ATLANTA, Oct. 13, 2021 /PRNewswire/ -- Delta Air
Lines (NYSE:DAL) today reported financial results for the September
quarter 2021 and provided its outlook for the December quarter
2021. Highlights of the September quarter 2021 results,
including both GAAP and adjusted metrics, are on page six and are
incorporated here.
"Our September quarter marked an important milestone in our
recovery, with our first quarterly profit since the start of the
pandemic," said Ed Bastian, Delta's
chief executive officer. "Our revenues reached two-thirds of
2019 levels thanks to the industry-leading operational performance
our people delivered through a busy summer, once again showing why
they are the best in the business."
"While demand continues to improve, the recent rise in fuel
prices will pressure our ability to remain profitable for the
December quarter. As the recovery progresses, I am confident
in our path to sustained profitability as we continue to provide
best-in-class service to our customers, strengthen preference for
our brand, while creating a simpler, more efficient airline."
September Quarter Financial and Operating
Results
- Adjusted pre-tax income of $216
million excludes a $1.3
billion net benefit related to the second payroll support
program extension (PSP3) partially offset by debt extinguishment
charges and mark-to-market adjustments on our investments
- Adjusted operating revenue of $8.3
billion, which excludes refinery sales, was 66 percent
recovered versus September quarter 2019 on capacity that was 71
percent restored. Sequentially versus the June quarter 2021,
adjusted operating revenue improved by $1.9
billion, or 30 percent, on an 11 percent increase in
capacity
- Total operating expense, which includes the remaining
$1.8 billion of benefit related to
PSP3, decreased $3.5 billion compared
to the September quarter 2019. Adjusted for the benefit
related to PSP3 and costs from third-party refinery sales, total
operating expense decreased $2.6
billion or 25 percent in the September quarter 2021 versus
the comparable 2019 period
- Remuneration from American Express in the quarter was just over
$1 billion, up 1 percent compared to
September quarter 2019
- Generated $151 million of
operating cash flow and invested $619
million back in the business
- At the end of the September quarter, the company had
$15.8 billion in liquidity, including
cash and cash equivalents, short-term investments and undrawn
revolving credit facilities
- Led the industry on key operating metrics, including a record
combined completion factor of 99.72 in August for both mainline and
Delta Connection. These operating results and other
enhancements to the customer experience supported domestic net
promoter scores above September quarter 2019 levels
December Quarter 2021 Outlook
|
4Q21
Forecast
|
Capacity
1
|
80%
restored
|
Total Revenue 1,
2
|
Recovered to
low 70s percentage
|
Fuel Price ($/gal)
2, 3
|
$2.25 -
$2.40
|
CASM-Ex 1,
2
|
Up 6% - 8%
|
Capital Expenditures
2
|
~$1.2
billion
|
Adjusted Net Debt
2
|
~$22
billion
|
1 Compared to December quarter
2019
|
2 Non-GAAP measure
|
3 Fuel
guidance based on prices as of October 11 (Brent at $83, cracks at
$13, Monroe profit with RINS at $1.30)
|
Revenue Environment
"Generating a profit for the quarter even with a majority of our
corporate and international customers still to return is a great
achievement. I am also encouraged by our relative revenue
performance, as we expect a record September quarter unit revenue
premium. Our ability to deliver a sustained unit revenue
premium throughout the pandemic demonstrates the success of our
customer-centric and revenue diversification strategies," said
Glen Hauenstein, Delta's
president.
"Our revenue recovery has shown strong progression through the
course of the year as our customers return to the skies. With
robust holiday demand and an expected improvement in corporate and
international demand, we expect total December quarter revenue to
recover to the low 70s percentage relative to 2019."
Operating revenue, adjusted of $8.3
billion for the September quarter 2021 improved 30 percent,
or $1.9 billion from June quarter
2021. Compared to the same period in 2019, operating revenue,
adjusted was 66 percent restored, in line with the company's
initial revenue guidance even as case counts from the COVID-19
variant impacted demand in August and early September. Total
passenger revenue was 63 percent recovered in the September quarter
2021 compared to September quarter 2019 on system capacity that was
71 percent restored compared to 2019 levels.
Compared to the June quarter 2021, system yields improved 4
percent and system load factors improved 11 points to 80 percent.
As a result, total unit revenue, adjusted improved 17 percent
sequentially.
Revenue-related Highlights:
- Domestic and Latin continue to lead recovery, Transatlantic
improved the most: Domestic passenger revenue was 72 percent
restored compared to September quarter 2019, a 17 point improvement
in the rate of recovery versus the June quarter 2021. International
passenger revenue recovered to 42 percent of September quarter 2019
levels, a 16 point improvement sequentially. Latin is the most
restored entity with passenger revenues 84 percent recovered,
followed by Transatlantic at 35 percent restored versus September
quarter 2019, up 20 points quarter over quarter driven by border
reopenings. Pacific passenger revenue remains the slowest to return
at 20 percent recovered with traffic largely still limited to
essential travel.
- Premium cabins outperformed main cabin in the most recovered
entities: Domestic and short-haul Latin premium product revenue
continued to outperform with recovery outpacing main cabin by
approximately 10 points. This was driven by an increase in paid
premium cabin load factors relative to September quarter 2019,
despite business travel being less than 50 percent recovered. This
relative outperformance is expected to be reflected at a system
level as premium revenue in other entities improves with the return
of business and international travel at scale.
- Corporate demand stable despite delay in return to
office: Corporate volumes improved in July but paused at
approximately 40 percent recovered for the September quarter 2021
compared to September quarter 2019 as corporations delayed the
reopening of offices due to the COVID-19 variant. This was a 10
point improvement sequentially from the June quarter, but below
expectations set at the outset of the quarter. With the decline in
COVID-19 case counts, Delta saw improving domestic corporate
volumes exiting September, and that improvement continues in
October. Small and Medium Enterprises continue to lead the recovery
in business travel.
- American Express remuneration exceeded 2019 levels:
American Express remuneration in the quarter exceeded 2019 levels
on co-brand spend that was nearly 15 percent higher than 2019 and
acquisitions that were approximately 95 percent restored to 2019.
Strong portfolio spend more than offset travel-related
remuneration. The company expects total remuneration to remain
above December quarter 2019 levels in the December quarter
2021.
- Cargo revenue continues to improve on yield strength:
Cargo revenue increased to $262
million, a 39 percent improvement compared to the September
quarter 2019. This represents the fourth consecutive quarter of
growth compared to 2019 comparable periods. Cargo strength relative
to 2019 is expected to continue in the December quarter 2021 as
constraints in global air cargo capacity during the peak holiday
shipping period support continued yield strength.
Cost Performance
"Leading the industry on operational performance and achieving
our goal of profitability for the quarter with an adjusted pre-tax
profit of $216 million are great
accomplishments and a testament to the perseverance of the Delta
people," said Dan Janki, Delta's
chief financial officer. "Our focus remains on restoring the
airline to prepare for the next leg of the recovery, building upon
our leadership position for the years ahead."
Total operating expenses, adjusted of $7.8 billion in the September quarter 2021
increased 12 percent sequentially, primarily driven by non-fuel
costs from the continued restoration of the airline. Compared
to September quarter 2019, total operating expenses, adjusted were
down $2.6 billion or 25 percent.
Fuel expense, adjusted increased 5 percent compared to the June
quarter 2021 as lower fuel prices partially offset an 11 percent
increase in capacity during the September quarter 2021.
Adjusted fuel price of $1.94 per
gallon was down 8 percent compared to the June quarter 2021 driven
primarily by a refinery contribution versus a loss in the June
quarter 2021. Carbon offsets expensed during the quarter
drove a 4¢ impact on fuel prices as Delta fulfills its commitment
to be a global carbon neutral airline by pursuing high quality,
verified offsets. During the September quarter 2021, fuel
efficiency, defined as gallons per 1,000 ASMs, improved 4.2 percent
versus the same period in 2019 as a result of our fleet renewal
efforts.
Non-fuel costs, adjusted of $6.3
billion increased 14 percent sequentially on an 11 percent
increase in capacity and a 30 percent increase in adjusted
revenue. Additionally, there was an increase in maintenance,
training and other people-related costs required to support the
restoration of the airline in the quarter as the company positions
for further demand recovery in 2022. Compared to the
September quarter of 2019, non-fuel unit costs (CASM-Ex) were 15
percent higher.
Non-operating expense for the September quarter 2021 was
$673 million including mark-to-market
losses on certain of our investments and losses on the
extinguishment of debt. Non-operating expense, adjusted was
$219 million, $6 million lower than June quarter 2021 driven by
lower net interest expense, partially offset by other non-operating
expenses.
Balance Sheet, Cash and Liquidity
"Balance sheet management remains a key priority for Delta as we
chart our return to investment grade metrics in the coming years,"
Janki said. "Over the last 12 months, we have reduced our
financial obligations by $12 billion.
During the September quarter, we used excess cash to reduce
gross debt and interest expense while rebuilding unencumbered
assets and managing our debt maturity profile."
At the end of the September quarter 2021, the company had total
debt and finance lease obligations of $27.8
billion with adjusted net debt of $19.3 billion. The company's total debt had
a weighted average interest rate of 4.2 percent at September
quarter-end. In addition to maturities and normal
amortization of nearly $184 million,
the company completed a $1 billion
debt tender offer, acquired aircraft with cash rather than
financing those acquisitions and executed $276 million of open market debt repurchases in
the September quarter 2021.
Since October 2020, Delta has
reduced its financial obligations by $12
billion in aggregate via pension contributions and paydown
of debt, including normal amortization. These actions have
driven interest savings, freed up previously secured collateral,
fully funded the pension on a Pension Protection Act basis and
improved the company's debt maturity profile.
Operating cash flow during the quarter was $151 million. Free cash flow was negative
$463 million for the quarter with net
capital expenditures reinvested in the business of $619 million.
The company's Air Traffic Liability was $6.4 billion at September quarter-end,
$562 million lower than at the end of
the June quarter due to the impact the variant had on cash sales
and normal seasonality. Travel credits at September
quarter-end accounted for approximately 40 percent of the Air
Traffic Liability and represented approximately 8 percent of
average daily bookings during the quarter.
Delta ended the September quarter with $15.8 billion in liquidity, including
$2.6 billion in undrawn revolver
capacity.
Fleet
Today the company announced the incremental acquisition of two
used A350 aircraft with deliveries planned for the December quarter
2021. Year to date and including today's announcement, the
company has finalized several fleet transactions, including the
exercise of 55 A321neo options scheduled to deliver between 2022
and 2027 and agreements to acquire 38 gently used aircraft in the
secondary market. These opportunistic acquisitions are
consistent with the broader fleet strategy, complementing other
actions taken over the last 18 months as the company accelerates
fleet renewal efforts and prepares for continued recovery.
Renewal efforts progress Delta towards a simpler, more
efficient and sustainable fleet while also elevating product and
customer experience.
Other Highlights from the September Quarter
Culture and People
- Increased vaccination rates to approximately 90 percent of
employees, as of October 12, 2021, as
Delta continues to prioritize the health and safety of our
people
- Safely transported 9,000 evacuees from harm's way in
Afghanistan on Delta aircraft, in
partnership with the Department of Defense under the Civil Reserve
Air Fleet (CRAF) program
- Partnered with the American Red Cross to transport 40,000
pounds of supplies, including American Red Cross blankets and
comfort kits for evacuees on CRAF flights
- Contributed $350,000 to the
American Red Cross for disaster relief efforts during the quarter –
this contribution is in addition to the $1
million grant to the American Red Cross as an Annual
Disaster Giving Program member
- Awarded the Travel Partner of the Year – Global Airline
accolade in the U.K. for recognition of our commitment to the
health and safety of our customers during the pandemic
Customer Experience and Loyalty
- Continued to lead the industry in operational reliability
across key operating metrics. In August, achieved record
completion factor performance of 99.72 for both mainline and Delta
Connection
- Achieved 116 Brand Perfect Days as of October 11, 2021, on par with pre-pandemic
levels. Brand Perfect Days are defined as those days when
there are no cancellations across Delta's mainline and regional
operations
- Hired more than 8,000 employees across the organization since
the beginning of 2021 to bolster customer service, reduce customer
wait times and improve reliability in the summer operation
- For the fifth year in a row, Delta's SkyMiles program secured
the No. 1 spot against all global airlines in U.S. News & World
Report's annual ranking of airline loyalty programs
- Selected by customers as the Skytrax Best Airline in
North America for 2021 and
recognized for its health, hygiene and safety protocols during the
COVID-19 pandemic
- Announced or launched network changes in response to increasing
travel demand, including:
-
- Nonstop service from Boston to
Tel Aviv and Athens beginning in 2022
- New flights to Boston's top 20
Domestic markets with launch of DFW and CLT in October and BWI, DEN
and SAN in July 2022
- Doubled flights from August to September
2021 to Canada's biggest
markets following the country's reopening to fully vaccinated
American
- Resumed nonstop service to Johannesburg, South Africa, restoring Delta
service to all pre-COVID markets in Africa
- Implemented the following changes to enhance Delta's customer
experience:
-
- Increased flexibility for our customers by extending waivers
for Basic Economy fares through the end of 2021 and by
eliminating same-day standby fees
- Led the industry as the only U.S. airline to extend Medallion
Status and key SkyMiles benefits to January
2023 to give our most loyal customers more flexibility as
travel resumes
- Resumed hot meal service in the premium cabin on
coast-to-coast flights, partnering with Souvla, Union Square Events
and chefs Jon+Vinny to serve fresh meals in Delta One
- Announced a new Spotify partnership to provide curated
playlists, podcasts and elevated audio experience to Delta Studio
for a more personalized experience
- Equipped more than 100 aircraft with fast
streaming Viasat connectivity and on track for more than
300 aircraft to be equipped by year-end 2021
- Reopened full network of Delta
Sky Clubs by July 2021 and re-introduced
signature hot food items in Clubs throughout the
summer
Environmental, Social and Governance
- Accelerated fleet renewal efforts by exercising options for 30
incremental A321neos in July 2021,
which are expected to be 20 percent more efficient than the
aircraft being replaced and begin deliveries in 2022
- Partnered with Chevron and Google to analyze sustainable
aviation fuel (SAF) emissions data and increase industry
transparency
- Signed an agreement with Aemetis for 250 million gallons of SAF
to be delivered over the 10-year term of the agreement. With
this announcement, Delta anticipates more than 80 million gallons
of SAF available for annual consumption beginning in 2025
- Announced our commitment to work with the Science Based Targets
initiative (SBTi) to set a net-zero 2050 target and an interim
emissions intensity target for our airline operations, consistent
with recently issued SBTi guidance for the aviation sector
- Announced plans to join three key climate coalitions - the UN's
Race to Zero initiative, the LEAF Coalition and the World Economic
Forum's Clean Skies for Tomorrow initiative – bolstering our
commitment to a future of zero impact aviation
- Continuing commitment to enhanced Inclusion Training with more
than 55,000 employees completing DEI (Diversity, Equity &
Inclusion) training classes in the last year
- Issued the 2021 "Close the Gap" report, demonstrating our
commitment to transparency in our journey to becoming a more
diverse, equitable, anti-racist and anti-discrimination
organization
Payroll Support Program / Government Grant
Accounting
In the September quarter 2021, the remaining $1.8 billion of PSP3 was recognized as a
contra-expense, which is reflected as "government grant
recognition" on the Consolidated Statements of Operations.
September Quarter Results
September quarter results have been adjusted primarily for the
government grant recognition, losses on extinguishment of debt,
unrealized losses on investments, and third-party refinery sales as
described in the reconciliations in Note A.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q21
|
3Q19
|
Pre-tax
income
|
1,532
|
|
1,947
|
|
(415)
|
|
(21)
|
%
|
Net income
|
1,212
|
|
1,495
|
|
(283)
|
|
(19)
|
%
|
Diluted earnings per
share
|
1.89
|
|
2.31
|
|
(0.42)
|
|
(18)
|
%
|
Pre-tax
margin
|
16.7
|
%
|
15.5
|
%
|
1.2
|
%
|
8
|
%
|
Operating
revenue
|
9,154
|
|
12,560
|
|
(3,406)
|
|
(27)
|
%
|
Total revenue per
available seat mile (TRASM) (cents)
|
16.93
|
|
16.58
|
|
0.35
|
|
2
|
%
|
Operating
expense
|
6,949
|
|
10,489
|
|
(3,540)
|
|
(34)
|
%
|
Fuel
expense
|
1,552
|
|
2,239
|
|
(687)
|
|
(31)
|
%
|
Average fuel price
per gallon
|
1.97
|
|
1.94
|
|
0.03
|
|
2
|
%
|
Cost per available
seat mile (CASM) (cents)
|
12.85
|
|
13.85
|
|
(1.00)
|
|
(7)
|
%
|
Non-operating
expense
|
673
|
|
124
|
|
549
|
|
443
|
%
|
Total debt and
finance lease obligations
|
27,819
|
|
10,119
|
|
17,700
|
|
175
|
%
|
Capital
expenditures
|
830
|
|
945
|
|
(115)
|
|
(12)
|
%
|
Operating cash
flow
|
151
|
|
2,245
|
|
(2,094)
|
|
(93)
|
%
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q21
|
3Q19
|
Pre-tax
income
|
216
|
|
1,968
|
|
(1,752)
|
|
(89)
|
%
|
Net income
|
194
|
|
1,507
|
|
(1,313)
|
|
(87)
|
%
|
Diluted earnings per
share
|
0.30
|
|
2.33
|
|
(2.02)
|
|
(87)
|
%
|
Pre-tax
margin
|
2.6
|
%
|
15.7
|
%
|
(13.1)
|
%
|
(83)
|
%
|
Operating
revenue
|
8,281
|
|
12,507
|
|
(4,226)
|
|
(34)
|
%
|
TRASM
(cents)
|
15.31
|
|
16.51
|
|
(1.20)
|
|
(7)
|
%
|
Operating
expense
|
7,846
|
|
10,460
|
|
(2,614)
|
|
(25)
|
%
|
Fuel
expense
|
1,533
|
|
2,257
|
|
(724)
|
|
(32)
|
%
|
Average fuel price
per gallon
|
1.94
|
|
1.96
|
|
(0.02)
|
|
(1)
|
%
|
Non-fuel
cost
|
6,313
|
|
7,685
|
|
(1,372)
|
|
(18)
|
%
|
Consolidated unit
cost (CASM-Ex) (cents)
|
11.67
|
|
10.15
|
|
1.53
|
|
15
|
%
|
Non-operating
expense
|
219
|
|
79
|
|
140
|
|
177
|
%
|
Adjusted net
debt
|
19,296
|
|
10,265
|
|
9,031
|
|
88
|
%
|
Capital expenditures,
net
|
619
|
|
822
|
|
(204)
|
|
(25)
|
%
|
Free cash
flow
|
(463)
|
|
1,422
|
|
(1,885)
|
|
(133)
|
%
|
About Delta Air Lines In a world that
thrives on connection, no one better connects the world than Delta
Air Lines (NYSE: DAL). Powered by its people around the world,
Delta is the U.S. global airline leader in safety, innovation,
reliability and customer experience. Delta was named by J.D. Power
& Associates as the No. 1 airline in its 2021 North American
Satisfaction Study, a recognition of its decade-long airline
industry leadership in operational excellence and award-winning
customer service.
Delta is a values-driven company with a mission of connecting
the people and cultures of the globe, striving to foster
understanding across a diverse world. Delta is the first airline to
commit to becoming carbon neutral on a global basis by focusing on
carbon reductions and removals, stakeholder engagement, and
coalition building. Delta's long-term vision is zero-impact
aviation: air travel that does not damage the environment directly
or indirectly via greenhouse gas emissions, noise, waste generation
or other environmental impacts. Its people are committed to these
values while leading the way in ensuring safe, reliable and
comfortable travel.
Forward Looking Statements
Statements made in
this press release that are not historical facts, including
statements regarding our estimates, expectations, beliefs,
intentions, projections, goals, aspirations, commitments or
strategies for the future, should be considered "forward-looking
statements" under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. Such statements are not
guarantees or promised outcomes and should not be construed as
such. 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,
goals, aspirations, commitments and strategies reflected in or
suggested by the forward-looking statements. These risks and
uncertainties include, but are not limited to, the material adverse
effect that the COVID-19 pandemic is having on our business; the
impact of incurring significant debt in response to the pandemic;
failure to comply with the financial and other covenants in our
financing agreements; the possible effects of accidents involving
our aircraft or aircraft of our airline partners; breaches or
lapses in the security of technology systems on which we rely;
disruptions in our information technology infrastructure; our
dependence on technology in our operations; our commercial
relationships with airlines in other parts of the world and the
investments we have in certain of those airlines; the effects of a
significant disruption in the operations or performance of third
parties on which we rely; failure to realize the full value of
intangible or long-lived assets; labor issues; the effects of
weather, natural disasters and seasonality on our business; the
cost of aircraft fuel; the availability of aircraft fuel; failure
or inability of insurance to cover a significant liability at
Monroe's Trainer refinery; failure
to comply with existing and future environmental regulations to
which Monroe's refinery operations
are subject, including costs related to compliance with renewable
fuel standard regulations; our ability to retain senior management
and other key employees, and to maintain our company culture;
significant damage to our reputation and brand, including from
exposure to significant adverse publicity; the effects of terrorist
attacks, geopolitical conflict or security events; competitive
conditions in the airline industry; extended interruptions or
disruptions in service at major airports at which we operate or
significant problems associated with types of aircraft or engines
we operate; the effects of extensive government regulation we are
subject to; the impact of environmental regulation, including
increased regulation to reduce emissions and other risks associated
with climate change, on our business; and unfavorable economic or
political conditions in the markets in which we operate or
volatility in currency exchange rates.
Additional information concerning risks and uncertainties that
could cause differences between actual results and forward-looking
statements is contained in our Securities and Exchange Commission
filings, including our Annual Report on Form 10-K for the fiscal
year ended December 31, 2020 and our
Quarterly Report for the quarterly period ended June 30, 2021. Caution should be taken not to
place undue reliance on our forward-looking statements, which
represent our views only as of the date of this press release, and
which we undertake no obligation to update except to the extent
required by law.
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in millions, except
per share data)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$
|
7,191
|
|
$
|
11,410
|
|
$
|
(4,219)
|
|
(37)
|
%
|
|
$
|
15,278
|
|
$
|
32,032
|
|
$
|
(16,754)
|
|
(52)
|
%
|
Cargo
|
262
|
|
189
|
|
73
|
|
39
|
%
|
|
728
|
|
567
|
|
161
|
|
28
|
%
|
Other
|
1,701
|
|
961
|
|
740
|
|
77
|
%
|
|
4,423
|
|
2,969
|
|
1,454
|
|
49
|
%
|
Total operating
revenue
|
9,154
|
|
12,560
|
|
(3,406)
|
|
(27)
|
%
|
|
20,429
|
|
35,568
|
|
(15,139)
|
|
(43)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
2,566
|
|
2,976
|
|
(410)
|
|
(14)
|
%
|
|
7,096
|
|
8,555
|
|
(1,459)
|
|
(17)
|
%
|
Aircraft fuel and
related taxes
|
1,552
|
|
2,239
|
|
(687)
|
|
(31)
|
%
|
|
4,056
|
|
6,508
|
|
(2,452)
|
|
(38)
|
%
|
Ancillary businesses
and refinery
|
1,079
|
|
279
|
|
800
|
|
NM
|
|
2,724
|
|
945
|
|
1,779
|
|
NM
|
Contracted
services
|
634
|
|
760
|
|
(126)
|
|
(17)
|
%
|
|
1,723
|
|
2,200
|
|
(477)
|
|
(22)
|
%
|
Depreciation and
amortization
|
501
|
|
631
|
|
(130)
|
|
(21)
|
%
|
|
1,494
|
|
1,960
|
|
(466)
|
|
(24)
|
%
|
Landing fees and other
rents
|
524
|
|
566
|
|
(42)
|
|
(7)
|
%
|
|
1,477
|
|
1,638
|
|
(161)
|
|
(10)
|
%
|
Regional carrier
expense
|
453
|
|
543
|
|
(90)
|
|
(17)
|
%
|
|
1,258
|
|
1,622
|
|
(364)
|
|
(22)
|
%
|
Aircraft maintenance
materials and outside repairs
|
433
|
|
424
|
|
9
|
|
2
|
%
|
|
1,014
|
|
1,334
|
|
(320)
|
|
(24)
|
%
|
Passenger commissions
and other selling expenses
|
308
|
|
597
|
|
(289)
|
|
(48)
|
%
|
|
640
|
|
1,668
|
|
(1,028)
|
|
(62)
|
%
|
Passenger
service
|
226
|
|
360
|
|
(134)
|
|
(37)
|
%
|
|
520
|
|
988
|
|
(468)
|
|
(47)
|
%
|
Aircraft
rent
|
105
|
|
110
|
|
(5)
|
|
(5)
|
%
|
|
313
|
|
318
|
|
(5)
|
|
(2)
|
%
|
Restructuring
charges
|
33
|
|
—
|
|
33
|
|
NM
|
|
(3)
|
|
—
|
|
(3)
|
|
NM
|
Government grant
recognition
|
(1,822)
|
|
—
|
|
(1,822)
|
|
NM
|
|
(4,512)
|
|
—
|
|
(4,512)
|
|
NM
|
Profit
sharing
|
—
|
|
517
|
|
(517)
|
|
(100)
|
%
|
|
—
|
|
1,256
|
|
(1,256)
|
|
(100)
|
%
|
Other
|
357
|
|
487
|
|
(130)
|
|
(27)
|
%
|
|
1,006
|
|
1,357
|
|
(351)
|
|
(26)
|
%
|
Total operating
expense
|
6,949
|
|
10,489
|
|
(3,540)
|
|
(34)
|
%
|
|
18,806
|
|
30,349
|
|
(11,543)
|
|
(38)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
2,205
|
|
2,071
|
|
134
|
|
6
|
%
|
|
1,623
|
|
5,219
|
|
(3,596)
|
|
(69)
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(314)
|
|
(70)
|
|
(244)
|
|
NM
|
|
(1,014)
|
|
(228)
|
|
(786)
|
|
NM
|
Impairments and equity
method (losses)/gains
|
(49)
|
|
27
|
|
(76)
|
|
NM
|
|
(102)
|
|
(44)
|
|
(58)
|
|
NM
|
Gain/(Loss) on
investments, net
|
(223)
|
|
(35)
|
|
(188)
|
|
NM
|
|
251
|
|
(17)
|
|
268
|
|
NM
|
Loss on extinguishment
of debt
|
(183)
|
|
—
|
|
(183)
|
|
NM
|
|
(266)
|
|
—
|
|
(266)
|
|
NM
|
Miscellaneous,
net
|
96
|
|
(46)
|
|
142
|
|
NM
|
|
301
|
|
(130)
|
|
431
|
|
NM
|
Total non-operating
expense, net
|
(673)
|
|
(124)
|
|
(549)
|
|
NM
|
|
(830)
|
|
(419)
|
|
(411)
|
|
98
|
%
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
1,532
|
|
1,947
|
|
(415)
|
|
(21)
|
%
|
|
793
|
|
4,800
|
|
(4,007)
|
|
(83)
|
%
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
(320)
|
|
(452)
|
|
132
|
|
(29)
|
%
|
|
(105)
|
|
(1,131)
|
|
1,026
|
|
(91)
|
%
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
1,212
|
|
1,495
|
|
(283)
|
|
(19)
|
%
|
|
$
|
688
|
|
$
|
3,669
|
|
$
|
(2,981)
|
|
(81)
|
%
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
1.90
|
|
$
|
2.32
|
|
|
|
|
$
|
1.08
|
|
$
|
5.61
|
|
|
|
Diluted Earnings
Per Share
|
$
|
1.89
|
|
$
|
2.31
|
|
|
|
|
$
|
1.07
|
|
$
|
5.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
637
|
|
646
|
|
|
|
|
636
|
|
654
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
641
|
|
648
|
|
|
|
|
641
|
|
656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in
millions)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Ticket - Main
cabin
|
$
|
3,742
|
|
$
|
6,021
|
|
$
|
(2,279)
|
|
(38)
|
%
|
|
$
|
7,939
|
|
$
|
16,680
|
|
$
|
(8,741)
|
|
(52)
|
%
|
Ticket - Business
cabin and premium products
|
2,495
|
|
4,008
|
|
(1,513)
|
|
(38)
|
%
|
|
5,128
|
|
11,306
|
|
(6,178)
|
|
(55)
|
%
|
Loyalty travel
awards
|
544
|
|
732
|
|
(188)
|
|
(26)
|
%
|
|
1,213
|
|
2,174
|
|
(961)
|
|
(44)
|
%
|
Travel-related
services
|
410
|
|
649
|
|
(239)
|
|
(37)
|
%
|
|
998
|
|
1,872
|
|
(874)
|
|
(47)
|
%
|
Total passenger
revenue
|
$
|
7,191
|
|
$
|
11,410
|
|
$
|
(4,219)
|
|
(37)
|
%
|
|
$
|
15,278
|
|
$
|
32,032
|
|
$
|
(16,754)
|
|
(52)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in
millions)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Refinery
|
$
|
872
|
|
$
|
6
|
|
$
|
866
|
|
NM
|
|
$
|
2,189
|
|
$
|
94
|
|
$
|
2,095
|
|
NM
|
Loyalty
program
|
453
|
|
485
|
|
(32)
|
|
(7)
|
%
|
|
1,260
|
|
1,443
|
|
(183)
|
|
(13)
|
%
|
Ancillary
businesses
|
215
|
|
285
|
|
(70)
|
|
(25)
|
%
|
|
586
|
|
895
|
|
(309)
|
|
(35)
|
%
|
Miscellaneous
|
161
|
|
185
|
|
(24)
|
|
(13)
|
%
|
|
388
|
|
536
|
|
(148)
|
|
(28)
|
%
|
Total other
revenue
|
$
|
1,701
|
|
$
|
961
|
|
$
|
740
|
|
77
|
%
|
|
$
|
4,423
|
|
$
|
2,969
|
|
$
|
1,454
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
3Q21 versus
3Q19
|
Revenue
|
|
3Q21
($M)
|
|
Change
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
5,759
|
|
(28)%
|
(15)%
|
(10)%
|
(16)%
|
Atlantic
|
|
730
|
|
(65)%
|
(20)%
|
1%
|
(56)%
|
Latin
America
|
|
564
|
|
(16)%
|
(10)%
|
(1)%
|
(7)%
|
Pacific
|
|
138
|
|
(80)%
|
(39)%
|
101%
|
(67)%
|
Total
Passenger
|
$
|
7,191
|
|
(37)%
|
(12)%
|
(2)%
|
(29)%
|
Cargo
Revenue
|
|
262
|
|
39%
|
|
|
|
Other
Revenue
|
|
1,701
|
|
77%
|
|
|
|
Total
Revenue
|
$
|
9,154
|
|
(27)%
|
2%
|
|
|
Third Party
Refinery Sales
|
|
(872)
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
8,281
|
|
(34)%
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
Statistical
Summary
(Unaudited)
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2021
|
2019
|
Change
|
|
2021
|
2019
|
Change
|
Revenue passenger
miles (millions)
|
43,057
|
|
66,862
|
|
(36)
|
|
%
|
|
94,290
|
|
181,652
|
|
(48)
|
|
%
|
Available seat miles
(millions)
|
54,083
|
|
75,742
|
|
(29)
|
|
%
|
|
142,730
|
|
209,911
|
|
(32)
|
|
%
|
Passenger mile yield
(cents)
|
16.70
|
|
17.07
|
|
(2)
|
|
%
|
|
16.20
|
|
17.63
|
|
(8)
|
|
%
|
Passenger revenue per
available seat mile (cents)
|
13.30
|
|
15.06
|
|
(12)
|
|
%
|
|
10.70
|
|
15.26
|
|
(30)
|
|
%
|
Total revenue per
available seat mile (cents)
|
16.93
|
|
16.58
|
|
2
|
|
%
|
|
14.31
|
|
16.94
|
|
(16)
|
|
%
|
TRASM, adjusted - see
Note A (cents)
|
15.31
|
|
16.51
|
|
(7)
|
|
%
|
|
12.78
|
|
16.83
|
|
(24)
|
|
%
|
Cost per available
seat mile (cents)
|
12.85
|
|
13.85
|
|
(7)
|
|
%
|
|
13.18
|
|
14.46
|
|
(9)
|
|
%
|
CASM-Ex - see
Note A (cents)
|
11.67
|
|
10.15
|
|
15
|
|
%
|
|
11.96
|
|
10.66
|
|
12
|
|
%
|
Passenger load
factor
|
80
|
%
|
88
|
%
|
(8)
|
|
pts
|
|
66
|
%
|
87
|
%
|
(21)
|
|
pts
|
Fuel gallons consumed
(millions)
|
789
|
|
1,154
|
|
(32)
|
|
%
|
|
2,023
|
|
3,215
|
|
(37)
|
|
%
|
Average price per
fuel gallon
|
$
|
1.97
|
|
$
|
1.94
|
|
2
|
|
%
|
|
$
|
2.00
|
|
$
|
2.03
|
|
(1)
|
|
%
|
Average price per
fuel gallon, adjusted - see Note A
|
$
|
1.94
|
|
$
|
1.96
|
|
(1)
|
|
%
|
|
$
|
1.99
|
|
$
|
2.02
|
|
(1)
|
|
%
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
September
30,
|
|
(in
millions)
|
2021
|
2019
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
1,212
|
|
$
|
1,495
|
|
|
Depreciation and
amortization
|
501
|
|
631
|
|
|
Changes in air
traffic liability
|
(562)
|
|
(854)
|
|
|
Changes in profit
sharing
|
—
|
|
517
|
|
|
Deferred government
grant recognition
|
(1,822)
|
|
—
|
|
|
Changes in balance
sheet and other, net
|
822
|
|
456
|
|
|
Net cash provided by
operating activities
|
151
|
|
2,245
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and
equipment additions:
|
|
|
|
Flight equipment,
including advance refunds/(payments)
|
(434)
|
|
(549)
|
|
|
Ground property and
equipment, including technology
|
(396)
|
|
(396)
|
|
|
Purchase of
short-term investments
|
(5,212)
|
|
—
|
|
|
Redemption of
short-term investments
|
5,664
|
|
—
|
|
|
Other, net
|
(6)
|
|
(180)
|
|
|
Net cash used in
investing activities
|
(384)
|
|
(1,125)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Payments on debt and
finance lease obligations
|
(1,553)
|
|
(355)
|
|
|
Repurchase of common
stock
|
—
|
|
(208)
|
|
|
Cash
dividends
|
—
|
|
(260)
|
|
|
Other, net
|
(12)
|
|
(628)
|
|
|
Net cash used in
financing activities
|
(1,565)
|
|
(1,451)
|
|
|
|
|
|
|
Net Increase in
Cash, Cash Equivalents and Restricted Cash
Equivalents
|
(1,798)
|
|
(331)
|
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
$
|
11,458
|
|
$
|
3,029
|
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
|
9,660
|
|
$
|
2,698
|
|
|
|
|
|
|
The following table
provides a reconciliation of cash, cash equivalents and restricted
cash reported within the Consolidated Balance Sheets to the total
of the same such amounts shown above:
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
8,785
|
|
$
|
1,899
|
|
|
Restricted cash included in
prepaid expenses and other
|
162
|
|
46
|
|
|
Other
assets:
|
|
|
|
Cash restricted for airport
construction
|
713
|
|
753
|
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
9,660
|
|
$
|
2,698
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
(in
millions)
|
2021
|
|
2020
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8,785
|
|
|
$
|
8,307
|
|
|
Short-term
investments
|
4,417
|
|
|
5,789
|
|
|
Accounts receivable,
net
|
2,183
|
|
|
1,396
|
|
|
Fuel
inventory
|
641
|
|
|
377
|
|
|
Expendable parts and
supplies inventories, net
|
371
|
|
|
355
|
|
|
Prepaid expenses and
other
|
1,074
|
|
|
1,180
|
|
|
Total current
assets
|
17,471
|
|
|
17,404
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
27,816
|
|
|
26,529
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,827
|
|
|
5,733
|
|
|
Goodwill
|
9,753
|
|
|
9,753
|
|
|
Identifiable
intangibles, net
|
6,004
|
|
|
6,011
|
|
|
Cash restricted for
airport construction
|
713
|
|
|
1,556
|
|
|
Equity
investments
|
1,919
|
|
|
1,665
|
|
|
Deferred income
taxes, net
|
1,813
|
|
|
1,988
|
|
|
Other noncurrent
assets
|
1,467
|
|
|
1,357
|
|
|
Total other
assets
|
27,496
|
|
|
28,063
|
|
Total
assets
|
$
|
72,783
|
|
|
$
|
71,996
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
|
2,296
|
|
|
$
|
1,732
|
|
|
Current maturities of
operating leases
|
636
|
|
|
678
|
|
|
Air traffic
liability
|
6,246
|
|
|
4,044
|
|
|
Accounts
payable
|
4,017
|
|
|
2,840
|
|
|
Accrued salaries and
related benefits
|
2,198
|
|
|
2,086
|
|
|
Loyalty program
deferred revenue
|
2,619
|
|
|
1,777
|
|
|
Fuel card
obligation
|
1,100
|
|
|
1,100
|
|
|
Other accrued
liabilities
|
1,812
|
|
|
1,670
|
|
|
Total current
liabilities
|
20,924
|
|
|
15,927
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
25,523
|
|
|
27,425
|
|
|
Noncurrent air
traffic liability
|
130
|
|
|
500
|
|
|
Pension,
postretirement and related benefits
|
8,408
|
|
|
10,630
|
|
|
Loyalty program
deferred revenue
|
4,837
|
|
|
5,405
|
|
|
Noncurrent operating
leases
|
5,742
|
|
|
5,713
|
|
|
Other noncurrent
liabilities
|
4,613
|
|
|
4,862
|
|
|
Total noncurrent
liabilities
|
49,253
|
|
|
54,535
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
2,606
|
|
|
1,534
|
|
Total liabilities and
stockholders' equity
|
$
|
72,783
|
|
|
$
|
71,996
|
|
Note A: The following tables show reconciliations of non-GAAP
financial measures. The reasons Delta uses these measures are
described below. Reconciliations may not calculate due to
rounding.
Delta sometimes uses information ("non-GAAP financial measures")
that is derived from the Consolidated Financial Statements, but
that is not presented in accordance with accounting principles
generally accepted in the U.S. ("GAAP"). Under the Securities and
Exchange Commission rules, non-GAAP financial measures may be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for or superior to GAAP
results. The tables below show reconciliations of non-GAAP
financial measures used in this release to the most directly
comparable GAAP financial measures.
Forward Looking Projections. Delta is not able to
reconcile forward looking non-GAAP financial measures without
unreasonable effort because the adjusting items such as those used
in the reconciliations below will not be known until the end of the
period and could be significant.
Pre-Tax Income, Net Income, and Diluted Earnings per Share,
adjusted. In the current period, pre-tax income, net income,
and diluted earnings per share, adjusted exclude the following
items directly related to the impact of COVID-19 and our
response for comparability with the prior period:
Restructuring charges.
During 2020, we recorded restructuring charges for items such as
fleet impairments and voluntary early retirement and separation
programs following strategic business decisions in response to the
COVID-19 pandemic. In the September quarter 2021, we recognized
$33 million of adjustments to certain
of those restructuring charges, representing changes in our
estimates.
Government grant
recognition. We recognized $1.8 billion of the grant
proceeds from the payroll support program extensions as
contra-expense during the September quarter 2021. We recognized the
grant proceeds as contra-expense based on the periods that the
funds were intended to compensate and have fully used all proceeds
from the payroll support program extensions as of the end of the
September quarter 2021.
Impairments and equity method
losses. These adjustments relate to recording our share of the
losses recorded by our equity method investees.
Loss on extinguishment of
debt. This adjustment relates to early termination of a portion
of our debt.
We also regularly adjust pre-tax income, net income, and diluted
earnings per share for the following items to determine pre-tax
income, net income, and diluted earnings per share, adjusted for
the reasons described below. We include the income tax effect of
adjustments when presenting net income, adjusted.
MTM adjustments and settlements
on hedges. Mark-to-market ("MTM") adjustments are
defined as fair value changes recorded in periods other than the
settlement period. Such fair value changes are not necessarily
indicative of the actual settlement value of the underlying hedge
in the contract settlement period. Settlements represent cash
received or paid on hedge contracts settled during the applicable
period.
Equity investment MTM
adjustments. We adjust for our proportionate share of our
equity method investee, Virgin Atlantic's, hedge portfolio MTM
adjustments (recorded in non-operating expense) to allow investors
to understand and analyze our core operational performance in the
periods shown.
MTM adjustments on
investments. Unrealized gains/losses result from our
equity investments that are accounted for at fair value in
non-operating expense. These gains/losses are driven by changes in
stock prices, other valuation techniques for investments in
companies without publicly-traded shares and foreign currency
fluctuations. Adjusting for these gains/losses allows investors to
better understand and analyze our core operational performance in
the periods shown.
Delta Private Jets
adjustment. Because we combined Delta Private Jets with Wheels
Up in January 2020, we have excluded
the impact of Delta Private Jets from 2019 results for
comparability.
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2021
|
|
September 30,
2021
|
|
Pre-Tax
|
Income
|
Net
|
|
Diluted
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per
Share
|
GAAP
|
$
|
1,532
|
|
$
|
(320)
|
|
$
|
1,212
|
|
|
$
|
1.89
|
|
Adjusted
for:
|
|
|
|
|
|
Restructuring
charges
|
33
|
|
(8)
|
|
25
|
|
|
|
Government grant
recognition
|
(1,822)
|
|
424
|
|
(1,398)
|
|
|
|
Impairments and equity
method losses
|
49
|
|
16
|
|
65
|
|
|
|
Loss on extinguishment
of debt
|
183
|
|
(43)
|
|
140
|
|
|
|
MTM adjustments and
settlements on hedges
|
19
|
|
(4)
|
|
15
|
|
|
|
MTM adjustments on
investments
|
223
|
|
(87)
|
|
136
|
|
|
|
Non-GAAP
|
$
|
216
|
|
$
|
(22)
|
|
$
|
194
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2019
|
|
September 30,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Diluted
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per
Share
|
GAAP
|
$
|
1,947
|
|
$
|
(452)
|
|
$
|
1,495
|
|
|
$
|
2.31
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(25)
|
|
6
|
|
(19)
|
|
|
|
Equity investment MTM
adjustments
|
10
|
|
(2)
|
|
8
|
|
|
|
MTM adjustments on
investments
|
35
|
|
(13)
|
|
22
|
|
|
|
Delta Private Jets
adjustment
|
1
|
|
—
|
|
1
|
|
|
|
Non-GAAP
|
$
|
1,968
|
|
$
|
(461)
|
|
$
|
1,507
|
|
|
$
|
2.33
|
|
Pre-Tax Margin, adjusted. In the current period, pre-tax
margin, adjusted excludes the following items directly related to
the impact of COVID-19 and our response: restructuring charges,
government grant recognition, impairments and equity method losses,
and loss on extinguishment of debt, as discussed above under the
heading pre-tax income, net income, and diluted earnings per share,
adjusted. We adjust pre-tax margin for MTM adjustments and
settlements on hedges, equity investment MTM adjustments and MTM
adjustments on investments for the same reasons described above
under the heading pre-tax income, net income, and diluted earnings
per share, adjusted. We adjust for third-party refinery sales for
the reasons described below.
Third-party refinery
sales. We adjust pre-tax margin for refinery sales to
third parties to determine pre-tax margin, adjusted because this
activity is not related to our airline segment. Pre-tax margin,
adjusted therefore provides a more meaningful comparison of pre-tax
margin from our airline operations to the rest of the airline
industry.
|
|
Three Months
Ended
|
|
September 30,
2021
|
September 30,
2019
|
Pre-tax
margin
|
16.7
|
%
|
15.5
|
%
|
Adjusted
for:
|
|
|
Restructuring
charges
|
0.4
|
%
|
—
|
%
|
Government grant
recognition
|
(19.9)
|
%
|
—
|
%
|
Impairments and equity
method losses
|
0.5
|
%
|
—
|
%
|
Loss on extinguishment
of debt
|
2.0
|
%
|
—
|
%
|
MTM adjustments and
settlements on hedges
|
0.2
|
%
|
(0.2)
|
%
|
Equity investment MTM
adjustments
|
—
|
%
|
0.1
|
%
|
MTM adjustments on
investments
|
2.4
|
%
|
0.3
|
%
|
Third-party refinery
sales
|
0.2
|
%
|
0.1
|
%
|
Pre-tax margin,
adjusted
|
2.6
|
%
|
15.7
|
%
|
Operating Revenue, adjusted and Total Revenue Per Available
Seat Mile ("TRASM"), adjusted. We adjust operating revenue
and TRASM for third party refinery sales for the reasons described
above under the heading pre-tax margin, adjusted. We make an
adjustment for the impact of Delta Private Jets for the same reason
described above under the heading pre-tax income, net income, and
diluted earnings per share, adjusted.
|
|
|
Three Months
Ended
|
|
3Q21 vs
3Q19
%
Change
|
(in
millions)
|
|
September 30,
2021
|
June 30,
2021
|
December 31,
2019
|
September 30,
2019
|
|
Operating
revenue
|
$
|
9,154
|
|
$
|
7,126
|
|
$
|
11,439
|
|
$
|
12,560
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(872)
|
|
(777)
|
|
(2)
|
|
(6)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(53)
|
|
(47)
|
|
|
|
Operating revenue,
adjusted
|
$
|
8,281
|
|
$
|
6,349
|
|
$
|
11,384
|
|
$
|
12,507
|
|
|
(34)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
(in
millions)
|
|
September 30,
2021
|
September 30,
2019
|
|
|
|
Change
|
Operating
revenue
|
$
|
20,429
|
|
$
|
35,568
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(2,189)
|
|
(94)
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(139)
|
|
|
|
|
|
Operating revenue,
adjusted
|
$
|
18,240
|
|
$
|
35,335
|
|
|
|
|
(48)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
3Q21 vs
3Q19
%
Change
|
|
|
September 30,
2021
|
June 30,
2021
|
September 30,
2019
|
|
|
TRASM
(cents)
|
16.93
|
|
14.68
|
|
16.58
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1.61)
|
|
(1.60)
|
|
(0.01)
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(0.06)
|
|
|
|
|
TRASM,
adjusted
|
15.31
|
|
13.08
|
|
16.51
|
|
|
|
(7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September 30,
2021
|
September 30,
2019
|
|
|
|
Change
|
TRASM
(cents)
|
14.31
|
|
16.94
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1.53)
|
|
(0.05)
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(0.07)
|
|
|
|
|
|
TRASM,
adjusted
|
12.78
|
|
16.83
|
|
|
|
|
(24)
|
%
|
Operating Expense, adjusted. In the current period,
operating expense, adjusted excludes the following items directly
related to the impact of COVID-19 and our response: restructuring
charges and government grant recognition, as discussed above under
the heading pre-tax income, net income, and diluted earnings per
share, adjusted. We also adjust operating expense for MTM
adjustments and settlements on hedges, third-party refinery sales
and the impact of Delta Private Jets for the same reasons described
above under the headings pre-tax income, net income, and diluted
earnings per share, adjusted, and pre-tax margin, adjusted to
determine operating expense, adjusted.
|
|
Three Months
Ended
|
|
(in
millions)
|
September 30,
2021
|
June 30,
2021
|
September 30,
2019
|
|
Operating
expense
|
$
|
6,949
|
|
$
|
6,310
|
|
$
|
10,489
|
|
|
Adjusted
for:
|
|
|
|
|
Restructuring
charges
|
(33)
|
|
(8)
|
|
—
|
|
|
Government grant
recognition
|
1,822
|
|
1,504
|
|
—
|
|
|
MTM adjustments and
settlements on hedges
|
(19)
|
|
(24)
|
|
25
|
|
|
Third-party refinery
sales
|
(872)
|
|
(777)
|
|
(6)
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(49)
|
|
|
Operating expense,
adjusted
|
$
|
7,846
|
|
$
|
7,005
|
|
$
|
10,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel expense, adjusted and Average fuel price per gallon,
adjusted. We adjust fuel expense for MTM adjustments and
settlements on hedges and the impact of Delta Private Jets for the
same reasons described under the heading pre-tax income, net
income, and diluted earnings per share, adjusted.
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
September
30,
|
June
30,
|
September
30,
|
|
|
September
30,
|
June
30,
|
September
30,
|
(in millions, except
per gallon data)
|
2021
|
2021
|
2019
|
|
|
2021
|
2021
|
2019
|
Total fuel
expense
|
$
|
1,552
|
|
$
|
1,487
|
|
$
|
2,239
|
|
|
|
$
|
1.97
|
|
$
|
2.16
|
|
$
|
1.94
|
|
MTM adjustments and
settlements on hedges
|
(19)
|
|
(24)
|
|
25
|
|
|
|
(0.02)
|
|
(0.03)
|
|
0.02
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(7)
|
|
|
|
—
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
1,533
|
|
$
|
1,463
|
|
$
|
2,257
|
|
|
|
$
|
1.94
|
|
$
|
2.12
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
|
Nine Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
September
30,
|
|
|
|
September
30,
|
September
30,
|
|
(in millions, except
per gallon data)
|
2021
|
2019
|
|
|
|
2021
|
2019
|
|
Total fuel
expense
|
$
|
4,056
|
|
$
|
6,508
|
|
|
|
|
$
|
2.00
|
|
$
|
2.03
|
|
|
MTM adjustments and
settlements on hedges
|
(20)
|
|
8
|
|
|
|
|
(0.01)
|
|
—
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(22)
|
|
|
|
|
—
|
|
(0.01)
|
|
|
Total fuel expense,
adjusted
|
$
|
4,037
|
|
$
|
6,494
|
|
|
|
|
$
|
1.99
|
|
$
|
2.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 2021
YTD compared to 2019 YTD
|
(38)
|
%
|
|
|
|
|
|
|
|
Non-Fuel Cost and Non-Fuel Unit Cost or Cost per Available
Seat Mile, ("CASM-Ex"). In the current period, non-fuel
cost and CASM-Ex excludes the following items directly related to
the impact of COVID-19 and our response: restructuring charges and
government grant recognition, as discussed above under the heading
pre-tax income, net income, and diluted earnings per share,
adjusted. We adjust for refinery sales to third parties for the
same reason described above under the heading pre-tax margin,
adjusted. We adjust for the impact of Delta Private Jets for the
same reason described above under the heading pre-tax income, net
income, and diluted earnings per share, adjusted. We also adjust
operating expense and CASM for the following items to determine
non-fuel cost and CASM-Ex for the reasons described below.
Aircraft fuel and related
taxes. The volatility in fuel prices impacts the comparability
of year-over-year financial performance. The adjustment for
aircraft fuel and related taxes allows investors to understand and
analyze our non-fuel costs and year-over-year financial
performance.
Profit sharing. We
adjust for profit sharing because this adjustment allows investors
to better understand and analyze our recurring cost performance and
provides a more meaningful comparison of our core operating costs
to the airline industry.
|
|
|
|
Three Months
Ended
|
|
3Q21 vs
3Q19
%
Change
|
|
|
|
|
|
September 30,
2021
|
December 31,
2019
|
September 30,
2019
|
|
|
CASM
(cents)
|
12.85
|
|
15.34
|
|
13.85
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Restructuring
charges
|
(0.06)
|
|
—
|
|
—
|
|
|
|
|
Government grant
recognition
|
3.37
|
|
—
|
|
—
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.87)
|
|
(3.08)
|
|
(2.96)
|
|
|
|
|
Third-party refinery
sales
|
(1.61)
|
|
—
|
|
(0.01)
|
|
|
|
|
Profit sharing
|
—
|
|
(0.59)
|
|
(0.68)
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(0.07)
|
|
(0.05)
|
|
|
|
|
CASM-Ex
|
11.67
|
|
11.59
|
10.15
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September 30,
2021
|
September 30,
2019
|
|
|
Change
|
|
CASM
(cents)
|
13.18
|
|
14.46
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Restructuring
charges
|
—
|
|
—
|
|
|
|
|
|
Government grant
recognition
|
3.16
|
|
—
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.84)
|
|
(3.10)
|
|
|
|
|
|
Third-party refinery
sales
|
(1.53)
|
|
(0.05)
|
|
|
|
|
|
Profit sharing
|
—
|
|
(0.60)
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(0.06)
|
|
|
|
|
|
CASM-Ex
|
11.96
|
|
10.66
|
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3Q21 vs
3Q19
%
Change
|
|
(in millions)
|
September 30,
2021
|
June 30,
2021
|
September 30,
2019
|
|
|
Operating
Expense
|
6,949
|
|
6,310
|
|
10,489
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Restructuring
charges
|
(33)
|
|
(8)
|
|
—
|
|
|
|
|
Government grant
recognition
|
1,822
|
|
1,504
|
|
—
|
|
|
|
|
Aircraft fuel and
related taxes
|
(1,552)
|
|
(1,487)
|
|
(2,239)
|
|
|
|
|
Third-party refinery
sales
|
(872)
|
|
(777)
|
|
(6)
|
|
|
|
|
Profit
sharing
|
—
|
|
—
|
|
(517)
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(42)
|
|
|
|
|
Non-Fuel
Cost
|
6,313
|
|
5,541
|
|
7,685
|
|
|
(18)
|
%
|
|
Non-operating expense, adjusted. In the current
period, non-operating expense, adjusted excludes the following
items directly related to the impact of COVID-19 and our response:
impairments and equity method losses and loss on extinguishment of
debt, as discussed above under the heading pre-tax income, net
income, and diluted earnings per share, adjusted. We also adjust
for equity investment MTM adjustments and MTM adjustments on
investments to determine non-operating expense, adjusted for the
same reasons described above in the heading pre-tax income, net
income, and diluted earnings per share, adjusted.
|
|
|
Three Months
Ended
|
(in
millions)
|
|
September 30,
2021
|
|
June 30,
2021
|
September 30,
2019
|
Non-operating
expense
|
$
|
673
|
|
|
$
|
40
|
|
$
|
124
|
|
Adjusted
for:
|
|
|
|
|
Impairments and equity
method losses
|
(49)
|
|
|
—
|
|
—
|
|
Loss on extinguishment
of debt
|
(183)
|
|
|
(26)
|
|
—
|
|
Equity investment MTM
adjustments
|
—
|
|
|
—
|
|
(10)
|
|
MTM adjustments on
investments
|
(223)
|
|
|
211
|
|
(35)
|
|
Non-operating
expense, adjusted
|
$
|
219
|
|
|
$
|
225
|
|
$
|
79
|
|
|
|
|
|
|
|
|
Adjusted Net Debt. Delta uses adjusted total debt,
including aircraft rent, in addition to adjusted debt and finance
leases, to present estimated financial obligations. Delta reduces
adjusted total debt by cash, cash equivalents and short-term
investments, and LGA restricted cash, resulting in adjusted net
debt, to present the amount of assets needed to satisfy the debt.
Management believes this metric is helpful to investors in
assessing the company's overall debt profile.
|
|
|
|
(in
millions)
|
|
September 30,
2021
|
Debt and finance
lease obligations
|
|
$
|
27,819
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
2,247
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
227
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
30,293
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,917
|
|
Adjusted total
debt
|
|
$
|
33,210
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(13,201)
|
|
Less: LGA restricted
cash
|
|
(713)
|
|
Adjusted net
debt
|
|
$
|
19,296
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
2019
|
Debt and finance
lease obligations
|
|
$
|
10,119
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(151)
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
9,968
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,948
|
|
Adjusted total
debt
|
|
$
|
12,916
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(1,899)
|
|
Less: LGA restricted
cash
|
|
(753)
|
|
Adjusted net
debt
|
|
$
|
10,265
|
|
|
|
|
|
Capital Expenditures, net. We present net capital
expenditures because management believes investors should be
informed that a portion of these capital expenditures from airport
construction projects are either reimbursed by a third party or
funded with restricted cash specific to these projects.
|
|
Three Months
Ended
|
(in
millions)
|
September 30,
2021
|
September 30,
2019
|
Flight equipment,
including advance payments
|
$
|
434
|
|
$
|
549
|
|
Ground property and
equipment, including technology
|
396
|
|
396
|
|
Net cash flows
related to certain airport construction projects
|
(211)
|
|
(123)
|
|
Capital expenditures,
net
|
$
|
619
|
|
$
|
822
|
|
Free Cash Flow. We present free cash flow because
management believes these metrics are helpful to investors to
evaluate the company's ability to generate cash that is available
for use for debt service or general corporate initiatives. Free
cash flow is defined as net cash from operating activities and net
cash from investing activities, adjusted for (i) net redemptions of
short-term investments, (ii) strategic investments and related and
(iii) net cash flows related to certain airport construction
projects and other. These adjustments are made for the following
reasons:
Net redemptions of short-term
investments. Net redemptions of short-term investments
represent the net purchase and sale activity of investments and
marketable securities in the period, including gains and losses. We
adjust for this activity to provide investors a better
understanding of the company's free cash flow generated by our
operations.
Strategic investments and
related. Cash flows related to our investments in and
related transactions with other airlines are included in our GAAP
investing activities. We adjust for this activity because it
provides a more meaningful comparison to our airline industry
peers.
Net cash flows related to
certain airport construction projects and other. Cash
flows related to certain airport construction projects are included
in our GAAP operating activities and capital expenditures. We have
adjusted for these items, which were primarily funded by cash
restricted for airport construction, to provide investors a better
understanding of the company's free cash flow and capital
expenditures that are core to our operations in the periods
shown.
|
|
|
|
Three Months
Ended
|
(in
millions)
|
|
|
September 30,
2021
|
September 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
151
|
|
$
|
2,245
|
|
Net cash used in
investing activities
|
|
(384)
|
|
(1,125)
|
|
Adjustments:
|
|
|
|
Net redemptions of
short-term investments
|
|
(452)
|
|
—
|
|
Strategic investments
and related
|
|
—
|
|
81
|
|
Net cash flows related
to certain airport construction projects and other
|
|
222
|
|
221
|
|
Free cash
flow
|
|
$
|
(463)
|
|
$
|
1,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Delta Air Lines