposition of aircraft,
net .. . .... . . . . . . . . . . . . . . .
INCOME BEFORE INCOME
TAXES
PROVISION FOR INCOME
TAXES (Note 3)
112,581
74,531
83,920
52,246
56,876
39,991
13,793
433,938
- - - -
82,175
12,634
(2,742)
9,892
(943)
(174)
8,775
73,400
34,209
95,409
64,992
68,719
45,416
40,568
38,940
9,096
363,140
68,422
6,961
(1,763)
5,198
(2,162)
(235)
2,801
65,621
29,487
NET INCOME .. ... .. ... $ 39,191 $ 36,134
NET INCOME
PER COMMON SHARE $2.05 $1.89
The accompanying notes are an integral part of these statements.
Statements of Retained Earnings
for the years ended June 30, 1969 and 1968
BALANCE AT BEGINNING
OF YEAR .. .... . .... ... .
Net income
Deduct:
Cash dividends-$.40 per share .
Transfer to common stock in
connection with a 3-for-1
stock split on December 1, 1967
BALANCE AT END OF YEAR
(Note 1)
DELTA AIR LINES, INC.
1969 1968
(In Thousands)
$115,149 $124,915
39,191 36,134
154,340 161,-049
7,650 7,650
38,250
$146,690 $115,149
Statements of Source and Disposition of Funds
for the years ended June 30, 1969 and 1968
FUNDS PROVIDED BY:
Net income ...... .. . .
Add noncash expenses-
Depreciation and amortization .
Deferred Feder.
al income taxes.
Investment tax credit, net
Other, net
Total from operations
Additional financing under-
Installment purchase
agreements
Bank credit agreement
FUNDS USED FOR:
Flight equipment additions,
including advances
Other property and equipment
additions . ........ .
Advance for SST development
Reduction of long-term debt
Cash dividends
INCREASE (DECREASE)
IN WORKING CAPITAL
WORKING CAPITAL
AT END OF YEAR
1969 1968
(In Thousands)
$ 39,191
56,876
21,333
8,212
1,117
126,729
128
90,000
$ 36,134
40,568
17,406
5,753
(5,003)
94,858
6,786
50,000
216,857 151,644
184,340
25,423
209,763
7,622
7,650
114,520
12,358
3,000
129,878
10,646
7,650
225,035 148,174
$ (8,178) $ 3,470
$ 15,958 $ 24,136
The accompanying notes are an integral part of these statements.
23
DELTA AIR LINES, INC.
24
Notes to Financial Statements June 30, 1969
1.LONG-TERM DEBT:
At June 30, 1969, the Company's long-term debt
of $222.5 million (including current maturities)
consisted of the following:
(a) $185 million due banks under a credit
agreement which provides for borrowings
up to $220 million on a revolving basis to
December 31, 1970, at which time the out-
standing balance will be converted to a
5-year term loan. Loans under the agree-
ment are unsecured and carry an interest
rate of % above the prime rate,
(b) $31.2 million due insurance companies
under 6% unsecured notes, repayable in
installments to October, 1974 ($5 million
payable in fiscal 1970), and
(c) $6.3 million due the manufacturer of the
Deltamatic Reservation System, repayable
in quarterly installments (including 4 %
interest) of $710,000.
Under terms of the credit agreements, $53.6
million of retained earnings at June 30, 1969,
is restricted as to the payment of cash dividends.
2. COMMITMENTS:
The Company has outstanding purchase com-
mitments for the acquisition of five Douglas
DC-8 jet aircraft, ten Douglas DC-9 jet air-
craft, five Boeing 747 jet aircraft and twenty-
four Lockheed L-1011 aircraft which will re-
quire an expenditure of approximately $475 mil-
lion during the fiscal years 1970 through 1975.
The Company leases certain airport facilities,
ticket offices, etc., under long-term agreements.
Minimum annual rentals are approximately $5.6
million under such leases expiring after June
30, 1972.
3. PROVISION FOR INCOME TAXES:
The provision for income taxes for 1969 and
1968 consists of the following:
Current income taxes
Deferred Federal
income taxes . . . ..
Investment tax credit
Less-Amortization of
investment tax credit
over life of
related equipment
1969 1968
( In Thousands)
$ 4,664 $ 6,328
21,333 17,406
12,798 ~
38,795 32,616
All available investment tax credits have been
utilized to reduce the Company's Federal in-
come taxes payable.
DELT A AIR LIN ES, IN C.
4. PENSION PLANS:
The Company has noncontributory pension plans
covering substantially all of its employees. The
total pension expense amounted to $10.9 mil-
lion in 1969. All prior service costs under the
plans are fully funded, and it is the Company's
policy to fund each year's accrued pension cost.
5. STOCK OPTIONS:
Under the Company's qualified stock option plan
for 100,000 shares of common stock, options
for 79,000 shares have been granted and were
outstanding at June 30, 1969 (50,000 shares at
$31.125 per share and 29,000 shares at $34.75
per share). Options for 12,500 shares are cur-
rently exercisable.
AUDITORS' REPORT
ARTHUR ANDERSEN & Co.
ATLANTA, GEORGIA
To the Stockholders and Board of Directors
of Delta Air Lines, Inc.:
We have examined the balance sheet of Delta Air
Lines, Inc. (a Delaware corporation) as of June
30, 1969, and the related statements of income,
retained earnings and source and disposition of
funds for the year then ended. Our examination
was made in accordance with generally accepted
auditing standards, and accordingly included such
tests of the accounting records and such other
auditing procedures as we considered necessary in
the circumstances. We have previously examined
and reported on the financial statements for the
preceding year.
In our opinion, the financial statements referred
to above present fairly the financial position of
Delta Air Lines, Inc. as of June 30, 1969, and the
results of its operations and the source and disposi-
tion of funds for the year then ended, in conformity
with generally accepted accounting principles ap-
plied on a basis consistent with that of the preced-
ing year.
Atlanta, Georgia,
August 15, 1969.
25
DELTA AIR LINES, IN C.
26
Five Years of Delta Air Lines Growth Years Ended June 30
(Dollars expressed in thousands except per share figures)
1969
Operating revenues
Passenger . .. . . .... $470,024
Cargo . ... 42,536
All other .. . ... . . 3,553
Total operating revenues $516,113
Operating expenses 433,938
Operating income .
. . . . . . .
. . .
. $ 82,175
Interest expense, etc.-net 8,949
Gain on disposition of aircraft-net 174
Income before income taxes . $ 73,400
Income taxes . ... . .. .. . . . 34,209
Net income .
. . . . . . . $ 39,191
Net income per share* $2.05
Dividends paid . . . . .
. .
. .
$7,650
Dividends paid per share* $0.40
Total assets $634,265
Stockholder equity $226,515
Stockholder equity per share* $11.84
Shares of common stock outstanding* 19,125,000
Revenue passengers carried 12,107,061
Available seat miles (000) . 14,768,892
Revenue passenger miles (000) 8,249,085
Passenger load factor 55.85%
Available ton miles (000) .... . ..... . . . . . 1,994,826
Revenue ton miles (000) . . . . . . . . . . .
. . . 965,795
Passenger revenue per passenger mile 5.70
Operating expenses per available seat mile 2.94
Operating expenses per available ton mile 21.75
* Adjusted to reflect all stock splits
1968
$396,793
32,141
2,628
$431,562
363,140
$ 68,422
3,036
235
$ 65,621
29,487
$ 36,134
$1.89
$7,650
$0.40
$468,249
$194,974
$10.19
19,125,000
10,368,831
11,972,737
7,116,095
59.44%
1,609,704
814,782
5.58
3.03
22.56
DELTA AIR LINES, INC.
1967 1966 1965
$362,368 $291,350 $234,036
31,638 24,039 19,620
3,830 3,541 3,804
$397,~36 $318,930 $257,460
308,737 253,092 213,131
$ 89,099 $ 65,838 $ 44,329
641 1,676 1,875
2,402 562 602
$ 90,860 $ 64,724 $ 43,056
41,670 30,170 20,051
$ 49,190 $ 34,554 $ 23,005
$2.57 $1.81 $1.20
$6,375 $6,056 $4,845
$0.33 $0.32 $0.25
$369,422 $314,350 $231,274
$166,490 $123,675 $ 95,177
$8.71 $6.47 $4.98
19,125,000 19,125,000 19,125,000
9,422,422 7,556,422 5,964,269
9,687,337 8,196,349 6,793,654
6,415,467 4,997,958 3,855,012
66.23% 60.98% 56.74%
1,304,889 1,090,282 907,014
735,898 569,625 442,239
5.65 5.83 6.07
3.16 3.06 3.12
23.66 23.21 23.50
27
28
Board of Directors
R. W. FREEMAN
W. T. BEEBE
B. W. BIEDENHARN
R. W. COURTS
C.H. DOLSON
EMERY FLINN
DAVID C. GARRETT, JR.
EDWARD H. GERRY
CHARLES H. KELLSTADT
JOHN R. LONGMIRE
R. S. MAURER
T. M. MILLER
WINSHIP NUNNALLY
ROBERT OPPENLANDER
CARLETON PUTNAM
Chairman of the Finance Committee
New Orleans, Louisiana
Atlanta, Georgia
Monroe, Louisiana
Atlanta, Georgia
Atlanta, Georgia
Miami, Florida
Atlanta, Georgia
New York, New York
Miami, Florida
St. Louis, Missouri
Atlanta, Georgia
Atlanta, Georgia
Atlanta, Georgia
Atlanta, Georgia
Washington, D. C.
GEORGE M. SNELLINGS, JR. Monroe, Louisiana
TRANSFER AGENTS:
The Citizens and Southern National Bank, Atlanta, Georgia
and The First National City Bank, New York City
REGISTRARS:
Trust Company of Georgia, Atlanta, Georgia and
Morgan Guaranty Trust Company of New York, New York City
COMMON STOCK:
Listed on the New York Stock Exchange
AUDITORS:
Arthur Andersen & Co.
ANNUAL MEETING:
October 23, 1969, Monroe, Louisiana
Delta Air Lines, Inc., General Offices, Atlanta Airport, Atlanta, Ga. 30320
Officers
C.H.DOLSON
ADMINISTRATION
W.T.BEEBE
R. W.ALLEN
R. H. WHARTON
J.A. YORK
FINANCE
President
Senior Vice President-Administration
Asst. Vice President-Administration
Asst. Vice President-Personnel
Asst. Vice President-Employee Services
ROBERT OPPENLANDER Senior Vice President-Finance & Treasurer
PAUL W. PATE Vice President-Properties
W. A. ATCHISON Asst. Vice President-Computer Services
J. D. DUNN Asst. Vice President-Purchasing
M. O. GALLOWAY Asst. Vice President-Comptroller
J. R. HOWELL Asst. Treasurer
HUGH H. SAXON
LEGAL
R. S. MAURER
ROBERT L. GRIFFITH
MORRIS SHIPLEY
J. W. CALLISON
J.A. COOPER
FRANKF.Rox
MARKETING
T.M.MILLER
SHELBY D. DEMENT
CHARLES P. KNECHT
J. W.MEYER
HENRY Ross
OPERATIONS
Asst. Treasurer
Senior Vice President-
General Counsel & Secretary
Vice President-Federal Affairs*
Vice President-Government Affairs
Asst. Vice President-Law
Asst. Vice President-Economic Research
Asst. Vice President-Law
Senior Vice President-Marketing
Asst. Vice President-Traffic & Sales
Asst. Vice President-Sales
Asst. Vice President-Customer Relations
Asst. Vice President-
Advertising & Sales Promotion
DAVID C. GARRETT, JR. Senior Vice President-Operations
T. P. BALL Asst. Vice President-Flight Operations
J. K. BURNETTE Asst. Vice President-Quality Control
A. C. FORD Asst. Vice President-Long Range Planning
E. L. HAMNER Asst. Vice President-Stations
D. P. HETTERMANN
JACKS. KING
W. L. MILLER
J.F. NYCUM
L. G. RoDEFELD
J. H. TURNER
C. B. WILDER
*Retired July 1, 1969
Asst. Vice President-Engineering
Asst. Vice President-Flight Control
Asst. Vice President-Materiel Services
Asst. Vice President-Flt. Eqpt. Development
Asst. Vice President-Communications
Asst. Vice President-Maintenance
Asst. Vice President-Technical Operations