DELTA AIR LINES, INC. 
ANNUALREPORT1976 
 Contents 
1 Highlights of the Year 
2 Description of Business 
3 Report to the Stockholders 
7 Earnings and Dividends 
8 Operating Revenues 
10 Operating Expenses 
11 Capitalization and Financing 
13 Flight Equipment and Purchase 
Commitments 
15 Personnel 
16 Regulatory Matters 
24 Route Map 
Financial Statements- 
26 Balance Sheets 
28 Statements of Income 
29 Statements of Retained Earnings 
29 Statements of Additional Paid-in Capital 
30 Statements of Changes in Financial Position 
31 Notes to Financial Statements 
41 Auditors' Report 
42 Summary of Operations 
42 Other Financial and Statistical Data 
44 Management's Analysis and Discussion 
of Summary of Operations 
45 Board of Directors 
46 Officers 
 Highlights of the Year 
The following comparative summary highlights 
the accomplishments of the past year in a num- 
ber of major categories. Net income and earn- 
ings per share for 197 5 have been restated to 
reflect a change in accounting method. (See Note 
2 to the financial statements). Dollars are ex- 
pressed in thousands, except per share figures. 
Per Cent 
1976 1975 Change 
Operating 
Revenues . .. . . . . ... .. $1,528,942 $1 ,377,030 + 11 % 
Operating 
Expenses .. . . . .. . . . . . $1 ,411,333 $1,282,000 + 10% 
Net Income .. . . . .. . . . $70,207 $51 ,880 + 35% 
Earnings Per 
Share . . ..... . .... . .. $3.53 $2.61 + 35% 
Revenue Passengers 
Enplaned . . . ..... . . .. 27,996,665 25,831,631 + 8% 
Available Seat 
Miles (000) . .. ...... . . 30,389,761 29,497,234 + 3% 
Revenue Passenger 
Miles (000) . ... ... . . .. 17,621 ,247 15,916,860 + 11 % 
Passenger Load 
Factor . . . .. . . . .. . . ... 57.98% 53.96% + 7% 
1 
 Description of Business 
Delta Air Lines, Inc., is a certificated trunk air 
carrier providing scheduled air transportation 
for passengers and cargo over a network of 
routes covering approximately 32,000 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 exten.sive federal 
regulation pursuant to the Federal Aviation Act 
of 1958, as amended, as well as other federal 
and state statutes. 
2 
 Report to the Stockholders 
We are pleased to report that fiscal 1976 was 
a very successful year. Earnings totaled 
$70.2 million or $3.53 per share, the second 
highest in Delta's history and 35% above last 
year. Total operating revenues for the year, 
which began during the depth of the recession, 
were up 11%. Passenger traffic grew 11% for 
the year and 15 % in the last half of the year. 
Cargo ton miles increased 15 % for the year and 
25% in the last six months. 
In addition to an improvement in consumer 
confidence and the stimulation of a recovering 
economy, traffic in the first half of the year was 
favorably impacted by strikes against major 
competitors totaling 142 strike days. Traffic also 
was positively influenced in fiscal 1975 by 
a strike against a major competitor lasting 
109 days. 
Despite major efforts to counter the effects 
of inflation, operating expenses increased 10% 
while operating capacity was up 3%. Salaries 
and related costs and aircraft fuel continuedto 
show substantial increases, accounting for more 
than 83% of the increase in cash costs. Signifi- 
cant productivity gains were realized, however, 
in several areas. The increases in traffic and 
operations were accomplished with average 
employment about 1% below that of 1975. The 
aircraft fleet modernization and standardiza- 
tion program, which will be largely complete 
by the end of calendar 1976, made a major 
contribution to the effort to minimize costs, 
particularly in the areas of maintenance, crew 
training and fuel efficiency. 
Our commitment to the efficient use of 
fuel, which is demonstrated by the more than 
one billion dollar investment in fuel-efficient 
aircraft in the last four years, continued to pay 
dividends. Since fiscal 1973 when the fleet 
modernization plan was begun, Delta has in- 
creased the seat miles flown per gallon of fuel 
3 
 DAVID C. GARRETT, JR. 
President 
W. T. BEEBE 
Chairman of the Board and 
Chief Executive Officer 
used by 17 %, and efficient scheduling of this 
improved aircraft fleet has produced a 31% 
increase in revenue passenger miles per gallon 
of fuel used. During the year we took delivery 
of 14 B-727-200 and three L-1011 aircraft. Five 
aircraft were sold which resulted in an after- 
tax gain of $3.9 million or 20 per share. 
The new aircraft purchases were financed 
with borrowings of $40 million available 
under the 1973 Bank Credit Agreement and 
$10.5 million under the loan agreement with 
Lazard Brothers & Co., Limited, and with 
internally generated funds. Long-term debt 
at year-end totaled $402 .4 million, including 
current maturities, down $35 million from the 
restated $437.4 million for the previous year 
and was only 74% of equity. No new financing 
was arranged during the year. Capital needs for 
the coming year will be met by internally gener- 
ated funds, and debt should continue to decline. 
4 
 During the year, the Civil Aeronautics 
Board approved three passenger fare increases 
totaling 8%. The benefits of these fare increases 
were nullified, however, by discount fares ap- 
proved last year which were intended to stimu- 
late traffic during the recession, and revenue 
per passenger mile was almost unchanged at 
7.98. Late in the year the trend in traffic mix 
began to shift away from discount fares back 
into full fares. This, combined with the Board's 
approval of a reduction in the discount rates 
applicable to the major discount fares, resulted 
in a 5% increase in the passenger mile yield in 
the June,1976 quarter. A further 2% fare in- 
crease has been approved to be effective 
September 15,1976. 
Regulatory reform efforts during the past 
year have greatly accelerated with a number of 
legislative proposals being offered by members 
of Congress and the Administration. Some of 
these proposals reveal a frightening lack of 
understanding of our nation's air transportation 
system, the finest and most efficient in the 
world. While we believe that changes can be 
made in the administration of the Federal 
Aviation Act of 1958 which will improve the 
quality of our air transportation system, many 
of the proposals contain provisions which could 
seriously undermine the present system. It is 
too early to determine which of the proposals 
will be considered by the Congress or when the 
Congress will act upon them. 
The outlook for fiscal 1977 is one of cau- 
tious optimism as we continue to be faced with 
great challenges. It is expected that the econ- 
omy will continue to recover but at a more 
deliberate pace than in similar situations in 
the past. Traffic growth is expected to remain 
firm, although comparisons with the strike 
period last year will be somewhat difficult. The 
problem of inflation has not yet been solved. 
Despite a continued strong effort to minimize 
cost increases, expenses in the areas of wages, 
5 
 fuel, landing fees, services and taxes are ex- 
pected to continue to increase in response to 
inflationary pressures. Traffic related expenses 
will continue to rise as traffic grows. 
The 28,000 Delta professionals have dem- 
onstrated countless times in the past that they 
can meet great challenges and turn them into 
great opportunities. We strongly believe that 
the coming year will be no different. We begin 
fiscal 1977 with a renewed dedication to main- 
tain our industry leadership, both in financial 
results and in service to our customers. 
DAVID C. GARRETT, JR. 
President 
September 7, 1976 
6 
W. T. BEEBE 
Chairman of the Board and 
Chief Executive Officer 
 Earnings and Dividends 
Fiscal 1976 net earnings were $70.2 million 
($3.53 per share), an increase of 35% over 1975 
earnings of $51.9 million ($2.61 per share). 
Both years include gains of 20<P per share after 
taxes from the disposition of aircraft. The 
current year's results include an unrealized 
gain of $10.6 million (27 per share after taxes) 
from the translation of the long-term portion of 
debt repayable in foreign currency. The pre- 
vious year's results have been restated to in- 
clude a similar unrealized gain of $5.2 million 
(13 per share after taxes). (See Note 2 to the 
financial statements). 
Operating income increased 24% to 
$117.6 million on an 11% growth in operating 
revenue to $1.53 billion and a 10% rise in 
operating expenses to $1.41 billion. Net interest 
expense of $31.4 million was essentially the 
same as last year. The effect of reduced interest 
rates in the current year was offset by a higher 
average level of outstanding debt and a reduced 
amount of interest capitalized. Income taxes 
were provided on book income at the rate of 
49.25% in both the current and the previous 
Earnings per Share* 
For the years ended June 30 
1976 
1975 
1974 
1973 
1972 
1971 
1970 
1969 
1968 
1967 
0 These data reflect the operations of Delta Air 
Lines, Inc. , and do not include the Northeast 
Airlines' system prior to August 1,197 2. Earnings 
for fiscal 1975 have been restated as described 
in Note 2 to the financial statements. 
7 
 year. The provisions for income taxes were 
reduced by investment tax credit amortization 
of $14.6 million in 1976 and $11.4 million in 
1975. The following table compares 1976 
earnings with restated 197 5 earnings. 
Per Cent 
1976 1975 Change 
(In Thousands) 
Operating Income ....... $117,609 $95,030 +24% 
Other Expense (Income), 
Net ............... 82066 15,185 -47 
Income before Taxes ..... 109,543 79,845 +37 
Income Taxes .......... 392336 272965 +41 
Net Income ............ $ 702207 $512880 +35% 
Per Share ........... $3.53 $2.61 +35% 
Dividend payments totaled $11.9 million 
or 60 per share in both years. At the July,1976 
meeting of the Board of Directors, the quarterly 
dividend was raised 17 % to 17.5 per share 
or an annual rate of 70 per share. Fiscal 1976 
marked the 27th consecutive year in which 
Delta has made cash dividend payments. 
Operating Revenues 
The following table compares operating 
revenues for fiscal 1976 and 1975 by major 
revenue category. During the current year, 
passenger security charges were incorporated 
into the basic passenger fare structure. To 
reflect this change, security charges in fiscal 
1975 totaling $10.6 million have been reclassi- 
fied from other net revenue to passenger reve- 
nue to conform with the 1976 presentation. 
1976 1975 
(In Thousands) 
Per Cent 
Chan1;e 
Passenger.. . . . . . . . $1,406,417 $1,271,720 + 11% 
Cargo. . . . . . . . . . . . 100,626 85,388 + 18 
Other, Net. . . . . . . . 21,899 19,922 + 10 
Total .......... $1 2 
5282 
942 $1,377,030 +11% 
Total operating revenues increased 
$151.9 million or 11% to $1.53 billion. Rev- 
enues were favorably impacted by a strike 
against a major competitor from September 1, 
1975 to January 6, 1976 and by a strike against 
8 
 another competitor from December 6 to 
December 22, 1975. Traffic also was positively 
influenced in fiscal 197 5 by a strike against a 
major competitor from July 15, 1974 to 
November 1, 1974. 
Passenger revenues rose 11% to 
$1.41 billion. Revenue passenger miles totaled 
17 .62 billion, up 11%, as traffic responded to 
the economic recovery which began during the 
summer of 197 5. Passenger traffic in the last 
half of the fiscal year was up 15% over the de- 
pressed levels of the same period in fiscal 197 5. 
The passenger mile yield remained almost 
unchanged from last year at 7.98 despite fare 
increases granted by the CAB at various times 
during the year totaling 8%. Circuitous routing 
of strike-generated passengers and discount 
fares filed last year which were intended to 
stimulate traffic during the recession combined 
to offset the fare increases. Effective June 1, 
1976, however, the CAB approved reductions 
in the discount rates applicable to the major 
discount fares, and the passenger mile yield 
grew 8% in that month. It is expected that the 
yield will continue to show positive growth 
during the coming fiscal year. 
Cargo revenues, reflecting traffic gains 
during the strike and the effects of the recover- 
ing economy, increased 18% to $100.6 million. 
Cargo ton miles increased 15 % and the average 
yield increased 2%. In addition, a $3.1 million 
increase in cargo revenues resulted from the 
fact that air express service was offered by 
Delta for the entire year during fiscal 1976 but 
only four months of the previous year. 
Other net revenue gained 10% over the 
previous year primarily as a result of expanded 
charter operations. 
Per Cent 
Revenue Statistics 1976 1975 Change 
Revenue Passenger 
Miles (000 ) ...... 17,621,247 15,916,860 +11% 
Revenue Passengers 
Enplaned ....... 27,996,665 25,831,631 + 8 
Cargo Ton Miles 
(000) .......... 261,622 228,057 +15 
Passenger Load 
Factor ......... 57.98% 53.96% + 7 
Passenger Mile Yield 7.98 7.99 
9 
 Operating Expenses 
The following table compares operating ex- 
penses by major expense functions for fiscal 
1976 with 1975. 
Per Cent 
1976 1975 C/rn111-;e 
(In Thousands) 
Salaries and Related 
Costs ............ . $ 626,511 $ 572,982 + 9% 
Aircraft Fuel. ....... . 272,404 235,849 +15 
Aircraft Maintenance 
Materials and Repairs 36,022 40,007 -10 
Aircraft Rentals ..... . 10,451 24,954 -58 
Other Rentals ....... . 27,875 29,104 - 4 
Landing Fees ....... . 31,840 27,925 +14 
Passenger Food and 
Related Supplies .... 52,316 49,679 + 5 
Passenger Commissions 45,320  37,329 +21 
Advertising ......... . 21,143 18,264 +16 
Other Cash Expenses .. 137,863 117,472 +17 
Total Cash Expenses $1,261,745 $1,153,565 + 9% 
Depreciation ....... . 149,588 128,435 +16 
Total Operating 
Expenses . . ...... . $1,411,333 $1,282,000 +10% 
Despite determined efforts to minimize 
controllable expenditures, total operating ex- 
penses increased 10% in fiscal 1976 as cash 
expenses were up 9%. Operating capacity grew 
3% to 30 .39 billion available seat miles, and 
revenue plane miles also increased 3%. Delta's 
fleet modernization and standardization pro- 
gram and other programs to improve aircraft 
performance contributed substantially to a 10% 
reduction in aircraft materials and outside 
repair costs. Aircraft rentals were down 
$14.5 million in the current year as a result 
of the phase-out of leased DC-10 aircraft during 
fiscal 1975. 
Salaries and related costs increased 9 % 
while average employment was 1% below the 
average of the previous year. The average price 
of fuel rose 15% to 29.97 per gallon, and the 
number of gallons used increased less than 1 % 
to 908.8 million. During the last half of the 
year, the price of fuel was up only 1% over the 
average price for the first half of the year. 
10 
 Passenger commissions were up 21%, as much 
of the passenger traffic gained during and after 
the strike period used the services of travel 
agents. Other cash expenses were up generally 
as a result of inflation and increased traffic. 
Depreciation expense increased 16% due 
to the continued introduction of new aircraft as 
part of Delta's fleet modernization plan. 
Per Cent 
Op_erating Statistics 1976 1975 Change 
Revenue Plane 
Miles (000) ......... 216,257 210,412 + 3% 
Available Seat 
Miles (000) ......... 30,389,761 29,497,234 + 3 
Available Ton 
Miles (000) ......... 4,145,183 4,030,116 . + 3 
Fuel Gallons 
Consumed (000) .... 908,776 903,478 + 1 
Average Price per Fuel 
Gallon ............ 29.97<P 26.10 +15 
Breakeven Load Factor 53.14% 49.93% + 6 
Capitalization and Financing 
During fiscal 1976, Delta borrowed the remain- 
ing $40 million available under the 1973 Bank 
Credit Agreement. On September 30,1975 the 
$300 million outstanding balance under this 
agreement and the $40 million outstanding 
under the 1975 Bank Credit Agreement were 
converted to five-year term loans. Repayment 
in quarterly installments of $11 million 
and $1.5 million, respectively, began on 
December 31, 1975. The remaining balances 
of $91 million on the 1973 agreement and 
$11.5 million on the 1975 agreement are pay- 
able on September 30, 1980. 
Under the loan agreement with Lazard 
Brothers & Co., Limited, $10.5 million was 
borrowed to finance Rolls-Royce engines for 
the L-1011 aircraft. Based on the exchange 
rate for the British pound sterling on June 30, 
1976, the balance outstanding under this agree- 
ment was $61.1 million. In accordance with the 
provisions of the Financial Accounting Stan- 
dards Board's Statement No.8, long-term debt 
11 
 was reduced $15 .8 million as a result of the 
translation (at June 30, 1976 exchange rates) 
of the long-term portion of the Lazard debt 
which is repayable in pounds sterling. Of the 
$15.8 million reduction, $10.6 million was 
applicable to the current year and $5 .2 million 
was applicable to fiscal 1975. (See Note 2 
to the financial statements). 
Long-term debt at June 30,1976 totaled 
$402.4 million, including current maturities, 
a decrease of $35 million from the restated 
$437.4 million for the previous year. At the 
end of the fiscal year, long-term debt, including 
current maturities, was 74% of equity. Internally 
generated funds of $234.3 million, plus borrow- 
ings totaling $50 .5 million, were used primarily 
for the purchase of flight and ground equip- 
ment totaling $212.8 million and debt repay- 
ments totaling $79 .4 million. 
At June 30,1976, outstanding purchase 
commitments for aircraft and related spares 
will require future expenditures of approxi- 
mately $417 million during fiscal years 1977 
through 1981. Mandatory debt repayments due 
in fiscal 1977 total $51.5 million after the 
prepayment on June 30,1976 of the September 
and December, 1976 quarterly payments under 
the 1973 and 1975 Bank Credit Agreements. 
Total stockholder equity at June 30, 1976 
was $542.1 million or $27.27 per share, up 
12% from the restated $24.34 per share 
last year. 
12 
 Flight Equipment and 
Purchase Commitments 
During the past fiscal year Delta accepted 
delivery of three Lockheed L-1011 aircraft and 
14 advanced model Boeing 727-200 aircraft. 
The fleet was reduced by the disposition of two 
DC-9-32's and three DC-8-5l's. At June 30, 
1976,Deltaoperated the following aircraft fleet: 
Type of 
Aircraft Seats Owned Leased 
B-747. . . . . . . . . . . 370 3 
L-1011. . . . . . . . . . . 256 21 
DC-8-61. . . . . . . . . 199 13 
DC-8-51. ........ 135/ 150 18 
B-727-200 ....... 135 58 
B-727-100.. . . . . . . 97 
DC-9-32. . . . . . . . . 90 _Q_ 
Total...... . . . . . 173 
13 
5 
18 
Total 
3 
21 
13 
18 
71 
5 
60 
191 
Two of the three DC-8-51 aircraft disposed 
of during the year were delivered prior to the 
end of the year on a contingent sales agree- 
ment, and payment for these aircraft was 
received after the close of the fiscal year. An 
agreement has been reached with Frederick 
B. Ayer for the sale of five more DC-8-5l's with 
tentative delivery scheduled for the December, 
1976 quarter. The remaining 13 DC-8-5l's will 
be phased out of scheduled service by the end 
of the March, 1977 quarter, and the Company 
is negotiating for the sale of these aircraft. 
13 
 Arrangements were completed during the 
year for the sale of the three remaining B-7 4 7 's 
to The Boeing Company. The aircraft will be 
delivered to Boeing in the March and in the 
June, 1977 quarters. 
After the end of the fiscal year, negotia- 
tions were completed for the sale of one 
DC-9-32 aircraft to Allegheny Airlines for 
delivery in the September, 1976 quarter. The 
Company is currently negotiating for the sale 
of six DC-9-32 aircraft to various parties with 
delivery of one in each quarter of fiscal 1977 
and two in July,1977. 
Negotiations for the purchase of all the 
capital stock of Storer Leasing Co., a wholly- 
owned subsidiary of Storer Broadcasting Com- 
pany, were completed during the year, and the 
purchase was consummated on July 27,1976. 
The purchase price to Delta was $30.4 million 
cash plus the assumption of $3.6 million of 
Storer Leasing's obligations. The assets of 
Storer Leasing consisted of six B-727-200 
aircraft, five B-727-100 aircraft, and 18 spare 
engines, all of which were leased to Delta. On 
July 30, 1976 the assets of Storer Leasing were 
transferred to Delta, and the leasing company 
was liquidated. 
At June 30,1976, Delta had purchase com- 
mitments for 25 B-727-200 aircraft and nine 
L-1011 aircraft. The B-727-200 delivery sched- 
ule includes 17 in fiscal 1977 and four each in 
fiscal 1978 and 1979. One L-1011 is scheduled 
for delivery in each of the December, 1977, and 
June and December, 1978 quarters. The six 
remaining L-lOll's are tentatively scheduled 
for delivery in fiscal years 1979 through 1981 
and are subject to cancellation on specified 
interim dates at a cost to Delta of $40,000 per 
aircraft. 
14 
 Personnel 
At June 30, 1976, the team of Delta profes- 
sionals numbered 27,891 (an average of 27,674 
during the year) compared to the June 30,1975 
total of 27,801 (an average of 28,008 during 
the year), excluding temporary and part-time 
personnel in both years. Salaries and related 
fringe benefits totaled $626 .5 million, an in- 
crease of 9% over last year, and equal to 41.0 
of each revenue dollar versus 41.6 for the 
previous year. 
Delta's commitment to its policy of pro- 
viding a stable and rewarding work environ- 
ment was highlighted during the year as five 
individuals completed forty years of service 
with the Company. 
During the year Mr. R. L. Gibson was 
advanced to the position of Vice President- 
Traffic. Mr. Gibson's career spans 30 years, and 
he has been associated with many outstanding 
developments in Delta's marketing operations. 
On January 2,1976, Mr. Herman S. Stanley, 
Assistant Vice President-Dining Service, retired 
after more than 29 years service with the Com- 
pany. Also retiring as of the end of this fiscal 
year was Mr. J. W. Meyer, Assistant Vice 
President-Customer Relations, after a career 
of more than 40 years service with Delta. These 
two fine individuals made many contributions 
to the success of our Company during their 
long careers with Delta. 
On October 1,1975, we were deeply sad- 
dened by the death of Mr. Charles H. Kellstadt, 
a member of the Board of Directors since 1964. 
Mr. Kellstadt made many significant contribu- 
tions to Delta in his capacity as a Board member. 
Mr. Emery Flinn chose not to stand for re- 
election as a Director and was elected Director 
Emeritus in recognition of his more than 17 
years of service on the Board. 
Mr. Jesse Hill, Jr., President of Atlanta Life 
Insurance Company, and Mr. R. W. Allen, 
Delta's Senior Vice President-Personnel, were 
elected Directors at the Annual Stockholders 
Meeting on October 23,1975, to fill the above 
vacancies. 
15 
 We were also saddened during the year 
by the deaths of Mr. Winship Nunnally and 
Mr. George B. Storer, Sr. Mr. Nunnally was a 
Delta Board member for more than 24 years 
and was elected Director Emeritus in 1971 in 
recognition of his many contributions to Delta's 
development. Mr. Storer became a member of 
the Delta Board on August 1, 1972, concurrent 
with the consummation of the merger between 
Delta Air Lines, Inc., and Northeast Airlines, 
Inc., and was elected Director Emeritus in 
October, 1972. 
Regulatory Matters 
Both the quantity and pace of regulatory 
activity increased during the year, particularly 
in the area of new and competitive routes. At 
the same time, however, regulatory reform 
(often improperly called "deregulation") efforts 
greatly intensified. 
Regulatory Reform 
These latter efforts included introduction 
of a number of legislative proposals in Congress 
during the past year, with others promised for 
1977. Each of these would significantly modify 
the current method and degree of regulation of 
the air transport industry. 
 Among the changes proposed are ( 1) a 
revised policy directive to the Civil Aeronautics 
Board which would increase emphasis on 
industry competition; (2) relaxation of the cur- 
rent certificate requirement and other means 
of facilitating entry and exit of air carriers into 
and from interstate markets; (3) "dual" certi- 
fication provisions which would permit the 
present supplemental air carriers to seek 
certification as scheduled carriers on particular 
routes, and would permit the present sched- 
uled carriers to seek increased charter authority 
by means of certificates to engage in supple- 
mental air transportation; ( 4) provisions for 
replacing unused "dormant" authority with 
new certifications; (5) a relaxation in the 
authority of the CAB to control rates and fares; 
(6) expedited administrative procedures; and 
(7) a reduction or elimination of certain anti- 
trust exemptions. Committee hearings have 
been held on a number of the proposals, and 
more hearings are expected in the remaining 
months of the current Congressional session, 
and in 1977. In the meantime, the CAB is ex- 
amining its own procedures with a view toward 
expedition of the administrative process. 
Delta supports some of these proposals, 
including increased pricing flexibility, prompt 
disposition of air carrier route applications, and 
greater administrative expedition in general. 
 Expedition alone would help achieve many of 
the goals of those suggesting legislative change, 
most of which can be accomplished under 
existing legislation. 
Delta does oppose, however, any major 
revision of the existing Federal Aviation Act 
under which this country has developed the 
world's foremost air transportation system, 
with more service, by more carriers, in more 
markets, with more competition and at lower 
fares than exist elsewhere. The present law is 
sufficiently flexible and adaptable to changing 
circumstances to negate the need for major 
revision to achieve the desired goals. Delta is 
vigorously opposing efforts to eliminate or 
significantly weaken the current certification 
process, which provides carriers with both the 
obligation to serve and the "security of route" 
necessary to permit stable operations and 
adequate financing. 
Because of the multitude of legislative and 
administrative proposals and the generally 
fluid nature of the regulatory reform situation 
at this time, it is too early for adequate assess- 
ment of the impact of any specific proposed 
change in the regulatory scheme upon Delta's 
operations. 
In the meantime, regulation under the 
present law has continued, including the 
following matters of major interest. 
 Route Cases - International 
Atlanta-London. The CAB has recom- 
mended grant to Delta of a nonstop route 
between Atlanta and London, England, which 
would also permit Delta to provide single- 
plane London service via Atlanta from 
Dallas/Ft.Worth and Houston. This decision 
remains subject to Presidential approval and to 
negotiation of a bilateral agreement between 
the United States and the United Kingdom 
covering the route. In the meantime, the 
Delta/ Pan American single-plane interchange 
service between Atlanta and London was 
replaced with a coordinated, connecting 
service at Dulles which will continue through 
October, 197 6. 
Chicago-Montreal. Delta and other car- 
riers are seeking nonstop authority between 
these two cities, as authorized for a U.S. Flag 
carrier by the most recent U.S.-Canadian 
bilateral agreement. The market is now served 
by Air Canada and Air France. An Adminis- 
trative Law Judge has recommended another 
applicant, but the case is being reviewed by 
the CAB. 
Route Cases-Domestic 
Boston-Atlanta. The CAB has granted 
Delta competitive nonstop authority between 
Boston and Atlanta, which Delta will imple- 
ment in mid-September, 1976. 
19 
 Cleveland-Atlanta. A hearing has been 
completed on the applications of Delta and 
others for competitive nonstop Cleveland- 
Atlanta authority. The CAB's Bureau of Oper- 
ating Rights has recommended grant of Delta's 
application if competitive service is to be 
established in this market. The Judge's Initial 
Decision is expected sometime in 1976, but 
the case probably will be reviewed by the 
CAB itself. 
Oklahoma/Denver-Southeast. Delta 
seeks operating rights between Atlanta, on the 
one hand, and Denver, Oklahoma City, and 
Tulsa, on the other hand. The CAB's Bureau 
of Operating Rights has recommended that 
Delta be granted the nonstop Atlanta-Denver 
portion of this route. A Law Judge's Initial 
Decision in this case is expected later in 1976, 
with final CAB decision sometime in 1977. 
In a related case, still in preliminary stages, 
Delta and others seek authority in the Wichita- 
Memphis and Wichita-Denver markets, with 
the right to operate between Memphis and 
Denver via Wichita. 
Nashville-St.Louis/ Atlanta/ Tampa/ Miami. 
Following disapproval of the agreement 
whereby TWA would have transferred its 
authority in these Nashville markets to Delta, 
TWA entered into a similar transfer agreement 
with another carrier. Delta has asked that any 
case considering the new agreement be 
expanded to also consider a new Delta appli- 
cation for authority of its own in these Nash- 
ville markets. This proceeding is in 
preliminary stages. 
Other Markets. In other pending cases, 
Delta seeks (1) nonstop authority in both the 
Memphis-Minneapolis/ St.Paul and Memphis- 
Milwaukee markets; (2) Memphis-Tampa 
nonstop authority; (3) competitive nonstop 
authority between Detroit and Boston; and 
(4) nonstop Cleveland-Indianapolis authority. 
In line with the generally renewed interest in 
route proceedings, Delta has applied for 
20 
 authority in a number of other markets, 
including Atlanta-Daytona Beach, Atlanta- 
Sarasota/ Bradenton, Savannah-Northeast, 
Cleveland-Cincinnati, Las Vegas-Phoenix, and 
Dallas-Albuquerque-Las Vegas, and is con- 
sidering other applications. Civic requests 
have been filed for expedited procedures with 
respect to some of the markets for which 
Delta has sought new authority. 
Court Cases. Delta's applications for 
nonstop authority in the Atlanta-Fort Myers 
and Miami-Los Angeles markets have both 
been denied, but Delta has appealed these 
decisions to the Federal Courts of Appeal. 
Route Realignment 
Under new guidelines announced by the 
CAB, Delta will seek a "realignment" of its 
routes which will both simplify the certificate 
under which Delta operates and result in the 
grant of some new authority, including 
particularly the relaxation of some of the 
burdensome "restrictions" in the present cer- 
tificates. Such restrictions were placed on 
Delta in years past in order to avoid grant of 
authority in markets not at issue in a particular 
proceeding, to control the degree of competi- 
tion in earlier years, or for other reasons. By 
and large, these restrictions are no longer valid 
regulatory devices. To the extent that the 
outmoded restrictions on Delta's authority are 
not removed in the realignment proceeding, 
Delta expects to pursue individual applications 
for modification. 
Route Cases-Competitive 
Other carriers seek authority in a number 
of Delta markets, including Atlanta-Detroit, 
Atlanta-Cincinnati, Dallas/ Ft.Worth-Las Vegas, 
Dallas/Ft.Worth-Shreveport, and Atlanta- 
Savannah. Consideration is also being given 
to the substitution of Eastern Air Lines for 
Piedmont between Atlanta and Columbia, and 
Piedmont in lieu of Eastern between Chicago 
and Louisville. 
21 
 Suspensions 
Delta has reinstituted nonstop service 
between Miami and San Francisco, but 
remains suspended at Brunswick, Georgia, 
and at a number of points in New England 
currently served by other carriers. 
Rate and Fare Cases 
Under modified versions of the fare 
standards adopted in the major Domestic 
Passenger Fare Investigation, the industry has 
been allowed to increase standard day coach, 
first clas and night coach fares during 1976 
as noted elsewhere. But the standards them- 
selves are under examination, both in CAB 
proceedings designed to update them and in 
court cases which protest certain modifications 
of the standards which were made by the 
agency without proceedings in which the 
carriers could express their views. There is 
also considerable Congressional interest in the 
standards and their possible modification. 
In the meantime, a Judge's Initial Deci- 
sion has been issued in the Domestic Night 
Coach Fare Investigation which adopts most of 
the positions advocated by Delta. Because 
Delta is the world's largest operator of stan- 
dard, low fare night coach services, known on 
the Delta system as "Early Bird" and "Owly 
Bird" services, this decision is of considerable 
importance to Delta. Final Board decision is 
expected later in 1976. 
 Various types of discounted fares continue 
to exist, but the so-called "no-frills" fares have 
been withdrawn and the CAB has terminated 
the proceeding which had been started to 
assess the legality of such fares. 
The industry air freight and mail rates 
remain under investigation. 
Charter and Tour Services 
Although the highly liberal one-stop 
inclusive tour and special event charter regula- 
tions are still relatively new, the CAB has 
already adopted additional and even more 
liberal charter regulations, which would 
further blur the distinction between individ- 
ually ticketed services and charter services. The 
proposed regulations would authorize "ad- 
vance booking charters:' which would permit 
members of the general public to use charter 
services to be sold through tour operators, 
including short duration trips with only a 
limited advance purchase/ payment require- 
ment, and even for a single destination. In 
addition, the CAB is considering the authori- 
zation of "contract bulk inclusive tours:' which 
would permit groups to purchase reduced rate 
transportation on regularly scheduled 
flights through tour operators, with 
minimal limitations. 
 ] 
Delta Air Lines System Route Map ] 
24 
SOUE ISLE- 
OULTON 
NGOR 
ESTER-CONCORD 
 DELTA AIR LINES, INC. 
Balance Sheets 
June 30, 1976 and 1975 
ASSETS 
CURRENT ASSETS: 
1976 1975* 
(In Thousands) 
Cash . . . . .... . .... . ....... . $ 28,773 $ 50,838 
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 5): 
Cost- 
Flight 
Equipment Other 
54,135 
82,908 50,838 
126,228 107,944 
17,300 
12,807 14,109 
8,510 8,033 
230,453 1981224 
1976 $1,658,359 $239,108 1,897,467 
1975 1A82J67 2281 
313 1,111,080 
Accumulated depreciation- 
1976 592,092 116,023 708,115 
1975 487 014 99,542 - - - - 586,556 
Advance payments for new 
equipment (Note 3) ... .. .. . 
OTHER ASSETS: 
Nonoperating property and 
equipment. ...... .. .. ... . . 
Long-term receivables and 
prepayments, etc .... . .... . . 
26 
1,189,352 1,124,524 
41,302 47 950 
1,230,654 1,172,474 
1,238 
5,149 
6,387 
2,643 
6 769 
9,412 
$1,467,494 $113801 110 
 LIABILITIES AND 
STOCKHOLDER EQUITY 
CURRENT LIABILITIES: 
Current maturities of long-term 
debt ..... . . . .. .......... . $ 
Short-term notes payable .. .. . 
Accounts payable and accrued 
liabilities ........ ...... ... . 
Air traffic liability . .... . .. .. . . 
Accrued income taxes ...... . 
Total current liabilities .... . 
LONG-TERM DEBT (Notes 2 
and4) ......... . .......... . 
DEFERRED CREDITS: 
Deferred income taxes ...... . 
Unamortized investment tax 
credits .................. . 
Other ..................... . 
COMMITMENTS AND 
CONTINGENCIES (Notes 3, 
5, 8 and 9) 
STOCKHOLDER EQUITY (Note 7): 
Common stock, par value 
$3.00 per share-Authorized 
25,000,000 shares; 
Outstanding 19,880,577 
shares ............... . . . 
Common stock purchase 
warrants . .... . . . . ... .. . . 
Additional paid-in capital. .. . 
Retained earnings (of which 
$246,472,000 is restricted 
at June 30, 1976 as to the 
payment of cash dividends 
under credit agreements) 
DELTA AIR LINES, INC. 
1976 1975* 
(In Thousands) 
51,454 
128,253 
76,856 
8.769 
265.332 
350.968 
273,664 
28,954 
6.464 
309,082 
59,642 
6,750 
73,331 
402,389 
$ 46,991 
3,000 
126,673 
52,393 
229,057 
390,437 
232,881 
37,059 
6,843 
276,783 
59,642 
6,750 
73,331 
344,110 
542.112 483,833 
$1,467,494 $1,380,110 
*Certain 1975 amounts have been reclassified to conform with the 
1976 presentation. 
The accompanying notes are an integral part of these balance sheets. 
27 
 DELTA AIR LINES, INC. 
Statements of Income 
For the years ended June 30, 1976 and 1975 
1976 1975* 
OPERATING REVENUES: 
(In Thousands) 
Passenger .. .... . ...... . . .. $1,406,417 $1,271,720 
Cargo ..... . . .. ... . . . ...... 100,626 85,388 
Other, net. .. . ......... .. .. . 211899 191922 
Total operating revenues .. 115281942 113771030 
OPERATING EXPENSES: 
Flying operations ........ . .. 464,854 425,300 
Maintenance ....... .. . ..... 162,047 162,486 
Aircraft and traffic servicing . .. 279,262 259,522 
Promotion and sales ......... 170,747 147,055 
Passenger service . . .. . . . .... 138,388 127,452 
Depreciation . .. .. ... .... . . . 148,897 127,191 
General and administrative ... 471138 321994 
Total operating expenses 114111333 112821000 
OPERATING INCOME .. .. .... 1171609 95,030 
OTHER EXPENSE (INCOME): 
Interest expense . .... . . ..... 34,634 37,380 
Less-Interest capitalized on 
advances for equipment . ... 31247 6,099 
31,387 31,281 
Realized and unrealized gains 
on foreign currency 
translation (Note 2) ....... . . (13,357) (5,855) 
Gain on disposition of aircraft (7,680) (7,944) 
Miscellaneous income, net. ... (21284) (2,297) 
81066 15,185 
INCOME BEFORE INCOME 
TAXES .. . .. ....... ... .. .. . 1091543 79,845 
PROVISION FOR INCOME 
TAXES (Note 6): 
Income taxes provided ....... 53,949 39,324 
Less-Amortization of 
investment tax credits . .. . . . (141613) (11,359) 
39,336 27,965 
NET INCOME (Note 2) . . .. .... $ 701207 $ 51,880 
NET INCOME PER COMMON 
SHARE (Note 2) .... ...... .. $3.53 $2.61 
*Certain 1975 amounts have been reclassified to conform with the 
1976 presentation. 
The accompanying notes are an integral part of these statements. 
28 
 DELTA AIR LINES, INC. 
Statements of Retained Earnings 
For the years ended June 30, 1976 and 1975 
BALANCE AT BEGINNING 
OF YEAR ... ..... . ....... . . 
Add (Deduct): 
Net income (Note 2) ........ . 
Cash dividends-$.60 per 
share .. ......... . . . .. ... . 
BALANCE AT END OF YEAR 
(restricted as indicated on 
balance sheet) .. .. . ..... ... . 
1976 1975 
(In Thousands) 
$344,110 
70,207 
(11,928) 
$402,389 
$304,158 
51 ,880 
(11,928) 
$344,110 
Statements of Additional Paid-in Capital 
For the years ended June 30, 1976 and 1975 
BALANCE AT BEGINNING 
OF YEAR .............. .. . . 
Add: 
Excessofproceedsoverpar 
value of 1,200 common 
shares issued in 1975 under 
employee stock option plan 
(Note 7) . .. . ............. . 
Income tax reduction to Com- 
pany resulting from sales by 
employees of common 
shares issued under stock 
option plan ... .. ... ..... . . . 
BALANCE AT END OF YEAR . . 
1976 1975 
(In Thousands) 
$73,331 $73,280 
38 
13 
$73,331 $73,331 
The accompanying notes are an integral part of these statements. 
29 
 DELTA AIR LINES, INC. 
Statements of Changes in Financial Position 
For the years ended June 30, 1976 and 1975 
FUNDS PROVIDED BY: 
Net income (Note 2) . ..... . ...... $ 
Add (deduct) items not affecting 
working capital- 
Depreciation . ....... ... . .. . . . 
Deferred income taxes ....... . 
Unrealized gain on translation 
of long-term portion of debt 
payable in pounds sterling . . . . 
Investment tax credits, net of 
amortization ...... ........ . . 
Other . . . . . .. ..... .. . .... . . . . 
Total from operations ...... . 
Long-term financing ....... . .... . 
Disposition of property and 
equipment (book value) ..... .. . . 
Common stock issued under 
employee stock option plan .... . . 
Other ...... . ... ..... . .... .. . . . 
FUNDS USED FOR: 
Property and equipment additions- 
Flight equipment, including 
advances .... .......... ..... . 
Ground property and equipment 
Reduction of long-term debt, net of 
unrealized foreign currency gains 
Cash dividends ... ... ...... . ... . 
1976 1975 
(In Thousands) 
70,207 
150,189 
36,849 
(10,620) 
(6,282) 
68 
240,411 
50,543 
5,790 
31284 
3001028 
197,328 
1si426 
212,754 
79,392 
111928 
$ 51 ,880 
128,435 
48,069 
(5,237) 
(7,733) 
78 
215,492 
97,833 
39,001 
55 
517 
3521898 
266,374 
331741 
300,115 
3041074 
DECREASE IN WORKING CAPITAL $ (41 
046) 
47,279 
111928 
3591322 
$ (6,424) 
CHANGES IN WORKING CAPITAL 
COMPONENTS: 
Increase (decrease) in- 
Cash and short-term investments $ 32,070 $ (10,193) 
Accounts receivable, net... . .... 18,284 (2,265) 
Refundable income taxes. . . . . . . (17,300) 17,300 
Other current assets. . . . . . . . . . . . (825) (768) 
Decrease (increase) in- 
Current maturities of long-term 
debt. ......... .. .. . ........ . 
Short-term notes payable . ..... . 
Accounts payable and accrued 
I iabi I ities ... . .... ... ..... . .. . 
Air traffic liability ..... .. . .. .... . 
Accrued income taxes ... . . . .. . . 
(4,463) 
3,000 
(25,747) 
(3,000) 
(1,580) (11,499) 
(24,463) 16,386 
(81769) 131362 
$ (41 
046) $ (6A24) 
The accompanying notes are an integral part of these statements. 
30 
 DELTA AIR LINES, INC. 
Notes to Financial Statements 
June 30, 1976 and 1975 
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 in 
order to properly reflect the total cost of acquiring 
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 higher by approxi- 
mately $88,000 in 1976 and lower by $850,000 
in 1975. 
Foreign Currency Transactions - Realized and 
unrealized foreign exchange adjustments are in- 
cluded in income on a current basis. (See Note 2). 
Retirement Plans-All of the Company's per- 
manent employees are covered under its noncontri- 
butory trusteed plans providing for retirement, dis- 
ability and survivor benefits. The total expense 
under these plans amounted to approximately 
$44,300,000 in 1976 and $35,600,000 in 1975. The 
Company's policy is to fund each year's accrued 
costs under the plans, which costs include amorti- 
zation of prior service costs ($34,700,000 at 
June 30, 1976) over a thirty-year period to 1991. As 
ofJune30, 1975 (date of most recent actuarial study), 
31 
 DELTA AIR LINES, INC. 
the assets of the plans exceeded the actuarially 
computed present value of vested benefits under 
the plans. 
The Company's retirement plans were amended 
in 1976 to conform with the provisions of the Em- 
ployee Retirement Income Security Act of 197 4. 
The effect of such amendments on the Company's 
annual pension costs, the funding thereof, vested 
benefits and unfunded prior service costs was not 
significant in 1976 and is not expected to be signifi- 
cant in future years. 
Income Taxes - Total income taxes are provided 
by applying the applicable tax rates to book income 
before income taxes. Deferred income taxes are 
provided for all significant items (principally depre- 
ciation) where there is a timing difference in record- 
ing such items for financial reporting purposes and 
for income tax purposes. Investment tax credits are 
amortized (as a reduction of the provision for in- 
come taxes) over seven years. (See Note 6). 
Earnings Per Share-Net income per common 
share is computed based on the weighted average 
number of outstanding shares during the year 
(19,880,577 shares in 1976 and 19,880,277 shares 
in 1975). Outstanding stock options and warrants 
(see Note 7) have no material dilutive effect on net 
income per common share in 1976 and 1975. 
2. CHANGE IN ACCOUNTING FOR FOREIGN 
CURRENCY TRANSACTIONS: 
In order to conform with the requirements of 
Statement No. 8 of the Financial Accounting Stand- 
ards Board, the Company changed its accounting 
effective June 30, 1976, to also record on a current 
basis unrealized gains and losses on translation of 
the long-term portion of its debt payable in pounds 
sterling to Lazard Brothers & Co., Limited (see 
Note 4). The 1975 financial statements have been 
restated to reflect this change in accounting method, 
and the effect on 197 4 and prior years is immaterial. 
The effect of the change was to increase net income 
by $5,390,000 ($.27 per share) in 1976 and 
$2,657,000 ($.13 per share) in 1975. 
32 
 DELTA AIR LINES, INC. 
The realized and unrealized gains on transla- 
tion of this debt at June 30, 1976 and 1975, shown 
separately in the accompanying statements of in- 
come, were as follows: 
1976 ~ 
Un Thousands) 
Unrealized gain- 
Current maturities .. . 
Long-term portion .. . 
Realized gain .. .... .. . 
$ 1,548 
10,620 
12,168 
1,189 
$13,357 
3. AIRCRAFT PURCHASE AND SALE 
COMMITMENTS: 
$ 566 
5,237 
5,803 
52 
$5,855 
At June 30, 1976, the Company had outstanding 
purchase commitments for the acquisition of 25 
Boeing B-727-200 aircraft and 9 Lockheed I.rl0ll 
aircraft, including related spare engines, which will 
require future expenditures of approximately $417 
million during fiscal years 1977 through 1981. The 
last 6 Lockheed L-1011 aircraft are cancelable by 
specified interim dates to February 28, 1979. At 
June 30, 1976, advance payments and other capi- 
talized expenditures relating to aircraft to be 
delivered amounted to $39,820,000 on the Boeing 
aircraft and $3,545,000 on the Lockheed aircraft. 
The Company has entered into agreements to 
sell 5 Douglas DC-8-51 aircraft and its remaining 
3 Boeing B-7 4 7 aircraft, which agreements provide 
for delivery of the aircraft during fiscal 1977. 
33 
 DELTA AIR LIN ES, INC. 
4. LONG-TERM DEBT : 
AtJune30,1976 and 1975, the Company's long- 
term debt (including current maturities) was as 
follows: 
(a) Due banks under 1973 credit 
agreement which provided 
for unsecured borrowings up 
to $300,000,000 on a revolv- 
ing basis through September, 
1975, at which time the out- 
standing balance was con- 
verted 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 Sep- 
tember, 1978, then 1/2% 
above the prime rate through 
September, 1980 
($22,000,000 payable in fiscal 
1977, as the September 30 
and December 31, 1976 
installments were voluntarily 
1976 1975 
(In Thousands) 
prepaid at June 30, 1976) .. . . . $245,000 $260,000 
(b) Due banks under 1975 
unsecured credit agreement, 
repayable in quarterly install- 
ments of $1 ,500,000 begin- 
ning December31 ,1975,with 
the remaining $11,500,000 
balance payable on Septem- 
ber 30, 1980. The interest 
rate is equal to 119% 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 ($3,000,000 payable in 
fiscal 1977, as the Septem- 
ber 30 and December 31 , 
1976 installments were 
voluntarily prepaid at June 
30, 1976) . .... . . ... . . .. . . . 
34 
32,500 40,000 
 DELTA AIR LINES, INC. 
1976 1975 
(In Thousands) 
(c) Due Lazard Brothers & Co., 
Limited under 5-1/2%, 6% and 
7-1/2% unsecured notes, re- 
payable in pounds sterling in 
20 semiannual installments 
to 1986 ($6,990,000 payable 
in fiscal 1977), translated at 
June 30, exchange rates 
(Note2).. . .. ....... . ... .. 61,127 
(d) Due Rolls-Royce (1971) 
Limited, repayable in 
monthly installments (includ- 
ing 6-1 /2% interest) to 
January, 1984 ($464,000 
payable in fiscal 1977).. . . . . 3,421 
(e) Due an insurance company 
under a 9-3/8% unsecured 
note, repayable in installments 
of $17,500,000 on April 30, 
1977 and 1978 ($17,500,000 
payable in fiscal 1977).. . . . . 35,000 
(f) Due insurance companies 
under 7% unsecured notes, 
repayable in installments to 
December 31, 1979 
($1,500,000 payable in 
fiscal 1977). . . . . . . . . . . . . . . 5,250 
(g) Convertible Subordinated 
Debentures, 6-1/2%, maturing 
August 1, 1986, with annual 
sinking fund redemptions of 
$1,100,000 beginning July 
31, 1976 ($1,876,000 and 
$1,100,000 acquired at June 
30, 1976 and 1975, respec- 
tively, for future sinking 
fund purposes)-(Note 7). . . 20,124 
Total. . . . . . . . . . . . . . . . . . . 402,422 
Less-Current maturities 51,454 
$350,968 
70,893 
3,885 
35,000 
6,750 
20,900 
437,428 
46,991 
$390,437 
At June 30, 1976, an additional $6,500,000 
(based on June 30, 1976 currency exchange rates) 
was available under the 7-1/ 2% loan agreement 
with Lazard Brothers & Co., Limited to finance the 
purchase of engines for the Company's L-1011 air- 
craft. In the opinion of management, funds provided 
35 
 DELTA AIR LINES, INC. 
from operations will sufficiently cover future expen- 
ditures for aircraft (see Note 3) and scheduled debt 
maturities. At June30,1976, the aggregate annual 
maturities of long-term debt for the next five fiscal 
years were as follows: 
Amount 
(In Thousands) 
1977 . ....... . ......... .... $51,454 
1978 . . . . . . . . . . . . . . . . . . . . . . 76,915 
1979 .. .. . . . . .. . ....... ... . 60,191 
1980 . . . . . . . . . . . . . . . . . . . . . . 59,441 
1981 . . . . . . . . . . . . . . . . . . . . . . 111 , 191 
In addition to restrictions on cash dividends as 
indicated on the balance sheet, the Company's credit 
agreements include requirements for maintenance 
of working capital (as defined) and limitations on 
indebtedness, leases and other obligations. In con- 
nection with the 1973 bank credit agreement, the 
Company has informally agreed to maintain on 
deposit with the lending banks average balances (in- 
cluding normal working balances) equal to 15% of 
the average daily outstanding borrowings, with the 
average balances and borrowings being computed 
over the term of the agreement. While a substantial 
portion of the cash balances at June 30, 1976 and 
197 5 is maintained for this purpose, there are no 
legal restrictions on the Company's use of these 
funds. No such balance requirements or agreements 
apply to the 1975 bank credit agreement. 
36 
 DELTA AIR LINES, INC. 
5. LEASE OBLIGATIONS: 
AtJuneS0,1976, the Company leased 18 Boeing 
B-727 aircraft and certain airport terminal and 
maintenance facilities, ticket offices, etc., under 
long-term agreements. (As discussed in Note 8, on 
July 27, 1976, the Company purchased the capital 
stock of Storer Leasing, Inc. ("Storer") and acquired 
11 of these leased aircraft). Rental expense 
was $38,326,000 in 1976 and $54,058,000 in 1975, 
including rentals under "financing leases" (as de- 
fined by the Securities and Exchange Commission) 
of $29,360,000 in 1976 and $28,662,000 in 1975. 
At June 30, 1976 (after giving effect to the 
subsequent Storer acquisition), 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 Total 
(In Thousands) 
1977 $ 23,300 $ 3,470 $ 26,770 
1978 22,230 2,710 24,940 
1979 21,140 2,100 23',240 
1980 20,910 1,410 22,320 
1981 19,750 1,090 20,840 
1982-1986 71,220 2,790 74,010 
1987-1991 61,920 120 62,040 
1992-1996 52,550 110 52,660 
After 1996 40,100 40,100 
$333,120 $13,800 $346,920 
The estimated present value (based on a 
weighted average interest rate in 1976 of 6.8%, with 
such interest rates used ranging from 3.1% to 13.5%) 
of the minimum rental commitments under financing 
leases was as follows at JuneS0,1976 (after giving 
effect to the subsequent Storer acquisition) and 
JuneS0,1975: 
Applicable to 1976 1975 
(In Thousands) 
Terminal facilities ............... $ 95,930 
Maintenance facilities.. . . . . . . . . . 66,270 
Aircraft... .. . .. .... . .......... 22,740 
Other.. . . . . . . . . . . . . . . . . . . . . . . . 9,980 
$194,920 
$ 89,930 
67,630 
47,640 
11,380 
$216,580 
37 
 DELTA AIR LINES, INC. 
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 1976 and 1975 
net income would have been less than 3%. 
6. INCOME TAXES: 
The provision for income taxes in 1976 and 
197 5 consisted of: 
1976 1975 
(In Thousands) 
Currently payable (refundable). . . . . . . $ 8,769 $(12,371) 
Deferred income taxes. . .. . . . . . . . . . . 36,849 48,069 
Investment tax credits . . . . . . . . . . . . . . 8,331 3,626 
Income taxes provided. . . . . . . . . . 53,949 39,324 
Less-Amortization of investment 
tax credits ... . . . . ..... . .. ....... . (14,613) (11,359) 
$39,336 $27,965 
Total income taxes provided were 49.25% of 
1976 and 1975 book income before income taxes, 
representing taxes provided at the 48.0% Federal 
statutory rate plus net state income taxes. As of 
June 30, 1976, approximately $34,000,000 of un- 
utilizedinvestment tax credits, of which $22,500,000 
expires in fiscal year 1982 and $11,500,000 in fiscal 
year 1983, are available to reduce future Federal 
income taxes payable. 
The provision for deferred income taxes re- 
sulted from the tax effect of the following timing 
differences: 
1976 1975 
(In Thousands) 
Depreciation and other property 
items. . . . . . . . . . . . . . . . . . . . . . . . . . . $34,069 $42,598 
Unrealized gain on foreign currency 
translation (Note 2) .. ............ . 
Other, net. ....................... . 
5,992 
(3,212) 
2,785 
2,686 
$36,849 $48,069 
The Internal Revenue Service has completed 
an examination of the Company's income tax returns 
for fiscal years 1966 through 1972, and on Septem- 
ber 25, 1975, issued a statutory notice of deficiency 
proposing additional income taxes of $25,681,000. 
38 
 DELTA AIR LINES, INC. 
The Company is contesting the proposed deficiency 
and believes that it has substantial defenses to most 
of the issues involved. The applicable law, however, 
is unsettled and the ultimate outcome of the matter 
is therefore uncertain. In the opinion of manage- 
ment, adequate provisions have been made for the 
alleged tax deficiency plus related interest, and 
the outcome of this matter will not have a material 
adverse effect on the Company's financial condition. 
7. COMMON STOCK: 
At JuneS0,1976, the Company had 1,080,496 
shares of unissued common stock reserved for stock 
options (500,000 shares), stock purchase warrants 
(500,000 shares at $48 per share) and conversion of 
Convertible Subordinated Debentures (80,496 
shares at $250 per share). 
Under the Company's Qualified Stock Option 
Plans, options for 1,250 shares at $51.75 per share 
were outstanding at JuneS0,1976. Transactions 
during 1976 and 1975 were as follows: 
Option Shares 
~ ~ 
Outstanding at beginnin_ 
g of year. . . . . . 8,200 
Exercised ... . . .. . . ............... . . 
Expired. .... . . . . . . . . . . . . . . . . . . . . . . . (6,950) 
Outstanding at end of year. . . . . . . . . . . . 1,250 
Exercisable at end of year . . . . . . . . . . . . 937 
13,150 
(1,200) 
(3,750) 
8,200 
7,575 
39 
 DELTA AIR LINES, INC. 
8. SUBSEQUENT ACQUISITION AND 
LIQUIDATION OF STORER LEASING, INC.: 
On July27,1976, the Company purchased all 
of the outstanding capital stock of Storer Leasing, 
Inc., a wholly-owned subsidiary of Storer Broad- 
casting Company, for cash of $30,350,000 and 
assumption of existing indebtedness of $3,649,000, 
payable in monthly installments through January, 
1978, with interest at 5-1/2% per annum. The 
assets of Storer Leasing consisted of 6 Boeing 727- 
200 and 5 Boeing 727-100 aircraft and 18 spare 
engines, all of which were previously leased to the 
Company. On July 30, 1976, Storer Leasing was 
liquidated and the assets transferred to the Company. 
9. CONTINGENCIES: 
The Company is a defendant in certain legal 
actions relating to environmental problems (pri- 
marily noise), alleged employee discrimination and 
other matters. Given the unsettled status of the 
law in many of the areas involved, the outcome of 
these actions is difficult to predict. In the present 
opinion of management and its legal counsel, how- 
ever, the disposition of these matters will not have a 
material adverse effect on the Company's financial 
condition or significantly interfere with its operations. 
40 
 DELTA AIR LINES, INC. 
Auditors' Report 
ARTHUR ANDERSEN & Co. 
ATLANTA, GEORGIA 
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, 1976 and 1975, and the related statements 
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, 1976 and 1975, 
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 
after giving retroactive effect to the change (with 
which we concur) in the method of accounting for 
the translation of foreign currency transactions as 
discussed in Note 2 to the financial statements. 
Atlanta, Georgia, 
August 13, 1976. 
41 
 DELTA AIR LINES, INC. 
Summary of Operations For the years ended June 30 
(Dollars expressed in thousands except per share figures) 
1976 
Operating revenues: 
Passenger2 
... 
.. . ...... . ..... .... . . .... $1,406,417 
Cargo .... . ... . .... . . ....... . ......... 100,626 
Other, net2 ... ........ . . .. .....       
21,899 
Total operating revenues . .. . . . .... . ..... .. 1,528,942 
Operating expenses ............. . ..... ... 1,411,333 
Operating income . .... . . . .. . . .. ... ... ... . $ 117,609 
Interest expense, etc., net* .............. .. 29,103 
Gain on disposition of aircraft .... . . ... . . .. . 7,680 
Realized and unrealized gains on foreign 
currency translation1 
. . . ........ . .. .. . .. . 
13,357 
Income before income taxes . . . .......... . . $ 109,543 
Income taxes ........ ... ....... . . .. : ..... 39,336 
Net income .... .. ... .... .......... ... .... $ 70,207 
Net income per share .. .... .. . ......... . . $3.53 
Dividends paid ......... . .............. ... $11,928 
Dividends paid per share ..... . . . . .. ..... . $.60 
*Has been reduced by interest capitalized of $3,247 
Other Financial and Statistical Data 
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . $ 350,968 
Stockholder equity . . . . . ... . .. .... . . .. . ... $ 542,112 
Stockholder equity per share..... . . . . . . . . . . $27.27 
Shares of common stock outstanding.. . . . . . . 19,880,577 
Revenue passengers enplaned ............ . 
Available seat miles (000) . .. . .... .. .. ... .. . 
Revenue passenger miles (000) .. .. ... .... . 
Passenger load factor .................... . 
Break-even load factor .. .... .. .. .. . . ... . . . 
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 .. . 
27,996,665 
30,389,761 
17,621,247 
57.98% 
53.14% 
4,145,183 
2,034,848 
7.98~ 
4.64~ 
34.05~ 
1Fiscal 1975 results have been restated to reflect a change in accounting 
method (see Note 2 to financial statements). 
2Passenger security charges for 1973 through 1975 have been 
reclassified from other net revenue to passenger revenue to conform 
with the 1976 presentation. 
42 
19751 
$1,271,720 
85,388 
19,922 
1,377,030 
1,282,000 
$ 95,030 
28,984 
7,944 
5,855 
$ 79,845 
27,965 
$ 51,880 
$2.61 
$11,928 
$.60 
$6,099 
$ 390,437 
$ 483,833 
$24.34 
19,880,577 
25,831,631 
29,497,234 
15,916,860 
53.96% 
49.93% 
4,030,116 
1,822,574 
7.99 
4.35 
31 .81 
DELTA Al R LIN ES, I NC. 
1974 1973 1972 
$1,124,759 $962,558 $806,068 
86,685 76,323 65,160 
15,683 10,818 12,338 
1,227,127 1,049,699 883,566 
1,070,043 928,940 816,000 
$ 157,084 $ 120,759 $ 67,566 
14,377 9,171 13,500 
18,607 4,653 1,897 
$ 161,314 $ 116,241 $ 55,963 
70,665 50,246 27,489 
$ 90,649 $ 65,995 $ 28,474 
$4.56 $3.32 $1.44 
$11,926 $9,925 $9,570 
$ .. 
60 $.50 $.50 
$10,810 $6,345 $3,770 
$ 345,119 $ 168,000 $199,585 
$ 443,826 $ 364,553 $306,637 
$22.33 $18.35 $15.46 
19,879,377 19,866,524 19,828,385 
25,565,208 23,702,870 20,562,953 
28,417,679 27,958,095 26,018,780 
15,445,891 14,449,748 12,433,986 
54.35% 51 .68% 47.79% 
46.76% 45.20% 43.80% 
3,847,226 3,815,285 3,613,790 
1,800,400 1,711,229 1,482,453 
7.28 6.66 6.48 
3.77 3.32 3.14 
27.81 24.35 22.58 
43 
 DELTA AIR LINES, INC. 
Management's Analysis and Discussion 
of Summary of Operations 
A comparison of the results of operations for fiscal 
years 1976 and 1975 can be found in previous 
sections of this report. The following is a com- 
parison of the results of 1975 and 1974. 
Restated earnings for fiscal 197 5 were 
$51.9 million, a decline of 43% from fiscal 1974. 
Included in fiscal 1975 are after-tax gains of 
$4.0 million from the sale of aircraft and 
$2.7 million from the translation of the long-term 
portion of debt payable in foreign currency. Fiscal 
197 4 results include a $9 .4 million after-tax gain on 
aircraft sales. 
Total operating revenues rose 12% in 1975 on 
a 10 % increase in revenue per passenger mile and 
a 3% gain in revenue passenger miles. Cargo 
revenues declined 1% on a 10% reduction in cargo 
ton miles and a 15% gain in yield. Cargo revenue in 
197 4 included $3 .5 million in mail payments retro- 
active to prior years. Other net revenue was up 
$4.2 million in 1975 primarily as a result of finders 
fees paid to Delta related to the sale of 
leased aircraft. 
Operating expenses in fiscal 197 5 were up 
$212 million or 20% higher than 1974. Increases in 
the price of fuel accounted for $91 million or 50% 
of the increase in cash expenses. Depreciation 
totaled $128.4 million, a 29% increase, which 
resulted from the introduction of new aircraft. 
Revenue plane miles were reduced 3% and avail- 
able seat miles rose 4%, reflecting the increased use 
of larger aircraft. 
Gross interest expense for 1975 increased 32% 
over 197 4 as a result of higher interest rates and 
increased borrowings to finance new aircraft pur- 
chases. Net interest expense, however, increased 
79% over 1974 due to a much lower level of 
capitalized interest. 
44 
 Board of Directors 
R. W. ALLEN 
W. T BEE BE 
B. W. BIEDENHARN 
R. W. COURTS 
C.H. DOLSON 
R. W. FREEMAN 
DAVID C. GARRETT, JR. 
EDWARD H. GERRY 
JESSE HILL, JR. 
JOHN R. LONGMIRE 
R. S. MAURER 
BILL MICHAELS 
T. M. MILLER 
ROBERT OPPENLANDER 
STUART W. PATTON 
DELTA AIR LINES, INC. 
Se 11ior Vice Presicle 11t - Pe rso 1111e l 
Chain11 a11 of th e Boa rd a11cl 
Chief Exerntil'e Office r 
Chairma11 of th e Boa rel a11d 
Director. Ouachita Coca-Cola Bottli11!-f Co. 
a11d Biede 11harn Realt!I Co .. lnc. 
Preside nt and Directo,~ Ouachita 
Canc/!J Co .. Monroe. Louisiana 
Director and Chairman of th e Executil'e 
Co mmittee. At/a11tic Realty Co .. 
At/c111ta . Geo r!-{ia 
Chairman of th e Executiie Committee 
Chairnwn of th e Compe nsation and 
Finance Committees: 
Chairman of th e Board allll Director. 
Louisiana Coca-Cola Bott/in!-{ Co .. Ltd. 
New Orleans. Louisiana 
Preside nt 
Partne r of Ge rry Broth ers l- Co .. 
I1westme 11t Mana1re me nt . New York. 
N ew York 
President. Chief Executii1e Office r and 
Director. Atlanta Life Insurance 
Company. Atlanta. Georgia 
Partne r of ini1estm ent banking firm of 
J.M. Simon & Co .. St.Louis. Missouri 
Se nior Vice President - 
Gene ral Counsel and Secretary 
Chairman of the Aue/it Committee: 
Chairman of the Board . 
Chief Executive Officer and Director. 
Storer Broadcastin1r Co .. Miami. Florida 
Re tired Se nior Vice President - 
Mark e ting 
Senior Vice President - Finance 
and Treasurer 
Member of law firm of Patton. Kanner. 
Nadeau. Segal. Zelle r & LaPorte and 
Director of Storer Broadcastin1r Co .. 
Miami. Florida 
CARLETON PUTNAM Private In vestments 
GEORGE M. SNELLINGS, JR. M ember of law firm of Sne llings. 
Breard. Sartor. Shafto & Inabne tt . 
Monroe. Louisiana 
45 
 DELTA AIR LINES, INC. 
Officers 
W. T. BEEBE Chairman of th e Board and 
Chief E.rnrntil'e Officer 
DAVID C. GARRETT. JR. President 
FINANCE 
ROBERT OPPENLANDER Senior Vice Preside ,11 - Finance .!.: Treasurer 
W. A. ATCHISON Vice President - Computer Serl'ices 
J. D. DUNN Vice Preside ,11-Pu rchasin1< 
M. 0. GALLOWAY Vice President - Comptroller 
REX A. McCLELLAND Vice Preside nt - Properties 
J. R. HOWELL Asst. Treasurer 
HUGH H. SAXON Asst. Treasure r 
AUDLY TOLLER, JR. Asst. Treasure r 
LEGAL & CORPORATE AFFAIRS 
R. S. MAURER Senior Vice President- Gen eral Counsel 
J. W. CALLISON 
FRANKF. ROX 
MORRIS SHIPLEY 
SIDNEY F. DAVIS 
A. C. FORD 
GEORGE E. SHEDD 
C. G. SWEAZEA 
E. A. THOMPSON 
IKE LASSETER 
MARKETING 
J. A. COOPER 
SHELBY D. DEMENT 
R. L. GIBSON 
CHARLES P. KNECHT 
J. T. MAPLES 
HENRY ROSS 
OPERATIONS 
HOYT T. FINCHER 
D. P. HETTERMANN 
C. A. SMITH 
J. K. BURNETTE 
ROBERT H. COWART 
JOHN P. DAVIS 
JACKS. KING 
C.J. MAY 
W. L. MILLER 
L. G. RODEFELD 
& Secretary 
Vice President-Law & Re1<11latory Affairs 
Vice President- Law & Public Affairs 
Vice President-Got1 
emment Affai,s 
Asst. Vice President- Corporate Legal Affairs 
& Asst. Secretary 
Asst. Vice President-Long Range Planning 
Asst. Vice President-Public Relations 
Asst. Vice President-Public Affairs 
Asst. Vice President-Economic Research 
Asst. Secretary 
Senior Vice President-Marketing 
Vice President - Consumer Affairs 
Vice President- Traffic 
Vice President- Marketing 
Asst. Vice President-Marketing Planning 
Asst. Vice President- Sales Promotion 
Senior Vice President- Operations 
Vice President- Technical Operations 
Vice President- Flight Operations 
Asst. Vice President-Quality Control 
Asst. Vice President- Operations 
Administration 
Asst. Vice President-Maintenance 
Asst. Vice President-Flight Control 
Asst. Vice President-Engineering 
Asst. Vice President-Materiel Services 
Asst. Vice President- Communications 
OPERATIONS-PASSENGER SERVICE 
HOLLIS L. HARRIS Senior Vice President- Operations- 
E. L. HAMNER 
FOY PHILLIPS 
C. A. THOMPSON 
PERSONNEL 
R. W. ALLEN 
J. A. YORK 
RUSSELL H. HEIL 
JOHN HUME 
H. M. JOHNSON 
EUGENE H. STEWART 
46 
Passenger Service 
Vice President- Stations 
Vice President- Passenger Service 
Asst. Vice President- Stations 
Senior Vice President-Personnel 
Vice President- Personnel Benefits 
Asst. Vice President- Personnel 
Administration 
Asst. Vice President-Training & 
Personnel Communications 
Asst. Vice President-Personnel Services 
Asst. Vice President - Corporate Security 
 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 28, 1976, Monroe, Louisiana 
Common Stock 
Listed on the New York Stock Exchange 
Market Prices and Dividends 
Market Price Range of 
Common Stock on 
Fiscal 1976 New York Stock Exchange 
Quarter Ended : High Low 
September 30 ..... 39 283/s 
December 31. ..... 385/s 28 
March 31 .... . .... 44 37 
June 30 .......... 451/s 39 
Fiscal 1975 
Quarter Ended: 
Sept em her 30 ...... 49 31 
December 31. ..... 43 27 7 
/s 
March 31 ......... 4l3/s 25 3 
/s 
June 30 .......... 38 7/s 317/s 
Availability of Form 10-K 
DELTA AIR LINES, INC. 
Cash 
Dividends 
Paid Per Share 
$.15 
.15 
.15 
.15 
$.15 
.15 
.15 
.15 
The Company will supply, upon written request and 
without charge, a copy of the Company's annual report 
for the fiscal year 1976 on Form 10-K to any person bene- 
ficially owning or owning of record any of the common 
stock of the Company on September7,1976. 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 LINES, INC. 
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 owner- 
ship, (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 within 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 Aeronautics Board, 
Washington ,D. C. 204 28. 
48 
 Delta Air Lines, Inc. 
General Offices 
Hartsfield Atlanta International Airport 
Atlanta, Georgia 30320