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Delta Air Lines Annual Report (Amendment), Year Ended Dec 31, 2006

Filing Date
Filed April 27, 2007
Period End
December 31, 2006
Security
DAL
In the record · 2016–202610-K1210-Q338-K210

DAL filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 210 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’17Oct ’17
  2. Material agreement8-K · Oct ’19Oct ’19
  3. Material agreement8-K · Nov ’21Nov ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K/A filed April 27, 2007. Cited figures are marked; the original filing is the authoritative source.

Delta Air Lines, Inc. filed this Amendment No. 1 to its Form 10-K for the fiscal year ended December 31, 2006, to add the Part III information (directors, executive officers, executive compensation, security ownership, related transactions, and auditor fees) that was omitted from its original March 2, 2007 annual report.

The amendment states that the company is still operating under Chapter 11 protection. Under its plan of reorganization, holders of allowed unsecured claims would generally receive common stock of reorganized Delta, and current holders of equity interests would receive no distributions and have their shares cancelled when the plan takes effect. The filing describes a planned emergence from Chapter 11 in early May 2007, and states that the company's securities became eligible to be listed on the NYSE again effective April 26, 2007.

The filing reports that the company sought $3.0 billiona in annual financial improvements by the end of 2007 and states that it reached that goal as of December 31, 2006. Officers did not receive annual or long-term incentive payments in 2006, and no stock or option awards were granted to officers that year. Stock options were rejected in bankruptcy effective March 31, 2006.

The company has also developed a post-emergence compensation program for approximately 39,000 noncontract employees, including a significant distribution of common stock, a cash lump-sum payment, pay increases expected to begin in summer 2007, and a new defined contribution retirement benefit. The pilot plan was terminated and the PBGC assumed trusteeship on December 31, 2006, and ALPA received a $2.1 billionb general unsecured pre-petition claim and $650 million in senior unsecured notes in exchange for concessions. As of February 28, 2007, there were 197,335,938 shares of common stock outstanding, and the aggregate market value held by non-affiliates as of June 30, 2006 was approximately $148 million.

The filing states that no annual shareowner meeting was held in 2006 due to the bankruptcy proceedings, and that the board met 10 times during 2006. Ernst & Young LLP reported 2006 audit fees of $2,787,000c and tax fees of $778,000, and Deloitte & Touche LLP reported 2005 audit fees of $4,285,500.

02—Key points

Key Highlights

  1. Delta remained in Chapter 11 at the time of filing, with emergence planned for early May 2007; under the plan, existing common stock is to be cancelled and unsecured creditors generally receive common stock of reorganized Delta.
  2. The company reports it reached its goal of $3.0 billion in annual financial improvements as of December 31, 2006, sought by the end of 2007 as part of the Chapter 11 process.
  3. No annual or long-term incentive payments were made to officers in 2006, and stock options were rejected in bankruptcy effective March 31, 2006.
  4. A broad-based post-emergence compensation program covers about 39,000 noncontract employees, including a significant common stock distribution, a cash lump-sum payment, and a new defined contribution retirement benefit.
  5. The pilots' union (ALPA) received a $2.1 billion general unsecured pre-petition claim and $650 million in senior unsecured notes in return for pilot concessions, and the pilot pension plan was terminated with the PBGC assuming trusteeship on December 31, 2006.
  6. There were 197,335,938 common shares outstanding as of February 28, 2007, and the non-affiliate market value as of June 30, 2006 was approximately $148 million.
  7. Ernst & Young LLP is the 2006 independent auditor, with 2006 audit fees of $2,787,000 and tax fees of $778,000; Deloitte & Touche LLP's 2005 audit fees were $4,285,500.

03—Questions

Frequently Asked Questions

  1. Why was this amendment filed?

    The filing states that it was filed under General Instruction G(3) to include the Part III information required by Form 10-K, which was not included in the original annual report filed on March 2, 2007. It also files certain exhibits with the amendment.

  2. What will happen to current shareholders when Delta emerges from Chapter 11?

    According to the filing, holders of allowed unsecured claims would generally receive common stock of reorganized Delta. Current holders of Delta's equity interests would not receive any distributions under the plan, and their equity interests would be cancelled once the plan becomes effective.

  3. How are executives and employees being compensated after emergence?

    The filing says officers will receive restricted stock, stock options, and performance shares, with a substantial portion of their pay at risk. Noncontract employees will receive a common stock distribution, a cash lump-sum payment, pay increases expected to begin in summer 2007, a Shared Rewards program, a profit sharing plan, and a new defined contribution retirement benefit. CEO Gerald Grinstein has stated he will not participate in management equity awards, cash incentive payments, or the severance program after emergence.

  4. What pension and retiree obligations does the filing describe?

    The filing states that the qualified defined benefit pilot plan was terminated effective September 2, 2006, and the PBGC assumed trusteeship on December 31, 2006, covering more than 13,000 active and retired pilots. The non-pilot Delta Retirement Plan was frozen effective March 31, 2007, and the non-qualified non-pilot plans were rejected as part of the plan of reorganization.

04—Continue

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