Contents 
Highlights of the Year. . . . . . . . . . . . . . . . . . . . . 1 
Report to the Stockholders. . . . . . . . . . . . . . . . . 3 
Earnings and Dividends. . . . . . . . . . . . . . . . . . . . 7 
Revenues...... . . . . . . . . . . . . . . . . . . . . . . . . . 7 
Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 
Capitalization and Financing. . . . . . . . . . . . . . . . 9 
Flight Equipment and Purchase 
Commitments .... .. .. .. .. ...... ..... 10 
Personnel. .. .. ............ . . . .. . ... .... 11 
Fuel Problems ... . . . .. ... ... .. .. .. ... .... 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 
Statements of Changes in Financial 
Position . .... .. .. ............... 26 
Notes to Financial Statements ...... . 27- 35 
Auditors' Report ...... .. . . ...... ..... 35 
Five-Year Summary. . . . . . . . . . . . . . . . . . . . 36, 37 
Board of Directors. . . . . . . . . . . . . . . . . . . . 38, 39 
Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 
 Highlights of the Year 
A comparative summary of the m ajor yard- 
sticks for evaluation of operations for years 
ended June 30 is shown below. D ollars are 
expressed in thousands, except per share figures. 
Per Cen t 
1974 1 973 Change 
O perating 
Revenues ......... . . $1,227,127 $1,049,699 + 17% 
O perating 
Expenses . . . .. . . ... . . $1,070,043 $928,940 + 15% 
Net Income . .. . . . .... $90,649 $65,995 + 37% 
Earnings Per 
Share ..... .. ... . . . . $4.56 $3.32 +37% 
Revenue Passengers 
Enplaned . .. .. . . .. . . 25,565,208 23,702,870 + 8% 
Available Seat 
Miles (000) . . . .. . .. . . 28,417,679 27,958,095 + 2% 
Revenue Passenger 
Miles (000) . .... . .... 15,581,370 14,449,748 + 8% 
Passenger Load 
Factor. . . ... . . ... . .. 54.83% 51.68% + 6% 
1 
 2 
W. T. BEEBE 
Chairman of the Board & 
Chief &ecutive Officer 
DAVID C. GARRETT, JR. 
President 
 Report to the Stockholders 
It is our pleasure to report to you that fiscal 
197 4 was the most successful year in Delta's 
history. Our net income of $90.6 million is the 
largest profit ever earned by an airline and 37% 
above that reported to you last year. Passenger 
revenues and total revenues reached record 
highs of $1.11 and $1.23 billion respectively. 
Revenue passenger miles increased 8% over last 
year to 15.58 billion, even though we had to 
substantially reduce our number of flights and 
seat miles in the last half of the year in response 
to the fuel crisis. 
This level of achievement is particularly 
gratifying when viewed against the backdrop 
of double digit inflation, the uncertain economy 
and high interest rates, as well as the fuel crisis, 
all of which plagued the industry and the coun- 
try during the past year. A very large part of 
our success during this year of crisis and uncer- 
tainty can be attributed to the people who make 
up the team of Delta Professionals. Truly, each 
member of the Delta family gave that extra 
measure of resourcefulness and effort in this 
past year while continuing to offer the highest 
possible level of service to our passengers and 
shippers under very difficult circumstances. It 
is that extra effort and concern for the customer 
which enhances Delta's reputation as the "Air- 
line of Professionals'.' 
Under the leadership of Chairman 
Robert D. Timm, the Civil Aeronautics Board 
recognized the need for timely fare and rate 
increases to offset the effects of inflation, 
particularly the rapid rise in fuel prices. Conse- 
quently, passenger fares were increased 5% on 
December 1, 1973, to cover general inflation and 
an additional 6% on April 16, 1974, to cover fuel 
price increases. In addition, much needed 
increases were granted in freight and mail rates, 
and the Board permitted the cancellation of 
various dilutionary discount rates and fares. 
Considerable progress was made during 
the past year in our program of modernizing 
and standardizing Delta's aircraft fleet. Thirty 
3 
 new aircraft, 21 Boeing 727-200's and 9 Lock- 
heed L-lOll's, were added to the fleet while 39 
aircraft were retired. The aircraft dispositions 
resulted in an after tax gain of $9 .4 million or 
47<t per share. 
A new $300 million credit agreement was 
finalized during the year to replace the 1967 
Bank Credit Agreement. The net proceeds from 
this agreement along with the $85 million loan 
agreement with Lazard Brothers & Co., Limited 
and internally generated funds are expected to 
meet our capital needs for currently outstanding 
orders for new B-727-200 and L-1011 aircraft. 
While we fully recognize and welcome the 
CAB's positive efforts to stabilize the industry's 
financial condition, we are deeply concerned 
about the Board's recent decision in the last 
phase of the Passenger Fare Investigation. We 
have petitioned the Board to reconsider this 
decision, which will significantly change the fare 
structure so as to raise short-haul fares while 
lowering longer haul fares. In addition, it will 
raise first-class fares over a period of time to a 
level equal to 163% of coach fares. We believe 
this decision, if permitted to stand, would not be 
in the best interests of the public or the industry 
and could have the effect of depressing total 
airline passenger revenues. The CAB has recently 
issued an order staying the effectiveness of this 
decision until further order of the Board. 
The outlook for fiscal 1975 is currently 
more unsettled than for any year in recent 
history. Present trends in the general economy 
and the low level of consumer confidence make 
it difficult to assess traffic growth, particularly 
for the latter part of the year. Consequently, 
our operating plans have been designed with 
maximum flexibility to respond quickly to 
actual traffic demand. Yields will be up signif- 
icantly due to fare increases already approved 
and present cost trends indicate a further mod- 
erate increase will be required later this year. 
Persistent and rapid inflation, particularly in 
4 
 fuel costs, will continue to put upward pressure 
on unit costs despite a more efficient aircraft 
fleet. In fact, much of our effort during this year 
will be directed towards the minimizing of con- 
trollable costs and the improvement of produc- 
tivity in all operating functions. Despite the 
magnitude of the challenges before us, we are 
confident that the Delta team of highly skilled 
professionals will once again keep your Com- 
pany in its well-earned position of leadership. 
u$Je~ 
W. T. BEEBE 
Chairman of the Board & 
Chief Execu tive O fficer 
September 6, 1974 
~~h'4 
DAVID C. GARRETT, JR. 
President 
5 
 EARNINGS PER SHARE* 
In Dollars 
5 
4-- - - - -- - - - - - - - - - - - -- - 
3 - - - - - - - - -- - - -- - -- - - - - 
2 - - - ------,;-....;f--------,F=I--E---1--- -1---t--t---l--t--l-- 
1 ----,;---a-----,1--1--11--11-------ll--il-------ll--l--l:--l--ll -l--t---t--t---l--J--t--- 
65 66 67 68 69 70 71 72 73 7 4 
STOCKHOLDER EQUITY PER SHARE* 
In Dollars 
25 
20 
15 
' 
5 
0 
65 66 67 68 69 70 71 72 73 7 4 
*These data reflect the operations of Delta Air Lines, Inc., 
and do not include the Northeast Airlines system prior 
to August 1, 1972. 
6 
 Earnings and Dividends 
As a result of excellent improvements in yields, 
acceptable traffic growth, and extensive efforts 
to counter the negative impact of inflation and 
the fuel shortage, net earnings reached an in- 
dustry record $90.6 million or $4.56 per share, 
a 37% increase over the $66.0 million ($3.32 per 
share) reported in 1973. 
The current year1s results include a gain of 
$18.6 million ( 47q: per share after taxes) from 
the sale of various aircraft. Last year1s results 
included a gain of $4.7 million (12q: per share  
after taxes) from aircraft sales, and a non- 
recurring charge of $4.0 million (lH per share 
after taxes) for merger related expenses. 
Dividend payments for the year totaled 
$11,925,268, or 60q: per share, a 20% increase 
over the soq: per share paid last year. Fiscal 
197 4 marked the 25th consecutive year in which 
Delta has made cash dividend payments. 
Revenues 
Operating revenues totaled a record $1.23 
billion, an increase of 17% over the $1.05 billion 
reported in 1973. Passenger revenue increased 
16% to $1.1 billion while cargo revenue in- 
creased 14% to $86.7 million, including $3.5 
million in mail payments retroactive to prior 
years. Security charges, which were only par- 
tially effective last year, totaled $14.7 million, 
an increase of $12.4 million. Other revenues 
were unchanged at $10.8 million. 
Passenger traffic was up 8% to 15.58 billion 
revenue passenger miles while available seat 
miles increased only 2% because of fuel con- 
straints in the last half of the year producing a 
load factor improvement from 51.68% to 
54.83%. 
The passenger mile yield was 7.lM, a gain 
of 8% from the 6.6Sq: reported in 1973. During 
the year the Civil Aeronautics Board approved 
a 5% passenger fare increase effective Decem- 
ber 1, 1973, and a 6% increase effective April 
16, 197 4. In addition, the phaseout of Family 
Plan and Youth discount fares continued 
throughout the year with the final elimination 
of the discounts effective June 1, 1974. Certain 
domestic excursion and military standby fares 
were also eliminated during the year. 
7 
 Cargo traffic declined 2% to 254.6 million 
ton miles. Freight ton miles remained level with 
last year while mail ton miles declined 8%, and 
express ton miles increased 3%. Delta withdrew 
from the agreement between the airlines and 
th Railway Express Agency and did not carry 
Express traffic after June 14, 1974. (See discus- 
sion in the section on Regulatory Matters) . 
Excluding the retroactive mail payments, cargo 
yield increased 11 % over the previous year. 
Expenses 
Operating expenses for the year totaled $1.07 
billion, a 15% increase over the $929 million 
reported last year as available seat miles in- 
creased only 2% to 28.4 billion while revenue 
aircraft miles declined 2%. 
Continued and rising inflation, the fuel 
shortage, and the fuel related reduction in 
operations combined to drive up unit costs 
14% to 4.osq: per available seat mile and 27.SH 
per available ton mile. The breakeven load 
factor was up 4% to 47.10%, but the spread 
between actual and breakeven load factor in- 
creased to 7.7% from 6.5% last year. 
The following table compares operating 
expenses for fiscal 1974 with 1973 by major 
expense function. 
Fiscal Year Ended 
1974 1973 Cha nge 
(In Th ousa nds) 
Salaries and Related Costs . . $ 509,054 $450,437 + 13% 
Aircraft Fuels. . . . . . . . . . . . 144,780 111,209 + 30 
Aircraft Maintenance 
Materials and Repairs .. . 
Aircraft Rentals . ...... .. . 
Other Rentals ..... . .. . . . 
Landing Fees .. ..... . ... . 
Passenger Food and 
Related Supplies ....... . 
Passenger Commissions . . . . 
Advertising ............ . 
Other Cash Expenses ..... . 
35,722 
29,498 
23,935 
23,584 
39,155 - 9 
21,173 + 39 
18,647 + 28 
20,210 + 17 
42,488 38,637 + 10 
32,127 27,311 + 18 
17,226 14,180 + 22 
111,753 103,067 + ~ 
Total Cash Expenses . . . .. $ 970,167 $844,206 + 15% 
Depreciation and 
Amortization . . .. ...... $ 99,876 $ 84,914 + ~ % 
Total Operating 
Expenses ... .... . . .. . $1,070,043 $928,940 + B % 
Even though the level of employment was up 
less than 1 % at the end of this year over last 
8 
 year, the average number of employees for the 
whole year was up 5% over the average for 
fiscal 1973. This factor along with higher wage 
levels required by inflation caused a 13% in- 
crease in total salary and related costs. Fuel 
cost increases are more fully discussed in a 
later section of this report. Aircraft rental costs 
were up 39% due to the inclusion'of the 5 leased 
DC-10 aircraft for a full year together with the 
higher interest rate applicable thereto. Increases 
in other rentals included the initial rentals on 
the new Atlanta Maintenance Base and occu- 
pancy of the new Dallas-Fort Worth regional 
airport facilities. It is significant to note that 
maintenance materials and supplies were down 
9%, reflecting the benefits of our fleet simpli- 
fication program. 
Net interest expense increased some $8.0 
million due to the higher level of borrowings 
required for the major new aircraft additions 
and a significantly higher average prime rate. 
Capitalization and Financing 
During fiscal 1974 a new bank credit agreement 
was negotiated which provides for borrowings 
up to $300 million on a revolving basis through 
September 30, 1975, at which time the balance 
outstanding will be converted to a term loan, 
repayable quarterly over five years. The initial 
proceeds of the new agreement were used to 
repay the $156 million principal outstanding 
under the 1967 Bank Credit Agreement. At 
June 30, 1974, $270 million had been borrowed 
under this agreement. 
Under the $85 million loan agreement with 
Lazard Brothers & Co., Limited a total of $46.9 
million was borrowed during the year to finance 
the Rolls-Royce engines for the Lockheed L-1011 
aircraft. After normal repayments of $600,000, 
the balance outstanding at year-end was 
$46.3 million. 
Total long-term debt of $366.4 million at 
June 30, 1974, increased $147.0 million from 
the previous year and was 82.5% of equity at 
year-end. These net borrowings together with 
net internally generated funds of $267.0 
million were utilized primarily for the purchase 
of flight and ground equipment in an aggregate 
amount of $439.8 million. Mandatory debt 
9 
 repayments due in fiscal 1975 total $21.2 
million. (See Note 3 to the attached Financial 
Statements). 
At June 30, 1974, outstanding commit- 
ments for aircraft and related spares (including 
options exercised after year end) will require 
future expenditures of $570 million 
during fiscal years 1975 through 1978. It is 
anticipated that the remaining funds available 
under current credit agreements of approxi- 
mately $66 million, together with internally 
generated funds, will sufficiently cover these 
purchase commitments and the repayment of 
normal debt maturities. Should additional 
capital be required, the Company has been 
offered additional funds by Lazard Brothers 
& Co., Limited at very favorable interest rates. 
Total stockholder equity at June 30, 1974, 
was $443,826,000 or $22.33 per share on the 
19,879,377 shares outstanding, an increase of 
22% over the $18.35 per share reported last 
year. 
Flight Equipment and Purchase 
Commitments 
During the past fiscal year Delta accepted 
delivery of 21 advanced model Boeing 727-200 
aircraft and 9 Lockheed L-1011 aircraft. Delta's 
fleet was reduced by the retirement of 39 air- 
craft during the year including the sale of 6 
DC-9-14's, 1 leased and 4 owned DC-9-31's, 15 
Convair 880's, 7 DC-8-33's, 1 leased B-727-100, 
and 3 all-cargo L-lO0's. A leased DC-9-31 and 
a DC-9-32 aircraft were destroyed in accidents. 
As of June 30, 1974, Delta operated the follow- 
ing aircraft fleet: 
Type of 
Aircraft Seats Owned Leased 
B-747 ......... 370 
DC-10 ........ 250 
L-1011 ........ 250 
DC-8-61 ..... . . 195 
DC-8-51 . ...... 135 
B-727-200 ..... 131 
B-727-100. . . . . 97 
DC-9-31/32. . . . 90 
FH-227 ........ 43 
Totals ...... . 
10 
5 
9 
13 
21 
31 
62 
__Q 
147 
5 
13 
5 
8 
31 
Fleet 
Total 
5 
5 
9 
13 
21 
44 
5 
70 
6 
178 
 Arrangements have been made with the owners 
of the 8 leased DC-9-311s to dispose of these 
aircraft. Deliveries will incJ.ude 4 in the Sep- 
tember, 1974 quarter and the remaining 4 dur- 
ing the latter part of fiscal 1975. The 5 leased 
DC-l01s will be returned to United Air Lines in 
April and May, 1975. 
During the year the Company entered 
into an agreement with the Lockheed Aircraft 
Corporation to advance delivery of 4 L-10l11s 
from early 1975 to the last quarter of calendar 
1974. With these deliveries, Delta will have a 
total of 18 of these aircraft on hand by the end 
of the year. The agreement also provides that 
orders for 12 "second buy11 L-10111s, originally 
scheduled for delivery in calendar years 1975 
and 1976, will now be delivered in calendar 
years 1976 and 1977. These 12 aircraft are now 
cancellable at various intervals between 
October 31, 1974 and January 31, 1976. 
At June 30, 1974, Delta had purchase 
commitments for 21 L-1011 and 11 Boeing 
727-200 aircraft. Subsequent to year-end, the 
Company exercised 16 of 20 B-727-200 air- 
craft options for delivery beginning in June, 
1975 and obtained 12 additional B-727-200 
options for delivery in 1976. The Company has 
also recently contracted to sell one B-747 
aircraft for delivery in September, 1974. 
Personnel 
At June 30, 1974, the team of Delta Profes- 
sionals numbered 27,600, up only slightly from 
the previous year's 27,500, excluding temporary 
summer employees in both years. Total salaries 
and related fringe benefits increased 13% to 
$509.1 million, equal to 41.5q: of each revenue 
dollar versus 42.9q: for the previous year. 
During the March quarter of this year, 
when fuel crisis related flight reductions were 
at their peak, 200 pilots and 468 flight atten- 
dants were temporarily reassigned to other 
duties in the Company. This was in keeping 
with Delta's tradition and policy to provide 
stable employment and the need for additional 
temporary staffing to meet the added work 
load caused by increased passenger demand for 
available seats and the attendant higher load 
factors. By August 1, 1974, all reassigned flight 
11 
 These are the professionals of Delta Air Lines-27,600 
strong. And they go all out to give passengers a smooth 
flight on Delta, the airline run by professionals. 
12 
 attendants had returned to flying status due to 
turnover and expansion of the L-1011 fleet. It is 
expected that the reassigned pilots will begin 
returning to flying status during the coming 
winter. 
After more than thirty years of distin- 
guished service, Mr. T. M. Miller, Senior Vice 
President-Marketing, retired on October 31, 
1973. Delta is grateful that Mr. Miller's expe- 
rience and judgment will continue to benefit 
the Company as he continues to serve on the 
Board of Directors and as a Consultant in the 
areas of advertising, scheduling and overall 
marketing policies. To succeed Mr. Miller, 
Mr. J. A. Cooper was advanced to Senior Vice 
President-Marketing. 
During the past year, Delta established 
the Operations-Passenger Service Division to 
ensure continued emphasis on efficient per- 
sonalized service to our customers. 
Mr. Hollis L. Harris was named to head the 
new division as Senior Vice President. 
To assure that Delta will continue to effec- 
tively meet the challenges presented by an 
increasingly complex business environment 
and in keeping with Delta's commitment to 
develop and promote management personnel 
from within the Company, eleven other execu- 
tives were advanced to positions of increased  
responsibility. These were Messrs. J. W. Callison 
to Vice President-Law & Regulatory Affairs; 
Shelby D. Dement to Vice President-Consumer 
Affairs; J. D. Dunn to Vice President- 
Purchasing; Charles P. Knecht to Vice President- 
Marketing; Foy Phillips to Vice President- 
Passenger Service; Frank F. Rox to Vice 
President-Law & Public Affairs; Sidney F. Davis 
to Assistant Vice President-Corporate Legal 
Affairs; C. J. May to Assistant Vice President- 
Engineering; Rex A. McClelland to Assistant 
Vice President-Properties; C. G. Sweazea to 
Assistant Vice President-Civic Affairs; and 
Audly Toller, Jr. to Assistant Treasurer. The 
combined Delta experience of these gentlemen 
totals over 270 years. 
Subsequent to the close of the fiscal year, 
Mr. J. F. Nycum, Assistant Vice President- 
Flight Equipment Development, retired on July 
13 
 31, 1974. In his 34 years of outstanding service 
to Delta, Mr. Nycum has been closely asso- 
ciated with the development of many aircraft, 
including the McDonnell Douglas DC-8 and 
DC-9 and the Lockheed L-1011. 
Fuel Problems 
Effective November 1, 1973, the Federal Gov- 
ernment instituted a program of fuel allocation 
to all airlines. Fuel was allocated monthly 
based on actual fuel usage for the same month 
during 1972. Effective January 7, 1974, the 
amount allocated was further reduced. In order 
to meet these reductions in fuel availability, 
Delta had to curtail plans for capacity in- 
creases and reduced its planned flight schedules 
by about 13% and available seat miles by 8%. 
At the same time that supply of fuel was  
being curtailed, the price was increasing 
rapidly. As of June 30, 1974, Delta's average 
price was 22.oq: per gallon, an 86% increase 
over the price at June 30, 1973. To counter the 
effects of reduced supply and sharply increas- 
ing price, every available fuel saving technique 
was employed, including retiring older and less 
fuel efficient DC-8-33's and Convair 880's 
earlier than planned, reduced cruising speeds, 
increased use of flight simulators for crew 
training, and revised ground handling pro- 
cedures. The result of these changes was an 
approximate 9% increase in fuel efficiency over 
last year. Even with this increased fuel effi- 
ciency, Delta's total fuel cost increased 30% for 
the year including a 39% increase in average 
price and a 6% reduction in the amount of fuel 
used. 
In the last quarter of the fiscal year fuel 
supplies eased, and Delta is currently receiving 
sufficient fuel to meet our current needs. The 
flight schedules which were eliminated during 
the worst part of the shortage are being rein- 
stated as traffic demand requires. However, the 
price of fuel is expected to continue to escalate. 
At June 30, 1974, Delta had 48% of its projected 
fuel requirements under contracts which allow 
for price increases based only on the escalation 
of crude oil prices. 
14 
 The Company is presently engaged in 
litiga tion with the Federal Energy Administra- 
tion concerning the jet fuel allocation program. 
In addition, the Company has suits pending 
against Exxon Company and Gulf Oil Corpora- 
tion which challenge certain price increases to 
Delta for jet fuel. It is too early to predict the 
outcome of these matters. 
It is expected that jet fuel will be de- 
allocated by the Federal Government later this 
year. We are hopeful that this action will have 
a moderating effect on the rise of fuel prices. 
Regulatory Matters 
In general, the Civil Aeronautics Board is con- 
tinuing to emphasize proceedings which hold the 
prospect of improving the economic condition of 
the airline industry, while de-emphasizing new 
route proceedings. Economic regulation affect- 
ing Delta Air Lines during the past year has been 
concentrated in two areas-route transfers and 
route exchanges between carriers, and continuing 
examination of the industry's fare level and fare 
structure and both freight and mail rate levels 
and structure. 
New Route Cases. 
The major route case now in process before the 
CAB - and one of the largest ever to be pro- 
cessed by that agency- is the Transatlantic 
Route Proceeding. The case involves possible 
certification of new trans-Atlantic services out of 
"inland" gateways in such areas as the Southeast 
and Southwest, and the possibility of renewing 
or revising existing trans-Atlantic U.S . Flag air- 
line certifications. Delta has concentrated its 
efforts in this proceeding on seeking nonstop 
authority between the major gateways of 
Atlanta, Georgia and London, England. Unless 
restricted by the United States or the United 
Kingdom, grant of Delta's application would 
also permit it to provide single-plane service via 
Atlanta to and from London for cities lying 
beyond Atlanta in the southern United States. 
The CAB's decision is expected to be submitted 
to the President of the United States for approval 
or disapproval sometime in late 1974 or early 1975. 
15 
 On the domestic system, the CAB has 
decided against certificating any new competi- 
tion in the Atlanta-Cleveland, Atlanta-Detroit 
and Atlanta-Cincinnati markets. Accordingly, 
Delta's bid to compete with United in the 
Cleveland market was denied, while all applica- 
tions to compete against Delta in the Atlanta- 
Detroit/ Cincinnati markets were also denied. 
One of the applicants for the Detroit and 
Cincinnati authority has appealed this CAB 
decision to a federal court of appeals, and 
Delta has intervened in the proceeding. 
In other court cases, a federal court of 
appeals has affirmed the CAB's grant to Delta 
of Memphis-Miami nonstop authority. The 
same court has upheld the CAB's grant of 
Houston-Miami authority to another carrier 
in lieu of an earlier grant to Delta which 
had been reversed by a previous court of 
appeals decision. 
Delta's motion to dismiss its application 
for Nashville-Detroit authority in the Detroit- 
Nashville Nonstop Service Investigation, 
remains pending before the CAB with no 
decision. 
Further proceedings in the Miami-Los 
Angeles Competitive Nonstop Service Investi- 
gation, which is considering whether to lift 
the present stay on Delta's authority in this 
market (imposed at the time of the Delta- 
Northeast merger) or to grant competitive 
authority to some other carrier, have been 
delayed pending formulation of an environ- 
mental impact statement. The Administrative 
Law Judge who heard the economic issues 
recommended the selection of Pan American 
Airways for this market and the termination 
of Delta's stayed authority. Delta is vigorously 
opposing this decision, and is seeking the right 
to reinstitute service in the market. 
The New England Service Investigation 
was decided in July of 197 4. Delta's certificate 
obligations were deleted at a number of smaller 
New England cities which had been on the 
former Northeast routes prior to its merger 
into Delta. Delta's services had been suspended 
at these cities, but in some cases service had 
been provided by a substitute "commuter" 
16 
 carrier, in some instances under contract with 
Delta. At the same time the CAB indefinitely 
suspended Delta's authority at nine other New 
England points and authorized service to these 
cities by a newly-certificated carrier. Delta's 
authority at Boston, Hartford, Burlington, 
Manchester-Concord, Portland, Bangor, 
Presque Isle and Worcester is unaffected by 
this decision. The decision provides for an 
October 15, 1974 effective date, subject to 
possible reconsideration. 
A combination of dwindling traffic 
volumes, increased competition by a com- 
muter carrier in the Atlanta-Brunswick, 
Georgia market, and the planned closing of 
the Glynco Naval Air Station has caused the 
CAB to approve Delta's application to suspend 
all services at Brunswick for the near future. 
Route Transfer and Route Exchange Cases. 
Delta and TWA have contracted for the trans- 
fer to Delta of TWA's existing authority be- 
tween Nashville, Tennessee, on the one hand, 
and St.Louis, Atlanta, Tampa/St.Petersburg/ 
Clearwater, and Miami/Ft.Lauderdale, on the 
other hand, with termination of TWA's 
authority at Nashville, in exchange for a 
payment of $1 million by Delta to TWA for its 
past developmental efforts at Nashville. This 
proceeding was heard during July, 1974, and 
an initial decision by the Administrative Law 
Judge is expected in the fall of 1974, with final 
agency decision late in 1974 or reasonably 
early in 1975. 
Delta and Piedmont Aviation have 
entered into an agreement whereby Delta 
would transfer to Piedmont Delta's nonstop 
authority between Asheville, North Carolina, 
on the one hand, and Chicago, Illinois, 
Columbus, Ohio, and Columbia, South Caro- 
lina, on the other hand, in exchange for trans- 
fer by Piedmont to Delta of Piedmont's 
nonstop authority between Charleston, South 
Carolina, on the one hand, and Charlotte, 
Greensboro/High Point/Winston-Salem, and 
Raleigh/Durham, North Carolina, on the other 
hand. The agreement provides that, upon the 
effective date of the route exchange, Asheville 
17 
 will be deleted from Delta's routes and 
Charleston will be deleted from Piedmont's 
routes. The agreement has been filed with the 
CAB for its approval and initial hearings are 
expected in late 1974. 
Other carriers have entered into various 
route exchange agreements which could have 
some adverse effect on Delta, if approved by 
the CAB. 
Rate and Fare Cases. 
The CAB's overall investigation into the 
structure and level of U.S. airline passenger 
fares is now substantially completed, after 
four and one-half years of processing. The 
most recent decision in the Investigation 
involved fare structure- that is, the relation- 
ships between different basic types of fares 
and between fares for differing lengths of 
travel. Among other things, this decision 
would require a large increase in first-class 
fares; some increase in short-haul day coach 
fares; and some decrease in long-haul day 
coach fares. Simultaneously, the CAB issued 
its decision on reconsideration in the so-called 
Joint Fares Phase of the Investigation, estab- 
lishing new rules for the publication of joint 
fares (for routings involving two or more 
carriers) and for division of revenue between 
the carriers under such fares, the overall 
effect of which would be to decrease industry 
revenues, with part or all of the decrease 
theoretically to be recouped from the new 
overall fare structure. Petitions for further 
clarification and for reconsideration of both of 
these decisions remain pending before the 
CAB. As indicated previously, the CAB has 
stayed the effectiveness of both of these 
decisions until further order of the Board. 
The fare structure decision did not resolve 
the issues which had been tried concerning 
reduced "off-peak" fares such as those used by 
Delta in its famous "Early Bird" and "Owly 
Bird" services. Instead, the CAB has instituted 
a new Domestic Night Coach Fare Investiga- 
tion, in which all aspects of off-peak fare 
18 
 operations and the related fare level and struc- 
ture will be considered. This case should go to 
trial sometime in 1975. 
Judicial review continues of the CAB's 
decision that passenger fares actually charged 
from October 1969 to mid-October 1970 were 
fully lawful. Decison in this court case is not 
expected before 1975. Other court cases which 
seek reparations for passengers on the theory 
that the October 1969-October 1970 fares were 
improper remain in abeyance pending final 
conclusion of this appeal from the CAB's 
decision. 
The trial has now been completed in a 
comprehensive investigation of the reason- 
ableness and the structure of all domestic 
airline air freight rates. An initial decision by 
the Administrative Law Judge is expected in 
this proceeding in 1975, following which the 
entire proceeding will be reviewed by the CAB. 
In yet another proceeding, the CAB is 
considering the level of mail rates which should 
be paid to the carriers on and after October 12, 
1973, as compensation for services rendered 
in carrying the various U.S. mails. Rates for  
the "past period" from December of 1970 
through October 12, 1973 have been finally 
decided by the agency, resulting in a payment 
to Delta of $3,800,000 in addition to mail pay 
previously received for that period. 
The CAB has decided that the previous 
agreement between the airlines and the Rail- 
way Express Agency, under which air express 
service has been provided for many years, 
should be disapproved. Delta withdrew from 
the airline/REA agreement, effective in mid- 
June of 1974. Delta filed a tariff with the CAB 
providing for on-line air express services on the 
Delta system, and is negotiating with other 
carriers for the creation of a new, industry- 
wide air express system. In the meantime, REA 
has appealed the CAB's decisions to court. 
Miscellaneous other rate and fare pro- 
ceedings remain in preliminary stages before 
the CAB. 
19 
 Delta Air Lines System Route Map 
20 
DELTN 
PAN AM 
THAU-JETS 
TO AND FROM 
EUROPE 
 DELTA AIR LINES, INC. 
Balance Sheets 
June 30, 1974 and 1973 
ASSETS 
CURRENT ASSETS: 
1974 197 3 
{In Thousands) 
Cash ..................... $ 29,886 $ 23,709 
Short-term cash investments, 
at cost .................. . 31,145 73,096 
61,031 96,805 
Accounts receivable, net ..... . 68,427 58,043 
Maintenance and operating 
supplies, at average cost . . .. . 11,023 6,566 
11,887 
Prepaid expenses, etc .... . ... . __ _ 3,028 
Total current assets ....... . 
PROPERTY AND EQUIPMENT 
(Note 2): 
Flight 
Equipment Other 
Cost- 
1974 $1,225,167 
1973 978,428 
$204,182 
152,464 
Accumulated depreciation- 
1974 403,044 89,264 
1973 439,635 75,841 
Advance payments for new 
equipment (Note 2) ..... .. . . 
OTHER ASSETS, being 
amortized : 
Nonoperating property and 
152,368 
1;429,349 
492,308 
937,041 
104,793 
1,041,834 
164,442 
1,130,892 
515,476 
615,416 
123,915 
739,331 
equipment . . . . . . . . . . . . . . . 604 1,797 
Preoperating expenses. . . . . . . . 1,777 
Unamortized debt expense ..... ___ 
5_2_1 579 
1,125 4,153 
$1,195,327 $ 907,926 
22 
 DELTA AIR LINES, INC. 
LIABILITIES AND 
STOCKHOLDER EQUITY 1974 1973 
(In Thousands) 
CURRENT LIABILITIES: 
Current maturities of 
long-term debt . ... . .. ..... $ 21,244 $ 51,400 
Accounts payable and accrued 
liabilities . . . ... . . . . .. ... . . 115,174 90,692 
Unearned transportation 
revenue ... . ... ... . . .. .. .. 26,997 19,114 
Accrued income taxes ....... . 13,362 27,309 
Total current liabilities .. . .. 176,777 188,515 
LONG-TERM DEBT (Note 3) .. . 345,119 168,000 
DEFERRED CREDITS (No te 5): 
Deferred Federal income taxes .. 184,813 161,347 
Unamortized investment tax 
credits . .... ... . .......... 44,792 25,511 
229,605 186,858 
COMMITMENTS (Notes 2 and 4) 
STOCKHOLDER EQUITY (Notes 
6 and 7): 
Common stock, par value 
$3.00 per share-Authorized 
25,000,000 shares; O utstanding 
19,879,377 shares in 1974 and 
19,866,524 shares in 1973 ..... 59,638 59,600 
Common stock purchase 
warrants ............ . .... 6,750 6,750 
Additional paid-in capital. .... 73,280 72,768 
Retained earnings ( of which 
$204,297,000 is restricted at 
June 30, 1974 as to the 
payment of cash dividends 
under credit agreements) .. . .. 304,158 225,435 
443,826 364,553 
$1,195,327 $ 907,926 
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, 1974 and 1973 
1974 1973 
{In Thou sands) 
OPERA TING REVENUES: 
Passenger .................. $1,114,868 
Cargo. . . . . . . . . . . . . . . . . . . . 86,685 
Other, net. . . . . . . . . . . . . . . . . 25,574 
Total operating revenues. . . . 1,227,127 
OPERATING EXPENSES: 
Flying operations ........... . 
Maintenance. . . ........... . 
Aircraft and traffic servicing .. . 
Promotion and sales .. . ..... . 
Passenger service ....... . ... . 
Depreciation and 
amortization ..... .. . .. . .. . 
General and administrative ... . 
316,207 
145,287 
233,181 
130,763 
113,885 
98,303 
32,417 
Total operating expenses. . . . 1,070,043 
OPERATING INCOME.... . . . . 157,084 
OTHER EXPENSE (INCOME): 
Interest expense ........ . . ... 28,275 
Less- Interest capitalized on 
advances for equipment . . .. .. (10,810) 
17,465 
Miscellaneous income, net ..... (3,088) 
Gain on disposition of aircraft. . (18,607) 
Merger integration costs .... . . 
(4,230) 
INCOME BEFORE INCOME 
TAXES 161,314 
PROVISIO N FO R INCOME 
TAXES (Note 5): 
Income taxes provided ....... . 78,953 
Less-Amortization of 
investment tax credits . .... . . (8,288) 
70,665 
NET INCO ME ............... $ 90,649 
NET INCOME PER COMMON 
SHARE .. ... . ...... ...... . $4.56 
$ 960,215 
76,323 
13,161 
1,049,699 
259,649 
141,330 
202,173 
110,452 
102,153 
84,301 
28,882 
928,940 
120,759 
15,808 
(6,345) 
9,463 
(4,316) 
(4,653) 
4,024 
4,518 
116,241 
56,736 
(6,490) 
50,246 
$ 65,995 
$3.32 
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, 197 4 and 1973 
197 4 1 973 
(In Thou sands) 
BALANCE AT BEGINNING 
OF YEAR ........... .. ... .. . $225,435 $169,365 
Add (Deduct): 
Net income .. -. . . . . . . . . . . . . . . . 90,649 
Cash dividends -$.60 and 
$.SO per share in 1974 and 
1973, respectively. . . . . . . . . . . . (11,926) 
BALANCE AT END OF YEAR 
(restricted as indicated on 
65,995 
(9,925) 
balance sheet) .. . . .. .... . .. .. . $304,158 $225,435 
Statements of Additional Paid-in Capital 
For the years ended June 30, 1974 and 1973 
BALANCE AT BEGINNING 
_fil.1__-1J!IL 
(In Thousands) 
OF YEAR .... ................. $72,768 $71,037 
Add: 
Excess of proceeds over par value of 
common shares issued (12,853 in 
1974 and 38,139 in 1973) under 
employee stock option plan 
(Note 6) ....... . ....... ...... . 
Income tax reduction to Company 
resulting from sales by employees 
of common shares issued under 
stock option plan .. ... ....... . . . 
Capital contributed to Northeast by 
Storer Broadcasting Company ... .. 
408 1,126 
104 435 
170 
BALANCE AT END OF YEAR . . . . .. . $73,280 $72,768 
The accompanying notes are an integral part of these statements. 
25 
 DELTA AIR LINES, INC. 
Statements of Changes in Financial Position 
For the years ended June 30, 1974 and 1973 
1974 1973 
(In Thousands) 
FUNDS PROVIDED BY: 
Net income ..... .............. $ 90,649 $ 65,995 
Add expenses not requiring current 
outlay of working capital- 
Depreciation and amortization .. 99,876 84,914 
Deferred income taxes ........ 27,316 14,466 
Investment tax credits, net . .... 19,281 1,586 
Other. ....... .... . .... . ... 1,177 720 
Total from operations ....... 238,299 167,681 
Disposition of property and 
equipment (book value) . . .. . . .. 40,629 17,876 
Long-term financing, less 
$124,000,000 long-term portion 
of bank debt refinanced in 1974 ... 195,619 5,000 
Common stock issued under 
employee stock option plan, 
including income tax reduction . .. 550 1,676 
Other . .. . .. ............. . ... 499 
475,097 192,732 
FUNDS USED FOR: 
Property and equipment additions- 
Flight equipment and advances .. . 385,228 135,036 
Other ................. . ... 54,563 18,695 
439,791 153,731 
Reduction of long-term debt . . . ... 18,500 36,585 
Cash dividends ................ 11,926 9,925 
Preoperating expenses . ..... .... . 1,366 2,611 
Settlement of prior years' income 
taxes (Note 5) ....... . ........ 3,850 
475,433 202,852 
DECREASE IN WORKING 
CAPITAL. .... . ... . . .. ... .... $ (336) $ (10,120) 
CHANGES IN WORKING 
CAPITAL COMPONENTS: 
Increase (decrease) in - 
Cash and short-term 
investments ......... .. . .... $ (35,774) 
Receivables, net. . . . . . . . . . . . . . 10,384 
Other current assets. . . . . . . . . . . 13,316 
Decrease (increase) in- 
Current maturities of long-term 
debt. . . . . . . . . . . . . . . . . . . . . . 30,156 
Accounts payable and accrued 
$ 22,086 
2,312 
(775) 
(7,504) 
liabilities ... .. ... . .... ..... . (24,482) (12,223) 
Other current liabilities . .. ..... . 6,064 (14,016) 
$ (336) $ (10,120) 
====== 
The accompanying notes are an integral part of these statements. 
26 
 DELTA AIR LINES, INC. 
Notes to Financial Statements 
June 30, 1974 and 1973 
1. SUMMARY OF ACCOUNTING POLICIES: 
Passenger Revenue-Passenger ticket sales are 
recorded as revenue when the transportation is 
used. The value of unused tickets is included in 
current liabilities in the financial statements. 
Depreciation-Substantially all of the Com- 
pany'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). 
Maintenance and Repairs-All maintenance and 
repair costs, including engine and airframe over- 
hauls, are charged to maintenance expense when 
incurred. Major replacements and betterments are 
capitalized. 
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 Expenses-When new aircraft 
fleets are introduced, training and other major 
costs incurred are deferred and then amortized on 
a straight-line basis generally over a period of two 
years or less. DC-10 preoperating expenses were 
amortized over a period of 12 months through 
February, 1974; L-1011 preoperating expenses were 
deferred through February, 1974 and fully amortized 
in March, 1974. 
Retirement Plans-All of the Company's per- 
manent employees are covered under its non- 
contributory trusteed plans providing for 
retirement, disability, and survivor benefits. The 
27 
 DELTA AIR LINES, INC. 
total expense under these plans amounted to ap- 
proximately $31,000,000 in 1974 and $26,100,000 
in 1973. The Company's policy is to fund each year's 
accrued costs under the plans, which costs include 
amortization of prior service costs over a thirty- 
year period to 1991. As of June 30, 1974, the assets 
of the plans exceeded the actuarially computed pres- 
ent value of vested benefits under the plans. 
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 and interest capitalized) where 
there is a timing difference in recording such items 
for financial reporting purposes and for income tax 
purposes. Utilized investment tax credits are amor- 
tized ( as a reduction of the provision for income 
taxes) over the approximate life of the related 
equipment. (See Note 5.) 
Earnings Per Share-Net income per common 
share is computed based on the weighted average 
number of outstanding shares during the year 
(19,875,610 shares in 1974 and 19,852,842 shares in 
1973). Outstanding stock options and warrants (see 
Note 6) have no material dilutive effect on net in- 
come per common share in 1974 and 1973. 
28 
 DELTA AIR LINES, INC. 
2. PURCHASE COMMITMENTS: 
The Company has purchase agreements for 
the following aircraft and related spare engines 
(including estimated expenditures under purchase 
options for 16 Boeing 727-200 aircraft exercised sub- 
sequent to June 30, 1974): 
21 Lockheed L-1011 
27 Boeing 727-200 
Adv ances and Estimated 
O ther Expenditures 
Expenditures to During Fisca l 
Ju ne 30, 1974 1975 through 1978 
(In Thousands) 
$ 91,048 $363,000 
22,461 
$113,509 
207,000 
$570,000 
The Company also has options to purchase 16 
additional Boeing 727-200 aircraft for delivery in 
1976 (including 12 obtained subsequent to June 30, 
1974). The Lockheed Aircraft Corporation, manu- 
facturer of the L-1011 aircraft, has encountered 
renewed financial difficulties as a result of pro- 
duction cost increases and other factors . An 
agreement is presently pending whereby Textron, 
Inc. would provide additional financing to Lock- 
heed. At June 30, 1974, the Company had received 
delivery of 9 L-1011 aircraft, and had firm orders 
for another 9 L-1011 aircraft scheduled for delivery 
by the end of December, 1974. Company manage- 
ment believes this contract will be fulfilled. Orders 
for an additional 12 aircraft are cancellable by the 
Company by various specified dates between Octo- 
ber 31, 1974 and Janu ary 31, 1976. Advances to 
Lockheed on the cancellable orders amounted to 
$10,324,000 at June 30, 1974, which advances (except 
for $40,000 per aircraft) are to be applied, in the 
event of cancellation, against the purchase price of 
the last 2 aircraft to be delivered under firm orders. 
In July, 1974, the Company sold 1 Boeing 747 
aircraft for delivery in fiscal 1975. 
29 
 DELTA AIR LINES, INC. 
3. LONG-TERM DEBT: 
At June 30, 1974 and 1973, the Companis 
long-term debt (including current maturities) was 
as follows: 1974 1913 
(a)Due banks under unsecured notes 
carrying an interest rate of 1/ 4% 
(In Thou sands) 
above the prime rate, $156,000,000 
repaid in September, 1973, with 
the proceeds from the 1973 bank 
credit agreement ($6,667,000 
payable in fiscal 1975) ........ . . $ 6,667 $177,150 
(b) Due banks under 1973 credit agree- 
ment which provides for un- 
secured borrowings up to 
$300,000,000 on a revolving basis 
through September, 1975, at which 
time the outstanding balance will 
be converted to a five-year term 
loan. The interest rate is equal 
to the prime rate through Septem- 
ber, 1975, then  % above the 
prime rate through September, 
1978, then % above the prime 
rate through September, 1980 .... 
(c) Due Lazard Brothers & Co., 
Limited under 5% and 6% 
unsecured notes, payable in 
pounds sterling in 20 semiannual 
installments to 1985 ($3,864,000 
270,000 
payable in fiscal 1975). . . . . . . . . . 46,348 
( d) Due Rolls-Royce (1971) Limited 
in monthly installments (including 
6% interest) to January, 1984 
($463,000 payable in fiscal 1975) . . 4,348 
( e) Due insurance companies under 
6% and 7% unsecured notes, 
payable in installments to 
December 31, 1979 ($10,250,000 
payable in fiscal 1975). . . . . . . . . . 17,000 
(f) Convertible Subordinated 
Debentures, 6%, maturing 
August 1, 1986, with annual 
sinking fund redemptions of 
$1,100,000 beginning July 31, 
1976 (Note 6) . . . . . . . . . . . . . . . . 22,000 
20,250 
22,000 
Total. . . . . . . . . . . . . . . . . . . . . . 366,363 219,400 
Less-Current maturities . . . . . . . 21,244 51,400 
$345,119 $168,000 
30 
 DELTA AIR LINES, INC. 
In connection with the bank credit agreements, 
the Company has informally agreed to maintain on 
deposit with the lending banks average balances 
(including normal working balances) equal to 15% 
of the average daily outstanding borrowings, with 
the average balances and borrowings being com- 
puted over the term of the agreements. There are 
no legal restrictions on the Company's use of 
these funds. 
The Company may borrow an additional 
$30,000,000 under the 1973 bank credit agreement 
and approximately $36,000,000 under the present 
loan agreement with Lazard Brothers & Co., 
Limited. Further, the Company is presently negotiat- 
ing with Lazard for additional long-term financing 
of approximately $20,000,000. Company manage- 
ment feels that these borrowings, together with 
funds provided from operations, will sufficiently 
cover future expenditures for aircraft (see Note 2) 
and scheduled debt maturities. Scheduled maturities 
of June 30, ;1974, long-term debt amount to 
$21,244,000in 1975, $39,664,000 in 1976, $51,764,000 
in 1977 through 1979, $51,014,000 in 1980, 
$67,264,000 in 1981 and $31,885,000 thereafter. 
4. LEASE OBLIGATIONS: 
At June 30, 1974, the Company leased 31 air- 
craft and certain airport terminal and maintenance 
facilities, ticket offices, etc. Leases for 5 Douglas 
DC-10 aircraft expire in May, 1975, and arrange- 
ments have been completed on behalf of the lessor 
for the disposition of 8 leased Douglas DC-9-31 
aircraft in fiscal 1975. Total rental expense was 
$53,433,000 in 1974 and $39,820,000 in 1973, includ- 
ing rentals under "financing leases" ( as defined by 
the Securities and Exchange Commission) of 
$29,354,000 in 1974 and $27,856,000 in 1973. 
At June 30, 1974, the Company's minimum 
rental commitments under noncancellable leases 
31 
 DELTA AIR LINES, INC. 
with initial or remaining terms of more than one 
year were as follows: 
Payable fo r Financing O th er 
Fisca l Year Leases Leases To tal 
(In T ho usands ) 
1975 $ 28,640 $16,910 $ 45,550 
1976 27,400 3,720 31,120 
1977 27,240 2,130 29,370 
1978 26,570 1,510 28,080 
1979 24,850 1,220 26,070 
1980-1984 84,070 3,170 87,240 
1985-1989 58,190 460 58,650 
1990-1994 49,630 70 49,700 
After 1994 53,580 30 53,610 
$380,170 $29,220 $409,390 
The estimated present value (based on a 
weighted average of 6.3 % of interest rates used 
ranging from 3.125% to 10.0%) of the minimum 
rental commitments under financing leases was as 
follows at June 30, 1974 and 1973: 
Applicable to 
Terminal facilities .. ... ..... . . . 
Maintenance facilities ..... .. .. . 
Aircraft ... .... . ... . ....... . 
Other . .... . . . ... .. ..... ... . 
1974 1973 
(In Th o usands ) 
$ 89,520 
70,660 
55,390 
12,050 
$227,620 
$ 71,190 
72,500 
80,530 
8,960 
$233,180 
Assuming all financing leases were capitalized 
and the related leasehold rights amortized on a 
straight-line basis and interest accrued on the out- 
standing present value, the effect on 1974 and 1973 
net income would have been less than 3%. 
32 
 DELTA AIR LINES, INC. 
5. INCOME TAXES : 
The provision for income taxes in 1974 and 
1973 consisted of the following elem ents: 
C urrently payable- 
Federal .. .. ............... . 
State ................ . . .. . 
Deferred Federal income 
taxes ... . . . . . . . .......... . 
Investment tax credits . . ....... . 
Income taxes provided ...... . 
Less- Amortization of 
utilized investment 
credits over approximate 
1974 197 3 
- - 
(/-11 Th o usands) 
$22,051 $33,027 
2,017 1,167 
27, 316 14,466 
27,569 8,076 
78,953 56,736 
life of related equipment. . . . . . (8,288) (6,490) 
$50,246 
$70,665 
Total income taxes provided were 48.9% and 
48.8% of 1974 and 1973 book income before income 
taxes, respectively, representing taxes provided at 
the 48.0% Federal statutory rate plus net state in- 
come taxes. At June 30, 1974 and 1973, all available 
investment tax credits had been utilized to reduce 
the Companis Federal income taxes payable. 
The provision for deferred Federal taxes 
resulted from the tax effect of the following timing 
differences: 
Depreciation .. ........ .. . ... . 
Interest capitalized ... . . . , ... .. . 
Preoperating expenses . . ... .. . . . 
Other, net. ...... .... ..... .. . 
1974 197 3 
(In Th o usands) 
$22,616 
5,189 
(853) 
364 
$27,316 
$ 8,009 
3,046 
853 
2,558 
$14,466 
In October, 1973, the Company reached a 
final agreement with the Internal Revenue Service 
providing for a $3,850,000 settlement of income tax 
deficiencies proposed for the taxable years 1963 
through 1965. Provision for these taxes had been 
made in prior years. The Internal Revenue Service 
is presently examining the Company's income tax 
returns for the years 1966 through 1972. In the 
opinion of management adequate provisions have 
been made for potential tax deficiencies and interest 
thereon. 
33 
 DELTA AIR LINES, INC. 
6. COMMON STOCK: 
At June 30, 1974, the Company had 1,098,650 
shares of unissued common stock reserved for stock 
options (510,650 sha res), stock purchase warrants 
(500,000 shares at $48 per share) and conversion of 
Convertible Su bord ina ted Debentures (88,000 
shares at $250 per share) . 
Under the Companis Qualified Stock Option 
Plans for 600,000 shares of common stock, options 
for 224,250 shares have been granted and options 
for 13,150 shares were outstanding at June 30, 1974 
(3,700 shares at $34.50 per share, 6,950 shares at 
$30.25 per share and 2,500 shares at $51.75 per 
share). Transactions during 1974 and 1973 were as 
follows: 
Op tio n Shares 
1974 1973 
Outstanding at beginning 
of year. . . . . . . . . . . . . . . . . . . . 150,116 
Granted .. .. .. .. .. . .. .... . . . . 
Exercised. . . . . . . . . . . . . . . . . . . . (12,853) 
Expired. . . . . . . . . . . . . . . . . . . . . (1,613) 
Terminated (see below) . .. ... . .. (122,500) 
Outstanding at end of year. . . . . . 13,150 
Exercisable at end of year. . . . . . . 9,338 
67,505 
125,000 
(38,139) 
(4,250) 
150,116 
18,304 
- - - 
Options granted in May, 1973, for the purchase 
of 122,500 shares of common stock at $51.75 per 
share were terminated in fiscal 197 4 in connection 
with the implementation of the 1972 Performance 
Share Unit Plan for officers and key employees. 
This Plan has no effect on the Company's authorized 
and unissued common stock. 
34 
 DELTA AIR LINES, INC. 
7. MERGER WITH 
NORTHEAST AIRLINES, INC.: 
On August 1, 1972, Delta's merger with North- 
east Airlines, Inc. was consummated. Delta issued 
( a) 668,515 shares of its common stock for all of 
the outstanding common stock of Northeast, and 
(b) warrants to Storer Broadcasting Company 
(majority stockholder of Northeast) 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 transferring to Delta the $40,085,000 
owed by Northeast to Storer at August 1, 1972. 
The estimated fair value of the warrants at the date 
of the merger agreement (May 12, 1971) was 
$6,750,000. The merger was accounted for as a 
pooling of interests and, accordingly, prior financial 
statements of Delta have been restated. 
Northeast's operating revenues and net loss 
for the month of July, 1972, which are included in 
the fiscal 1973 results of operations, amounted to 
$12,464,000 and $131,000 ( $. 01 per share), 
respectively. 
Auditors' Report 
ARTHUR ANDERSEN & Co. 
ATLANTA , G EORGIA 
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, 1974 
and 1973, and the related statements of income, retained 
earnings, additional paid-in capital and changes in finan- 
cial 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 circumstances. 
In our opinion, the accompanying financial state- 
ments present fairly the financial position of Delta Air 
Lines, Inc. as of June 30, 1974 and 1973, and the results of 
its operations and the changes in its financial position for 
the years then ended, in conformity with generally ac- 
cepted accounting principles consistently applied during 
the periods. 
Atlanta, Georgia, 
August 23, 1974. 
~ a,._~ <I G . 
35 
 DELTA AIR LINES, INC. 
Five Years of Delta Air Lines Growth Years ended June 30 
(Dollars expressed in thousands except per hare figures) 
DELTA ONLY RESULTS: 
Operating revenues ..................... . 
Net income .... . ........ . ..... ......... . 
Net income per share .................. . 
AS RESTATED TO REFLECT POOLING OF 
NORTHEAST AIRLINES, INC. (1): 
Operating revenues 
197 4 
Passenger. ........................... $1,114,868 
Cargo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,685 
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,574 
Total operating revenues ............ . .... . $1,227,127 
Operating expenses. . . . . . . . . . . . . . . . . . . . . . . 1,070,043 
Operating income ...... . ................ . 
Interest expense, etc., net. ................ . 
Gain (loss) on disposition of aircraft . . . . ... . . 
Income before taxes .. .... ...... ..... .... . $ 
Income taxes ..... . . . ................ . .. . 
Income before extraordinary items ......... . $ 
157,084 
14,377 
18,607 
161,314 
70,665 
90,649 
Extraordinary items ................. ... .. ___ _ 
Net income ................ . ............ $ 
Net income per share ................... . 
Dividends paid ......................... . 
Dividends paid per share .... . ..... ...... . 
90,649 
$4.56 
$11,926 
$.60 
Stockholder equity ................... . ... $ 443,826 
Stockholder equity per share. . . . . . . . . . . . . . . $22.33 
Shares of common stock outstanding ......... 19,879,377 
Revenue passengers enplaned ............... 25,565,208 
Available seat miles (000) ..... .. ........... 28,417,679 
Revenue passenger miles (000) . ... . .... . .... 15,581,370 
Passenger load factor. . . . . . . . . . . . . . . . . . . . . 54.83% 
Break-even load factor. . . . . . . . . . . . . . . . . . . . 47.10% 
Available ton miles (000) ................. . 
Revenue ton miles (000) .................. . 
Passenger revenue per passenger mile .. . ... . . . 
Operating expenses per available seat mile .... . 
Operating expenses per available ton mile ..... . 
3,847,226 
1,807,321 
7.lM 
3.77({: 
27.8H 
(1) The restated amounts and statistical data for years 1970 
through 1972 combine Delta-only results of operations for the 
three years ended June 30, 1972 with Northeast's results for 
the three years ended December 31, 1971. 
36 
1973 
$ 960,215 
76,323 
13,161 
$1,049,699 
928,940 
$ 120,759 
9,171 
4,653 
$ 116,241 
50,246 
$ 65,995 
$ 65,995 
$3.32 
$9,925 
$.50 
$ 364,553 
$18.35 
19,866,524 
23,702,870 
27,958,095 
14,449,748 
51.68% 
45.18% 
3,815,285 
1,711,229 
6.65({: 
3.32({: 
24.35({: 
197 2 
$757,569 
$ 42,169 
$2.20 
$806,068 
65,160 
12,338 
$883,566 
816,000 
$ 67,566 
13,500 
1,897 
$ 55,963 
27,489 
$ 28,474 
$ 28,474 
$1.44 
$9,570 
$.50 
$306,637 
$15.46 
19,828,385 
20,562,953 
26,018,780 
12,433,986 
47.79% 
43.80% 
3,613,790 
1,482,453 
6.48({: 
3.14({: 
22.58({: 
DELTA AIR LINES, INC. 
197 1 
$661,246 
$ 29,994 
$1.57 
$713,665 
60,097 
10,320 
$784,082 
735,605 
$ 48,477 
15,699 
$ 32,778 
12,419 
$ 20,359 
(700) 
$ 19,659 
$.99 
$9,562 
$.50 
$278,239 
$14.06 
19,793,515 
18,880,818 
24,838,909 
11,575,358 
46.60% 
43.40% 
3,403,838 
1,381,954 
6.17({: 
2.9M 
21.6H 
1970 
$622,129 
$ 44,527 
$2.33 
$679,018 
56,615 
8,585 
$744,218 
669,429 
$ 74,789 
18,477 
(227) 
$ 56,085 
33,511 
$ 22,574 
(7,224) 
$ 15,350 
$.78 
$7,650 
$.40 
$257,142 
$12.99 
19,793,515 
18,830,393 
22,820,681 
11,232,679 
49.22% 
43.76% 
3,094,437 
1,323,265 
6.05({: 
2.93({: 
21.63({: 
37 
 vJ 
\() 
Board of Directors 
Top Row 
R. W. FREEMA CARLETO PUT AM 
Washington, D.C. 
DAVID C. GARRETT, JR. R. S. MAURER 
Atlanta, Georgia 
New Orleans, Louisiana 
Chairman of the 
Finance Committee C.H. DOLSO 
Atlanta, Georgia 
Chairman of the 
Executive Committee 
Bottom Row 
R. W. COURTS 
Atlanta, Georgia 
STUART W. PATTO 
Miami, Florida 
Atlanta, Geo rgia 
ROBERT OPPE LANDER 
Atlanta, Georgia 
EMERY FLIN 
Mia111i, Florida 
BILL MICHAELS 
Miami, Florida 
W. T. BEEBE 
Atlanta, Georgia 
EDWARD H. GERRY 
ew York, ew York 
B. W. BIEDE HAR 
Monroe, Louisiana 
T. M. MILLER 
Atlanta, Georgia 
CHARLES H. KELLSTADT 
Miami, Florida 
JOHN R. LO GMIRE 
St. Louis, Missouri 
GEORGE M. S ELLI GS, JR. 
Monroe, Louisiana 
 DELTA AIR LI ES, I C. 
Officers 
W T. BEEBE Clia11111an of t/1e Boa,d [-< Chief 
E,erntn,e Offici>1 
DAVID C. GARRETT, JR . P1eside11t 
FINANCE 
ROBERT OPPE LA DER Senio, V,ce P1es ide11t-F11ta11ce 
[-< Treasu,cr 
W. A . ATCHISON 
J.D.D N 
1\.1 . 0 . GALLOWAY 
REX A. MCCLELLAND 
J. R. HOWELL 
HUGHH . SA O t 
AUD LY TOLLER, JR 
Vice P1es1dc11t-Co111pute 1 Se1v1ces 
Vice Pres1de 11t - P111 chasing 
Vice Pres1de11t -Co,nptro/le, 
Asst. Vice P,es1de11t-Properties 
Asst. Treas11re 1 
Asst. Treas111er 
Ass t. Treas111er 
LEGAL & CORPORATE AFFAIRS 
R. S. MAURER 
J. W. CALLISON 
FRANK F. ROX 
MORRIS SH IPLEY 
SID EY F. DAV IS 
A. C. FORD 
GEORGE E. SHEDD 
C. G . SWEAZEA 
IKE LASSETER 
MARKETING 
J. A . COOPER 
SHELBY D . DEMENT 
CHARLES P. KNECHT 
R. L. GIBSON 
J. T. MAPLES 
J. W. MEYER 
HE RY ROSS 
OPERATIONS 
HOYT T. FINCHER 
D . P. HETTERMAN 
C. A . SM ITH 
J. K. BUR ETTE 
JOHN P. DAVIS 
JACKS . KING 
. ).MAY 
W. L. M ILLER 
J. F. YCUM 
L. G. RODEFELD 
Se,1101 Vice Preside11t-Ce11e1al Co11nsel 
& Sec,etary 
V,ce President-Law[-, Regula to, y Affairs 
V,ce President -Law & Public Affairs 
V,ce President - G 011er111ne11t Affairs 
Asst. Vice Pres1dent-Corpo1ate Legal Affa11s 
& Asst. Sec,etary 
Asst . Vice President- Long Range Planning 
Asst. Vice Pres1de11t-P11b/1c Relations 
A,st. Vice Pres1de11t-Civ1c Affai,s 
Asst. 5Pcreta, y 
Se,1101 Vice Preside11t-Market111g 
Vice Preside11t- Cons11111er Affai, s 
Vice President-Ma,1-.eting 
Asst. Vice Preside11t-Traffic 
Asst. Vice President-Marketing Pla1111i11g 
Asst. Vice Preside11t-C11sto111er Relations 
Asst. Vice President-Sales Pro111ot1on 
Senior Vice P,esident-Operations 
Vi ce President- Teclinical Operatio11s 
Vice President-Flight Operations 
Asst. Vice Pres1dent-Q11al,ty Control 
Asst. Vice Pres1d(n1t-Maintcnance 
Asst. Vice President-Flight Cont,ol 
Asst. Vice President-Engineering 
Asst. Vice P,esident-Materie/ Services 
Asst. Vice President-Flight Eq11ip111ent 
Development 
Asst. Vice President- Co1111m111ications 
OPERATIONS - PASSENGER SERVICE 
HOLLIS L. HARRIS 
E. L. H AMNER 
FOY PHILLIPS 
PERSONNEL 
R. W. ALLEN 
). A. YORK 
40 
Senior Vice Pres,dent-Operntions- 
Passenger Sen,ice 
Vice President-Stations 
Vice P,esident- Passenger Service 
Senior Vice President-Personnel 
Asst. Vice President-Employee Services 
 Tran sfer Agent and Reg istrar 
The Citizens and Southern ational Bank 
99 Annex 
Atlanta, Georgia 30399 
Common Stock 
List don the ew York Stock Exchange 
Auditors 
Arthur Andersen & Co. 
25 Pryor Street, .E. 
Atlanta, Georgia 30303 
Annual Mee ti ng 
O ctober 24, 1974, Monroe, Louisiana 
DELTA AIR LI ES, I C. 
Notice to the Stockholders of Delta Air Lines, Inc. 
Part 245 of the Economic Regulations of the Civil Aeronautics 
Board provides that: (1) any person who either owns, as of 
December 31st of the year preceding issuance of this annual 
report, or subsequently acquires, beneficially or as trustee, more 
than 5%, in the aggregate, of any class of the capital stock or 
capital of Delta Air Lines, Inc., shall file with the Board a report 
containing the information required by Sec. 245.12 of Subpart 
245, on or before April 1, as to the capital stock or capital owned 
as of December 31 of the preceding year, and, in the case of stock 
subsequently acquired, a report under Sec. 245.13, within 10 days 
after such acquisition, unless such person has otherwise filed 
with the Board a report covering such acquisition or ownership, 
(2) any bank or broker covered by (1), to the extent that it holds 
shares as trustee on the last day of any quarter of a calendar year, 
shall file with the Board, within 30 days after the end of the 
quarter, a report in accordance with the provisions of Section 
245 .14; and (3) any person required to report under this subpart 
who grants a security interest in more than 5% of any class of the 
capital stock or capital of Delta Air Lines, Inc. shall wi thin 30 
days after granting such security interest file with the Board a 
report containing the information required in Section 245.15. 
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 Aeronau tics Board, 
Washington, D . C. 20428. 
Delta Air Li ne s, Inc. 
General Office s, H artsfield Atlan ta Internationa l Airport 
Atlanta, Georg ia 30320