UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): June
13, 2007
DELTA
AIR LINES, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-05424
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58-0218548
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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P.O.
Box 20706, Atlanta, Georgia 30320-6001
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (404)
715-2600
Registrant’s
Web site address: www.delta.com
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Cautionary
Statement Regarding Forward-Looking Statements
Statements
contained in this Form 8-K and the Exhibits hereto include “forward-looking
statements” as defined in the Private Securities Litigation Reform Act of 1995.
All forward-looking statements involve a number of risks and uncertainties
that
could cause actual results to differ materially from the estimates,
expectations, beliefs, intentions, projections and strategies reflected in
or
suggested by the forward-looking statements. These risks and uncertainties
include, but are not limited to, the actions and decisions of Delta’s creditors
and other third parties with continuing interests arising in connection with
Delta’s Chapter 11 proceedings; the cost of aircraft fuel; the impact that
Delta’s indebtedness will have on its financial and operating activities and its
ability to incur additional debt; the restrictions that financial covenants
in
Delta’s financing agreements will have on its financial and business operations;
labor issues; interruptions or disruptions in service at one of Delta’s hub
airports; Delta’s increasing dependence on technology in its operations; Delta’s
ability to retain management and key employees; the effects of terrorist
attacks; and competitive conditions in the airline industry.
In
addition, fresh start reporting adjustments reflect a preliminary allocation
of
fair value and may be subject to additional adjustments within one year after
emergence in accordance with Statement of Financial Accounting Standards
No.
141, “Business Combinations”. Estimates of fair value are based primarily on
independent appraisals and valuations and are inherently subject to
uncertainties beyond the control of Delta.
Additional
information concerning risks and uncertainties that could cause differences
between actual results and forward-looking statements is contained in Delta’s
Securities and Exchange Commission filings, including its Annual Report on
Form
10-K for the fiscal year ended December 31, 2006. Caution should be taken
not to
place undue reliance on Delta’s forward-looking statements, which represent
Delta’s views only as of June 13, 2007, and which Delta has no current intention
to update.
ITEM
7.01 Regulation FD Disclosure.
Investor
Update
Delta
Air
Lines, Inc. today issued an Investor Update, which provides updated guidance
for
the June 2007 quarter. This information is attached as Exhibit 99.1
hereto.
Fresh
Start Reporting Update
Delta
today also provided updated information, attached hereto as Exhibit 99.2,
regarding the estimated impact that the adoption of fresh start reporting
as a
result of Delta’s emergence from bankruptcy will have on its financial
statements for the two month period ending June 30, 2007 and the eight month
period ending December 31, 2007.
On
May 2,
2007, Delta furnished on Exhibit 99.1 (the “May 2 Exhibit”) to a Current Report
on Form 8-K information regarding the projected financial impact on its
financial statements of certain non-cash accounting events, including the
adoption of fresh start reporting. In the May 2 Exhibit, Delta stated that
the
estimates relating to the adoption of fresh start reporting were subject
to
change and excluded the impact of a possible change in accounting for its
SkyMiles®
Frequent
Flyer Program (“SkyMiles Program”), which Delta was then evaluating.
Exhibit
99.2 to this Form 8-K includes a description of a change in accounting for
the
SkyMiles Program due to Delta’s adoption of fresh start reporting, the impact of
fresh start reporting on Delta’s fuel hedging gains and a refinement of
preliminary estimates of the amortization of intangible assets and other
fresh
start reporting adjustments. This information updates the fresh start reporting
section of the May 2 Exhibit but does not affect sections of the May 2 Exhibit
that discuss Share-Based Compensation Expense or Accounting Reclassification
Items.
Other
Important Notes
In
accordance with general instruction B.2 of Form 8−K, the information in this
report (including in Exhibits 99.1 and 99.2) that is being furnished pursuant
to
Item 7.01 of Form 8−K shall not be deemed to be “filed” for the purposes of
Section 18 of the Securities Exchange Act, as amended, or otherwise subject
to
liabilities of that section, nor shall that information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended,
except
as expressly set forth in such filing. This report will not be deemed an
admission as to the materiality of any information in the report that is
required to be disclosed solely by Regulation FD.
Item
8.01 Other Events.
Delta
today issued a press release announcing that it had entered into an amended
and
restated Visa/MasterCard credit card processing agreement that, among other
things, resulted in the release by the credit card processor (the “Processor”)
of the holdback under the agreement and extended the term of the agreement
to
October 31, 2008. A copy of the press release is attached as Exhibit 99.3.
Prior
to
the amendment, the Processor was permitted to withhold payment from our
receivables of an amount (“Reserve”) that was generally equal to the Processor’s
potential liability for tickets purchased with Visa or MasterCard which have
not
yet been used for travel (the “unflown ticket liability”). The Processing
Agreement also allowed Delta to substitute a letter of credit, which was
issued
by Merrill Lynch, for a portion of the Reserve equal to the lesser of $300
million and 45% of the unflown ticket liability.
Including
the letter of credit, the Reserve, which adjusts daily, totaled approximately
$1.1 billion. On May 31, 2007, Delta and the Processor entered into a letter
agreement pursuant to which the Processor surrendered the letter of credit
and
correspondingly reduced the amount of the Reserve. On June 8, 2007, Delta
and
the Processor entered into the amended and restated agreement (the “Amended
Agreement”), under which the Processor returned to Delta the remaining amount of
the Reserve (approximately $800 million).
The
Amended Agreement provides that no future holdback of receivables or Reserve
is
required except in certain circumstances including events that in the reasonable
determination of the Processor would have a material adverse effect on
Delta.
Further,
if either Delta or the Processor determines not to extend the term of the
Amended Agreement beyond October 31, 2008, then the Processor may maintain
a
holdback or Reserve during the period of 90 days before the expiration date,
equal to approximately 100% of the value of tickets for which Delta had received
payment under the Amended Agreement, but which have not been used for travel,
unless Delta has unrestricted cash above a level specified in the Amended
Agreement. Such a Reserve would be released to Delta following termination
as
tickets are used for travel.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
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Exhibit
99.1
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Investor
Update (June 13, 2007)
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Exhibit
99.2
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Information
Regarding Non-Cash Accounting Events
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Exhibit
99.3
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Press
Release dated June 13, 2007 titled “Delta
Air Lines Amends Credit Card Processing Agreement”
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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DELTA
AIR LINES, INC.
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By:
/s/
Edward H. Bastian
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Date:
June 13, 2007
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Edward H. Bastian
Executive Vice President - Chief Financial
Officer
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EXHIBIT
INDEX
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Exhibit
Number
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Description |
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Exhibit
99.1
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Investor
Update (June 13, 2007)
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Exhibit
99.2
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Information
Regarding Non-Cash Accounting Events
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Exhibit
99.3
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Press
Release dated June 13, 2007 titled “Delta
Air Lines Amends Credit Card Processing Agreement”
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