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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 11, 1994
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DELTA AIR LINES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-5424 58-0218548
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320
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(Address of principal executive offices)
Registrant's telephone number, including area code: (404) 715-2600
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Item 5. OTHER EVENTS
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1. Exchange Offers
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On October 17, 1994, the Delta Family-Care Savings Plan (the "Plan") and
Delta Air Lines, Inc. ("Delta") began offers to exchange (the "Exchange Offers")
each series of the Plan's outstanding Series A, B and C Guaranteed Serial ESOP
Notes, which are guaranteed by Delta (the "Existing Notes"), for either (1) an
equal principal amount of a corresponding new series of 1994 Series A, B or C
Guaranteed Serial ESOP Notes to be issued by the Plan and guaranteed by Delta
(the "New Notes"); or (2) cash in an amount to be received in a private
placement by the Plan of an equal principal amount of the corresponding series
of New Notes. It is anticipated that the New Notes, if and when issued, will
have terms substantially similar to the Existing Notes, except that: (1) the
interest rate on each series of New Notes will be higher than the interest rate
on the corresponding series of Existing Notes; (2) Delta will not be required to
purchase the New Notes upon the occurrence of a "Purchase Event"; and (3) the
New Notes will not have the benefit of an "Approved Credit Enhancement"
("Purchase Event" and "Approved Credit Enhancement" are described in Note 5 of
the Notes to Consolidated Financial Statements in Delta's 1994 Annual Report to
Stockholders). The Exchange Offers are subject to certain conditions, are
scheduled to expire on November 17, 1994, and may be amended or extended by the
Plan and Delta at any time and from time to time. No assurance can be given that
the Exchange Offers or the related private placement will be completed.
The New Notes have not been and will not be registered under the Securities
Act of 1933 (the "Securities Act"), and may not be offered or sold in the United
States absent registration or an exemption from the registration requirements of
the Securities Act. This description of the Exchange Offers is made pursuant to
Rule 135c under the Securities Act, and does not constitute an offer to sell the
New Notes or an offer to exchange the Existing Notes for New Notes.
2. Restructuring Charges
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Delta's fiscal 1994 operating expenses included a $112 million restructuring
charge for costs associated with an early retirement program under which
approximately 1,500 employees elected to retire effective November 1, 1993, and
a $414 million restructuring charge related to the Leadership 7.5 program, which
includes costs associated with workforce reductions, reductions in inventory
levels, facility closings and route terminations. Delta may record additional
restructuring charges, or adjustments to the fiscal
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1994 Leadership 7.5 restructuring charge, to reflect the continuing
implementation of Leadership 7.5 initiatives. Delta cannot presently determine
the amount or timing of any such charges or adjustments.
3. Antitrust Matters
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As reported on page 18 of Delta's Annual Report on Form 10-K for the fiscal
year ended June 30, 1994, the Attorneys General of several states have been
investigating whether several major airlines, including Delta, have engaged in
price fixing and other unlawful restraints of trade. On October 11, 1994, Delta
and seven other U.S. airlines agreed to settle, without admitting liability, the
allegations to be asserted against them by state and local government entities
nationwide in a class action lawsuit expected to be filed in November 1994 in
the United States District Court for the District of Columbia. Under the
proposed settlement, which is subject to approval of the District Court, the
eight carriers will pay $1.75 million in cash (of which Delta's share will be
approximately $330,000) and will make available $40 million in air fare
discounts of 10% on future domestic air travel on any of the eight carriers.
Delta expects to record its $330,000 share of the cash settlement as a
nonoperating expense during fiscal 1995, and will account for the air fare
discounts that are applied against tickets purchased for travel on Delta as a
reduction to revenue equal to the value of the 10% travel discount when
transportation is provided. Delta anticipates that its share of such discounts
will approximate its relative domestic market share among the eight carriers,
which was approximately 20% in fiscal 1994, but neither the face amount of the
discounts to be redeemed on Delta nor the generative or dilutive revenue effect
of the travel discounts is known.
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SIGNATURE
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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.
BY: /s/ Julius P. Gwin
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Julius P. Gwin
Vice President-Finance
DATED: October 19, 1994
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