-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VKcMUzXN4tq8cZNnoya+zDRdCFQP/yWVfovMKG30nRuW+TyqxpMJGf69U5Qi3yGj g4hryJfEGAV2p2qtMwZWYw== 0000931763-96-000925.txt : 19961118 0000931763-96-000925.hdr.sgml : 19961118 ACCESSION NUMBER: 0000931763-96-000925 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA AIR LINES INC /DE/ CENTRAL INDEX KEY: 0000027904 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 580218548 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20319 FILM NUMBER: 96662717 BUSINESS ADDRESS: STREET 1: HARTSFIELD ATLANTA INTL AIRPORT STREET 2: 1030 DELTA BLVD CITY: ATLANTA STATE: GA ZIP: 30320-6001 BUSINESS PHONE: 4047152600 MAIL ADDRESS: STREET 1: 1030 DELTA BLVD STREET 2: DEPT 971 CITY: ATLANTA STATE: GA ZIP: 30320-6001 FORMER COMPANY: FORMER CONFORMED NAME: DELTA AIR CORP DATE OF NAME CHANGE: 19660908 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-5424 DELTA AIR LINES, INC. State of Incorporation: Delaware IRS Employer Identification No.: 58-0218548 Hartsfield Atlanta International Airport, Atlanta, Georgia 30320 Telephone: (404) 715-2600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Number of shares outstanding by each class of common stock, as of October 31, 1996: Common Stock, $3.00 par value - 74,677,809 shares outstanding
PART I. FINANCIAL INFORMATION Item 1. Financial Statements DELTA AIR LINES, INC. Consolidated Balance Sheets (Unaudited) (In Millions) SEPTEMBER 30 JUNE 30 ASSETS 1996 1996 - ------------------------------------------------------------------------------ CURRENT ASSETS: Cash and cash equivalents $ 882 $ 1,145 Short-term investments 505 507 Accounts and notes receivable, net 1,085 968 Maintenance and operating supplies, at average cost 68 73 Deferred income taxes 325 352 Prepaid expenses and other 247 237 ------------ ----------- Total current assets 3,112 3,282 ------------ ----------- PROPERTY AND EQUIPMENT: Flight equipment owned 8,359 8,202 Less: Accumulated depreciation 3,264 3,235 ------------ ----------- 5,095 4,967 ------------ ----------- Flight equipment under capital leases 515 515 Less: Accumulated amortization 139 127 ------------ ----------- 376 388 ------------ ----------- Ground property and equipment 2,756 2,697 Less: Accumulated depreciation 1,586 1,532 ------------ ----------- 1,170 1,165 ------------ ----------- Advance payments for equipment 334 275 ------------ ----------- 6,975 6,795 ------------ ----------- OTHER ASSETS: Marketable equity securities 441 473 Deferred income taxes 377 415 Postemployment benefits 294 294 Investments in associated companies 280 266 Cost in excess of net assets acquired, net 263 265 Leasehold and operating rights, net 135 140 Non-operating property, net 113 151 Other 149 145 ------------ ----------- 2,052 2,149 ------------ ----------- $ 12,139 $ 12,226 ============ ===========
The accompanying notes are an integral part of these consolidated balance sheets. 2
DELTA AIR LINES, INC. Consolidated Balance Sheets (Unaudited) (In Millions except Share Amounts) SEPTEMBER 30 JUNE 3O LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996 - ------------------------------------------------------------------------------------------------ CURRENT LIABILITIES: Current maturities of long-term debt $ 51 $ 40 Current obligations under capital leases 56 58 Accounts payable and miscellaneous accrued liabilities 1,660 1,540 Air traffic liability 1,372 1,414 Accrued salaries and vacation pay 371 385 Accrued rent 193 201 ------------ ----------- Total current liabilities 3,703 3,638 ------------ ----------- NONCURRENT LIABILITIES: Long-term debt 1,701 1,799 Postretirement benefits 1,804 1,796 Accrued rent 609 616 Capital leases 363 376 Other 409 425 ------------ ----------- 4,886 5,012 ------------ ----------- DEFERRED CREDITS: Deferred gain on sale and leaseback transactions 788 802 Manufacturers' and other credits 96 96 ------------ ----------- 884 898 ------------ ----------- COMMITMENTS AND CONTINGENCIES (Notes 3 and 4) EMPLOYEE STOCK OWNERSHIP PLAN PREFERRED STOCK: Series B ESOP Convertible Preferred Stock, $1.00 par value, $72.00 stated and liquidation value; Issued and outstanding 6,727,521 shares at September 30, 1996 and 6,738,740 shares at June 30, 1996 484 485 Unearned compensation under employee stock ownership plan (334) (347) ------------ ----------- 150 138 ------------ ----------- STOCKHOLDERS' EQUITY: Series C Convertible Preferred Stock, $1.00 par value, $50,000 liquidation preference; Issued and outstanding 13,978 shares at June 30, 1996. - - Common stock, $3.00 par value; Authorized, 150,000,000 shares; Issued 82,915,261 shares at September 30, 1996 and 72,265,994 shares at June 30, 1996 249 217 Additional paid-in capital 2,596 2,627 Net unrealized gain on noncurrent marketable equity securities 107 126 Retained earnings (deficit) 113 (119) Treasury stock at cost, 7,836,392 shares at September 30, 1996, and 4,487,888 shares at June 30, 1996 (549) (311) ------------ ----------- 2,516 2,540 ------------ ----------- $ 12,139 $ 12,226 ============ ===========
The accompanying notes are an integral part of these consolidated balance sheets. 3 DELTA AIR LINES, INC. Consolidated Statements of Operations (Unaudited) (In Millions, except Share Data)
Three Months Ended September 30 ------------------------ 1996 1995 ---------- ---------- OPERATING REVENUES: Passenger $ 3,170 $ 2,977 Cargo 124 129 Other, net 138 82 ---------- ---------- Total operating revenues 3,432 3,188 ---------- ---------- OPERATING EXPENSES: Salaries and related costs 1,092 1,037 Aircraft fuel 416 348 Passenger commissions 278 278 Contracted services 199 172 Other selling expenses 179 145 Depreciation and amortization 166 161 Aircraft rent 137 140 Aircraft maintenance materials and outside repairs 108 109 Passenger service 105 104 Facilities and other rent 99 113 Landing fees 64 69 Other 151 126 ---------- ---------- Total operating expenses 2,994 2,802 ---------- ---------- OPERATING INCOME 438 386 ---------- ---------- OTHER INCOME (EXPENSE): Interest expense (54) (75) Interest capitalized 8 7 Interest income 19 23 Miscellaneous, net (13) (4) ---------- ---------- (40) (49) ---------- ---------- INCOME BEFORE INCOME TAXES 398 337 INCOME TAXES PROVIDED (160) (136) ---------- ---------- NET INCOME 238 201 PREFERRED STOCK DIVIDENDS (2) (22) ---------- ---------- NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 236 $ 179 ========== ========== PRIMARY INCOME PER COMMON SHARE $ 3.09 $ 3.47 ========== ========== FULLY DILUTED INCOME PER COMMON SHARE $ 2.98 $ 2.57 ========== ========== WEIGHTED AVERAGE SHARES USED IN PER SHARE COMPUTATION: Primary 76,490,970 51,445,077 Fully Diluted 79,533,689 80,513,991 DIVIDENDS PER COMMON SHARE $ 0.05 $ 0.05 ========== ==========
The accompanying notes are an integral part of these consolidated statements. 4 DELTA AIR LINES, INC. Statistical Summary (Unaudited)
Three Months Ended September 30 ------------------------ 1996 1995 -------- -------- STATISTICAL SUMMARY: Revenue Passengers Enplaned (000) 25,260 22,104 Revenue Passenger Miles (millions) 25,395 22,758 Available Seat Miles (millions) 34,386 33,397 Passenger Mile Yield 12.49 c 13.08 c Operating Revenue Per Available Seat Mile 9.98 c 9.54 c Operating Cost Per Available Seat Mile 8.71 c 8.39 c Passenger Load Factor 73.85 % 68.14 % Breakeven Passenger Load Factor 63.65 % 59.32 % Revenue Ton Miles (millions) 2,873 2,615 Cargo Ton Miles (millions) 333 339 Cargo Ton Mile Yield 37.18 c 38.10 c Fuel Gallons Consumed (millions) 658 641 Average Price Per Fuel Gallon 63.21 c 54.32 c Number of Aircraft in Fleet at End of Period 538 542 Full-Time Equivalent Employees at End of Period 60,888 58,007
5 DELTA AIR LINES, INC. Consolidated Statements of Cash Flows (Unaudited) (In Millions)
Three Months Ended September 30 -------------------- 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 238 $ 201 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 166 161 Deferred income taxes 77 70 Amortization of deferred gain on sale and leaseback transactions (14) (15) Rental expense less than payments (15) - Employee benefits expense in excess of (less than) payments 14 (27) Changes in certain assets and liabilities: Increase in receivables (117) (260) Decrease (increase) in other current assets (5) 16 Increase (decrease) in air traffic liability (42) 10 Increase in accounts payable and accrued liabilities 120 121 Increase (decrease) in other payables (14) 10 Decrease in other noncurrent liabilities - (38) Other, net 26 (50) --------- --------- Net cash provided by operating activities 434 199 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Property and equipment additions: Flight equipment, including advance payments (295) (191) Ground property and equipment (65) (51) Decrease in short-term investments, net 3 26 Proceeds from sale of flight equipment - 6 --------- --------- Net cash used in investing activities (357) (210) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 1 14 Repurchase of common stock (234) - Payments on long-term debt and capital lease obligations (103) (85) Cash dividends (4) (22) --------- --------- Net cash used in financing activities (340) (93) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS (263) (104) Cash and cash equivalents at beginning of period 1,145 1,233 --------- --------- Cash and cash equivalents at end of period $ 882 $ 1,129 ========= ========= The accompanying notes are an integral part of these consolidated statements.
6 DELTA AIR LINES, INC. Notes to Consolidated Financial Statements September 30, 1996 (Unaudited) 1. ACCOUNTING AND REPORTING POLICIES: The Company's accounting and reporting policies are summarized in Note 1 (page 33) of the Notes to Consolidated Financial Statements in Delta's 1996 Annual Report to Stockholders. These interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's 1996 Annual Report to Stockholders. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair statement of results for the interim periods. Certain amounts in the Consolidated Statements of Operations for the three months ended September 30, 1995, have been reclassified to conform with the current financial statement presentation. 2. LONG-TERM DEBT: During the September 1996 quarter, the Company voluntarily repurchased and retired $87 million principal amount of its long-term debt. As a result of these transactions, the Company recognized a net pretax loss of $8 million during the quarter ended September 30, 1996; this amount is included in miscellaneous, net in the Company's Consolidated Statements of Operations. The 1995 Bank Credit Agreement provides for unsecured borrowings by the Company of up to $1.25 billion on a revolving basis until September 26, 2001. Up to $500 million of this facility may be used for the issuance of letters of credit. At September 30, 1996, no borrowings or letters of credit were outstanding under the 1995 Bank Credit Agreement. The Company's credit agreement with ABN AMRO Bank, N.V. and a group of banks (Letter of Credit Facility) provides for the issuance of letters of credit for up to $550 million in stated amount to credit enhance the Delta Family- Care Savings Plan's Series C Guaranteed Serial ESOP Notes (Series C ESOP Notes), which are guaranteed by Delta. At September 30, 1996, the face amount of the letter of credit under the Letter of Credit Facility was $470 million, which covers $290 million outstanding principal amount of the Series C ESOP Notes, up to $148 million of Make Whole Premium Amount and approximately one year of interest on the Series C ESOP Notes. For additional information regarding Delta's long-term debt, including the Series C ESOP Notes, see Note 7 (page 37) of the Notes to Consolidated Financial Statements in Delta's 1996 Annual Report to Stockholders. During the three months ended September 30, 1996 and 1995, Delta made cash interest payments, net of interest capitalized, of $42 million and $43 million, respectively. 7 3. AIRCRAFT PURCHASE COMMITMENTS: At September 30, 1996, the Company's aircraft fleet, purchase commitments and options were:
CURRENT FLEET ----------------------------- AIRCRAFT TYPE OWNED LEASED TOTAL ORDERS OPTIONS --------------- ----- ------ ----- ------- ------- B-727-200 106 23 129 - - B-737-200 1 53 54 - - B-737-300 - 13 13 - - B-757-200 47 41 88 6* 28 B-767-200 15 - 15 - - B-767-300 2 24 26 2 - B-767-300ER 10 7 17 14 12 L-1011-1 27 - 27 - - L-1011-200 1 - 1 - - L-1011-250 6 - 6 - - L-1011-500 17 - 17 - - MD-11 6 7 13 2 17 MD-88 63 57 120 - 15 MD-90 12 - 12 19 50 --- --- --- -- --- 313 225 538 43 122 === === === == ===
*Includes two used aircraft to be delivered after September 30, 1996. The MD-88 aircraft options may be converted to MD-90 aircraft orders, and the B-767-300ER aircraft options may be converted to B-767-300 aircraft orders, at Delta's election. During the September 1996 quarter, the Company accepted delivery of one MD-11 aircraft. In addition, Delta entered into an agreement to purchase nine B-727-200 aircraft, which the Company currently leases under operating leases, and an agreement to purchase four used B-757-200 aircraft, two of which were delivered during the quarter. Delta also exercised options to purchase an additional 32 shipsets of Stage 3 engine hushkits for B-727-200 aircraft. Additionally, the Company retired four L-1011-1 aircraft. Subsequent to September 30, 1996, Delta accepted delivery of one B-767-300ER aircraft, one used B-757-200 aircraft, one MD-11 aircraft and one MD-90 aircraft. 8 Future expenditures for aircraft, engines and engine hushkits on firm order at September 30, 1996, are estimated to be $2.4 billion, as follows:
AMOUNT YEARS ENDING JUNE 30 (IN MILLIONS) ------------------------------- ------------- Remainder of fiscal year 1997 $ 750 1998 760 1999 330 2000 240 2001 210 After 2001 70 ------ Total $2,360 ======
4. CONTINGENCIES: Delta is a defendant in certain legal actions relating to alleged employment discrimination practices, antitrust matters, environmental issues and other matters concerning Delta's business. Although the ultimate outcome of these matters cannot be predicted with certainty and could have a material adverse effect on Delta's consolidated financial condition, results of operations or liquidity, management presently believes that the resolution of these actions is not likely to have such effects. 5. STOCKHOLDERS' EQUITY: During the September 1996 quarter, the Company issued 10,629,465 common shares upon the conversion or redemption of 13,977,510 Depositary Shares (each of which represented 1/1,000th of a share of Series C Convertible Preferred Stock). In addition, the Company issued a total of 19,650 common shares, at an average price of $57.80 per share, under the 1989 Stock Incentive Plan, the Dividend Reinvestment and Stock Purchase Plan and the Non-Employee Directors' Stock Plan. On April 24, 1996, Delta's Board of Directors authorized the Company to repurchase up to 24.7 million shares of its common stock and common stock equivalents. See Note 14 (page 45) of the Notes to Consolidated Financial Statements in Delta's 1996 Annual Report to Stockholders. During the September 1996 quarter, the Company repurchased 3,344,300 shares of its common stock at an average price of $69.99 per share under this authorization. Since April 24, 1996, the Company has repurchased a total of 4,165,600 common shares at an average price of $71.96 per share. At September 30, 1996, 5,102,377 common shares were reserved for issuance under the 1989 Stock Incentive Plan; 5,770,868 common shares were reserved for conversion of the Series B ESOP Convertible Preferred Stock; and 249,927 common shares were reserved for issuance under the Non-Employee Directors' Stock Plan. 9 6. INCOME TAXES: Income taxes are provided at the estimated annual effective tax rate, which differs from the federal statutory rate of 35% primarily due to state income taxes and the effect of certain expenses that are not deductible for income tax purposes. The Company made income tax payments in excess of income tax refunds received of $45 million and $75 million during the three months ended September 30, 1996 and 1995, respectively. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------------------------------------------------------------------------ RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- During the three months ended September 30, 1996, Delta invested $295 million in flight equipment and $65 million in ground property and equipment; paid $234 million to repurchase 3,344,300 shares of the Company's common stock; made payments of $103 million on long-term debt and capital lease obligations, which included Delta's voluntary repurchase and retirement of $87 million principal amount of long-term debt; and paid $4 million in cash dividends. The principal sources of these funds were $434 million of cash from operations and $263 million from cash reserves. Cash and cash equivalents and short-term investments totaled $1.39 billion at September 30, 1996, compared to $1.65 billion at June 30, 1996. The Company may repurchase additional long-term debt and common stock from time to time. As of September 30, 1996, the Company had negative working capital of $591 million, compared to negative working capital of $356 million at June 30, 1996. A negative working capital position is normal for Delta and does not indicate a lack of liquidity. The Company expects to meet its current obligations as they become due through available cash, short-term investments and internally generated funds, supplemented as necessary by debt financing and proceeds from sale and leaseback transactions. At September 30, 1996, the Company had $1.25 billion of credit available under its 1995 Bank Credit Agreement, subject to compliance with certain conditions. For additional information regarding Delta's long-term debt, see Note 2 of the Notes to Consolidated Financial Statements of this Form 10-Q. At September 30, 1996, long-term debt and capital lease obligations, including current maturities, totaled $2.17 billion, compared to $2.27 billion at June 30, 1996. Stockholders' equity was $2.52 billion at September 30, 1996 and $2.54 billion at June 30, 1996. The Company's debt-to-equity position, including current maturities, was 46% debt and 54% equity at September 30, 1996, compared to 47% debt and 53% equity at June 30, 1996. At September 30, 1996, there was outstanding $290 million principal amount of the Delta Family-Care Savings Plan's Series C Guaranteed Serial ESOP Notes (Series C ESOP Notes), which are guaranteed by Delta. The Series C ESOP Notes currently have the benefit of a credit enhancement in the form of a letter of credit in the amount of $470 million under Delta's Credit Agreement with ABN AMRO Bank and a group of banks. Delta is required to purchase the Series C ESOP Notes in certain circumstances. For additional information regarding the Series C ESOP Notes, see Note 7 (page 37) of the Notes to Consolidated Financial Statements in Delta's 1996 Annual Report to Stockholders. At its meeting on October 24, 1996, Delta's Board of Directors declared a cash dividend of five cents per common share, payable December 1, 1996, to stockholders of record on November 9, 1996. See Part II, Item 5 of this Form 10-Q for information regarding (1) the Company's adoption of a new stockholder rights plan; (2) the implementation of the Company's two broad-based non-qualified stock option programs for Delta personnel; (3) the Company's stock repurchase authorization; and (4) Delta Express, the Company's new low-fare service. 11 RESULTS OF OPERATIONS Three Months Ended September 30, 1996 and 1995 - ---------------------------------------------- For the quarter ended September 30, 1996, Delta recorded unaudited net income of $238 million ($3.09 primary and $2.98 fully diluted income per common share after preferred stock dividend requirements) and operating income of $438 million. For the quarter ended September 30, 1995, the Company recorded net income of $179 million ($3.47 primary and $2.57 fully diluted income per common share after preferred stock dividend requirements) and operating income of $386 million. The September 1996 quarter primary earnings per common share reflect an increase in the number of outstanding common shares due to the recent conversion or redemption of the Series C Convertible Preferred Stock and the conversion of the 3.23% Convertible Subordinated Notes. For additional information on these conversions or redemptions see Notes 7 and 12 of the Notes to Consolidated Financial Statements in Delta's 1996 Annual Report to Stockholders and Note 5 of the Notes to Consolidated Financial Statements in this Form 10-Q. Operating revenues in the September 1996 quarter totaled $3.4 billion, an increase of 8% from $3.2 billion in the September 1995 quarter. Passenger revenue increased 6% to $3.2 billion, reflecting a 12% increase in revenue passenger miles, partially offset by a 5% decline in the passenger mile yield. The increase in passenger traffic is due to the Company's use of more competitive pricing strategies; Delta's realignment of its domestic route system on December 1, 1995, which increased the Company's operations at its Atlanta and Cincinnati hubs; the suspension of service during the September 1996 quarter by a low-cost, low-fare competitor; and favorable economic conditions. The decrease in the passenger mile yield resulted from the Company's use of more competitive pricing strategies and the continued presence of low-cost, low-fare carriers in overall domestic markets served by Delta. Cargo revenue decreased 4% to $124 million, as cargo ton miles and the cargo ton mile yield each declined 2%. The decrease in cargo ton miles is primarily due to reductions in service to certain international cities. The decrease in cargo ton mile yield is a result of increased competition in the international cargo market. All other revenue, net increased 68% to $138 million, primarily due to the expansion of joint marketing programs and increased revenues from code share agreements. Operating expenses for the September 1996 quarter totaled $3.0 billion, an increase of 7% from the September 1995 quarter, and operating capacity increased 3% to 34.39 billion available seat miles. As discussed below, the increase in operating expenses during the September 1996 quarter is primarily due to higher jet fuel prices and an increase in full-time equivalent employees to improve customer service. Salaries and related costs increased 5%, primarily due to a 5% increase in full- time equivalent employees. Aircraft fuel expense increased 20%, as the average fuel price per gallon increased 16% to 63.21 cents and fuel gallons consumed increased 3%. Passenger commissions remained unchanged from the September 1995 quarter. Contracted services expense rose 16%, due to increased information technology services. Other selling expenses increased 23%, the result of increased advertising and promotion costs associated with the 1996 Centennial Olympic Games and booking fee payments to computer reservations system providers. 12 Depreciation and amortization expense rose 3%, largely due to the acquisition of additional ground equipment and higher amortization of software development costs. Aircraft rent expense decreased 2% due to the return of certain aircraft to lessors. Aircraft maintenance materials and outside repairs and passenger service expense each remained virtually unchanged. Facilities and other rent decreased 12%, due to certain facilities rent accrual adjustments, the subleasing of certain airport facilities and the reclassification of certain unoccupied airport facilities costs to nonoperating categories. Landing fees decreased 7%, resulting from scheduled reductions in certain international markets. Other operating expenses increased 20%, primarily reflecting the October 1, 1995 expiration of the exemption from the 4.3 cents per gallon federal tax on commercial aviation jet fuel used in domestic operations, partially offset by increased services provided to outside parties. Nonoperating expense in the September 1996 quarter totaled $40 million, compared to nonoperating expense of $49 million in the September 1995 quarter. Interest expense decreased 28% to $54 million, due to a lower average level of long-term debt outstanding. Interest income decreased 17% to $19 million, primarily due to a decline in interest rates and lower average levels of cash invested. Miscellaneous expense, net increased to $13 million in the September 1996 quarter from $5 million in the September 1995 quarter, due to Delta's agreement to pay $20 million to settle certain class action antitrust lawsuits filed by travel agents and the voluntary repurchase and retirement of long-term debt, partially offset by income from associated companies and foreign exchange gains. For additional information regarding the antitrust settlement, see page 12 of Delta's Annual Report on Form 10-K for the fiscal year ended June 30, 1996. Pretax income of $398 million for the September 1996 quarter resulted in an income tax provision of $160 million. After a $2 million provision for preferred stock dividends, net income available to common stockholders was $236 million. 13 ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and the Board of Directors of Delta Air Lines, Inc.: We have reviewed the accompanying consolidated balance sheet of DELTA AIR LINES, INC. (a Delaware Corporation) AND SUBSIDIARIES as of September 30, 1996 and the related consolidated statements of operations and cash flows for the three-month periods ended September 30, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. Arthur Andersen LLP Atlanta, Georgia November 1, 1996 14 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ----------------------------------------------------------- At Delta's Annual Meeting of Stockholders held on October 24, 1996, the holders of Delta's Common Stock and Series B ESOP Convertible Preferred Stock, voting together as a single class, took the following actions: 1. Elected the persons named below to Delta's Board of Directors by the following vote:
FOR WITHHELD ---------- -------- Ronald W. Allen 70,879,791 2,790,650 Edwin L. Artzt 72,134,581 1,535,860 Henry A. Biedenharn, III 72,165,857 1,504,584 James L. Broadhead 72,052,844 1,617,597 Edward H. Budd 72,182,393 1,488,048 George D. Busbee 72,029,345 1,641,096 R. Eugene Cartledge 72,171,899 1,498,542 Mary Johnston Evans 72,117,290 1,553,151 Gerald Grinstein 72,087,431 1,583,010 Jesse Hill, Jr. 72,118,762 1,551,679 Peter D. Sutherland 72,133,095 1,537,346 Andrew J. Young 71,764,034 1,906,407
There were no broker non-votes on this matter. 2. Ratified the appointment of Arthur Andersen LLP as independent auditors of Delta for fiscal year 1997 by a vote of 72,516,317 FOR; 974,642 AGAINST; and 179,482 ABSTENTIONS. There were no broker non-votes on this matter. 3. Approved the material terms of the Incentive Compensation Plan by a vote of 70,282,502 FOR; 3,031,877 AGAINST; and 356,062 ABSTENTIONS. There were no broker non-votes on this matter. 4. Approved the DeltaShare Stock Option Plan and the Pilots Stock Option Plan by a vote of 57,346,005 FOR; 9,201,385 AGAINST; and 252,410 ABSTENTIONS. There were 6,870,641 broker non-votes on this matter. 5. Defeated a stockholder proposal relating to political activities by the Company by a vote of 7,032,021 FOR; 55,813,167 AGAINST; and 3,954,612 ABSTENTIONS. There were 6,870,641 broker non-votes on this matter. 6. Defeated a stockholder proposal relating to Company employment matters by a vote of 10,477,082 FOR; 51,114,848 AGAINST; and 5,207,870 ABSTENTIONS. There were 6,870,641 broker non-votes on this matter. 15 ITEM 5. OTHER INFORMATION - ------------------------- STOCKHOLDER RIGHTS PLAN - ----------------------- On October 24, 1996, Delta's Board of Directors adopted a new Stockholder Rights Plan (Rights Plan) to replace the plan that expired on November 4, 1996. The new Rights Plan, like the former plan, is designed to enhance the Board's ability to protect stockholders against unsolicited attempts to acquire Delta that do not offer an adequate price to all stockholders or are otherwise not in the best interests of the Company and its stockholders. For additional information concerning the Rights Plan and the rights issued thereunder, see Delta's Current Report on Form 8-K dated October 28, 1996. BROAD-BASED STOCK OPTION PLANS - ------------------------------ On April 24, 1996, the Board of Directors adopted, subject to stockholder approval, two broad-based non-qualified stock option plans (Plans) for Company personnel. One plan is for eligible Delta personnel who are not pilots (Nonpilot Plan); the other covers the Company's pilots (Pilot Plan). On October 24, 1996, the Company's stockholders approved the Plans. The Nonpilot and Pilot Plans provide for the grant of non-qualified stock options to purchase 14.7 million and 10.0 million shares of the Company's Common Stock (Common Stock), respectively. The stock option grants under the Nonpilot and Pilot Plans will be made in three equal annual installments to eligible personnel in their individual capacities. Delta personnel who receive stock options may purchase from the Company shares of Common Stock at a purchase price per share equal to the opening price of the Common Stock on the New York Stock Exchange on the applicable grant date. Stock options awarded under the plans are exercisable beginning one year, and ending ten years, after the applicable grant date. The stock options are not transferable other than upon the death of the person awarded the stock options. The initial grant date under the Nonpilot and Pilot Plans was October 30, 1996. On that date, Delta granted to eligible personnel non-qualified stock options to purchase a total of approximately 8.2 million shares of Common Stock at a purchase price of $69.00 per share. The second and third grant dates under the Nonpilot and Pilot Plans are scheduled to occur on October 30, 1997 and 1998, respectively. 16 STOCK REPURCHASE AUTHORIZATION - ------------------------------ On April 24, 1996, Delta's Board of Directors authorized the Company to repurchase up to 24.7 million shares of Common Stock and Common Stock equivalents. Under this authorization, the Company may repurchase up to 6.2 million of these shares before the initial stock option grants under the broad- based stock option plans become exercisable, and repurchase the remaining shares as Delta personnel exercise their stock options. Repurchases are subject to market conditions and may be made on the open market or in privately negotiated transactions. Through September 30, 1996 the Company repurchased 4,165,600 shares of Common Stock for $300 million under this authorization. DELTA EXPRESS - ------------- On October 1, 1996, Delta began operating Delta Express, a new low-fare service within Delta that operates a dedicated fleet of Boeing 737-200 aircraft in certain highly competitive, leisure-oriented markets within Delta's system, connecting the northeast and midwest with Orlando and other Florida cities. The financial impact of this operation on Delta cannot presently be determined. 17 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ---------------------------------------- (a) Exhibits 4. First Amendment to the Second Amended and Restated Credit Agreement dated as of September 27, 1995, among Delta, Certain Banks, and NationsBank of Georgia, N.A., as Agent Bank. 11. Statement regarding computation of per share earnings. 12. Statement regarding computation of ratio of earnings to fixed charges. 15. Letter from Arthur Andersen LLP regarding unaudited interim financial information. 27. Financial Data Schedule (For SEC use only). (b) Reports on Form 8-K: During the quarter ended September 30, 1996, Delta did not file any Current Reports on Form 8-K. Subsequent to September 30, 1996, Delta filed a Current Report on Form 8-K dated October 28, 1996 relating to the Company's adoption of a new Stockholder Rights Plan. 18 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Delta Air Lines, Inc. ------------------------------ (Registrant) By: /s/ Thomas J. Roeck, Jr. --------------------------------- Thomas J. Roeck, Jr. Senior Vice President - Finance and Chief Financial Officer November 13, 1996 - ----------------- (Date) 19 EX-4 2 FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED EXHIBIT 4 FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 6, 1996 by and among DELTA AIR LINES, INC., a corporation organized under the laws of the State of Delaware (the "Company"), the Banks appearing on the signature pages hereof (the "Banks") and NATIONSBANK, N.A. (SOUTH), successor to NationsBank of Georgia, National Association, as Agent Bank (the "Agent Bank"). WHEREAS, the Company, the Banks and the Agent Bank entered into that certain Second Amended and Restated Credit Agreement dated as of September 27, 1995 (the "Credit Agreement") pursuant to which the Banks made certain financial accommodations available to the Company; WHEREAS, the Company has requested that the Banks and the Agent Bank amend the Credit Agreement in certain respects; and WHEREAS, the Banks and the Agent Bank are willing to so amend the Credit Agreement on the terms and conditions set forth herein. NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto agree as follows: SECTION 1. SPECIFIC AMENDMENTS TO CREDIT AGREEMENT. --------------------------------------- (a) The Credit Agreement is hereby amended by deleting the pricing grid contained in the definition of the term "Applicable Margin" in Section 1.1 thereof and substituting in lieu thereof the following:
- -------------------------------------------------------------------------------------------------------------- LONG TERM SENIOR UNSECURED APPLICABLE MARGIN LEVEL DEBT RATING OF THE COMPANY FOR EURODOLLAR RATE APPLICABLE MARGIN FOR (S&P/MOODY'S) LOANS BASE RATE LOANS - -------------------------------------------------------------------------------------------------------------- 1 A- or higher or A3 or higher 0.25% 0% - -------------------------------------------------------------------------------------------------------------- 2 BBB+ or Baa1 0.35% 0% - -------------------------------------------------------------------------------------------------------------- 3 BBB or Baa2 0.40% 0% - -------------------------------------------------------------------------------------------------------------- 4 BBB- or Baa3 0.50% 0% - -------------------------------------------------------------------------------------------------------------- 5 BB+ or Ba1 0.75% 0% - -------------------------------------------------------------------------------------------------------------- 6 BB and Ba2 1.00% 0% - -------------------------------------------------------------------------------------------------------------- 7 BB- or lower or Ba3 or lower 1.375% 0.25% - --------------------------------------------------------------------------------------------------------------
(b) The Credit Agreement is hereby further amended by deleting the defined term "Termination Date" contained in Section 1.1 thereof and substituting in lieu thereof the following: "'Termination Date' shall mean September 26, 2001 (or the date to which the Credit Facility has been extended pursuant to Section 3.19 hereof) unless the Credit Facility is earlier terminated pursuant to the applicable provisions of this Agreement." (c) The Credit Agreement is hereby further amended by deleting the pricing grid contained in Section 3.11 thereof and substituting in lieu thereof the following: - ---------------------------------------------------------------------------- LONG TERM SENIOR UNSECURED DEBT RATING OF THE COMPANY COMMITMENT FEE LEVEL (S&P/MOODY'S) PERCENTAGE - ---------------------------------------------------------------------------- 1 A- or higher or A3 or higher 0.09% - ---------------------------------------------------------------------------- 2 BBB+ or Baa1 0.10% - ---------------------------------------------------------------------------- 3 BBB or Baa2 0.125% - ---------------------------------------------------------------------------- 4 BBB- or Baa3 0.15% - ---------------------------------------------------------------------------- 5 BB+ or Ba1 0.20% - ---------------------------------------------------------------------------- 6 BB and Ba2 0.25% - ---------------------------------------------------------------------------- 7 BB- or lower or Ba3 or lower 0.375% - --------------------------------------------------------------------------- (d) The Credit Agreement is hereby further amended by deleting the words "Commitment Fee" appearing in the nineteenth line of the second paragraph of Section 3.11 (appearing in the second line of page 21 of the Credit Agreement) and substituting in lieu thereof the word "level". SECTION 2. EXTENSION OF TERMINATION DATE. The Company acknowledges and ----------------------------- agrees that the extension of the Termination Date contemplated by Section 1(b) of this First Amendment shall constitute one of the two extension requests provided for in Section 3.19 of the Credit Agreement. SECTION 3. EFFECTIVENESS OF AMENDMENT. This First Amendment shall not be -------------------------- effective until the date (the "Amendment Effective Date") the following conditions precedent to effectiveness shall be satisfied: (a) (i) this First Amendment shall be executed and delivered by the Company, the Agent Bank and each of the Banks and (ii) delivery of a notice from the Agent Bank to the Banks and the Company that this First Amendment has been fully executed by all parties hereto; and (b) the Agent Bank shall have received a certificate from the Treasurer of the Company certifying that, after giving effect to this First Amendment, no Default or Event of Default under the Credit Agreement will be in existence. -2- SECTION 4. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. ----------------------------------------------- (a) In order to induce the Agent Bank and the Banks to enter into this First Amendment, the Company hereby reaffirms each of the representations and warranties of the Company contained in the Credit Agreement as of the date hereof except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date). (b) After giving effect to this First Amendment, the Company represents and warrants to the Agent Bank and the Banks that no Default or Event of Default has occurred or is continuing under the Credit Agreement. (c) The execution, delivery and performance of this First Amendment by the Company does not require the consent of any other Person under any document, instrument or agreement to which the Company is a party or under which the Company is bound. SECTION 5. REFERENCES TO THE CREDIT AGREEMENT. Each reference to the ---------------------------------- Credit Agreement in the Credit Agreement, the Notes or any of the other instruments, agreements, certificates or other documents executed in connection therewith (collectively, the "Loan Documents"), shall be deemed to be a reference to the Credit Agreement, as amended by this First Amendment, and as the same may be further amended, restated, supplemented or otherwise modified from time to time in accordance with Section 12.4 of the Credit Agreement. Further, the Company and the Banks hereby acknowledge and agree that all references to "NationsBank of Georgia, National Association" in its individual capacity or in its capacity as Agent Bank (and any defined term used to designate "NationsBank of Georgia, National Association" in its individual capacity or in its capacity as Agent Bank) contained in the Credit Agreement and the other Loan Documents shall be deemed to be references to "NationsBank, N.A. (South)". SECTION 6. BENEFITS. This First Amendment shall be binding upon, and -------- shall inure to the benefit of, the parties hereto and their respective successors and assigns. SECTION 7. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, ------------- AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. SECTION 8. EFFECT. Except as expressly herein amended, the terms and ------ conditions of the Credit Agreement shall remain in full force and effect without amendment or modification, express or implied. The entering into this First Amendment by the Agent Bank and the Banks shall not be construed or interpreted as an agreement by the Agent Bank or the Banks to enter into any future amendment or modification of the Credit Agreement or any of the other Loan Documents. -3- SECTION 9. COUNTERPARTS. This First Amendment may be executed in any ------------ number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns. SECTION 10. DEFINITIONS. All capitalized terms which are used herein and ----------- not otherwise defined herein shall have the meanings given such terms as set forth in the Credit Agreement. [Signatures Contained on Following Pages] -4- IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Second Amended and Restated Credit Agreement to be executed under seal by their duly authorized officers as of the date above written. THE COMPANY: DELTA AIR LINES, INC. By: ------------------------------------- Title: ------------------------------- THE AGENT BANK: NATIONSBANK, N.A. (SOUTH), as Agent Bank and as a Bank By: ------------------------------------- Title: ------------------------------- [SIGNATURES CONTINUED ON FOLLOWING PAGES] -5- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] THE BANKS: Managing Agents BANK OF AMERICA, NATIONAL TRUST AND SAVINGS ASSOCIATION By: ------------------------------------- Title: ------------------------------- THE CHASE MANHATTAN BANK, N.A. By: ------------------------------------- Title: ------------------------------- CITICORP USA, INC. By: ------------------------------------- Title: ------------------------------- CIBC INC. By: ------------------------------------- Title: ------------------------------- ROYAL BANK OF CANADA By: ------------------------------------- Title: ------------------------------- Co-Agents CREDIT SUISSE By: ------------------------------------- Title: ------------------------------- -6- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY By: ------------------------------------- Title: ------------------------------- LTCB TRUST COMPANY By: ------------------------------------- Title: ------------------------------- MITSUBISHI TRUST & BANKING CORPORATION By: ------------------------------------- Title: ------------------------------- NATIONAL WESTMINSTER BANK PLC By: ------------------------------------- Title: ------------------------------- SUNTRUST BANK, ATLANTA f/k/a TRUST COMPANY BANK By: ------------------------------------- Title: ------------------------------- By: ------------------------------------- Title: ------------------------------- -7- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] Participants BANK OF TOKYO-MITSUBISHI TRUST COMPANY By: ------------------------------------ Title: ------------------------------ BAYERISCHE VEREINSBANK AG New York Branch By: ------------------------------------ Title: ------------------------------ By: ------------------------------------ Title: ------------------------------ KREDIETBANK N.V. By: ------------------------------------ Title: ------------------------------ MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: ------------------------------------ Title: ------------------------------ THE FIRST NATIONAL BANK OF CHICAGO, as successor to NBD Bank By: ------------------------------------ Title: ------------------------------ -8- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] WACHOVIA BANK OF GEORGIA, N.A. By: ------------------------------------- Title: ------------------------------- THE SANWA BANK, LIMITED By: ------------------------------------- Title: ------------------------------- THE BANK OF NEW YORK By: ------------------------------------- Title: ------------------------------- BANK OF MONTREAL By: ------------------------------------- Title: ------------------------------- THE BANK OF NOVA SCOTIA By: ------------------------------------- Title: ------------------------------- CREDIT LYONNAIS CAYMAN ISLANDS BRANCH By: ------------------------------------- Title: ------------------------------- -9- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] THE DAI-ICHI KANGYO BANK, LTD. By: -------------------------------- Title: ----------------------------- THE FUJI BANK By: -------------------------------- Title: ----------------------------- THE BANK OF TOKYO-MITSUBISHI BANK, LIMITED By: -------------------------------- Title: ----------------------------- THE NORTHERN TRUST COMPANY By: -------------------------------- Title: ----------------------------- PNC BANK, NATIONAL ASSOCIATION By: -------------------------------- Title: ----------------------------- THE SUMITOMO BANK, LIMITED, ATLANTA AGENCY By: -------------------------------- Title: ----------------------------- -10- [SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 6, 1996 WITH DELTA AIR LINES, INC.] THE TOKAI BANK, LTD. By: ------------------------------ Title: --------------------------- THE TOYO TRUST & BANKING CO., LTD. By: ------------------------------ Title: --------------------------- STAR BANK, N.A. CINCINNATI By: ------------------------------ Title: --------------------------- -11- EX-11 3 STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 DELTA AIR LINES, INC. STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (In millions except per share amounts)
1996 1995 ------ ------ PRIMARY: Weighted average shares outstanding 76 51 Additional shares assuming exercise of stock options - - ----- ----- Average shares outstanding as adjusted 76 51 ===== ===== Net income $ 238 $ 201 Preferred dividends series C - (20) Preferred dividends series B (2) (2) ----- ----- Net income available to primary common shares $ 236 $ 179 ===== ===== Primary earnings per common share $3.09 $3.47 ===== ===== FULLY DILUTED: Weighted average shares outstanding 76 51 Additional shares assuming: Conversion of series C convertible preferred stock 1 17 Conversion of series B ESOP convertible preferred stock 2 2 Conversion of 3.23% convertible subordinated notes - 10 Exercise of stock options - - ----- ----- Average shares outstanding as adjusted 79 80 ===== ===== Net income $ 238 $ 201 Interest on 3.23% convertible subordinated notes net of taxes - 8 Additional required ESOP contribution assuming conversion of series B ESOP convertible preferred stock (1) (1) ----- ----- Net income available to fully diluted common shares $ 237 $ 208 ===== ===== Fully diluted earnings per common share $2.98 $2.57 ===== =====
EX-12 4 STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS
DELTA AIR LINES, INC. EXHIBIT 12 STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In Millions except ratios) - --------------------------------------- -------------------------- Three Months Three Months Ended Ended September 30, September 30, 1996 1995 ------------- ------------- Earnings : Income $ 238 $ 201 Add (deduct): Income tax provision 160 136 Fixed charges 133 160 Interest capitalized (8) (7) Interest offset on Guaranteed Serial ESOP Notes - (1) ---------- ----------- Earnings as adjusted $ 523 $ 489 ========== =========== Fixed charges: Interest expense $ 54 $ 75 1/3 of rentals 79 84 Additional interest on Guaranteed Serial ESOP Notes - 1 ---------- ----------- Total fixed charges $ 133 $ 160 ========== =========== Ratio of earnings to fixed charges 3.93 3.06 - ----------------------------------
EX-15 5 LETTER FROM ARTHUR ANDERSEN LLP REGARDING UNAUDITED ARTHUR ANDERSEN LLP EXHIBIT 15 To the Stockholders and the Board of Directors of Delta Air Lines, Inc.: We are aware that Delta Air Lines, Inc. has incorporated by reference in its Registration Statement Nos. 2-94541, 33-30454, 33-50175, 33-52045, and 33-65391 its Form 10-Q for the quarter ended September 30, 1996, which includes our report dated November 1, 1996 covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933 (the "Act"), that report is not considered a part of the Registration Statements prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Arthur Andersen LLP - --------------------- Atlanta, Georgia November 1, 1996 EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DELTA AIR LINES, INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RELATED FINANCIAL STATEMENTS. 1,000,000 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 882 505 1,135 50 68 3,112 11,964 4,989 12,139 3,703 2,171 0 0 249 2,267 12,139 0 3,432 0 2,994 (14) 5 54 398 160 238 0 0 0 238 3.09 2.98
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