Disney Puts Delta Air Lines Exposure At $119M


DOW JONES NEWSWIRES
May 13, 2004 9:56 a.m.

WASHINGTON -- Walt Disney Co. (DIS) put its exposure to Delta Air Lines Inc. (DAL) at $119 million, according to a quarterly report filed Thursday with the Securities and Exchange Commission.

"The inability of Delta to make their lease payments, or the termination of our lease through a bankruptcy proceeding, could result in a write-off of our $119 million investment and could accelerate certain income tax payments," the entertainment company said in the filing.

Delta said in its March 31 quarterly report that if it can't achieve a competitive cost structure, regain sustained profitability and access the capital markets on acceptable terms, it will need to pursue alternative courses of action including the possibility of seeking to restructure its costs under Chapter 11.

According to Thursday's filing, as of March 31, Disney's remaining aircraft leveraged lease investment totaled approximately $174 million, consisting of $119 million with Delta and $55 million with FedEx Corp. (FDX).

The company said it continue to monitor the recoverability of the investments, "particularly the Delta leases."