<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 23, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
DELTA AIR LINES, INC.
(Exact name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 58-0218548
(State or other Jurisdiction of (I.R.S. Employer
incorporation or Organization) Identification Number)
</TABLE>
HARTSFIELD ATLANTA INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2600
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
COPIES OF CORRESPONDENCE TO:
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<S> <C>
ROBERT S. HARKEY, ESQ. ROBERT W. REEDER, III
SENIOR VICE PRESIDENT -- SULLIVAN & CROMWELL
GENERAL COUNSEL & SECRETARY 125 BROAD STREET
DELTA AIR LINES, INC. NEW YORK, NEW YORK 10004-2498
HARTSFIELD ATLANTA (212) 558-3755
INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2387
</TABLE>
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
-------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED PRICE(1) REGISTRATION FEE(2)
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<S> <C> <C>
Debt Securities, Pass Through Certificates and
Equipment Trust Certificates................. $1,000,000,000 $264,000
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</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933. If any Debt Securities,
Pass Through Certificates or Equipment Trust Certificates are issued at a
discount, such greater amount as shall result in an aggregate initial
offering price of $1,000,000,000. If any Debt Securities or Pass Through
Certificates or Equipment Trust Certificates are issued in a currency or
composite currency other than U.S. dollars, such different amount as shall
result in an aggregate initial offering price of U.S.$1,000,000,000.
(2) Pursuant to Rule 429, the prospectuses filed as part of this Registration
Statement also relate to the remaining unsold (1) $662,500,000 principal
amount of Debt Securities and Pass Through Certificates previously
registered under Form S-3 Registration Statement (File No. 333-58647), and
(2) $3,600,000 principal amount of Debt Securities, and $80,281,000
principal amount of Equipment Trust Certificates and Pass Through
Certificates, previously registered under Form S-3 Registration Statement
(File No. 33-50175). Filing fees of $195,438 and $26,213 were paid with
respect to these securities.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains three separate forms of prospectuses
to be used in connection with offerings of Debt Securities, Pass Through
Certificates and Equipment Trust Certificates.
<PAGE> 3
SUBJECT TO COMPLETION, DATED FEBRUARY 23, 2000
PROSPECTUS
DELTA AIR LINES, INC.
DEBT SECURITIES
-------------------------
This prospectus relates to the issuance of unsecured debt securities and
other evidences of indebtedness by Delta Air Lines, Inc.
ISSUANCE OF DEBT SECURITIES:
- - Series may be periodically offered;
- - Series may be denominated in U.S. dollars or other currencies or currency
units;
- - Prices and terms will be determined at the time of sale; and
The total aggregate principal amount (or, in the case of debt securities issued
at a discount, the initial offering price) will not exceed US $1,746,381,000 (or
the equivalent in foreign currencies or currency units).
FORMS THAT DEBT SECURITIES MAY TAKE:
- - Registered form;
- - Bearer form; or
- - Global form.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to a particular series of debt securities. Sales of
debt securities may not be consummated without both this prospectus and a
prospectus supplement.
INFORMATION FOUND IN THE PROSPECTUS SUPPLEMENT:
- - Aggregate principal amount of the series of debt securities
- - Denominations
- - Maturity
- - Interest rate
- - Time of interest payments
- - Any terms for redemption
- - Any terms for sinking fund payments
- - Any listing on a national securities exchange
- - Initial public offering price
- - Names of any underwriters or agents
- - Terms of any underwriting arrangements
- - Amounts to be purchased by underwriters or agents
- - Compensation of underwriters or agents
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is , 2000
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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<S> <C>
About This Prospectus....................................... 1
Delta Air Lines, Inc........................................ 1
Use of Proceeds............................................. 1
Consolidated Ratios of Earnings to Fixed Charges............ 1
Description of Debt Securities Delta May Offer.............. 2
Plan of Distribution........................................ 12
Validity of the Debt Securities............................. 12
Experts..................................................... 12
Where You Can Find More Information......................... 13
</TABLE>
-------------------------
You should rely only on the information contained in this prospectus or any
prospectus supplement or information contained in documents which you are
referred to in this prospectus or any prospectus supplement. Delta has not
authorized anyone to provide you with information different from that contained
in this prospectus or any prospectus supplement. Delta is offering to sell the
debt securities only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus or any prospectus supplement is
accurate only as of the date on the front of those documents, regardless of the
time of delivery of the documents or any sale of the debt securities.
<PAGE> 5
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Delta filed with
the Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf process, Delta may sell the securities described in this
prospectus in one or more offerings up to a total dollar amount of
$1,746,381,000. This prospectus provides you with a general description of the
debt securities Delta may offer.
Each time Delta sells debt securities, Delta will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described in the
section entitled "Where You Can Find More Information" on page 13.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
DELTA AIR LINES, INC.
Delta is a major airline engaged in domestic and foreign air
transportation. We provide scheduled air transportation over a network of routes
throughout the United States and between the United States and various foreign
countries.
We operate hubs at Atlanta, Cincinnati, Dallas/Fort Worth and Salt Lake
City. We also operate an international gateway at New York's Kennedy Airport and
a Pacific gateway in Portland, Oregon. Our principal executive offices are
located at Hartsfield Atlanta International Airport, Atlanta, Georgia 30320, and
our telephone number is (404) 715-2600. Delta is incorporated under the laws of
the State of Delaware.
USE OF PROCEEDS
Delta intends to use the net proceeds from the sale of the debt securities
offered hereby for general corporate purposes, unless otherwise specified in the
prospectus supplement relating to a specific issuance of debt securities. Such
general corporate purposes may include, among other possible uses, the repayment
of short-term or long-term indebtedness, capital expenditures, repurchases of
common stock and acquisitions.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Delta and its consolidated subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JUNE 30, DECEMBER 31,
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1995 1996 1997 1998 1999 1998 1999
- ---- ---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1.69 1.43 3.05 3.41 3.45 3.04 3.67
</TABLE>
Earnings represent:
- Income before income taxes, excluding the cumulative effect of accounting
changes;
plus
- Fixed charges, excluding capitalized interest and interest offset on the
Guaranteed Serial ESOP Notes of the Delta Family-Care Savings Plan, which
are guaranteed by Delta.
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Fixed charges include:
- Interest, whether expensed or capitalized, including gross interest on
the Guaranteed Serial ESOP Notes;
- Amortization of debt issuance costs; and
- One-half of rental expense, except for the years ended June 30, 1995,
1996 and 1997, where one-third of the rentals were included in fixed
charges. Management of Delta believes this is representative of the
interest factor in those periods.
DESCRIPTION OF DEBT SECURITIES DELTA MAY OFFER
As required by federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called the
indenture. The indenture is a contract, dated as of May 1, 1991, between Delta
and The Bank of New York, which acts as trustee.
The trustee has two main roles. First, the trustee can enforce your rights
against us if we default. There are some limitations on the extent to which the
trustee acts on your behalf, described under "Remedies If an Event of Default
Occurs" on pages 10-11. Second, the trustee performs administrative duties for
us, such as sending you interest payments, transferring your debt securities to
a new buyer if you sell and sending you notices.
The indenture and its associated documents contain the full legal text of
the matters described in this section. The indenture and the debt securities are
governed by New York law. A copy of the indenture may be obtained from Delta as
described below under "Where You Can Find More Information" on page 13.
Delta may issue as many distinct series of debt securities under the
indenture as it wishes.
This section summarizes the material terms of the debt securities that are
common to all series, although the prospectus supplement which describes the
terms of each series of debt securities may also describe differences with the
material terms summarized here.
Because this section is a summary, it does not describe every aspect of the
debt securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the indenture, including definitions of
certain terms used in the indenture. In this summary, Delta describes the
meaning for only the more important terms. Delta also includes references in
parentheses to certain sections of the indenture. Whenever Delta refers to
particular sections or defined terms of the indenture in this prospectus or in
the prospectus supplement, such sections or defined terms are incorporated by
reference in this prospectus or in the prospectus supplement. You must look to
the indenture for the most complete description of what Delta describes in
summary form in this prospectus.
This summary also is subject to and qualified by reference to the
description of the particular terms of your series described in the prospectus
supplement. Those terms may vary from the terms described in this prospectus.
The prospectus supplement relating to each series of debt securities will be
attached to the front of this prospectus. There may also be a further prospectus
supplement, known as a pricing supplement, which contains the precise terms of
debt securities you are offered.
Delta may issue the debt securities as original issue discount securities,
which will be offered and sold at a substantial discount below their stated
principal amount. (Section 101) The prospectus supplement relating to the
original issue discount securities will describe federal income tax consequences
and other special considerations applicable to them. The debt securities may
also be issued as indexed securities or securities denominated in foreign
currencies or currency units, as described in more detail in the prospectus
supplement relating to any of the particular debt securities. The prospectus
supplement relating to specific debt securities will also describe any special
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considerations and certain additional tax considerations applicable to such debt
securities.
In addition, the specific financial, legal and other terms particular to a
series of debt securities are described in the prospectus supplement and the
pricing supplement relating to the series. The prospectus supplement relating to
a series of debt securities will describe the following terms of the series:
- the title of the series of debt securities;
- any limit on the aggregate principal amount of the series of debt
securities;
- the person to whom interest on a debt security is payable, if other than
the holder on the regular record date;
- the date or dates on which the series of debt securities will mature;
- the rate or rates, which may be fixed or variable, per annum at which the
series of debt securities will bear interest, if any, and the date or
dates from which that interest, if any, will accrue;
- the place or places where the principal of (and premium, if any) and
interest on the debt securities is payable;
- the dates on which interest, if any, on the series of debt securities
will be payable and the regular record dates for the interest payment
dates;
- any mandatory or optional sinking funds or similar provisions or
provisions for redemption at the option of the issuer;
- the date, if any, after which and the price or prices at which the series
of debt securities may, in accordance with any optional or mandatory
redemption provisions, be redeemed and the other detailed terms and
provisions of those optional or mandatory redemption provisions, if any;
- if other than denominations of $1,000 and any of its integral multiples,
the denominations in which the series of debt securities will be
issuable;
- the currency of payment of principal, premium, if any, and interest on
the series of debt securities;
- if the currency of payment of principal, premium, if any, and interest on
the series of debt securities is subject to the election of Delta or a
holder, the currency or currencies in which payment can be made and the
period within which, and the terms and conditions upon which, the
election can be made;
- any index used to determine the amount of payment of principal, premium,
if any, and interest on the series of debt securities;
- the applicability of the provisions described under "Defeasance" on pages
8-9;
- any event of default under the series of debt securities if different
from those described under "What Is an Event of Default?" on page 10;
- if the series of debt securities will be issuable only in the form of a
global security, the depository or its nominee with respect to the series
of debt securities and the circumstances under which the global security
may be registered for transfer or exchange in the name of a person other
than the depositary or the nominee; and
- any other special feature of the series of debt securities.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
Investors who hold debt securities in accounts at banks or brokers will
generally not be recognized by us as legal holders of debt securities. This is
called holding in street name. Instead, Delta would recognize only the bank or
broker, or the financial institution the bank or broker uses to hold its debt
securities. These
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intermediary banks, brokers and other financial institutions pass along
principal, interest and other payments on the debt securities, either because
they agree to do so in their customer agreements or because they are legally
required to. If you hold debt securities in street name, you should check with
your own institution to find out:
- how it handles securities payments and notices;
- whether it imposes fees or charges;
- how it would handle voting if required;
- whether and how you can instruct it to send you debt securities
registered in your own name so that you can be a direct holder as
described below; and
- how it would pursue rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by Delta or the trustee, run only to persons who are
registered as holders of debt securities. As noted above, Delta does not have
obligations to you if you hold debt securities in street name or other indirect
means, either because you choose to hold debt securities in that manner or
because the debt securities are issued in the form of global securities as
described below. For example, once we make payment to the registered holder, we
have no further responsibility for the payment, even if that holder is legally
required to pass the payment along to you as a street name customer but does not
do so.
GLOBAL SECURITIES
-WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "Street Name and Other
Indirect Holders". If Delta chooses to issue debt securities in the form of
global securities, the ultimate beneficial owners can only be indirect holders.
Delta does this by requiring that the global security be registered in the name
of a financial institution it selects and by requiring that the debt securities
included in the global security not be transferred to the name of any other
direct holder unless the special circumstances described below occur. The
financial institution that acts as the sole direct holder of the global security
is called the depositary. Any person wishing to own a debt security must do so
indirectly by virtue of an account with a broker, bank or other financial
institution that in turn has an account with the depositary. The prospectus
supplement indicates whether your series of securities will be issued only in
the form of global securities.
-SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, an investor's rights relating to a global security will be governed by
the account rules of the investor's financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize
this type of investor as a holder of debt securities and instead deal only with
the depositary that holds the global security.
If you are an investor, you should be aware that if debt securities are
issued only in the form of global securities:
- You cannot get debt securities registered in your own name.
- You cannot receive physical certificates for your interest in the debt
securities.
- You will be a street name holder and must look to your own bank or broker
for payments on the debt securities and protection of your legal rights
relating to the debt securities. See "Legal Ownership -- Street Name and
Other Indirect Holders" on pages 3-4.
- You may not be able to sell interests in the debt securities to some
insurance companies and other institutions that are
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required by law to own their securities in the form of physical
certificates.
- The depositary's policies will govern payments, transfers, exchange and
other matters relating to your interest in the global security. Delta and
the trustee have no responsibility for any aspect of the depositary's
actions or for its records of ownership interest in the global security.
Delta and the trustee also do not supervise the depositary in any way.
SPECIAL SITUATIONS WHEN GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described in the next paragraph, the global security will
terminate and interests in it will be exchanged for physical certificates
representing debt securities. After that exchange, the choice of whether to hold
debt securities directly or in street name will be up to you. You must consult
your own bank or brokers to find out how to have your interests in debt
securities transferred to our own name, so that you will be a direct holder. The
rights of street name investors and direct holders in the debt securities have
been previously described in the subsections entitled "Street Name and Other
Indirect Holders" on pages 3-4 and "Direct Holders" on page 4.
The special situations for termination of a global security are:
- When the depositary notifies Delta that it is unwilling, unable or no
longer qualified to continue as depositary.
- When Delta notifies the trustee that it wishes to terminate the global
security.
- When an event of default on the securities has occurred and has not been
cured, disregarding for this purpose any requirement of notice or that
the default exists for a specified period of time. (Default is discussed
later under "Events of Default" on page 10.)
The prospectus supplement may also list additional situations for terminating a
global security that would apply only to the particular series of debt
securities covered by the prospectus supplement. When a global security
terminates, the depositary (and not Delta or the trustee) is responsible for
deciding the names of the institutions that will be the initial direct holders.
(Sections 204 and 305)
IN THE REMAINDER OF THIS DESCRIPTION "YOU" MEANS DIRECT HOLDERS AND NOT STREET
NAME OR OTHER INDIRECT HOLDERS OF DEBT SECURITIES. INDIRECT HOLDERS SHOULD READ
THE PREVIOUS SUBSECTION ON PAGES 3-4 ENTITLED "STREET NAME AND OTHER INDIRECT
HOLDERS".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- ADDITIONAL MECHANICS relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where Delta makes
payments;
- Your rights in several SPECIAL SITUATIONS, such as if Delta merges with
another company, or if Delta wants to change a term of the debt
securities;
- Promises Delta makes to you about how it will run its business, or a
business action Delta promises not to take, known as a RESTRICTIVE
COVENANT;
- DEFEASANCE clauses, which may allow for Delta to be completely released
from its payment and other obligations on the debt securities or
partially released from any restrictive covenants in the debt securities;
and
- Your rights if Delta DEFAULTS or experiences other financial
difficulties.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
The debt securities will be issued:
- only in fully registered form;
- without interest coupons; and
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- in denominations that are even multiples of $1,000. (Section 302)
You may have your debt securities divided into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. (Section
305) This is called an exchange.
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as Delta's agent for registering debt securities in the names
of holders and transferring debt securities. Delta may change this appointment
to another entity or perform these functions itself. The entity performing the
role of maintaining the list of registered holders is called the security
registrar. It will also perform transfers. (Section 305)
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the security registrar is satisfied with your
proof of ownership. (Section 305)
If Delta has designated additional transfer agents, they are named in the
prospectus supplement. Delta may cancel the designation of any particular
transfer agent. Delta may also approve a change in the office through which any
transfer agent acts. (Section 1002)
If the debt securities are redeemable and Delta redeems less than all of
the debt securities of a particular series, Delta may block the transfer or
exchange of debt securities during the period beginning 15 days before the day
Delta mails the notice of redemption and ending on the day of that mailing, in
order to freeze the list of holders to prepare the mailing. Delta may also
refuse to register transfers or exchanges of debt securities selected for
redemption, except that Delta will continue to permit transfers and exchanges of
the unredeemed portion of any debt security being partially redeemed. (Section
305)
PAYMENT AND PAYING AGENTS
Delta will pay interest to you if you are a direct holder listed in the
trustee's records at the close of business on a particular day in advance of
each due date for interest, even if you no longer own the debt security on the
interest due date. That particular day, usually about two weeks in advance of
the interest due date, is called the regular record date and is stated in the
prospectus supplement. (Section 307) Holders buying and selling debt securities
must work out between them how to compensate for the fact that Delta will pay
all the interest for an interest period to the one who is the registered holder
on the regular record date. The most common manner is to adjust the sales price
of the securities to pro rate interest fairly between buyer and seller. This pro
rated interest amount is called accrued interest.
Delta will pay interest, principal and any other money due on the debt
securities at the corporate trust office of the trustee in New York City. That
office is currently located at 101 Barclay Street, Floor 21W, New York, New York
10286. You must make arrangements to have your payments picked up at or wired
from that office. Delta may also choose to pay interest by mailing checks.
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS, BROKERS OR
OTHER FINANCIAL INSTITUTIONS FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS.
Delta may also arrange for additional payment offices, and may cancel or
change these offices, including its use of the trustee's corporate trust office.
These offices are called paying agents. Delta may also choose to act as its own
paying agent. Delta must notify you of changes in the paying agents for any
particular series of debt securities. (Section 1002)
NOTICES
Delta and the trustee will send notices regarding the debt securities only
to direct
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holders, using their addresses as listed in the trustee's records. (Sections 101
and 106)
Regardless of who acts as paying agent, all money paid by Delta to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to Delta. After that two-year period, you may look
only to Delta for payment and not to the trustee, any other paying agent or
anyone else. (Section 1003)
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
Delta is generally permitted to consolidate or merge with another person.
We are also permitted to sell or lease substantially all of our assets to
another person or to buy or lease substantially all of the assets of another
person. However, we may not take any of these actions unless all of the
following conditions are met:
- Where Delta merges out of existence or sells or leases substantially all
of its assets, the other person must be a corporation, partnership or
trust organized under the laws of a state or the District of Columbia or
under federal law, and it must agree to be legally responsible for the
debt securities.
- The merger, sale of assets or other transaction must not cause a default
on the debt securities, and Delta must not already be in default (unless
the merger or other transaction would cure the default). For purposes of
this no-default test, a default would include an event of default that
has occurred and not been cured. A default for this purpose would also
include any event that would be an event of default if the requirements
for giving Delta default notice or Delta's default having to exist for a
specific period of time were disregarded. (Section 801)
MODIFICATION AND WAIVER
There are three types of changes Delta can make to the indenture and the
debt securities.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your debt securities without your specific approval. Following is a list
of those types of changes:
- change the stated maturity of the principal or interest on a debt
security;
- reduce any amounts due on a debt security;
- reduce the amount of principal payable upon acceleration of the maturity
of a debt security (including the amount payable on an original issue
discount security) following a default;
- change the place or currency of payment on a debt security;
- impair your right to sue for payment;
- reduce the percentage of the principal amount of debt securities the
consent of which is needed to modify or amend the indenture;
- reduce the percentage of the principal amount of debt securities the
consent of which is needed to waive compliance with certain provisions of
the indenture or to waive certain defaults; or
- modify any other aspect of the provisions dealing with modification and
waiver of the indenture. (Section 902)
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture and the debt securities is the kind that requires a vote in favor by
the holders of debt securities owning a majority of the principal amount of the
particular series affected. Most changes fall into this category, except for
clarifying changes and certain other changes that would not adversely affect
holders of the debt securities described in the next paragraph. (Sections 901
and 902) Delta may obtain a waiver of a past default from the holders of debt
securities owning a
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majority of the principal amount of the particular series affected. However,
Delta cannot obtain a waiver of a payment default or any other aspect of the
indenture or the debt securities listed and described previously on page 7 under
"Changes Requiring Your Approval" unless Delta obtains an individual consent to
the waiver from every holder. (Section 513)
CHANGES NOT REQUIRING APPROVAL. The third type of change to the indenture
and the debt securities does not require any vote by holders of debt securities.
This type is limited to clarifications and certain other changes that would not
adversely affect holders of the debt securities in any material respect.
(Section 901) Holders of debt securities will also not be eligible to vote if
the debt securities have been fully defeased as described below under
"Defeasance -- Full Defeasance" on page 9. (Section 1301)
FURTHER DETAILS CONCERNING VOTING. When taking a vote, Delta will use the
following rules to decide how much principal amount to attribute to a debt
security:
- For original issue discount securities, Delta will use the principal
amount that would be due and payable on the voting date if the maturity
of the debt securities were accelerated to that date because of a
default.
- For debt securities whose principal amount is not known (for example,
because it is based on an index), Delta will use a special rule for that
debt security described in the prospectus supplement.
- For debt securities denominated in one or more foreign currencies or
currency units, Delta will use the U.S. dollar equivalent.
Delta will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding debt securities that are
entitled to vote or take other action under the indenture. Delta, however, will
not be permitted to set a record date in order to determine the holders of
outstanding debt securities that are entitled to:
- give notices of defaults;
- accelerate the maturity of the debt securities;
- rescind a declaration of acceleration; or
- direct the trustee in taking actions under the indenture. (Section 104)
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS, BROKERS OR
OTHER FINANCIAL INSTITUTIONS FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR
DENIED IF DELTA SEEKS TO CHANGE THE INDENTURE OR THE DEBT SECURITIES OR REQUEST
A WAIVER.
ABSENCE OF RESTRICTIVE COVENANTS
The indenture does not contain any promises by Delta on how it will operate
its business, and does not restrict Delta's ability to incur debt or grant liens
on its assets. If Delta determines to include such a promise for the benefit of
a particular series of debt securities, such promise, or restrictive covenant,
will be described in the prospectus supplement relating to that series of debt
securities.
DEFEASANCE
Delta may be completely released from its payment and other obligations on
the debt securities or may be released from certain events of default as
described below. The following discussion of full defeasance and covenant
defeasance will be applicable to your series of debt securities only if Delta
chooses to have them apply to that series. If Delta does so choose, it will
state that in the prospectus supplement. (Section 1301)
8
<PAGE> 13
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, Delta can legally release itself from any payment or other obligations on
the debt securities, called full defeasance, if Delta puts in place the
following other arrangements for you to be repaid:
- Delta must deposit in trust for your benefit and the benefit of all
direct holders of the debt securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the
debt securities on their various due dates.
- There must be a change in current federal tax law or a ruling from the
Internal Revenue Service that lets Delta make the above deposit without
causing you to be taxed on the debt securities any differently than if
Delta did not make the deposit and just repaid the debt securities. Under
current federal tax law, the deposit and Delta's legal release from the
debt securities would be treated as though we took back your debt
securities and gave you your share of the cash and notes or bonds
deposited in trust. In that event, you could recognize gain or loss on
the debt securities you give back to Delta.
- Delta must deliver to the trustee a legal opinion of Delta's counsel
confirming the tax law change described above. (Sections 1301 and 1302)
If we are able to fully defease the debt securities, as described above,
you would have to rely solely on the trust deposit for repayment on the debt
securities. You could not look to Delta for repayment.
COVENANT DEFEASANCE. Under current federal tax law, Delta can make the
same type of deposit described above and be released from any restrictive
covenants in the debt securities and an event described in the fifth and sixth
bullet points below under "What Is an Event of Default?" on page 10 will no
longer constitute an event of default. This is called covenant defeasance. In
that event, you would lose the protection of any such restrictive covenant and
such event of default but would gain the protection of having money and
securities set aside in trust to repay the debt securities. In order to achieve
covenant defeasance, Delta must do the following:
- Delta must deposit in trust for the benefit of all direct holders of the
debt securities a combination of money and U.S. government or U.S.
government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on
their respective due dates; and
- Delta must deliver to the trustee a legal opinion of its counsel
confirming that under current federal income tax law Delta may make the
above deposit without causing you to be taxed on the debt securities any
differently than if Delta did not make the deposit and simply repaid the
debt securities in accordance with their terms.
If Delta accomplishes covenant defeasance, the following provisions of the
indenture and the debt securities would no longer apply:
- Any promises Delta may have made regarding the conduct of its business
relating to any series of debt securities and described in the prospectus
supplement; and
- The events of default relating to a default on the payment or
acceleration of other indebtedness described in the fifth and sixth
bullet points below under "What Is an Event of Default?" on page 10.
If Delta accomplishes covenant defeasance, you can still look to Delta for
repayment of the debt securities if there was a shortfall in the trust deposit.
In fact, if one of the remaining events of default occurred (such as Delta's
bankruptcy) and the debt securities become
9
<PAGE> 14
immediately due and payable, there may be such a shortfall. (Sections 1302 and
1303)
DEFAULT AND RELATED MATTERS
RANKING
The debt securities are not secured by any of Delta's property or assets.
Accordingly, your ownership of debt securities means you are one of Delta's
unsecured creditors. The debt securities are not subordinated to any of Delta's
other debt obligations and therefore they rank equally with all of Delta's other
unsecured and unsubordinated indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT? The term "Event of Default" means any of the
following:
- Delta does not pay the principal or any premium on a debt security within
5 business days of its due date.
- Delta does not pay interest on a debt security within 30 days of its due
date.
- Delta does not deposit money in a separate account, known as a sinking
fund, when a deposit is due.
- Delta remains in breach of covenant or warranty of the indenture for 60
days after it receives a notice of default stating it is in breach. The
notice must be sent by either the trustee or holders of 25% of the
outstanding principal amount of debt securities of the affected series.
- Delta or any restricted subsidiary fails to pay at the final stated
maturity any indebtedness for borrowed money totaling over $75,000,000
and Delta or the restricted subsidiary does not repay the indebtedness
within 10 days after Delta receives a notice of default from the trustee
or holders of 25% of the outstanding principal amount of the affected
debt securities.
- Delta or any restricted subsidiary defaults on any indebtedness for
borrowed money totaling over $75,000,000 and Delta's or the restricted
subsidiary's obligation to repay such indebtedness is accelerated, and
this repayment obligation remains accelerated for 10 days after Delta
receives a notice of default by the trustee or holders of 25% of the
outstanding principal amount of the affected debt securities.
- Delta files for bankruptcy or certain other events in bankruptcy,
insolvency or reorganization occur.
- Any other event of default described in the prospectus supplement occurs.
(Section 501)
CERTAIN DEFINITIONS RELATING TO THE EVENTS OF DEFAULT. The following are
terms that are important in your understanding of the events of default.
"Restricted subsidiary" means a subsidiary of Delta that:
- has its properties and operations principally in the United States; and
- owns an airplane, or an engine installed in an airplane, with 75 or more
passenger seats. (Section 101)
"Restricted subsidiary", however, does not include a subsidiary of Delta
which is primarily engaged in the business of a finance company. (Section 101)
"Subsidiary" is a corporation of which more than 50% of the voting stock is
owned by Delta and/or one or more of its other subsidiaries. Voting stock is a
kind of stock that ordinarily votes for the election of directors. (Section 101)
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the holders of at least 25% in principal
amount of the debt securities
10
<PAGE> 15
of the affected series may declare the entire principal amount (or, in the case
of original issue discount securities, the portion of the principal amount that
is specified in the terms of the affected debt security) of all the debt
securities of that series to be due and immediately payable. This is called a
declaration of acceleration of maturity. However, a declaration of acceleration
of maturity may be cancelled, but only before a judgment or decree based on the
acceleration has been obtained, by the holders of at least a majority in
principal amount of the debt securities of the affected series. (Section 502)
Reference is made to the prospectus supplement relating to any series of
debt securities which are original issue discount securities for the particular
provisions relating to acceleration of the maturity of a portion of the
principal amount of original issue discount securities upon the occurrence of an
event of default and its continuation.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee reasonable protection from
expenses and liability, called an indemnity. (Section 603) If reasonable
indemnity is provided, the holders of a majority of the outstanding principal
amount of the securities of the relevant series may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy
available to the trustee. These majority holders may also direct the trustee in
performing any other action under the indenture. (Section 512)
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- You must give the trustee written notice that an event of default has
occurred and remains uncured.
- The holders of 25% of the outstanding principal amount of all the
securities of the relevant series must make a written request that the
trustee take action because of an event of default, and must offer
reasonable indemnity to the trustee against the cost and other
liabilities of taking that action.
- The trustee must have not taken action for 60 days after receipt of the
above written request and offer of indemnity and no directions
inconsistent with the above written request must have been given to the
trustee during such period. (Section 507)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date. (Section 508)
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS, BROKERS OR
OTHER FINANCIAL INSTITUTIONS FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION
TO OR MAKE A REQUEST OF THE TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF
ACCELERATION.
Delta will furnish to the trustee every year a written statement of certain
of its officers certifying that to their knowledge Delta is in compliance with
the indenture and the debt securities, or else specifying any default and
indicating the nature and status of the default. (Section 1004)
OUR RELATIONSHIP TO THE TRUSTEE
The Bank of New York and certain of its affiliates are the trustees under a
number of other indentures to which Delta is a party; some of these indentures
relate to indebtedness which is secured. If an event of default occurred under
the indenture relating to the debt securities or one of these other indentures,
The Bank of New York may be deemed to have a conflicting interest with respect
to the debt securities for purposes of the Trust Indenture Act of 1939 and,
accordingly, may be required to resign as trustee.
11
<PAGE> 16
PLAN OF DISTRIBUTION
Delta may sell debt securities:
- to or through underwriting syndicates represented by managing
underwriters;
- through one or more underwriters without a syndicate for them to offer
and sell to the public;
- through dealers or agents; and
- to investors directly in negotiated sales or in competitively bid
transactions.
Any underwriter or agent involved in the offer and sale of any series of
the debt securities will be named in the prospectus supplement.
The prospectus supplement for each series of debt securities will describe:
- the terms of the offering of those debt securities, including the name of
the agent or the name or names of any underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agent or
underwriters and all other items constituting underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- other specific terms of the particular debt securities.
Only the agents or underwriters named in a prospectus supplement are agents
or underwriters in connection with the debt securities being offered by that
prospectus supplement.
Underwriters, agents and dealers may be entitled, under agreements with
Delta, to indemnification against certain civil liabilities, including
liabilities under the Securities Act of 1933.
Underwriters to whom debt securities are sold by Delta for public offering
and sale are obliged to purchase all of those particular debt securities if any
are purchased. This obligation is subject to certain conditions and may be
modified in the applicable prospectus supplement.
Each series of debt securities will be a new issue of securities and will
not have an established trading market. Unless otherwise indicated in the
applicable prospectus supplement, Delta will not list any series of debt
securities on an exchange. No assurance can be given that you will be able to
resell any debt securities that you may purchase.
Underwriters, dealers or agents may engage in transactions with, or perform
services for, Delta or its affiliates in the ordinary course of business.
VALIDITY OF THE DEBT SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the debt securities offered hereby will be passed upon for us by
Robert S. Harkey, Senior Vice President -- General Counsel, and for any agents,
dealers or underwriters by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule included or incorporated
by reference in our Annual Report on Form 10-K for the fiscal year ended June
30, 1999 and incorporated by reference in this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated
12
<PAGE> 17
herein by reference in this prospectus in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any documents we file at the SEC's public reference room, 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also available to
the public on the SEC's web site at http://www.sec.gov and through the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, on which our common
stock is listed.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell
all the debt securities. This prospectus is part of a registration statement we
filed with the SEC.
- Annual Report on Form 10-K for the fiscal year ended June 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended December 31, 1999;
- Current Report on Form 8-K dated November 30, 1999; and
- Current Report on Form 8-K dated January 31, 2000.
Any party to whom this prospectus is delivered, including a holder in
street name, may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this prospectus), at no cost, by
writing or telephoning us at the following address:
Delta Air Lines, Inc.
Investor Relations Department
(Dept. No. 829)
P.O. Box 20706
Atlanta, Georgia 30320
(404) 715-2600
13
<PAGE> 18
------------------------------------------------------
------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
-------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$1,746,381,000
DELTA AIR LINES, INC.
DEBT SECURITIES
--------------------
PROSPECTUS
--------------------
, 2000
------------------------------------------------------
------------------------------------------------------
<PAGE> 19
SUBJECT TO COMPLETION, DATED FEBRUARY 23, 2000
PROSPECTUS
DELTA AIR LINES, INC.
PASS THROUGH CERTIFICATES
-------------------------
This prospectus relates to the issuance of Pass Through Certificates by one
or more Pass Through Trusts to be formed by Delta Air Lines, Inc.
THE CERTIFICATES:
- - Will be issued in one or more series with distribution rates and distribution
dates specified in the prospectus supplement;
- - Will represent interests in the relevant Pass Through Trust only and will be
repaid only from the assets of that Trust, and will not represent obligations
of, or be guaranteed by, Delta;
- - May have one or more forms of liquidity enhancement; and
- - Will be issued in registered form and may be issued in accordance with a
book-entry system.
The aggregate public offering price of the Certificates will not exceed
$1,746,381,000.
EACH PASS THROUGH TRUST:
- - Will issue one or more series of Certificates;
- - Will use the proceeds of each series of Certificates to purchase Equipment
Notes of one or more series, each with an interest rate equal to the rate on
that series of Certificates and with a maturity date on or prior to the final
distribution date for that series of Certificates; and
- - Will pass through principal and interest paid on the Equipment Notes that it
owns, subject to any applicable subordination provisions.
THE EQUIPMENT NOTES:
- - Will be issued in series;
- - Will be issued either in connection with sale/leaseback transactions relating
to aircraft leased to us ("Leased Aircraft"), or to finance or refinance all
or a portion of the cost of aircraft owned by us ("Owned Aircraft") or to
raise funds for general corporate purposes;
- - If issued in connection with Leased Aircraft, will not be our obligations and
will not be guaranteed by us, but amounts due from us under the relevant lease
will be sufficient to make all payments required under those Equipment Notes;
and
- - Will be secured by the aircraft specified in the prospectus supplement and, in
the case of any Leased Aircraft, by the interest of the lessor in that lease.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to the particular series of Certificates being sold
and the underlying Equipment Notes. Sales of Certificates may not be consummated
without both this prospectus and a prospectus supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is , 2000
<PAGE> 20
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
About This Prospectus....................................... 1
Delta Air Lines, Inc........................................ 1
General Outline............................................. 1
Use of Proceeds............................................. 2
Consolidated Ratios of Earnings to Fixed Charges............ 3
Description of the Certificates............................. 3
Description of the Equipment Notes.......................... 17
Certain United States Federal Income Tax Consequences....... 24
ERISA Considerations........................................ 27
Plan of Distribution........................................ 27
Validity of the Certificates................................ 28
Experts..................................................... 28
Where You Can Find More Information......................... 29
</TABLE>
-------------------------
You should rely only on the information contained in this prospectus or any
prospectus supplement or information contained in documents which you are
referred to in this prospectus or any prospectus supplement. Delta has not
authorized anyone to provide you with information different from that contained
in this prospectus or any prospectus supplement. Delta is offering to sell the
pass through certificates only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus or any prospectus
supplement is accurate only as of the date on the front of those documents,
regardless of the time of delivery of the documents or any sale of the pass
through certificates.
<PAGE> 21
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Delta filed with
the Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf process, the Certificates described in this prospectus may be
sold in one or more offerings up to a total dollar amount of $1,746,381,000.
This prospectus provides you with a general description of the Certificates that
may be offered.
Each time Certificates are sold, Delta will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described in the section
entitled "Where You Can Find More Information" on page 29.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
DELTA AIR LINES, INC.
Delta is a major airline engaged in domestic and foreign air
transportation. We provide scheduled air transportation over a network of routes
throughout the United States and between the United States and various foreign
countries.
We operate hubs in Atlanta, Cincinnati, Dallas/Fort Worth and Salt Lake
City. We also operate an international gateway at New York's Kennedy Airport and
a Pacific gateway in Portland, Oregon. Our principal executive offices are
located at Hartsfield Atlanta International Airport, Atlanta, Georgia 30320, and
our telephone number is (404) 715-2600. Delta is incorporated under the laws of
the State of Delaware.
GENERAL OUTLINE
The Certificates are securities that evidence an ownership interest in a
pass through trust (a "Trust"). The holders of the Certificates issued by a
Trust will be the beneficiaries of that Trust. The beneficial interest in a
Trust represented by a Certificate will be a percentage interest in the property
of that Trust. The beneficial interest will be equal to the original face amount
of that Certificate divided by the original face amount of all the Certificates
issued by that Trust. Each Certificate will represent a beneficial interest only
in the property of the Trust that issued that Certificate. Multiple series of
Certificates may be issued. If more than one series of Certificates is issued,
each series of Certificates will be issued by a separate Trust.
The property that will be held by each Trust will include equipment notes
("Equipment Notes") secured by either Leased Aircraft or Owned Aircraft.
Payments on principal and interest on the Equipment Notes owned by a Trust will
be passed through to holders of the Certificates issued by that Trust in
accordance with the terms of the Basic Agreement (as defined below) for that
Trust.
We will enter into a Pass Through Trust Agreement (the "Basic Agreement")
in anticipation of offerings of Certificates. In connection with issuance of a
particular series of Certificates, we will enter into a separate Trust
Supplement (a "Trust Supplement"). The Trust Supplement with respect to a
particular series of Certificates will form a separate Trust for that series,
and will name the trustee for that Trust (the "Trustee"). Action taken by the
Trustee with respect to any series of Certificates will be taken on behalf of
the Trust it represents.
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<PAGE> 22
The Trustee will enter into one or more purchase or refunding agreements
(each, a "Note Purchase Agreement") in connection with each series of
Certificates. Under a Note Purchase Agreement, the Trustee will agree to
purchase one or more Equipment Notes to be issued under a trust indenture (an
"Indenture"). Each Equipment Note will relate to one or more Aircraft, as
described in the applicable prospectus supplement.
The Equipment Notes in each Trust will have identical interest rates, which
in each case will be equal to the rate applicable to the Certificates issued by
that Trust. Also, the Equipment Notes in each Trust will have identical priority
of payment (in each case, relative to any other Equipment Notes issued under the
same Indenture). The maturity dates of the Equipment Notes in each Trust will
occur on or before the final distribution date applicable to the Certificates
that will be issued by that Trust.
The Trustee will distribute the amount of payments of principal, premium,
if any, and interest received by it as holder of the Equipment Notes to the
registered holders of Certificates of the Trust (the "Certificateholders") in
which the Equipment Notes are held. These distributions may be subject to the
effect of any cross-subordination provisions described in the prospectus
supplement for a series of Certificates (which could, if applicable, limit or
delay your receipt of distributions).
LEASED AIRCRAFT
Each series of Equipment Notes issued in connection with a Leased Aircraft
(the "Leased Aircraft Notes") will be issued by a trustee (an "Owner Trustee")
under an Indenture (a "Leased Aircraft Indenture") between an Owner Trustee and
a loan trustee (a "Loan Trustee"). The Owner Trustee and the Loan Trustee with
respect to each series of Leased Aircraft Notes will be specified in the related
prospectus supplement.
The Owner Trustee will not be acting in its individual capacity, but solely
as owner trustee of a separate trust for the benefit of one or more
institutional investors (each, an "Owner Participant"). With respect to each
Leased Aircraft, the related Owner Participant(s) will have provided or will
provide, from sources other than the Leased Aircraft Notes, a portion of the
equipment cost of the related Leased Aircraft. No Owner Participant will be
personally liable for any amount payable under the related Leased Aircraft
Indenture or the related Leased Aircraft Notes.
Each Leased Aircraft will be leased by the related Owner Trustee to us
pursuant to a separate lease agreement (a "Lease").
OWNED AIRCRAFT
Equipment Notes that are not Leased Aircraft Notes are "Owned Aircraft
Notes". Each series of Owned Aircraft Notes will be issued under an Indenture
(an "Owned Aircraft Indenture") between a Loan Trustee and us.
USE OF PROCEEDS
The Trustee will use the proceeds of the Certificates for the purchase of
one or more Equipment Notes. The Equipment Notes will be issued:
- To finance or refinance the debt portion and, in certain cases, to
refinance some of the equity portion of one or more separate leveraged
lease transactions entered into by us, as lessee of Leased Aircraft;
- To finance the purchase of Owned Aircraft by us, or to refinance any debt
previously issued by us in connection
2
<PAGE> 23
with our purchase of Owned Aircraft; and
- To provide us with proceeds available for general corporate purposes.
General corporate purposes of Delta may include, among other possible uses, the
repayment of short-term or long-term indebtedness, capital expenditures,
repurchases of common stock and acquisitions.
To the extent that the proceeds of any offering of Certificates are not
used to purchase Equipment Notes on the date of issuance of those Certificates,
the relevant proceeds will be held for the benefit of those Certificateholders.
If those proceeds are not used to purchase Equipment Notes by the date specified
in the applicable prospectus supplement, they will be returned to the applicable
Certificateholders. See "Description of Certificates -- Delayed Purchase of
Equipment Notes" on pages 15-16 for a description of the procedure for delayed
purchase of Equipment Notes.
The prospectus supplement with respect to any series of Certificates will
provide additional details with respect to the use of proceeds of those
Certificates, and with respect to the use of proceeds of any Equipment Notes to
be purchased by the Trust.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Delta and its consolidated subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JUNE 30, DECEMBER 31,
- -------------------------------- ------------
1995 1996 1997 1998 1999 1998 1999
- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
1.69 1.43 3.05 3.41 3.45 3.04 3.67
</TABLE>
Earnings represent:
- Income before income taxes, excluding the cumulative effect of accounting
changes; plus
- Fixed charges, excluding capitalized interest and interest offset on the
Guaranteed Serial ESOP Notes of the Delta Family-Care Savings Plan, which
are guaranteed by Delta.
Fixed charges include:
- Interest, whether expensed or capitalized, including gross interest on
the Guaranteed Serial ESOP Notes;
- Amortization of debt issuance costs; and
- One-half of rental expense, except for the years ended June 30, 1995,
1996 and 1997, where one-third of the rentals were included in fixed
charges. Management of Delta believes this is representative of the
interest factor in those periods.
DESCRIPTION OF THE CERTIFICATES
In connection with each offering under this prospectus and accompanying
prospectus supplement, one or more separate Trusts will be formed and one or
more series of Certificates will be issued. Each series of Certificates will be
issued pursuant to the Basic Agreement and a Trust Supplement between the
Trustee and us. The statements made under this caption are summaries of detailed
provisions of the Basic Agreement.
3
<PAGE> 24
We have filed a copy of the Basic Agreement with the Securities and
Exchange Commission ("SEC") as an exhibit to the registration statement. In
addition, we will file with the SEC forms of each of the agreements listed below
and discussed in this prospectus or the accompanying prospectus supplement:
- Trust Supplement
- Note Purchase Agreement
- Indenture
- Lease
- Trust Agreement
- Participation Agreement, and
- Liquidity Facility Assignment
You should refer to those agreements for more information regarding the terms
discussed in this prospectus and accompanying prospectus supplement. See "Where
You Can Find More Information" on page 29 for information on documents we file
with the SEC. The summaries contained in this prospectus and the accompanying
prospectus supplement are qualified in their entirety by reference to those
filed agreements.
The Certificates offered pursuant to this prospectus will be limited to
$1,746,381,000 aggregate public offering price.
The prospectus supplement accompanying this prospectus contains a glossary.
You should refer to the glossary for definitions of the material terms used with
respect to the series of Certificates being offered. To the extent that any
provision in the accompanying prospectus supplement is inconsistent with this
summary, the prospectus supplement will control.
GENERAL
WHAT THE CERTIFICATES REPRESENT
Each Certificate will represent a fractional undivided interest in the
Trust created by the Basic Agreement and the related Trust Supplement. All
payments and distributions will be made only from the property of the related
Trust (the "Trust Property"). The Trust Property will include:
- The Equipment Notes held in that Trust;
- All monies at any time paid, due and to become due on those Equipment
Notes (subject to the effect of any cross-subordination provisions
described in the prospectus supplement for a series of Certificates);
- Funds from time to time deposited with the Trustee in accounts of the
Trust; and
- If specified in the prospectus supplement related to a series of
Certificates, rights under intercreditor agreements relating to
cross-subordination arrangements and monies receivable under a liquidity
facility.
The Certificates will be issued in minimum denominations of $1,000 or an
integral multiple of that amount. One Certificate of each series, however, may
be issued in a different denomination.
WHAT THE CERTIFICATES DO NOT REPRESENT
The Certificates do not represent an interest in or an obligation of us,
the Trustee, any of the Loan Trustees or Owner Trustees in their individual
capacities, any Owner Participant or any of their affiliates. By accepting a
Certificate, you agree to look solely to the income and proceeds from the Trust
Property as provided in the Basic Agreement and the applicable Trust Supplement.
ISSUANCE OF EQUIPMENT NOTES
The Equipment Notes issued under a single Indenture may be held in more
than one Trust. One Trust may hold Equipment Notes issued under more than one
Indenture. Unless otherwise provided in a prospectus supplement, only Equipment
Notes having the same priority of payment (which will constitute a "Class" of
Equipment Notes) may be held in the same Trust.
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PASS THROUGH OF INTEREST PAID ON EQUIPMENT NOTES
Interest paid on the Equipment Notes will be passed through to
Certificateholders of each Trust. The rate of payment to Certificateholders will
be the same rate per annum payable on the Equipment Notes held by that Trust.
This rate will be set forth for each Trust on the cover page of the applicable
prospectus supplement, and may be affected by any cross-subordination provisions
described in the prospectus supplement for a series of Certificates.
DESCRIPTION OF INFORMATION CONTAINED IN PROSPECTUS SUPPLEMENTS
You should consult the related prospectus supplement for a description of
the specific series of Certificates. The information in the related prospectus
supplement will include the following:
- Specific designation and title of the Certificates;
- Aggregate principal amount of each series of Certificates;
- Regular Distribution Dates and Special Distribution Dates applicable to
those Certificates;
- Distribution rates on those Certificates;
- Ranking of the Certificates in terms of priority of payment;
- Subordination provisions among the holders of Certificates, including any
cross-subordination provisions among the holders of Certificates in
separate Trusts;
- Currency or currencies (including currency units) in which the
Certificates may be denominated;
- Specific form of the Certificates, including whether or not the
Certificates are to be issued in accordance with a book-entry system;
- Any related lease or financing arrangements;
- Any listing on a national securities exchange;
- Description of the Equipment Notes to be purchased by the Trust,
including:
-- the period or periods within which, the price or prices at which, and
the terms and conditions upon which the Equipment Notes may or must be
redeemed or defeased in whole or in part, by us or, with respect to
Leased Aircraft Notes, the Owner Trustee,
-- the interest rate and payment dates of the Equipment Notes,
-- the payment priority of the Equipment Notes in relation to any other
Equipment Notes issued in relation to the same Aircraft,
-- any additional related security or liquidity enhancements, and
-- any intercreditor or other rights or limitations between the holders
of Equipment Notes which have different priorities but relate to the
same Aircraft;
- Description of the related Aircraft;
- Description of the related Note Purchase Agreement and related
Indentures, including:
-- a description of the events of default under the related Indentures,
-- the remedies exercisable upon the occurrence of events of default, and
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-- any limitations on the exercise of those remedies with respect to the
related Equipment Notes;
- If the Certificates relate to Leased Aircraft, a description of the
related Leases, Trust Agreements and Participation Agreements, including:
-- the names of the related Owner Trustees,
-- a description of the events of default under the Leases, the remedies
exercisable upon the occurrence of the described events of default and
any limitations on the exercise of those remedies with respect to the
Leased Aircraft Notes,
-- a description of the events of loss with respect to the related Leased
Aircraft and any right we may have to replace Leased Aircraft, and
-- any rights of the Owner Trustee or Owner Participant to cure our
failures to pay rent under the related Lease;
- Description of the terms of any underwriting arrangement, including:
-- the names of any underwriters or agents,
-- the amounts to be purchased by underwriters or agents, and
-- the compensation of underwriters or agents;
- The extent, if any, to which the provisions of the operative documents
applicable to the Equipment Notes may be amended by the parties to those
Equipment Notes and whether the consent of the holders or the consent of
the holders of a specified percentage of aggregate principal amount of
the Equipment Notes is necessary for amendment; and
- Any other special terms pertaining to the relevant Certificates.
BOOK-ENTRY REGISTRATION
GENERAL
The applicable prospectus supplement for each series of Certificates will
state whether those Certificates will be subject to the following provisions and
the provisions under the caption "Definitive Certificates" on page 8.
Upon issuance, each series of Certificates will be represented by one or
more fully registered global certificates. Unless otherwise provided in a
prospectus supplement, each global certificate will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of
DTC's nominee, CEDE & Co. ("Cede"). No person acquiring an interest in
Certificates (a "Certificate Owner") will be entitled to receive a certificate
representing their interest in those Certificates until, if ever, a Definitive
Certificate, as described under "Definitive Certificates" on page 8 is issued.
Unless and until Definitive Certificates are issued, all references to
actions by Certificateholders will refer to actions taken by DTC upon
instructions from DTC Participants. All references to distributions, notices,
reports and statements to Certificateholders will refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of those Certificates, or to DTC Participants for distribution to
Certificate Owners in accordance with DTC procedures.
DTC AND DTC PARTICIPANTS
DTC is:
- A limited purpose trust company organized under the laws of the State of
New York;
- A member of the Federal Reserve System;
- A "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- A "clearing agency" registered pursuant to section 17A of the Exchange
Act.
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DTC was created to hold securities for its participants ("DTC
Participants") and to facilitate the clearance and settlement of securities
transactions between DTC Participants through electronic book-entries, thereby
eliminating the need for physical transfer of certificates. DTC Participants
include:
- Securities brokers and dealers
- Banks
- Trust companies
- Clearing corporations
Indirect access to the DTC system also is available to Indirect
Participants that clear through or maintain a custodial relationship with a DTC
Participant either directly or indirectly. Indirect Participants may include:
- Banks
- Brokers
- Dealers
- Trust companies
PROCEDURE FOR TRANSFERS AND PAYMENTS
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Certificates may do so only through DTC Participants and
Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal and interest from the Trustee through DTC, DTC
Participants or Indirect Participants, as the case may be.
Under a book-entry format, Certificate Owners may experience some delay in
their receipt of payments, because the payments will be forwarded by the Trustee
to Cede, as nominee for DTC. DTC will forward those payments in same-day funds
to DTC Participants who are credited with ownership of the Certificates. The
amounts forwarded to DTC Participants will be proportionate to the principal
amount of each DTC Participant's respective holdings of beneficial interests in
the Certificates. Subsequently, DTC Participants will forward payments to
Indirect Participants or Certificate Owners, as the case may be, in accordance
with customary industry practices. The forwarding of these distributions to the
Certificate Owners will be the responsibility of the appropriate DTC
Participants.
Unless and until, if ever, the Definitive Certificates are issued, the only
"Certificateholder" will be Cede. Certificate Owners will not be recognized by
the Trustee as Certificateholders, as the term is used in the Basic Agreement,
and Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Certificates among the DTC Participants for whom it is acting with respect
to the Certificates. DTC also is required to receive and transmit distributions
of principal, premium, if any, and interest with respect to the Certificates.
Similarly, the DTC Participants and Indirect Participants, with which
Certificate Owners have accounts for their Certificates, are required to make
book-entry transfers and receive and transmit applicable payments on behalf of
their respective customers. Accordingly, although Certificate Owners will not
possess the Certificates, the Rules provide a mechanism by which Certificate
Owners will receive payments and will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
its Certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to its Certificates, may be limited due
to the lack of a physical certificate for those Certificates.
DTC has advised Delta that it will take any action permitted to be taken by
a Certificateholder under the Basic Agreement only at the direction of one or
more of the DTC Participants to whose accounts the Certificates
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are credited. Additionally, in the event any action requires approval by
Certificateholders of a particular percentage of beneficial interest in each
Trust, DTC will take such action only at the direction of and on behalf of DTC
Participants whose holdings include undivided interests that satisfy that
percentage. DTC may take conflicting actions with respect to the undivided
interests of DTC Participants who hold those undivided interests.
Neither Delta nor the Trustee will have any liability for:
- Any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Certificates held by Cede, as
nominee for DTC; or
- For maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
DEFINITIVE CERTIFICATES
Certificates will be issued in certificated form ("Definitive
Certificates") to Certificate Owners or their nominees, rather than to DTC or
its nominee, only if:
- Delta advises the Trustee in writing that DTC is no longer willing or
able to discharge properly its responsibilities as depository with
respect to the Certificates and Delta is unable to locate a qualified
successor;
- Delta, at its option, elects to terminate the book-entry system through
DTC; or
- After the occurrence of particular events specified in the related
Prospectus Supplement, Certificate Owners with fractional undivided
interests aggregating at least a majority in interest in the applicable
Trust advise the Trustee, Delta and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC, or its
successor, is no longer in the Certificate Owners' best interest.
Upon the occurrence of any of these events, the Trustee will be required to
notify all Certificate Owners through DTC Participants of the availability of
Definitive Certificates. Upon surrender by DTC of the global certificates
representing the Certificates and receipt of instructions for re-registration,
the Trustee will reissue the Certificates as Definitive Certificates to
Certificate Owners.
If and when Definitive Certificates are issued to owners, distributions of
principal, premium, if any, and interest with respect to Certificates will be
made in accordance with the procedures set forth in the Basic Agreement and the
applicable Trust Supplements. The Trustee will make these distributions directly
to holders in whose names the Definitive Certificates were registered at the
close of business on the applicable record date. The distributions will be made
by check mailed to the address of each applicable holder as it appears on the
register maintained by the Trustee. The final payment on any Certificate,
however, will be made only upon presentation and surrender of the Certificate at
the office or agency specified in the notice of final distribution to
Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at the
office of the Trustee upon compliance with the requirements set forth in the
Basic Agreement and the applicable Trust Supplements. No service charge will be
imposed for any registration of transfer or exchange, but payment of a sum
sufficient to cover any tax or other governmental charge will be required.
PAYMENTS AND DISTRIBUTIONS
GENERAL
Payments of principal, premium, if any, and interest on the Equipment Notes
held in each Trust will be distributed by the Trustee, upon receipt, to the
Certificateholders of the applicable Trust on the dates specified in the
applicable prospectus supplement, except in certain cases. Any
cross-subordination provisions set forth in the prospectus supplement for a
series of Certificates may affect these
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payments. Also, payments may be affected when some or all of the relevant
Equipment Notes are in default as described in the applicable prospectus
supplement.
SCHEDULED PAYMENTS
Scheduled payments of principal of, and interest on, the unpaid principal
amount of the Equipment Notes held in each Trust will be scheduled to be
received by the Trustee on the Regular Distribution Dates specified in the
applicable prospectus supplement ("Scheduled Payments"). Each Certificateholder
of each Trust will be entitled to receive a proportional share of any
distribution of Scheduled Payments of principal and interest made on the
Equipment Notes held in that Trust, subject to any cross-subordination
provisions set forth in the prospectus supplement for that series of
Certificates.
SPECIAL PAYMENTS
Special payments ("Special Payments") include all payments, other than
Scheduled Payments received on a Regular Distribution Date or within five days
thereafter. Special Payments would include payments of principal, premium, if
any, and interest received by the Trustee on account of the early redemption or
purchase, if any, of the Equipment Notes relating to one or more Aircraft held
in a Trust.
Special Payments received by the Trustee relating to one or more Aircraft
will be distributed on the "Special Distribution Date" determined by the method
described in the applicable prospectus supplement. The applicable prospectus
supplement may, however, specify that payments received by the Trustee following
default in relation to the Equipment Notes on a Regular Distribution Date as a
result of a drawing under any Liquidity Facility provided for the benefit of the
specified Certificateholders will be distributed on the Regular Distribution
Date to those Certificateholders. The Trustee will mail notice of any
anticipated Special Distribution Date to the Certificateholders of record of the
applicable Trust.
POOL FACTORS
Certificateholders will receive periodic statements of the Pool Balance and
Pool Factor with respect to the relevant Trust. Those statements will provide
information with respect to the remaining principal portion of the Certificates
issued by that Trust. The "Pool Balance" indicates, as of any given date, the
original aggregate face amount of the Certificates of a Trust less the aggregate
amount of all payments made in relation to those Certificates. The aggregate
amount of all payments will not include, however, payments of interest or
premium or reimbursements of any costs and expenses connected to payments of
interest or premium.
The "Pool Factor" for each Trust as of any date is the Pool Balance for
that Trust divided by the aggregate original face amount of Certificates of that
Trust (rounded to the seventh decimal place).
The Pool Factor for a Trust will initially be 1.0000000 and will decline as
a result of reductions in the Pool Balance of that Trust. The amount of a
Certificateholder's proportional share of the Pool Balance of a Trust will be
the original denomination of the holder's Certificate of that Trust multiplied
by the Pool Factor for that Trust.
The Pool Factor and the Pool Balance for each Trust will be computed and
mailed to the Certificateholders on a Regular Distribution Date or Special
Distribution Date. Each computation will give effect to (1) the payment of
principal, if any, on the Equipment Notes or other Trust Property held in the
Trust and (2) the distribution of principal to be made on that date.
In the event of an early redemption, a purchase of an issue of Equipment
Notes by the related Owner Trustee after an Indenture Default (as defined below)
or a default in the payment of principal in respect of one or more issues of the
Equipment Notes held in a Trust (if the applicable payment is not made within
five days of the Regular Distribution Date), the Pool Factor and the Pool
Balance of each Trust
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affected will be recomputed, after giving appropriate effect to that event.
Notice of the recomputation will be mailed to the Certificateholders of that
Trust.
REPORTS TO CERTIFICATEHOLDERS
Together with each distribution of a Scheduled Payment or a Special
Payment, the Trustee will send to the Certificateholders a statement giving
effect to that distribution and setting forth the following information:
- The amount of distribution allocable to principal and the amount
allocable to premium per $1,000 aggregate principal amount of Certificate
for that Trust, if any;
- The amount of distribution allocable to interest, per $1,000 aggregate
principal amount of Certificate for that Trust; and
- The Pool Balance and the Pool Factor for that Trust.
If the Certificates are registered in the name of DTC or its nominee, on
the record date prior to each Regular Distribution Date and Special Distribution
Date, the Trustee will request from DTC a securities position listing setting
forth the names of all DTC Participants reflected on DTC's books as holding
interests in the Certificates on that date. On each Regular Distribution Date
and Special Distribution Date, the applicable Trustee will mail to each of these
DTC Participants the described statement and will make available additional
copies as requested by them for forwarding to Certificate Owners.
In addition, after the end of each calendar year, the Trustee will prepare
a report for each Certificateholder of each Trust at any time during the
preceding calendar year. Each report will contain the sum of the distributions
allocable to principal, premium, if any, and interest with respect to the Trust
for that calendar year. In the event a person was a Certificateholder during
only a portion of that calendar year, the report will contain the sum for the
applicable portion of that calendar year. The report will also contain other
items readily available to the Trustee and which a Certificateholder reasonably
requests as necessary for the purpose of that Certificateholder's preparation of
its federal income tax return. The report and other items will be prepared on
the basis of information supplied to the Trustee by the DTC Participants and
will be delivered by the Trustee to those DTC Participants. The report will then
be available for forwarding by DTC Participants to Certificate Owners.
At the time, if any, Certificates are issued in the form of Definitive
Certificates, the Trustee will prepare and deliver the information described
above to each Certificateholder of record of each Trust as the name and period
of ownership of that Certificateholder appears on the records of the registrar
of the Certificates.
VOTING OF EQUIPMENT NOTES
The Trustee, as holder of the Equipment Notes held in each Trust, has the
right to vote, give consents or waivers or otherwise exercise rights as the
holder of those Equipment Notes. The Basic Agreement and Trust Supplement
relating to each Trust will set forth:
- The circumstances under which the Trustee may direct any action or cast
any vote as the holder of the Equipment Notes held in the applicable
Trust at its own discretion;
- The circumstances in which the Trustee will seek instructions from the
Certificateholders of the Trust before taking action as the holder of
Equipment Notes; and
- If applicable, the percentage of Certificateholders required to direct
the Trustee to take any action.
The Trustee's rights will be subject to the effect of any
cross-subordination provisions set forth in the related prospectus supplement.
If specified in the related prospectus supplement, the right of a Trustee to
vote and give consents and waivers with respect to the Equipment Notes held in
the related Trust may, in the
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circumstances set forth in an intercreditor agreement to be executed by that
Trustee and specified in that prospectus supplement, be exercisable by another
person specified in that prospectus supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection. The prospectus supplement will
specify the events of default under the Basic Agreement ("Events of Default")
and under the related Indentures ("Indenture Defaults"). The Indenture Defaults
in the case of Leased Aircraft Indentures will include events of default under
the related Leases (a "Lease Event of Default"). With respect to any Equipment
Notes that are supported by a Liquidity Facility, the Indenture Defaults or
Events of Default also may include events of default under that Liquidity
Facility.
Unless otherwise provided in a prospectus supplement, all of the Equipment
Notes issued under the same Indenture will relate to a specific Aircraft and
there will be no cross-collateralization or cross-default provisions in the
Indentures. Accordingly, events resulting in an Indenture Default under any
particular Indenture would not necessarily result in an Indenture Default
occurring under any other Indenture.
As described below under "Cross-Subordination Issues" on page 15, a
prospectus supplement may provide the terms of any cross-subordination
provisions among Certificateholders of separate Trusts. If cross-subordination
provisions are provided, payments made pursuant to an Indenture under which an
Indenture Default has not occurred may be distributed first to the holders of
the Certificates issued under the Trust holding the most senior Equipment Notes
issued under other Indentures.
The ability of the applicable Owner Trustee or Owner Participant under a
Leased Aircraft Indenture to cure Indenture Defaults, including an Indenture
Default that results from the occurrence of a Lease Event of Default under the
related Lease, will be described in the prospectus supplement. Some Certificates
or Equipment Notes may be entitled to the benefits of a Liquidity Facility. A
drawing under a Liquidity Facility for the purpose of making a payment of
interest because Delta failed to make a corresponding payment will not cure an
Indenture Default or any Lease Default related to that failure by Delta.
The prospectus supplement related to a series of Certificates will describe
the circumstances under which the Trustee of a Trust may vote some or all of the
Equipment Notes held in that Trust. The prospectus supplement also will set
forth the percentage of Certificateholders of the Trust entitled to direct the
Trustee to take any action with respect to the Equipment Notes of that Trust. If
the Equipment Notes outstanding under an Indenture are held by more than one
Trust, then the ability of the Certificateholders of any one Trust to cause the
Loan Trustee with respect to any Equipment Notes held in that Trust to
accelerate those Equipment Notes or to direct the exercise of remedies by the
Loan Trustee under the applicable Indenture will depend upon the proportion of
the aggregate principal amount of the Equipment Notes outstanding under the
applicable Indenture and Trust to the aggregate principal amount of all
Equipment Notes outstanding under that Indenture. In addition, if
cross-subordination provisions are applicable to any series of Certificates,
those provisions may affect the ability of the Certificateholders of any one
Trust to accelerate the Equipment Notes or to direct the exercise of remedies by
the Loan Trustee depending, in part, upon the Class of Equipment Notes held in
that Trust.
If the Equipment Notes outstanding under an Indenture are held by more than
one Trust, then each Trust will hold Equipment Notes with different terms from
the Equipment Notes held in the other Trusts. The Certificateholders of each
Trust may, therefore, have divergent or conflicting interests from those of the
Certificateholders of the other Trusts holding Equipment Notes issued under the
same Indenture.
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In addition, so long as the same institution acts as Trustee of each Trust, in
the absence of instructions from the Certificateholders of any Trust, the
Trustee for that Trust might, for the same reason, be faced with a potential
conflict of interest upon an Indenture Default. In the event this sort of
conflict of interest occurs, the Trustee has indicated that it would resign as
Trustee of one or all of the related Trusts, and a successor trustee would be
appointed in accordance with the terms of the Basic Agreement.
The prospectus supplement for a series of Certificates will specify whether
and under what circumstances the Trustee may sell all or part of the Equipment
Notes held in the related Trust. A "Special Payments Account" will be
established by the Trustee for the benefit of the Certificateholders of the
applicable Trust, and any proceeds received by the Trustee upon any such sale
will be deposited into that Special Payments Account and distributed to the
Certificateholders of the applicable Trust on a Special Distribution Date.
The market for Equipment Notes in default may be very limited, and the
Trustee may not be able to sell such Equipment Notes for a reasonable price.
Furthermore, if the same institution acts as Trustee of multiple Trusts, it may
be faced with a conflict in deciding from which Trust to sell Equipment Notes to
available buyers. If the Trustee sells any Equipment Notes in default for less
than their outstanding principal amount, the Certificateholders of that Trust
will receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against Delta, any Owner Trustee, any
Owner Participant or the Trustee. Furthermore, unless otherwise specified in the
applicable prospectus supplement, neither the Trustee nor the Certificateholders
of that Trust could take any action with respect to any remaining Equipment
Notes held in that Trust, so long as no related Indenture Defaults exist.
The Trustee will deposit in the Special Payments Account for a Trust, and
will distribute to the Certificateholders of that Trust on a Special
Distribution Date, any amount, other than Scheduled Payments received on a
Regular Distribution Date or within five days of a Regular Distribution Date,
distributed to the Trustee of that Trust under any Indenture on account of the
Equipment Notes held in that Trust. In addition, a prospectus supplement may
provide that the applicable Owner Trustee may, under specified circumstances,
redeem or purchase the outstanding Equipment Notes issued under the applicable
Indenture. If any Equipment Notes are so redeemed or purchased, the price paid
by the Owner Trustee to the Trustee of any Trust for those Equipment Notes will
be deposited in the Special Payments Account for that Trust and will be
distributed to the Certificateholders of that Trust on a Special Distribution
Date.
The Trustee will invest and reinvest, to the extent practicable, any funds
held by the Trustee in the Special Payments Account for the related Trust,
pending the distribution of those funds on a Special Distribution Date. Those
investments would be made in "Permitted Investments" specified in the related
prospectus supplement.
The Basic Agreement provides that the Trustee of each Trust will, within 90
days after the occurrence of a default (as defined below in this paragraph) in
respect of that Trust, give to the Certificateholders of that Trust notice,
transmitted by mail, of all uncured or unwaived defaults with respect to that
Trust known to it. The Trustee may withhold that notice, however, except in the
case of default in the payment of principal, premium, if any, or interest on any
of the Equipment Notes held in that Trust, if the Trustee in good faith
determines that the withholding of notice is in the interests of those
Certificateholders. The term "default" as used in this paragraph only means the
occurrence of an Indenture Default with respect to Equipment Notes held in a
Trust, except that in determining whether any Indenture Default has occurred,
any related grace period or notice will be disregarded.
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act
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with the required standard of care, to demand
reasonable security or indemnity by the Certificateholders of that Trust before
proceeding to exercise any right or power under the Basic Agreement at the
request of those Certificateholders.
The prospectus supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the Trustee
to waive, any past Event of Default related to that Trust and its consequences.
The prospectus supplement for a series of Certificates also will specify the
percentage of Certificateholders, and whether that percentage includes
Certificateholders of any other Trust holding Equipment Notes issued under
related Indentures, entitled to waive, or to instruct the Trustee or the Loan
Trustee to waive, any past Indenture Default. A waiver by the relevant
Certificateholders of, or instruction by the relevant Certificateholders to the
Trustee to waive, any past Indenture Default will annul any direction previously
given.
MERGERS AND SIMILAR EVENTS
We are generally permitted to consolidate or merge with another person. We
are also permitted to sell or lease substantially all of our assets to another
person or to buy or lease substantially all of the assets of another person.
However, we may not take any of these actions unless all of the following
conditions are met:
- The surviving, successor or transferee person will:
-- be organized and validly existing under the laws of the United States
or any of its states or the District of Columbia,
-- be a "citizen of the United States", as defined in Title 49 of the
United States Code relating to aviation (the "Transportation Code")
(see "Equipment Notes -- Security -- Special Rights of Lessors,
Conditional Vendors and Holders of Security Interests Under the
Bankruptcy Code" on pages 19-20 for the definition of "citizen of the
United States") holding an air carrier operating certificate issued by
the Secretary of Transportation pursuant to Chapter 447 of Title 49,
United States Code, if, and so long as, such status is a condition of
entitlement to the benefits of Section 1110 of the Bankruptcy Code,
and
-- expressly assume all of our obligations contained in the Basic
Agreement and any Trust Supplement, the Note Purchase Agreements, any
Owned Aircraft Indentures and, in relation to the Leased Aircraft, the
applicable Participation Agreements and Leases, and any other
operative documents; and
- Delta will have delivered a certificate and an opinion or opinions of
counsel indicating that the relevant transaction, in effect, complies
with these conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
SUPPLEMENTAL AGREEMENTS ENTERED WITHOUT CONSENT
The Basic Agreement contains provisions permitting us, together with the
Trustee of each Trust, to enter into a supplemental trust agreement without the
consent of the Certificateholders of that Trust to, among other things:
- Provide for the formation of that Trust and the issuance of a series of
Certificates;
- Evidence the succession of another corporation to Delta and the
assumption by that corporation of our obligations under the Basic
Agreement and the applicable Trust Supplement;
- Add to our covenants for the benefit of the Certificate, or to surrender
any of our rights or powers under the Basic Agreement;
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- Cure any ambiguity or correct or supplement any defective or inconsistent
provision of the Basic Agreement or the applicable Trust Supplement or to
make any other provisions necessary to address related matters or
questions that arise, provided that doing so does not materially
adversely affect the interests of the Certificateholders;
- Cure any ambiguity or correct any mistake or to give effect or provide
for replacement liquidity facilities, if applicable to the relevant
Certificates;
- Comply with any requirement of the SEC, applicable law, rules or
regulations of any exchange or quotation system on which any Certificates
may be listed or of any regulatory body;
- Modify, eliminate or add to the provisions of the Basic Agreement to the
extent necessary to continue the qualification of the Basic Agreement,
including any supplemental agreement under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and to add to the Basic
Agreement any other provisions expressly permitted by the Trust Indenture
Act, with some certain exceptions;
- Provide for a successor Trustee or to add to or change any provision of
the Basic Agreement as necessary to facilitate the administration of the
related Trusts by more than one Trustee; and
- Make any other amendments or modifications to the Basic Agreement,
provided the amendments or modifications will only apply to Certificates
issued after the relevant amendment.
No supplemental trust agreement entered into under any of these provisions,
however, will be permitted if it adversely affects the status of any Trust as a
grantor trust for U.S. federal income tax purposes.
SUPPLEMENTAL AGREEMENTS ENTERED WITH CONSENT
The Basic Agreement also contains provisions permitting us, together with
the Trustee of each Trust, and with the consent of the Certificateholders of
that Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of that Trust, to execute a supplemental trust agreement
that adds any provisions to or changes or eliminates any of the provisions of
the Basic Agreement (to the extent relating to that Trust) or the applicable
Trust Supplement, or modifies the rights of the Certificateholders. No such
supplemental trust agreement may, however, without the consent of each
Certificateholder to be affected:
- Reduce in any manner the amount of, or delay the timing of, any receipt
by the Trustee of payments on the Equipment Notes held in the applicable
Trust or distributions related to any Certificate, or change the date or
place of any payment related to any Certificate, or make distributions
payable in coin or currency other than that provided for in the
Certificates, or impair the right of any Certificateholder of the Trust
to institute suit for the enforcement of any applicable payment when due;
- Permit the disposition of any Equipment Note held in the Trust, except as
provided in the Basic Agreement or the applicable Trust Supplement, or
otherwise deprive any Certificateholder of the benefit of the ownership
of the applicable Equipment Notes;
- Reduce the percentage of the aggregate fractional undivided interests of
the Trust provided for in the Basic Agreement or the applicable Trust
Supplement, as the consent of the Certificateholders of that Trust is
required for any related supplemental trust agreement or for any waiver
provided for in the Basic Agreement or applicable Trust Supplement;
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- Modify any of the provisions relating to the rights of the relevant
Certificateholders with regards to the waiver of events of default or
supplemental agreements, with some limited exceptions;
- Alter the priority of distributions specified in any applicable
intercreditor agreement in a manner materially adverse to the interests
of the Certificateholders of that Trust; or
- Adversely affect the status of any Trust as a grantor trust for U.S.
federal income tax purposes.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The prospectus supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to those Equipment Notes,
including any Lease related to Leased Aircraft Notes, or any Liquidity Facility.
CROSS-SUBORDINATION ISSUES
The Equipment Notes issued under a single Indenture may be held in more
than one Trust, and one Trust may hold Equipment Notes issued under several
Indentures. Unless otherwise provided in a prospectus supplement, only Equipment
Notes of the same Class may be held in a Trust. If Equipment Notes of different
Classes are held in the same Trust, payments made on account of a subordinate
class of Certificates issued under a prospectus supplement may, under
circumstances described in that prospectus supplement, be subordinated to the
prior payment of all amounts owing to Certificateholders of a Trust holding
senior Equipment Notes issued under a Related Indenture. The prospectus
supplement relating to an issuance of Certificates will describe any applicable
"cross-subordination" provisions and any related terms, including the percentage
of Certificateholders under any Trust which are permitted to:
- Grant waivers of defaults under any related Indenture;
- Consent to the amendment or modification of any related Indenture; or
- Direct the exercise of remedial actions under any related Indenture.
Payments made on account of Certificates may also be subordinated to the
rights of the provider of any related Liquidity Facility, as described under
"Liquidity Facility" on page 16.
TERMINATION OF THE TRUSTS
Our obligations and the obligations of the Trustee with respect to a Trust
will terminate upon the distribution to Certificateholders of that Trust of:
- All amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement; and
- The disposition of all property held in that Trust.
Before termination, the Trustee will send notice of the termination of that
Trust to each Certificateholder of record. That notice will specify the amount
of the proposed final payment and the proposed date for the distribution of the
final payment for that Trust.
The final distribution to any Certificateholder of a terminating Trust will
be made only upon surrender of that Certificateholder's Certificates at the
office or agency of the Trustee specified in the applicable notice of
termination.
DELAYED PURCHASE OF EQUIPMENT NOTES
In the event that, on the issuance date of any Certificates, all of the
proceeds from the sale of those Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, the Equipment
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Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable prospectus supplement. If such a delay occurs, any
proceeds from the sale of Certificates which are not used to purchase Equipment
Notes will be held under an arrangement described in the applicable prospectus
supplement pending the purchase of those Equipment Notes. The arrangements with
respect to the payment of interest on funds being held will be described in the
applicable prospectus supplement. If the proceeds are not used to purchase the
Equipment Notes by the relevant date specified in the applicable prospectus
supplement, they will be returned to the holders of the applicable Certificates.
LIQUIDITY FACILITY
The related prospectus supplement may provide that distributions made by
the Trustee with respect to the related Certificates will be supported by a
Liquidity Facility issued by an institution identified in the related prospectus
supplement.
A Liquidity Facility is a revolving credit agreement, letter of credit,
bank guarantee, insurance policy or other instrument or agreement that will
increase the likelihood that the Certificateholders will receive timely payments
of interest on the Certificates. While a Liquidity Facility is designed to
increase the likelihood of timely payments of interest, it is not a guarantee of
the timely or ultimate payment of principal. Unless otherwise provided in the
related prospectus supplement, the provider of the relevant Liquidity Facility
will have a senior claim upon the assets of the related Trust. See "Description
of the Equipment Notes -- Liquidity Facility" on page 23 for a description of
how the Equipment Notes may be similarly supported by a Liquidity Facility.
THE TRUSTEE
REPRESENTATIONS, LIABILITIES, OBLIGATIONS AND POWERS
Unless otherwise provided in the prospectus supplement for any series of
Certificates, the Trustee for each series of Certificates will be The Bank of
New York. The Trustee makes no representations as to the validity or sufficiency
of the Basic Agreement, any Trust Supplement, any Equipment Notes or any other
operative document.
The Trustee will not be liable with respect to any series of Certificates
for any action taken or omitted to be taken by it in good faith under the
direction of the holders of a majority in principal amount of outstanding
Certificates of that series. If provided by the prospectus supplement, the
Trustee will not have any obligation to exercise any of its rights or powers
under the Basic Agreement at the request of any Certificateholders, unless they
have offered to the Trustee indemnity satisfactory to it.
The Basic Agreement provides that the Trustee (in its individual or
fiduciary capacity) may acquire and hold Certificates and, subject to some
conditions, may otherwise deal with us and with any Owner Trustee with the same
rights it would have if it were not the Trustee.
RESIGNATION AND REMOVAL
The Trustee may resign from its position as Trustee of any or all of the
Trusts at any time. If the Trustee resigns, we will appoint a successor trustee.
If the Trustee ceases to be eligible to continue as Trustee for any Trust or
becomes incapable of acting as Trustee or becomes insolvent, we may remove that
Trustee. Also, any Certificateholder holding Certificates of that Trust for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of an ineligible,
incapable, or insolvent Trustee and the appointment of a successor trustee. Any
resignation or removal of the Trustee and appointment of a successor does not
become effective until acceptance of the appointment by the successor trustee.
Pursuant to the resignation and successor trustee provisions, it is possible
that different trustees could be appointed to act as successor trustees for each
Trust. All references in this prospectus to the Trustee should be read to take
into account the possibility that the
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Trusts could have different successor trustees in the event of a resignation or
removal.
FEE, EXPENSES AND INDEMNIFICATION
The Basic Agreement provides that we will pay the Trustee's fees and
expenses and indemnify the Trustee against certain liabilities.
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries of detailed provisions
of the Indentures and Equipment Notes. For more complete and detailed
information, you should consult the entire prospectus and the applicable
prospectus supplement. Statements that do not distinguish between the Leased
Aircraft Notes and the Owned Aircraft Notes or between their respective
Indentures refer to any Equipment Notes and any Indenture. Additionally, we will
file with the SEC forms of the Indenture and Equipment Notes. You should refer
to those agreements for more information regarding the terms discussed in this
prospectus and accompanying prospectus supplement. See "Where You Can Find More
Information" on page 29 for more information on documents we file with the SEC.
The summaries contained in this prospectus and the accompanying prospectus
supplement are qualified in their entirety by reference to those filed
agreements.
To the extent that any provision in the accompanying prospectus supplement
is inconsistent with any provision in this summary, the prospectus supplement
will control.
GENERAL
Equipment Notes will be issued under a Leased Aircraft Indenture or an
Owned Aircraft Indenture.
- A Leased Aircraft Indenture will be between an Owner Trustee and a Loan
Trustee, and will be entered into in connection with a leveraged lease
arrangement relating to Leased Aircraft. The Owner Trust administered by
the Owner Trustee will be the owner of the Leased Aircraft. An Owner
Participant will be the beneficiary of the Owner Trust. Leased Aircraft
Notes issued under a Leased Aircraft will be nonrecourse obligations of
the Owner Trust. Leased Aircraft Notes will not be our obligations or the
obligations of the applicable Owner Participant, and will not be
enforceable against us or such Owner Participant. Leased Aircraft Notes
will be secured by the Leased Aircraft described in the applicable
prospectus supplement and by certain rights of the applicable Owner Trust
under the related Lease.
- An Owned Aircraft Indenture will be between us and a Loan Trustee. Owned
Aircraft Notes issued under an Owned Aircraft Indenture will be our
direct obligations. Owned Aircraft Notes will be secured by Aircraft
owned by us and described in the applicable prospectus supplement.
PRINCIPAL AND INTEREST PAYMENTS
Interest received by the Trustee on the Equipment Notes held in each Trust
will be passed through to the Certificateholders of that Trust on the dates and
at the rate per annum set forth in the applicable prospectus supplement until
the final distribution for that Trust. Likewise, principal payments received by
the Trustee on the Equipment Notes held in each Trust will be passed through to
the Certificateholders of that Trust in scheduled amounts on the dates set forth
in the applicable prospectus supplement until the final distribution date for
that Trust.
REDEMPTION
The applicable prospectus supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment
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Notes may be redeemed or purchased prior to their stated maturity date, in whole
or in part. If the Equipment Notes can be redeemed or purchased prior to their
stated maturity, the prospectus supplement will describe the premium, if any,
applicable upon redemption or purchase, and any other terms applying to the
redemption or purchase of the Equipment Notes.
SECURITY
LEASED AIRCRAFT NOTES
The Leased Aircraft Notes will be secured by:
- An assignment by the related Owner Trustee to the related Loan Trustee of
that Owner Trustee's rights under the Lease or Leases relating to the
Leased Aircraft, including the right to receive payments of rent under
the related Lease; and
- A mortgage granted to the Loan Trustee in the applicable Leased Aircraft,
subject to our rights under the applicable Lease.
Under the terms of each Lease, our obligations with respect to the Leased
Aircraft will be those of a lessee under a "net lease". Accordingly, we will be
obligated, among other things (and at our own expense), to cause the Leased
Aircraft to be duly registered, to pay all costs of operating that Aircraft and
to maintain, service, repair and overhaul (or cause to be maintained, serviced,
repaired and overhauled) that Aircraft.
With respect to the Leased Aircraft, the assignment by the related Owner
Trustee to the related Loan Trustee of its rights under the related Lease will
exclude, among other things:
- Rights of that Owner Trustee and the related Owner Participant relating
to indemnification from us for certain matters;
- Insurance proceeds payable to that Owner Trustee in its individual
capacity and to the related Owner Participant under liability insurance
maintained by us as directed by that Lease or by that Owner Trustee or
related Owner Participant;
- Insurance proceeds payable to that Owner Trustee in its individual
capacity or to the related Owner Participant under certain casualty
insurance maintained by that Owner Trustee or related Owner Participant
pursuant to that Lease; and
- Any rights of the related Owner Participant or that Owner Trustee to
enforce payment of these amounts and their respective rights to the
related proceeds of the foregoing.
OWNED AIRCRAFT NOTES
The Owned Aircraft Notes will be secured by a mortgage granted to the
related Loan Trustee of all of our right, title and interest in and to the Owned
Aircraft specified in the related Owned Aircraft Indenture. Under the terms of
each Owned Aircraft Indenture, we will be obligated, among other things (and at
our own expense), to cause the Owned Aircraft to be duly registered, to pay all
costs of operating that Aircraft and to maintain, service, repair and overhaul
(or cause to be maintained, serviced, repaired and overhauled) that Aircraft.
INSURANCE COVERAGE
The prospectus supplement will describe the insurance coverage required for
the relevant Aircraft.
RECOGNITION OF THE LOAN TRUSTEE'S SECURITY INTEREST
We will be required, except under certain circumstances, to keep each
Aircraft registered under the Transportation Code, and to record the Indenture
and the Lease, if applicable, among other documents, relating to each Aircraft
under the Transportation Code. The recording of the Indenture, the Lease, if
applicable, and other documents with respect to each Aircraft will give the
related Loan Trustee a
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perfected security interest in the related Aircraft whenever it is located in
the United States or any of its territories and possessions. The Convention on
the International Recognition of Rights in Aircraft (the "Convention") provides
that the security interest will also be recognized, with some exceptions, in
those jurisdictions that have ratified or adhere to the Convention. We will have
the right, with some conditions and at our own expense, to register each
Aircraft in countries other than the United States. Each Aircraft may also be
operated by us or under lease, sublease or interchange arrangements in countries
that are not parties to the Convention.
The extent to which the related Loan Trustee's security interest would be
recognized in an Aircraft located in a country that is not a party to the
Convention, and the extent to which that security interest would be recognized
in a jurisdiction adhering to the Convention if the Aircraft is registered in a
jurisdiction not a party to the Convention, is uncertain. Moreover, in the case
of an Indenture Default, the ability of the related Loan Trustee to realize upon
its security interest in an Aircraft could be adversely affected as a legal or
practical matter if that Aircraft were registered or located outside the United
States.
Unless otherwise specified in the applicable prospectus supplement, the
Equipment Notes will not be cross-collateralized. Consequently, the Equipment
Notes issued in relation to any one Aircraft will not be secured by any other
Aircraft or, in the case of Leased Aircraft Notes, any other Lease. Unless and
until an Indenture Default relating to a Leased Aircraft occurs and is
continuing, the related Loan Trustee may exercise only limited rights of the
related Owner Trustee under the related Lease.
INVESTMENT AND REINVESTMENT OF RELATED FUNDS
The Loan Trustee will invest and reinvest funds, if any, relating to any
Aircraft and held by that Loan Trustee, pending distribution of those funds.
Investments will be described in the applicable Indenture. We will direct the
investment and reinvestment of those funds. We will not, however, direct
investment and reinvestment:
- In the case of a Leased Aircraft Indenture, if a Lease Event of Default
exists under the applicable Lease; or
- In the case of an Owned Aircraft Indenture, if an Indenture Default
exists or a payment default or bankruptcy default exists under that
Indenture.
The net amount of any loss resulting from any of the investments made at
our direction will be paid by us.
SPECIAL RIGHTS OF LESSORS, CONDITIONAL VENDORS AND HOLDERS OF SECURITY
INTERESTS UNDER THE BANKRUPTCY CODE
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that the
right of lessors, conditional vendors and holders of security interests in
"equipment" (as defined in Section 1110 of the U.S. Bankruptcy Code) to take
possession of that equipment in compliance with the provisions of a lease,
conditional sale contract or security agreement, as the case may be, is not
affected by:
- The automatic stay provision of the U.S. Bankruptcy Code, which enjoins
repossessions by creditors for the duration of the reorganization period;
- The provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the reorganization
period;
- Section 1129 of the U.S. Bankruptcy Code, which governs the confirmation
of plans of reorganization in Chapter 11 cases; or
- Any power of the bankruptcy court to enjoin a repossession.
Section 1110 relief would not be available, however, if the following two
conditions are satisfied: (1) within 60 days after the date of the order for
relief under the U.S. Bankruptcy Code, or such longer period consented to by the
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lessor, conditional vendor or holder of a security interest, the trustee in
reorganization agrees to perform the debtor's obligations that become due on or
after that date; and (2) all defaults, other than defaults resulting solely from
the financial condition, bankruptcy, insolvency or reorganization of the debtor,
or from any failure of the debtor to pay penalty rates based on a failure to
perform non-monetary obligations are cured before the later of the expiration of
that 60-day period and the date that is 30 days after the date of default.
Accordingly, the right of a lessor, conditional vendor or holder of a
security interest to take possession of an aircraft in the event of default
would not be exercisable for 60 days following the date of the order for relief
(unless specifically permitted by the bankruptcy court). Furthermore, if the
conditions specified above are satisfied within the applicable period, it is
unclear whether Section 1110 affords any relief at all with respect to the
exercise of any right to take possession based on an event of default occurring
after that period.
"Equipment" is defined in Section 1110 of the U.S. Bankruptcy Code, in
part, as an aircraft, aircraft engine, propeller, appliance, or spare part that
is subject to a security interest granted by, leased to, or conditionally sold
to a debtor that is a citizen of the United States holding an "air carrier
operating certificate" issued by the Secretary of Transportation pursuant to
chapter 447 of Title 49 of the U.S. Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds of more of cargo.
A "spare part" is defined in Section 40102 of Title 49 of the U.S. Code as
an accessory, appurtenance, or part of an aircraft (except an aircraft engine or
propeller), aircraft engine (except a propeller), propeller, or appliance, that
is to be installed at a later time in an aircraft, aircraft engine, propeller,
or appliance.
A "citizen of the United States" is defined in Section 40102 of Title 49 of
the U.S. Code as:
- An individual who is a citizen of the United States;
- A partnership each of whose partners is an individual who is a citizen of
the United States; or
- A corporation or association organized under the laws of the United
States or a State, the District of Columbia, or a territory or possession
of the United States, of which the president and at least two-thirds of
the board of directors and other managing officers are citizens of the
United States, and in which at least 75 percent of the voting interest is
owned or controlled by persons that are citizens of the United States.
In connection with any issuance of Certificates under this prospectus and
the applicable prospectus supplement, unless otherwise described in the
applicable prospectus supplement, it is a condition to the Trustee's obligation
to purchase Equipment Notes with respect to each Aircraft that outside counsel
designated by us provide its opinion to that Trustee that:
- If that Aircraft is a Leased Aircraft, the Owner Trustee, as lessor under
the Lease for that Aircraft, and the Loan Trustee, as assignee of that
Owner Trustee's rights under the applicable Lease pursuant to the
applicable Indenture, will be entitled to the benefits of Section 1110 of
the U.S. Bankruptcy Code with respect to the airframe and engines
comprising that Aircraft; or
- If that Aircraft is an Owned Aircraft, the Loan Trustee will be entitled
to the benefits of Section 1110 with respect to the airframe and engines
comprising that Owned Aircraft, in each case so long as we continue to be
a "citizen of the United States" holding an "air carrier operating
certificate" for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo.
The opinion of outside counsel will not address the possible replacement of an
Aircraft after an event of loss in the future. Events of loss and any right we
have to replace Aircraft will be
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described in the applicable prospectus supplement.
OTHER RANKING OF EQUIPMENT NOTES
Some of the Equipment Notes for one or more Aircraft, as described in the
applicable prospectus supplement, may be subordinated and junior in right of
payment to other Equipment Notes for the same Aircraft. The terms of any
subordination will be described in that prospectus supplement.
PAYMENTS AND LIMITATION OF LIABILITY
PAYMENTS
The Owner Trustee will lease each Leased Aircraft to us for a term
commencing on the date that Aircraft is delivered to the Owner Trustee. The term
will expire on a date after the latest maturity date of the related Leased
Aircraft Notes, unless previously terminated as permitted by the terms of the
related Lease. Some payments, such as basic rent, under each related Lease will
be payable by us. Also, the related Owner Trustee under the applicable Indenture
will assign our payments to the related Loan Trustee to provide the funds
necessary to pay principal of, premium, if any, and interest due from the Owner
Trustee on the Leased Aircraft Notes issued under the related Indenture.
In certain cases, the basic rent payments under a Lease may be adjusted,
but each Lease will provide that under no circumstances will our rent payments
be less than the scheduled payments on the related Leased Aircraft Notes. The
balance of any basic rent payment under each Lease, after payment of amounts due
on the Leased Aircraft Notes issued under the Indenture corresponding to the
applicable Lease, will be paid over to the applicable Owner Trustee. Our
obligation to pay rent and to cause other payments to be made under each Lease
will be our general obligations.
LIMITATION OF LIABILITY
The Leased Aircraft Notes will not be our obligations and will not be
guaranteed by us, except in some specified circumstances involving our purchase
of a Leased Aircraft and our assumption of some specified obligations, including
the obligation to make payments on the related Leased Aircraft Notes. None of
the Owner Trustees, the Owner Participants or the Loan Trustees will be
personally liable to any holder of the Leased Aircraft Notes for amounts payable
under those Leased Aircraft Notes, or, except as provided in the related
Indentures in the case of the Owner Trustees and the Loan Trustees, for any
liability under those Indentures.
Except in the circumstances mentioned, all amounts payable under any Leased
Aircraft Notes, other than payments made in connection with an optional
redemption or purchase by the related Owner Trustee or the related Owner
Participant, will be made only from:
- The assets subject to the lien of the applicable Indenture with respect
to the related Aircraft or the income and proceeds received by the
related Loan Trustee from the applicable Indenture, including rent
payable by us under the related Lease; and
- If provided in the related prospectus supplement, the applicable
Liquidity Facility.
Except as otherwise provided in the applicable Indenture, no Owner Trustee
will be personally liable for any amount payable or for any statements,
representations, warranties, agreements or obligations under any Indenture or
Leased Aircraft Notes except for its own willful misconduct or gross negligence.
None of the Owner Participants will have any duty or responsibility under the
Leased Aircraft Indentures or under the related Leased Aircraft Notes to the
related Loan Trustee or to any holder of those Leased Aircraft Notes.
Our obligations under each Owned Aircraft Indenture and under the Owned
Aircraft Notes will be our general obligations.
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DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus supplement, each
Indenture provides that the obligations under the applicable Indenture of the
related Loan Trustee and the related Owner Trustee, in relation to any Leased
Aircraft Notes, or our obligations, with respect to any Owned Aircraft Notes,
will be deemed to have been discharged and paid in full on the 91st day after
the date of irrevocable deposit with the related Loan Trustee.
The deposit must consist of:
- Money; or
- Obligations of the United States or any agency or instrumentality of the
United States the payment of which is backed by the full faith and credit
of the United States which, through the payment of principal and interest
on those obligations and complying with their terms, will provide money
in an aggregate amount sufficient to pay when due, including as a
consequence of redemption in respect of which notice is given on or prior
to the date of irrevocable deposit, the:
-- principal of,
-- premium, if any, and
-- interest on all Equipment Notes issued under and in compliance with
the terms of the applicable Indenture.
Discharge may occur only if, among other things:
- No event of default or event which with the giving of notice or lapse of
time, or both, would become an event of default under the Indenture has
occurred and is continuing on the date of irrevocable deposit; and
- We have delivered an opinion of counsel to the effect that holders of the
Equipment Notes will not recognize income, gain or loss for federal
income tax purposes as a result of the deposit, defeasance and discharge
and will be subject to federal income tax on the same amount and in the
same manner and at the same time as would have been the case if the
deposit, defeasance and discharge had not occurred.
Deposit as described will not be deemed to discharge certain obligations,
including the obligations:
- To register the transfer or exchange of Equipment Notes;
- To replace stolen, lost, destroyed or mutilated Equipment Notes; and
- To maintain paying agencies and hold money for payment in Trust.
Upon defeasance, or upon payment in full of the principal of, premium, if
any, and interest on all Equipment Notes issued under any Indenture on its
maturity date or deposit with the applicable Loan Trustee of money sufficient to
satisfy those amounts no earlier than one year prior to the related Indenture's
maturity, the holders of the related Equipment Notes will have no beneficial
interest in or other rights related to the Aircraft or other assets subject to
the lien of the Indenture. Consequently, the lien will terminate.
OUR ASSUMPTION OF OBLIGATIONS
In relation to Leased Aircraft and unless otherwise specified in the
applicable prospectus supplement, upon our exercise of any purchase options we
may have under the related Lease prior to the end of the term of that Lease, we
may assume on a full recourse basis all of the obligations of the Owner Trustee,
other than its obligations in its individual capacity under the Indenture with
respect to that Aircraft, including the obligations to make payments on the
related Leased Aircraft Notes.
If we assume the obligations of the Owner Trustee relevant provisions of
the related Lease, including provisions relating to maintenance, possession and
use of the related Aircraft, liens,
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insurance and events of default, will be incorporated into the Indenture. Also,
the Leased Aircraft Notes issued under that Indenture will not be redeemed and
will continue to be secured by the Aircraft. It is a condition to our assumption
that, if the related Aircraft is registered under the laws of the United States,
an opinion of counsel be delivered at the time of assumption. The opinion should
substantially state that the related Loan Trustee under the Indenture would,
immediately following assumption, be entitled to the benefits of Section 1110 of
the Bankruptcy Code with respect to the related Aircraft and its engines. The
opinion need not be delivered if the benefits of Section 1110 are not available
to the Loan Trustee with respect to that Aircraft or any engine immediately
prior to assumption.
LIQUIDITY FACILITY
The related prospectus supplement may provide that one or more payments of
interest on the related Equipment Notes of one or more series will be supported
by a Liquidity Facility issued by an institution identified in the related
prospectus supplement. Unless otherwise provided in the related prospectus
supplement, the provider of the Liquidity Facility will have a senior claim upon
the assets securing the Equipment Notes.
OUR RELATIONSHIP TO THE TRUSTEE
The Bank of New York and certain of its affiliates are the trustees under a
number of other indentures to which Delta is a party; some of these indentures
relate to indebtedness which is secured by some of Delta's assets. If an event
of default occurred under an indenture relating to the Equipment Notes or one of
these other indentures, The Bank of New York may be deemed to have a conflicting
interest with respect to the debt securities for purposes of the Trust Indenture
Act of 1939 and, accordingly, may be required to resign as trustee.
INTERCREDITOR ISSUES
Equipment Notes may be issued in different Classes, which means that the
Equipment Notes may have different payment priorities even though they are
issued by the same borrower and relate to the same Aircraft. If different
Classes of Equipment Notes are issued, the related prospectus supplement will
describe:
- The priority of distributions among those Equipment Notes, and any
Liquidity Facilities for those Equipment Notes;
- The ability of any Class to exercise and/or enforce any or all remedies
with respect to the related Aircraft, and if the Equipment Notes are
Leased Aircraft Notes, the related Lease; and
- Other intercreditor terms and provisions.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Unless otherwise indicated in the applicable prospectus supplement, this
summary describes the principal United States federal income tax consequences of
owning the Certificates. This summary is the opinion of Sullivan & Cromwell,
special tax counsel to Delta. It applies to you only if you acquire Certificates
in the initial offering at the initial offering price and you own your
Certificates as capital assets for tax purposes. This summary does not apply to
you if you are a member of a class of holders subject to special rules, such as:
- A dealer in securities or currencies;
- A trader in securities that elects to use a mark-to-market method of
accounting;
- A bank;
- A life insurance company;
- A tax-exempt organization;
- A person that owns Certificates that are a hedge or that are hedged
against interest rate risks;
- A person that owns Certificates as part of a straddle or conversion
transaction for tax purposes; or
- A person whose functional currency for tax purposes is not the U.S.
dollar.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, existing and proposed regulations under the
Internal Revenue Code, published rulings and court decisions, all as currently
in effect. These laws are subject to change, possibly on a retroactive basis.
PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF OWNING THESE
CERTIFICATES IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE CODE AND LAWS OF ANY
OTHER TAXING JURISDICTION
U.S. CERTIFICATE HOLDERS
This section describes the tax consequences to a U.S. Certificateholder.
You are a U.S. Certificateholder if you are a beneficial owner of a Certificate
and you are:
- A citizen or resident of the United States;
- A domestic corporation;
- An estate whose income is subject to United States federal income tax
regardless of its source; or
- A trust if a United States court can exercise primary supervision over
the trust's administration and one or more U.S. persons are authorized to
control all substantial decisions of the trust.
If you are not a U.S. Certificateholder, this section does not apply to you and
you should refer to "U.S. Alien Certificateholders" on page 25.
TAX STATUS OF THE TRUSTS
Each Trust will be classified as a grantor trust for United States federal
income tax purposes.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
If you are a U.S. Certificateholder, you will be treated as owning your
proportional undivided interest in each of the Equipment Notes and any other
property held by the related Trust. Accordingly, your share of interest paid on
the Equipment Notes will be taxable as ordinary income, as it is paid or
accrued, in accordance with your method of accounting for United States federal
income tax purposes. In the event that a Trust is supported by a Liquidity
Facility, any amounts received by the Trust under the Liquidity Facility
attributable to unpaid interest will be treated for United States federal income
tax purposes as having
24
<PAGE> 45
the same characteristics as the payments they replace. If we were to assume an
Owner Trust's obligations under Leased Aircraft Notes, that assumption would be
treated for United States federal income tax purposes as a taxable exchange of
those Leased Aircraft Notes, resulting in recognition of gain or loss by you.
You will be entitled to deduct, consistent with your method of accounting,
your proportional share of fees and expenses paid or incurred by the
corresponding Trust as provided in Section 162 or 212 of the Code. Some fees and
expenses, including fees paid to the Trustee and the provider of the Liquidity
Facility, if applicable, will be borne by parties other than the
Certificateholders. Certain of these fees and expenses will be treated as
constructively received by the Trust, in which case a U.S. Certificateholder
will be required to include in income and will be entitled to deduct its
proportional share of those fees and expenses. If a U.S. Certificateholder is an
individual, estate or trust, the deduction for the relevant holder's share of
fees or expenses will be allowed only to the extent that all of that holder's
miscellaneous itemized deductions, including that holder's share of such fees
and expenses, exceed 2% of that holder's adjusted gross income. In addition, in
the case of U.S. Certificateholders who are individuals, certain otherwise
allowable itemized deductions will be subject generally to additional
limitations on itemized deductions under applicable provisions in the Code.
ORIGINAL ISSUE DISCOUNT
The Equipment Notes may be issued with original issue discount ("OID"). The
applicable Prospectus Supplement will state whether any Equipment Notes to be
held by the related Trust will be issued with OID and, if applicable, will
describe the special United States federal income tax rules governing debt
instruments issued with OID. Generally, a holder of a debt instrument issued
with OID that is not de minimis must include that OID in income for United
States federal income tax purposes as it accrues, in advance of the receipt of
the cash attributable to that income, under a method that takes into account the
compounding of interest.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, you will
generally recognize capital gain or loss equal to the difference between the
amount realized on the disposition (other than any amount attributable to
accrued interest which will be taxable as ordinary income) and your adjusted tax
basis in the related Equipment Notes any other property held by the
corresponding Trust. Any gain or loss will be long-term capital gain or loss to
the extent that gain or loss is attributable to property held by the Trust for
more than one year. Long-term capital gain of a noncorporate U.S.
Certificateholder is generally taxed at a maximum rate of 20%.
U.S. ALIEN CERTIFICATEHOLDERS
This section describes the tax consequences to a "U.S. Alien
Certificateholder". You are a U.S. Alien Certificateholder if you are the
beneficial owner of a Certificate and are, for United States federal income tax
purposes:
- A nonresident alien individual;
- A foreign corporation;
- A foreign partnership; or
- An estate or trust that is not subject to United States federal income
tax on a net income basis on income or gain from a Certificate.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below, if you are a U.S. Alien
Certificateholder of a Certificate:
- Payments of interest on the Equipment Notes to, or on behalf of, a U.S.
Alien Certificateholder will not be subject to United States federal
withholding tax if,
25
<PAGE> 46
- - you do not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Delta or an Owner
Participant entitled to vote,
- - you are not a controlled foreign corporation that is related to Delta
or an Owner Participant through stock ownership, and
- - you certify, to the Trustee or a U.S. payor, under penalties of
perjury, that you are not a United States Certificateholder and
provide your name and address, or
- - a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course
of its trade or business and holds the Certificate certifies to the
Trustee or a U.S. payor under penalties of perjury that a similar
statement has been received from you by it or by a similar financial
institution between it and you and furnishes the payor with a copy
thereof; and
- No deduction for any United States federal withholding tax will be made
from any gain that you realize on the sale or exchange of your
Certificate.
Further, a Certificate held by an individual, who at death is not a citizen or
resident of the United States will not be includible in the individual's gross
estate for United States federal estate tax purposes if:
- The decedent did not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of Delta or an Owner
Participant entitled to vote at the time of death; and
- The income on the Equipment Note would not have been effectively
connected with a United States trade or business of the decedent at the
same time.
If you receive a payment after December 31, 2000, recently finalized
Treasury regulations will apply. Under these regulations, after December 31,
2000 you may use an alternative method to satisfy the certification requirement
described above. Additionally, if you are a partner in a foreign partnership,
after December 31, 2000, you (in addition to the foreign partnership) must
provide the certification described above, and the partnership must provide
certain information. The Internal Revenue Service will apply a look-through rule
in the case of tiered partnerships.
BACKUP WITHHOLDING AND INFORMATION REPORTING
U.S. CERTIFICATEHOLDERS
In general, if you are a noncorporate U.S. Certificateholder, all payments
on an Equipment Note will be reported to the Internal Revenue Service. In
addition, the proceeds of the sale of your Certificate before maturity within
the United States will be reported to the Internal Revenue Service.
Additionally, backup withholding at a rate of 31% will apply to any payments if
you fail to provide an accurate taxpayer identification number, or you are
notified by the Internal Revenue Service that you have failed to report all
interest and dividends required to be shown on your federal income tax returns.
U.S. ALIEN CERTIFICATEHOLDERS
You are generally exempt from backup withholding and information reporting
with respect to any payments on an Equipment Note provided that you provide the
certification described under "U.S. Alien Certificateholders", and provided
further that payor does not have actual knowledge that you are a U.S. person.
See the discussion above with respect to the rules under the final withholding
regulations.
In general, payment of the proceeds from the sale of Certificates to or
through a United States office of a broker is subject to both United States
backup withholding and information reporting, unless you are a U.S. Alien
Certificateholder and you certify as to your non-
26
<PAGE> 47
United States status under penalties of perjury or otherwise establish an
exemption. Payments of the proceeds from the sale by a U.S. Alien
Certificateholder of a Certificate made to or through a foreign office of a
broker will not be subject to information reporting or backup withholding.
Information reporting, but not backup withholding, however, may apply to a
payment made outside of the United States of the proceeds of a sale of
Certificate through an office outside the United States if the broker is:
- A U.S. person;
- A controlled foreign corporation for United States tax purposes;
- A foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified
three-year period; or
- With respect to payments made after December 31, 2000, a foreign
partnership, if at any time during the tax year: (1) one or more of its
partners are "U.S. persons" (as defined in the U.S. Treasury regulations)
who in the aggregate own more than 50% of the income or capital interest
in the partnership, or (2) such foreign partnership is engaged in a
United States trade or business unless the broker has documentary
evidence in its records that you are a non-U.S. person and does not have
actual knowledge that you are a U.S. person, or you otherwise establish
an exemption.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, the
Certificates may not be purchased by:
- An employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); or
- An individual retirement account or an employee benefit plan subject to
section 4975 of the Code.
Certain governmental plans and non-electing church plans, however, are not
subject to Title I of ERISA or Section 4975 of the Code and, therefore, may
purchase the Certificates.
PLAN OF DISTRIBUTION
The Certificates may be sold to or through underwriters, directly to other
purchasers or through agents. The distribution of the Certificates may be
effected from time to time in one or more transactions at:
- A fixed price or prices, which may be changed;
- Market prices prevailing at the time of sale;
- Prices related to the prevailing market prices at the time of sale; or
- Negotiated prices.
In connection with the sale of Certificates, underwriters or agents may
receive compensation from us or from purchasers of Certificates for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Certificates to or through dealers, and those dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Certificates may be deemed to be underwriters, and any discounts or commissions
received by them
27
<PAGE> 48
from us, and any profit on the resale of Certificates by them, may be deemed to
be underwriting discounts and commissions under the Securities Act. Any outright
or deemed underwriter or agent will be identified, and any related compensation
received from us will be described, in the applicable prospectus supplement.
Under agreements which we may enter into, underwriters and agents who
participate in the distribution of Certificates may be entitled to
indemnification by us against some liabilities, including liabilities under the
Securities Act.
If indicated in the applicable Prospectus Supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by specific
institutions to purchase Certificates from us pursuant to contracts providing
for payment and delivery on a future date. Institutions with which these
contracts may be made include, among others:
- Commercial and savings banks
- Insurance companies
- Pension funds
- Investment companies
- Educational and charitable institutions
In all cases, we must approve the contracting institutions. The obligations
of any purchaser under any payment and delivery contract will be subject to the
condition that the purchase of the Certificates is not, at the time of delivery,
prohibited under the laws of the jurisdiction to which that purchaser is
subject. The underwriters relevant or other agents will not have any
responsibility in respect of the validity or performance of such contracts.
Unless otherwise indicated in the applicable prospectus supplement, we do
not intend to apply for the listing of any series of Certificates on a national
securities exchange. If the Certificates of any series are sold to or through
underwriters, the underwriters may make a market in those Certificates, as
permitted by applicable laws and regulations. No underwriter would be obligated,
however, to make a market in those Certificates, and any market-making that is
done could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Certificates of any series.
Some of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
VALIDITY OF THE CERTIFICATES
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the offered Certificates will be passed upon for us by Robert S.
Harkey, Senior Vice President --
General Counsel, and for any agents, dealers or underwriters by Sullivan &
Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule included or incorporated
by reference in our Annual Report on Form 10-K for the fiscal year ended June
30, 1999 and incorporated by reference in this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein by reference in this
prospectus in reliance upon the authority of said firm as experts in accounting
and auditing in giving said reports.
28
<PAGE> 49
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any documents we file at the
SEC's public reference room 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public on the SEC's
web site at http://www.sec.gov and through the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which our common stock is listed.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 ("Exchange
Act") until we sell all the Certificates. This prospectus is part of a
registration statement we filed with the SEC.
- Annual Report on Form 10-K for the fiscal year ended June 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended December 31, 1999;
- Current Report on Form 8-K dated November 30, 1999; and
- Current Report on Form 8-K dated January 31, 2000.
Any party to whom this prospectus is delivered, including a holder in
street name, may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this prospectus), at no cost, by
writing or telephoning us at the following address:
Delta Air Lines, Inc.
Investor Relations Department
(Dept. No. 829)
P.O. Box 20706
Atlanta, Georgia 30320
(404) 715-2600
29
<PAGE> 50
------------------------------------------------------
------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
-------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$1,746,381,000
DELTA AIR LINES, INC.
PASS THROUGH CERTIFICATES
--------------------
PROSPECTUS
--------------------
, 2000
------------------------------------------------------
------------------------------------------------------
<PAGE> 51
SUBJECT TO COMPLETION, DATED FEBRUARY 23, 2000
PROSPECTUS
DELTA AIR LINES, INC.
EQUIPMENT TRUST CERTIFICATES
-------------------------
This prospectus relates to the issuance of one or more series of Equipment
Trust Certificates (the "Certificates") by one or more Owner Trusts (each, an
"Owner Trust") to be formed in connection with a sale and leaseback of aircraft
("Leased Aircraft") by Delta Air Lines, Inc.
THE CERTIFICATES:
- Will be issued in one or more series with interest rates and payment
dates specified in the prospectus supplement;
- Will be issued by Owner Trusts in connection with a lease of Leased
Aircraft to Delta;
- Will represent obligations of the relevant Owner Trust only and will be
repaid only from the assets of that Owner Trust;
- Will not represent obligations of, or be guaranteed by, Delta, but
amounts due from Delta under the relevant lease will be sufficient to
make all payments required under those Certificates;
- Will be secured by the Leased Aircraft specified in the prospectus
supplement and by the interest of the Owner Trust in the underlying
lease;
- May have one or more forms of liquidity or credit enhancement; and
- Will be issued in registered form and may be issued in accordance with a
book-entry system.
The aggregate public offering price of the Certificates will not exceed
$1,746,381,000.
EACH OWNER TRUST:
- Will issue one or more series of Certificates;
- Will use the proceeds of each series of Certificates to finance or
refinance the purchase of a Leased Aircraft, and will lease that Leased
Aircraft to Delta; and
- Will enter into a lease with Delta with respect to the Leased Aircraft.
This prospectus is accompanied by a prospectus supplement which includes
additional information as to the particular series of Certificates being sold,
as well as the underlying Lease. Sales of Certificates may not be consummated
without both this prospectus and a prospectus supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is , 2000
<PAGE> 52
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
About This Prospectus....................................... 1
Delta Air Lines, Inc........................................ 1
Use of Proceeds............................................. 1
Consolidated Ratios of Earnings to Fixed Charges............ 2
Description of the Certificates............................. 2
Certain United States Federal Income Tax Consequences....... 15
ERISA Considerations........................................ 18
Plan of Distribution........................................ 18
Validity of the Certificates................................ 19
Experts..................................................... 19
Where You Can Find More Information......................... 19
</TABLE>
-------------------------
You should rely only on the information contained in this prospectus or any
prospectus supplement or information contained in documents which you are
referred to in this prospectus or any prospectus supplement. Delta has not
authorized anyone else to provide you with information different from that
contained in this prospectus or any prospectus supplement. Delta is offering to
sell the equipment trust certificates only in jurisdictions where offers and
sales are permitted. The information contained in this prospectus or any
prospectus supplement is accurate only as of the date on the front of those
documents, regardless of the time of delivery of the documents or any sale of
the equipment trust certificates.
<PAGE> 53
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC") utilizing a shelf registration
process. Under this shelf process, the Certificates described in this prospectus
may be sold in one or more offerings up to a total dollar amount of
$1,746,381,000. This prospectus provides you with a general description of the
Certificates that may be offered.
Each time Certificates are sold, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described in the section
entitled "Where You Can Find More Information" on pages 19-20.
For more detail, you should read our registration statement and the
exhibits filed with our registration statement.
DELTA AIR LINES, INC.
Delta is a major airline engaged in domestic and foreign air
transportation. We provide scheduled air transportation over a network of routes
throughout the United States and between the United States and various foreign
countries.
We operate hubs in Atlanta, Cincinnati, Dallas/Fort Worth and Salt Lake
City. We also operate an international gateway at New York's Kennedy Airport and
a Pacific gateway in Portland, Oregon. Our principal executive offices are
located at a Hartsfield Atlanta International Airport, Atlanta, Georgia 30320,
and our telephone number is (404) 715-2600. Delta is incorporated under the laws
of the State of Delaware.
USE OF PROCEEDS
The relevant Owner Trustee will use the proceeds of the Certificates to
finance or refinance the debt portion and, in certain cases, to refinance some
of the equity portion, of one or more separate leveraged lease transactions
entered into by us, as lessee of Leased Aircraft.
Any proceeds received by us in connection with any financing of a sale and
leaseback of Leased Aircraft will be used by us for general corporate purposes.
Our general corporate purposes may include, among other possible uses, the
repayment of short-term or long-term indebtedness, capital expenditures,
repurchases of common stock and acquisitions.
To the extent that the proceeds of any offering of Certificates are not
used to finance or refinance the purchase of Leased Aircraft on the date of
issuance of those Certificates, the relevant proceeds will be held for the
benefit of the holders of those Certificates. If those proceeds are not used to
finance or refinance the purchase of Leased Aircraft by the date specified in
the applicable prospectus supplement, they will be returned to the applicable
Certificateholders. See "Description of Certificates -- Delayed Delivery of
Leased Aircraft" on page 13 for a description of the procedure for such a
delayed financing or refinancing.
The prospectus supplement with respect to any series of Certificates will
provide additional details with respect to the use of proceeds of those
Certificates.
1
<PAGE> 54
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Delta and its consolidated subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED JUNE 30, DECEMBER 31,
- -------------------------------- -------------
1995 1996 1997 1998 1999 1998 1999
- ---- ---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1.69 1.43 3.05 3.41 3.45 3.04 3.67
</TABLE>
Earnings represent:
- Income before income taxes, excluding the cumulative effect of accounting
changes; plus
- Fixed charges, excluding capitalized interest and interest offset on the
Guaranteed Serial ESOP Notes of the Delta Family-Care Savings Plan, which
are guaranteed by Delta.
Fixed charges include:
- Interest, whether expensed or capitalized, including gross interest on
the Guaranteed Serial ESOP Notes;
- Amortization of debt issuance costs; and
- One-half of rental expense, except for the years ended June 30, 1995,
1996 and 1997 where one-third of the rentals were included in fixed
charges. Management of Delta believes this is representative of the
interest factor in those periods.
DESCRIPTION OF THE CERTIFICATES
In connection with each offering under this prospectus and accompanying
prospectus supplement, one or more separate Owner Trusts will be formed and one
or more series of Certificates will be issued. The Certificates will be issued
under a trust indenture and security agreement (an "Indenture") among an Owner
Trustee, an Indenture Trustee to be identified in the relevant prospectus
supplement and us, in connection with a leveraged lease arrangement relating to
Leased Aircraft. In a leveraged lease transaction, one or more persons ("Owner
Participants") will form an Owner Trust to acquire an aircraft, and that Owner
Trust will then lease the aircraft to us pursuant to a lease agreement (a
"Lease"). The Owner Trust will be the owner of the Lease Aircraft.
The terms of each leveraged lease transaction will be governed by an
agreement (a "Participation Agreement") among us, the Owner Trustee, the Owner
Participant and the Indenture Trustee. Each Owner Participant will contribute a
portion of the purchase price of the related Leased Aircraft in the form of debt
or equity, and the remainder of the purchase price will be financed, or
"leveraged", through the issuance of the Certificates.
The Owner Trust will be administered by the Owner Trustee. An Owner
Participant will be the beneficiary of the Owner Trust. The Certificates will be
nonrecourse obligations of the Owner Trust. The Certificates will not be our
obligations or the obligations of the applicable Owner Participant, and will not
be enforceable against us or any Owner Participant. The Certificates will be
secured by the Leased Aircraft described in the applicable Prospectus Supplement
and by certain rights of the applicable Owner Trust under the related Lease.
We will file with the SEC the form of the Indenture. In addition, we will
file with the SEC forms of each of the agreements listed below and discussed in
this prospectus or the accompanying prospectus supplement:
- Lease
- Participation Agreement
- Trust Agreement
- Liquidity Facility Agreement
You should refer to those agreements for more information regarding the
terms discussed
2
<PAGE> 55
in this prospectus and accompanying prospectus supplement. See "Where You Can
Find More Information" on pages 19-20 for information on documents we file with
the SEC. The summaries contained in this prospectus and the accompanying
prospectus supplement are qualified in their entirety by reference to those
filed agreements.
The Certificates offered pursuant to this prospectus will be limited to
$1,746,381,000 aggregate public offering price.
The prospectus supplement accompanying this prospectus contains a glossary.
You should refer to the glossary for definitions of the material terms used with
respect to the series of Certificates being offered. To the extent that any
provision in the accompanying prospectus supplement is inconsistent with this
summary, the prospectus supplement will control.
DESCRIPTION OF INFORMATION CONTAINED IN PROSPECTUS SUPPLEMENTS
You should consult the related prospectus supplement for a description of
the specific series of Certificates. The information in the related prospectus
supplement will include the following:
- Specific designation and title of the Certificates;
- Aggregate principal amount of each series of Certificates;
- Payment dates applicable to those Certificates;
- Interest rate on those Certificates;
- Ranking of the Certificates in terms of priority of payment;
- Currency or currencies (including currency units) in which the
Certificates may be denominated;
- Specific form of the Certificates;
- Any liquidity or credit enhancement arrangement with respect to the
Certificates;
- Any listing on a national securities exchange;
- Description of the related Leased Aircraft;
- Description of the related Indenture, including:
-- a description of the events of default under the related Indenture,
-- the remedies exercisable upon the occurrence of events of default, and
-- any limitations on the exercise of those remedies with respect to the
related Certificates;
- A description of the related Leases, Trust Agreements and Participation
Agreements, including:
-- the names of the related Owner Trustees,
-- a description of the events of default under the Leases, the remedies
exercisable upon the occurrence of the described events of default and
any limitations on the exercise of those remedies with respect to the
Certificates,
-- a description of the events of loss with respect to the related Leased
Aircraft and any right we may have to replace Leased Aircraft, and
-- any rights of the Owner Trustee or Owner Participant to cure our
failures to pay rent or other defaults under the related Lease;
- Description of the terms of any underwriting arrangement, including:
-- the names of any underwriters or agents,
-- the amounts to be purchased by underwriters or agents, and
-- the compensation of underwriters or agents;
3
<PAGE> 56
- The extent, if any, to which the provisions of the operative documents
applicable to the Certificates may be amended by the parties to those
operative documents and whether the consent of the holders of a specified
percentage of aggregate principal amount of the Certificates is necessary
for amendment; and
- Any other special terms pertaining to the relevant Certificates.
BOOK-ENTRY REGISTRATION
GENERAL
The applicable prospectus supplement for each series of Certificates will
state whether those Certificates will be subject to the following provisions and
the provisions under the caption "Definitive Certificates" on pages 5-6.
Upon issuance, each series of Certificates will be represented by one or
more fully registered global certificates. Unless otherwise provided in a
prospectus supplement, each global certificate will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of
DTC's nominee, CEDE & Co. ("Cede"). No person acquiring an interest in
Certificates (a "Certificate Owner") will be entitled to receive a certificate
representing their interest in those Certificates until a Definitive
Certificate, as described under "Definitive Certificates" on pages 5-6, is
issued.
Unless and until Definitive Certificates are issued, all references to
actions by Certificateholders will refer to actions taken by DTC upon
instructions from DTC Participants. All references to distributions, notices,
reports and statements to Certificateholders will refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of those Certificates, or to DTC Participants for distribution to
Certificate Owners in accordance with DTC procedures.
DTC AND DTC PARTICIPANTS
DTC is:
- A limited purpose trust company organized under the laws of the State of
New York;
- A member of the Federal Reserve System;
- A "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- A "clearing agency" registered pursuant to section 17A of the Exchange
Act.
DTC was created to hold securities for its participants ("DTC
Participants") and to facilitate the clearance and settlement of securities
transactions between DTC Participants through electronic book-entries, thereby
eliminating the need for physical transfer of certificates. DTC Participants
include:
- Securities brokers and dealers
- Trust companies
- Banks
- Clearing corporations
Indirect access to the DTC system also is available to indirect
participants ("Indirect Participants") that clear through or maintain a
custodial relationship with a DTC Participant either directly or indirectly.
Indirect Participants may include:
- Banks
- Brokers
- Dealers
- Trust companies
PROCEDURE FOR TRANSFERS AND PAYMENTS
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Certificates may do so only through DTC Participants and
Indirect
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Participants. In addition, Certificate Owners will receive all distributions of
principal and interest from the Indenture Trustee through DTC, DTC Participants
or Indirect Participants, as the case may be.
Under a book-entry format, Certificate Owners may experience some delay in
their receipt of payments, because the payments will be forwarded by the
Indenture Trustee to Cede, as nominee for DTC. DTC will forward those payments
in same-day funds to DTC Participants who are credited with ownership of the
Certificates. The amounts forwarded to DTC Participants will be proportionate to
the principal amount of each DTC Participant's respective holdings of beneficial
interests in the Certificates. Subsequently, DTC Participants will forward
payments to Indirect Participants or Certificate Owners, as the case may be, in
accordance with customary industry practices. The forwarding of these
distributions to the Certificate Owners will be the responsibility of the
appropriate DTC Participants.
Unless and until, if ever, the Definitive Certificates are issued, the only
"Certificateholder" will be Cede. Certificate Owners will not be recognized by
the Indenture Trustee as Certificateholders, as the term is used in the
Indenture, and Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Certificates among the DTC Participants for whom it is acting with respect
to the Certificates. DTC also is required to receive and transmit distributions
of principal, premium, if any, and interest with respect to the Certificates.
Similarly, the DTC Participants and Indirect Participants, with which
Certificate Owners have accounts for their Certificates, are required to make
book-entry transfers and receive and transmit applicable payments on behalf of
their respective customers. Accordingly, although Certificate Owners will not
possess the Certificates, the Rules provide a mechanism by which Certificate
Owners will receive payments and will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
its Certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to its Certificates, may be limited due
to the lack of a physical certificate for those Certificates.
DTC has advised us that it will take any action permitted to be taken by a
Certificateholder under the Indenture only at the direction of one or more of
the DTC Participants to whose accounts the Certificates are credited.
Additionally, in the event any action requires approval by Certificateholders of
a particular percentage of beneficial interest of the Certificates, DTC will
take such action only at the direction of and on behalf of DTC Participants
whose holdings of the Certificates satisfy that percentage.
Neither we nor the Indenture Trustee will have any liability for:
- Any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Certificates held by Cede, as
nominee for DTC; or
- Maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
DEFINITIVE CERTIFICATES
Certificates will be issued in certificated form ("Definitive
Certificates") to Certificate Owners or their nominees, rather than to DTC or
its nominee, only if:
- We advise the Indenture Trustee in writing that DTC is no longer willing
or able to discharge properly its responsibilities as depository with
respect to the Certificates and we are unable to locate a qualified
successor;
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- We, at our option, elect to terminate the book-entry system through DTC;
or
- After the occurrence of particular events specified in the related
prospectus supplement, Certificate Owners holding at least a majority in
interest in the applicable Series advise the Indenture Trustee, us and
DTC through DTC Participants in writing that the continuation of a
book-entry system through DTC, or its successor, is no longer in the
Certificate Owners' best interest.
Upon the occurrence of any of these events, the Indenture Trustee will be
required to notify all Certificate Owners through DTC Participants of the
availability of Definitive Certificates. Upon surrender by DTC of the global
certificates representing the Certificates and receipt of instructions for
re-registration, the Indenture Trustee will reissue the Certificates as
Definitive Certificates to Certificate Owners.
If and when Definitive Certificates are issued to Certificate Owners,
distributions of principal, premium, if any, and interest with respect to
Certificates will be made in accordance with the procedures set forth in the
Indenture. The Indenture Trustee will make these distributions directly to
holders in whose names the Definitive Certificates were registered at the close
of business on the applicable record date. The distributions will be made by
check mailed to the address of each applicable holder as it appears on the
register maintained by the Indenture Trustee. The final payment on any
Certificate, however, will be made only upon presentation and surrender of the
Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at the
office of the Indenture Trustee upon compliance with the requirements set forth
in the Indenture. No service charge will be imposed for any registration of
transfer or exchange, but payment of a sum sufficient to cover any tax or other
governmental charge will be required.
REDEMPTION
The applicable prospectus supplement will describe the circumstances,
whether voluntary or involuntary, under which the Certificates may be redeemed
or purchased prior to their stated maturity date, in whole or in part. If the
Certificates can be redeemed or purchased prior to their stated maturity, the
prospectus supplement will describe the premium, if any, applicable upon
redemption or purchase, and any other terms applying to the redemption or
purchase of the Certificates.
SECURITY
The Certificates will be secured by:
- An assignment by the related Owner Trustee to the related Indenture
Trustee of that Owner Trustee's rights under the Lease relating to the
Leased Aircraft, including the right to receive payments of rent under
that Lease; and
- A mortgage granted to the Indenture Trustee in the applicable Leased
Aircraft, subject to our rights under the applicable Lease.
Under the terms of each Lease, our obligations with respect to the Leased
Aircraft will be those of a lessee under a "net lease". Accordingly, we will be
obligated, among other things (and at our own expense), to cause the Leased
Aircraft to be duly registered, to pay all costs of operating that Leased
Aircraft and to maintain, service, repair and overhaul that Leased Aircraft (or
to cause that Leased Aircraft to be maintained, serviced, repaired and
overhauled).
The assignment by the related Owner Trustee to the related Indenture
Trustee of its rights under the related Lease will exclude, among other things:
- Rights of that Owner Trustee and the related Owner Participant relating
to indemnification from us for certain matters;
- Insurance proceeds payable to that Owner Trustee in its individual
capacity
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and to the related Owner Participant under liability insurance maintained by us
as directed by that Lease or by that Owner Trustee or related Owner Participant;
- Insurance proceeds payable to that Owner Trustee in its individual
capacity or to the related Owner Participant under certain casualty
insurance maintained by that Owner Trustee or related Owner Participant
pursuant to that Lease; and
- Any rights of the related Owner Participant or that Owner Trustee to
enforce payment of these amounts and their respective rights to the
related proceeds of the foregoing.
INSURANCE COVERAGE
The prospectus supplement will describe the insurance coverage required for
the relevant Leased Aircraft.
RECOGNITION OF THE INDENTURE TRUSTEE'S SECURITY INTEREST
We will be required, except under certain circumstances, to keep each
Leased Aircraft registered under Title 49 of the United States Code relating to
Aviation the ("Transportation Code"), and to record the Indenture and the Lease,
among other documents, relating to each Leased Aircraft under the Transportation
Code. The recording of the Indenture, the Lease, and other documents with
respect to each Leased Aircraft will give the related Indenture Trustee a
perfected security interest in the related Leased Aircraft whenever it is
located in the United States or any of its territories and possessions. The
Convention on the International Recognition of Rights in Leased Aircraft (the
"Convention") provides that the security interest will also be recognized, with
some exceptions, in those jurisdictions that have ratified or adhere to the
Convention. We will have the right, with some conditions and at our expense, to
register each Leased Aircraft in countries other than the United States. Each
Leased Aircraft may also be operated by us or under lease, sublease or
interchange arrangements in countries that are not parties to the Convention.
The extent to which the related Indenture Trustee's security interest would
be recognized in a Leased Aircraft located in a country that is not a party to
the Convention, and the extent to which that security interest would be
recognized in a jurisdiction adhering to the Convention if the Leased Aircraft
is registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of an Indenture Default, the ability of the related
Indenture Trustee to realize upon its security interest in a Leased Aircraft
could be adversely affected as a legal or practical matter if that Leased
Aircraft were registered or located outside the United States.
Unless otherwise specified in the applicable prospectus supplement, the
Certificates will not be cross-collateralized and consequently the Certificates
issued in relation to any one Leased Aircraft will not be secured by any other
Lease. Unless and until an Indenture Default (as defined under "Events of
Default and Certain Rights upon an Event of Default" on pages 10-11) relating to
a Leased Aircraft occurs and is continuing, the related Indenture Trustee may
exercise only limited rights of the related Owner Trustee under the related
Lease.
INVESTMENT AND REINVESTMENT OF RELATED FUNDS
The Indenture Trustee will invest and reinvest funds, if any, relating to
any Leased Aircraft and held by that Indenture Trustee, pending distribution of
those funds. Investments will be described in the applicable Indenture. We will
direct the investment and reinvestment of those funds. We will not, however,
direct investment and reinvestment if a Lease Event of Default (as defined under
"Events of Default and Certain Rights upon an Event of Default" on page 10)
exists under the applicable Lease.
The net amount of any loss resulting from any of the investments made at
our direction will be paid by us.
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SPECIAL RIGHTS OF LESSORS, CONDITIONAL VENDORS AND HOLDERS OF SECURITY INTERESTS
UNDER THE BANKRUPTCY CODE
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that the
right of lessors, conditional vendors and holders of security interests in
"equipment" (as defined in Section 1110 of the U.S. Bankruptcy Code) to take
possession of that equipment in compliance with the provisions of a lease,
conditional sale contract or security agreement, as the case may be, is not
affected by:
- The automatic stay provision of the U.S. Bankruptcy Code, which enjoins
repossessions by creditors for the duration of the reorganization period;
- The provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the reorganization
period;
- Section 1129 of the U.S. Bankruptcy Code, which governs the confirmation
of plans of reorganization in Chapter 11 cases; or
- Any power of the bankruptcy court to enjoin a repossession.
Section 1110 relief would not be available, however, if the following two
conditions are satisfied: (1) within 60 days after the date of the order for
relief under the U.S. Bankruptcy Code, or such longer period consented to by the
lessor, conditional vendor or holder of a security interest, the trustee in
reorganization agrees to perform the debtor's obligations that become due on or
after that date; and (2) all defaults, other than defaults resulting solely from
the financial condition, bankruptcy, insolvency or reorganization of the debtor,
or from any failure of the debtor to pay penalty rates based on a failure to
perform non-monetary obligations are cured before the later of the expiration of
that 60-day period and the date that is 30 days after the date of default.
Accordingly, the right of a lessor, conditional vendor or holder of a
security interest to take possession of an aircraft if an event of default
occurs would not be exercisable for 60 days following the date of the order for
relief (unless specifically permitted by the bankruptcy court). Furthermore, if
the conditions specified above are satisfied within the applicable period, it is
unclear whether Section 1110 affords any relief at all with respect to the
exercise of any right to take possession based on an event of default occurring
after that period.
"Equipment" is defined in Section 1110 of the U.S. Bankruptcy Code, in
part, as an aircraft, aircraft engine, propeller, appliance, or spare part that
is subject to a security interest granted by, leased to, or conditionally sold
to a debtor that is a citizen of the United States holding an "air carrier
operating certificate" issued by the Secretary of Transportation pursuant to
chapter 447 of Title 49 of the U.S. Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds of more of cargo.
A "spare part" is defined in Section 40102 of Title 49 of the U.S. Code as
an accessory, appurtenance, or part of an aircraft (except an aircraft engine or
propeller), aircraft engine (except a propeller), propeller, or appliance, that
is to be installed at a later time in an aircraft, aircraft engine, propeller,
or appliance.
A "citizen of the United States" is defined in Section 40102 of Title 49 of
the U.S. Code as:
- An individual who is a citizen of the United States;
- A partnership each of whose partners is an individual who is a citizen of
the United States; or
- A corporation or association organized under the laws of the United
States or a State, the District of Columbia, or a territory or possession
of the United States, of which the president and at least two-thirds of
the board of directors and other managing officers are citizens of the
United States, and in which at least 75 percent of the voting interest is
owned or controlled by persons that are citizens of the United States.
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In connection with any issuance of Certificates under this prospectus and
the applicable prospectus supplement, unless otherwise described in the
applicable prospectus supplement, it is a condition to the Indenture Trustee's
obligations under an Indenture that outside counsel designated by us provide its
opinion to the Indenture Trustee that the Owner Trustee, as lessor under the
Lease for that Leased Aircraft, and the Indenture Trustee, as assignee of that
Owner Trustee's rights under the applicable Lease pursuant to the applicable
Indenture, will be entitled to the benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to the airframe and engines comprising that Leased
Aircraft. The opinion of outside counsel will not address the possible
replacement of a Leased Aircraft after an event of loss in the future. Events of
loss and any right we have to replace Leased Aircraft will be described in the
applicable prospectus supplement.
OTHER RANKING OF CERTIFICATES
Some of the Certificates issued in connection with one or more Leased
Aircraft, as described in the applicable prospectus supplement, may be
subordinated and junior in right of payment to other Certificates issued in
connection with the same Leased Aircraft. The terms of any subordination will be
described in the related prospectus supplement.
PAYMENTS AND LIMITATION OF LIABILITY
PAYMENTS
The Owner Trustee will lease each Leased Aircraft to us for a term
commencing on the date that Leased Aircraft is delivered to the Owner Trustee.
The term will expire on a date after the latest maturity date of the related
Certificates, unless previously terminated as permitted by the terms of the
related Lease. Some payments, including basic rent, under each related Lease
will be payable by us. The Owner Trustee will assign our payments to the related
Indenture Trustee to provide the funds necessary to pay principal of, premium,
if any, and interest due from the Owner Trustee on the Certificates issued under
the related Indenture.
In certain cases, the basic rent payments under a Lease may be adjusted,
but each Lease will provide that under no circumstances will our rent payments
be less than the scheduled payments on the related Certificates. The balance of
any basic rent payment under each Lease, after payment of amounts due on the
Certificates issued under the Indenture corresponding to the applicable Lease,
will be paid over to the applicable Owner Trustee. Our obligation to pay rent
and to cause other payments to be made under each Lease will be our general
obligations.
LIMITATION OF LIABILITY
The Certificates will not be our obligations and will not be guaranteed by
us, except in some specified circumstances involving our purchase of a Leased
Aircraft and our assumption of some specified obligations, including the
obligation to make payments on the related Certificates. None of the Owner
Trustees, the Owner Participants or the Indenture Trustees will be personally
liable to any holder of the Certificates for amounts payable under those
Certificates, or, except as provided in the related Indentures in the case of
the Owner Trustees and the Indenture Trustees, for any liability under those
Indentures.
Except in the circumstances mentioned, all amounts payable under any
Certificates, other than payments made in connection with an optional redemption
or purchase by the related Owner Trustee or the related Owner Participant, will
be made only from:
- The assets subject to the lien of the applicable Indenture with respect
to the related Leased Aircraft or the income and proceeds received by the
related Indenture Trustee from the applicable Indenture, including rent
payable by us under the related Lease; and
- If provided in the related prospectus supplement, the applicable
Liquidity Facility.
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Except as otherwise provided in the applicable Indenture, no Owner Trustee
will be personally liable for any amount payable or for any statements,
representations, warranties, agreements or obligations under any Indenture or
Certificates except for its own willful misconduct or gross negligence. None of
the Owner Participants will have any duty or responsibility under the Indentures
or under the related Certificates to the related Indenture Trustee or to any
holder of those Certificates.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
You will have special rights if an event of default occurs and is not cured
as described later in this subsection. The prospectus supplement will specify
the events of default under the related Indenture (each, an "Indenture
Default"). The Indenture Defaults will include events of default under the
related Leases (each, a "Lease Event of Default"). With respect to any
Certificates that are supported by a Liquidity Facility, the Indenture Defaults
also may include events of default under that Liquidity Facility.
Unless otherwise provided in a prospectus supplement, all of the
Certificates issued under the same Indenture will relate to a specific Leased
Aircraft and there will be no cross-collateralization or cross-default
provisions in the Indentures. Accordingly, events resulting in an Indenture
Default under any particular Indenture would not necessarily result in an
Indenture Default occurring under any other Indenture.
The ability of the applicable Owner Trustee or Owner Participant under an
Indenture to cure Indenture Defaults, including an Indenture Default that
results from the occurrence of a Lease Event of Default, will be described in
the prospectus supplement. Some Certificates may be entitled to the benefits of
a Liquidity Facility. A drawing under a Liquidity Facility for the purpose of
making a payment of interest because we failed to make a corresponding payment
will not cure an Indenture Default or any Lease Default related to that failure
by us.
Each Indenture provides that, the Indenture Trustee will, within 90 days
after the occurrence of an Indenture Default in respect of that Indenture give
to the Certificateholders notice, transmitted by mail, of all uncured or
unwaived defaults with respect to that Indenture known to it. The Indenture
Trustee may withhold that notice, however, except in the case of default in the
payment of principal, premium, if any, or interest on any of the Certificates,
if the Indenture Trustee in good faith determines that the withholding of that
notice is in the interests of those Certificateholders. The term "default" as
used in this paragraph only means the occurrence of an Indenture Default with
respect to the Certificates of a particular series, except that in determining
whether any Indenture Default has occurred, any related grace period or notice
will be disregarded.
If an Indenture Default occurs and has not been cured, the Indenture
Trustee or Certificateholders holding at least 25% in principal amount of the
Certificates of the affected series may declare the entire principal amount of
all the Certificates of that series to be due and immediately payable. However,
a declaration of acceleration of maturity may be canceled, but only before a
judgment or decree based on the acceleration has been obtained, by the holders
of at least a majority in principal amount of the Certificates of the affected
series.
Each Indenture will contain a provision entitling the Indenture Trustee,
subject to the duty of the Owner Trustee during a default to act with the
required standard of care, to demand reasonable security or indemnity by the
Certificateholders before proceeding to exercise any right or power under the
Indenture at the request of those Certificateholders.
The prospectus supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the Indenture
Trustee to waive, any past Indenture Default and its consequences. A waiver by
the relevant Certificateholders of, or
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instruction by the relevant Certificateholders to the Indenture Trustee to
waive, any past Indenture Default will annul any direction previously given.
MERGERS AND SIMILAR EVENTS
We are generally permitted to consolidate or merge with another person. We
are also permitted to sell or lease substantially all of our assets to another
person or to buy or lease substantially all of the assets of another person.
However, we may not take any of these actions unless all of the following
conditions are met:
- The surviving, successor or transferee person will:
-- be organized and validly existing under the laws of the United States
or any of its states or the District of Columbia,
-- be a "citizen of the United States", as defined in the Transportation
Code holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49,
United States Code, if, and so long as, such status is a condition of
entitlement to the benefits of Section 1110 of the Bankruptcy Code,
and
-- expressly assume all of our obligations contained in any Indentures
and the applicable Participation Agreements and Leases, and any other
operative documents; and
- We will have delivered a certificate and an opinion or opinions of
counsel indicating that the relevant transaction, in effect, complies
with these conditions.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
There are three types of changes that can be made to an Indenture, Lease,
Participation Agreement and Trust Agreement.
CHANGES REQUIRING EACH CERTIFICATEHOLDER'S APPROVAL
The following types of changes require approval by each Certificateholder:
- Reductions in the principal amount, premium, or interest payment payable
on the Certificates;
- Changes in the date on which payments of principal, premium or interest
are payable or other changes affecting the terms of payment of the
Certificates;
- Reductions in the rental amount payable by us below the amount required
to pay all principal, premium, and interest on the Certificates;
- Reductions in the amount payable upon the occurrence of an event of loss
concerning the related Leased Aircraft or upon termination of the related
Lease;
- Creations of security interests in property subject to the lien of the
Indenture having the same or greater priority with the security interest
created by the Indenture or changes depriving a Certificate Owner of the
lien of the Indenture; and
- Reductions in the percentage of aggregate principal amount of the
Certificates necessary to modify or amend, or waive compliance with, any
provision of the Indenture.
CHANGES NOT REQUIRING CERTIFICATEHOLDER'S APPROVAL
The following types of changes do not require the approval of any
Certificateholder:
- Changes required by law; or
- Changes that would not adversely affect the interests of
Certificateholders.
CHANGES REQUIRING MAJORITY APPROVAL
Any other change to an Indenture, Lease, Participation Agreement or Trust
Agreement
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requires the consent of Certificateholders holding at least 50% of the aggregate
principal amount of the Certificates of the related Series.
DEFEASANCE OF THE INDENTURES AND THE CERTIFICATES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus supplement, each
Indenture provides that the obligation of the related Indenture Trustee and the
related Owner Trustee, in relation to any Certificates, will be deemed to have
been discharged and paid in full on the 91st day after the date of irrevocable
deposit with the related Indenture Trustee of an amount sufficient to discharge
the indebtedness evidenced by the Certificates.
The deposit must consist of:
- Money; or
- Obligations of the United States or any agency or instrumentality of the
United States the payment of which is backed by the full faith and credit
of the United States which, through the payment of principal and interest
on those obligations and complying with their terms, will provide money
in an aggregate amount sufficient to pay when due, including as a
consequence of redemption in respect of which notice is given on or prior
to the date of irrevocable deposit, the:
-- principal of,
-- premium, if any, and
-- interest on all Certificates issued under and in compliance with the
terms of the applicable Indenture.
Discharge may occur only if, among other things:
- No Indenture Default or event which with the giving of notice or lapse of
time, or both, would become an Indenture Default under the Indenture has
occurred and is continuing on the date of irrevocable deposit; and
- We have delivered an opinion of counsel to the effect that holders of the
Certificates will not recognize income, gain or loss for federal income
tax purposes as a result of the deposit, defeasance and discharge and
will be subject to federal income tax on the same amount and in the same
manner and at the same time as would have been the case if the deposit,
defeasance and discharge had not occurred.
Deposit as described will not be deemed to discharge certain obligations,
including the obligations:
- To register the transfer or exchange of Certificates;
- To replace stolen, lost, destroyed or mutilated Certificates; and
- To maintain paying agencies and hold money for payment in trust.
Upon defeasance, or upon payment in full of the principal of, premium, if
any, and interest on all Certificates issued under any Indenture on its maturity
date or deposit with the applicable Indenture Trustee of money sufficient to
satisfy those amounts no earlier than one year prior to the related Indenture's
maturity, the holders of the related Certificates will have no beneficial
interest in or other rights related to the Leased Aircraft or other assets
subject to the lien of the Indenture. Consequently, the lien will terminate.
OUR ASSUMPTION OF OBLIGATIONS
Unless otherwise specified in the applicable prospectus supplement, upon
our exercise of any purchase options we may have under the related
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Lease prior to the end of the term of that Lease, we may assume on a full
recourse basis all of the obligations of the Owner Trustee, other than its
obligations in its individual capacity under the Indenture with respect to that
Leased Aircraft, including the obligations to make payments on the related
Certificates.
If we assume the obligations of the Owner Trustee, relevant provisions of
the related Lease, including provisions relating to maintenance, possession and
use of the related Leased Aircraft, liens, insurance and events of default will
be incorporated into the Indenture. Also, the Certificates issued under that
Indenture will not be redeemed and will continue to be secured by the Leased
Aircraft. It is a condition to our assumption that, if the related Leased
Aircraft is registered under the laws of the United States, an opinion of
counsel be delivered at the time of assumption. The opinion should substantially
state that the related Indenture Trustee would, immediately following
assumption, be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the related Leased Aircraft and its engines. The opinion need
not be delivered if the benefits of Section 1110 are not available to the
Indenture Trustee with respect to that Leased Aircraft or any engine immediately
prior to assumption.
DELAYED DELIVERY OF LEASED AIRCRAFT
In the event that, on the issuance date of any Certificates, all of the
proceeds from the sale of those Certificates are not used to finance or
refinance the purchase by the relevant Owner Trustee of a Leased Aircraft, the
Leased Aircraft may be financed or refinanced by the Owner Trustee at any time
on or prior to the date specified in the applicable prospectus supplement. If a
delay occurs, any proceeds from the sale of Certificates which are not use to
finance or refinance the purchase of Leased Aircraft will be held under an
arrangement described in the applicable prospectus supplement, pending the
financing or refinancing of the Leased Aircraft. The arrangements with respect
to the payment of interest on funds being held will be described in the
applicable prospectus supplement. If the proceeds are not used to finance or
refinance the purchase of the Leased Aircraft by the relevant date specified in
the applicable prospectus supplement, they will be returned to the holders of
the applicable Certificates.
LIQUIDITY FACILITY
The related prospectus supplement may provide that one or more payments of
interest on the related Certificates of one or more Series will be supported by
a Liquidity Facility issued by an institution identified in the related
prospectus supplement. Unless otherwise provided in the related prospectus
supplement, the provider of the Liquidity Facility will have a senior claim upon
the assets securing the Certificates.
THE INDENTURE TRUSTEE
REPRESENTATIONS, LIABILITIES, OBLIGATIONS AND POWERS
Unless otherwise provided in the prospectus supplement for any series of
Certificates, the Indenture Trustee for each series of Certificates will be The
Bank of New York. The Indenture Trustee makes no representations as to the
validity or sufficiency of the Indenture, any Certificates or any other
operative document.
The Indenture Trustee will not be liable with respect to any series of
Certificates for any action taken or omitted to be taken by it in good faith
under the direction of the holders of a majority in principal amount of
outstanding Certificates of that series. If provided by the prospectus
supplement, the Owner Trustee will not have any obligation to exercise any of
its rights or powers under the Indenture at the request of any
Certificateholders, unless they have offered to the Owner Trustee indemnity
satisfactory to it.
Each Indenture provides that the Indenture Trustee (in its individual or
fiduciary capacity) may acquire and hold Certificates and, subject to some
conditions, may otherwise deal with us
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with the same rights it would have if it were not the Indenture Trustee.
RESIGNATION AND REMOVAL
The Indenture Trustee may resign from its position as Indenture Trustee of
any or all of the series Certificates at any time. If the Indenture Trustee
resigns, we will appoint a successor trustee. If the Indenture Trustee ceases to
be eligible to continue as Indenture Trustee for any series Certificates or
becomes incapable of acting as Indenture Trustee or becomes insolvent, we may
remove that Indenture Trustee. Also, any Certificateholder holding Certificates
of that series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of an ineligible, incapable, or insolvent Indenture Trustee and the appointment
of a successor trustee. Any resignation or removal of the Indenture Trustee and
appointment of a successor does not become effective until acceptance of the
appointment by the successor trustee. Pursuant to the resignation and successor
trustee provisions, it is possible that different trustees could be appointed to
act as successor trustees for each series. All references in this prospectus to
the Indenture Trustee should be read to take into account the possibility that
the series could have different successor trustees in the event of a resignation
or removal.
FEE, EXPENSES AND INDEMNIFICATION
The Indenture provides that we will pay the Indenture Trustee's fees and
expenses and indemnify the Indenture Trustee against certain liabilities.
OUR RELATIONSHIP TO THE INDENTURE TRUSTEE
The Bank of New York and certain of its affiliates are the trustees under a
number of other indentures to which we are a party; some of these indentures
relate to indebtedness which is secured. If an event of default occurred under
an Indenture or one of these other indentures, The Bank of New York may be
deemed to have a conflicting interest with respect to the Certificates for
purposes of the Trust Indenture Act of 1939 and, accordingly, may be required to
resign as Indenture Trustee.
INTERCREDITOR ISSUES
Certificates may be issued in different classes, which means that the
Certificates may have different payment priorities even though they are issued
by the same Owner Trust and relate to the same Leased Aircraft. If different
classes of Certificates are issued, the related prospectus supplement will
describe:
- The priority of distributions among those Certificates, and any Liquidity
Facilities for those Certificates;
- The ability of any class to exercise and/or enforce any or all remedies
with respect to the related Leased Aircraft and the related Lease; and
- Other intercreditor terms and provisions.
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<PAGE> 67
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Unless otherwise indicated in the applicable prospectus supplement, this
summary describes the principal United States federal income tax consequences of
owning the Certificates. This summary is the opinion of Sullivan & Cromwell,
special tax counsel to Delta. It applies to you only if you acquire Certificates
in the initial offering at the initial offering price and you own your
Certificates as capital assets for tax purposes. This summary does not apply to
you if you are a member of a class of holders subject to special rules, such as:
- A dealer in securities or currencies,
- A trader in securities that elects to use a mark-to-market method of
accounting,
- A bank,
- A life insurance company,
- A tax-exempt organization,
- A person that owns Certificates that are a hedge or that are hedged
against interest rate risks,
- A person that owns Certificates as part of a straddle or conversion
transaction for tax purposes, or
- A person whose functional currency for tax purposes is not the U.S.
dollar.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, existing and proposed regulations under the
Internal Revenue Code, published rulings and court decisions, all as currently
in effect. These laws are subject to change, possibly on a retroactive basis.
PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF OWNING THESE
CERTIFICATES IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE CODE AND LAWS OF ANY
OTHER TAXING JURISDICTION
U.S. CERTIFICATE HOLDERS
This section describes the tax consequences to a U.S. Certificateholder.
You are a U.S. Certificateholder if you are a beneficial owner of a Certificate
and you are:
- A citizen or resident of the United States,
- A domestic corporation,
- An estate whose income is subject to United States federal income tax
regardless of its source, or
- A trust if a United States court can exercise primary supervision over
the trust's administration and one or more U.S. persons are authorized to
control all substantial decisions of the trust.
If you are not a U.S. Certificateholder, this section does not apply to you and
you should refer to "U.S. Alien Certificateholders" below on page 17.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
If you are a U.S. Certificateholder, interest paid on the Certificates will
be taxable as ordinary income, as it is paid or accrued, in accordance with your
method of accounting for United States federal income tax purposes. In the event
that a Trust is supported by a Liquidity Facility, any amounts received by the
Trust under the Liquidity Facility attributable to unpaid interest will be
treated for United States federal income tax purposes as having the same
characteristics as the payments they replace. If we were to assume an Owner
Trust's obligations under the Certificates, that assumption would be treated for
United States federal income tax purposes as a taxable exchange of those
Certificates, resulting in recognition of gain or loss by you.
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<PAGE> 68
ORIGINAL ISSUE DISCOUNT
The Certificates may be issued with original issue discount ("OID"). The
applicable Prospectus Supplement will state whether any Certificates will be
issued with OID and, if applicable, will describe the special United States
federal income tax rules governing debt instruments issued with OID. Generally,
a holder of a debt instrument issued with OID that is not de minimis must
include that OID in income for United States federal income tax purposes as it
accrues, in advance of the receipt of the cash attributable to that income,
under a method that takes into account the compounding of interest.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, you will
generally recognize capital gain or loss equal to the difference between the
amount realized on the disposition (other than any amount attributable to
accrued interest which will be taxable as ordinary income) and your adjusted tax
basis in the Certificates. Any gain or loss will be long-term capital gain or
loss if the Certificate has been held for more than one year. Long-term capital
gain of a noncorporate U.S. Certificateholder is generally taxed at a maximum
rate of 20%.
U.S. ALIEN CERTIFICATEHOLDERS
This section describes the tax consequences to a "U.S. Alien
Certificateholder". You are a U.S. Alien Certificateholder if you are the
beneficial owner of a Certificate and are, for United States federal income tax
purposes:
- A nonresident alien individual;
- A foreign corporation;
- A foreign partnership; or
- An estate or trust that is not subject to United States federal income
tax on a net income basis on income or gain from a Certificate.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below, if you are a U.S. Alien
Certificateholder of a Certificate:
- The Owner Trustee and its paying agents will not be required to deduct
United States federal withholding tax from payments on the Certificates
to you if, in the case of interest income;
-- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Owner Participant
entitled to vote,
-- you are not a controlled foreign corporation that is related to the
Owner Participant through stock ownership, and
-- you certify to the Owner Trustee or a U.S. payor, under penalties of
perjury, that you are not a United States Certificateholder and
provide your name and address, or
-- a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business and holds the Certificate certifies to the Owner
Trustee or a U.S. payor under penalties of perjury that a similar
statement has been received from you by it or by a similar financial
institution between it and you and furnishes the payor with a copy
thereof; and
- No deduction for any United States federal withholding tax will be made
from any gain that you realize on the sale or exchange of your
Certificate.
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<PAGE> 69
Further, a Certificate held by an individual, who at death is not a citizen
or resident of the United States will not be includible in the individual's
gross estate for United States federal estate tax purposes if:
- The decedent did not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Owner
Participant entitled to vote at the time of death; and
- The income on the Certificate would not have been effectively connected
with a United States trade or business of the decedent at the same time.
If you receive a payment after December 31, 2000, recently finalized
Treasury regulations will apply. Under these regulations, after December 31,
2000 you may use an alternative method to satisfy the certification requirement
described above. Additionally, if you are a partner in a foreign partnership,
after December 31, 2000, you (in addition to the foreign partnership) must
provide the certification described above, and the partnership must provide
certain information. The Internal Revenue Service will apply a look-through rule
in the case of tiered partnerships.
BACKUP WITHHOLDING AND INFORMATION REPORTING
UNITED STATES CERTIFICATEHOLDERS
In general, if you are a noncorporate U.S. Certificateholder, the Owner
Trustee and other payors are required to report to the Internal Revenue Service
all payments on your Certificates. In addition, the proceeds of the sale of your
Certificate before maturity within the United States will be reported to the
Internal Revenue Service. Additionally, backup withholding at a rate of 31% will
apply to any payments if you fail to provide an accurate taxpayer identification
number, or you are notified by the Internal Revenue Service that you have failed
to report all interest and dividends required to be shown on your federal income
tax returns.
U.S. ALIEN CERTIFICATEHOLDERS
You are generally exempt from backup withholding and information reporting
with respect to any payments on a Certificate provided that you provide the
certification described under "U.S. Alien Certificateholders" on page 16, and
provided further that the payor does not have actual knowledge that you are a
U.S. person. See the discussion above with respect to the rules under the final
withholding regulations.
In general, payment of the proceeds from the sale of Certificates to or
through a United States office of a broker is subject to both United States
backup withholding and information reporting, unless you are a U.S. Alien
Certificateholder and you certify as to your non-United States status under
penalties of perjury or otherwise establish an exemption. Payments of the
proceeds from the sale by a U.S. Alien Certificateholder of a Certificate made
to or through a foreign office of a broker will not be subject to information
reporting or backup withholding. However, information reporting, but not backup
withholding, may apply to a payment made outside of the United States of the
proceeds of a sale of Certificate through an office outside the United States if
the broker is:
- A U.S. person;
- A controlled foreign corporation for United States tax purposes;
- A foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified
three-year period; or
- With respect to payments made after December 31, 2000, a foreign
partnership, if at any time during the tax year: (1) one or more of its
partners are "U.S. persons" (as defined in U.S. Treasury regulations) who
in the aggregate own more than 50% of the income or capital interest in
the partnership, or (2) such foreign partnership is engaged in a United
States trade or business unless the broker has documentary
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<PAGE> 70
evidence in its records that you are a non-U.S. person and does not have
actual knowledge that you are a U.S. person, or you otherwise establish
an exemption.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, the
Certificates may not be purchased by:
- An employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); or
- An individual retirement account or an employee benefit plan subject to
section 4975 of the Code.
Certain governmental plans and non-electing church plans, however, are not
subject to Title I of ERISA or Section 4975 of the Code and, therefore, may
purchase the Certificates.
PLAN OF DISTRIBUTION
The Certificates may be sold to or through underwriters, directly to other
purchasers or through agents. The distribution of the Certificates may be
effected from time to time in one or more transactions at:
- A fixed price or prices, which may be changed;
- Market prices prevailing at the time of sale;
- Prices related to the prevailing market prices at the time of sale; or
- Negotiated prices.
In connection with the sale of the Certificates, underwriters or agents may
receive compensation from us or from purchasers of the Certificates for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell the Certificates to or through dealers, and those dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act
as agents. Underwriters, dealers and agents that participate in the distribution
of the Certificates may be deemed to be underwriters, and any discounts or
commissions received by them from us and any profit on the resale of the
Certificates by them may be deemed to be underwriting discounts and commissions,
under the Securities Act. Any outright or deemed underwriter or agent will be
identified, and any related compensation received from us will be described, in
the applicable prospectus supplement.
Under agreements which we may enter into, underwriters and agents who
participate in the distribution of the Certificates may be entitled to
indemnification by us against some liabilities, including liabilities under the
Securities Act.
If indicated in the applicable prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by specific
institutions to purchase the Certificates from us pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
these contracts may be made include, among others:
- Commercial and savings banks
- Insurance companies
- Pension funds
- Investment companies
- Educational and charitable institutions
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<PAGE> 71
In all cases, we must approve the contracting institutions. The obligations
of any purchaser under any payment and delivery contract will be subject to the
condition that the purchase of the Certificates is not at the time of delivery
prohibited under the laws of the jurisdiction to which that purchaser is
subject. The underwriters or relevant other agents will not have any
responsibility in respect of the validity or performance of such contracts.
Unless otherwise indicated in the applicable prospectus supplement, we do
not intend to apply for the listing of any series of Certificates on a national
securities exchange. If the Certificates of any series are sold to or through
underwriters, the underwriters may make a market in those Certificates, as
permitted by applicable laws and regulations. No underwriter would be obligated,
however, to make a market in those Certificates, and any market-making that is
done could be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Certificates of any series.
Some of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for, us in the ordinary
course of business.
VALIDITY OF THE CERTIFICATES
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the offered Certificates will be passed upon for us by Robert S.
Harkey, Senior Vice President -- General Counsel and for any agents, dealers or
underwriters by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule included or incorporated
by reference in our Annual Report on Form 10-K for the fiscal year ended June
30, 1999 and incorporated by reference in this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein by reference in this
prospectus in reliance upon the authority of said firm as experts in accounting
and auditing in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any documents we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public on the SEC's
web site at http://www.sec.gov and through the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which our common stock is listed.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information as well as
the information included in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the
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<PAGE> 72
Securities Exchange Act of 1934 ("Exchange Act") until we sell all the
Certificates. This prospectus is part of a registration statement we filed with
the SEC.
- Annual Report on Form 10-K for the fiscal year ended June 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended December 31, 1999;
- Current Report on Form 8-K dated November 30, 1999; and
- Current Report on Form 8-K dated January 31, 2000.
Any party to whom this prospectus is delivered, including a holder in
street name, may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this prospectus), at no cost, by
writing or telephoning us at the following address:
Delta Air Lines, Inc.
Investor Relations Department
(Dept. No. 829)
P.O. Box 20706
Atlanta, Georgia 30320
(404) 715-2600
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<PAGE> 73
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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
-------------------------
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$1,746,381,000
DELTA AIR LINES, INC.
EQUIPMENT TRUST CERTIFICATES
--------------------
PROSPECTUS
--------------------
, 2000
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<PAGE> 74
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $264,000
Printing and engraving expenses............................. 125,000
Trustee and agents' fees and expenses....................... 25,000
Accountant's fees and expenses.............................. 60,000
Rating Agency fees.......................................... 60,000
Legal fees and expenses..................................... 100,000
Miscellaneous............................................... 50,000
--------
Total..................................................... $684,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or to any of its stockholders for monetary damages for a breach
of fiduciary duty as a director, except (i) for breach of the director's duty of
loyalty, (ii) for acts of omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for certain unlawful
dividends and stock repurchases or (iv) for any transaction from which the
director derived an improper personal benefit. Article Eighteenth of the
Certificate of Incorporation of Delta (the "Certificate") provided that no
director shall be personally liable to Delta or its stockholders for monetary
damages for any breach of his fiduciary duty as a director, except as provided
in Section 102 of the DGCL.
Section 145 of the DGCL provides that in the case of any action other than
one by or in the right of the corporation, a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in such capacity on behalf of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Section 145 of the DGCL provides that in the case of an action by or in the
right of a corporation to procure a judgment in its favor, a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any action or suit by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation in such capacity on behalf of another corporation
or enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement or such
action or suit if he acted under standards similar to those set forth in the
preceding paragraph, except that no indemnification may be made in respect of
any action or claim as to which such person shall have been adjudged to be
liable to the corporation unless a court determines that such person is fairly
and reasonably entitled to indemnification.
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<PAGE> 75
Article Tenth of Delta's Certificate provides that Delta shall to the
extent permitted by law indemnify any person for all liabilities incurred by or
imposed upon him as a result of any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, in which
he shall be involved by reason of the fact that he is or was serving as a
director, officer or employee of Delta, or that, at the request of Delta, he is
or was serving another corporation or enterprise in any capacity.
Delta has purchased and maintains at its expense on behalf of directors and
officers insurance, within certain limits, covering liabilities that may be
incurred by them in such capacities.
The Forms of Underwriting Agreements filed as Exhibits 1(a), (b) and (c) to
the registration statement will provide for indemnification of Delta's directors
and officers by the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
REFERENCE
NUMBER DOCUMENT DESCRIPTION
- --------- --------------------
<S> <C> <C>
1(a) -- Form of Underwriting Agreement Standard Provisions related
to Pass Through Certificates.*
1(b) -- Form of Underwriting Agreement Standard Provisions relating
to Equipment Trust Certificates.*
1(c) -- Form of Underwriting Agreement Standard Provisions relating
to Debt Securities.*
4(a)(1) -- Form of Pass Through Trust Agreement to be entered into
between Delta Air Lines, Inc. and the Pass Through Trustee,
relating to Pass Through Certificates. Incorporated by
reference to Exhibit 4(a) to Delta's Registration Statement
on Form S-3 (Registration No. 333-58647).**
4(a)(2) -- Form of Trust Indenture and Security Agreement to be entered
into between the Owner Trustee and the Indenture Trustee,
relating to Equipment Notes in connection with an offering
of Pass Through Certificates. Incorporated by reference to
Exhibit 4(c)(1) to Delta's Registration Statement on Form
S-3 (Registration No. 33-46663).**
4(b) -- Form of Trust Indenture and Security Agreement to be entered
into among the Owner Trustee, the Indenture Trustee and
Delta Air Lines, Inc., as Lessee, relating to Equipment
Trust Certificates. Incorporated by reference to Exhibit
4(b)(1) to Delta's Registration Statement on Form S-3
(Registration No. 33-46663).**
4(c) -- Indenture, dated as of May 1, 1991, relating to the Debt
Securities. Incorporated by reference to Exhibit 4 to
Delta's Registration Statement on Form S-3 (Registration No.
33-40190).
4(d) -- Form of Lease Agreement to be entered into between the Owner
Trustee, as Lessor, and Delta Air Lines, Inc., as Lessee,
relating to Pass Through Certificates or Equipment Trust
Certificates. Incorporated by reference to Exhibit 4(f) to
Delta's Registration Statement on Form S-3 (Registration No.
33-46663).**
4(e) -- Form of Trust Agreement to be entered into between the Owner
Trustee, as Lessor, and Delta Air Lines, Inc., as Lessee,
relating to Pass Through Certificates or Equipment Trust
Certificates. Incorporated by reference to Exhibit 4(e) to
Delta's Registration Statement on Form S-3 (Registration No.
33-46663).**
5(a) -- Opinion of Robert S. Harkey, counsel for Delta, relating to
Pass Through Certificates.
</TABLE>
II-2
<PAGE> 76
<TABLE>
<CAPTION>
EXHIBIT
REFERENCE
NUMBER DOCUMENT DESCRIPTION
- --------- --------------------
<S> <C> <C>
5(b) -- Opinion of Robert S. Harkey, counsel for Delta, relating to
Equipment Trust Certificates.
5(c) -- Opinion of Robert S. Harkey, counsel for Delta, relating to
Debt Securities.
8 -- Tax Opinion of Sullivan & Cromwell, special counsel for
Delta, relating to Pass Through Certificates and Equipment
Trust Certificates.
12(a) -- Statement regarding computation of Ratio of Earnings to
Fixed Charges for the five fiscal years ended June 30, 1999.
Incorporated by reference to Exhibit 12 to Delta's Annual
Report on Form 10-K for the fiscal year ended June 30, 1999
(File No. 1-5424).
12(b) -- Statement regarding computation of Ratio of Earnings to
Fixed Charges for the six months ended December 31, 1999 and
December 31, 1998. Incorporated by reference to Exhibit 12
to Delta's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1999 (File No. 1-5424).
23(a) -- Consent of Robert S. Harkey, counsel for Delta (included in
Exhibits (a),(b) and (c)).
23(b) -- Consent of Sullivan & Cromwell, special counsel for Delta
(included in Exhibit 8).
23(c) -- Consent of Arthur Andersen LLP, independent public
accountants.
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Trustee
for the Debt Securities, as Pass Through Trustee for the
Pass Through Certificates and as Indenture Trustee for the
Equipment Trust Certificates.
</TABLE>
- -------------------------
* To be filed by amendment or on Form 8-K.
** Separate Trust Indenture and Security Agreements, Participation Agreements,
Trust Agreements and Lease Agreements will be entered into with respect to
each Aircraft and each Series of Equipment Trust Certificates in connection
with any particular offering of Equipment Trust Certificates or Pass Through
Certificates. The Prospectus Supplement for each such offering will set forth
any material details in which the Trust Indenture and Security Agreements and
the related forms of Equipment Trust Certificates, the Participation
Agreements, the Trust Agreements differ from the corresponding Exhibit for
the form of such documents.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 ("Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of
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<PAGE> 77
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if the change
in volume represents no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of such registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, and State of Georgia, on the 23rd day of
February, 2000.
DELTA AIR LINES, INC.
By: /s/ EDWARD H. WEST
------------------------------------
Edward H. West
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by or on behalf of the following
persons in the capacities indicated on the 23rd day of February, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ LEO F. MULLIN Chairman of the Board, President and Chief
- ----------------------------------------------------- Executive Officer
Leo F. Mullin (Principal Executive Officer)
* Director
- -----------------------------------------------------
Edwin L. Artzt
* Director
- -----------------------------------------------------
James L. Broadhead
* Director
- -----------------------------------------------------
Edward H. Budd
* Director
- -----------------------------------------------------
R. Eugene Cartledge
* Director
- -----------------------------------------------------
Mary Johnston Evans
* Director
- -----------------------------------------------------
George M. C. Fisher
* Director
- -----------------------------------------------------
David R. Goode
* Director
- -----------------------------------------------------
Gerald Grinstein
* Director
- -----------------------------------------------------
Andrew J. Young
/s/ EDWARD H. WEST Executive Vice President and Chief Financial
- ----------------------------------------------------- Officer
Edward H. West (Principal Financial Officer and Principal
Accounting Officer)
*By: /s/ EDWARD H. WEST Attorney-in-Fact
- -----------------------------------------------------
Edward H. West
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5(a)
[Letterhead of Delta Air Lines, Inc.]
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport Tel (404) 715-2387
Atlanta, Georgia 30320 Fax (404) 715-2233
February 23, 2000
Re: Registration of Pass Through Certificates
Ladies and Gentlemen:
This opinion is delivered to you in connection with the filing
by Delta Air Lines, Inc., a Delaware corporation (the "Company"), of its
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, which Registration Statement, together with the previous
registration statement (File No. 333-58647) previously filed by the Company,
relates to up to $1,746,381,000 in aggregate principal amount of Pass Through
Certificates of the Company (the "Certificates"). The Certificates will be
issued pursuant to the terms of the Pass Through Trust Agreement to be entered
into between the Company and The Bank of New York, as Pass Through Trustee (the
"Pass Through Trustee"), a form of which has been incorporated by reference as
an exhibit to the Registration Statement (the "Pass Through Agreement"), as
supplemented by a separate Series Supplement for each series of Certificates
(each, a "Series Supplement").
In connection with the opinions expressed below, I or counsel
under my general supervision have examined and relied upon the accuracy of
originals or copies, certified or otherwise identified to my satisfaction, of
such agreements, documents, certificates and statements of government officials
and other papers as deemed necessary or advisable as a basis for such opinion.
In all such examinations, I have assumed the genuineness of all signatures
(other than those on behalf of the Company), the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals and the
conformity to original documents of all documents submitted to me as certified
or photostatic copies, and as to certificates and telegraphic and telephonic
confirmations given by public officials, I have assumed the same to have been
properly given and to be accurate.
Based on the foregoing, I am of the opinion, that, assuming
(i) the due authorization, execution and delivery of the Pass Through Agreement
and each applicable Series Supplement by each of the parties thereto (other
than Delta), (ii) that the Pass Through Agreement and each applicable Series
Supplement have not been terminated, varied, transferred or assigned and
(iii) the due authorization, execution, issue, delivery and authentication by
the Pass Through Trustee of the Certificates to be issued under the Pass Through
Agreement and each applicable Series Supplement, in each case in accordance with
the terms of such Pass Through Agreement and each such Series
<PAGE> 2
Delta Air Lines, Inc.
February 23, 2000
Page 2
Supplement, (A) the Pass Through Agreement constitutes, and each applicable
Series Supplement, when duly executed and delivered, will constitute a valid
and binding agreement of each of the parties thereto, and (B) the Certificates,
when duly executed, delivered and authenticated by the Pass Through Trustee in
accordance with the terms of the Pass Through Agreement and each applicable
Series Supplement and sold in accordance with the related purchase agreement or
underwriting agreement between the Company and the purchasers or underwriters,
as the case may be, named therein, will be validly issued, will constitute
valid and binding obligations of the Pass Through Trustee in accordance with
their terms and will be entitled to the benefits of the Pass Through Agreement
and each applicable Series Supplement in accordance with their terms and the
terms of the Pass Through Agreement and such Series Supplement.
The foregoing opinions are subject, as to enforcement, to the
effect of (1) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights and remedies of creditors generally, (2)
general principles of equity (whether applied by a court of law or equity), and
(3) requirements that a claim with respect to any Certificates denominated
other than in United States dollars (or a foreign currency or composite
currency judgment in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Validity
of the Certificates" in the prospectus relating to the Certificates that
constitutes a part of the Registration Statement.
Sincerely,
/s/ ROBERT S. HARKEY
-------------------------------------
Robert S. Harkey
Senior Vice President-General Counsel
and Secretary
<PAGE> 1
EXHIBIT 5(b)
[Letterhead of Delta Air Lines, Inc.]
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport Tel (404) 715-2387
Atlanta, Georgia 30320 Fax (404) 715-2233
February 23, 2000
Re: Registration of Equipment Trust Certificates
Ladies and Gentlemen:
This opinion is delivered to you in connection with the filing
by Delta Air Lines, Inc., a Delaware corporation (the "Company"), of its
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, which Registration Statement, together with the
previous registration statement (File No. 333-58647) previously filed by the
Company relates to up to $1,746,381,000 in aggregate principal amount of
Equipment Trust Certificates of the Company (the "Certificates"). Each series
of Certificates will be issued pursuant to the provisions of a separate Trust
Indenture and Security Agreement to be entered into among Wilmington Trust
Company, as Owner Trustee (the "Owner Trustee"), The Bank of New York, as
Indenture Trustee (the "Indenture Trustee") and the Company, as Lessee,
substantially in the form incorporated by reference as an exhibit to the
Registration Statement (each, an Indenture and, in the case of a refinancing
transaction, each, as originally executed and as supplemented by a related
Trust Agreement and Trust Indenture Supplement, an "Original Indenture").
In connection with the opinions expressed below, I or counsel
under my general supervision have examined and relied upon the accuracy of
originals or copies, certified or otherwise identified to my satisfaction, of
such agreements, documents, certificates and statements of government officials
and other papers as deemed necessary or advisable as a basis for such opinion.
In all such examinations, I have assumed the genuineness of all signatures
(other than those on behalf of the Company), the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals and the
conformity to original documents of all documents submitted to me as certified
or photostatic copies, and as to certificates and telegraphic and telephonic
confirmations given by public officials, I have assumed the same to have been
properly given and to be accurate.
Unless otherwise defined herein, capitalized terms used herein
have the meanings and assigned thereto in the related Indentures.
Based on the foregoing, I am of the opinion that, assuming (i)
the due authorization, execution and delivery of the Indentures (including the
original Indentures, if any), the Trust Agreements and the related Trust
Agreement and Trust Indenture
<PAGE> 2
Delta Air Lines, Inc.
February 23, 2000
Page 2
Supplements by each of the parties thereto (other than the Company), (ii) that
the Trust Agreements, the Original Indentures, if any, and the related Trust
Agreement and Trust Indenture Supplements have not been terminated, varied,
transferred or assigned, (iii) the due authorization, execution, issue and
delivery by the Owner Trustee, and the due authentication by the Indenture
Trustee, of the Certificates to be issued under each such Indenture, in each
case in accordance with the terms of such Indenture, and (iv) in the case of a
refinancing transaction, that the outstanding original Loan Certificate under
each Original Indenture is delivered by the holder thereof to the Indenture
Trustee thereunder for cancellation and is cancelled, (A) the Indentures, when
duly executed and delivered, will constitute valid and binding agreements of
each of the parties thereto, and (B) the Certificates, when duly executed and
delivered by the Owner Trustee and duly authenticated by the Indenture Trustee
in accordance with the terms of the respective Indentures and sold in accordance
with the related purchase agreement or underwriting agreement between the
Company and the purchasers or underwriters, as the case may be, named therein,
will be validly issued, will constitute valid and binding obligations of the
Owner Trustee in accordance with their terms and will be entitled to the
benefits of the applicable Indenture in accordance with their terms and the
terms of such Indenture.
The foregoing opinions are subject, as to enforcement, to the
effect of (1) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights and remedies of creditors generally, (2)
general principles of equity (whether applied by a court of law or equity), and
(3) requirements that a claim with respect to any Certificates denominated
other than in United States dollars (or a foreign currency or composite
currency judgment in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Validity
of the Certificates" in the prospectus relating to the Certificates that
constitutes a part of the Registration Statement.
Sincerely,
/s/ROBERT S. HARKEY
-------------------------------------
Robert S. Harkey
Senior Vice President-General Counsel
and Secretary
<PAGE> 1
EXHIBIT 5(c)
[Letterhead of Delta Air Lines, Inc.]
Tel (404) 715-2387
Fax (404) 715-2233
February 23, 2000
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Re: Registration of Debt Securities
Ladies and Gentlemen:
This opinion is delivered to you in connection with the filing by
Delta Air Lines, Inc., a Delaware corporation (the "Company"), of its
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, which Registration Statement, together with the previous
registration statement (File No. 333-58647) previously filed by the Company,
relates to up to $1,746,381,000 in aggregate principal amount of debt securities
of the Company (the "Debt Securities"). The Debt Securities are to be issued by
the Company in one or more series pursuant to an Indenture, dated as of May 1,
1991 (the "Indenture"), between the Company and The Bank of New York, successor
to The Citizens and Southern National Bank of Florida (the "Trustee"), a form of
which has been incorporated by reference as an exhibit to the Registration
Statement.
In connection with the opinions expressed below, I or counsel under
my general supervision have examined and relied upon the accuracy of originals
or copies, certified or otherwise identified to my satisfaction, of such
agreements, documents, certificates and statements of government officials and
other papers as deemed necessary or advisable as a basis for such opinion. In
all such examinations, I have assumed the genuineness of all signatures (other
than those on behalf of the Company), the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals and the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and as to certificates and telegraphic and telephonic confirmations
given by public officials, I have assumed the same to have been properly given
and to be accurate.
Based upon and subject to the foregoing, and to the qualifications
set forth herein, it is my opinion that the Debt Securities, when the final
terms and provisions
<PAGE> 2
Delta Air Lines, Inc.
February 23, 2000
Page 2
thereof have been duly established and when duly executed on behalf of the
Company, authenticated by the Trustee under the Indenture and sold by the
Company, will be validly issued, will constitute valid and binding obligations
of the Company in accordance with their terms and will be entitled to the
benefits of the Indenture in accordance with their terms and the terms of the
Indenture.
The foregoing opinions are subject, as to enforcement, to the effect
of (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights and remedies of creditors generally, (2) general principles
of equity (whether applied by a court of law or equity), and (3) requirements
that a claim with respect to any Debt Securities denominated other than in
United States dollars (or a foreign currency or composite currency judgment in
respect of such claim) be converted into United States dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Validity of
the Debt Securities" in the prospectus relating to the Debt Securities that
constitutes a part of the Registration Statement.
Sincerely,
/s/ ROBERT S. HARKEY
-------------------------------
Robert S. Harkey
Senior Vice President - General Counsel
and Secretary
<PAGE> 1
EXHIBIT 8
[LETTERHEAD OF SULLIVAN & CROMWELL]
February 23, 2000
Delta Air Lines, Inc.,
Hartsfield Atlanta International Airport,
Atlanta, Georgia 30320.
Dear Sirs:
We have acted as special tax counsel to Delta Air Lines, Inc. ("Delta")
in connection with the registration under the Securities Act of 1933 (the "Act")
of up to $1,746,381,000 aggregate initial offering price of Pass Through
Certificates and Equipment Trust Certificates pursuant to a Registration
Statement on Form S-3 filed on February 23, 2000 (the "Registration Statement").
In connection with our engagement, we have examined and relied upon the
accuracy and completeness of the facts, information, covenants, statements and
representations contained in originals or copies, certified or otherwise,
identified to our satisfaction, of (i) the Form of Pass Through Trust Agreement,
included as an exhibit to the Registration Statement No. 333-58647 on Form S-3
<PAGE> 2
Delta Air Lines, Inc. -2-
relating to Delta, filed on July 7, 1998; (ii) the Form of Indenture and
Security Agreement relating to Equipment Notes, included as an Exhibit to the
Registration Statement No. 33-46663 on Form S-3 filed on March 25, 1992 (the
"1992 Registration Statement") and (iii) the Form of Trust Indenture and
Security Agreement, included as an exhibit to the 1992 Registration Statement.
As to any facts material to our opinion which we did not independently establish
or verify, we have relied upon written and oral statements and representations.
Our opinion is expressly conditioned on, among other things, the accuracy and
completeness of all such facts, information, covenants, statements and
representations.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents. As to any facts material to our opinion which were not independently
established or verified, we have relied upon statements, representations, and
certifications of officers and other representatives of Delta and others.
<PAGE> 3
Delta Air Lines, Inc. -3-
We hereby confirm to you our opinion as set forth under the heading
"Certain United States Federal Income Tax Consequences" in the Prospectuses
included in the Registration Statement.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to the Registration Statement and the
references to us in the above-mentioned Prospectuses under the heading "Certain
United States Federal Income Tax Consequences." In giving such consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE> 1
EXHIBIT 23(c)
[Letterhead of Arthur Andersen LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-3 (relating to Debt
Securities, Pass Through Certificates and Equipment Trust Certificates) of our
reports dated August 13, 1999 included or incorporated by reference in Delta Air
Lines, Inc.'s Annual Report on Form 10-K for the year ended June 30, 1999 and to
all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 16, 2000
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ EDWIN L. ARTZT
---------------------------------------
Edwin L. Artzt
Director
Delta Air Lines, Inc.
<PAGE> 2
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful attorneys-
in-fact, with full power of substitution, for me and in my name, in any and all
capacities, to sign one or more registration statements on Form S-3 in such form
as said attorneys deem appropriate or advisable, to be filed with the Securities
and Exchange Commission by Delta Air Lines, Inc. (the "Company") in respect of
the issuance of Debt Securities of the Company and/or the issuance of Pass
Through Certificates and Equipment Trust Certificates, and all amendments to
such registration statements (including post-effective amendments and any
related registration statement filed pursuant to Rule 462), and to file the same
with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ JAMES L. BROADHEAD
------------------------
James L. Broadhead
Director
Delta Air Lines, Inc.
<PAGE> 3
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ EDWARD H. BUDD
-----------------------------------
Edward H. Budd
Director
Delta Air Lines, Inc.
<PAGE> 4
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ R. EUGENE CARTLEDGE
-----------------------------------
R. Eugene Cartledge
Director
Delta Air Lines, Inc.
<PAGE> 5
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ MARY JOHNSTON EVANS
--------------------------------
Mary Johnston Evans
Director
Delta Air Lines, Inc.
<PAGE> 6
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ GEORGE M.C. FISHER
--------------------------------
George M.C. Fisher
Director
Delta Air Lines, Inc.
<PAGE> 7
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the issuance
of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ DAVID R. GOODE
---------------------------
David R. Goode
Director
Delta Air Lines, Inc.
<PAGE> 8
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the
issuance of Pass Through Certificates and Equipment Trust Certificates, and
all amendments to such registration statements (including post-effective
amendments and any related registration statement filed pursuant to Rule 462),
and to file the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ GERALD GRINSTEIN
-----------------------------------------------
Gerald Grinstein
Director
Delta Air Lines, Inc.
<PAGE> 9
EXHIBIT 24
POWER OF ATTORNEY
I hereby constitute and appoint Leo F. Mullin, Edward H. West and M.
Michele Burns, and each of them separately, my true and lawful
attorneys-in-fact, with full power of substitution, for me and in my name, in
any and all capacities, to sign one or more registration statements on Form S-3
in such form as said attorneys deem appropriate or advisable, to be filed with
the Securities and Exchange Commission by Delta Air Lines, Inc. (the "Company")
in respect of the issuance of Debt Securities of the Company and/or the
issuance of Pass Through Certificates and Equipment Trust Certificates, and all
amendments to such registration statements (including post-effective amendments
and any related registration statement filed pursuant to Rule 462), and to file
the same with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I have hereunto signed this power of attorney as of
this 18th day of February, 2000.
/s/ ANDREW J. YOUNG
---------------------------------------
Andrew J. Young
Director
Delta Air Lines, Inc.
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) (3)___(3)
------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
13-5160382
(I.R.S. employer identification no.)
48 WALL STREET, NEW YORK, NEW YORK 10286
(Address of principal executive offices) (Zip Code)
-------------------
THE BANK OF NEW YORK
10161 CENTURION PARKWAY
HIGHWOODS CENTER, 2ND FLOOR
JACKSONVILLE, FLORIDA 32256
ATTN: MS. SANDRA CARREKER
(904) 998-4700
(Name, address and telephone number of agent for service)
--------------------
DELTA AIR LINES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 58-0218548
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
HARTSFIELD ATLANTA INTERNATIONAL AIRPORT
ATLANTA, GEORGIA 30320
(404) 715-2600
(Address and telephone number of principal executive offices)
--------------------
DEBT SECURITIES, PASS THROUGH CERTIFICATES
AND EQUIPMENT TRUST CERTIFICATES
(Title of the indenture securities)
<PAGE> 2
1. General Information.
Furnish the following information as to the trustee--
Name and address of each examining or supervising authority to
which it is subject.
SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK
2 RECTOR STREET
NEW YORK, N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK
33 LIBERTY PLAZA
NEW YORK, N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION
NEW YORK, N.Y.
Whether it is authorized to exercise corporate trust powers.
YES.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
NONE. (SEE NOTE ON PAGE 4.)
3-15 Not Applicable
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
(1) A copy of the Organization Certificate of the Bank of New York
(formerly Irving Trust Company) as now in effect,
<PAGE> 3
which contains the authority to commence business and a grant of powers
to exercise corporate trust powers. (Exhibit 1 to Amendment 1 to Form
T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b
to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
(4) A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
(6) The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration No. 33-44051.)
(7) A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of
all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment to
this Form T-1.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of Jacksonville
and the State of Florida, on the 23rd day of February, 2000.
THE BANK OF NEW YORK
By: /s/ William Cardozo
----------------------------------
William Cardozo, Agent
<PAGE> 5
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, in connection with the proposed issuance of Delta Air Lines, Inc.
Debt Securities, The Bank of New York hereby consents that reports of
examinations by Federal, State, Territorial or District Authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
THE BANK OF NEW YORK
By: /s/ William Cardozo
----------------------------------
William Cardozo, Agent
<PAGE> 6
EXHIBIT 7 TO FORM T-1
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business September 30, 1999, published in accordance
with a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C> <C>
ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin....................................................................... $ 6,394,412
Interest-bearing balances..................................................................... 3,966,749
Securities:
Held-to-maturity securities................................................................... 805,227
Available-for-sale securities................................................................. 4,152,260
Federal funds sold and securities
purchased under agreements to resell.......................................................... 1,449,439
Loans and lease financing receivables:
Loans and leases,
net of unearned income. . . . . 37,900,739
LESS: Allowance for loan and
lease losses. . . . . . . . . . 572,761
LESS: Allocated transfer
risk reserve. . . . . . . . . . 11,754
Loans and leases, net of unearned
income and allowance and reserve........................................................... 37,316,224
Assets held in trading accounts....................................................................... 1,646,634
Premises and fixed assets (including
capitalized leases).......................................................................... 678,439
Other real estate owned............................................................................... 11,571
Investments in unconsolidated
subsidiaries and associated
companies.................................................................................... 183,038
Customers' liability to this bank
on acceptances outstanding................................................................... 349,282
Intangible assets..................................................................................... 790,558
Other assets.......................................................................................... 2,498,658
-----------
Total assets.......................................................................................... $60,242,491
===========
LIABILITIES
Deposits:
In domestic offices.......................................................................... $26,030,231
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Noninterest-bearing . . . . . . . 11,348,986
Interest-bearing. . . . . . . . . 14,681,245
In foreign offices, Edge and
Agreement subsidiaries, and IBFs........................................................... 18,530,950
Noninterest-bearing . . . . . . . 156,624
Interest-bearing. . . . . . . . . 18,374,326
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased...................................................................... 2,094,678
Demand notes issued to the
U.S. Treasury................................................................................ 232,459
Trading liabilities................................................................................... 2,081,462
Other borrowed money:
With remaining maturity of one year
or less.................................................................................... 863,201
With remaining maturity of more
than one year through three years.......................................................... 449
With remaining maturity of more
than three years........................................................................... 31,080
Bank's liability on acceptances
executed and outstanding................................................................... 351,286
Subordinated notes and debentures..................................................................... 1,308,000
Other liabilities..................................................................................... 3,055,031
-----------
Total liabilities..................................................................................... 54,578,827
===========
EQUITY CAPITAL
Common stock.......................................................................................... 1,135,284
Surplus............................................................................................... 815,314
Undivided profits and capital
reserves..................................................................................... 3,759,164
Net unrealized holding gains (losses)
on available-for-sale securities............................................................. (15,440)
Cumulative foreign currency
translation adjustments...................................................................... (30,658)
-----------
Total equity capital.................................................................................. 5,663,664
-----------
Total liabilities and equity capital.................................................................. $60,242,491
===========
</TABLE>
I, Thomas J. Masiro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Masiro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by
<PAGE> 8
us and to the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the Board of Governors of the Federal Reserve
System and is true and correct.
Thomas A. Renyi )
Gerald L. Hassell ) Directors
Allen R. Griffith )
