Delta Air Lines annual report 1972

Delta Air Lines,Inc.
Annual Report 1972
DELTA AIR LINES, INC.
ANNUAL REPORT
1972
Contents
Highlights of the Year 3
Report to the Stockholders 4
Revenues and Expenses 7
Earnings and Dividends 8
Capitalization and Financing 8
Flight Equipment and Purchase
Commitments 9
Facilities 11
Marketing 12
Environmental Matters 12
Security Programs 13
Personnel 14
Regulatory Matters 15
Route Map 20, 21
Financial Statements --
Balance Sheets 22, 23
Statements of Income 24
Statements of Retained Earnings 25
Statements of Additional Paid-in
Capital 25
Auditors' Report 25
Statements of Changes in Financial
Position 26
Notes to Financial Statements 27
Five-Year Summary 32, 33
Pro Forma Combined Condensed
Financial Statements --
Balance Sheets 34, 35
Statements of Income 36
Notes to Pro Forma Combined Con
densed Financial Statements 36
Board of Directors 38
Officers 39
1
$3.00
EARNINGS PER SHARE
RETURN ON INVESTMENT
2.50 -
1.00 -
2
Highlights of the Year
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.
1972 1971
Per Cent
Change
Operating
Revenues $757,569 $661,246 + 15%
Operating
Expenses $682,117 $608,475 + 12%
Net Income $42,169 $29,994 + 41%
Earnings Per
Share $2.20 $1.57 + 41%
Revenue Passengers
Enplaned 17,880,837 16,373,467 + 9%
Available Seat
Miles (000) 22,105,725 20,553,892 + 00
Revenue Passenger
Miles (000) 10,609,729 9,719,346 + 9%
Passenger Load
Factor 48.00% 47.29% + 2%
3
Report to the Stockholders
Fiscal 1972 was a good year for Delta. Net
earnings rebounded strongly to $42.2 million
or $2.20 per share, up 41% from the depressed
1971 level. After only nominal growth in 1971,
passenger traffic responded to the overall
improvement in the economy and increased
9%. This growth together with a 5% increase
in passenger mile yields resulting from the
May, 1971 fare increase produced a 15%
growth in operating revenues.
Growth in operating capacity was held to
only 8% for the year and was at its lowest
level since Delta introduced jet services in 1959.
Despite a major improvement in employee
productivity and careful monitoring and con
trol of all costs, unit operating costs were up
4% to 3.08c per available seat mile and un
doubtedly would have been even higher with
out the President's programs on wage and
price restraints.
During recent months Delta has made a
number of significant changes to its long
range flight equipment plans. In May, Delta
signed an agreement assigning to United Air
Lines purchase rights to five McDonnell
Douglas DC-10 aircraft for delivery beginning
in October, 1972. Immediately upon delivery
to United the aircraft will be leased to Delta for
approximately two and one-half years to May,
1975. The return of the aircraft to United
may require certain revisions to the Lockheed
L-1011 aircraft delivery schedule. This action
recognizes the major improvement in Lock
heed's financial condition since our last report
4
to you and the longer term need to standardize
on only one wide-body trijet aircraft type.
Including options exercised in August,
1972, Delta has ordered 28 Boeing 727-200
aircraft with wide-bodied interiors for de
livery in fiscal years 1973 and 1974. Negotia
tions were also concluded recently for options
on an additional 14 B-727-200 aircraft for de
livery beginning late in fiscal year 1974. As
modification kits become available later this
year, the 13 B-727-200 aircraft acquired in the
Northeast merger will be modified to the wide
bodied interior in order that the entire fleet will
be fully interchangeable and competitive.
Concurrently with the purchase and de
livery of the new B-727-200 aircraft. Delta
has agreed to sell its fleet of 16 CV-880 air
craft and 7 DC-8-33 aircraft and associated
spare engines and parts to The Boeing Com
pany. In a separate agreement concluded in
August, 1972, Delta agreed to sell its 13
DC-9-14 aircraft and spare engines to Southern
Airways.
The purchase of the Boeing aircraft and the
sale of the older CV-880, DC-9-14, and
and DC-8-33 aircraft will permit Delta to
modernize and standardize its post-merger
fleet while retaining approximately the same
level of scheduled frequencies at lower seat
mile costs. Financing for all outstanding
purchase commitments will be provided by
internally generated funds together with
additional bank borrowings permissible under
existing loan agreements.
The Civil Aeronautics Board and the Presi
dent granted final approval of the Northeast
merger in May, 1972 and the merger was con
summated on August 1, 1972. The merger
adds to Delta's route system a number of new
and important route segments including the
highly competitive New England and East
Coast to Elorida, Bermuda and the Bahamas
markets. Unfortunately, the Civil Aero-
5
nautics Board ordered Delta not to operate
Northeast's Miami-Los Angeles route pending
decision in a new proceeding for re-examina
tion of this authority. Delta requested and
anticipates expedited handling of this
proceeding.
The addition of Northeast's routes to the
Delta system offers several outstanding op
portunities for improved service to the travel
ing public. Delta's financial strength insures
the resources to support effective competition
in the East Coast markets. In the New England
area, Delta will effectively utilize its expertise,
developed over many years in the smaller
markets of the South and Southwest, to pro
vide improved services to many of the com
munities in this area and to tie the area into
the major markets in Delta's expanded system.
These new and expanded marketing op
portunities, together with the operating
efficiencies gained through better utilization
of the combined resources, offer an exciting
and sound basis for the continued growth and
financial stability of Delta in the years
ahead. We are confident that the approxi
mately 25,000 highly skilled and dedicated
individuals who make up the Delta team will
respond to these new challenges in the same
professional manner which has created Delta's
unique reputation for excellent personalized
service. To each of these employees, including
the more than 3,500 former Northeast em
ployees who are now "Delta Professionals,"
we offer our pledge of continued loyalty, sup
port and dedication to the Delta heritage of
integrity and fair play to its employees, its
customers, and its stockholders.
W. T. BEEBE DAVID C. GARRETT, JR.
Chairman of the Board & President
Chief Executive Officer
September 15, 1972
6
Revenues and Expenses
Operating revenues totaled $757.6 million,
an increase of 15% over 1971. Passenger
revenues also increased 15% to $690.0
million and accounted for 91% of total
revenues.
Responding to the general upturn in the
economy beginning last fall, passenger traffic
increased 9% for the year (12% in the last
six months) to a total of 10.6 billion revenue
passenger miles. Freight traffic also responded
with a healthy 12% growth, but mail and
express volumes were down slightly so that
total cargo revenues were up only 9% to
$59.4 million.
The passenger mile yield was 6.50(P, up 5%
over6.18<P in 1971. This increase was due
essentially to operating a full year under the
6% general fare increase granted in May 1971.
The cargo yield was up 4% over the previous
year.
Operating expenses increased 12% over
1971 to $682.1 million. Operating capacity
increased 8%, principally from the introduction
of two additional Boeing 747's in December
and a full year's operation of the first three
Boeing 747's introduced last year. Although
inflationary pressures have moderated over
recent months, the cumulative effect of
previous high levels of inflation caused unit
costs per seat mile and ton mile to rise 4% and
2%, respectively.
7
Earnings and Dividends
Reflecting the improved traffic growth and
higher yields, net earnings were up 41% over
1971 to $42.2 million, or $2.20 per share.
The 1972 results include a $2,072,500 (5<P
per share after taxes) reduction in amortization
expense resulting from the refund of advances
made for the SST development and a 5<P per
share after-tax gain from insurance proceeds
on a DC-9 aircraft destroyed in a training
accident. The 1971 results included a reduction
of $1,775,000 (9(f per share) in state income
taxes representing provisions made in prior
years and no longer required.
Fiscal 1972 marked the 23rd consecutive
year of cash dividend payments. Such pay
ments totaled $9,570,153 for the fiscal year
or 50<F per share.
Capitalization and Financing
In fiscal 1972, the 1967 Bank Credit Agree
ment was amended to provide for the deferral
of the September and December, 1971
quarterly payments of $8 million each and to
extend the term of the agreement by one year
to December 31, 1976. The short-term bank
borrowing of $ 12 million, made in fiscal 1971,
was repaid in December, 1971.
In connection with the special advance
payments of $20.4 million to Lockheed Air
craft Corporation as a part of its refinancing
program. Delta entered into a separate Bank
Credit Agreement providing for total borrow
ings of $20 million during a revolving period
ending September 30, 1972. At year-end, no
borrowings had been made under this
agreement.
Delta is presently re-negotiating with
hazard Brothers & Co., a London merchant
bank representing a syndicate of British
banks, for the financing of the Rolls-Royce
engines for its entire L-1011 fleet. Originally,
8
Delta entered into an agreement with hazards
for the financing of the first 12 L-lOll's and
related spare engines for approximately $38
million. This agreement was frustrated by the
bankruptcy of Rolls-Royce, Ltd. in early 1971.
Agreement in principle has been reached for
the new financing which will provide Delta
with about $80 million in long-term financing
at favorable interest rates.
Outstanding purchase commitments,
including commitments made subsequent to
the close of the fiscal year, will require future
expenditure of approximately $487 million
during fiscal years 1973 through 1976. It is
anticipated that internally generated funds
together with additional borrowings permis
sible under existing loan agreements should
provide adequate cash for these purchase
commitments and for payment of outstanding
debt in accordance with its normal maturities.
Total stockholder equity at year-end was
$317.5 million, or $16.57 per share, an
increase of 12% over June 30, 1971.
Flight Equipment and Purchase Commitments
During fiscal 1972, Delta accepted delivery
of two wide-bodied B-747 and one Super DC-9
aircraft. Also, during the year one standard
DC-9 was sold and a second was destroyed
in a training accident. As of June 30, 1972,
Delta owned and operated the following jet
passenger aircraft:
Type of
A ircraft Seats
Fleet
Total
B-747 370 5
DC-8-61 195 13
DC-8-51 135 21
DC-8-33 135 7
CV-880 96 16
DC-9-32 89 63
DC-9-14 68 13
Total 138
9
In addition, Delta owns and operates three
L-100-20 all-cargo aircraft. Also, under an
interchange agreement with Pan American,
certain through-plane services are operated
between Atlanta, Georgia and Frankfurt,
Germany via London, England with B-747
aircraft owned by Pan American. Delta leases
flying time on these aircraft for operation
between Atlanta, Georgia and the interchange
point, Dulles International Airport, Washing
ton, D.C. and for certain additional operations
over Delta's domestic routes.
Effective with the merger consummation
on August 1, 1972, Delta acquired Northeast's
aircraft fleet consisting of the following:
Type of Fleet
Aircraft Seats Owned Leased Total
B-727-100 96 2 6 8
B-727-200 130 13 13
DC-9-30 92 4 10 14
FH-227 43 _6 _6
Total 12 29 41
Of the leased aircraft, all except seven
B-727-200 aircraft are being leased from
Storer Leasing Corporation, a wholly owned
subsidiary of Storer Broadcasting Company.
At June 30, 1972, Delta had outstanding
purchase commitments for 14 Boeing 727-200
aircraft with wide-bodied interiors for delivery
during fiscal years 1973 and 1974 and 24
Lockheed L-1011 aircraft for delivery during
fiscal years 1974 through 1976. Delta has sub
sequently exercised an option to purchase 14
additional Boeing 727-200 aircraft for delivery
in fiscal year 1974 and has secured options
for 14 additional aircraft for delivery begin
ning late in fiscal year 1974.
In conjunction with the purchase of the
B-727-200 aircraft. Delta has entered into
10
agreements to sell its fleet of 16 CV-880 air
craft and 7 DC-8-33 aircraft and associated
spare engines and parts to The Boeing Com
pany. Also, in August, 1972, Delta announced
the sale of its 13 DC-9-14 aircraft and spare
engines to Southern Airways for delivery con
currently with the receipt of the first 14
B-727-200 beginning in February, 1973. These
actions will permit Delta to modernize and
standardize its post-merger fleet while retain
ing approximately the same level of scheduled
frequencies at lower seat mile costs.
In May, 1972, Delta agreed to assign to
United Air Lines rights held by Delta to
purchase five McDonnell Douglas DC-10
aircraft for delivery beginning in October,
1972. A definitive lease agreement has now
been executed, subject to Civil Aeronautics
Board approval, providing that immediately
upon delivery to United the aircraft will be
leased to Delta for approximately two and
one-half years to May, 1975. This action was
taken in recognition of the major improve
ment in Lockheed's financial condition over
the past several months. The L-1011 program
is proceeding and a number of aircraft are
currently in revenue service with other airline
buyers. In order to replace the DC-10 aircraft
to be returned to United in May, 1975, Delta
is considering certain revisions to the L-lOl 1
aircraft delivery schedule.
Facilities
During the past year Delta moved into new
or expanded airport terminal facilities at New
Orleans, Little Rock, Shreveport, and
Chicago's O'Hare. Airport expansion projects
are under way at Atlanta, Knoxville, Bir
mingham, Orlando, Ft. Lauderdale, Cincin
nati, Memphis and Houston. Construction of
the new Dallas/Fort Worth Regional Airport
is on schedule and should be completed in
1973.
11
The expanded portion of the Atlanta
Maintenance and Overhaul Base will be com
pleted in October, 1972. The facilities for
engine overhaul and test are already finished
and in operation. Renovation of certain areas
of the original facility will be completed by
the summer of 1973. Upon completion, the
Atlanta Base will provide the capacity to
handle all aircraft on order as well as those
acquired in the Northeast merger.
In addition to these major expansions,
new or expanded sales, reservations, and
ticketing offices were completed this year
and construction is underway on a number
of other similar facilities.
Marketing
In fiscal 1972, Delta developed and intro
duced a new computerized ticketing system
called "Guaranteed Fares" which can com
pute passenger fares with extreme accuracy,
even for the most complex itinerary, and print
the necessary ticket. This system permits the
issuance of approximately 85% of Delta's
tickets by computer, and provides time savings
to customers and airline employees, as well
as accurate up-to-the-minute fare information
for our affiliated travel agents.
Environmental Matters
In keeping with Delta's policies on environ
mental protection, programs for the reduction
of air, noise and water pollution have been
developed and are being implemented. Un
burned carbon emissions, visible as a smoke
trail, are being eliminated from our DC-9
engines through a program of engine modi
fication started several years ago and now
virtually completed. Considerable progress
has been made in the reduction of both smoke
and noise pollution in the engines of the new
wide-bodied aircraft Delta has purchased.
12
Both the DC-10 and L-1011 have passed the
Federal Air Regulation tests for noise levels
and these aircraft will be noticeably quieter
than previous generations of jets. In addition,
Delta has adopted operating procedures
which reduce noise at airports without sac
rificing safety. These procedures include gain
ing maximum altitude before passing above
communities in the vicinity of the airports
Delta serves, power reductions after take-off,
use of runways which avoid flight patterns
over residential areas, and curfews on jet
engine ground operation at night.
Incorporated in the expanded Atlanta
Maintenance and Overhaul Base is a new
industrial waste treatment plant. This $2.5
million plant will insure that all waste water
released from the maintenance facility will
be free of all contaminants. All new ground
equipment and ground facilities include,
where appropriate, the latest available tech
niques for minimizing pollution in all its forms.
Security Programs
In response to the alarming trend of aircraft
hijacking, piracy, and extortion, your company
is cooperating to the fullest extent with the
Federal Aviation Administration and law
enforcement agencies in an effort to stop this
threat to the airline industry. Our security
program includes passenger and baggage
screening techniques, detection devices to
reduce the risk of weapons being smuggled
on board aircraft, and a new positive identi
fication program for authorized personnel in
sensitive areas at airports and other company
facilities. In addition, the ventral stairway
on certain aircraft types has been rendered
inoperable in flight, making it impossible to
parachute from the aircraft.
13
Personnel
Total employees at June 30, 1972, numbered
21,309, an increase of less than 3% over the
previous year's 20,786. Total salaries and
related employee benefit costs increased 13%
to $324.3 million, equal to 43<P of each
revenue dollar.
On November 1, 1971, Mr. C. H. Dolson
retired as Chairman of the Board and Chief
Executive Officer after an outstanding career
which spanned more than 37 years. Fortu
nately, Delta will still benefit from Mr. Dolson's
experience and judgment since he will con
tinue to serve as a director and as chairman of
the recently created Executive Committee. To
succeed Mr. Dolson, Mr. W. T. Beebe was
elected Chairman of the Board and Chief
Executive Officer and Mr. David C. Garrett, Jr.
was named President.
Also retiring during the year was Captain
T. P. Ball, Vice President-Flight Operations,
who made many significant and lasting con
tributions to Delta and the industry during
his 34 year Delta career.
Shortly after his promotion to Vice Presi
dent-Technical Operations,Mr. James H. Turner
suffered a fatal heart attack in November,
1971. Having served both Delta and his
community with quiet distinction for more
than 30 years, Mr. Turner will be remembered
for the personal warmth and compassion
which endeared him to all who knew him.
Due to Delta's historic policy of devel
oping and promoting executives and managers
from within, highly capable and experienced
replacements were immediately available to
provide consistent policy direction and sta
bility of management. In Delta's Operations
Division, Mr. H. T. Fincher was advanced to
the position of Senior Vice President-Opera
tions, Mr. Don Hettermann to Vice President-
14
Technical Operations, Mr. C. A. Smith to
Vice President-Flight Operations,
Mr. John P. Davis to Assistant Vice President-
Maintenance and Mr. Hollis L. Harris to
Assistant Vice President-Engineering.
Mr. Winship Nunnally chose not to stand
for reelection as a director and retired after
more than 24 years of active service on our
Board. He has been elected a Director Emer
itus and takes with him our gratitude for his
contributions to Delta's development.
Shortly after the close of the fiscal year,
Mr. George B. Storer, Sr. and Mr. Bill Michaels
were elected to the Board of Directors.
Regulatory Matters
During the fiscal year regulatory activities
continued to be concentrated in the field of
rate and fare investigations and merger pro
ceedings, although more activity developed
with respect to new routes than has been
true for some three to four years.
Route Cases
On the domestic system, the recommendation
of a Civil Aeronautics Board Trial Examiner
that Delta be granted nonstop authority be
tween Atlanta and Cleveland has been re
manded to the Examiner for further hearings
to update the record. In the earlier hearings
the Examiner also recommended one addi
tional competitor in Delta's Atlanta-Cincin-
nati and Atlanta-Detroit markets, and these
matters were also remanded.
The proceeding ordered by a Federal appeals
court to review the earlier denial of Delta's
nonstop Memphis-Miami and Nashville-
Atlanta nonstop applications has now been
submitted to the C AB for final decision. The
cab's Trial Examiner has recommended
Delta for the Memphis-Miami market, but
selected another applicant for the Nashville-
Atlanta market. Delta continues to pursue
15
its application for nonstop authority in both
markets.
In another proceeding remanded by the
Federal courts to the CAB, in this instance to
review an earlier grant of nonstop Miami-
Houston authority to Delta, the Examiner's
initial decision (issued on July 21, 1972)
recommended that Continental, not Delta,
be certificated at the conclusion of this pro
ceeding. The full CAB will review this initial
decision and, before the Board, Delta will
continue vigorously to seek permanent non
stop authority. In the meantime. Delta con
tinues to operate the route under temporary
exemption authority pending the CAB's final
decision.
Hearings have also been completed in the
Detroit-Nashville Nonstop Service Investi
gation. The CAB's Bureau of Operating
Rights has recommended another applicant
in this case, but Delta will continue to pursue
its application. An Examiner's initial decision
is expected late in 1972.
On the international system, the CAB
reversed a Hearing Examiner's recommenda
tion in favor of Delta, and granted other
carriers authority to fly nonstop between
Jamaica and the Chicago and Atlanta gate
ways. Delta has filed an application for non
stop authority between Atlanta and London,
England with the right to operate beyond
London to Frankfurt, Germany. A motion
for expedited hearing on this application
has been filed with the CAB.
Various applications have been filed by
other carriers for new route authority or for
realignment of their existing authority which
would create new competition for Delta, but
all of these proceedings are in preliminary
stages.
16
Delta-Northeast Merger
In May, 1972, the CAB approved the
merger of Northeast Airlines into Delta and
the merger was consummated after the end
of the fiscal year, on August 1, 1972. This
merger has expanded Delta's operations into
the East Coast to Florida and various New
England, Bahamas and Bermuda markets,
and will result in new routings between the
present system of the two carriers. A court
challenge to the merger by Eastern and
National will be argued in late September,
1972 and thereafter decided, but a related
request to stay consummation of the merger
was denied by the court in July.
In its order approving the Delta-Northeast
merger, the CAB provided for transfer of all
of Northeast's authority to Delta, but ordered
that Delta should not operate the Miami-Los
Angeles route pending final decision in a new
proceeding to be instituted for the purpose of
re-examination of this authorization. Delta
has requested that this proceeding move
forward as soon as possible.
Delta is also a party to the New England
Service Investigation, in which the former
Northeast Airlines' and now Delta's route
system in northern New England is being
investigated to determine what adjustments,
if any, should be made in that system and in
the related route patterns of other carriers to
serve the future needs of the northern New
England communities. Hearings will begin in
September of 1972, and the Trial Examiner's
initial decision is not expected before the
summer of 1973.
17
Other Merger Cases
Near the end of the fiscal year Mohawk
Airlines merged into Allegheny Airlines. The
expanded Allegheny and the expanded Delta
systems will bring the two companies some
what more into competition than has been
true in the past. A pending merger between
Eastern Air Lines and Caribbean Atlantic
Airlines could affect Delta's Caribbean
operations, if approved by the CAB, but this
proceeding still awaits CAB and Presidential
decision. A proposed merger between Ameri
can Airlines and Western Air Lines was dis
approved. A National Airlines-Northwest
Airlines merger remains pending.
Rate and Fare Cases
The two-and-one-half year old investigation
into the structure and level of U.S. airline
passenger fares continued throughout the
fiscal year. Five of the Investigation's ten
phases have been fully decided, and two
others await only a response to requests for
reconsideration of the Board's basic decision.
In one phase, decided during the previous
fiscal year, the CAB tentatively concluded
that basic airline fares should be increased
by 9% over those then in effect. In May, 1971,
the CAB permitted 6% of the increase to
become effective.
In August, 1972, the CAB adjusted the
total to 8.9% and, with Price Commission
approval, granted the remaining 2.9% (2.7%
above present fares) for effectiveness on
September 5, 1972. Other phases of the
Investigation still pending involve special
types of charges, such as discount fares, as
well as the overall fare structure (the rela
tionship between different basic types of
fares). Completion of the entire Investigation
18
is not expected until some time in calendar
year 1973.
In another pending proceeding investi
gating the propriety of the passenger fare
levels actually charged from October 1969
to mid-October 1970, a CAB Examiner has
concluded that the fares were lawful. It is
expected that the CAB itself will review this
decision. Court cases which seek reparations
for passengers on the theory that the October
1969-October 1970 fares were improper
remain in abeyance pending conclusion of
this proceeding before the CAB.
The comprehensive investigation into the
reasonableness and the structure of domestic
airline air freight rates; an investigation of
the air mail rate level and structure; and
miscellaneous other rate and fare proceedings
remain in preliminary stages before the CAB.
19
Delta Air Lines System Route Map
i-
DELTA AIR LINES, INC.
Balance Sheets
June 30, 1972 and 1971
ASSETS
CURRENT ASSETS:
Cash
Short-term cash investments,
at cost
1972
(In Thi
$ 39,327
27,014
1971
ousancis)
$ 34,854
66,341 34,854
Accounts receivable, net 45,008 43,484
Refund of prior years' Eederal
income taxes 2,491
Maintenance and operating
supplies, at average cost 5,155 5,558
Prepaid expenses, etc 2,075 1,902
Total current assets 118,579 88,289
PROPERTY AND EQUIPMENT
(Notes 1 and 3);
Flight
Equipment Other
Cost --
1972 $869,315 $126,375 995,690
1971 822,280 1 16,824 939,104
Accumulated
depreciation --
1972 379,273 58,407 437,680
1971 311,221 47,806 359,027
558,010 580,077
Advance payments for new
equipment (Note 3) 98,717 72,813
656,727 652,890
NOTES RECEIVABLE FROM
NORTHEAST AIRLINES,INC.,
noninterest-bearing(Note8) 5,400 1,000
DEFERRED CHARGES, being
amortized;
Advance for Supersonic
Transport development
(Note 5) 978
Boeing 747 preoperating
expense (Note 1) --
1,306
--
2,284
$780,706 $744,463
22
DELTA AIR LINES, INC.
LIABILITIES AND
STOCKHOLDER EQUITY 1972 1971
(In Thousands)
CURRENT LIABILITIES;
Current maturities of long-
term debt $ 37,467 $ 37,675
Short-term notes payable
Accounts payable and accrued
--
14,910
liabilities
Unearned transportation
55,640 47,712
revenue 13,686 10,965
Accrued income taxes 14,789 765
Air travel plan deposits 1,663 1,678
Total current liabilities 123,245 113,705
LONG-TERM DEBT (Note 2).... 167,422 188,889
DEFERRED CREDITS
(Notes 1 and 4);
Deferred Federal income taxes.
.
Unamortized investment tax
148,581 136,459
credits 23,925 21,586
172,506 158,045
STOCKHOLDER EQUITY
(Notes 7 and 8):
Common stock, par value
$3.00 per share--
Authorized 25,000,000 shares
Outstanding 19,159,870
shares in 1972 and
19,125,000 shares in 1971.
. .
57,479 57,375
Additional paid-in capital
Retained earnings (of which
23,456 22,450
$89,300,000 is restricted as
to the payment of cash
dividends under credit
agreements) 236,598 203,999
317,533 283,824
COMMITMENTS (Note 3)
$780,706 $744,463
The accompanying notes are an integral part of these balance sheets.
23
DELTA AIR LINES, INC.
Statements of Income
For the years ended June 30, 1972 and 1971
OPERATING REVENUES;
Passenger
1972 1971
(In Thousands)
$690,022 $600,637
Cargo 59,408 54,327
Other, net 8,139 6,282
Total operating revenues 757,569 661,246
OPERATING EXPENSES;
Elying operations 181,208 164,334
Maintenance 108,520 95,121
Aircraft and traffic
servicing 143,869 125,837
Promotion and sales 75,761 67,691
Depreciation and amortization
(Notes 1 and 5) 82,990 76,152
Passenger service 67,493 59,548
General and administrative.
.
22,276 19,792
Total operating expenses 682,117 608,475
Income from operations
before income taxes 75,452 52,771
OTHER EXPENSE(INCOME);
Interest expense 12,991 15,947
Less --Interest capitalized
on advances for equipment
(Note 1) (3,770) (4,639)
Miscellaneous income, net. . .
9,221
(1,140)
11,308
(730)
Gain on disposition of
aircraft, less income taxes
of $908,000 (989)
INCOME BEFORE
INCOME TAXES
7,092
68,360
10,578
42,193
PROVISION FOR INCOME
TAXES (Note 4) 26,191 12,199
NET INCOME !5 42,169 $ 29,994
NET INCOME PER
COMMON SHARE
(Note 1) $2.20 $1.57
The accompanying notes are an integral part of these statements.
24
DELTA AIR LINES. INC.
Statements of Retained Earnings
For the years ended June 30, 1972 and 1971
1972 1971
(In Thousands)
BALANCE AT BEGINNING
OF YEAR $203,999 $183,567
Net income 42,169 29,994
Less --Cash dividends --
246,168 213,561
$.50 per share
BALANCE AT END OF
YEAR (restricted as
9,570 9,562
indicated on balance sheet) $236,598 $203,999
Statements of Additional Paid-in Capital
For the years ended June 30, 1972 and 1971
1972 1971
(In Thousands)
BALANCE AT BEGINNING
OEYEAR $ 22,450 $ 22,450
Excess of proceeds over par
value of 34,870 common
shares issued under
employee stock option
plan (Note 7) 1,006 --
BALANCE AT END OF
YEAR $ 23,456 $ 22,450
The accompanying notes are an integral part of these statements.
Auditors' Report
Arthur Andersen 8c Co.
Atlamta, Geohoia
To the Stockholders and Board of Directors
of Delta Air Lines. Inc.:
We have examined the balance sheets of Delta Air Lines,
Inc. (a Delaware corporation) as of June 30. 1972 and 1971,
and the related statements of income, retained earnings, addi
tional paid-in capital and changes in financial position for the
years 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 circum
stances.
In our opinion, the financial statements referred to above
present fairly the financial position of Delta Air Lines, Inc. as
of June 30, 1972 and 1971, and the results of its operations and
changes in financial position for the years then ended, in con
formity with generally accepted accounting principles consis
tently applied during the periods.
Atlanta, Georgia,
August 22, 1972.
25
DELTA AIR LINES. INC,
Statements of Changes in Financial Position
T'or the years ended June 30, 1972 and 1971
1972 1971
FUNDS PROVIDED BY:
(In Thousands)
Net income $ 42,169 $ 29,994
Add expenses not requiring cur-
rent outlay of working capital-
Depreciation and
amortization 82,990 77,553
Deferred income taxes...
Investment tax credit, net
12,122 21,028
of amortization 2,339 (4,981)
Total from operations
. .
139,620 123,594
Dispositions of property 4,049 643
Refund of SST advance
Common stock issued under
3,000 --
employee stock option plan
Additional financing under
1,110 --
bank credit agreement -
20,000
FUNDS USED FOR;
147,779 144,237
Property and equipment additions --
Flight equipment, including
advances 80,457 117,464
Other 11,135 15,860
91,592 133,324
Reduction of long-term debt . . .
21,467 37,675
Cash dividends
Boeing 747 preoperating
9,570 9,562
expenses
Advances to Northeast
--
1.959
Airlines, Inc 4,400 1,000
INCREASE (DECREASE) IN
127,029 183,520
WORKING CAPITAL $ 20,750 $ (39,283)
CHANGES IN WORKING
CAPITAL COMPONENTS
Increase(decrease)in --
Cash
Receivables, net
Other current assets
Decrease (increase) in --
Current maturities of long
terrn debt
Short-term notes payable .
Accounts payable and
accrued liabilities
Other current liabilities
.. .
$ 31,487 $(10,508)
(967) 3,865
(230) 1,003
208 (14,296)
14,910 (14,910)
(7,928) (8,684)
(16,730) 4,247
$ 20,750 $(39,283)
I he accompany mg notes are an integral part of these statements.
26
DELTA AIR LINES, INC.
Notes to Financial Statements
June 30, 1972 and 1971
1. SUMMARY OF ACCOUNTING POLICIES:
Depreciation: Substantially all of the Company's
flight equipment is being depreciated on a straight-
line basis to residual values (10% of cost) over a
10-year period from dates placed in service. Ground
property and equipment is depreciated on a
straight-line basis over its estimated service life
(various lives ranging from 3 to 30 years).
Interest Capitalized: Interest on advances for
new equipment is capitalized based on the Com
pany's current interest rate on long-term debt.
Capitalization of interest ceases when the equip
ment is placed in service.
Preoperating Costs: When new aircraft fleets
are introduced, training costs incurred up to the
time the initial aircraft is placed in service are de
ferred, and then amortized on a straight-line basis
generally over a period of two years or less. Amor
tization of $1,959,000 of such Boeing 747 pre
operating costs over an 18-month period was com
pleted at June 30,1972.
Retirement Costs: The Company's policy is to
fund each year's accrued costs under its employee
retirement, disability, and survivor benefit plans,
which costs include amortization of prior service
costs over a thirty-year period. (See Note 6.)
Income Taxes: Total income taxes are provided
by applying the applicable tax rates to book in
come before income taxes. Deferred Federal income
taxes are provided for all significant items (prin
cipally depreciation) where there is a timing dif
ference in recording such items for financial re
porting purposes and for income tax purposes.
Utilized investment tax credits are amortized (as
a reduction of the provision for income taxes) over
the approximate life of the related equipment. (See
Note 4.)
Earnings Per Share: Net income per common
share is computed based on the weighted average
number of outstanding shares during the year
(19,141,980 shares in 1972 and 19,125,000
shares in 1971). Outstanding stock options have
no material dilutive effect on net income per com
mon share.
27
DELTA AIR LINES, INC,
2. LONG-TERM DEBT:
At June 30, 1972 and 1971, the Company's
long-term debt (including current maturities) con
sisted of the following:
1972 1971
, . ,, , , , ,
(In Thousands)
(a) Due banks under unsecured
notes carrying an interest
rate of 34'% above the
prime rate, repayable (as
amended in September,
1971) in quarterly install
ments of $8.0 million to
September 30, 1976, with
the remaining $52.0
million payable on
December 31, 1976 $188,000 $204,000
(b) Due insurance companies
under 6% unsecured notes,
repayable in installments
to October, 1974 ($5.0
million payable in fiscal
1973), and 16,250 21,250
(c) Due the manufacturer of
the Deltamatic Reserva
tions System, repayable in
quarterly installments
(including 43^% interest)
to August, 1974 ($467,000
payable in fiscal 1973) 639 1,314
Total
. .
204,889 226,564
Less --Current maturities
. . .
37,467 37,675
$167,422 $188,889
3. COMMITMENTS:
At June 30, 1972, the Company had purchase
commitments and options for the following air
craft and related spare engines:
A ircraft
Advances
A nd Other
Expenditures to
June 30. 1972
Estimated
Expenditures
After
fune 30. 1972
(In Thousands)
24 Lockheed L-1011
. .
$ 65,613 $325,000
14 Boeing 727-200 13,769 88,000
14 Boeing 727-200 (Options) .
420 102,000
79,802 515,000
5 McDonnell Douglas DC-10 .
28,000 (28,000)
$107,802 $487,000
28
DELTA AIR LINES. INC.
The last 6 of the 24 Lockheed L-1011 aircraft are
cancellable on or before October 31, 1973. Subse
quent to June 30, 1972, the Company agreed in
principle with The Boeing Company, subject to
execution of definitive agreements, to (a) exercise
the outstanding options for 14 Boeing 727-200 air
craft, and (b) secure options for an additional 14
727-200 aircraft. In May, 1972, the Company en
tered into an agreement with United Air Lines,
Inc., wherein, subject to approval by the Civil
Aeronautics Board, United will be substituted for
the Company as purchaser of the 5 McDonnell
Douglas DC-10 aircraft. Accordingly, the Company
will be reimbursed for all advances and other
expenditures to date of delivery. Upon delivery to
United beginning in October, 1972, the aircraft
will be simultaneously leased to the Company for
a period of approximately two and one-half years
to May, 1975.
In connection with its aircraft acquisition pro
gram, the Company has entered into agreements
to sell its 16 Convair 880 aircraft, 13 Douglas
DC-9-14 aircraft and 7 Douglas DC-8-33 aircraft.
The Company leases certain airport facilities,
ticket offices, etc., under long-term agreements.
Minimum annual rentals are approximately $9.5
million under such leases expiring after June 30,
1975.
4. INCOME TAXES:
The provision for income taxes for 1972 and
1971 consists of the following:
1972 1971
(In Thousands)
Current income taxes --
Federal (refund in 1971).
. . . .
$11,056 $(2,491)
State 674 (1,357)
Deferred Federal income taxes
. .
12,122 21,028
Investment tax credits 8,654 1,121
32,506 18,301
Less --Amortization of utilized
investment tax credits over
approximate life of related
equipment 6,315 6,102
$26,191 $12,199
In 1971, the provision for state income taxes was
reduced by $1,775,000, representing provisions
made in prior years and no longer required.
29
DELTA AIR LINES, INC.
At June 30, 1972, all available investment tax
credits have been utilized to reduce the Company's
Federal income taxes payable.
The Company has filed a petition with the U.S.
Tax Court contesting income tax deficiencies as
sessed by the Internal Revenue Service for the
taxable years 1963 through 1965. The petition has
been granted and the case is scheduled for trial in
January, 1973. In the opinion of management, the
settlement of this matter will not have a material
effect on the Company's financial position.
5. ADVANCE FOR SUPERSONIC TRANSPORT
(SST) DEVELOPMENT:
Upon abandonment of the SST program by the
U.S. Government, the Company received a refund
in August, 1971, of the $3,000,000 originally ad
vanced for SST development. In accordance with
the accounting prescribed by the Civil Aeronautics
Board, the $2,072,000 excess of the refund over
the unamortized balance was credited to amortiza
tion expense. As a result of the refund, 1972 net
income was increased by $1,057,000 ($.05 per
share).
6. RETIREMENT PLANS;
Substantially all of the Company's employees
are covered under its noncontributory trusteed
plans providing for retirement, disability, and sur
vivor benefits. A complete updating of the benefits,
actuarial methods and assumptions was effected
in 1971 for nonpilot personnel and in 1972 for
pilots. The total expense under these plans
amounted to $19.1 million in 1972 and $16.7
million in 1971. The Company's policy is to fund
each year's accrued costs under these plans, which
costs include amortization of prior service costs
over a thirty-year period.
At June 30, 1972 and 1971, the assets of the
plans exceeded the actuarially computed present
value of vested benefits under the plans.
7. STOCK OPTIONS;
Under the Company's 1967 Qualified Stock
Option Plan for 100,000 common shares, options
for 99,250 shares have been granted at option
30
DELTA AIR LINES, INC.
prices ranging from $31,125 to $34.75 per share.
Transactions during 1972 and 1971 areas follows:
Option Shares
Outstanding,
1972 1971
beginning of year. . . .
99,250 99,250
Granted ~ --
Exercised (34,870) --
Expired (250) --
Outstanding, end of year 64,130 99,250
Exercisable, end of year 45,693 55,125
In July, 1972, the Board of Directors approved,
subject to stockholder approval, reserving an addi
tional 500,000 shares of the Company's unissued
common stock for stock options for officers and
key employees.
8. SUBSEQUENT MERGER WITH
NORTHEAST AIRLINES, INC.:
On August 1, 1972, Delta's merger with North
east Airlines, Inc. became effective. Eastern Air
Lines, Inc. and National Airlines, Inc. filed peti
tions in the Court of Appeals for the District of
Columbia seeking an injunction against the con
summation of the merger. These petitions were de
nied on July 28, 1972, but further hearings will be
held in September, 1972, to consider Eastern's and
National's contention that the merger was improp
erly approved by the Civil Aeronautics Board.
Under terms of the May 12, 1971 agreements
with Northeast and Storer Broadcasting Company
(majority stockholder of Northeast), Delta issued
(a) 668,515 shares of its common stock for all of
the outstanding common stock of Northeast, and
(b) warrants to Storer to purchase 500,000 shares
of Delta common stock at $48.00 per share on or
prior to May 1, 1978, in exchange for Storer trans
ferring to Delta the $40,085,000 owed by North
east to Storer at August 1, 1972. At June 30, 1972,
Storer and Delta had each advanced $5.4 million
to Northeast under terms of an agreement pro
viding for interim financing of Northeast's oper
ations.
The merger will be accounted for as a pooling
of interests. See pages 34 through 37 for unau
dited pro forma combined condensed financial
statements of Delta and Northeast.
31
DELTA AIR LINES. INC, DELTA AIR LINES, INC.
Five Years of Delta Air Lines Growth Years ended June 30
(Dollars expressed in thousands except per share figures)
1972
Operating revenues
Passenger $690,022
Cargo 59,408
Other, net 8,139
Total operating revenues $757,569
Operating expenses 682,117
Operating income $ 75,452
Interest expense, etc., net 8,081
Gain on disposition of aircraft, net 989
Income before taxes $ 68,360
Income taxes 26,191
Net income $ 42,169
Net income per share $2.20
Dividends paid $9,570
Dividends paid per share $0.50
Total assets $780,706
Stockholder equity $317,533
Stockholder equity per share $16.57
Shares of common stockoutstanding 19,159,870
Revenue passengers enplaned 17,880,837
Available seat miles (000) 22,105,725
Revenue passenger miles (000) 10,609,729
Passenger load factor 48.00%
Break-even load factor 42.75%
Available ton miles (000) 3,072,534
Revenue ton miles (000) 1,276,211
Passenger revenue per passenger mile 6.504
Operating expenses per available seat mile 3.084
Operating expenses per available ton mile 22.204
1971 1970 1969 1968
$600,637 $565,670 $470,024 $396,793
54,327 50,786 42,536 32,141
6,282 5,673 3,553 2,628
$661,246 $622,129 $516,113 $431,562
608,475 529,179 433,938 363,140
$ 52,771 $ 92,950 $ 82,175 $ 68,422
10,578 14,642 8,949 3,036
--
--
174 235
$ 42,193 $ 78,308 $ 73,400 $ 65,621
12,199 33,781 34,209 29,487
$ 29,994 $ 44,527 $ 39,191 $ 36,134
$1.57 $2.33 $2.05 $1.89
$9,562 $7,650 $7,650 $7,650
$0.50 $0.40 $0.40 $0.40
$744,463 $692,016 $634,265 $468,249
$283,824 $263,392 $226,515 $194,974
$14.84 $13.77 $11.84 $10.19
19,125,000 19,125,000 19,125,000 19,125,000
16,373,467 15,784,053 13,927,366 11,783,372
,
20,553,892 18,559,724 14,768,892 11,972,737
9,719,346 9,397,913 8,249,085 7,116,095
47.29% 50.64% 55.85% 59.44%
43.13% 42.31% 46.07% 49.19%
2,799,440 2,508,105 1,994,826 1,609,704
1,172,819 1,125,409 965,795 814,782
6.184 6.024 5.704 5.584
2.964 2.854 2.944 3.034
21.744 21.104 21.754 22.564
32 33
DELTA AIR LINES. INC.
Delta Air Lines, Inc. and Northeast Airlines, Inc.
Pro Forma Combined Condensed Balance Sheets
June 30, 1972 (Unaudited)
ASSETS DELTA NORTHEAST COMBINED
CURRENT ASSETS:
Cash and cash
investments $ 66,341
(In 7'honsancls)
$ 8,377 $ 74,718
Receivables, net 45,008 12,282 57,290
Supplies, prepaid
expenses, etc. 7,230 3,352 10,582
118,579 24,011 142,590
PROPERTY AND
EQUIPMENT:
Flight and ground
equipment
Less --Accumulated
depreciation . .
Advance payments
995,690
437,680
98,717
48,943
15,237
1,044,633
452,917
98,717
656,727 33,706 690,433
NOTES RECEIVE-
ABLE FROM
NORTHEAST
DEFERRED
CHARGES, ETC.
(Note A)
5,400
5,717 5,717
5,400 5,717 5,717
$780,706 $63,434 $838,740
34
DELTA AIR LINES, INC.
LIABILITIES AND
STOCKHOLDER
EQUITY DELTA NORTHEAST COMBINED
CURRENT
LIABILITIES:
Current maturities
of long-term debt
(NoteE) $ 37,467
(In Thousands)
$ 2,863 $ 40,330
Accounts payable
and accrued
liabilities, etc.
. . .
85,778 25,227 111,005
123,245 28,090 151,335
OTHER
LIABILITIES;
Long-term debt,
less current
maturities
(NoteE) 167,422 38,026 205,448
Amounts due Storer
Broadcasting.... 39,916
Notes payable
to Delta 5,400
167,422 83,342 205,448
DEFERRED
CREDITS 172,506 172,506
COMMITMENTS
(Note C)
STOCKHOLDER
EQUITY:
Common stock
and additional
paid-in capital. . .
80,935 6,685 127,536
Retained earnings
(deficit) 236,598 (54,683) 181,915
317,533 (47,998) 309,451
$780,706 $63,434 $838,740
The accompanying notes on pages 36 and 37 are an integral part
of these condensed balance sheets.
35
DELTA AIR LINES. INC.
Delta Air Lines, Inc. and Northeast Airlines, Inc.
Pro Forma Combined Condensed Statements Of Income
1972 and 1971 (Unaudited)
(Notes A and B)
1972 1971
(Itt Thousands)
Operating revenues $883,566 $784,082
Operating expenses .
816,952 736,013
66,614 48,069
Interest expense 14,156 16,184
Other income, net (1,980) (287)
Extraordinary charge(Northeast). -
700
Income before income taxes 54,438 31,472
Income taxes (Note B) 26,191 12,199
Net income $ 28,247 $ 19,273
Pro forma earnings per share
(NoteD) $1.43 $.97
The accompanying notes are an integral part of these statements.
Delta Air Lines, Inc. and Northeast Airlines, Inc.
Notes to Pro Forma Combined Condensed Statements
(Unaudited)
(A) On the terms set forth in Note 8 to Delta's
financial statements, the pro forma combined state
ments give effect to the merger as a pooling of
interests. These statements are not necessarily
indicative of future results or results which would
have been obtained during these periods. Pending
detailed study, no effect has been given in the
statements for possible adjustments to conform
Northeast's methods of accounting for deferred
charges with Delta's methods.
(B) In the pro forma statements of income.
Delta's years ended June 30, 1972 and 1971 have
been combined with Northeast's years ended
December 31, 1971 (net loss of $13,922,000) and
1970 (net loss of $10,721,000). No effect has been
given to income tax reductions resulting from these
Northeast losses, which were included in Storer's
consolidated income tax returns.
For the six months ended June 30, 1972, North
east had unaudited revenues of $74,178,000 and
a net loss of $1,398,000. Pro forma earnings per
share for 1972 and 1971 would have been $1.67
and $.64, respectively, if Northeast's results for
the twelve months ended June 30, 1972 and 1971
had been combined with Delta's.
36
DELTA AIR LINES, INC.
' (C) In addition to Delta's purchase and lease
commitments discussed in Note 3 to Delta's fi
nancial statements, Delta assumed Northeast's
long-term lease commitments for flight and ground
equipment, which agreements provide for annual
rentals of $15,700,000.
(D) Pro forma earnings per share is computed
based on the weighted average number of Delta's
! outstanding shares plus the 668,515 Delta shares
j issued for Northeast's common stock. The issuance
of an additional 655,505 Delta shares upon as-
:
sumed exercise or conversion of Delta's stock op-
I tions. Northeast's stock options and convertible
I debentures assumed, and warrants issued to
; Storer, would not have a material dilutive effect
1 on pro forma earnings per share.
I (E) On August 1,1972, Delta paid off $3,547,000
i
of Northeast's long-term debt, including applicable
j current maturities.
!
37
DELTA AIR LINES, INC.
Board of Directors
R. W. FREEMAN Chairman of the Finance Committee
New Orleans, Louisiana
C. H. DOLSON
W, T. BEEBE
B. W. BIEDENHARN
R. W. COURTS
EMERY FLINN
DAVID C. GARRETT, JR.
EDWARD H. GERRY
CHARLES H. KELLSTADT
JOHN R. LONGMIRE
R. S. MAURER
BILL MICHAELS
T. M. MILLER
ROBERT OPPENLANDER
CARLETON PUTNAM
GEORGE M, SNELLINGS,JR.
GEORGE B. STORER, SR.
Chairman of the Executive Committee
Atlanta. Georgia
Atlanta. Georgia
Monroe. Louisiana
Atlanta, Georgia
Miami, Florida
Atlanta, Georgia
New York. New York
Miami, Florida
St. Louis. Missouri
Atlanta, Georgia
Miami, Florida
Atlanta. Georgia
Atlanta. Georgia
Washington, D C
Monroe, Louisiana
Miami, Florida
38
DELTA AIR LINES, INC.
Officers
W. T BEEBE Chairman of the Board & Chief
Executive Officer
DAVID C. GARRETT. JR. President
FINANCE
ROBERT OPPENLANDER
W. A, ATCHISON
M O. GALLOWAY
PAUL W. PATE
J. D DUNN
J. R HOWELL
HUGH H. SAXON
Senior Vice President --
Finance & Treasurer
Vice President --
Computer Services
Vice President --
Comptroller
Vice President --
Properties
Asst Vice President --
Purchasing
Asst Treasurer
Asst Treasurer
LEGAL & CORPORATE AFFAIRS
R. S. MAURER
MORRIS SHIPLEY
J W. CALLISON
A C. FORD
FRANK F. ROX
GEORGE E. SHEDD
SIDNEY F. DAVIS
IKE LASSETER
Senior Vice President-- General Counsel
& Secretary
Vice President --
Government Affairs
Asst Vice President --
Law
Asst Vice President --
Long Range Planning
Asst Vice President --
Law
Asst Vice President --
Public Relations
Asst. Secretary & Asst, to General Counsel
Asst Secretary
MARKETING
I M MILLER
SHELBY D. DEMENT
CHARLES P. KNECHT
J. A. COOPER
R, L. GIBSON
j.T MAPLES
J W. MEYER
HENRY ROSS
Senior Vice President --
Marketing
Vice President --
Marketing Administration
Vice President --
Sales
Asst Vice President --
Marketing
Asst Vice President--Traffic
Administration
Asst Vice President --
Marketing Planning
Asst Vice President --
Customer Relations
Asst Vice President -- Advertising &
Sales Promotion
OPERATIONS
HOYTT FINCHER
E. L. HAMNER
D. P. HETTERMANN
C. A. SMITH
j. K BURNETTE
JOHN P DAVIS
HOLLIS L. HARRIS
JACK S. KING
W. L. MILLER
J F. NYCUM
L G. RODEFELD
C. B WILDER
Senior Vice President --
Operations
Vice President --
Stations
Vice President --
Technical Operations
Vice President --
Flight Operations
Asst Vice President --
Quality Control
Asst Vice President --
Maintenance
Asst Vice President --Engineering
Asst Vice President --
Elight Control
Asst. Vice President --
Materiel Services
Asst Vice President --
Flight Equipment
Development
Asst Vice President --
Communications
Asst Vice President --
Operations
Administration
PERSONNEL
R W ALLEN
R H WHARTON
J. A YORK
Senior Vice President --
Personnel
Asst Vice President --
Employee Relations
Asst Vice President --
Employee Services
39
DELTA AIR LINES, INC.
Transfer Agents
The Citizens and Southern National Bank
99 Annex
Atlanta, Georgia 30399
The First National City Bank
111 Wall Street
New York, N.Y. 10015
Registrars
Trust Company of Georgia
P.O. Box 4418
Atlanta, Georgia 30302
Morgan Guaranty Trust Company
30 West Broadway
New York, N.Y. 10015
Common Stock
Listed on the New York Stock Exchange
Auditors
Arthur Andersen & Co.
Annual Meeting
October 26, 1972, Monroe, Louisiana
Notice to the Stockholders of Delta Air Lines, Inc.
This notice is published in accordance with regulations
adopted by the Civil Aeronautics Board.
Any person who owns more than 5% of the capital stock
or capital of an air carrier as of December 31 of any year, either
beneficially or as trustee, is required to file a report with the
C.A.B. on or before April 1 of the following year containing
certain information required by Section 245.13 of the C.A.B.
Economic Regulations.
Any person acquiring more than 5% of the capital stock
or capital is required to file a report within 10 days of the
acquisition.
Any stockholder who believes that he may be required to
file such a report may obtain further information by writing
to the Director, Bureau of Operating Rights, Civil Aeronautics
Board, Washington, D.C. 20428.
Delta Air Lines, Inc.
General Offices, Hartsfield Atlanta International Airport,
Atlanta, Georgia 30320
40