-----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, DKc2m1QV1fQKgkSYWYeEOJkjQmeNGxvyCXKneMLIzTJIErDYqHCRzEGGs4ZdZ0Tj vsBZLmpEa8WukwamYvYk2Q== 0000950144-97-013536.txt : 19971223 0000950144-97-013536.hdr.sgml : 19971223 ACCESSION NUMBER: 0000950144-97-013536 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971222 SROS: BSE SROS: CSE SROS: CSX SROS: NYSE SROS: PHLX SROS: PSE 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: 11-K SEC ACT: SEC FILE NUMBER: 000-20319 FILM NUMBER: 97741834 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 11-K 1 DELTA AIR LINES, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Fiscal Year Ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-5424 A. Full title of the plan and address of the plan, if different from that of the issuer named below: DELTA FAMILY-CARE SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: DELTA AIR LINES, INC. Hartsfield Atlanta International Airport Atlanta, Georgia 30320 2 DELTA FAMILY-CARE SAVINGS PLAN FINANCIAL STATEMENTS AND SCHEDULES JUNE 30, 1997 AND 1996 TABLE OF CONTENTS REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Statement of Net Assets Available for Benefits With Fund Information--June 30, 1997 Statement of Net Assets Available for Benefits With Fund Information--June 30, 1996 Statement of Changes in Net Assets Available for Benefits With Fund Information for the Year Ended June 30, 1997 Statement of Changes in Net Assets Available for Benefits With Fund Information for the Year Ended June 30, 1996 NOTES TO FINANCIAL STATEMENTS AND SCHEDULES SCHEDULES SUPPORTING FINANCIAL STATEMENTS Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes--June 30, 1997 Schedule II: Item 27d--Schedule of Reportable Transactions for the Year Ended June 30, 1997 - 2 - 3 [LETTERHEAD OF ARTHUR ANDERSEN LLP] REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrative Committee of Delta Air Lines, Inc.: We have audited the accompanying statements of net assets available for benefits with fund information of the DELTA FAMILY-CARE SAVINGS PLAN (the "Plan") as of June 30, 1997 and 1996 and the related statements of changes in net assets available for benefits with fund information, for the years then ended. These financial statements and the schedules referred to below are the responsibility of the Administrative Committee of Delta Air Lines, Inc. in its capacity as administrator of the Plan. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of June 30, 1997 and 1996 and the changes in its net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the accompanying table of contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits with fund information and the statements of changes in net assets available for benefits - 3 - 4 with fund information is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Arthur Andersen LLP Atlanta, Georgia October 10, 1997 - 4 - 5 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION JUNE 30, 1997 (IN THOUSANDS)
TOTAL NET INVESTMENTS RECEIVABLES ASSETS LIABILITIES ASSETS ------------ ----------- ------------ ----------- ----------- (Schedule I) (Note 3) (Note 3) FUND (NOTE 2): Stocks $ 389,007 $ 1,547 $ 390,554 $ 388 $ 390,166 Bonds 107,033 488 107,521 106 107,415 Delta Stock 118,804 586 119,390 0 119,390 Contracts 607,645 769 608,414 0 608,414 Index 307,305 698 308,003 0 308,003 Conservative 43,469 160 43,629 38 43,591 Growth 94,891 393 95,284 77 95,207 Delaware 18,732 58 18,790 0 18,790 Contrafund 242,493 417 242,910 0 242,910 Equity Income 73,312 159 73,471 0 73,471 Growth & Income 143,237 307 143,544 0 143,544 Magellan 108,822 94 108,916 0 108,916 OTC 44,875 137 45,012 0 45,012 Merrill Lynch 7,201 12 7,213 0 7,213 Templeton 82,794 212 83,006 0 83,006 Select 35,852 78 35,930 0 35,930 Ultra 74,454 204 74,658 0 74,658 Preferred 662,890 6,893 669,783 430,505 239,278 Participant loans 57,209 0 57,209 0 57,209 ------------ ---------- ------------ ----------- ----------- Total $ 3,220,025 $ 13,212 $ 3,233,237 $ 431,114 $ 2,802,123 ============ ========== ============ =========== ===========
The accompanying notes are an integral part of this statement. - 5 - 6 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION JUNE 30, 1996 (IN THOUSANDS)
TOTAL NET INVESTMENTS RECEIVABLES ASSETS LIABILITIES ASSETS ----------- ----------- ----------- ----------- ----------- (Note 3) (Note 3) FUND (NOTE 2): Stocks $ 352,728 $ 2,259 $ 354,987 $ 505 $ 354,482 Bonds 110,645 679 111,324 169 111,155 Delta Stock 129,752 1,068 130,820 463 130,357 Contracts 587,624 1,336 588,960 0 588,960 Index 193,673 784 194,457 0 194,457 Conservative 41,676 190 41,866 61 41,805 Growth 84,003 442 84,445 115 84,330 Delaware 21,993 98 22,091 0 22,091 Contrafund 181,920 509 182,429 0 182,429 Equity Income 34,255 122 34,377 0 34,377 Growth & Income 79,329 317 79,646 0 79,646 Magellan 108,591 196 108,787 0 108,787 OTC 34,873 122 34,995 0 34,995 Merrill Lynch 5,258 13 5,271 0 5,271 Templeton 47,609 234 47,843 0 47,843 Select 3,169 13 3,182 0 3,182 Ultra 63,218 293 63,511 0 63,511 Preferred 650,703 6,555 657,258 445,189 212,069 Participant loans 50,861 0 50,861 0 50,861 ----------- ----------- ----------- ---------- ----------- Total $ 2,781,880 $ 15,230 $ 2,797,110 $ 446,502 $ 2,350,608 =========== =========== =========== ========== ===========
The accompanying notes are an integral part of this statement. - 6 - 7 Page 1 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1997 (IN THOUSANDS)
DELTA STOCKS BONDS STOCK CONTRACTS INDEX CONSERVATIVE GROWTH -------- -------- ------- ---------- --------- ------------ ------ ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 25,364 $ 8,247 $ 9,466 $ 29,410 $ 19,917 $ 3,187 $ 7,679 Employer 1,249 338 407 1,984 1,334 32 69 --------- --------- --------- --------- --------- -------- ------- 26,613 8,585 9,873 31,394 21,251 3,219 7,748 --------- --------- --------- --------- --------- -------- ------- Investment income: Net appreciation (depreciation) in fair value of investments 82,391 8,747 906 0 67,538 6,552 16,919 Interest and dividends 787 280 359 41,939 578 92 215 --------- --------- --------- --------- --------- -------- -------- 83,178 9,027 1,265 41,939 68,116 6,644 17,134 Less investment expenses (1,514) (433) 0 0 0 (150) (292) --------- --------- --------- --------- --------- -------- -------- 81,664 8,594 1,265 41,939 68,116 6,494 16,842 --------- --------- --------- --------- --------- -------- -------- Total additions 108,277 17,179 11,138 73,333 89,367 9,713 24,590 --------- --------- --------- --------- --------- -------- -------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (25,819) (9,052) (8,496) (70,863) (15,360) (2,696) (3,988) Administrative expenses (49) (65) (1) (320) (74) (26) (50) Interest expense on ESOP notes 0 0 0 0 0 0 0 --------- --------- --------- --------- --------- -------- -------- Total deductions (25,868) (9,117) (8,497) (71,183) (15,434) (2,722) (4,038) --------- --------- --------- --------- --------- -------- -------- Net increase (decrease) prior to interfund transfers 82,409 8,062 2,641 2,150 73,933 6,991 20,552 Interfund transfers (46,725) (11,802) (13,608) 17,304 39,613 (5,205) (9,675) --------- --------- --------- --------- --------- -------- -------- NET INCREASE (DECREASE) 35,684 (3,740) (10,967) 19,454 113,546 1,786 10,877 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1996 354,482 111,155 130,357 588,960 194,457 41,805 84,330 --------- --------- --------- --------- --------- -------- -------- End of year, June 30, 1997 $ 390,166 $ 107,415 $ 119,390 $ 608,414 $ 308,003 $ 43,591 $ 95,207 ========= ========= ========= ========= ========= ======== ========
- 7 - 8 Page 2 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1997 (IN THOUSANDS)
GROWTH EQUITY AND MERRILL DELAWARE CONTRAFUND INCOME INCOME MAGELLAN OTC LYNCH -------- ---------- ------- -------- ---------- ------- ------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 3,047 $ 22,903 $ 4,819 $ 10,504 $ 10,876 $ 4,425 $ 767 Employer 122 802 321 618 171 285 20 ------- --------- ------- -------- -------- ------- ------ 3,169 23,705 5,140 11,122 11,047 4,710 787 ------- --------- ------- -------- -------- ------- ------ Investment income: Net appreciation (depreciation) in fair value of investments (1,068) 33,243 11,548 22,101 19,597 2,126 680 Interest and dividends 1,684 13,199 4,177 4,946 3,650 5,592 579 ------- --------- ------- -------- -------- ------- ------ 616 46,442 15,725 27,047 23,247 7,718 1,259 Less investment expenses 0 0 0 0 0 0 0 ------- --------- ------- -------- -------- ------- ------ 616 46,442 15,725 27,047 23,247 7,718 1,259 ------- --------- ------- -------- -------- ------- ------ Total additions 3,785 70,147 20,865 38,169 34,294 12,428 2,046 ------- --------- ------- -------- -------- ------- ------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (1,094) (10,663) (3,785) (6,484) (5,868) (2,967) (309) Administrative expenses (1) (23) (10) (18) (18) (1) (2) Interest expense on ESOP notes 0 0 0 0 0 0 0 ------- --------- ------- -------- -------- ------- ------ Total deductions (1,095) (10,686) (3,795) (6,502) (5,886) (2,968) (311) ------- --------- ------- -------- -------- ------- ------ Net increase (decrease) prior to interfund transfers 2,690 59,461 17,070 31,667 28,408 9,460 1,735 Interfund transfers (5,991) 1,020 22,024 32,231 (28,279) 557 207 ------- --------- ------- -------- -------- ------- ------ NET INCREASE (DECREASE) (3,301) 60,481 39,094 63,898 129 10,017 1,942 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1996 22,091 182,429 34,377 79,646 108,787 34,995 5,271 ------- --------- ------- -------- -------- ------- ------ End of year, June 30, 1997 $18,790 $ 242,910 $73,471 $143,544 $108,916 $45,012 $7,213 ======= ========= ======= ======== ======== ======= ======
- 8 - 9 Page 3 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1997 (IN THOUSANDS)
PARTICIPANT TEMPLETON SELECT ULTRA PREFERRED LOANS TOTAL --------- ------- ------- --------- ----------- --------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 6,292 $ 755 $ 8,708 $ 0 $ 0 $ 176,366 Employer 398 93 400 31,888 0 40,531 -------- ------- ------- -------- -------- ---------- 6,690 848 9,108 31,888 0 216,897 -------- ------- ------- -------- -------- ---------- Investment income: Net appreciation (depreciation) in fair value of investments 11,594 2,677 9,820 (1,695) 0 293,676 Interest and dividends 2,316 542 4,195 36,508 0 121,638 -------- ------- ------- -------- -------- ---------- 13,910 3,219 14,015 34,813 0 415,314 Less investment expenses 0 0 0 (8) 0 (2,397) -------- ------- ------- -------- -------- ---------- 13,910 3,219 14,015 34,805 0 412,917 -------- ------- ------- -------- -------- ---------- Total additions 20,600 4,067 23,123 66,693 0 629,814 -------- ------- ------- -------- -------- ---------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (3,348) (229) (3,791) (8,206) 36,650 (146,368) Administrative expenses (2) (1) (5) 0 0 (666) Interest expense on ESOP notes 0 0 0 (31,265) 0 (31,265) -------- ------- ------- -------- -------- ---------- Total deductions (3,350) (230) (3,796) (39,471) 36,650 (178,299) -------- ------- ------- -------- -------- ---------- Net increase (decrease) prior to interfund transfers 17,250 3,837 19,327 27,222 36,650 451,515 Interfund transfers 17,913 28,911 (8,180) (13) (30,302) 0 -------- ------- ------- -------- -------- ---------- NET INCREASE (DECREASE) 35,163 32,748 11,147 27,209 6,348 451,515 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1996 47,843 3,182 63,511 212,069 50,861 2,350,608 -------- ------- ------- -------- -------- ---------- End of year, June 30, 1997 $ 83,006 $35,930 $74,658 $239,278 $ 57,209 $2,802,123 ======== ======= ======= ======== ======== ==========
The accompanying notes are an integral part of this statement. - 9 - 10 Page 1 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1996 (IN THOUSANDS)
DELTA STOCKS BONDS STOCK CONTRACTS INDEX CONSERVATIVE GROWTH -------- -------- ------- --------- -------- ------------ ------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 29,543 $ 9,488 $ 9,278 $ 31,188 $ 16,066 $ 3,437 $ 7,846 Employer 2,239 607 643 2,657 1,434 57 103 -------- -------- -------- -------- --------- ------- ------- 31,782 10,095 9,921 33,845 17,500 3,494 7,949 -------- -------- -------- -------- --------- ------- ------- Investment income: Net appreciation (depreciation) in fair value of investments 63,564 6,187 15,481 0 35,733 4,836 11,348 Interest and dividends 810 283 338 41,817 442 91 199 -------- -------- -------- -------- --------- ------- ------- 64,374 6,470 15,819 41,817 36,175 4,927 11,547 Less investment expenses (1,908) (588) (1) 0 0 (197) (351) -------- -------- -------- -------- --------- ------- ------- 62,466 5,882 15,818 41,817 36,175 4,730 11,196 -------- -------- -------- -------- --------- ------- ------- Total additions 94,248 15,977 25,739 75,662 53,675 8,224 19,145 -------- -------- -------- -------- --------- ------- ------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (10,025) (5,096) (3,504) (33,430) (5,109) (1,658) (2,136) Administrative expenses (93) (125) (1) (607) (101) (49) (92) Interest expense on ESOP notes 0 0 0 0 0 0 0 -------- -------- -------- -------- --------- ------- ------- Total deductions (10,118) (5,221) (3,505) (34,037) (5,210) (1,707) (2,228) -------- -------- -------- -------- --------- ------- ------- Net increase (decrease) prior to interfund transfers 84,130 10,756 22,234 41,625 48,465 6,517 16,917 Interfund transfers (68,923) (19,522) (16,349) (88,466) 13,901 (569) (2,200) -------- -------- -------- -------- --------- ------- ------- NET INCREASE (DECREASE) 15,207 (8,766) 5,885 (46,841) 62,366 5,948 14,717 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1995 339,275 119,921 124,472 635,801 132,091 35,857 69,613 -------- -------- -------- -------- --------- ------- ------- End of year, June 30, 1996 $354,482 $111,155 $130,357 $588,960 $ 194,457 $41,805 $84,330 ======== ======== ======== ======== ========= ======= =======
- 10 - 11 Page 2 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1996 (IN THOUSANDS)
GROWTH EQUITY AND MERRILL DELAWARE CONTRAFUND INCOME INCOME MAGELLAN OTC LYNCH -------- ---------- --------- ------ -------- ------- ------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 1,257 $ 16,563 $ 2,403 $ 5,412 $ 14,025 $ 1,973 $ 646 Employer 149 846 200 562 425 195 22 ------- -------- ------- ------- -------- ------- ------ 1,406 17,409 2,603 5,974 14,450 2,168 668 ------- -------- ------- ------- -------- ------- ------ Investment income: Net appreciation (depreciation) in fair value of investments 2,145 8,665 2,974 8,642 (13,164) 1,400 282 Interest and dividends 363 18,718 1,589 2,285 24,775 932 408 ------- -------- ------- ------- -------- ------- ------ 2,508 27,383 4,563 10,927 11,611 2,332 690 Less investment expenses 0 0 0 0 0 0 0 ------- -------- ------- ------- -------- ------- ------ 2,508 27,383 4,563 10,927 11,611 2,332 690 ------- -------- ------- ------- -------- ------- ------ Total additions 3,914 44,792 7,166 16,901 26,061 4,500 1,358 ------- -------- ------- ------- -------- ------- ------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (158) (3,428) (816) (1,664) (3,518) (614) (284) Administrative expenses (1) (30) (9) (16) (41) (1) (2) Interest expense on ESOP notes 0 0 0 0 0 0 0 ------- -------- ------- ------- -------- ------- ------ Total deductions (159) (3,458) (825) (1,680) (3,559) (615) (286) ------- -------- ------- ------- -------- ------- ------ Net increase (decrease) prior to interfund transfers 3,755 41,334 6,341 15,221 22,502 3,885 1,072 Interfund transfers 14,924 40,158 12,798 38,514 1,391 23,351 750 ------- -------- ------- ------- -------- ------- ------ NET INCREASE (DECREASE) 18,679 81,492 19,139 53,735 23,893 27,236 1,822 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1995 3,412 100,937 15,238 25,911 84,894 7,759 3,449 ------- -------- ------- ------- -------- ------- ------ End of year, June 30, 1996 $22,091 $182,429 $34,377 $79,646 $108,787 $34,995 $5,271 ======= ======== ======= ======= ======== ======= ======
- 11 - 12 Page 3 of 3 DELTA FAMILY-CARE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED JUNE 30, 1996 (IN THOUSANDS)
PARTICIPANT TEMPLETON SELECT ULTRA PREFERRED LOANS TOTAL --------- -------- ----- --------- ----------- --------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: Participant $ 4,241 $ 322 $ 6,315 $ 0 $ 0 $ 160,003 Employer 384 20 536 27,925 0 39,004 -------- ------ ------- -------- ----------- ---------- 4,625 342 6,851 27,925 0 199,007 -------- ------ ------- -------- ----------- ---------- Investment income: Net appreciation (depreciation) in fair value of investments 4,159 11 5,416 14,057 0 171,736 Interest and dividends 1,240 274 2,466 33,822 0 130,852 -------- ------ ------- -------- ----------- ---------- 5,399 285 7,882 47,879 0 302,588 Less investment expenses 0 0 0 0 0 (3,045) -------- ------ ------- -------- ----------- ---------- 5,399 285 7,882 47,879 0 299,543 -------- ------ ------- -------- ----------- ---------- Total additions 10,024 627 14,733 75,804 0 498,550 -------- ------ ------- -------- ----------- ---------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Withdrawals (880) (51) (1,116) (6,042) (1,523) (81,052) Administrative expenses (3) (1) (7) (45) 0 (1,224) Interest expense on ESOP notes 0 0 0 (32,297) 0 (32,297) -------- ------ ------- -------- ----------- ---------- Total deductions (883) (52) (1,123) (38,384) (1,523) (114,573) -------- ------ ------- -------- ----------- ---------- Net increase (decrease) prior to interfund transfers 9,141 575 13,610 37,420 (1,523) 383,977 Interfund transfers 11,070 1,121 30,392 6 7,653 0 -------- ------ ------- -------- ----------- ---------- NET INCREASE (DECREASE) 20,211 1,696 44,002 37,426 6,130 383,977 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year, July 1, 1995 27,632 1,486 19,509 174,643 44,731 1,966,631 -------- ------ ------- -------- ----------- ---------- End of year, June 30, 1996 $ 47,843 $3,182 $63,511 $212,069 $ 50,861 $2,350,608 ======== ====== ======= ======== =========== ==========
The accompanying notes are an integral part of this statement. - 12 - 13 DELTA FAMILY-CARE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS AND SCHEDULES JUNE 30, 1997 AND 1996 1. DESCRIPTION OF PLAN The following description of the Delta Family-Care Savings Plan (the "Plan") provides only general information regarding the Plan as in effect on June 30, 1997. This document is not part of the summary plan description of the Plan and is not a document pursuant to which the Plan is maintained within the meaning of Section 402 (a)(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Participants should refer to the plan document for a complete description of the Plan's provisions. To the extent not specifically prohibited by statute or regulation, Delta Air Lines, Inc. ("Delta" or the "Company") reserves the right to unilaterally amend, modify or terminate the Plan at any time and such changes may be applied to all Plan participants and their beneficiaries regardless of whether the participant is actively working or retired at the time of the change. The Plan is a defined contribution plan established by the Company. Active Delta personnel who have completed 12 consecutive months of employment and are either paid on the United States domestic payroll or employed in the Commonwealth of Puerto Rico are eligible to participate in the Plan. Participation may begin on the first day of the first pay period following eligibility. The Plan is subject to the provisions of ERISA. The responsibility for operation and administration of the Plan (except for investment management and control of assets) is vested in the Administrative Committee of the Company. The Benefit Funds Investment Committee (the "BFIC") of the board of directors is responsible for investment management and control of assets of the Plan. However, the Plan allows a participant to exercise control over the assets in his account (except the Preferred Stock Fund) and is intended to qualify as a plan described in Section 404(c) of ERISA and Federal Regulation 2550.404(c) - 1. The BFIC has appointed outside investment managers and a trustee to manage assets of the Plan. The BFIC evaluates the performance of the investment managers and the trustee. The investment managers and the trustee are authorized to purchase and sell securities subject to certain investment restrictions determined by the BFIC. The trustee and recordkeeping functions of the Plan are performed by Fidelity Management Trust Company (the "Trustee") and Fidelity Institutional Retirement Services Company (the "Recordkeeper"), respectively. The Recordkeeper is responsible for maintaining appropriate records of investment transactions, participant account balances, and, under the direction of the Administrative Committee, distributions from participants' accounts. - 13 - 14 CONTRIBUTIONS Eligible nonpilot personnel who are not based in Puerto Rico and who had gross earnings (as defined in the Plan) of less than $55,000 in the previous calendar year may contribute up to 15% of their earnings to the Plan. Eligible nonpilot personnel who had gross earnings of $55,000 or more in the previous calendar year and Puerto Rico based personnel may contribute up to 10% of their gross earnings to the Plan; provided, however, that if an employee had been eligible to contribute at the rate of 15% in a prior year because his or her earnings were less than $55,000, he or she is eligible to remain at a maximum contribution percentage of 15% of earnings. See Note 11 for discussion of plan amendments effective after the plan year end. For the plan year ended June 30, 1996, eligible pilot personnel may contribute up to 6% of their gross earnings to the Plan. Effective July 1, 1996, Delta amended the Plan to increase the maximum contribution percentage for highly compensated pilots to 7% from 6% and nonhighly compensated pilots to 10% from 6%; provided that a pilot's total contributions to the Plan for a calendar year may not exceed the then current limit under Section 402(g) of the Internal Revenue Code. This amendment also provided that, effective January 1, 1997, the Administrative Committee would be allowed to determine whether the contribution percentage for highly compensated pilots may be changed for each subsequent plan year to a percentage that is at least 7% but no more than 10% of eligible earnings. Employee contributions may be made, at the option of the employee, as pretax contributions or after-tax contributions, or as a combination of both pretax and after-tax contributions. Delta contributes $.50 to a participant's account for every $1 contributed by the participant, up to 2% of the participant's annual earnings. In accordance with federal law, an employee's annual gross earnings in excess of specified levels are not considered for purposes of determining how much the employee or Delta may contribute to the Plan. Moreover, there are other limits imposed by federal law which may limit the amount of pretax, after-tax, or employer contributions that may be made on behalf of a participant. Beginning October 1, 1989, the first $1,000 (increased by $50 per plan year) of Delta's contributions to a participant's account (the "Annual Cap") is invested in Delta's Series B ESOP Convertible Preferred Stock ("Preferred Stock"), and Delta's Common Stock ("Common Stock") (Note 7). The remainder, if any, of Delta's contributions to a participant's account during a plan year will be invested in the other plan funds (Note 2) in the same proportion as the participant directs for his or her own contributions; provided, however that Delta's matching contributions in excess of the Annual Cap shall be made in Common Stock for noncollectively bargained, highly compensated employees, as determined under the Internal Revenue Code of 1986 (the "Code"), as amended. VESTING Participants are immediately vested in all contributions to their accounts, plus actual earnings thereon. - 14 - 15 PARTICIPANT ACCOUNTS Individual accounts are maintained for each of the Plan's participants to reflect the participant's contributions and related employer matching contributions as well as the participant's share of the Plan's income and any related administrative expenses. Allocations of this income and expense are based on the proportion that each participant's account balance bears to the total of all participant account balances. Income from participant loans is not subject to this allocation. ACCOUNT DISTRIBUTIONS Upon retirement or eligibility for long term disability, a participant's non-ESOP account balance may be distributed in the form of monthly installments which continue over the participant's life expectancy. The life expectancy is calculated based on the participant's age at retirement, date of long term disability, or, if distribution is deferred, the date the request for distribution is processed. The monthly installment payments are based on (a) the amount remaining in the participant's account; (b) the investment gains and losses on the investment options in which the participant's account was invested during the year; and (c) life expectancy actuarial factors. However, a participant may elect a different form of retirement benefit, such as a single-sum cash payment, cash payments in monthly variable installments for a definite period not to exceed life expectancy, or variable monthly installments to be paid over the life expectancy of the participant and the participant's spouse. A participant's ESOP account balance may be distributed as a lump-sum payment in cash or Common Stock, at the participant's election, when distribution of the non-ESOP portion of the account begins. Upon termination of employment for reasons other than retirement or disability, a participant's non-ESOP account balance may be distributed as a lump-sum cash payment or the participant may elect to defer distribution. A participant's ESOP account balance may be distributed as a lump-sum cash payment or in Common Stock, at the participant's election, when distribution of the non-ESOP portion of the account begins. A participant, while employed, may elect to withdraw all after-tax contributions, pre-1989 matching contributions, and the earnings thereon. Under certain specified hardship circumstances, a participant, while employed, may also elect to withdraw pretax contributions. Distributions from the Plan are subject to income taxes, and specified types of early withdrawals may also be subject to significant tax penalties. LOANS TO PARTICIPANTS Participants may borrow against a portion of their plan account balances. The loans are repaid, generally through regular payroll deductions, over a period not to exceed four years. The principal amounts of the loans are assets of the Plan and earn interest, which represents income to the borrowing participant, at a fixed rate equal to the average of the secured loan interest rate and the unsecured loan interest rate of the Delta Employees' Credit Union at initiation of the loan. This rate fluctuated between 9.70% and 10.75% during the 1997 and 1996 plan years. - 15 - 16 2. INVESTMENT OPTIONS The following investment options, all of which are participant-directed except the Preferred Stock Fund, were available to participants under the Plan during the plan years ended June 30, 1997 and 1996. The investment options under the Plan will be changed effective January 1, 1998 (Note 11): - Commingled Stocks Fund ("Stocks Fund")--invested in investment strategy portfolios which primarily held U.S. and foreign stocks. - Commingled Bonds Fund ("Bonds Fund")--invested in a diversified portfolio invested primarily in fixed-income securities. - Delta Common Stock Fund ("Delta Stock Fund")--invested primarily in Delta Air Lines, Inc. Common Stock. - Insurance Contracts/Stable Value Fund ("Contracts Fund")--invested primarily in a portfolio of investment contracts issued by major insurance companies. - Fidelity U.S. Equity Index Commingled Fund ("Index Fund")--invested in a pooled investment vehicle which is invested primarily in a portfolio of the common stock of corporations included in the Standard & Poor's 500 Index. - Delta Air Lines, Inc. Preferred Stock Fund ("Preferred Fund")--invested primarily in Delta Air Lines, Inc. Preferred Stock and Common Stock (Note 7). In addition, participants may also invest in two investment strategy portfolios and ten mutual funds from the "Window of Choices" option. The investment strategy portfolios are as follows: - Conservative Growth Balanced Fund ("Conservative")--invested primarily in portfolios of high-quality fixed-income securities and diversified U.S. equity securities. - Growth Balanced Fund ("Growth")--invested primarily in portfolios of diversified U.S. equity securities and high-quality fixed-income securities. The "Window of Choices" option contains the following ten mutual funds: - Delaware Group Trend Fund ("Delaware")--invested primarily in U.S. stocks of emerging and other growth-oriented companies. - Fidelity Contrafund ("Contrafund")--invested primarily in undervalued common stocks and securities convertible into common stocks and other securities for capital appreciation. - Fidelity Equity-Income Fund ("Equity Income")--invested primarily in dividend-paying common and preferred stocks. - 16 - 17 - Fidelity Growth & Income Fund ("Growth & Income")--invested primarily in U.S. equity securities of companies that offer potential for earnings growth while paying current dividends. - Fidelity Magellan Fund ("Magellan")--invested primarily in common stocks and securities convertible into common stocks of both U.S. and foreign companies. - Fidelity OTC Portfolio ("OTC")--invested primarily in securities that are traded on the over-the-counter market. - Merrill Lynch Capital Fund (Class A) ("Merrill Lynch")-- invested primarily in equity securities, corporate bonds and money market securities, and may invest in the securities of foreign issuers. - Templeton Institutional Fund Foreign Equity Series ("Templeton")--invested primarily in stocks of undervalued foreign companies. - Twentieth Century Select Investors Fund ("Select")--invested primarily in large capitalization U.S. common stocks. - Twentieth Century Ultra Investors Fund ("Ultra")--invested primarily in U.S. common stocks of small to medium-sized companies. During the plan years ended June 30, 1997 and 1996, all Plan participants could allocate their contributions and existing fund balances in 1% multiples among the investment options available to them, but they could not allocate more than 50% of their contributions to the Delta Stock Fund. 3. SUMMARY OF ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. The preparation of the financial statements in conformity with generally accepted accounting principles requires plan management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates. INVESTMENTS Investments (Note 2), except for investment contracts and Preferred Stock, are stated at market value determined from publicly stated price information at the end of each day. The Preferred Stock has a stated value of $72 per share (Note 7). Investments in investment contracts are presented at cost plus accrued income (contract value). The fair value of the investment contracts at June 30, 1997 and 1996 was $612,494,000 and $587,624,000, respectively. The average yields for the Contracts Fund for the years ending - 17 - 18 June 30, 1997 and 1996 were 6.88% and 6.91%, respectively. The crediting rates for the Contracts Fund for June 30, 1997 and 1996 were 6.02% and 6.87%, respectively. The fair market values of individual investments that represent 5% or more of the Plan's total net assets at June 30, 1997 and 1996 and the applicable number of shares or principal amounts are separately identified as follows (dollars in thousands):
NUMBER OF SHARES OR MARKET OR PRINCIPAL CONTRACT AMOUNT VALUE ---------- -------- 1997: Fidelity Broad Market Duration Portfolio 11,690,568 $169,746 Fidelity Magellan Fund 2,033,162 185,120 Fidelity Contrafund 5,258,992 242,493 Fidelity Growth & Income Fund 6,300,632 227,138 Fidelity Select Equity Portfolio 6,328,537 162,263 Fidelity U.S. Equity Index Commingled Fund 12,558,430 307,305 Delta Common Stock 3,305,374 271,040 Delta Preferred Stock 6,668,316 480,119 1996: Fidelity Broad Market Duration Portfolio 12,718,692 $170,431 Fidelity Magellan Fund 2,440,236 182,529 Fidelity Contrafund 4,624,308 181,920 Fidelity Growth & Income Fund 5,259,774 154,217 Fidelity Select Equity Portfolio 7,461,827 143,415 Fidelity U.S. Equity Index Commingled Fund 10,658,909 193,672 Delta Common Stock 3,180,868 264,012 Delta Preferred Stock 6,738,740 485,189
The net appreciation (depreciation) in fair value of investments includes both net unrealized appreciation (depreciation) of plan assets and net realized gain (loss) on sales of plan assets. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. - 18 - 19 RECEIVABLES AND LIABILITIES The receivables shown in the aggregate in the accompanying statements of net assets as of June 30, 1997 and 1996 include the following (in thousands):
1997 1996 ------- ------- Employer contributions $10,940 $12,372 Participant contributions 2,194 2,477 Interest and dividends 78 9 Due from broker 0 372 ------- ------- Total $13,212 $15,230 ======= =======
The liabilities shown in the aggregate in the accompanying statements of net assets as of June 30, 1997 and 1996 include the following (in thousands):
1997 1996 -------- -------- ESOP notes: Principal $394,553 $408,759 Interest 31,265 32,296 Due to broker 4,687 4,597 Management fees payable 609 850 -------- -------- Total $431,114 $446,502 ======== ========
ADMINISTRATIVE EXPENSES Certain administrative functions for the Plan are performed by officers or employees of Delta. No such officer or employee receives compensation from the Plan. All other administrative expenses of the Plan, including trustee fees, are paid by the Plan unless paid by Delta. - 19 - 20 4. PARTICIPANTS The following table represents the number of participants in each fund at June 30, 1997:
PARTICIPANTS ------------ Fund: Stocks 25,323 Bonds 15,055 Delta Stock 17,708 Contracts 27,073 Index 19,596 Conservative 5,324 Growth Balanced 9,984 Delaware 2,873 Contrafund 17,029 Equity Income 5,481 Growth & Income 9,875 Magellan 10,603 OTC 4,040 Merrill Lynch 1,263 Templeton 7,141 Select 1,764 Ultra 7,224 Preferred (allocated) 55,724 Total 56,960
At June 30, 1997, 10,661 retired participants (or their designated beneficiaries) were receiving monthly distributions from their accounts or had elected to defer distribution to a later date. 5. FEDERAL INCOME TAXES The Plan has received a letter of determination dated June 4, 1996 from the Internal Revenue Service ("IRS") which states that the Plan, as amended through June 29, 1995, is in compliance with Section 401(a) and applicable subsections of Section 409 of the Code, is entitled to an exemption from federal income taxation under Section 501(a) of the Code, is an employee stock ownership plan with a cash or deferred arrangement under Section 401(k) of the Code, and satisfies the requirements of Section 4975(e)(7) of the Code. In the opinion of Delta's management, the Plan as of June 30, 1997 continues to be in compliance with Section 401(a) and applicable subsections of Sections 409, 401(k), and 4975 (e)(7), and continues to be entitled to an exemption from federal income taxation under Section 501(a); thus, no provision for federal income taxes has been made in the accompanying financial statements. - 20 - 21 6. PLAN TERMINATION The Plan provides that Delta, at its discretion, may amend or discontinue the Plan at any time. Plan assets that are held in the Contracts Fund are subject to certain restrictions which, in the event of plan termination, may affect the timing and value of participant account distributions. Such distributions from the Contracts Fund may (a) be made in installments over a period of one or more years or (b) if distributed in a single sum, incur a reduction in value. The amount of such a reduction would depend on the market value adjustments made by each insurance company to the value of assets distributed from their respective contracts. 7. EMPLOYEE STOCK OWNERSHIP PLAN In connection with the establishment of the ESOP in 1989, Delta sold 6,944,450 shares of Preferred Stock to the ESOP trustee for $72 per share, or approximately $500 million. The ESOP trustee initially financed this purchase by borrowing $493 million from Delta and approximately $7 million from a bank. In 1990, the Plan issued $481.4 million principal amount of its Guaranteed Serial ESOP notes ("ESOP Notes") to third-party lenders and repaid the outstanding principal balances of the original loans. The ESOP Notes and certain related tax indemnities are guaranteed by Delta (Note 8). The shares of Preferred Stock will be held in the name of the Trustee until redemption or conversion and may not be sold by the Trustee or distributed outside the Plan except for resale to Delta. The Preferred Stock is redeemable at Delta's option, at specified redemption prices payable, at Delta's election, in cash or Common Stock. Delta is required to redeem shares of Preferred Stock at any time to enable the Trustee to provide for distributions to participants. Each share of Preferred Stock has a stated value of $72; bears an annual cumulative cash dividend of 6%, or $4.32; is convertible into .8578 shares of Common Stock (conversion price of $83.94), subject to adjustment in certain circumstances; has a liquidation preference of $72, plus any accrued and unpaid dividends; generally votes together as a single class with the Common Stock on matters upon which the Common Stock is entitled to vote; and has one vote per share, subject to adjustment in certain circumstances. In the event that full cumulative dividends on the Preferred Stock have not been paid when due, Delta may not pay cash dividends on its Common Stock. The Plan provides that shares of Preferred Stock and Common Stock allocated to a participant's account in the Preferred Fund ("Allocated Shares") and the Common Stock attributable to a participant's account in the Delta Stock Fund will be voted by the Trustee in accordance with the participant's confidential voting instructions or, if no voting instructions are received by the Trustee, such shares will be voted by the Trustee in its discretion. The Plan further provides that shares of Preferred Stock not yet allocated to any participant's account will be voted by the Trustee in proportion to the votes cast with respect to Allocated Shares for which voting instructions are received. - 21 - 22 Unallocated shares of Preferred Stock are held in a separate "Unallocated Account" of the Plan, pending release and allocation to participants' accounts. The number of shares of Preferred Stock released from the Unallocated Account for a plan year will generally be the number of shares of Preferred Stock held in the Unallocated Account times the ratio that the amount of principal and interest paid on the ESOP Notes with respect to such plan year bears to the total amount of principal and interest remaining to be paid (including payments with respect to such plan year). Shares are released from the Unallocated Account to a "Holding Account" upon debt service payments and are then allocated to participants' accounts as Delta matching contributions and/or dividend income are received. Shares of Preferred Stock released from the Unallocated Account (and not allocated as described in the last sentence of the preceding paragraph) will be allocated as of the end of each quarter to the accounts of participants making contributions to the Plan. The number of shares of Preferred Stock so allocated will be based on a value equal to the higher of $72 per share or the market value of the shares of Preferred Stock as defined in the Plan. If during the plan year, the value of the Preferred Stock released from the Unallocated Account as a result of the repayment of the ESOP Notes is less than Delta's matching contribution to the Plan for that year, this difference will be made up by Delta (a) prepaying the ESOP Notes to release additional shares of Preferred Stock; (b) contributing cash to the Plan so the Trustee may purchase Common Stock; or (c) contributing shares of Common Stock to the Plan; in each case, for allocation to participants' accounts. However, if at the end of the plan year the value of the Preferred Stock released from the Unallocated Account as a result of the scheduled repayment of the ESOP Notes during that plan year is greater than Delta's matching contribution to the Plan for that plan year, the excess will be divided evenly among all participants making contributions to the Plan. The ESOP Notes will be repaid primarily from the Company's contributions (Note 1) and dividends on the Preferred Stock. If dividends on Allocated Shares are used to repay the ESOP Notes, additional shares of Preferred Stock and Common Stock equal in value to such dividends will be allocated to the accounts of participants who otherwise would have received such dividends. As of June 30, 1997, 2,167,204 shares of Preferred Stock with a market value, as defined, of approximately $156,038,677 had been allocated to participants' accounts and 4,501,112 shares of Preferred Stock with a market value, as defined, of approximately $324,080,064 were held in the Unallocated Account. During the plan year ended June 30, 1997, 70,492 shares of Preferred Stock were redeemed in connection with the payment of participant benefits. 8. LONG-TERM DEBT During plan year 1995, the Plan voluntarily prepaid in whole, with funds provided by Delta, the Plan's 1990 Series A and Series B Guaranteed Serial ESOP Notes ("Old Notes"), which were guaranteed by Delta. Simultaneously with the prepayment, the Plan issued to Delta 1994 Series A and Series B Guaranteed Serial ESOP Notes ("New Notes") in a principal amount equal to the Old Notes that were prepaid. The New Notes have the - 22 - 23 same interest rate and final maturity date as the corresponding series of Old Notes. Other terms of the New Notes are substantially the same as the corresponding series of Old Notes, except that the New Notes do not have the benefit of a credit enhancement. The principal amount outstanding and the other terms of the Plan's Series C ESOP Notes were not affected by the prepayment of the Old Notes. At June 30, 1997, the Plan's long-term debt, including current maturities of $16,146,000, consisted of $394,554,000 aggregate principal amount of Series C ESOP Notes and New Notes (Note 7) with final maturity dates ranging from July 1, 1999 to January 1, 2009 and interest rates ranging from 7.26% to 8.10%. The interest rates on the Series C ESOP Notes and the New Notes are subject to adjustment in the event of certain changes in the federal income tax laws. Subject to certain restrictions, the Series C ESOP Notes and the New Notes may be prepaid at the option of the Plan at any time in whole or in part. As discussed in Note 7 of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Stockholders, Delta may be required to purchase the Series C ESOP Notes at the option of the holders in certain circumstances. At June 30, 1997, the annual maturities of the Series C ESOP Notes and the New Notes for the next five years and thereafter were as follows (in thousands):
Years ending June 30: 1998 $ 16,146 1999 18,283 2000 20,635 2001 23,223 2002 26,072 After 2002 290,195 -------- Total $394,554 ========
- 23 - 24 9. PARTICIPANT UNITS At June 30, 1997, the number of participant units and unit value by fund (based on net asset value) were as follows:
UNIT UNITS VALUE ----------- ------ Fund: Stocks 20,486,153 $19.05 Bonds 8,797,784 12.21 Delta Stock 6,963,220 17.15 Contracts 608,414,258 1.00 Index 12,558,430 24.53 Conservative 2,872,935 15.17 Growth 5,634,984 16.90 Delaware 1,105,140 17.00 Contrafund 5,258,992 46.19 Equity Income 1,490,387 49.30 Growth & Income 3,973,282 36.13 Magellan 1,195,183 91.13 OTC 1,289,161 34.92 Merrill Lynch 207,725 34.72 Templeton 4,494,797 18.47 Select 767,528 46.81 Ultra 2,276,899 32.79 Preferred (allocated) 4,039,296 59.24
10. RELATED PARTY TRANSACTIONS Certain of the Plan's investments are shares of mutual funds or interests in cash reserve accounts managed by the Trustee or affiliates of the Trustee. Transactions related to such investments qualify as permissible party-in-interest transactions under ERISA. Fees paid to the Trustee and the Recordkeeper by the Plan for investment management and recordkeeping fees totaled $3,063,000 and $4,270,000 for the years ended June 30, 1997 and 1996, respectively. Additional fees totaling approximately $3,000 were paid to the Trustee and Recordkeeper directly by Delta for the plan year ended June 30, 1996. 11. SUBSEQUENT EVENTS As mentioned in Note 1, the Administrative Committee has the power under the Plan to determine the applicable maximum contribution percentage for highly compensated pilot employees under the Plan for each plan year. In accordance with this provision, the Administrative Committee determined that effective for the plan year that commenced July 1, 1997, pilot participants who were highly compensated employees (within the meaning of the Internal Revenue Code) for the previous plan year may contribute to the Plan a maximum contribution percentage of 10% of earnings. - 24 - 25 Effective September 1, 1997, the Plan was amended to provide the following material changes: a. Nonpilot participants who are highly compensated employees (within the meaning of the Internal Revenue Code) for the immediately preceding plan year may contribute to the Plan for a plan year a maximum contribution percentage of 12% of earnings. The plan provisions which permitted a participant to remain at the higher maximum contribution level of 15% if his earnings went from below $55,000 to above $55,000 was eliminated. b. Rollover contributions may be contributed to the Plan by employees who are hired into a job classification that is eligible for the Plan, but who have not yet met the Plan's one-year participation requirement. The rollover contribution must be made to the Plan before the employee's one-year waiting period is over. c. Deferrals or contributions of some or all of the payments from the Delta Air Lines, Inc. Performance Payment Program, Delta Air Lines, Inc. Target Profit Sharing Program, Delta Air Lines, Inc. Leadership Performance Compensation Program, and Delta Air Lines, Inc. Pilots Profit Sharing Program are permitted by the Plan upon the election of those participating in the Plan, provided however, that the Administrative Committee may, in its discretion, determine a maximum amount of contribution of such payments from year to year. Effective January 1, 1998, the Plan will be amended to add, as a core investment option, another investment strategy portfolio, called the Balanced Fund, and to expand the "Window of Choices" option to a total of 146 mutual funds. In addition, the Conservative Growth Balanced Fund will be renamed the Conservative Balanced Fund and its investment mix will be altered, as will the investment mix of the Growth Balanced Fund. 12. RECONCILIATION TO THE FORM 5500 As of June 30, 1997 and 1996, the Plan had approximately $300,000 and $271,000, respectively, of pending distributions to participants who elected to withdraw from the Plan. These amounts are recorded as a liability in the Plan's Form 5500; however, in accordance with generally accepted accounting principles these amounts are not recorded as a liability in the accompanying statements of net assets. - 25 - 26 The following table reconciles net assets available for benefits for the years ended June 30, 1997 and 1996 per the financial statements to the Form 5500 to be filed by the Company (in thousands):
NET ASSETS AVAILABLE -------------------------- DISTRIBUTIONS FOR BENEFITS BENEFITS TO -------------------------- PAYABLE PARTICIPANTS 1997 1996 --------- ------------- ----------- ------------ Per financial statements $ 0 $ 146,368 $ 2,802,123 $ 2,350,608 Accrued benefits payable 300 300 (300) (271) --------- ------------- ------------ ------------- Per Form 5500 $ 300 $ 146,668 $ 2,801,823 $ 2,350,337 ========= ============= ============ =============
- 26 - 27 SCHEDULE I Page 1 of 4 DELTA FAMILY-CARE SAVINGS PLAN ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1997
PRINCIPAL AMOUNT($) OR COST OR NUMBER OF CONTRACT MARKET NAME OF ISSUER SHARES VALUE VALUE ---------------------------------------------------- ----------- ------------ ------------ STOCKS: Delta International Equity Pool: * Fidelity Management & Research Company, Fidelity Overseas Fund 1,027,843 $ 26,335,562 $ 36,797,000 * FMTC Select International Portfolio 1,791,889 65,777,067 105,395,000 Delta U.S. Equity Pool: * Fidelity Management & Research Company, Fidelity Magellan Fund 641,396 39,521,733 58,399,000 * Fidelity Management & Research Company, Fidelity Growth and Income Fund 1,781,372 34,079,562 64,218,000 * Fidelity Management & Research Company, FMTC Select Equity Portfolio 4,843,912 66,980,008 124,198,000 ------------ ------------ Total 232,693,932 389,007,000 ------------ ------------ BONDS: * Fidelity Broad Market Duration Portfolio 7,371,388 88,516,628 107,033,000 ------------ ------------ DELTA STOCK: * Delta Air Lines, Inc. Common Stock 1,433,282 87,106,848 117,529,000 * Fidelity Institutional Cash Portfolio: Money Market 1,275,287 1,275,287 1,275,000 ------------ ------------ Total 88,382,135 118,804,000 ------------ ------------ CONTRACTS: * Fidelity Management Trust Company, Short Term Investment Fund 17,151,366 17,151,366 17,151,000 Guaranteed Contracts: American International GIC: GIC-935, 7.03%, due June 30, 2001 10,714,959 10,714,959 10,878,000 Allstate Life Insurance Company GIC: GA-5753, 7.50%, due December 31, 1998 17,737,404 17,737,404 18,070,000 GA-5953, 6.79%, due March 13, 1998 8,158,495 8,158,495 8,211,000 CDC Capital Inc. BRI: BR-261-01, 6.78%, due September 30, 1997 9,999,969 9,999,969 10,010,000 BR-305-01, 7.01%, due September 25, 1997 15,013,928 15,013,928 15,191,000 CIGNA GIC: GIC-25121, 8.68%, due January 17, 1998 7,787,585 7,787,585 7,899,000 GA-25230, 6.82%, due January 25, 2001 12,325,350 12,325,350 12,387,000 CNA Assurance Company GIC: 12971, 6.93%, due September 30, 1998 17,902,281 17,902,281 18,064,000
- 27 - 28 SCHEDULE I Page 2 of 4
PRINCIPAL AMOUNT($) OR COST OR NUMBER OF CONTRACT MARKET NAME OF ISSUER SHARES VALUE VALUE ---------------------------------------------------- ----------- ------------ ------------ First Allmerica GIC: GA-91288-A02, 9.44%, due August 15, 1997 14,872,545 $14,872,545 $14,933,000 91288C, 7.10%, due March 31, 1999 15,703,882 15,703,882 15,860,000 Jackson National Life ABS: 6.55%, due May 15, 1997 35,398,755 35,398,755 35,739,000 John Hancock GIC: GAC 5642, 9.29%, due July 31, 1997 4,636,298 4,636,298 4,674,000 GAC 5737, 6.89%v, due September 2, 1997 9,023,342 9,023,342 9,197,000 GAC 5833, 6.96%v, due September 2, 1997 5,181,800 5,181,800 5,293,000 GA 7940, 6.21%, due March 31, 2000 11,235,966 11,235,966 11,149,000 Lincoln National GIC: GA09725, 7.38%, due June 30, 1998 7,501,464 7,501,464 7,630,000 Massachusetts Mutual GIC: PGIC 10391, 7.37%v, due July 5, 2002 27,202,279 27,202,279 27,693,000 GAC-10064, 9.70%, due October 1, 1997 18,530,932 18,530,932 18,751,000 MBL Life Assurance GIC: 6-4982-1, 6.35%v, due December 31, 1999 8,768,221 8,768,221 8,768,000 6-4982-2, 6.35%v, due December 31, 1999 2,026,389 2,026,389 2,026,000 6-4982-3, 6.35%v, due December 31, 1999 2,947,545 2,947,545 2,948,000 6-4982-4, 6.35%v, due December 31, 1999 186,114 186,114 186,000 4982-1, 5.10%v, due December 31, 1999 3,977,361 3,977,361 3,977,000 4982-2, 5.10%v, due December 31, 1999 919,284 919,284 919,000 4982-3, 5.10%v, due December 31, 1999 1,337,034 1,337,034 1,337,000 4982-4, 5.10%v, due December 31, 1999 84,335 84,335 84,000 New York Life GIC: GA-30248, 7.17%, due September 30, 1999 17,488,263 17,488,263 17,790,000 GA-30248-002, 6.00%, due June 30, 1998 5,532,553 5,532,553 5,541,000 GA-06494-002, 6.67%, due December 01, 1997 3,017,495 3,017,495 3,038,000 Ohio National Life Insurance Company GIC: GA5774, 6.67%, due December 31, 1999 10,805,647 10,805,647 10,846,000 Pacific Mutual Life Insurance Co. GIC: G-26062.01, 5.16%, due June 30, 1999 11,922,281 11,922,281 11,643,000 Peoples Securities GIC: BDA00368FR-00, 5.24%, due December 31, 1997 11,957,811 11,957,811 11,946,000 BDA00615FR-00, 6.30%, due June 30, 1998 10,762,487 10,762,487 10,803,000 BDA00668FR-00, 6.51%, due May 29, 1998 10,584,953 10,584,953 10,632,000 BDA00283TR, 5.95%, open 69,727,651 69,727,649 70,799,000 Principal Financial Group GIC: 41238801, 6.05%, due September 30, 1998 12,117,406 12,117,406 12,122,000 Protective Life GIC: GA-1386, 7.26%, due March 16, 2001 433 433 0
- 28 - 29 SCHEDULE I Page 3 of 4
PRINCIPAL AMOUNT($) OR COST OR NUMBER OF CONTRACT MARKET NAME OF ISSUER SHARES VALUE VALUE ---------------------------------------------------- ----------- ------------ ------------ Provident Life & Accident GIC: 630-05856, 7.10%, due July 15, 1997 6,243,464 $ 6,243,464 $ 6,292,000 627-05737-01A, 7.04%, due September 30, 1997 12,170,809 12,170,809 12,210,000 Prudential GIC: 007942 211, 6.25%, due March 31, 1998 17,034,909 17,034,909 17,074,000 SafeCo Life Insurance GIC: LP1052744, 6.02%, due June 30, 1998 10,996,297 10,996,297 10,974,000 Security Life of Denver GIC: FA0501, 6.68%, due October 31, 1997 12,318,798 12,318,798 12,341,000 SunLife of Canada GIC: S-0921-G, 7.37%, due December 30, 1999 11,704,841 11,704,841 11,971,000 TransAmerica Occidental GIC: 76597, 6.34%, due July 15, 1997 9,944,611 9,944,611 9,991,000 Union Bank of Switzerland: 2216, 6.26%v, due July 21, 1997 6,294,659 6,294,659 6,279,000 2242, 7.03%v, due September 15, 1997 6,688,248 6,688,248 6,768,000 2149, 6.95%v, due July 15, 1997 10,115,639 10,115,639 10,193,000 2150, 6.76%v, due July 15, 1997 10,269,593 10,269,593 10,358,000 SEPARATE INSURANCE CONTRACTS: Aetna Life Insurance Company SEP: 014464, 7.06%v, due November 16, 1998 8,264,937 8,264,937 8,464,000 New York Life SEP: GA-20019, 6.24%v, open 5,006,323 5,006,323 5,003,000 GA-20040, 5.28%v, open 12,513,777 12,513,777 12,504,000 Provident National SEP: 028-05451, 5.05%v, open 105,678 105,678 102,000 Prudential SEP: 917480-001, 6.09%v, due December 31, 1998 7,170,046 7,170,046 7,195,000 TransAmerica Occidental SEP: 76630, 6.55%v, due November 15, 2000 10,560,767 10,560,767 10,590,000 ------------ ------------ Total Separate Insurance Contracts 43,621,528 43,858,000 ------------ ------------ Total Insurance Contracts Fund 607,645,258 612,494,000 ------------ ------------ * Fidelity Management Trust Company, Fidelity U.S. Equity Index Commingled Fund 12,558,430 205,181,719 307,305,000 Conservative: Delta U.S. Equity Pool: * Fidelity Management & Research Company, Fidelity Magellan Fund 44,543 3,085,120 4,056,000 * Fidelity Management & Research Company, Fidelity Growth and Income Fund 123,711 2,660,297 4,460,000 * Fidelity Management & Research Company, FMTC Select Equity Portfolio 336,395 5,228,550 8,625,000
- 29 - 30 SCHEDULE I Page 4 of 4
PRINCIPAL AMOUNT($) OR COST OR NUMBER OF CONTRACT MARKET NAME OF ISSUER SHARES VALUE VALUE ---------------------------------------------------- ----------- -------------- -------------- * FMTC Broad Market Duration 1,813,274 $ 22,298,349 $ 26,328,000 -------------- -------------- Total Conservative 33,272,316 43,469,000 -------------- -------------- GROWTH: Delta U.S. Equity Pool: * Fidelity Management & Research Company, Fidelity Magellan Fund 152,040 9,478,851 13,843,000 * Fidelity Management & Research Company, Fidelity Growth and Income Fund 422,267 8,173,606 15,223,000 * Fidelity Management & Research Company, FMTC Select Equity Portfolio 1,148,230 16,064,415 29,440,000 * FMTC Broad Market Duration 2,505,906 30,764,592 36,385,000 -------------- -------------- Total Conservative Growth Balanced Fund 64,481,464 94,891,000 -------------- -------------- PREFERRED: * Delta Air Lines, Inc. Common Stock 1,872,092 118,074,564 153,511,000 * Delta Air Lines, Inc. Convertible Pref. Series B 6,668,316 480,116,648 480,119,000 * Fidelity Instrument Cash Portfolio: Money Market 29,259,970 29,259,970 29,260,000 -------------- -------------- Total 627,451,182 662,890,000 -------------- -------------- Twentieth Century Investors, Inc., Twentieth Century Ultra Fund 2,276,899 61,249,451 74,454,000 Twentieth Century Investors, Inc., Twentieth Century Select Fund 767,528 33,322,721 35,852,000 * Fidelity Management & Research Company, Fidelity Magellan Fund 1,195,183 93,367,735 108,822,000 * Fidelity Management & Research Company, Fidelity Contrafund 5,258,992 197,095,514 242,493,000 * Fidelity Management & Research Company, Fidelity Equity-Income Fund 1,490,387 61,325,322 73,312,000 * Fidelity Management & Research Company, Fidelity Growth & Income Fund 3,973,282 114,921,227 143,237,000 * Fidelity Management & Research Company, OTC Portfolio 1,289,161 41,172,437 44,875,000 Delaware Management Company, Delaware Group Trend Fund 1,105,140 17,518,773 18,732,000 Merrill Lynch Asset Management, Merrill Lynch Capital Fund (Class A) 207,725 6,279,354 7,201,000 Templeton Investment Counsel, Templeton Foreign Equity Series 4,494,797 68,522,963 82,794,000 Participant Loans, interest rate between 9.7% and 10.75% 57,209,252 57,209,252 57,209,000 -------------- -------------- Total investments $2,699,609,381 $3,224,874,000 -------------- --------------
*Represents a party in interest. The accompanying notes are an integral part of this schedule. - 30 - 31 SCHEDULE II Page 1 of 2 DELTA FAMILY-CARE SAVINGS PLAN ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (a) FOR THE YEAR ENDED JUNE 30, 1997
EXPENSE DESCRIPTION OF ASSET INCURRED (INCLUDES INTEREST RATE AND PURCHASE SELLING WITH COST OF NET GAIN IDENTITY OF PARTY INVOLVED MATURITY IN CASE OF A LOAN) PRICE PRICE TRANSACTION ASSETS (LOSS) - ------------------------------ --------------------------- ------------ ------------ ----------- ------------ ----------- * FIDELITY MANAGEMENT Inst. Money Market TRUST COMPANY 518 transactions $578,519,604 $ 0 (b) $ 0 $ 0 518 transactions 0 594,387,414 (b) 594,387,414 0 * FIDELITY OTC FUND Mutual Fund 253 transactions 89,906,771 0 (b) 0 0 253 transactions 0 82,030,317 (b) 81,931,465 98,852 * FIDELITY DELTA COMMON Common Stock STOCK FUND 253 transactions 60,516,971 0 (b) 0 0 254 transactions 0 72,305,848 (b) 61,889,125 10,416,723 * FIDELITY COMMINGLED Commingled Stock Fund STOCK FUND 253 transactions 55,626,393 0 (b) 0 0 253 transactions 0 100,196,807 (b) 71,361,282 28,835,525 * FIDELITY EQUITY-INCOME FUND Mutual fund 253 transactions 84,919,224 0 (b) 0 0 252 transactions 0 57,408,989 (b) 54,762,460 2,646,529
- 31 - 32 SCHEDULE II Page 2 of 2
EXPENSE DESCRIPTION OF ASSET INCURRED (INCLUDES INTEREST RATE AND PURCHASE SELLING WITH COST OF NET GAIN IDENTITY OF PARTY INVOLVED MATURITY IN CASE OF A LOAN) PRICE PRICE TRANSACTION ASSETS (LOSS) - ------------------------------- --------------------------- ------------ ------------ ----------- ------------ --------- * FIDELITY CONTRAFUND Mutual fund 253 transactions $ 96,610,198 $ 0 (b) $ 0 $ 0 253 transactions 0 69,282,033 (b) 63,895,850 5,386,183 * FIDELITY GROWTH & INCOME Mutual fund FUND 253 transactions 115,737,241 0 (b) 253 transactions 0 73,930,134 (b) 0 0 71,658,303 2,271,831 * FIDELITY U.S. EQUITY INDEX Index fund POOL 253 transactions 186,895,769 0 (b) 253 transactions 0 140,801,556 (b) 0 0 PEOPLE SECURITY LIFE GIC fund 123,669,734 17,131,822 14 transactions 168,525,075 0 (b) 41 transactions 0 90,423,931 (b) 0 0 90,423,931 0
*Represents party in interest. (a) Represents a series of transactions in securities of the same issue having a cumulative value in excess of 5% of the current value of plan assets at the beginning of the plan year. (b) The normal expenses associated with asset purchases are built into the Trustee's cost records and therefore are not shown separately here. The accompanying notes are an integral part of this schedule. - 32 - 33 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee of Delta Air Lines, Inc. has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. DELTA FAMILY-CARE SAVINGS PLAN /s/ James B. Taylor ----------------------------- By: James B. Taylor Chief Investment Officer Delta Air Lines Benefit Trust Delta Air Lines, Inc. December 19, 1997 - 33 - 34 EXHIBIT INDEX EX-23 Consent of Arthur Andersen LLP. EX-23 2 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23 [LETTEHEAD OF ARTHUR ANDERSEN LLP] CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated October 10, 1997 included in Delta Air Lines, Inc.'s annual report on Form 11-K for the Delta Family-Care Savings Plan for the year ended June 30, 1997 into the Company's previously filed Registration Statement No. 33-30454. ARTHUR ANDERSEN LLP Arthur Andersen LLP Atlanta, Georgia December 19, 1997 -----END PRIVACY-ENHANCED MESSAGE-----