<PAGE> 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, 1998
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
<PAGE> 2
DELTA FAMILY-CARE SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
JUNE 30, 1998 AND 1997
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits, With Fund
Information--June 30, 1998
Statement of Net Assets Available for Benefits, With Fund
Information--June 30, 1997
Statement of Changes in Net Assets Available for Benefits, With Fund
Information, for the Year Ended June 30, 1998
Statement of Changes in Net Assets Available for Benefits, With Fund
Information, for the Year Ended June 30, 1997
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment
Purposes--June 30, 1998
Schedule II: Item 27d--Schedule of Reportable Transactions for the
Year Ended June 30, 1998
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<PAGE> 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, 1998 and 1997 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, 1998 and 1997 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 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 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
December 4, 1998
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<PAGE> 4
DELTA FAMILY-CARE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
JUNE 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL NET
INVESTMENTS RECEIVABLES ASSETS LIABILITIES ASSETS
----------- ----------- ---------- ----------- ----------
(Note 2 and (Note 3) (Note 3)
Schedule I)
<S> <C> <C> <C> <C> <C>
FUND (NOTE 2):
Balanced funds $ 176,756 $ 75 $ 176,831 $ 0 $ 176,831
Growth and income funds 122,971 210 123,181 0 123,181
Growth funds 462,337 761 463,098 0 463,098
Income funds 185,140 193 185,333 0 185,333
Targeted retirement funds 1,415 3 1,418 0 1,418
International balanced fund 11 0 11 0 11
International growth and
income fund 260 0 260 0 260
International growth funds 117,191 240 117,431 0 117,431
International income funds 179 1 180 0 180
Money market funds 2,977 8 2,985 0 2,985
Fidelity Contrafund 296,934 310 297,244 0 297,244
Delta Common Stock Fund 170,974 152 171,126 0 171,126
Fidelity Growth & Income
Portfolio 202,366 325 202,691 0 202,691
Commingled Stock Fund 419,567 457 420,024 0 420,024
Insurance Contracts/Stable
Value Fund 620,129 761 620,890 0 620,890
Fidelity U.S. Equity Index
Pool 355,650 642 356,292 0 356,292
Delta Preferred Stock
Fund--nonparticipant
directed 1,021,399 7,855 1,029,254 413,799 615,455
Participant loans 61,520 0 61,520 0 61,520
---------- ---------- ---------- ---------- ----------
Total $4,217,776 $ 11,993 $4,229,769 $ 413,799 $3,815,970
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 5
DELTA FAMILY-CARE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION,
JUNE 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL NET
INVESTMENTS RECEIVABLES ASSETS LIABILITIES ASSETS
----------- ----------- ---------- ----------- ----------
(Note 2) (Note 3) (Note 3)
<S> <C> <C> <C> <C> <C>
FUND (NOTE 2):
Balanced funds $ 138,360 $ 553 $ 138,913 $ 115 $ 138,798
Growth and income funds 80,513 171 80,684 0 80,684
Growth funds 282,735 571 283,306 0 283,306
Income funds 107,033 488 107,521 106 107,415
International growth funds 82,794 212 83,006 0 83,006
Fidelity Contrafund 242,493 417 242,910 0 242,910
Delta Common Stock Fund 118,804 586 119,390 0 119,390
Fidelity Growth & Income Portfolio 143,237 307 143,544 0 143,544
Commingled Stock Fund 389,007 1,547 390,554 388 390,166
Insurance Contracts/Stable Value Fund 607,645 769 608,414 0 608,414
Fidelity U.S. Equity Index Pool 307,305 698 308,003 0 308,003
Delta Preferred Stock
Fund--nonparticipant directed 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
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
-5-
<PAGE> 6
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, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
INTERNATIONAL
GROWTH GROWTH
AND TARGETED INTERNATIONAL AND
BALANCED INCOME GROWTH INCOME RETIREMENT BALANCED INCOME
FUNDS FUNDS FUNDS FUNDS FUNDS FUND FUND
--------- --------- --------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Participant $ 11,594 $ 9,055 $ 37,325 $ 8,837 $ 62 $ 0 $ 3
Employer 165 426 1,492 372 7 0 0
--------- --------- --------- --------- --------- --------- ---------
11,759 9,481 38,817 9,209 69 0 3
--------- --------- --------- --------- --------- --------- ---------
Investment income:
Net appreciation (depreciation)
in fair value of investments 30,735 14,971 46,339 10,543 98 (2) 20
Interest and dividends 500 6,047 39,413 1,440 25 0 0
Other receipts 0 0 0 0 0 0 0
--------- --------- --------- --------- --------- --------- ---------
31,235 21,018 85,752 11,983 123 (2) 20
--------- --------- --------- --------- --------- --------- ---------
Total additions 42,994 30,499 124,569 21,192 192 (2) 23
--------- --------- --------- --------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Withdrawals (6,589) (5,079) (19,163) (7,927) (8) 0 0
Administrative expenses (112) (30) (47) (92) 0 0 0
Interest expense on ESOP notes 0 0 0 0 0 0 0
--------- --------- --------- --------- --------- --------- ---------
Total deductions (6,701) (5,109) (19,210) (8,019) (8) 0 0
--------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) prior to
interfund transfers 36,293 25,390 105,359 13,173 184 (2) 23
Interfund transfers 1,740 17,107 74,433 64,745 1,234 13 237
--------- --------- --------- --------- --------- --------- ---------
NET INCREASE 38,033 42,497 179,792 77,918 1,418 11 260
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year, July 1, 1997 138,798 80,684 283,306 107,415 0 0 0
--------- --------- --------- --------- --------- --------- ---------
End of year, June 30, 1998 $ 176,831 $ 123,181 $ 463,098 $ 185,333 $ 1,418 $ 11 $ 260
========= ========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
-6-
<PAGE> 7
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, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
DELTA FIDELITY
INTERNATIONAL INTERNATIONAL MONEY COMMON GROWTH & COMMINGLED
GROWTH INCOME MARKET FIDELITY STOCK INCOME STOCK
FUNDS FUNDS FUNDS CONTRAFUND FUND PORTFOLIO FUND
------------- ------------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Participant $ 9,652 $ 5 $ 65 $ 25,066 $ 9,503 $ 16,420 $ 24,239
Employer 489 1 10 617 319 691 969
--------- --------- --------- --------- --------- --------- ---------
10,141 6 75 25,683 9,822 17,111 25,208
--------- --------- --------- --------- --------- --------- ---------
Investment income:
Net appreciation (depreciation)
in fair value of investments 9,409 (7) 0 46,415 65,735 36,652 78,126
Interest and dividends 3,886 6 38 23,759 352 8,057 731
Other receipts 0 0 0 0 0 0 0
--------- --------- --------- --------- --------- --------- ---------
13,295 (1) 38 70,174 66,087 44,709 78,857
--------- --------- --------- --------- --------- --------- ---------
Total additions 23,436 5 113 95,857 75,909 61,820 104,065
--------- --------- --------- --------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Withdrawals (4,567) 0 (371) (11,781) (8,511) (8,899) (20,658)
Administrative expenses (28) 0 0 (32) (1) (44) (68)
Interest expense on ESOP notes 0 0 0 0 0 0 0
--------- --------- --------- --------- --------- --------- ---------
Total deductions (4,595) 0 (371) (11,813) (8,512) (8,943) (20,726)
--------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) prior
to interfund transfers 18,841 5 (258) 84,044 67,397 52,877 83,339
Interfund transfers 15,584 175 3,243 (29,710) (15,661) 6,270 (53,481)
--------- --------- --------- --------- --------- --------- ---------
NET INCREASE 34,425 180 2,985 54,334 51,736 59,147 29,858
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year, July 1, 1997 83,006 0 0 242,910 119,390 143,544 390,166
--------- --------- --------- --------- --------- --------- ---------
End of year, June 30, 1998 $ 117,431 $ 180 $ 2,985 $ 297,244 $ 171,126 $ 202,691 $ 420,024
========= ========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
-7-
<PAGE> 8
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, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
INSURANCE FIDELITY DELTA
CONTRACTS/ U.S. PREFERRED
STABLE EQUITY STOCK FUND--
VALUE INDEX NONPARTICPANT PARTICIPANT
FUND POOL DIRECTED LOANS TOTAL
----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Participant $ 29,381 $ 25,086 $ 0 $ 0 $ 206,293
Employer 1,729 1,255 37,301 0 45,843
----------- ----------- ----------- ----------- -----------
31,110 26,341 37,301 0 252,136
----------- ----------- ----------- ----------- -----------
Investment income:
Net appreciation (depreciation) in fair
value of investments 0 84,837 349,576 0 773,447
Interest and dividends 39,768 670 29,412 0 154,104
Other receipts 0 0 105 0 105
----------- ----------- ----------- ----------- -----------
39,768 85,507 379,093 0 927,656
----------- ----------- ----------- ----------- -----------
Total additions 70,878 111,848 416,394 0 1,179,792
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Withdrawals (54,032) (15,921) (10,085) 38,813 (134,778)
Administrative expenses (443) (138) (40) 0 (1,075)
Interest expense on ESOP notes 0 0 (30,092) 0 (30,092)
----------- ----------- ----------- ----------- -----------
Total deductions (54,475) (16,059) (40,217) 38,813 (165,945)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) prior to interfund
transfers 16,403 95,789 376,177 38,813 1,013,847
Interfund transfers (3,927) (47,500) 0 (34,502) 0
----------- ----------- ----------- ----------- -----------
NET INCREASE 12,476 48,289 376,177 4,311 1,013,847
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year, July 1, 1997 608,414 308,003 239,278 57,209 2,802,123
----------- ----------- ----------- ----------- -----------
End of year, June 30, 1998 $ 620,890 $ 356,292 $ 615,455 $ 61,520 $ 3,815,970
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
-8-
<PAGE> 9
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)
<TABLE>
<CAPTION>
GROWTH
AND
BALANCED INCOME GROWTH INCOME
FUNDS FUNDS FUNDS FUNDS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Participant $ 10,866 $ 5,586 $ 27,811 $ 8,247
Employer 101 341 1,071 338
--------- --------- --------- ---------
10,967 5,927 28,882 8,585
--------- --------- --------- ---------
Investment income:
Net appreciation (depreciation) in fair
value of investments 23,471 12,228 33,152 8,747
Interest and dividends 307 4,756 15,663 280
--------- --------- --------- ---------
23,778 16,984 48,815 9,027
Less investment expenses (442) 0 0 (433)
--------- --------- --------- ---------
23,336 16,984 48,815 8,594
--------- --------- --------- ---------
Total additions 34,303 22,911 77,697 17,179
--------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Withdrawals (6,684) (4,094) (13,949) (9,052)
Administrative expenses (76) (12) (26) (65)
Interest expense on ESOP notes 0 0 0 0
--------- --------- --------- ---------
Total deductions (6,760) (4,106) (13,975) (9,117)
--------- --------- --------- ---------
Net increase (decrease) prior to interfund
transfers 27,543 18,805 63,722 8,062
Interfund transfers (14,880) 22,231 (12,982) (11,802)
--------- --------- --------- ---------
NET INCREASE (DECREASE) 12,663 41,036 50,740 (3,740)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year, July 1, 1996 126,135 39,648 232,566 111,155
--------- --------- --------- ---------
End of year, June 30, 1997 $ 138,798 $ 80,684 $ 283,306 $ 107,415
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 10
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)
<TABLE>
<CAPTION>
DELTA GROWTH
INTERNATIONAL COMMON AND COMMINGLED
GROWTH FIDELITY STOCK INCOME STOCK
FUNDS CONTRAFUND FUND PORTFOLIO FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Participant $ 6,292 $ 22,903 $ 9,466 $ 10,504 $ 25,364
Employer 398 802 407 618 1,249
--------- --------- --------- --------- ---------
6,690 23,705 9,873 11,122 26,613
--------- --------- --------- --------- ---------
Investment income:
Net appreciation
(depreciation) in fair
value of investments 11,594 33,243 906 22,101 82,391
Interest and dividends 2,316 13,199 359 4,946 787
--------- --------- --------- --------- ---------
13,910 46,442 1,265 27,047 83,178
Less investment expenses 0 0 0 0 (1,514)
--------- --------- --------- --------- ---------
13,910 46,442 1,265 27,047 81,664
--------- --------- --------- --------- ---------
Total additions 20,600 70,147 11,138 38,169 108,277
--------- --------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Withdrawals (3,348) (10,663) (8,496) (6,484) (25,819)
Administrative expenses (2) (23) (1) (18) (49)
Interest expense on ESOP notes 0 0 0 0 0
--------- --------- --------- --------- ---------
Total deductions (3,350) (10,686) (8,497) (6,502) (25,868)
--------- --------- --------- --------- ---------
Net increase (decrease) prior to
interfund transfers 17,250 59,461 2,641 31,667 82,409
Interfund transfers 17,913 1,020 (13,608) 32,231 (46,725)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) 35,163 60,481 (10,967) 63,898 35,684
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year, July 1, 1996 47,843 182,429 130,357 79,646 354,482
--------- --------- --------- --------- ---------
End of year, June 30, 1997 $ 83,006 $ 242,910 $ 119,390 $ 143,544 $ 390,166
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 11
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)
<TABLE>
<CAPTION>
INSURANCE FIDELITY DELTA
CONTRACTS/ U.S. PREFERRED
STABLE EQUITY STOCK FUND--
VALUE INDEX NONPARTICIPANT PARTICIPANT
FUND POOL DIRECTED LOANS TOTAL
----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Participant $ 29,410 $ 19,917 $ 0 $ 0 $ 176,366
Employer 1,984 1,334 31,888 0 40,531
----------- ----------- ----------- ----------- -----------
31,394 21,251 31,888 0 216,897
----------- ----------- ----------- ----------- -----------
Investment income:
Net appreciation (depreciation)
in fair value of investments 0 67,538 (1,695) 0 293,676
Interest and dividends 41,939 578 36,508 0 121,638
----------- ----------- ----------- ----------- -----------
41,939 68,116 34,813 0 415,314
Less investment expenses 0 0 (8) 0 (2,397)
----------- ----------- ----------- ----------- -----------
41,939 68,116 34,805 0 412,917
----------- ----------- ----------- ----------- -----------
Total additions 73,333 89,367 66,693 0 629,814
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Withdrawals (70,863) (15,360) (8,206) 36,650 (146,368)
Administrative expenses (320) (74) 0 0 (666)
Interest expense on ESOP notes 0 0 (31,265) 0 (31,265)
----------- ----------- ----------- ----------- -----------
Total deductions (71,183) (15,434) (39,471) 36,650 (178,299)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 2,150 73,933 27,222 36,650 451,515
Interfund transfers 17,304 39,613 (13) (30,302) 0
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 19,454 113,546 27,209 6,348 451,515
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year, July 1, 1996 588,960 194,457 212,069 50,861 2,350,608
----------- ----------- ----------- ----------- -----------
End of year, June 30, 1997 $ 608,414 $ 308,003 $ 239,278 $ 57,209 $ 2,802,123
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
-11-
<PAGE> 12
DELTA FAMILY-CARE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
JUNE 30, 1998 AND 1997
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, 1998. 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 ("ERISA"), as amended.
Participants should refer to the plan document for a complete
description of the Plan's provisions. 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 full-time regular, associate, and pilot 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 Delta's 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/her account (except the Preferred Stock Fund, which consists of
both Delta Series B ESOP convertible preferred stock ("Preferred
Stock") and Delta common stock ("Common Stock")) and is intended to
qualify as a plan described in Section 404(c) of ERISA and Federal Reg.
2550.404(c)-1. The BFIC has appointed outside investment managers and a
trustee to manage the 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,
-12-
<PAGE> 13
and, under the direction of the Administrative Committee, distributions
from participants' accounts.
CONTRIBUTIONS
For the plan year ended June 30, 1997, eligible nonpilot personnel who
were 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 were able
to 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 were able to
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/her earnings were less than
$55,000, he/she remained eligible to make a maximum contribution of 15%
of earnings.
Effective July 1, 1997, the gross earnings threshold for nonpilot
personnel used in determining eligibility to defer in excess of 10% was
increased by the Administrative Committee to $80,000.
Effective September 1, 1997, the Plan was amended to provide that the
maximum contribution percentage for a nonpilot individual would depend
on whether he/she met the definition of "highly compensated employee"
within the meaning of the Internal Revenue Code (the "Code") based on
his/her gross compensation during the previous plan year (as of June
30, 1998, the amount is $80,000). The plan provision which permitted a
plan participant to remain at the higher maximum contribution
percentage if his earnings went from below $55,000 to above $55,000 was
eliminated. Additionally, effective September 1, 1997, the deferral
percentage for eligible nonpilot personnel who are highly compensated
employees was increased to 12%. The maximum deferral percentage for
those who are not highly compensated employees remained at 15% and for
Puerto Rico employees remained at 10%.
Eligible nonhighly compensated pilot personnel are allowed to
contribute up to 10% of their gross earnings to the Plan. Highly
compensated pilots are also allowed to contribute up to 10% of their
gross earnings to the Plan; 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 Code. The Administrative Committee is
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.
Also, effective September 1, 1997, 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, at its discretion,
determine a maximum amount of contribution of such payments from year
to year. These contributions are not eligible for employer matching
contributions.
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<PAGE> 14
Employee contributions may be made, at the option of the employee, as
pre-tax contributions or after-tax contributions or as a combination of
both pre-tax 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 pre-tax, 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 matching contributions to a participant's account (the
"Annual Cap") is invested in Delta Preferred Stock and Delta Common
Stock (Note 6). 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/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 Code, as amended.
Effective June 30, 1998, the Plan was amended to provide for a
supplemental matching contribution for pilots who (a) contribute the
maximum amount possible to the Plan in the prior calendar year
(currently $10,000) and (b) do not receive for the plan year a matching
contribution equal to 2% of the lesser of the pilot's earnings or the
compensation limit under Section 401(a)(17) of the Code (currently
$160,000) (the "Compensation Limit"). The supplemental contribution
will be made to the Plan for the plan year as soon as practicable but
no later than September 30 following the end of the plan year. The
amount of the contribution for each eligible pilot will be the
difference between 2% of the lesser of his/her actual earnings or the
Compensation Limit and the amount he/she actually received in matching
contributions for the plan year.
Effective September 1, 1997, 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.
See Note 10 for discussion of the plan amendments effective after June
30, 1998.
VESTING
Participants are immediately vested in all contributions to their
accounts plus actual earnings thereon.
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
-14-
<PAGE> 15
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; 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.
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 pre-tax contributions.
Certain 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
1998 plan years.
Effective September 1, 1997, (a) the waiting period between plan loans
was reduced to 30 days from 90 days and (b) those participants who have
a plan loan in effect at the time they commence qualified military
service (within the meaning of the Uniformed Services Employment and
Reemployment Rights Act) may suspend loan repayments for the duration
of the qualified military service.
-15-
<PAGE> 16
2. INVESTMENT OPTIONS
Effective January 2, 1998, the investment options available to
participants were expanded to consist of eight core funds and 146
mutual funds. All available investment options are participant-directed
except the Preferred Stock Fund, which consists of employer
contributions (both Delta Preferred Stock and Delta Common Stock) only.
Prior to January 2, 1998, the investment options available to
participants were comprised of seven core options and ten mutual funds.
The investment options are shown in the accompanying financial
statements combined by similar investment objectives. Investments
representing in excess of 5% of plan assets are shown separately. The
investment objectives and the related funds for the plan years ended
June 30, 1998 and 1997, are as follows (funds available during the plan
year ended June 30, 1997, are indicated by an asterisk):
- Balanced Funds (10 Funds)--strive to blend long-term growth
from stocks with income from dividends and interest through
a generally stable mix of bonds, preferred stock and common
stock:
<TABLE>
<S> <C>
-- Delta Air Lines, Inc. Balanced -- Fidelity Puritan Fund
Fund -- Founders Balanced Fund
-- Delta Air Lines, Inc. Conservative -- INVESCO Total Return Fund
Balanced Fund* -- Janus Balanced Fund
-- Delta Air Lines, Inc. Growth -- MAS Balanced Portfolio (Institutional Class)
Balanced Fund* -- USAA Cornerstone Strategy Fund
-- Fidelity Balanced Fund
</TABLE>
- Growth and Income Funds (20 Funds)--strive to combine stock
price gains with income generated primarily from dividends
and interest:
<TABLE>
<S> <C>
-- Calvert Social Investment -- Founders Blue Chip Fund
Fund--Managed Growth Portfolio -- INVESCO Industrial Income Fund
-- Fidelity Asset Manager -- INVESCO Value Equity Fund
-- Fidelity Asset Manager: Income -- MAS Value Portfolio
-- Fidelity Convertible Securities -- Merrill Lynch Capital Fund, Inc.
Fund (Class A)*
-- Fidelity Equity-Income Fund* -- Neuberger & Berman Guardian
-- Fidelity Equity-Income II Fund Trust
-- Fidelity Freedom Income Fund -- Spartan U.S. Equity Index Fund
-- Fidelity Fund -- Strong Total Return Fund
-- Fidelity Real Estate Investment -- USAA Income Stock Fund
Portfolio -- Warburg Pincus Growth &
-- Fidelity Utilities Fund Income Fund
</TABLE>
-16-
<PAGE> 17
- Growth Funds (52 Funds)--strive for a long-term increase in
share price and capital appreciation by normally investing
in companies whose long-term earnings are expected to grow
significantly faster than the earnings of the stocks
represented in major stock indices:
<TABLE>
<S> <C>
-- American Century Mutual Funds, -- Founders Special Fund
Inc.--Twentieth Century Select -- INVESCO Dynamics Fund
Fund* -- INVESCO Growth Fund
-- American Century Mutual Funds, -- INVESCO Small Company
Inc.--Twentieth Century Ultra Growth Fund
Fund* -- Janus Enterprise Fund
-- Calvert Capital Accumulation -- Janus Fund
Fund (Class A) -- Janus Mercury Fund
-- Calvert New Vision Small Cap -- Janus Twenty Fund
Fund -- MAS Mid Cap Growth Portfolio
-- Delaware Trend Fund -- Morgan Stanley Institutional
(Institutional Class)* Fund, Inc.--Emerging Growth
-- Fidelity Asset Manager: Growth Portfolio (Class B)
-- Fidelity Blue Chip Growth Fund -- Neuberger & Berman Focus Trust
-- Fidelity Capital Appreciation -- Neuberger & Berman Genesis
Fund Trust
-- Fidelity Disciplined Equity Fund -- Neuberger & Berman Manhattan
-- Fidelity Dividend Growth Fund Trust
-- Fidelity Emerging Growth Fund -- Neuberger & Berman Partners
-- Fidelity Export and Multinational Trust
Fund -- PBHG Emerging Growth Fund
-- Fidelity Fifty -- PBHG Growth Fund
-- Fidelity Growth Company Fund -- PIMCO Capital Appreciation Fund
-- Fidelity Large Cap Stock Fund (Administrative Class)
-- Fidelity Low-Priced Stock Fund -- PIMCO Mid Cap Growth Fund
-- Fidelity Magellan Fund* (Administrative Class)
-- Fidelity Mid-Cap Stock Fund -- Spartan Market Index Fund
-- Fidelity OTC Portfolio* -- Strong Discovery Fund
-- Fidelity Retirement Growth Fund -- Strong Growth Fund
-- Fidelity Small Cap Stock Fund -- Strong Opportunity Fund
-- Fidelity Stock Selector -- USAA Growth Fund
-- Fidelity TechnoQuant Growth -- Warburg Pincus Capital
Fund Appreciation Fund
-- Fidelity Trend Fund -- Warburg Pincus Emerging
-- Fidelity Value Fund Growth Fund
-- Founders Frontier Fund
-- Founders Growth Fund
</TABLE>
-17-
<PAGE> 18
- Income Funds (24 Funds)--strive to achieve a high level of
income, with a generally lower level of risk, by investing
in a combination of corporate and government bonds:
<TABLE>
<S> <C>
-- Delta Air Lines, Inc. Commingled -- MAS Fixed Income Portfolio
Bond Fund* -- MAS High Yield Portfolio
-- Fidelity Capital and Income Fund -- PIMCO High Yield Fund (Administrative
-- Fidelity Ginnie Mae Fund Class)
-- Fidelity Government Securities -- PIMCO Low Duration Fund
Fund (Administrative Class)
-- Fidelity Institutional -- PIMCO Total Return Fund
Short-Intermediate Government (Administrative Class)
Fund -- Strong Advantage Fund
-- Fidelity Intermediate Bond Fund -- Strong Government Securities
-- Fidelity Investment Grade Bond Fund
Fund -- Strong Short-Term Bond Fund
-- Fidelity Short-Term Bond Fund -- Templeton Global Bond Fund I
-- Fidelity U.S. Bond Index Fund -- Warburg Pincus Global Fixed
-- INVESCO High Yield Fund Income Fund
-- INVESCO Select Income Fund -- USAA GNMA Trust
-- Janus Flexible Income Fund -- USAA Income Fund
</TABLE>
- Targeted Retirement Funds (4 Funds)--designed for investors
who want a simple approach to investing for retirement. The
funds will gradually adopt a more conservative asset
allocation over time as the target date approaches:
-- Fidelity Freedom 2000 Fund
-- Fidelity Freedom 2010 Fund
-- Fidelity Freedom 2020 Fund
-- Fidelity Freedom 2030 Fund
- International Balanced Fund (1 fund)--strives to blend
long-term growth from stocks with income from dividends and
interest through a generally stable mix of bonds, preferred
stock, and common stock whose primary trading markets are
outside the United States:
-- Fidelity Global Balanced Fund
- International Growth and Income Fund (1 Fund)--strives to
combine stock price gains with income generated primarily
from dividends and interest by investing in securities
issued by businesses and governments whose primary trading
markets are outside the United States:
-- Fidelity International Growth and Income Fund
-18-
<PAGE> 19
- International Growth Funds (31 Funds)--strive for a
long-term increase in share price and capital appreciation
by normally investing in companies whose primary trading
markets are outside the United States and whose long-term
earnings are expected to grow significantly faster than the
earnings of the stocks represented in major stock indices:
<TABLE>
<S> <C>
-- Calvert World Values Fund, -- Fidelity Worldwide Fund
Inc.--International Equity Fund -- Founders Worldwide Growth
-- Fidelity Canada Fund Fund
-- Fidelity Diversified International -- Janus Worldwide Fund
Fund -- Morgan Stanley Institutional
-- Fidelity Emerging Markets Fund Fund, Inc.--Active Country Allocation
-- Fidelity Europe Capital Portfolio (Class B)
Appreciation Fund -- Morgan Stanley Institutional
-- Fidelity Europe Fund Fund, Inc.--Emerging Markets
-- Fidelity France Fund Portfolio (Class B)
-- Fidelity Germany Fund -- Morgan Stanley Institutional
-- Fidelity Hong Kong & China Fund, Inc.--Global Equity
Fund Portfolio (Class B)
-- Fidelity International Value Fund -- Templeton Developing Markets
-- Fidelity Japan Fund Trust I
-- Fidelity Japan Small Companies -- Templeton Foreign Fund I
Fund -- Templeton Growth Fund, Inc. I
-- Fidelity Latin America Fund -- Templeton Institutional Funds,
-- Fidelity Nordic Fund Inc.--Foreign Equity Series*
-- Fidelity Overseas Fund -- Templeton World Fund I
-- Fidelity Pacific Basin Fund -- USAA International Fund
-- Fidelity Southeast Asia Fund -- Warburg Pincus International
-- Fidelity United Kingdom Fund Equity Fund
</TABLE>
- International Income Funds (3 Funds)--strive to achieve a
high level of income by investing in a combination of bonds
of corporations and governments whose primary trading
markets are outside the United States:
-- Fidelity International Bond Fund
-- Fidelity New Markets Income Fund
-- PIMCO Global Bond Fund (Administrative Class)
- Money Markets (2 Funds)--strive to achieve stable monthly
income while preserving investment principal:
-- Fidelity Retirement Government Money Market Portfolio
-- Fidelity Retirement Money Market Portfolio
- Fidelity Contrafund*--invested primarily in undervalued
common stocks and securities convertible into common stocks
and other securities for capital appreciation.
- Delta Common Stock Fund*--invested primarily in Delta Air
Lines, Inc. Common Stock.
-19-
<PAGE> 20
- Fidelity Growth & Income Portfolio*--invested primarily in
U.S. equity securities of companies that offer potential
for earnings growth while paying current dividends.
- Commingled Stock Fund*--invested in investment strategy
portfolios which primarily hold U.S. and foreign stocks.
- Insurance Contracts/Stable Value Fund*--invested primarily
in a portfolio of investment contracts issued by major
insurance companies.
- Fidelity U.S. Equity Index Commingled Pool*--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 Preferred Stock Fund*--invested primarily in Delta
Air Lines, Inc. Preferred and Common Stock (Note 6).
During the plan year ended June 30, 1997, all plan participants could
allocate their contributions and existing fund balances in 1% multiples
among the investment options available to them. Effective January 2,
1998, accounts are limited to 30 investment options at any time, and
future payroll deductions are required to be allocated in 5% increments
(to no more than 20 investment options at a time). Participants are not
permitted to allocate more than 50% of their contributions to the Delta
Common 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.
Certain amounts have been reclassified to conform with the current year
presentation.
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 is stated at
market value, which is determined based on the greater of (a) the
market price of the Delta Common Stock into which each preferred share
is convertible or (b) $72 per share. The Plan's investment contracts
are fully benefit responsive and therefore are presented at cost plus
accrued income (contract value). The fair value of the investment
contracts included in the Insurance Contracts/Stable Value Fund at June
30, 1998 and 1997 was $623,706,000 and $612,494,000, respectively. The
average yields for the Insurance Contracts/Stable Value Fund for the
years ending June 30, 1998
-20-
<PAGE> 21
and 1997 were 6.74% and 6.88%, respectively. The weighted average
crediting rates for the investment contracts for June 30, 1998 and 1997
were 6.49% and 6.02%, respectively.
Certain guaranteed insurance contracts ("GICs") included in the
Insurance Contracts/Stable Value Fund are synthetic; that is, the Plan
owns certain fixed income securities, and the contract issuer provides
a "wrapper" that guarantees a fixed rate of return and provides benefit
responsiveness. At June 30, 1998, the fair value of the underlying
assets of the synthetic GICs and the value of the related wrapper
contracts were $301,908,000 and $(6,118,000), respectively.
The fair market values of individual investments that represent 5% or
more of the Plan's total net assets at June 30, 1998 and 1997 and the
applicable number of shares are separately identified as follows
(dollars in thousands):
<TABLE>
<CAPTION>
MARKET OR
NUMBER OF CONTRACT
SHARES VALUE
------------ -----------
<S> <C> <C>
1998:
Fidelity Magellan Fund 2,266,261 $248,212
Fidelity Contrafund 5,437,350 296,934
Fidelity Growth & Income Portfolio 6,741,194 296,680
Fidelity U.S. Equity Index Commingled Pool 11,162,904 355,650
Delta Common Stock 6,643,290 429,323
Delta Preferred Stock 6,603,865 732,237
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 Portfolio 6,300,632 227,138
Fidelity Select Equity Portfolio 6,328,537 162,263
Fidelity U.S. Equity Index Commingled Pool 12,558,430 307,305
Delta Common Stock 6,610,748 271,040
Delta Preferred Stock 6,668,316 480,119
</TABLE>
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.
-21-
<PAGE> 22
RECEIVABLES AND LIABILITIES
The receivables shown in the aggregate in the accompanying statements
of net assets available for benefits as of June 30, 1998 and 1997
include the following (in thousands):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Employer contributions $ 11,920 $ 10,940
Participant contributions 0 2,194
Interest and dividends 73 78
-------- --------
Total $ 11,993 $ 13,212
======== ========
</TABLE>
The liabilities shown in the aggregate in the accompanying statements
of net assets available for benefits as of June 30, 1998 and 1997
include the following (in thousands):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
ESOP notes:
Principal $378,408 $394,553
Interest 30,092 31,265
Due to broker for purchases of securities 5,265 4,687
Management fees payable 0 609
Other payables 34 0
-------- --------
Total $413,799 $431,114
======== ========
</TABLE>
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.
4. 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 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,
1998 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.
-22-
<PAGE> 23
5. 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
Insurance Contracts/Stable Value 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 Insurance Contracts/Stable Value 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.
6. EMPLOYEE STOCK OWNERSHIP PLAN
In connection with the establishment of the Employee Stock Ownership
Plan ("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 7).
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, and 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
1.7155 shares of Common Stock, 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 two votes 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 Delta Preferred Stock Fund
("Allocated Shares") and the Common Stock attributable to a
participant's account in the Delta Common 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 at 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.
-23-
<PAGE> 24
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 can 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, 1998, 2,435,030 shares of Preferred Stock with a market
value, as defined, of approximately $269,996,160 had been allocated to
participants' accounts, and 4,168,835 shares of Preferred Stock with a
market value, as defined, of approximately $462,240,425 were held in
the Unallocated Account. During the plan year ended June 30, 1998,
64,351 shares of Preferred Stock were redeemed in connection with the
payment of participant benefits.
7. 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
-24-
<PAGE> 25
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, 1998, the Plan's long-term debt, including current
maturities of $18,283,000, consisted of $378,408,000 aggregate
principal amount of Series C ESOP Notes and New Notes 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 1998 Annual Report to Shareowners, Delta may be required to
purchase the Series C ESOP Notes at the option of the holders in
certain circumstances.
At June 30, 1998, 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):
<TABLE>
<S> <C>
Years ending June 30:
1999 $ 18,283
2000 20,635
2001 23,223
2002 26,072
2003 29,207
After 2003 260,988
--------
Total $378,408
========
</TABLE>
8. PARTICIPANT UNITS
At June 30, 1998 and 1997, the number of participant units and unit
value by fund (based on net asset value), excluding mutual funds, were
as follows:
<TABLE>
<CAPTION>
UNIT
UNITS VALUE
----------- -------
<S> <C> <C>
1998:
Insurance Contracts/Stable Value Fund 620,128,653 $ 1.00
Commingled Bond Fund 8,196,793 13.48
Conservative Balanced Fund 2,871,459 17.51
Balanced Fund 66,347 11.05
Growth Balanced Fund 5,511,852 20.94
Commingled Stock Fund 18,108,217 23.17
Delta Common Stock Fund 6,370,115 26.84
Delta Preferred Stock Fund (allocated) 2,435,030 110.88
</TABLE>
-25-
<PAGE> 26
<TABLE>
<CAPTION>
UNIT
UNITS VALUE
----------- -------
<S> <C> <C>
1997:
Insurance Contracts/Stable Value Fund 608,414,258 $ 1.00
Commingled Bond Fund 8,797,784 12.21
Conservative Balance Fund 2,872,935 15.17
Growth Balance Fund 5,634,984 16.90
Commingled Stock Fund 20,486,153 19.05
Delta Common Stock Fund 6,963,220 17.15
Delta Preferred Stock Fund (allocated) 2,167,204 72.00
</TABLE>
9. 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 totaled $1,075,000 and $3,063,000 for the years ended
June 30, 1998 and 1997, respectively.
10. SUBSEQUENT EVENTS
Effective July 1, 1998, the Plan was amended to provide that the
maximum deferral percentage under the Plan for U.S.-based nonpilot
participants who are not highly compensated employees within the
meaning of the Internal Revenue Code will be 23% of earnings (as
defined in the Plan). The Plan also provided that the maximum deferral
percentage for those participants who are highly compensated employees
shall remain at 12% or such other amount determined by the
Administrative Committee.
On October 22, 1998, Delta's shareowners approved an amendment to the
Company's Certificate of Incorporation to effect a two-for-one stock
split of the issued Common Stock. This amendment became effective on
November 2, 1998. As a result of the stock split, each outstanding
share of the Company's Series B ESOP Convertible Preferred Stock was
adjusted changing (1) the conversion price from $83.94 to $41.97; (2)
the conversion rate from 0.8578 to 1.7155; and (3) the voting rights
from one vote per share to two votes per share. All amounts have been
restated to reflect the stock split.
Effective January 1, 1999, the Delta Technology Savings Plan, a defined
contribution plan of a wholly-owned subsidiary of the Company, will be
merged into the Plan. The Company has not finalized any changes in
either plan that may occur as part of this plan merger.
-26-
<PAGE> 27
11. RECONCILIATION TO THE FORM 5500
As of June 30, 1998 and 1997, the Plan had approximately $0 and
$300,000, 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 available
for benefits.
The following table reconciles net assets available for benefits for
the years ended June 30, 1998 and 1997 per the financial statements to
the Form 5500 to be filed by the Company (in thousands):
<TABLE>
<CAPTION>
NET ASSETS AVAILABLE
DISTRIBUTIONS FOR BENEFITS
BENEFITS TO ----------------------------
PAYABLE PARTICIPANTS 1998 1997
-------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Per financial statements $ 0 $134,778 $3,815,970 $2,802,123
Accrued benefits payable 0 0 0 (300)
----- -------- ---------- ----------
Per Form 5500 $ 0 $134,778 $3,815,970 $2,801,823
===== ======== ========== ==========
</TABLE>
-27-
<PAGE> 28
SCHEDULE I
Page 1 of 8
DELTA FAMILY-CARE SAVINGS PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
COMMINGLED STOCK FUND:
* Fidelity Management Trust Company Cash Account $ 423,338 $ 423,338
Delta International Equity Pool:
* Fidelity Management & Research Company, Fidelity
Overseas Fund 983,919 25,745,708 37,093,742
* FMTC Select International Portfolio 1,755,598 65,841,658 113,429,177
Delta U.S. Equity Pool:
* Fidelity Management & Research Company, Fidelity
Magellan Fund 638,100 38,743,260 69,716,339
* Fidelity Management & Research Company, Fidelity
Growth and Income Fund 1,554,366 29,358,917 68,407,668
* Fidelity Management & Research Company, FMTC Select
Equity Portfolio 3,874,618 58,409,603 130,497,120
------------ ------------
Total 218,522,484 419,567,384
------------ ------------
COMMINGLED BOND FUND:
* Fidelity Management Trust Company Cash Account 208,955 208,955
* Fidelity Broad Market Duration Portfolio 6,845,675 84,200,726 110,283,818
------------ ------------
Total 84,409,681 110,492,773
------------ ------------
DELTA COMMON STOCK FUND:
* Delta Air Lines, Inc. Common Stock 2,616,678 97,885,037 169,102,816
* Fidelity Institutional Cash Portfolio: Money Market 1,611,592 1,611,592 1,611,592
* Fidelity Management Trust Company Cash Account 259,472 259,472
------------ ------------
Total 99,756,101 170,973,880
------------ ------------
INSURANCE CONTRACT/STABLE VALUE FUND:
* Fidelity Management Trust Company, Short Term Investment
Fund 57,007,250 57,007,250
Guaranteed Investment Contracts:
American International:
GIC-935, 7.03%, due July 2, 2001 11,468,221 11,468,221 11,526,469
Allstate Life Insurance Company:
GA-5753, 7.50%, due August 2, 1999 9,533,855 9,533,855 9,365,199
GA-5953, 6.79%, due March 14, 2001 8,159,964 8,159,964 8,322,828
CDC Capital Inc.:
BR-261-01, 6.78%, due July 2, 2001 10,000,000 10,000,000 10,208,057
CIGNA:
GA-25230, 6.82%, due January 25, 2001 13,165,939 13,165,939 12,984,038
CNA Assurance Company:
12971, 6.93%, due February 1, 1999 9,571,454 9,571,454 9,406,788
First Allmerica:
91288C, 7.10%, due March 31, 1999 16,818,858 16,818,858 16,354,579
Jackson National Life:
G-1151-1, 5.89%, due November 25, 2000 10,055,030 10,055,030 10,118,827
John Hancock:
GAC 5737, 6.89%v, due June 1, 2000 9,042,926 9,042,926 9,170,738
GAC 5833, 6.96%v, due June 1, 2000 5,179,991 5,179,991 5,260,157
GA 7940, 6.21%, due March 31, 2000 11,933,719 11,933,719 11,425,417
</TABLE>
-28-
<PAGE> 29
SCHEDULE I
Page 2 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
Lincoln National:
GA09725, 7.38%, due June 30, 1999 7,501,464 $ 7,501,464 $ 7,372,516
New York Life:
GA-30248, 7.17%, due September 30, 1999 18,742,171 18,742,171 18,497,637
GA-06494-002, 6.67%, due March 15, 2001 3,018,046 3,018,046 3,078,600
Ohio National Life Insurance Company:
GA5774, 6.67%, due December 31, 1999 11,526,383 11,526,383 11,105,671
Pacific Mutual Life Insurance Co.:
G-26062.01, 5.16%, due June 30, 1999 12,537,471 12,537,471 12,066,450
Peoples Securities:
BDA00668FR-00, 6.51%, due February 26,1999 8,455,525 8,455,525 8,497,052
Principal Financial Group:
41238801, 6.05%, due September 30, 1998 12,850,509 12,850,509 12,778,527
Protective Life:
GA-1386, 7.26%, due March 16, 2001 13,758,098 13,758,098 13,878,739
Prudential:
GA-10009-211, 6.10%, due June 19, 2001 10,017,861 10,017,861 10,055,101
GA-10009-212, 6.15%, due June 16, 2003 5,006,545 5,006,545 5,030,367
SafeCo Life Insurance:
LP1052744, 6.02%, due March 31, 1999 7,774,050 7,774,050 7,634,190
Security Life of Denver:
FA0501, 6.68%, due October 31, 2000 12,527,880 12,527,880 12,133,317
SunLife of Canada:
S-0921-G, 7.37%, due December 30, 1999 12,567,488 12,567,488 12,398,957
Synthetic Insurance Contracts:
Chase Manhattan Bank:
Ford Credit Auto Ow, 5.93%, due January 15, 2001 10,022,423 10,022,423 10,026,000
Jackson National Life ABS:
S-1107-1, 5.89%, due July 15, 1998 49,527,900 49,527,900 51,276,348
Massachusetts Mutual:
PGIC 10391, 7.37%v, due July 5, 2002 21,518,816 21,518,816 22,024,989
MBL Life Assurance:
6-4982-1, 6.35%v, due December 31, 1999 9,622,966 9,622,966 9,623,122
6-4982-2, 6.35%v, due December 31, 1999 2,223,926 2,223,926 2,220,962
6-4982-3, 6.35%v, due December 31, 1999 3,234,826 3,234,826 3,234,930
6-4982-4, 6.35%v, due December 31, 1999 203,829 203,829 204,260
4982-1, 5.10%v, due December 31, 1999 4,098,575 4,098,575 4,098,493
4982-2, 5.10%v, due December 31, 1999 947,300 947,300 947,281
4982-3, 5.10%v, due December 31, 1999 1,377,782 1,377,782 1,377,754
4982-4, 5.10%v, due December 31, 1999 86,899 86,899 88,898
Peoples Securities:
Americredit Auto Trust, 6.04%, due February 12,
2001 5,057,160 5,057,160 5,066,958
Sears Credit Account, 5.82%, due August 15, 2000 6,098,093 6,098,093 6,095,527
BDA00283TR, 5.95%, open 61,218,338 61,218,338 62,669,779
Provident Life & Accident:
630-05856, 7.11%, due July 15, 1998 5,430,702 5,430,702 5,592,839
State Street Bank:
CSXT Trade Receivable, 6.10%, due June 25, 2003 8,011,481 8,011,481 8,037,417
96042, 6.46%, due July 15, 1998 34,524,490 34,524,490 35,408,573
TransAmerica Occidental:
76597, 6.44%, due June 15, 1999 6,814,395 6,814,395 6,843,693
Union Bank of Switzerland:
2216, 6.26%v, due October 20, 1999 5,309,583 5,309,583 5,309,000
2242, 7.03%v, due September 17, 2001 6,661,637 6,661,637 6,856,546
2149, 6.95%v, due July 15, 2002 10,166,420 10,166,420 10,414,725
2150, 6.76%v, due January 15, 2001 10,379,419 10,379,419 10,522,877
Westdeutsche Landesbank:
WLB6064, 5.95%, due January 15, 2003 7,187,213 7,187,213 7,199,700
</TABLE>
-29-
<PAGE> 30
SCHEDULE I
Page 3 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
AEtna Life Insurance Company:
014464/14617, 6.95%v, due November 16, 1998 18,884,907 $ 18,884,907 $ 19,231,796
Prudential:
917480-001, 6.09%v, due December 31, 1998 2,042,911 2,042,911 2,046,263
TransAmerica Occidental:
76630, 6.55%v, due November 15, 2000 11,255,964 11,255,964 11,607,561
Merrill Lynch commercial paper 10,000,000 10,001,747
------------ --------------
Total 620,128,653 623,705,509
------------ ---------------
BALANCED FUND:
* Fidelity Management Trust Company Cash Account 2,427 2,427
Delta U.S. Equity Pool:
* Fidelity Management & Research Company, Fidelity
Magellan Fund 870 99,985 95,409
* Fidelity Management & Research Company, Fidelity
Growth and Income Fund 2,127 75,767 93,618
* Fidelity Management & Research Company, FMTC Select
Equity Portfolio 5,303 150,738 178,589
* FMTC Broad Market Duration 22,538 354,689 363,089
------------ --------------
Total 683,606 733,132
------------ --------------
CONSERVATIVE BALANCED FUND:
* Fidelity Management Trust Company Cash Account 303,607 303,607
Delta U.S. Equity Pool:
* Fidelity Management & Research Company, Fidelity
Magellan Fund 29,469 2,300,229 3,230,704
* Fidelity Management & Research Company, Fidelity
Growth and Income Fund 72,030 1,743,071 3,170,059
* Fidelity Management & Research Company, FMTC Select
Equity Portfolio 179,552 3,467,841 6,047,328
* FMTC Broad Market Duration 2,329,457 30,943,404 37,527,553
------------ --------------
Total 38,758,152 50,279,251
------------ --------------
GROWTH BALANCED FUND:
* Fidelity Management Trust Company Cash Account 21,062 21,062
Delta U.S. Equity Pool:
* Fidelity Management & Research Company, Fidelity
Magellan Fund 210,487 15,024,028 23,075,681
* Fidelity Management & Research Company, Fidelity
Growth and Income Fund 514,486 11,384,927 22,642,519
* Fidelity Management & Research Company, FMTC Select
Equity Portfolio 1,282,475 22,650,327 43,193,747
* FMTC Broad Market Duration 1,644,020 20,392,149 26,485,169
------------ --------------
Total 69,472,493 115,418,178
------------ --------------
DELTA PREFERRED STOCK FUND:
* Delta Air Lines, Inc. Common Stock 4,026,612 135,373,879 260,219,801
* Delta Air Lines, Inc. Convertible Pref. Series B 6,603,865 481,961,245 732,236,585
* Fidelity Instrument Cash Portfolio--Money Market 28,943,179 28,943,179 28,943,179
------------ --------------
Total 646,278,303 1,021,399,565
------------ --------------
MUTUAL FUNDS:
* Fidelity Management & Research Company, Fidelity Asset
Manager 45,286 858,299 884,888
* Fidelity Management & Research Company, Fidelity Asset
Manager: Growth 75,418 1,430,088 1,544,559
* Fidelity Management & Research Company, Fidelity Asset
Manager: Income 10,681 132,099 134,788
* Fidelity Management & Research Company, Fidelity
Balanced Fund 23,787 381,065 398,665
* Fidelity Management & Research Company, Fidelity Blue
Chip Fund 82,937 3,565,066 3,888,083
</TABLE>
-30-
<PAGE> 31
SCHEDULE I
Page 4 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
* Fidelity Management & Research Company, Fidelity Canada
Fund 1,311 $ 23,667 $ 22,524
* Fidelity Management & Research Company, Fidelity
Capital & Income Fund 119,541 1,242,504 1,238,445
* Fidelity Management & Research Company, Fidelity
Capital Appreciation Fund 53,361 1,083,640 1,150,462
* Fidelity Management & Research Company, Fidelity
Contrafund 5,437,350 217,655,752 296,933,667
* Fidelity Management & Research Company, Fidelity
Convertible Securities Fund 11,140 220,040 223,025
* Fidelity Management & Research Company, Fidelity
Disciplined Equity Fund 49,038 1,351,803 1,468,692
* Fidelity Management & Research Company, Fidelity
Diversified International Fund 31,016 538,435 580,619
* Fidelity Management & Research Company, Fidelity
Dividend Growth Fund 862,422 23,557,934 24,303,058
* Fidelity Management & Research Company, Fidelity
Emerging Growth Fund 10,064 256,981 295,471
* Fidelity Management & Research Company, Fidelity
Emerging Markets Fund 11,918 112,264 96,059
* Fidelity Management & Research Company, Fidelity Equity-
Income II Fund 35,761 1,036,321 1,096,430
* Fidelity Management & Research Company, Fidelity
Equity-Income Fund 1,495,363 66,515,567 85,534,762
* Fidelity Management & Research Company, Fidelity Europe
Capital Appreciation Fund 267,857 4,855,054 5,051,780
* Fidelity Management & Research Company, Fidelity Europe
Fund 114,828 4,033,169 4,272,739
* Fidelity Management & Research Company, Fidelity
Export & Multinational Fund 27,088 489,023 532,823
* Fidelity Management & Research Company, Fidelity Fifty
Fund 12,346 209,324 212,968
* Fidelity Management & Research Company, Fidelity France
Fund 14,703 225,686 252,156
* Fidelity Management & Research Company, Fidelity Fund 278,662 9,525,219 9,814,492
* Fidelity Management & Research Company, Fidelity
Germany Fund 18,846 303,722 329,799
* Fidelity Management & Research Company, Fidelity Global
Balanced Fund 705 11,516 11,580
* Fidelity Management & Research Company, Fidelity Ginnie Mae
Fund 25,388 277,011 275,972
* Fidelity Management & Research Company, Fidelity
Government Securities Fund 6,581 65,758 65,941
* Fidelity Management & Research Company, Fidelity
Growth & Income Portfolio 4,598,185 149,204,019 202,366,117
* Fidelity Management & Research Company, Fidelity Growth
Company Fund 12,606 582,806 619,481
* Fidelity Management & Research Company, Fidelity Hong
Kong & China Fund 21,717 225,930 200,012
* Fidelity Management & Research Company, Fidelity
Institutional Short-Intermediate Government Portfolio 9,780 92,568 91,930
* Fidelity Management & Research Company, Fidelity
Intermediate Bond Fund 34,921 356,571 356,191
* Fidelity Management & Research Company, Fidelity International
Bond Fund 6,827 61,909 60,901
* Fidelity Management & Research Company, Fidelity
International Growth & Income Fund 11,559 240,662 260,304
* Fidelity Management & Research Company, Fidelity
International Value Fund 24,286 320,416 341,222
</TABLE>
-31-
<PAGE> 32
SCHEDULE I
Page 5 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
* Fidelity Management & Research Company, Fidelity
Investment Grade Bond Fund 85,825 $ 629,079 $ 630,816
* Fidelity Management & Research Company, Fidelity Japan
Fund 20,133 202,512 200,727
* Fidelity Management & Research Company, Fidelity Japan
Small Company Fund 31,296 183,645 183,396
* Fidelity Management & Research Company, Fidelity
Large-Cap Stock Fund 18,297 272,735 271,527
* Fidelity Management & Research Company, Fidelity Latin
America Fund 48,411 785,191 678,235
* Fidelity Management & Research Company, Fidelity
Low-Priced Stock Fund 304,330 7,981,686 8,253,421
* Fidelity Management & Research Company, Fidelity
Magellan Fund 1,387,335 116,317,178 152,093,530
* Fidelity Management & Research Company, Fidelity
Mid-Cap Stock Fund 56,491 985,544 990,850
* Fidelity Management & Research Company, Fidelity New
Markets Income Fund 8,080 104,591 98,094
* Fidelity Management & Research Company, Fidelity Nordic
Fund 68,688 1,196,381 1,294,769
* Fidelity Management & Research Company, Fidelity OTC
Portfolio 1,106,448 37,621,055 43,937,058
* Fidelity Management & Research Company, Fidelity
Overseas Fund 2,800 102,173 105,572
* Fidelity Management & Research Company, Fidelity
Pacific Basin Fund 25,456 314,630 298,852
* Fidelity Management & Research Company, Fidelity
Puritan Fund 65,436 1,319,087 1,383,317
* Fidelity Management & Research Company, Fidelity Real
Estate Investment Portfolio 73,956 1,462,358 1,374,100
* Fidelity Management & Research Company, Fidelity
Retirement Government Money Market Portfolio 1,217,895 1,217,895 1,217,895
* Fidelity Management & Research Company, Fidelity
Retirement Growth Fund 28,513 564,516 592,492
* Fidelity Management & Research Company, Fidelity
Retirement Money Market Portfolio 1,758,888 1,758,888 1,758,888
* Fidelity Management & Research Company, Fidelity
Short-Term Bond Fund 1,093 9,539 9,513
* Fidelity Management & Research Company, Fidelity Small
Cap Select Fund 89,168 1,490,584 1,469,496
* Fidelity Management & Research Company, Fidelity
Southeast Asia Fund 31,451 275,506 224,562
* Fidelity Management & Research Company,
Spartan Market Index Fund 28,948 2,108,431 2,270,961
* Fidelity Management & Research Company,
Spartan U.S. Equity Index Fund 172,711 6,570,311 6,993,066
* Fidelity Management & Research Company, Fidelity Stock
Selector Fund 21,982 639,590 679,473
* Fidelity Management & Research Company, Fidelity
TechnoQuant Growth Fund 27,497 330,073 342,340
* Fidelity Management & Research Company, Fidelity Trend
Fund 4,730 280,804 295,931
* Fidelity Management & Research Company, Fidelity United
Kingdom Fund 2,635 39,095 41,209
* Fidelity Management & Research Company, Fidelity U.S.
Bond Index Fund 36,150 391,939 392,224
* Fidelity Management Trust Company, Fidelity U.S. Equity
Index Commingled Fund 11,162,904 198,021,458 355,650,107
</TABLE>
-32-
<PAGE> 33
SCHEDULE I
Page 6 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
* Fidelity Management & Research Company, Fidelity
Utilities Fund 61,848 $ 1,250,127 $ 1,316,744
* Fidelity Management & Research Company, Fidelity Value
Fund 20,719 1,187,514 1,222,824
* Fidelity Management & Research Company, Fidelity
Worldwide Fund 24,092 422,022 447,387
* Strategic Advisors, Fidelity Freedom 2000 Fund 36,854 434,086 442,988
* Strategic Advisors, Fidelity Freedom 2010 Fund 30,230 371,050 388,759
* Strategic Advisors, Fidelity Freedom 2020 Fund 33,924 419,057 453,907
* Strategic Advisors, Fidelity Freedom 2030 Fund 9,737 122,356 129,411
* Strategic Advisors, Fidelity Freedom Income Fund 1,722 18,652 18,855
American Century Mutual Funds, Inc., American
Century--Twentieth Century Select Fund 410,861 18,724,217 20,966,240
American Century Mutual Funds, Inc., American
Century--Twentieth Century Ultra Fund 2,949,221 82,989,008 99,831,119
Calvert Asset Management Company, Inc., Calvert Capital
Accumulation Fund--Class A 14,950 441,294 442,224
Calvert Asset Management Company, Inc., Calvert New
Vision Small Cap Fund 1,079 16,494 16,619
Calvert Asset Management Company, Inc., Calvert Social
Investment Managed Growth Fund 96 3,248 3,339
Calvert Asset Management Company, Inc., Calvert World
Values International Equity Fund 139,957 2,949,485 3,051,053
Delaware Management Company, Delaware Trend Fund-
Institutional Class 1,031,474 17,148,006 19,463,921
Founders Asset Management, Founders Balanced Fund 59,817 721,195 733,353
Founders Asset Management, Founders Blue Chip Fund 15,217 115,325 119,909
Founders Asset Management, Founders Frontier Fund 3,207 96,940 95,767
Founders Asset Management, Founders Growth Fund 77,373 1,429,093 1,597,763
Founders Asset Management, Founders Special Fund 223,842 1,863,140 1,963,096
Founders Asset Management, Founders Worldwide Growth Fund 21,740 521,484 528,272
INVESCO Funds Group, Inc., INVESCO Dynamics Fund 18,464 282,611 305,031
INVESCO Funds Group, Inc., INVESCO Growth Fund 102,080 576,402 601,251
INVESCO Funds Group, Inc., INVESCO High Yield Fund 8,067,154 59,583,451 59,212,913
INVESCO Funds Group, Inc., INVESCO Industrial Income
Fund 22,998 356,314 372,111
INVESCO Funds Group, Inc., INVESCO Select Income Fund 94,130 632,300 635,380
INVESCO Funds Group, Inc., INVESCO Small Company Growth
Fund 51,041 615,921 626,783
INVESCO Funds Group, Inc., INVESCO Total Return Fund 201,438 6,059,109 6,313,077
INVESCO Funds Group, Inc., INVESCO Value Equity Fund 13,130 385,316 406,886
Janus Capital Corporation, Janus Balanced Fund 73,544 1,203,873 1,293,632
Janus Capital Corporation, Janus Enterprise Fund 2,724 90,625 96,984
Janus Capital Corporation, Janus Flexible Income Fund 350,775 3,512,914 3,525,292
Janus Capital Corporation, Janus Fund 94,153 2,604,707 2,840,592
Janus Capital Corporation, Janus Mercury Fund 439,916 8,647,867 9,502,176
Janus Capital Corporation, Janus Twenty Fund 303,746 11,251,657 12,784,667
Janus Capital Corporation, Janus Worldwide Fund 492,075 20,607,011 23,191,498
Merrill Lynch Asset Management, Merrill Lynch Capital
Fund (Class A) 252,629 8,057,582 9,407,914
Miller, Anderson & Sherrerd, MAS Fixed Income (I) 20 246 248
Miller, Anderson & Sherrerd, MAS Funds Balanced
Portfolio--Institutional Class 1,074 14,764 15,589
Miller, Anderson & Sherrerd, MAS Funds Fixed Income
Portfolio 34,754 418,690 421,913
Miller, Anderson & Sherrerd, MAS Funds High Yield
Portfolio 92,257 903,414 903,192
Miller, Anderson & Sherrerd, MAS Funds Mid Cap Growth
Portfolio 145,793 3,149,256 3,347,397
Miller, Anderson & Sherrerd, MAS Funds Value Portfolio 189,876 3,476,687 3,567,766
Morgan Stanley Asset Management, Inc., Morgan Stanley
Institutional Emerging Growth Portfolio (Class B) 8,613 75,599 78,123
</TABLE>
-33-
<PAGE> 34
SCHEDULE I
Page 7 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
Morgan Stanley Asset Management, Inc., Morgan Stanley
Institutional Emerging Markets Portfolio (Class B) 10,151 $ 131,225 $ 112,572
Morgan Stanley Asset Management, Inc., Morgan Stanley
Institutional Fund Active Country Allocation
Portfolio (Class B) 40,513 495,075 503,177
Morgan Stanley Asset Management, Inc., Morgan Stanley
Institutional Global Equity Portfolio (Class B) 42,140 850,502 884,517
Neuberger & Berman Management, Inc., Neuberger & Berman
Focus Trust 23,709 521,770 561,664
Neuberger & Berman Management, Inc., Neuberger & Berman
Genesis Trust 662,826 14,580,899 14,595,436
Neuberger & Berman Management, Inc., Neuberger & Berman
Guardian Trust 29,254 537,853 568,705
Neuberger & Berman Management, Inc., Neuberger & Berman
Manhattan Trust 8,623 121,604 135,729
Neuberger & Berman Management, Inc., Neuberger & Berman
Partners Trust 245,053 4,379,533 4,580,036
Pacific Investment Management Company, PIMCO Capital
Appreciation Fund-Administrative Class 330,378 7,796,352 8,586,514
Pacific Investment Management Company, PIMCO Global
Bond Fund-Administrative Class 2,063 20,094 20,052
Pacific Investment Management Company, PIMCO High Yield
Fund-Administrative Class 171,781 1,996,691 1,990,938
Pacific Investment Management Company, PIMCO Low
Duration Fund-Administrative Class 34,369 350,236 349,186
Pacific Investment Management Company, PIMCO Mid Cap
Growth Fund-Administrative Class 312,107 7,092,341 7,478,079
Pacific Investment Management Company, PIMCO Total
Return Fund-Administrative Class 161,415 1,720,493 1,730,366
Pilgrim Baxter & Associates, PBHG Emerging Growth Fund 17,453 415,025 426,385
Pilgrim Baxter & Associates, PBHG Growth Fund 30,555 836,664 830,177
Strong Capital Management, Strong Advantage Fund 81,406 820,446 821,387
Strong Capital Management, Strong Discovery Fund 1,419 26,412 25,997
Strong Capital Management, Strong Government Securities
Fund 101,020 1,091,454 1,097,082
Strong Capital Management, Strong Growth Fund 33,413 625,904 711,706
Strong Capital Management, Strong Opportunity Fund 24,662 990,926 1,026,445
Strong Capital Management, Strong Short-Term Bond Fund 15,982 156,325 156,141
Strong Capital Management, Strong Total Return Fund 1,083 30,783 33,314
Templeton Asset Management Hong Kong, Templeton
Developing Markets Trust I 67,985 838,715 719,279
Templeton Global Advisors, Templeton Foreign Fund I 165,823 1,709,248 1,693,056
Templeton Global Advisors, Templeton Growth Fund, Inc. I 103,139 2,090,051 2,090,621
Templeton Global Advisors, Templeton World Fund I 176,762 3,091,302 3,181,711
Templeton Global Bond Managers, Templeton Global Bond
Fund I 863 8,421 8,321
Templeton Investment Counsel, Templeton Foreign Equity
Series 3,343,313 53,309,783 66,331,326
USAA Investment Management, USAA Cornerstone Strategy
Fund 6,336 187,605 188,309
USAA Investment Management, USAA GNMA Trust 26,576 273,964 275,323
USAA Investment Management, USAA Growth Fund 11,885 225,379 242,683
USAA Investment Management, USAA Income Fund 32,319 417,460 417,239
USAA Investment Management, USAA Income Stock Fund 29,092 571,963 593,176
USAA Investment Management, USAA International Fund 9,277 194,173 199,001
Warburg Pincus Counsellors, Warburg Pincus Capital
Appreciation Fund 62,326 1,211,683 1,330,670
Warburg Pincus Counsellors, Warburg Pincus Emerging
Growth Fund 19,341 759,525 810,404
</TABLE>
-34-
<PAGE> 35
SCHEDULE I
Page 8 of 8
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST OR
OR NUMBER CONTRACT MARKET
NAME OF ISSUER OF SHARES VALUE VALUE
- -------------------------------------------------------------------- ------------------ ------------------ -----------------
<S> <C> <C> <C>
Warburg Pincus Counsellors, Warburg Pincus Global
Fixed-Income Fund 4,031 $ 41,981 $ 41,518
Warburg Pincus Counsellors, Warburg Pincus Growth &
Income Fund 27,322 480,855 506,547
Warburg Pincus Counsellors, Warburg Pincus
International Equity Fund 4,332 79,374 83,037
-------------- --------------
Total mutual funds 1,249,048,560 1,647,264,817
-------------- --------------
PARTICIPANT LOANS
Participant loans, interest rates ranging from 9.70% to 10.75% 61,519,925 61,519,925
-------------- --------------
Total investments $3,088,577,958 $4,221,354,414
============== ==============
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
-35-
<PAGE> 36
SCHEDULE II
Page 1 of 2
DELTA FAMILY-CARE SAVINGS PLAN
ITEM27D--SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
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)
- --------------------------- ------------------------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
* FIDELITY MANAGEMENT Institutional Money Market:
TRUST COMPANY 508 transactions $626,043,717 $ 0 (b) $ 0 $ 0
512 transactions 0 588,290,618 (b) 588,290,618 0
* FIDELITY MANAGEMENT Fidelity U.S. Equity Index Pool:
TRUST COMPANY 252 transactions 162,341,118 0 (b) 0 0
252 transactions 0 198,768,653 (b) 169,501,379 29,267,274
* FIDELITY MANAGEMENT & Fidelity OTC Portfolio:
RESEARCH COMPANY 252 transactions 146,849,809 0 (b) 0 0
252 transactions 0 149,380,087 (b) 150,401,191 (1,021,104)
* FIDELITY MANAGEMENT & Fidelity Growth & Income
RESEARCH COMPANY Portfolio:
252 transactions 137,524,839 0 (b) 0 0
252 transactions 0 114,948,287 (b) 103,242,047 11,706,240
* FIDELITY MANAGEMENT & Fidelity Contrafund:
RESEARCH COMPANY 252 transactions 102,579,197 0 (b) 0 0
252 transactions 0 94,533,877 (b) 82,018,958 12,514,919
</TABLE>
-36-
<PAGE> 37
SCHEDULE II
Page 2 of 2
<TABLE>
<CAPTION>
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)
- --------------------------- ------------------------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
* FIDELITY MANAGEMENT Delta Commingled Stock Fund:
TRUST COMPANY 252 transactions $ 86,346,079 $ 0 (b) $ 0 $ 0
252 transactions 0 100,406,926 (b) 84,103,334 16,303,592
</TABLE>
*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.
-37-
<PAGE> 38
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 Trusts
Delta Air Lines, Inc.
December 22, 1998
-38-
<PAGE> 1
[LETTERHEAD 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 December 4, 1998 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, 1998 into the Company's previously filed Registration
Statement No. 33-30454.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
December 21, 1998
