DELTA AIR LINES, INC. 
ANNUALREPORT1975 
  Contents 
Highlights of the Year 2 
Description of Business 2 
Letter to Stockholders 3 
Earnings and Dividends 9 
Operating Revenues 9 
Operating Expenses 11 
Capitalization and Financing 12 
Flight Equipment and Purchase 
Commitments 14 
Personnel 15 
Regulatory Matters 16 
Route Map 24 
Financial Statements - 
Balance Sheets 26 
Statements of Income 28 
Statements of Retained Earnings 29 
Statements of Additional Paid-in 
Capital 30 
Statements of Changes in Financial 
Position 31 
Notes to Financial Statements 32 
Auditors' Report 41 
Summary of Operations 42 
Other Financial and Statistical Data 42 
Management's Analysis and Discussion of 
Summary of Operations 44 
Board of Directors 45 
Officers 46 
1 
 Highlights of the Year 
A comparative summary of the major yard- 
sticks for evaluation of operations for years 
ended June 30 is shown below. Dollars are 
expressed in thousands, except per share 
figures. Percent 
197 5 1974 Change 
Operating 
Revenues $1 ,377 ,030 $1,227 ,127 + 12% 
Operating 
Expenses . $1 ,282,000 $1,070,043 + 20% 
Net Income . $49,223 $90,649 - 46% 
Earn ings Per 
Share $2.48 $4.56 - 46% 
Reven ue Passengers 
Enplaned .. 25,832 ,608 25,565,208 + 1% 
Available Seat 
Miles (000) 29,497,234 28,4 17,679 + 4% 
Revenue Passenger 
Miles (000) . 15,916,860 15,445,89 1 + 3% 
Passenger Load 
Factor 53.96% 54.35% 1% 
Description of Business 
Delta Air Lines, Inc. is a certificated trunk 
air carrier providing scheduled air transpor- 
tation for passengers and cargo over a network 
of routes covering approximately 34,000 
miles . Delta's route structure connects the 
Northeast and Midwest with the southern 
states from Texas to Florida, the Southeast 
to California, and the East Coast to Florida. 
In addition Delta operates international 
flights to Canada, Bermuda, the Bahamas, 
Jamaica, Venezuela, and Puerto Rico. Service 
over nearly all of Delta's routes is highly 
competitive. As an air carrier, Delta is subject 
to extensive federal regulation pursuant to 
the Federal Aviation Act of 1958, as amended, 
and other federal and state statutes. 
2 
 Letter to Stockholders 
This pas-t fiscal year has been a difficult one 
for our nation and the airline industry as we 
have struggled with the burdens of recession, 
inflation, and the energy crisis. Despite the 
extraordinary efforts of all who make up the 
Delta family, we have not escaped the negative 
influences of these problems. Net earnings 
were $49.2 million, or $2.48 per share, a 46% 
decline from the industry record earnings 
reported last year. The recession and the 
highest level of unemployment since the 1930's 
brought a reduction in Del ta' s traffic after the 
first four months of the year when traffic was 
inflated by an extended strike against a major 
competitor. Costs continued their upward 
spiral, increasing 20% over last year, despite 
a concerted effort by our people to minimize 
controllable costs. 
The problem of limited fuel supplies last 
year was replaced by the even more significant 
problem of soaring fuel prices this year. The 
average price per gallon jumped 64% this 
year over last year, and this fact alone ac- 
counted for half of the total increase in our 
cash operating expenses. Extensive efforts 
were made to minimize the impact of these 
fuel price increases. Revenue plane miles 
were reduced 3% from last year and 8% from 
1973, and total fuel consumption was reduced 
1% from last year and 7% from 1973. Avail- 
able seat miles flown per gallon of fuel used 
increased 5% over last year and 14% over 1973. 
Available seat miles rose 4% as the result 
of using larger aircraft and a change in the 
seating configuration of the B-727-200 
aircraft. Good progress was made in our 
program of modernizing and standardizing 
the aircraft fleet, and improvements in the 
efficient use of fuel were realized as the 
3 
  Company accepted delivery of 9 L-1011 and 
13 B-727-200 aircraft. Twenty-one aircraft 
were removed from the fleet and either sold 
or returned to the lessor. The aircraft sales 
resulted in an after-tax gain of $4 million or 
20<): per share. 
Outside financing totaling $95 million 
was arranged during the year including a new 
$40 million Bank Credit Agreement, a 
$35 million loan agreement with The Travelers 
Indemnity Company, and an amendment to 
the existing loan agreement with Lazard 
Brothers & Co., Limited for an additional $20 
million to finance the purchase of Rolls-Royce 
engines used on the L-1011 aircraft. The 
proceeds from these financing arrangements, 
together with funds available from previous 
financing and internally generated funds, are 
expected to meet our capital needs for cur- 
rently outstanding orders for new aircraft. 
During the year the Civil Aeronautics 
Board approved a temporary 4% increase in 
passenger fares which was recently reviewed 
and extended to January 14, 1976. Late in the 
year the Board implemented the new pas- 
senger fare structure formula which increases 
short-haul coach fares by as much as 9% and 
reduces long-haul coach fares by as much as 
6%. At the same time first class fares were 
raised to 140% of coach fares with further 
increases scheduled over the next two years 
to a level equal to 163% of coach fares. We do 
not believe that this new fare structure is in 
the best interest of the public or the industry. 
Our initial experience with the new structure 
has shown that significant numbers of pas- 
sengers are being diverted from first class to 
other classes of service. If this trend continues, 
the whole fare level will have to be raised to 
recover the revenue lost by this unnecessary 
diversion. 
David C. Garrett, Jr., President, and 
W . T. Beebe, Chairman of the Board 
& Chief Executive Officer, at Delta's 
jet maintenance base. 
5 
 Within the past year the efficacy and 
economic effects of airline regulation by the 
Civil Aeronautics Board have been the subject 
of increasingly heavy debate by members of 
Congress, the Administration, and others. 
In addition, the Board has recently asked for 
comments on a proposed experiment to test 
the effect of loosening the regulations on en try 
and exit into the airline business and of in- 
creased freedom in setting fares. We seriously 
doubt that the entry/exit part of the experi- 
ment would provide significant public bene- 
fits and Delta therefore will oppose it, but 
will otherwise cooperate with the Board to 
the extent that we reasonably can. We are 
hopeful that the critics will soon recognize 
that the present air transportation system in 
this country, including its general regulatory 
climate, is the best in the world and efficiently 
serves the needs of all who require air 
trans port a tion. 
The CAB has also liberalized the charter 
regulations so as to make charter services 
available, for the first time and on a fairly 
unrestricted basis, to members of the public 
who do not belong to pre-existing groups. 
Our outlook for fiscal 1976 is one of 
caution and concern. It appears that the 
economy has reached its low point, and some 
modest recovery will take place in the coming 
year. The problems of inflation and spiraling 
fuel prices, however, are still with us and even 
a financially strong airline such as Delta 
cannot continue to counter the resultant 
debilitating effects without timely fare and 
rate increases. It is hoped that the Board will 
not allow political pressures to interfere with 
its approval of such increases as the need for 
them is demonstrated. 
The problems associated with fuel prices 
are especially critical to the airline industry 
since we have no alternatives to petroleum 
based fuel. If we are to maintain a viable air 
carrier industry in this country which re- 
sponds effectively to the needs of the public, 
the Congress and the Administration must 
6 
 deal r alistically with fuel prices. It is impera- 
tive that a national energy policy be developed 
which deals fairly with all sectors of the 
economy. 
The coming year will present us with 
new and formidable challenges. We are 
confident, however, that the nearly 28,000 
skilled and dedicated professionals who are 
the foundation of Delta will successfully meet 
these challenges, and your Company will 
maintain its position as one of the outstanding 
airlines in the world. 
DAVID C. GARRETT, JR . 
Presid ent 
September 5, 1975 
7 
W. T. BEEBE 
Chairman of the Board & 
Chief Execu tive Officer 
 EARNINGS PER SHARE* 
In Dollars 
5 
4 
3 
2 
0 
66 67 68 69 70 71 72 73 74 75 
STOCKHOLDER EQUITY PER SHARE* 
In Dollars 
25 
20 
15 
10 
5 
0 
66 67 68 69 70 71 72 73 74 75 
*These data reflect the operations of Delta Air Lines, Inc., 
and do not include the Northeast Airlines system 
prior to August 1, 1972. 
8 
 Earnings and Dividends 
Net earnings for fiscal 1975 were $49.2 
million, or $2.48 per share, a decline of 46% 
from the record earnings of $90.6 million 
($4.56 per share) reported last year. The 
current year's results include a -$7. 9 million 
(20<!: per share after taxes) gain on the dispo- 
sition of aircraft while the previous year's 
results include an $18.6 million ( 47<!: per share 
after taxes) gain from aircraft sales. 
Operating income declined 40% to 
$95 million as the combined effects of general 
inflation and the spiraling price of fuel caused 
operating expenses to increase 20% to $1.28 
billion while operating revenues were up only 
12% to $1.38 billion. Net interest expense 
increased 79% to $31.3 million as a result of 
higher interest rates in 1975, increased bor- 
rowings to finance new aircraft purchases, 
and a reduced amount of interest capitalized. 
Income taxes were provided on book income 
at the rate of 49.25% in the current year and 
48. 9% last year. The provisions for income 
taxes were reduced by investment tax credit 
amortization of $11.4 million in 1975 and 
$8 .3 million in 1974. 
Dividend payments for the year totaled 
$11.9 million, or 60<!: per share. Fiscal 1975 
was the 26th consecutive year in which Delta 
has made cash dividend payments. 
Operating Revenues 
The following table com pares opera ting 
revenues for fiscal 1975 and 1974 by major 
revenue categories. 
1975 1974 % Change 
( In Thousands) 
Passenger .. . ..... $1,261,138 $1,110,013 + 14% 
Cargo . . . . . . . . . . . 85,388 86,685 - 1 
Other, net .. 30 504 30 429 
Total ...... $1 ,377,030 $1,227,127 + ll_% 
9 
 Operating revenues increased by $149.9 
million or 12% to $1.38 billion. During the 
first four months of the year, revenues were 
substantially boosted by a strike against a 
major competitor. Revenue growth in the last 
eight months of the year was adversely 
affected by the recession as the national 
economic posture was at its lowest point and 
unemployment was at its highest level in 
many years. 
Passenger revenues rose 14% to $1.26 
billion primarily as a result of a 10% gain in 
revenue per passenger mile - up from 7.19<i: to 
7. 92<i:. This increase in revenue per passenger 
mile was attributable to the continued effect 
of the 6% passenger fare increase granted by 
the CAB in April last fiscal year and the 
temporary 4% increase which took effect 
November 15,1974. The latter increase was 
recently reviewed by the CAB and extended 
to January 14, 1976. During the last half of 
the year various carriers filed , and the CAB 
approved, a number of discount fares in an 
effort to stimulate traffic growth, and as a 
result some erosion of the passenger mile 
yield has been experienced. 
Revenue passenger miles totaled 
15.92 billion for the year, up 3% from the 15.45 
billion in 1974. During the competitor's strike 
period, passenger mile growth averaged 15%. 
Following the end of that strike, passenger 
miles declined an average of 2%. 
Cargo revenues declined 1% to $85.4 
million. Included in the previous year's cargo 
revenue was $3 .5 million in mail payments 
retroactive to prior years. Excluding these 
payments from the 1974 revenues, cargo 
revenue gained 3% in 1975 over 1974. Cargo 
yield rose 15% and ton miles dropped 10%. 
Other net revenue remained virtually flat. 
Security charges were down in 1975 by $4.2 
million as the CAB reduced the allowable 
security charge by 42%. This reduction was 
offset by the non-recurring fees paid to Delta 
related to the sale of 8 DC-9-31 aircraft pre- 
viously leased from Storer Leasing, Inc. 
 Operating Expenses 
The following table compares operating 
expenses by major expense functions for 
fiscal 1975 with 1974. 
1975 __ 
1 
_ 
9_ 
74 
__ % Change 
( In Thousands) 
Salaries and Related 
Costs . . ....... .. .. $ 572 ,982 $ 509,054 + 13% 
Aircraft Fuels. 235 ,849 144,780 + 63 
Aircraft Maintenance 
Materials and Repairs 40,007 35,722 + 12 
Aircraft Rentals . 24,954 29,498 - 15 
Other Rentals .... 29,104 23,935 + 22 
Landing Fees . 27,925 23,584 + 18 
Passenger Food and 
Related Supplies. 49,679 42,488 + 17 
Passenger Commissions 37,329 32, 127 + 16 
Advertising. 18,264 17,226 + 6 
Other Cash Expenses . 117,472 111,753 + 5 
Total Cash Expenses $1,153,565 $ 970, 167 + 19% 
Depreciation and 
Amortization ... 128,435 99,876 + 12_ 
Total Operating 
Expenses . . ... $1,282,000 $1,070,043 + 20% 
FUEL COST AS A PERCENT OF 
PASSENGER REVENUE 
% of Passenger 
Revenue 
20 
18 
16 
14 
12 
10 
0 
71 72 73 74 75 
11 
 Operating expenses increased 20% over 
those reported for 1974, although operating 
capacity was held to 29.5 billion available 
seat miles, an increase of only 4% over last 
year. Revenue plane miles were cut 3% to 
210 million with the increase in available seat 
miles achieved by the increased use of larger 
aircraft. 
Continuing escalation in fuel cost was 
the major contributor to the rise in expenses, 
accounting for $91 million or 50% of the $183 
million increase in cash expenses. Fuel gallons 
used in 197 5 totaled 903. 5 million, down 1 % 
from 1974. The average price per gallon in- 
creased 64% from 15 . 87<!: to 26.10<!: . Salaries 
and related costs rose 13%, while the average 
number of employees increased 2%. Aircraft 
rentals declined 15% as 5 leased DC-10 air- 
craft were returned to the lessor late in fiscal 
197 5, and 8 leased DC-9 aircraft were removed 
from the fleet and sold by Delta for the account 
of the lessor. All other cash expenses rose 11 % 
due to the high level of inflation experienced 
throughout the year. Depreciation and 
amortization expense increased $29 million 
or 29% due to the continued introduction of 
new aircraft related to Delta's fleet modern- 
ization plan. 
Capitalization and Financing 
During fiscal 1975 a new three- year loan 
agreement was negotiated with The Travelers 
Indemnity Company providing for unsecured 
borrowings of $35 million at an interest rate 
of 9 3/ 8% per annum. The total amount has 
been borrowed and repayment will be made 
in installments of $17.5 million on April 30, 
1977 and 1978. Also, the Company negotiated 
a new Bank Credit Agreement with a group of 
28 banks which provided an immediate 
unsecured borrowing of $40 million. The 
terms of the agreement include repayment 
over five years beginning December 31, 1975 
and require no compensating balances. 
Shortly after this borrowing, a $40 million 
repayment was made on the 1973 revolving 
12 
 Bank Credit Agreement, which agreement 
requires an average 15% compensating 
balances. 
The loan agreement with Lazard Brothers 
& Co., Limited was amended during the 
year to provide $20 million (based on the 
exchange rate at the time the agreement was 
signed) additional financing for the Rolls- 
Royce engines used on Lockheed L-1011 
aircraft. The new financing carries an interest 
rate of 7 1/2%. Based on June 30, 1975 cur- 
rency exchange rates, $19.3 million was 
available under the amended agreement. 
Long-term debt at June 30,1975 totaled 
$442.7 million (including current maturities), 
up $76.3 million from the previous year and 
amounted to 92% of equity at year end. These 
net borrowings together with net internally 
generated funds of $242.6 million were used 
primarily to purchase flight and ground 
equipment in an aggregate amount of $300.1 
million. 
At June 30,1975, outstanding purchase 
commitments for aircraft and related spares 
will require future expenditures of $381 
million during fiscal years 1976 through 1979. 
Mandatory debt repayments due in fiscal 
1976 amount to $47 million. It is expected 
that the funds available under existing credit 
agreements totaling approximately $59 
million, together with funds provided from 
operations, will be sufficient to cover these 
purchase commitments and the repayment 
of normal debt maturities. 
Total stockholder equity at June 30,1975 
was $481.2 million or $24.20 per share, up 
8% over the $22.33 per share reported last year. 
Subsequent to the close of the fiscal year, 
the Company filed a registration statement 
with the Securities and Exchange Commis- 
sion to register 500,000 warrants to purchase 
Delta stock at $48 per share. These warrants, 
which expire on May 1, 1978, were issued to 
Storer Broadcasting Company in connection 
with the merger of Northeast Airlines, Inc. 
into Delta Air Lines, Inc. on August 1, 1972. 
13 
 Flight Equipment and 
Purchase Commitments 
During the past fiscal year Delta accepted 
delivery of 9 Lockheed L-1011 aircraft and 13 
advanced model Boeing 727-200 aircraft. The 
fleet was reduced by the disposition of 21 
aircraft, including the sale of 6 FH-227's, 
and 2 Boeing B-747's. Five leased Douglas 
DC-lO's and 8 leased DC-9's were returned 
to their respective lessors. At June 30, 1975, 
Delta operated the following aircraft fleet: 
Ty p e of 
Aircraft S eat s 
B-747 ..... 370 
L-1011 .. 250 
DC-8-61 . 195 
DC-8-51. 135 
B-727-200 ...... 135 
B-727-100 ... . . . 97 
DC-9-32 .. . . . . . . . . 90 
Totals .. . 
Owned 
3 
18 
13 
21 
44 
_1_ 
161 
Leased Total 
3 
18 
13 
21 
13 57 
5 5 
_1_ 
18 179 
The Company is currently negotiating 
with The Boeing Company for the sale of its 
remaining three B-7 4 7 aircraft for ten ta ti ve 
delivery of two in early and one in mid-1977. 
Negotiations are expected to be completed in 
the near future, but it is also expected that 
Boeing's obligation to purchase the three 
aircraft will be subject to cancellation on De- 
cember 31, 1975, if Boeing's prospective pur- 
chaser, The Flying Tiger Line, is unable to 
secure adequate financing to purchase the 
three aircraft by that time. 
The Company has entered into an agree- 
ment with FBA Aircraft, S.A. for the sale of 
its fleet of 21 DC-8-51 aircraft. The agreement 
calls for deliveries to begin in the September 
quarter of 197 5 and continue through the 
June quarter of 1976. The agreement specifies 
that delivery of certain of the aircraft can be 
deferred for a limited period of time. If the 
purchaser chooses to exercise the option to 
defer delivery on any aircraft, the agreement 
requires certain deposits and interest pay- 
ments on the unpaid balance of the purchase 
price. 
At June 30, 1975, Delta had purchase 
commitments for 18 B-727-200 aircraft with 
14 
 deliveries scheduled from July, 197 5 througl; 
August, 1976 and 12 L-1011 aircraft. Three 
L-1011 aircraft are scheduled for delivery in 
the June,1976 quarter. The nine remaining 
L-lOll's are currently scheduled for delivery 
in fiscal years 1977 through 1979 and are 
subject to cancellation at a cost to Delta of 
$40,000 per aircraft cancelled. At year end, 
the Company had options for an additional 
12 B-727-200 aircraft, scheduled for delivery 
during fiscal 1977. 
Personnel 
At June 30,1975, the team of Delta Profes- 
sionals numbered 27,800, up slightly from 
the previous year's 27,600, excluding tem- 
porary employees in both years. Salaries and 
related fringe benefits totaled $57 3 million, 
an increase of 13% over last year, and equal 
to 41.M of each revenue dollar versus 41,5q: 
for the previous year. 
During the year, 
when the level of 
national unemployment 
soared to its highest level 
in decades, Delta con- 
tinued its policy of 
providing a stable and 
rewarding work environ- 
ment for all of its 
personnel. This was ac- 
complished with the help 
and cooperation of all of our people. Vacancies 
in certain critical jobs, created by retirement 
and resignation, were filled by existing per- 
sonnel. As the cutback in operations reduced 
the need for people in certain job categories, 
reassignments were made to other areas 
where productive contributions could be 
made. Also, the Company granted individual 
requests for personal leaves of absence for 
limited periods of time in those areas most 
affected by the reduced levels of traffic and 
operations . 
With the increasing complexities in the 
business environment, Delta further strength- 
ened its position to effectively meet these 
15 
 challenges of the future by advancing ten 
executives to positions of increased responsi- 
bility. Promoted to Vice President were 
Messrs. Rex A. McClelland, Properties, and 
J .A. York, Personnel Benefits. Promoted to 
Assistant Vice President were Messrs. 
Robert H. Cowart, Operations Administration; 
Russell H. Heil, Personnel Administration; 
John Hume, Training and Personnel 
Communications; H. M. Johnson, Personnel 
Services; Herman S. Stanley, Dining Services; 
Eugene H. Stewart, Corporate Security; 
C.A. Thompson, Stations; and E.A. Thompson, 
Economic Research. 
Regulatory Matters 
The past year has seen renewed interest in 
route proceedings, while basic fare and rate 
investigations have continued; a growing 
emphasis on liberalized charter and inclusive 
tour regulations; and growing pressure by 
various governmental and non-governmental 
bodies for significant changes in the federal 
statutes regulating commercial air 
transportation. 
Route Cases 
Atlanta-London. Delta has concentrated 
its efforts in the pending Transatlantic Route 
Proceeding on seeking nonstop authority 
between the major gateways of Atlanta, 
Georgia and London, England which, unless 
restricted, would also permit Delta to provide 
single-plane London service via Atlanta for 
other cities in the Southern United States. 
Delta's application has been supported by 
the CAB's Bureau of Operating Rights, the 
U.S. Department of Transportation, and the 
U.S. Department of Justice. The CAB is 
expected to submit its decision to the President 
in late 197 5, with final action not expected 
until sometime in 1976. Implementation of 
any new routes authorized by the decision 
will have to await appropriate treaty pro- 
visions between the United States and the 
countries involved. 
16 
 Atlanta-London Interchange. Delta has 
served notice on Pan American terminating 
the existing single-plane interchange service 
operated by the two companies between 
Atlanta and London via Washington, D.C. 
effective October 26,1975. This notice was 
served in light of the awaited decision in the 
Transatlantic Route Proceeding, and the 
absence of need for the amount of local 
domestic capacity which has been made 
available by the B-7 4 7 interchange service 
between Atlanta and Washington Dulles 
Airport. Delta and Pan American have negoti- 
ated a replacement agreement which, subject 
to CAB approval, will provide for a coordi- 
nated change-of-gauge ( connecting) service 
between Atlanta and London via Dulles. 
Chicago-Montreal. The CAB has insti- 
tuted a proceeding to determine if a U.S. 
carrier should be certificated to operate 
nonstop between Chicago, Illinois and Mon- 
treal, Canada, as authorized by the most 
recent U.S.-Canadian bilateral treaty. Delta 
and a number of other U.S. carriers seek this 
authority. A CAB decision is not expected 
before mid-1976. 
Fort Myers, Florida-Atlanta. Delta and 
a number of other carriers seek nonstop 
authority between Fort Myers, Florida and 
the Atlanta gateway. There is presently no 
single-carrier service between Fort Myers 
and Atlanta or points beyond in the Midwest. 
Delta's application has been supported by 
Fort Myers civic parties, as well as most of 
the mid western cities to which Delta proposes 
Fort Myers service through the Atlanta gate- 
way. An Administrative Law Judge, however, 
has recommended selection of Eastern rather 
than Delta, a recommendation which Delta 
will vigorously contest on appeal to the CAB. 
Boston-Atlanta. The CAB has recently 
agreed to hear Delta's application, filed in 
1970 (and competing proposals) for nonstop 
authority between Boston and Atlanta. 
Delta's participation in the traffic between 
these two cities ( on intermediate-stop ser- 
vices) has grown to a sizeable volume since 
17 
 the Delta-Northeast merger in 1972. Decision 
is not expected before mid-1976. The CAB 
denied a related Delta application for immedi- 
ate, temporary exemption authority pending 
decision in the basic case. 
Detroit-Boston. The CAB has instituted 
a proceeding to consider certification of com- 
petitive, nonstop service between Detroit 
and Boston. Delta and a number of other 
carriers are seeking this authority. The case 
will go to hearing in the fall of 197 5, with final 
decision not expected until well into 1976. 
Miami-Los Angeles. The CAB is consider- 
ing 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 the 
authority to some other carrier. The Adminis- 
trative Law Judge who heard the case recom- 
mended selection of Pan American, and the 
termination of Delta's stayed authority. Delta 
has vigorously opposed this recommendation 
and continues to seek the right to reinstitute 
this service. The case is now awaiting CAB 
decision. 
Chicago-New Orleans. The CAB will 
determine whether Eastern Air Lines' present 
authority to compete against Delta in the 
Chicago-New Orleans market (not currently 
being operated by Eastern) should be sus- 
pended or be deleted, and whether new 
authority should be granted to another carrier. 
18 
 A number of other carriers have applied. 
United and Eastern Air Lines have entered 
into an agreement for the transfer of Eastern's 
Chicago-New Orleans authority to United. 
These proceedings will be tried together. The 
hearing will commence in December, 1975. 
Atlanta-Cleveland/ Detroit/ Cincinnati. 
In July 1975 the CAB decided once again to 
examine the possible need for competitive 
service in these three markets. In two earlier 
hearings an Administrative Law Judge 
recommended Delta for the Atlanta-Cleveland 
market and a competitor in Delta's Atlanta- 
Detroit/ Cincinnati markets, but those 
proceedings ended with a denial of all appli- 
cations based on the energy shortage as it 
then existed and public interest considera- 
tions. The new case is not expected to go to 
hearing before late 1975 or early 1976. 
Dallas/ Ft. Worth-Shreveport. The CAB 
has started a proceeding, still in preliminary 
stages, to consider authorizing competitive 
nonstop service in this market, wherein only 
Delta now has nonstop rights. 
Route Transfer and Route Exchange Cases 
On September 3, 1975, the CAB disap- 
proved the application filed by Delta and 
TWA for approval of their agreement whereby 
Delta would have obtained TWA's existing 
authority between Nashville, Tennessee and 
St.Louis/ Atlanta/ Tampa-St.Petersburg- 
Clearwater/ Miami-Ft.Lauderdale, with ter- 
mination of all TWA Nash ville authority, in 
exchange for payment of $1,000,000. This 
decision remains subject to petitions for re- 
consideration from interested parties. 
Delta has terminated its agreement with 
Piedmont Aviation, whereby Delta would 
have transferred certain of its Asheville, 
North Carolina authorities to Piedmont and 
Piedmont would have transferred certain of 
its Charleston, South Carolina authorities to 
Delta. The termination notice was given in 
accordance with the terms of the agreement, 
based on the CAB's failure to approve the 
agreement by June 15,1975. 
19 
 Suspensions 
Delta's authority to suspend its services 
between Miami and San Francisco has been 
continued until December 31, 1975. 
Rate and Fare Cases 
The CAB's overall investigation into the 
structure and level of U.S. airline passenger 
fares is now virtually completed. The most 
recent decision, involving fare structure- 
that is, the relationships between different 
basic types of fares and between fares for 
differing lengths of travel-took effect on 
April 29,1975. This resulted in increases in 
first class fares ( with additional increases 
slated for future applicability); some increase 
in short-haul day coach fares; and some de- 
crease in long-haul day coach fares. A simul- 
taneous decision in the so-called Joint Fares 
Phase of the Investigation, establishing new 
rules for the publication of joint fares and 
division of such revenues between the carriers, 
has also been implemented, but recent 
decision on petitions for reconsideration will 
require further technical changes in this area. 
The CAB permitted passenger fares to 
increase 4% in November, 1974, due to the 
spiraling cost of inflation, and especially the 
escalating cost of fuel. The original increase 
was scheduled to expire on June 30,1975, but 
the CAB has allowed this increase to remain in 
effect until January 14,1976. Meanwhile, in 
response to requests from some carriers for 
additional fare increases, the CAB has decided 
to investigate the need to retain the 4% in- 
crease after January 14, 197 6 and the need for 
additional fare increases above the 4% 
increase. In addition, the CAB has decided 
to start a rule-making proceeding to consider 
changes in the industry load factor standard 
and is contemplating review of the industry's 
rate of return on investment standard. The 
load factor standard is important in CAB 
ra temaking proceedings because if carriers 
20 
 do not maintain a load factor equal to or in 
excess of the standard, now set at 55%, 
portions of their operating costs are not taken 
in to account as a basis for increases in fares. 
The Domestic Night Coach Fare Investi- 
gation, which is considering reduced "off- 
peak" fares such as those used by Delta in its 
famous "Early Bird" and "Owly Bird" 
services, is slated to go to hearing in Septem- 
ber, 197 5. Decision in this proceeding is not 
expected until sometime well into 1976. 
Two new types of discounts have been 
allowed to take effect during the past fiscal 
year. One is an" excursion" type fare generally 
applicable to markets of more than 750 miles, 
which affords a 20% discount on-season and 
25% off-season if certain conditions on length 
of stay are met. A second type of fare involves 
a 35% discount for travel during certain non- 
peak periods, if the passenger chooses to 
travel in a cabin of the aircraft in which the 
usual amenities (food and beverage service 
and the like) are not provided. The latter 
service is currently confined to certain East 
Coast and southern transcontinental markets, 
while the "excursion" fares are essentially 
nationwide in scope. The 35% discount for 
the austere service is currently under investi- 
gation by the CAB in its No Frill Fares 
Investigation, which went to hearing in 
August, 1975. To date, the limited experience 
of the Company has indicated that the no frill 
fares apparently have not generated as much 
additional traffic as was intended. Instead, 
indications are that they have resulted in 
diversion of many passengers who would 
otherwise be flying at standard fares to the 
no frill fares. 
Charter and Tour Services 
The CAB has recently issued exceedingly 
liberal One Stop Inclusive Tour Charter and 
Special Event Charter regulations. These 
regulations, permitting members of the gen- 
eral public to use charter services on a liberal 
basis whether or not they are members of 
21 
 pre-existing groups, will largely blur the 
distinction between charter and scheduled 
services. The new regulations are applicable 
both to domestic and international trans- 
portation, with some minor differences for 
each type of service. Delta had opposed such 
extreme liberalization because of the adverse 
effect which such rules could have on the 
economics of the nation's important scheduled 
services, and the Company is currently 
studying what action, if any, it should take 
in light of the new regulations. 
Regulatory Reform 
The Administration and several members 
of Congress have indicated their intentions to 
introduce legislation during the current year 
which, if enacted, would probably change the 
current method and degree of regulation of the 
air transport industry. 
Some of the proposed changes most 
widely discussed include a reduction or 
elimination of certain antitrust exemptions, 
which air carriers now have under the Federal 
Aviation Act; a reduction in the authority of 
the CAB to control the fares charged by air 
carriers; and introduction of a "free market 
entry" concept which would facilitate the 
entry and exit of air carriers certificated by the 
CAB, as well as other non-certificated air 
carriers, into markets which are currently 
certificated to a particular air carrier or air 
carriers and in which, under present law:, no 
other carriers can operate without prior 
approval of the CAB . 
The CAB has also given notice that it is 
considering a series of actions designed to 
assess the economic and operational conse- 
quences of a reduction in regulatory con- 
straints on the airline industry. The proposed 
CAB action will consist of a series of limited 
experiments dealing with both price flexi- 
bility and the "free market entry" concept 
between specified city pairs and in specified 
markets. The CAB has invited comments 
from the public, the Congress, the airline 
22 
 industry and others with respect to its pro- 
posal. Although it is too early to tell when 
and, if so, in what form the experiments will 
take place or what city pairs and markets will 
be involved, Delta will give careful considera- 
tion to cooperating to the extent that the 
Company can reasonably do so. 
Because of the uncertainties involved 
and the lack of any comprehensive legislative 
proposals, it is too early to adequately assess 
the impact, if any, on the operations of Delta 
of any change in the regulatory scheme 
governing the airline industry. 
23 
 Delta Air Lines System Route Map 
 DELTA AIR LINES, INC . 
Balance Sheets 
June30, 1975and 1974 
ASSETS 
CURRENT ASSETS: 
Cash . 
Short-term cash investments, 
at cost .. 
Accounts receivable, net . 
Refundable income taxes . 
Maintenance and operating 
supplies, at average cost . 
Prepaid expenses, etc . 
Total current assets . 
PROPERTY AND EQUIPMENT 
(Notes 3 and 4): 
Cost- 
Flight 
Equipment Other 
1975 1974 
[In Thousands) 
$ 50,838 $ 29 ,886 
31,145 
50,838 61 ,031 
81 ,544 68,427 
17,300 
14,109 11 ,023 
8,033 11 ,887 
171 ,824 152 368 
1975 $1 ,482 ,767 $228,313 1,711 ,080 
197 4 1,225,167 204 ,182 1,429,349 
Accumulated depreciation - 
1975 487 ,014 99 ,542 586,556 
197 4 403 ,044 89 ,264 - - - - 492 ,308 
937 ,041 
Advance payments for neyv 
equipment (Note 3) . 
OTHER ASSETS : 
Nonoperating property and 
equipment . 
Long-term receivables and 
prepayments, etc. 
26 
1,124,524 
47,950 104,793 
1,172,474 1,041 834 
2,643 
6,769 
604 
52 1 
9,412 1,125 
$1 ,353,710 $1 ,195,327 
 DELTA AIR LINES, INC. 
LIABILITIES AND 
STOCKHOLDER EQUITY 1975 1974 
(In Thousands) 
CURRENT LI ABILITI ES: 
Current maturities of long-term 
debt . $ 46,991 $ 21,244 
Short-term notes payable . 3,000 
Accounts payable and accrued 
liabilities . 126,673 115,174 
Unearned transportation 
revenue . 25,993 26,997 
Accrued income taxes . 13 362 
Total current liabilities . 202,657 176 777 
LONG-TERM DEBT(Note 2) . 395,673 345 119 
DEFERRED CREDITS: 
Deferred Federal income taxes . 230,302 184,813 
Unamortized investment tax 
credits . 37,059 44,792 
Other . 6,843 
274,204 229,605 
COMMITMENTS (Notes 3 and 4) 
STOCKHOLDER EQUITY 
(Note 6): 
Common stock, par value 
$3.00 per share - Authorized 
25,000,000 shares; 
Outstanding 19,880,577 
shares in 1975 and 
19,879,377 shares in 197 4 . 59,642 59,638 
Common stock purchase 
warrants . 6,750 6,750 
Additional paid-in capital . 73,331 73,280 
Retained earni ngs (of which 
$221 ,884,000 is restricted 
at June 30, 1975 as to the 
payment of cash dividends 
under credit agreements) . 341 ,453 304 158 
481 ,176 443,826 
$1 ,353,710 $1 ,195,327 
The accompanying notes are an integral part of these balance sheets. 
27 
 DELTA AIR LINES, INC 
Statements of Income 
FortheyearsendedJune30, 1975and 1974 
1975 1974 
[In Thousands) 
OPERATING REVENU ES: 
Passenger . . $1 ,261 ,138 $1,11 0,0 13 
Cargo . 85,388 86 ,685 
Other, net . 30,504 30,429 
Total operating revenues .. 1,377,030 1,227,127 
OPERATING EXPENSES: 
Flying operations . 425,300 3 16,207 
Maintenance . 162,486 145,287 
Aircraft and traffic servicing . 259,522 233 ,181 
Promotion and sales . 147,055 130,763 
Passenger service . 127,452 113,885 
Depreciation and amortization . 127,191 98 ,303 
General and administrative . 32,994 32,417 
Total operating expenses . 1,282,000 1,070,043 
OPERATING INCOM E . 95,030 157,084 
OTH ER EXPEN SE (INCO ME): 
Interest expense . 37,380 28,275 
Less - Interest capitalized on 
advances for equipment . 6,099 10,810 
31 ,281 17,465 
Miscellaneous income, net. (2,916) (3 ,088) 
Gain on disposition of aircraft . (7,944) (18,607) 
20,421 (4 ,230) 
INCOME BEFORE INCOM E 
TAXES. 74,609 161 ,314 
PROVISION FOR INCOME 
TAXES (Note 5): . 
Income taxes provided . 36,745 78,953 
Less - Amortization of 
investment tax credits . (11 ,359) (8,288) 
25,386 70 665 
NET INCOME . $ 49,223 $ 90,649 
NET INCOME PER COMMON 
SHARE . $2.48 $4.56 
The accompanying notes are an integral part of these statements. 
28 
 DELTA AIR LINES, INC. 
Statements of Retained Earnings 
FortheyearsendedJune30, 1975 and 1974 
1975 1974 
(In Thousands) 
BALANCE AT BEGINNING 
OF YEAR . . $304,158 $225,435 
Add (Deduct): 
Net income . 49,223 90,649 
Cash dividends -$.60 per 
share . (11,928) (11 ,926) 
BALANCE AT END OF YEAR 
(restricted as indicated on 
balance sheet) . $341,453 $304,158 
The accompanying notes are an integral part of these statements. 
29 
 DELTA AIR LINES, INC. 
Statements of Additional Paid-in Capital 
For the years ended J une 30, 1975 and 1974 
BALANCE AT BEGINNING 
OF YEAR . 
Add: 
Excess of proceeds over par value of 
common shares issued (1,200 
shares in 1975 and 12,853 shares in 
1974) 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 .. 
BALANCE AT END OF YEAR . 
1975 1974 
[In Thousands) 
$73,280 $72,768 
38 408 
13 104 
- - - 
$73,331 $73,280 
The accompanying notes are an integral part of these statements 
30 
 DELTA AIR LINES, INC. 
Statements of Changes in Financial Position 
Forthe yearsendedJune30, 1975and 1974 
1975 1974 
(In Thousands) 
FUNDS PROVIDED BY: 
Net income. . $ 49,223 $ 90 ,649 
Add (deduct) items not affecting 
working capital - 
Depreciation and amortization 128,435 99,876 
Deferred income taxes . 45,489 27 ,316 
Investment tax credits, net . (7,733) 19,281 
Other . 78 1,177 
Total from operations . 215,492 238,299 
Long-term financing , less in 1974 
$124 ,000,000 long-term portion of 
bank debt refinanced . 97,833 195,619 
Disposition of property and 
equipment (book value) . 39,001 40,629 
Common stock issued under 
employee stock option plan , 
including income tax reduction 55 550 
Other . 517 
352,898 475 ,097 
FUNDS USED FOR : 
Property and equipment additions - 
Flight equipment, including 
advances . 266,374 385 ,228 
Other . 33,741 54 ,563 
300,115 439 ,791 
Reduction of long-term debt .. . . . 47,279 18,500 
Cash dividends . 11,928 11 ,926 
Preoperating expenses . 1,366 
Settlement of prior years' income 
taxes (Note 5) . 3,850 
359,322 475,433 
DECREASE IN WORKING CAPITAL $ (6,424) $ (336) 
CHANGES IN WORKING CAPITAL 
COMPONENTS: 
Increase (decrease) in - 
Cash and short-term investments $ (10,193) $(35 ,774) 
Receivables, net . 13,117 10,384 
Refundable income taxes . 17,300 
Other current assets . (768) 13,316 
Decrease (increase) in - 
Current maturities of long-term 
debt . (25,747) 30,156 
Short-term notes payable . (3,000) 
Accounts payable and accrued 
liabilities . (11 ,499) (24,482) 
Other current liabilities . . 14,366 6,064 
$ (6,424) $ (336) 
The accompanying notes are an integral part of these statements. 
31 
 DELTA AIR LINES, INC . 
Notes to Financial Statements 
June 30 ,1975 and 1974 
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 
overhauls, are charged to maintenance expense 
when incurred. Major replacements and better- 
ments are capitalized. 
Interest Capitalized- Interest on advances 
for new equipment is capitalized based on the 
Company's current interest rate on long-term debt 
in order to properly reflect the total cost of acquir- 
ing such equipment. Capitalization of interest 
ceases when the equipment is placed in service. 
Assuming all interest had been charged to expense 
as incurred, net income would have been lower by 
approximately $850,000 in 1975 and $4,420,000 in 
1974. 
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. As of March 31, 1974, all pre- 
operating expenses were fully amortized. 
Foreign Currency Transactions-Foreign ex- 
change adjustments are included in income on a 
current basis, except for adjustments related to 
32 
 DELTA AIR LINES, INC 
long-term debt which are recorded when such 
debt becomes due within one year (see Note 2). 
Foreign exchange adjustments included in 1975 
and 1974 income were not significant. 
Retirement Plans - All of the Company's per- 
manent employees are covered under its noncon- 
tributory trusteed plans providing for retirement, 
disability and survivor benefits. The total expense 
under these plans amounted to approximately 
$35,600,000 in 1975 and $31,000,000 in 1974. The 
Company's policy is to fund each year's accrued 
costs under the plans, which costs include amor- 
tization of prior service costs ($37,200,000 at 
June 30,1975) over a thirty-year period to 1991. 
As of June 30,1975, the assets of the plans ex- 
ceeded the actuarially computed present value of 
vested benefits under the plans. 
The Pension Reform Act of 1974 requires the 
Company to amend its retirement plans to con- 
form with certain provisions of the Act, which 
will become effective in 1976. The Company be- 
lieves that the effect on annual pension costs and 
the funding of such costs for 1976 and subsequent 
years and the effect on vested benefits and prior 
service costs resulting from such amendments will 
not be significant. 
Income Taxes- Total income taxes are pro- 
vided by applying the applicable tax rates to book 
income before income taxes. Deferred Federal in- 
come taxes are provided for all significant items 
(principally depreciation and interest capitalized) 
where there is a timing difference in recording 
such items for financial reporting purposes and 
for income tax purposes. Investment tax credits 
are amortized ( as a reduction of the provision for 
income taxes) over approximately seven years. 
(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 
(19,880,277 shares in 1975 and 19,875,610 shares 
in 1974 ). Outstanding stock options and warrants 
(see Note 6) have no material dilutive effect on 
net income per common share in 1975 and 1974. 
33 
 DELTA AIR LINES, INC 
2. LONG-TERM DEBT: 
At June 30, 1975 and 1974, the Company's 
long-term debt (including current maturities) was 
as follows: 1915 1914 
(a) Due banks under unsecured 
notes carrying an interest rate 
of 1/ 4% above the prime rate . $ 
(b) Due banks under 1973 credit 
agreement which provides for 
unsecured borrowings up to 
$300,000,000 on a revolving 
basis through September, 
1975, at which time the out- 
standing balance will be 
converted to a five-year term 
loan, repayable in quarterly 
installments of $11 ,000,000 
beginning December 31, 
1975, with the remaining 
$91 ,000,000 balance payable 
on September 30, 1980. The 
interest rate is equal to the 
prime rate through Septem- 
ber, 1975, then 1/ 4% above 
the prime rate through 
September, 1978, then 1/ 2% 
above the prime rate through 
September, 1980 
($33,000,000 payable in 
fiscal 1976) . 
(c) Due banks under 1975 
unsecured credit agreement, 
repayable in quarterly install- 
ments of $1 ,500,000 begin- 
ning December 31, 1975, with 
the remaining $11 ,500,000 
balance payable on Septem- 
ber, 30, 1980. The interest 
rate is equal to 11 9% of the 
prime rate through Septem- 
ber, 1975, then 119% of the 
prime rate plus 1/4% through 
September, 1978, and then 
119% of the prime rate plus 
1 /2% through September, 
1980 ($4,500,000 payable in 
fiscal 1976). 
34 
[In Thousands) 
$ 6,667 
260,000 270,000 
40,000 
 (d) Due Lazard Brothers & Co , 
Limited under 5-1 /2% and 6% 
unsecured notes, repayable 
in pounds sterling in 20 semi- 
annual installments to 1985 
(translated at June 30 
exchange rates, total debt was 
$46,725,000 in 1974 and 
$70,890,000 in 1975, of 
which $7,527,000 is payable 
in fiscal 1976) . 
(e) Due Rolls-Royce (1971 ) 
Limited in monthly install- 
ments (including 6-1 / 2% 
interest) to January, 1984 
($464,000 payable in fiscal 
1976) 
(f) Due insurance companies 
under 6% and 7% unsecured 
notes, repayable in install- 
ments to December 31 , 1979 
($1 ,500,000 payable in fiscal 
1976) 
(g) Due an insurance company 
under a 9-3/ 8% unsecured 
note, repayable in installments 
of $17,500,000 on April 30, 
1977 and 1978 
(h) Convertible Subordinated 
Debentures, 6-1/ 2%, maturing 
August 1, 1986, with annual 
sinking fund redemptions of 
$1 ,100,000 beginning July 
31 , 1976($1 , 100,000 acquired 
in fiscal 1975 for future sinking 
fund purposes)-(Note 6) . 
Total. 
Less - Current maturities 
DELTA AIR LINES, INC . 
1975 1974 
(In Thousands) 
76,129 
3,885 
6,750 
35,000 
20,900 
442,664 
46,991 
$395,673 
46,348 
4,348 
17,000 
22,000 
366,363 
21,244 
$345,119 
At June 30,1975, the Company may borrow 
an additional $40,000,000 under the 1973 bank 
credit agreement, of which $15,000,000 was bor- 
rowed on July 1,1975. In addition, approximately 
$19,300,000 (based on June 30,1975 currency ex- 
change rates) is available under loan agreements 
with Lazard Brothers & Co., Limited to finance 
the purchase of engines for the Company's 
L-1011 aircraft. In the opinion of management, these 
35 
 DELTA AIR LI NES, INC . 
borrowings, together with funds provided from 
operations, will sufficiently cover future expen- 
ditures for aircraft (see Note 3) and scheduled 
debt maturities. At June 30,1975, the aggregate 
annual maturities of long-term debt for the next 
five fiscal years were as follows: 
Amount 
[In Thousands) 
1976 . 
1977 . 
. . . .... $46,99 1 
1978 ................. . 
1979 . 
1980. 
77,579 
78,679 
61,179 
60,429 
In addition to restrictions on cash dividends 
as indicated on the balance sheet, the Company's 
credit agreements include requirements for main- 
tenance of working capital (as defined) and limi- 
tations on indebtedness , leases and other 
obligations. In connection with the 1973 bank 
credit agreement, 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 out- 
standing borrowings, with the average balances 
and borrowings being computed over the term 
of the agreement. While a substantial portion of the 
cash balances shown on the accompanying balance 
sheet is maintained for this purpose, there are no 
legal restrictions on the Company's use of these 
funds. No such balance requirements or agree- 
ments apply to the 1975 bank credit agreement. 
36 
 DELTA AIR LINES, INC . 
3. PURCHASE AND SALE COMMITMENTS: 
At June 30,1975, the Company had outstand- 
ing purchase commitments for the acquisition of 
18 Boeing B-727-200 aircraft and 12 Lockheed 
L-1011 aircraft, including related spare engines, 
which will require future expenditures of approxi- 
mately $381 million during fiscal years 1976 
through 1979. The last 9 Lockheed L-1011 aircraft 
are cancelable by specified interim dates to July 
31, 1977. The Company also held options for an 
additional 12 Boeing B-727-200 aircraft for de- 
livery in fiscal year 1977. At June 30, 1975, advance 
payments and other capitalized expenditures re- 
lating to aircraft to be delivered amounted to 
$13,883,000 on the Lockheed aircraft and $38,570,000 
on the Boeing aircraft. 
The Company has entered into an agreement 
to sell its 21 Douglas DC-8-51 aircraft, which agree- 
ment provides for delivery of the aircraft between 
September, 1975 and June, 1976. 
37 
 DELTA AIR LI NES, INC. 
4. LEASE OBLIGATIONS: 
At June 30,1975, the Company leased 18 Boe- 
ing B-727 aircraft and certain airport terminal 
and maintenance facilities, ticket offices, etc. under 
long-term agreements. Leases for 5 Douglas DC-10 
aircraft expired in May, 1975, and 8 leased Douglas 
DC-9-31 aircraft were disposed of during the year 
on behalf of the lessor. Rental expense was 
$54,058,000 in 1975 and $53,433,000 in 1974, in- 
cluding rentals under "financing leases" (as de- 
fined by the Securities and Exchange Commission) 
of $28,662,000 in 1975 and $29,354,000 in 1974. 
At June 30,1975, the Company's minimum 
rental commitments under noncancelable leases 
with initial or remaining terms of more than one 
year were as follows : 
Payable for Financing Other 
Fiscal Year Leases Leases ~ 
(In Thousands) 
1976 $ 28,150 $ 2,920 $ 31 ,070 
1977 28,070 2,380 30,450 
1978 27,330 1,680 29,010 
1979 25,700 1,370 27 ,070 
1980 23,990 970 24,960 
1981-1985 76,590 2,550 79,140 
1986-1990 60,000 190 60,190 
1991-1995 50,570 70 50,640 
After 1995 45,950 10 45,960 
$366,350 $12,140 $378,490 
The estimated present value (based on a 
weighted average interest rate of 6.4%, with such 
interest rates used ranging from 3.5% to 13.0%) 
of the minimum rental commitments under fi- 
nancing leases was as follows at June 30,1975 
and 1974: 
Applicable to 1975 1974 
(In Thousands] 
Terminal facilities . . ... $ 89,930 $ 89,520 
Maintenance facilities .... . 67,630 70,660 
Aircraft .............. . . . . 47,640 55 ,390 
Other ...... ... . . . . 11 ,380 12,050 
$2 16,580 $227 ,620 
Assuming all financing leases were capital- 
ized and the related leasehold rights amortized 
on a straight-line basis and interest accrued on 
the outstanding present value, the effect on 1975 
and 1974 net income would have been less than 3%. 
38 
 DELTA AIR LIN ES, INC. 
5. INCOME TAXES : 
The provision for income taxes in 197 5 and 
1974 consisted of: 
1975 1974 
(In Thousands) 
Currently payable (refundable) - 
Federal . . $( 13,300) $22,051 
State . 930 2,017 
Deferred Federal income taxes . 45,489 27,316 
Investment tax credits .. 3,626 27 ,569 
Inco me taxes provided . 36,745 78,953 
Less - Am ortization of investment 
tax credits . (11 ,359) (8 ,288) 
$25,386 $70,665 
Total income taxes provided were 49.25% 
and 48 .9% of 1975 and 1974 book income before 
income taxes, respectively, representing taxes 
provided at the 48.0% Federal statutory rate plus 
net state income taxes. As of June 30,1975, ap- 
proximately $22,500,000 of unutilized investment 
tax credits, expiring in fiscal year 1982, are avail- 
able to reduce future Federal income taxes payable. 
The provision for def erred Federal income 
taxes resulted from the tax effect of the following 
timing differences: 
Depreciation . 
Interest capitalized . 
Preoperating expenses . 
Other expenses, net . 
1975 1974 
(In Thousands) 
.. $38,478 
2,928 
4,083 
$45,489 
$22,616 
5,189 
(853) 
364 
$27 ,316 
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 
peen made in prior years. The Internal Revenue 
Service has recently completed an examination 
of the Company's income tax returns for the years 
1966 through 1972 and has raised certain issues 
which the Company intends to contest. In the 
opinion of management, adequate provisions 
have been made for potential tax deficiencies and 
interest thereon. 
39 
 DELTA AIR LINES, INC. 
6. COMMON STOCK: 
At June 30, 1975, the Company had 1,090,550 
shares of unissued common stock reserved for 
stock options (506,950 shares), stock purchase 
warrants (500,000 shares at $48 per share) and 
conversion of Convertible Subordinated Deben- 
tures (83,600 shares at $250 per share) . 
Under the Company's Qualified Stock Option 
Plans, options for 8,200 shares were outstanding 
at June 30,1975 (6,950 shares at $30.25 per share 
and 1,250 shares at $51.75 per share) . Transactions 
during 1975 and 1974 were as follows: 
Outstanding at beg inning of year . 
Exercised . 
Expired . 
Terminated (see below) .... . . . . . . .. . 
Option Shares 
1975 1974 
13,150 
(1,200) 
(3,750) 
150,116 
(12,853) 
(1,613) 
(122 ,500) 
Outstanding at end of year .. . .. . . . . . . 8,200 13,150 
Exercisable at end of year . 7,575 9,338 
Options granted in May, 1973, for the pur- 
chase of 122,500 shares of common stock at $51.75 
per share were terminated in fiscal 1974 in con- 
nection with the implementation of the 1972 Per- 
formance Share Unit Plan for officers and key 
employees. This plan has no effect on the Com- 
pany's authorized and unissued common stock. 
40 
 DELTA AIR LIN ES, INC. 
Auditors' Report 
ARTH UR ANDERSEN & Co. 
ATLANTA, GEORG IA 
To the Stockholders and the 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, 1975 and 1974, and the related state- 
ments of income, retained earnings, additional 
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 circumstances. 
In our opinion, the accompanying financial 
statements present fairly the financial position 
of Delta Air Lines, Inc. as of June 30, 1975 and 
1974, and the results of its operations and the 
changes in its financial position for the years then 
ended, in conformity with generally accepted 
accounting principles consistently applied 
during the periods. 
Atlanta, Georgia, 
August 15, 1975 . 
41 
 DELTA AIR LINES, INC 
Summary of Operations For the years ended June 30 
(Dollars expressed in thousands except per share figures) 
1975 
Operating revenues 
Passenger . ........ . . . . . ... . . 
. . . . . . $1 ,261 ,138 
Cargo . . ... . .. . 85,388 
Other, net . ........ .. ... 30,504 
Total operating revenues . ........ ' 
.... $1 ,377,030 
Operating expenses . 1,282,000 
Operating income . $ 95,030 
Interest expense, etc ., net* . 28,365 
Gain on disposition of aircraft . 7,944 
Income before taxes . ... .. ... . . $ 74,609 
Income taxes . 25,386 
Net income before extraordinary items . $ 49,223 
Extraordinary items . . . . . . . . . . . . . . . 
Net income . $ 49,223 
Net income per share . $2.48 
Dividends paid . ..... . . .. $11,928 
Dividends paid per share . ..... . .. . $.60 
*Has been reduced by interest capitalized of .. $ 6,099 
Other Financial and Statistical Data 
Long-term debt . .. . ... . .. .... . .. . $ 395,673 
Stockholder equity . . . . . . . . . . . . . . . $ 481 ,176 
Stockholder equity per share . $24.20 
Shares of common stock outstanding . 19,880,577 
Revenue passengers enplaned . 25,832,608 
Available seat miles (000). 29,497,234 
Revenue passenger miles (000). 15,916,860 
Passenger load factor . 53.96% 
Break-even load factor . 49.89% 
Available ton miles (000) ..... 4,030,116 
Revenue ton miles (000). 1,822,574 
Passenger revenue per passenger mile . 7.92~ 
Operating expenses per available seat mile . 4.35~ 
0 perating expenses per available ton mile . 31.8H 
42 
1974 
$1 ,11 0,013 
86 ,685 
30,429 
$1,227 ,127 
1,070,043 
$ 157,084 
14,377 
18,607 
$ 161 ,3 14 
70,665 
$ 90 ,649 
$ 90,649 
$4 .56 
$1 1,926 
$.60 
$ 10,810 
$ 345 ,119 
$ 443 ,826 
$22.33 
19,879,377 
25,565 ,208 
28,41 7,679 
15,445 ,891 
54 .35% 
46.66% 
3,847 ,226 
1,800,400 
7.19q; 
3_ 
77q; 
27 81(): 
DELTA AIR LINES, INC . 
1973 1972 1971 
$ 960 ,215 $806 ,068 $7 13,665 
76 ,323 65 ,160 60,097 
13,161 12,338 10,320 
$1,049 ,699 $883 ,566 $784,082 
928 ,940 816,000 735,605 
$ 120,759 $ 67 ,566 $ 48,477 
9,171 13,500 15,699 
4,653 1 897 
$ 11 6,24 1 $ 55,963 $ 32 ,778 
50 ,246 27,489 12,419 
$ 65 ,995 $ 28 ,474 $ 20,359 
(700) 
$ 65 ,995 $ 28,474 $ 19,659 
$3 .32 $1.44 $.99 
$9 ,925 $9 ,570 $9 ,562 
$.50 $.50 $.50 
$ 6,345 $ 3,770 $ 4,639 
$ 168,000 $199 ,585 $229 ,339 
$ 364,553 $306,637 $278 ,239 
$18.35 $ 15.46 $14.06 
19,866 ,524 19,828,385 19,793 ,515 
23 ,702 ,870 20,562 ,953 18,880 ,818 
27 ,958,095 26,018 ,780 24,838 ,909 
14,449 ,748 12,433,986 11 ,575 ,358 
51 .68% 47 .79% 46.60% 
45.18% 43 .80% 43.40% 
3,815 ,285 3,613,790 3,403 ,838 
1,711 ,229 1,482,453 1,381 ,954 
6.65(): 6.48(): 6.17(): 
3.32(): 3.14(): 2 95q; 
24.35(): 22 .ssq; 21 .6 1q; 
43 
 DELTA AIR LINES, INC. 
Management's Analysis and Discussion of 
Summary of Operations 
Net earnings in fiscal 1975 were $49.2 million, a 
decline of 46% from fiscal 1974. Earnings in 1974 were 
a record $90.6 million, 37% higher than fiscal 1973. 
Included in these years were after-tax gains on the 
sale of aircraft totaling $4.0 million in 1975, $9.4 million 
in 1974, and $2.4 million in 1973. Also included in 1973 
was a non-recurring charge of $2.3 million after taxes 
for expenses related to the August 1, 1972 merger with 
Northeast Airlines. 
Total operating revenues rose 12% in fiscal 1975 
on a 3% gain in revenue passenger miles and a 10% 
increase in passenger mile yield. Cargo revenue 
declined 1% on a 10% reduction in cargo ton miles and 
15% gain in yield. In fiscal 1974 operating revenues 
were up 17% over 1973 as revenue passenger miles and 
passenger mile yield each increased 8%. Cargo revenue 
grew 14% on an 11% gain in yield and a 2% decline in ton 
miles. Cargo revenue in fiscal 1974 included $3.5 million 
in mail payments retroactive to prior years. Other net 
revenue increased $17 .3 million primarily as a result of 
the introduction of security charges. 
Passenger mile yield in both 1975 and 1974 
benefited from fare increases granted by the CAB to 
counter the effects of fuel price increases and general 
inflation. 
Operating expenses in fiscal 197 5 were up $212 
million or 20%. Increases in the price of fuel accounted 
for $91 million, or 50% of the increase in cash expenses. 
Depreciation totaled $128.4 million, up 29%. Revenue 
plane miles were reduced 3% and available seat miles 
rose 4%, reflecting the increased use of larger aircraft. 
In fiscal 1974, operating expenses increased 15% 
primarily as the result of increases in aircraft and 
facility rental expenses and the substantial effect of 
inflation on other cash costs, especially fuel. Available 
seat miles increased only 2%, and revenue plane miles 
were reduced 5% as a result of the reduced fuel 
availability. 
Net interest expense increased 79% in fiscal 1975 
and 85% in fiscal 1974. The increases in both years 
resulted from higher interest rates and increased 
borrowings to finance new aircraft purchases. 
The extraordinary item of $700,000 ( 4<1'. per share) 
in fiscal 1971 represents write-down of flight equip- 
ment to estimated realizable values made by Northeast 
Airlines prior to the 1972 merger. 
44 
 DELTA AIR LINES, INC . 
Board of Directors 
W. T. BEEBE Chairman of the Board & 
Chief Executive Officer 
8. W. BI ED EN HARN President and Director of 
Ouachita Coca-Cola Bottling Co., 
Ouachita Candy Co., and 
Biedenharn Realty Co., Inc. 
R. W. COURTS Director and Chairman of the Executive 
Committee, Atlantic Realty Co. 
C.H. DOLSON Chairman of the Executive Committee 
EMERY FLINN President, Specialized Investments, Inc., 
In vestment Counselor 
R. W. FREEMAN Chairman of the Finance and 
Compensation Committees; 
Chairman of the Board and Director, 
Louisiana Coca-Cola Bottling Co., L_ 
td. 
DAVID C. GARRETT, JR. President 
EDWARD H. GERRY Chairman of the Audit Committee; 
Partner of Gerry Brothers & Co., 
Investment Management 
CHARLES H. KELLSTADT Retired Chairman of the Board, 
Sears, Roebuck and Co; Director and 
Chairman of the Executive Committee, 
General Development Corporation 
JOHN R. LONGMIRE Partner of investment banking firm of 
I. M . Simon & Co. 
R. S. MAURER Senior Vice President- 
General Counsel & Secretary 
BILL MICHAELS Director and Chairman of the Board of 
Storer Broadcasting Company 
T. M. MILLER Retired Senior Vice President-Marketing 
ROBERT OPPENLANDER Senior Vice President-Finance 
& Treasurer 
STUART W. PATTON Me mber of the law firm of Patton, Kanner, 
Nadeau, Segal, Zeller & LaPorte and 
Director of Storer Broadcasting Company 
CARLETON PUTNAM Private In vestments 
GEORGE M. SNELLINGS, JR. Member of the law firm of Snellings, 
Breard, Sartor, Shafto & Inabnett 
45 
 DELTA AIR LI NES, INC . 
Officers 
W. T. BEEBE Chairman of the Board & Chief 
Executive Officer 
DAVI D C. GARRETT, JR. President 
Fl NANCI; 
ROBERT OPPENLANDER Senior Vice President - Finance & Treas urer 
W. A. ATCHISON Vice President - Computer S ervices 
J . D. DUNN Vice President - Purchas ing 
M . 0 . GALLOWAY 
REX A. McCLELLAND 
J . R. HOWELL 
HUGH H . SAXON 
AUDLY TOLLER, JR. 
Vice President - Comptroller 
Vice President - Properties 
A ss t. Treasurer 
A sst. Treasurer 
A sst. Treasurer 
LEGAL & CORPORATE AFFAIRS 
R. S. MAURER 
J . W. CALLISON 
FRANK F. ROX 
MORRIS SHIPLEY 
SIDNEY F. DAVIS 
A. C. FORD 
G EORGE E . SH E DD 
C. G. SWEAZEA 
E . A. THOMPSON 
IKE LASSETER 
MARKETING 
J . A. COOPER 
SHELBY D. DEMENT 
CHARLES P. KNECHT 
R. L. GIBSON 
J . T. MAPLES 
J . W. MEYER 
HENRY ROSS 
OPERATIONS 
HOYT T. FINCHER 
D. P. HETTERMANN 
C. A. SMITH 
J . K. BURNETTE 
ROBERT H . COWART 
JOHN P . DAVIS 
JACKS . KI NG 
C. J . MAY 
W. L. MILLER 
L. G . RODEFELD 
Se nior Vice President - General Counsel 
& S ecretary 
Vice President - Law & Regulatory Affairs 
Vice President - Law & Public Affairs 
Vice President - Government Affairs 
A sst. Vice President - Corporate Legal Affairs 
& A sst. S ecretary 
A sst. Vice President -Long Range Planning 
A sst. Vice President -Pu blic Relations 
A sst. Vice President - Civic Affairs 
A sst. Vice Preside nt -Economic Research 
Asst. Secreta ry 
Se nior Vice President - Ma rketing 
Vice President - Consumer Affairs 
Vice President- Marketing 
A sst. Vice President - Traffic 
A sst. Vice President - M ark eting Planning 
A sst. Vice President -Customer Relations 
A sst. Vice President- Sales Promotion 
Senior Vice President - Operations 
Vice President - Technical Operations 
Vice President - Flight Operatio ns 
A sst. Vice Presid ent - Quality Co ntrol 
A sst. Vice President-Operations 
Adminis tration 
A sst. Vice President -Maintenance 
A sst. Vice President - Fligh t Cont rol 
A sst. Vice President -Engineering 
A sst. Vice Presid ent - Ma teriel Services 
A sst. Vice President - Communications 
OPERATIONS - PASSENGER SERVICE 
HOLLIS L. HARRIS 
E. L. HAMNER 
FOY PHILLIPS 
HERMANS. STANLEY 
C. A. THOMPSON 
PERSONNEL 
R. W. ALLEN 
J . A. YORK 
RUSSELL H . HEIL 
JOHN HUME 
H . M . JOHNSON 
EUGENE H . STEWART 
Se nior Vice President - Operations - 
Passenger Se rvice 
Vice President - Statio ns 
Vice President - Passenger S ervice 
A sst. Vice President - Dining Service 
A sst. Vice President -Stations 
Se nior Vice President - Personnel 
Vice President - Personnel Benefit s 
A sst. Vice President - Personnel 
Adminis tratio n 
A sst. Vice Pres ident - Training & 
Personnel Communications 
A sst. Vice President - Personnel Services 
A sst. Vice President - Corporate Secu rity 
46 
 Transfer Agent and Registrar 
The Citizens and Southern National Bank 
99 Annex 
Atlanta, Georgia 30399 
Auditors 
Arthur Andersen & Co . 
25 Park Place, N .E. 
Atlanta, Georgia 30303 
Annual Meeting 
October 23, 1975, Monroe, Louisiana 
Common Stock 
Listed on the New York Stock Exchange 
Market Prices and Dividends 
Markel Price Range of 
Common Stock on 
DELTA AIR LIN ES, INC 
Cas h 
Dividends 
Fiscal 1975 New York Stock Exchange Paid Per Share 
Quarter Ended: High Low 
September 30. 49 31 $.15 
December 31 . 43 27 7/g .15 
March 31. 41 3/g 25 3/s .15 
June 30 ....... . 38 7/g 31 7/g .15 
Fiscal 1974 
Quarter Ended : 
September 30. 57 7/s 42 3/s $. 15 
December 31 . 56 1 
/ 2 35 .15 
March 31. 54 3/4 33 l/ 4 .15 
June 30 . 56 1 
/ 8 47 3/s .15 
Availability of Form 10-K 
The Company will supply, upon written request and 
without charge, a copy of the Company's annual report 
for the fiscal year 1975 on Form 10-K to any person bene- 
ficially owning or owning of record any of the common 
stock of the Company on September 5, 1975. Requests 
for the report should be directed to R. S. Maurer, 
Secretary, Delta Air Lines, Inc., Hartsfield Atlanta 
International Airport, Atlanta, Georgia 30320. 
47 
 DELTA AIR LIN ES, INC 
Notice to the Stockholders of Delta Air Lines, Inc. 
Part 245 of the Econom ic Regula tions of th e Civil 
Aerona utics Board provides tha t : ( l) a ny per on who 
either ow ns , as of Decem ber 31st o f the yea r preceding 
issua nce of this a nnua l report, or s ubsequently acquired , 
beneficia lly or a trus tee, more tha n 5%, in the aggrega te, 
of a ny class of the capita l stock or capita l of Delta Air 
Lines, In c., s hall file with the Board a report containing 
the inform a tio n required by Sec. 245.12 of Subpart 245 , 
on or before April 1, as to the capita l s tock or capita l 
owned as of Decem ber 31 of the precedin g year, a nd , in 
the case of s tock s ubsequently acquired, a report under 
Sec. 245 .13, within 10 d ays after s uch acquis ition, unless 
s uch person has otherwise fil ed with the Board a report 
covering s uch acquisi tio n or owners h ip , (2) any bank or 
broker covered by ( l ), to the extent that il holds s hares as 
trus tee on the las t d ay of a ny quarter of a calendar year, 
shall file with the Board , w ithin 30 days after the end of 
the quarter, a report in accordan ce with the provisions of 
Section 245.14; an d (3) a ny person required to report 
under this s ubpa rt who gra nts a security interes t in more 
than 5% of a ny class of the ca pita l stock or capital of 
Delta Air Lines, Inc. s ha ll within 30 d ays after grantin g 
such secu rity interest file with the Board a report con- 
taining the information required in Section 245.15. Any 
stockholder who believes that he m ay be required to file 
such a report may o btain further information by writing 
to the Director, Burea u of Operating Rights, Civil 
Aerona utics Board , Was hin gton, D .C. 20428. 
Delta Air Lines, Inc. 
General Offices 
Hartsfield Atlanta International Airport 
Atlanta, Georgia 30320 
48