ATLANTA, April 22, 2020 /PRNewswire/ -- Delta Air
Lines (NYSE: DAL) today reported financial results for the March
quarter 2020 and outlined its response to the COVID-19 global
pandemic.
"These are truly unprecedented times for all of us, including
the airline industry. Government travel restrictions and
stay-at-home orders have been effective in slowing the spread of
the virus, but have also severely impacted near-term demand for air
travel, reducing our expected June quarter revenues by 90 percent,
compared to a year ago," said Ed
Bastian, Delta's chief executive officer. "Delta is taking
decisive action to prioritize the safety of our employees and
customers while protecting our business and bolstering liquidity. I
am especially proud of the incredible work the Delta people are
doing to keep our nation's airways open, playing an active role in
the fight against the virus."
Bastian continued, "I would like to thank the President, members
of Congress, and the Administration for their bipartisan support of
the Payroll Support Program under the CARES Act, which recognizes
the important role the airlines play in the U.S. economy. The
Payroll Support Program will help safeguard Delta jobs while
positioning our nation for recovery."
Response to COVID-19
Network and Customer Experience
To address the challenges of COVID-19, the company is
taking the following actions:
- Making significant capacity reductions for the June quarter
versus prior year with total system capacity down 85 percent,
including domestic down by 80 and international capacity down by 90
percent
- Adopting new cleaning procedures on all flights, including
fogging on all aircraft overnight and sanitizing high-touch areas
like tray tables, entertainment screens, armrests and seat-back
pockets before boarding
- Taking steps to help employees and customers practice social
distancing, including blocking middle seats, pausing automatic
upgrades, modifying our boarding process and moving to essential
meal service only
- Extending 2020 Medallion Status an additional year, rolling
Medallion Qualification Miles into 2021, and extending Delta
SkyMiles American Express Card benefits and Delta Sky Club
memberships
- Giving customers flexibility to plan, re-book and travel
including extending expiration on travel credits to two years
Community Response
Delta and its 90,000 employees are taking an active role in our
nation's fight against the virus by:
- Offering free flights to medical professionals fighting
COVID-19 in the hardest-hit areas of the U.S.
- Chartering international cargo-only flights to provide
healthcare workers with materials needed to do their jobs
- Operating charters and specially approved scheduled flights to
nations around the world to repatriate more than 28,000 people
displaced by the virus to the U.S.
- Manufacturing tens of thousands of face shields and masks at
Delta Flight Products to aid healthcare workers
- Partnering with the U.S. military to develop and manufacture
secure, sterile transport pods at Delta TechOps, which will safely
transit infected personnel to hospitals and medical centers
- Donating over 200,000 pounds of food to hospitals, first
responders, community food banks, and organizations including
Feeding America
Expense Management
The company expects June quarter total expenses to decline by
approximately 50%, or $5 billion,
over prior year due to reduced capacity, lower fuel and cost
initiatives, including:
- Parking more than 650 aircraft
- Consolidating airport facilities, with temporary concourse and
Delta Sky Club closures
- Instituting a company-wide hiring freeze and offering voluntary
leave options with 37,000 employees taking short-term unpaid
leave
- Reducing salary expense through pay reductions for executive
management and reduced work schedules across organization
Balance Sheet, Cash and Liquidity
Delta's top financial priority remains preserving cash and
enhancing liquidity. Accordingly, the company has taken the
following actions:
- Raised $5.4 billion of capital
since early March, including securing a $3.0
billion secured term loan, closing $1.2 billion in aircraft sale leasebacks, issuing
$1.1 billion in AA, A and B tranches
of our 2020-1 Enhanced Equipment Trust Certificates (EETC), and
funding $150 million in private
aircraft mortgages to enhance liquidity and satisfy maturing
obligations
- Drew down $3 billion under
existing revolving credit facilities
- Reduced planned capital expenditures by more than $3 billion, including working with original
equipment manufacturers to optimize the timing of our future
aircraft deliveries and deferring aircraft mods, IT initiatives,
and ground equipment refreshment
- Extended payment terms with airports, vendors and lessors
- Suspended shareholder returns, including the Company's stock
repurchase program and future dividend payments
CARES Act Relief
The company expects to receive relief from the Coronavirus Aid,
Relief and Economic Security (CARES) Act in the following
forms:
- Payroll support of $5.4 billion,
comprised of $3.8 billion of direct
relief and a $1.6 billion
low-interest, unsecured 10-year loan. Delta has already received
$2.7 billion of these funds and
expects to receive the remainder over the next three months. As
consideration, the U.S. Treasury will receive warrants to purchase
over 6.5 million shares of Delta common stock at a strike price of
$24.39 with a 5-year maturity
- Eligibility for $4.6 billion in
secured loans, if the company chooses to apply and accept
funds
"With the significant impact of COVID-19 on Delta's revenue, we
were burning $100 million per day at
the end of March. Through our decisive actions, we expect that cash
burn to moderate to approximately $50
million per day by the end of the June quarter," said
Paul Jacobson, Delta's chief
financial officer. "The decade of work we put into the balance
sheet to lower debt and build unencumbered assets has been critical
to our success in raising capital and we expect to end the June
quarter with approximately $10
billion in liquidity."
March Quarter Results
Adjusted results primarily exclude the impact of mark-to-market
("MTM") adjustments.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
1Q20
|
1Q19
|
Pre-tax
(loss)/income
|
(607)
|
|
946
|
|
(1,553)
|
|
NM
|
Net
(loss)/income
|
(534)
|
|
730
|
|
(1,264)
|
|
NM
|
Diluted
(loss)/earnings per share
|
(0.84)
|
|
1.09
|
|
(1.93)
|
|
NM
|
Operating
revenue
|
8,592
|
|
10,472
|
|
(1,880)
|
|
(18)
|
%
|
Fuel
expense
|
1,595
|
|
1,978
|
|
(383)
|
|
(19)
|
%
|
Average fuel price
per gallon
|
1.81
|
|
2.06
|
|
(0.25)
|
|
(12)
|
%
|
Consolidated unit
cost (CASM)
|
15.30
|
|
15.14
|
|
0.16
|
|
1
|
%
|
Total unit revenues
(TRASM)
|
14.59
|
|
16.78
|
|
(2.19)
|
|
(13)
|
%
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
1Q20
|
1Q19
|
Pre-tax
(loss)/income
|
(422)
|
|
831
|
|
(1,254)
|
|
NM
|
Net
(loss)/income
|
(326)
|
|
639
|
|
(965)
|
|
NM
|
Diluted
(loss)/earnings per share
|
(0.51)
|
|
0.96
|
|
(1.47)
|
|
NM
|
Operating
revenue
|
8,592
|
|
10,381
|
|
(1,789)
|
|
(17)
|
%
|
Fuel
expense
|
1,602
|
|
1,963
|
|
(361)
|
|
(18)
|
%
|
Average fuel price
per gallon
|
1.82
|
|
2.04
|
|
(0.23)
|
|
(11)
|
%
|
Consolidated unit
cost (CASM-Ex)
|
12.58
|
|
11.49
|
|
1.09
|
|
9
|
%
|
Total unit revenues
(TRASM, adjusted)
|
14.59
|
|
16.63
|
|
(2.04)
|
|
(12)
|
%
|
- Adjusted pre-tax loss of $422
million or $0.51 per
share
- Total revenue of $8.6 billion,
down 18 percent versus prior year, with total unit revenue down 13
percent
- Total expense decreased $450
million driven by lower fuel, partially offset by higher
revenue- and capacity-related expenses, with non-fuel unit cost
(CASM-Ex) up 9 percent compared to prior year
- Fuel expense decreased 19 percent relative to March quarter
2019. Delta's fuel price for the March quarter of $1.81 per gallon included a $29 million benefit from the refinery
- At the end of the March quarter, the company had $6.0 billion in unrestricted liquidity
Forward Looking Statements
Statements in this press release that are not historical facts,
including statements regarding our estimates, expectations,
beliefs, intentions, projections or strategies for the future, may
be "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
material adverse effect that the COVID-19 pandemic is having on our
business; the impact of incurring significant debt in response to
the pandemic; possible effects of accidents involving our aircraft;
breaches or security lapses in our information technology systems;
disruptions in our information technology infrastructure; our
dependence on technology in our operations; the performance of our
significant investments in airlines in other parts of the world;
the restrictions that financial covenants in our financing
agreements could have on our financial and business operations;
labor issues; the effects of weather, natural disasters and
seasonality on our business; the effects of an extended disruption
in services provided by third parties; 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; the impact of
environmental regulation on the Trainer refinery, including costs
related to renewable fuel standard regulations; our ability to
retain senior management and key employees; damage to our
reputation and brand if we are exposed to significant adverse
publicity; the effects of terrorist attacks or geopolitical
conflict; competitive conditions in the airline industry;
interruptions or disruptions in service at major airports at which
we operate; the effects of extensive government regulation on our
business; the impact of environmental regulation on our business;
and the sensitivity of the airline industry to prolonged periods of
stagnant or weak economic conditions; uncertainty in economic
conditions and regulatory environment in the United Kingdom related to the exit of the
United Kingdom from the European
Union.
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 Dec. 31, 2019 and our
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2020. Caution should be
taken not to place undue reliance on our forward-looking
statements, which represent our views only as of April 22, 2020, and which we have no current
intention to update.
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
(in millions, except
per share data)
|
2020
|
2019
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
Passenger
|
$
|
7,569
|
|
$
|
9,254
|
|
$
|
(1,685)
|
|
(18)
|
%
|
Cargo
|
152
|
|
192
|
|
(40)
|
|
(21)
|
%
|
Other
|
871
|
|
1,026
|
|
(155)
|
|
(15)
|
%
|
Total operating
revenue
|
8,592
|
|
10,472
|
|
(1,880)
|
|
(18)
|
%
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
Salaries and related
costs
|
2,771
|
|
2,639
|
|
132
|
|
5
|
%
|
Aircraft fuel and
related taxes
|
1,595
|
|
1,978
|
|
(383)
|
|
(19)
|
%
|
Regional carriers
expense, excluding fuel
|
902
|
|
893
|
|
9
|
|
1
|
%
|
Depreciation and
amortization
|
678
|
|
615
|
|
63
|
|
10
|
%
|
Contracted
services
|
675
|
|
632
|
|
43
|
|
7
|
%
|
Aircraft maintenance
materials and outside repairs
|
469
|
|
476
|
|
(7)
|
|
(1)
|
%
|
Landing fees and other
rents
|
467
|
|
419
|
|
48
|
|
11
|
%
|
Passenger commissions
and other selling expenses
|
358
|
|
427
|
|
(69)
|
|
(16)
|
%
|
Passenger
service
|
257
|
|
271
|
|
(14)
|
|
(5)
|
%
|
Ancillary businesses
and refinery
|
219
|
|
351
|
|
(132)
|
|
(38)
|
%
|
Aircraft
rent
|
100
|
|
102
|
|
(2)
|
|
(2)
|
%
|
Profit
sharing
|
—
|
|
220
|
|
(220)
|
|
(100)
|
%
|
Other
|
511
|
|
429
|
|
82
|
|
19
|
%
|
Total operating
expense
|
9,002
|
|
9,452
|
|
(450)
|
|
(5)
|
%
|
|
|
|
|
|
Operating
(Loss)/Income
|
(410)
|
|
1,020
|
|
(1,430)
|
|
NM
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
Interest expense,
net
|
(79)
|
|
(83)
|
|
4
|
|
(5)
|
%
|
Gain/(loss) on
investments, net
|
(112)
|
|
100
|
|
(212)
|
|
NM
|
Miscellaneous,
net
|
(6)
|
|
(91)
|
|
85
|
|
(93)
|
%
|
Total non-operating
expense, net
|
(197)
|
|
(74)
|
|
(123)
|
|
NM
|
|
|
|
|
|
(Loss)/Income
Before Income Taxes
|
(607)
|
|
946
|
|
(1,553)
|
|
NM
|
|
|
|
|
|
Income Tax
Benefit/(Provision)
|
73
|
|
(216)
|
|
289
|
|
NM
|
|
|
|
|
|
Net
(Loss)/Income
|
$
|
(534)
|
|
$
|
730
|
|
$
|
(1,264)
|
|
NM
|
|
|
|
|
|
Basic
(Loss)/Earnings Per Share
|
$
|
(0.84)
|
|
$
|
1.10
|
|
|
|
Diluted
(Loss)/Earnings Per Share
|
$
|
(0.84)
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
637
|
|
665
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
637
|
|
667
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
Ticket- Main
cabin
|
$
|
3,798
|
|
$
|
4,721
|
|
$
|
(923)
|
|
(19.6)
|
%
|
Ticket- Business
cabin and premium products
|
2,713
|
|
3,267
|
|
(554)
|
|
(17.0)
|
%
|
Loyalty travel
awards
|
543
|
|
692
|
|
(149)
|
|
(21.5)
|
%
|
Travel-related
services
|
515
|
|
574
|
|
(59)
|
|
(10.3)
|
%
|
Total passenger
revenue
|
$
|
7,569
|
|
$
|
9,254
|
|
$
|
(1,685)
|
|
(18.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
Loyalty
program
|
$
|
474
|
|
$
|
474
|
|
$
|
—
|
|
—
|
%
|
Ancillary businesses
and refinery
|
223
|
|
369
|
|
(146)
|
|
(39.6)
|
%
|
Miscellaneous
|
174
|
|
183
|
|
(9)
|
|
(4.9)
|
%
|
Total other
revenue
|
$
|
871
|
|
$
|
1,026
|
|
$
|
(155)
|
|
(15.1)
|
%
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
1Q20 versus
1Q19
|
Revenue
|
|
1Q20
($M)
|
|
Change
YoY
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
5,601
|
|
|
(16.9)%
|
(16.0)%
|
(3.2)%
|
(1.1)%
|
Atlantic
|
|
818
|
|
|
(23.8)%
|
(13.3)%
|
(5.5)%
|
(12.1)%
|
Latin
America
|
|
765
|
|
|
(11.2)%
|
(5.6)%
|
1.5%
|
(5.9)%
|
Pacific
|
|
385
|
|
|
(33.3)%
|
(9.3)%
|
1.0%
|
(26.5)%
|
Total
Passenger
|
$
|
7,569
|
|
|
(18.2)%
|
(13.3)%
|
(2.0)%
|
(5.7)%
|
Cargo
Revenue
|
|
152
|
|
|
(20.8)%
|
|
|
|
Other
Revenue
|
|
871
|
|
|
(15.1)%
|
|
|
|
Total
Revenue
|
$
|
8,592
|
|
|
(18.0)%
|
(13.1)%
|
|
|
Third Party
Refinery Sales
|
|
—
|
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
8,592
|
|
|
(17.2)%
|
(12.3)%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Statistical
Summary
|
(Unaudited)
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2020
|
2019
|
Change
|
Revenue passenger
miles (millions)
|
43,062
|
|
51,617
|
|
(16.6)
|
|
%
|
Available seat miles
(millions)
|
58,885
|
|
62,416
|
|
(5.7)
|
|
%
|
Passenger mile yield
(cents)
|
17.58
|
|
17.93
|
|
(2.0)
|
|
%
|
Passenger revenue per
available seat mile (cents)
|
12.85
|
|
14.83
|
|
(13.3)
|
|
%
|
Total revenue per
available seat mile (cents)
|
14.59
|
|
16.78
|
|
(13.1)
|
|
%
|
TRASM, adjusted - see
Note A (cents)
|
14.59
|
|
16.63
|
|
(12.3)
|
|
%
|
Operating cost per
available seat mile (cents)
|
15.30
|
|
15.14
|
|
1.0
|
|
%
|
CASM-Ex - see Note A
(cents)
|
12.58
|
|
11.49
|
|
9.5
|
|
%
|
Passenger load
factor
|
73.1
|
%
|
82.7
|
%
|
(9.6)
|
|
pts
|
Fuel gallons consumed
(millions)
|
880
|
|
962
|
|
(8.5)
|
|
%
|
Average price per
fuel gallon
|
$
|
1.81
|
|
$
|
2.06
|
|
(12.1)
|
|
%
|
Average price per
fuel gallon, adjusted - see Note A
|
$
|
1.82
|
|
$
|
2.04
|
|
(11.0)
|
|
%
|
Number of aircraft in
fleet, end of period
|
677
|
|
1,039
|
|
(362)
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
Three Months
Ended
|
|
March
31,
|
(in
millions)
|
2020
|
2019
|
Cash Flows From
Operating Activities:
|
|
|
Net (loss)
income
|
$
|
(534)
|
|
$
|
730
|
|
Depreciation and
amortization
|
678
|
|
615
|
|
Deferred income
taxes
|
21
|
|
219
|
|
Pension,
postretirement and postemployment payments greater than
expense
|
(75)
|
|
3
|
|
Change in
receivables
|
682
|
|
(897)
|
|
Change in prepaids
and other current assets
|
343
|
|
162
|
|
Changes in air
traffic liability
|
482
|
|
1,938
|
|
Changes in profit
sharing
|
(1,647)
|
|
(1,069)
|
|
Other, net
|
408
|
|
241
|
|
Net cash provided by
operating activities
|
358
|
|
1,942
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
Property and
equipment additions:
|
|
|
Flight equipment, including
advance payments
|
(629)
|
|
(1,059)
|
|
Ground property and
equipment, including technology
|
(308)
|
|
(301)
|
|
Redemption of
short-term investments
|
—
|
|
206
|
|
Acquisition of
strategic investments
|
(2,099)
|
|
—
|
|
Other, net
|
65
|
|
58
|
|
Net cash used in
investing activities
|
(2,971)
|
|
(1,096)
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
Payments on debt and
finance lease obligations
|
(1,238)
|
|
(1,285)
|
|
Repurchase of common
stock
|
(344)
|
|
(1,325)
|
|
Cash
dividends
|
(260)
|
|
(233)
|
|
Proceeds from
short-term obligations
|
2,882
|
|
1,750
|
|
Proceeds from
long-term obligations
|
3,962
|
|
500
|
|
Other, net
|
342
|
|
(16)
|
|
Net cash provided by
(used in) financing activities
|
5,344
|
|
(609)
|
|
|
|
|
Net Increase in
Cash, Cash Equivalents and Restricted Cash
Equivalents
|
2,731
|
|
237
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
3,730
|
|
2,748
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
6,461
|
|
$
2,985
|
|
|
|
|
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
|
$
|
5,967
|
|
$
|
1,910
|
|
Restricted cash included in
prepaid expenses and other
|
39
|
|
57
|
|
Other
assets:
|
|
|
Cash restricted for airport
construction
|
455
|
|
1,018
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
6,461
|
|
$
|
2,985
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
(in
millions)
|
2020
|
|
2019
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
5,967
|
|
|
$
|
2,882
|
|
|
Accounts receivable,
net
|
2,280
|
|
|
2,854
|
|
|
Fuel
inventory
|
439
|
|
|
730
|
|
|
Expendable parts and
supplies inventories, net
|
535
|
|
|
521
|
|
|
Prepaid expenses and
other
|
1,054
|
|
|
1,262
|
|
|
Total current
assets
|
10,275
|
|
|
8,249
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
31,644
|
|
|
31,310
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,488
|
|
|
5,627
|
|
|
Goodwill
|
9,753
|
|
|
9,781
|
|
|
Identifiable
intangibles, net
|
6,019
|
|
|
5,163
|
|
|
Cash restricted for
airport construction
|
455
|
|
|
636
|
|
|
Equity
investments
|
3,684
|
|
|
2,568
|
|
|
Other noncurrent
assets
|
1,420
|
|
|
1,198
|
|
|
Total other
assets
|
26,819
|
|
|
24,973
|
|
Total
assets
|
$
|
68,738
|
|
|
$
|
64,532
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
|
4,337
|
|
|
$
|
2,287
|
|
|
Current maturities of
operating leases
|
768
|
|
|
801
|
|
|
Air traffic
liability
|
5,598
|
|
|
5,116
|
|
|
Accounts
payable
|
3,337
|
|
|
3,266
|
|
|
Accrued salaries and
related benefits
|
1,844
|
|
|
3,701
|
|
|
Loyalty program
deferred revenue
|
1,099
|
|
|
3,219
|
|
|
Fuel card
obligation
|
1,100
|
|
|
736
|
|
|
Other accrued
liabilities
|
1,309
|
|
|
1,078
|
|
|
Total current
liabilities
|
19,392
|
|
|
20,204
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
12,662
|
|
|
8,873
|
|
|
Pension,
postretirement and related benefits
|
8,285
|
|
|
8,452
|
|
|
Loyalty program
deferred revenue
|
5,718
|
|
|
3,509
|
|
|
Noncurrent operating
leases
|
5,204
|
|
|
5,294
|
|
|
Deferred income
taxes, net
|
1,502
|
|
|
1,456
|
|
|
Other noncurrent
liabilities
|
1,666
|
|
|
1,386
|
|
|
Total noncurrent
liabilities
|
35,037
|
|
|
28,970
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
14,309
|
|
|
15,358
|
|
Total liabilities and
stockholders' equity
|
$
|
68,738
|
|
|
$
|
64,532
|
|
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 U.S. 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. The Company is not able to
reconcile forward looking non-GAAP financial measures 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 (Loss)/Income and Net (Loss)/Income, adjusted. We
adjust pre-tax (loss)/income and net (loss)/income for the
following items to determine pre-tax (loss)/income and net
(loss)/income, adjusted for the reasons described below. We include
the income tax effect of adjustments when presenting net
(loss)/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 record our proportionate share of
earnings/loss from our equity investments in Virgin Atlantic and
Aeroméxico in non-operating expense. We adjust for our equity
method investees' hedge portfolio MTM adjustments to allow
investors to understand and analyze our core operational
performance in the periods shown.
MTM adjustments on
investments. Unrealized gains/losses on our equity
investments in GOL, China Eastern,
Air France-KLM and Hanjin-KAL, the largest shareholder of Korean
Air, which are accounted for at fair value in non-operating
expense, are driven by changes in stock prices and foreign
currency. During the December 2019
quarter, we sold our GOL investment, which generated a gain in
adjusted results that had previously been included in GAAP results.
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
|
|
March 31,
2020
|
|
March 31,
2020
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Loss
|
(in millions, except
per share data)
|
Loss
|
Tax
|
Loss
|
|
Per Diluted
Share
|
GAAP
|
$
|
(607)
|
|
$
|
73
|
|
$
|
(534)
|
|
|
$
|
(0.84)
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(7)
|
|
2
|
|
(5)
|
|
|
|
Equity investment MTM
adjustments
|
69
|
|
(16)
|
|
53
|
|
|
|
MTM adjustments on
investments
|
123
|
|
37
|
|
160
|
|
|
|
Total
adjustments
|
185
|
|
23
|
|
208
|
|
|
0.33
|
|
Non-GAAP
|
$
|
(422)
|
|
$
|
96
|
|
$
|
(326)
|
|
|
$
|
(0.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2019
|
|
March 31,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
946
|
|
$
|
(216)
|
|
$
|
730
|
|
|
$
|
1.09
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
8
|
|
(2)
|
|
6
|
|
|
|
Equity investment MTM
adjustments
|
(21)
|
|
5
|
|
(16)
|
|
|
|
MTM adjustments on
investments
|
(100)
|
|
20
|
|
(80)
|
|
|
|
Delta Private Jets
adjustment
|
(1)
|
|
—
|
|
(1)
|
|
|
|
Total
adjustments
|
(115)
|
|
23
|
|
(91)
|
|
|
(0.13)
|
|
Non-GAAP
|
$
|
831
|
|
$
|
193
|
|
$
|
639
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
Non-Fuel Unit Cost or Cost per Available Seat Mile,
("CASM-Ex"). We adjust CASM for the following items to
determine CASM-Ex for the reasons described below. We adjust for
the Delta Private Jets sale for the same reason described above
under the heading pre-tax (loss)/income and net (loss)/income,
adjusted.
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.
Third-party refinery
sales. We adjust CASM for refinery sales to third parties
to determine CASM-Ex because these revenues are not related to our
airline segment. CASM-Ex therefore provides a more meaningful
comparison of revenue from our airline operations to the rest of
the airline industry.
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
|
|
|
|
|
|
|
March 31,
2020
|
|
March 31,
2019
|
|
Change
|
CASM
(cents)
|
15.30
|
|
|
15.14
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.72)
|
|
|
(3.17)
|
|
|
|
Third-party refinery
sales
|
—
|
|
|
(0.08)
|
|
|
|
Profit sharing
|
—
|
|
|
(0.35)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.05)
|
|
|
|
CASM-Ex
|
12.58
|
|
|
11.49
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue, adjusted and Total Revenue Per Available
Seat Mile ("TRASM"), adjusted. We adjust operating revenue
and TRASM for refinery sales to third parties for the same reason
described under the heading non-fuel unit cost or cost per
available seat mile. We adjust for the Delta Private Jets sale for
the same reason described above under the heading pre-tax
(loss)/income and net (loss)/income, adjusted. Operating revenue,
adjusted and TRASM, adjusted therefore provide a more meaningful
comparison of revenue from our airline operations to the rest of
the airline industry.
|
|
|
Three Months
Ended
|
|
|
(in
millions)
|
|
March 31,
2020
|
|
March 31,
2019
|
|
Change
|
Operating
revenue
|
$
|
8,592
|
|
|
$
|
10,472
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
—
|
|
|
(48)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(43)
|
|
|
|
Operating revenue,
adjusted
|
$
|
8,592
|
|
|
$
|
10,381
|
|
|
(17.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
2020
|
|
March 31,
2019
|
|
Change
|
TRASM
(cents)
|
14.59
|
|
|
16.78
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
—
|
|
|
(0.08)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.07)
|
|
|
|
TRASM,
adjusted
|
14.59
|
|
|
16.63
|
|
|
(12.3)
|
%
|
|
|
|
|
|
|
|
|
Fuel expense, adjusted and Average fuel price per gallon,
adjusted. The tables below show the components of fuel
expense, including the impact of hedging and the refinery on fuel
expense and average price per gallon. We then adjust for MTM
adjustments and settlements on hedges and the Delta Private Jets
sale for the same reasons described under the heading pre-tax
(loss)/income and net (loss)/ income, adjusted.
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
(in millions, except
per gallon data)
|
2020
|
2019
|
|
|
2020
|
2019
|
Fuel purchase
cost
|
$
|
1,631
|
|
$
|
1,936
|
|
|
|
$
|
1.85
|
|
$
|
2.01
|
|
Fuel hedge
impact
|
(7)
|
|
8
|
|
|
|
(0.01)
|
|
0.01
|
|
Refinery segment
impact
|
(29)
|
|
34
|
|
|
|
(0.03)
|
|
0.04
|
|
Total fuel
expense
|
$
|
1,595
|
|
$
|
1,978
|
|
|
|
$
|
1.81
|
|
$
|
2.06
|
|
MTM adjustments and
settlements on hedges
|
7
|
|
(8)
|
|
|
|
0.01
|
|
(0.01)
|
|
Delta Private Jets
adjustment
|
—
|
|
(7)
|
|
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
1,602
|
|
$
|
1,963
|
|
|
|
$
|
1.82
|
|
$
|
2.04
|
|
|
|
|
|
|
|
|
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SOURCE Delta Air Lines