ATLANTA, Jan. 14, 2021 /PRNewswire/ -- Delta Air Lines
(NYSE:DAL) today reported financial results for the December
quarter and full year 2020 and provided its outlook for the March
quarter 2021. Highlights of the December quarter and full
year 2020 results, including both GAAP and adjusted metrics, are on
page five and are incorporated here.
"Our December quarter results capped the toughest year in
Delta's history. I want to thank the Delta people who have
risen to the occasion, focusing on delivering results for all of
our stakeholders by putting our customers at the center of our
recovery," said Ed Bastian, Delta's
chief executive officer. "While our challenges continue in
2021, I am optimistic this will be a year of recovery and a turning
point that results in an even stronger Delta returning to revenue
growth, profitability and free cash generation."
December Quarter Financial Results
- Adjusted pre-tax loss of $2.1
billion excludes nearly $1
billion of items directly related to the impact of, and our
response to, COVID-19, including charges associated with employee
pay and benefit changes, which were offset by the benefit of the
CARES Act payroll support program (PSP) grant recognized in the
quarter
- Adjusted operating revenue of $3.5
billion declined 69 percent on 62 percent lower sellable
capacity (see Note A) versus the prior year period
- Total operating expense, which includes $930 million of items described above, decreased
$5.2 billion over prior year period.
Adjusted for those items and third-party refinery sales,
total operating expense decreased $4.6
billion or 47 percent in the December quarter compared to
the prior year period, driven by lower capacity- and
revenue-related expenses and strong cost management across the
business
- During the December quarter cash burn (see Note B) averaged
$12 million per day, marking an
approximate 90 percent reduction in cash burn since late March
- At the end of 2020, the company had $16.7 billion in liquidity, including cash and
cash equivalents, short-term investments and undrawn revolving
credit facilities
Full Year 2020 Financial Results
- Adjusted pre-tax loss of $9.0
billion excludes a net of $6.6
billion of items primarily related to the impact of, and our
response to, COVID-19
- Adjusted operating revenue of $15.9
billion declined 66 percent on 61 percent lower sellable
capacity versus the prior year
- Total operating expense, which includes $4.3 billion of COVID- related and other items,
decreased $10.8 billion over prior
year. Adjusted for those items and third-party refinery
sales, total operating expense decreased $16.0 billion or 40 percent in 2020 compared to
the prior year
March Quarter 2021 Outlook
|
1Q21
Forecast
|
Scheduled Capacity
1
|
Down ~35%
|
Sellable Capacity
1
|
Down ~55%
|
Total Revenue 1,
2
|
Down 60% -
65%
|
Total Operating
Expense 1, 2
|
Down 35% -
40%
|
Consolidated CASM
1, 2
|
Down 5% -
10%
|
Capital
Expenditures
|
~$350
million
|
Average Daily Cash
Burn 2
|
$10-15
million
|
Liquidity
3
|
$18-19
billion
|
Adjusted Net Debt
2, 3
|
~$18
billion
|
|
|
1 Compared to March quarter
2019
|
2 Non-GAAP measure
|
3 Includes estimated PSP funds of
~$3.0 billion
|
Revenue Environment
Delta's adjusted operating revenue of $3.5 billion for the December quarter was down 69
percent versus the prior year period, a 10-point improvement from
September quarter 2020. Passenger revenues declined 74
percent on 62 percent lower sellable capacity. Non-ticket
revenues outperformed passenger revenues, with cargo revenues up 10
percent versus the prior year period and total loyalty revenues
down 54 percent.
For the full year, adjusted operating revenue declined to
$15.9 billion, down 66 percent versus
2019, as the global pandemic severely affected air travel.
Passenger revenues declined 70 percent on 61 percent lower sellable
capacity. Total loyalty revenues were down 51 percent and
American Express remuneration declined 30 percent compared to prior
year to $2.9 billion.
"We see three distinct phases in 2021. The early part of
the year will be characterized by choppy demand recovery and a
booking curve that remains compressed, followed by an inflection
point, and finally a sustained demand recovery as customer
confidence gains momentum, vaccinations become widespread and
offices re-open," said Glen
Hauenstein, Delta's president. "For each phase, Delta
has the levers to pull to successfully react to the emerging demand
environment, including tightly matching our sellable capacity to
expected demand."
Cost Performance
Total adjusted operating expense for the December quarter
decreased $4.6 billion or 47 percent
versus the prior year period excluding items related to the
company's response to COVID-19 and the $1.4
billion CARES Act benefit, resulting in Delta's consolidated
CASM, adjusted being 4.5 percent lower than the prior year
period. This performance was driven by a $1.3 billion, or 64 percent reduction in fuel
expense versus the prior year period, a 51 percent reduction in
maintenance expense and lower volume- and revenue-related expenses.
Salaries and related costs were down 34 percent compared to
the prior year period as a result of approximately 20 percent of
our workforce, or nearly 18,000 employees, electing to voluntarily
depart the company, in addition to the impact of voluntary unpaid
leaves, work hour reductions and other cost-saving initiatives.
Non-operating expense for the December quarter was up
$248 million versus the prior year
period, driven primarily by higher interest expense from increased
debt the company has incurred during the COVID-19 pandemic.
"We reduced our average daily cash burn to $12 million in the December quarter, a reduction
of nearly 90 percent since the early days of the pandemic in March,
as we progress to achieving cash breakeven in the spring," said
Gary Chase, Delta's interim co-chief
financial officer. "Remaining agile and disciplined with our
cost structure will be key to our success, and when combined with
an improving demand environment, will allow us to return to the
free cash flow generation needed for debt reduction."
Balance Sheet, Cash and Liquidity
Delta ended the December quarter with $16.7 billion in liquidity. Cash used in
operations during the quarter was $1.3
billion. Daily cash burn averaged $12 million for the quarter, down from
$24 million per day in the September
quarter.
The company anticipates receiving approximately $3 billion from the U.S. Treasury under the PSP
extension in the March quarter. With these funds and an
estimated $10 to $15 million in average daily cash burn for the
March quarter, the company expects to end the March quarter with
approximately $18 to $19 billion in liquidity.
At the end of the December quarter, the company had total debt
and finance lease obligations of $29.2
billion with adjusted net debt of $18.8 billion, $8.3
billion higher year over year. The company's total
debt had a weighted average interest rate of 4.6 percent at
year-end. During the quarter, the company repaid $2.6 billion under its revolving credit
facilities drawn down in March 2020,
$3 billion associated with the
364-day term loan entered into in March
2020 and a $450 million
unsecured debt maturity. The company currently has
$9 to $10
billion in unencumbered assets, primarily consisting of
aircraft, engines and spare parts.
At the end of the December quarter, the company's Air Traffic
Liability stood at $4.5 billion,
including a current liability of $4.0
billion and a non-current liability of $0.5 billion. Travel credits represent
approximately 65 percent of the Air Traffic Liability at the end of
the December quarter. The company refunded more than
$3 billion to customers in 2020 and
extended the use of certain travel credits through December 2022 to provide additional flexibility
to customers.
Highlights from 2020
In 2020, Delta undertook a number of initiatives related to our
culture and people, our customers' experience and loyalty and other
actions to protect and restore the business and serve our
communities.
Culture and People: Delta's number one priority
during the pandemic has been taking care of our people. The
following measures were taken to preserve our culture, create a
more inclusive environment and protect the health and safety of our
people
- Avoiding involuntary furloughs of U.S. employees by providing
generous voluntary separation and early retirement programs,
voluntary unpaid leaves, job sharing and other initiatives
- Slowing the COVID-19 spread with an extensive employee testing
program, while helping ease the strain on the health system by
offering free flu shots for all U.S. employees
- Protecting employees with pay protection programs for those
diagnosed, exposed or at high risk from COVID-19
- Addressing systemic racial inequity with a commitment to double
our spend with Black-owned businesses and double the percentage of
Black Officers and Directors by 2025; a commitment to increase
Black representation on our Board of Directors; enhanced employee
inclusion training; and joining forces with organizations and
coalitions that advance equity and justice, including OneTen,
Operation HOPE and others
- Recognized by Glassdoor as one of the Best Places to Work for
the fifth year, ranking No. 7 on the 2021 list of 100 large
companies, the highest rank Delta has ever received
Customer Experience and Loyalty: Delta's
innovative, customer-centric approach focused on customer health
and safety and improving the travel experience during the
challenges of the pandemic
- Blocking middle seats through at least March 30, 2021 – the only major U.S. airline to
make such a commitment
- Launched the industry's first COVID-tested flights from
Atlanta to Rome and Atlanta to Amsterdam with no quarantine on arrival
- Created a Global Cleanliness organization and implemented the
Delta CareStandard, our ongoing, organization-wide commitment to
cleanliness and safety that includes mask requirements, regular
sanitization of surfaces, onboard use of industrial-grade HEPA
filters and more than 100 other measures to ensure a safe travel
experience
- Eliminated change fees for U.S. customers and discontinued
redeposit/reissuance fees for SkyMiles members; extended Medallion
member benefits through January
2022
- Unveiled Phase I of the new Salt Lake
City airport, with accelerated investment in Los Angeles and New York-LaGuardia airports to
provide customers state of the art facilities across our domestic
network
Actions Taken to Protect and Restore the
Business: Delta took quick and decisive action to
mitigate liquidity risk at the onset of the global pandemic.
Financing transactions and efficiency initiatives have created a
long-term competitive cost structure that will aid in the recovery
of the airline
- Completed more than $25 billion
in financing transactions in 2020, including Delta's $9 billion SkyMiles financing, the largest debt
financing in aviation history
- Received $5.6 billion in PSP
proceeds through the CARES Act legislation passed in March 2020, with $4.0
billion in grant funds, $1.6
billion in low-interest rate loans and issuance of warrants
for over 6.7 million shares – Delta's shareholder dilution of 1
percent in 2020 was primarily attributable to warrants issued under
the CARES Act
- Restructured our aircraft orderbook, reducing aircraft purchase
commitments by $2 billion in 2020 and
$5 billion through 2022
- Accelerated its fleet simplification strategy with 227 aircraft
retirements in 2020, reducing the number of fleet families from 13
to 11. Delta anticipates the cumulative retirement of nearly
400 aircraft through 2025, further simplifying fleet families down
to nine
- Reduced total adjusted operating expense by 40 percent during
the full year 2020, with a nearly 50 percent or greater reduction
in each of the June, September and December quarters
Serving our Communities: Continued to exhibit the
Delta values of serving our communities and giving back to those in
need
- Supported healthcare workers by manufacturing 70,000 face
shields to extend the life of essential N95 mask respirators,
donating 800,000 pounds of snacks and drinks to hospitals in 20
different countries, and provided more than 350 free flights for
medical professionals traveling to assist states that were heavily
impacted by the pandemic
- Donated more than one million pounds of food across the globe
and millions of amenity kits, blankets and dishware to social
service agencies
- Maintained our commitment to serving our communities by
partnering with KABOOM! to build five playgrounds, building 750
bikes and contributing 1,300 toys and $735,000 in donations to Toys for Tots
- Donated more than 10,000 pints of blood to the American Red
Cross, serving as the No. 1 American Red Cross corporate blood
donor for the third straight year
- Supported and encouraged Delta people who volunteered their
time and talents to numerous charities and organizations
CARES Act Accounting and Other COVID-19 Related
Charges
In the December quarter, the remaining $1.4 billion of the CARES Act PSP grant was
recognized as a contra-expense, which is reflected as "CARES Act
grant recognition" on the Consolidated Statements of
Operations.
During the December quarter, the company recorded $421 million in restructuring charges primarily
related to employees benefits and other matters within operating
expense.
December Quarter and Full Year 2020 Results
December quarter and full year results have been adjusted
primarily for the CARES Act grant recognition, restructuring
charges, and impairment charges described in this release.
|
GAAP
|
Adjusted
|
GAAP
|
Adjusted
|
($ in millions except
per share and unit costs)
|
4Q20
|
4Q19
|
4Q20
|
4Q19
|
FY20
|
FY19
|
FY20
|
FY19
|
Pre-tax
(loss)/income
|
(1,108)
|
|
1,397
|
|
(2,121)
|
|
1,417
|
|
(15,587)
|
|
6,198
|
|
(8,996)
|
|
6,214
|
|
Net
(loss)/income
|
(755)
|
|
1,099
|
|
(1,604)
|
|
1,098
|
|
(12,385)
|
|
4,767
|
|
(6,839)
|
|
4,776
|
|
Diluted
(loss)/earnings per share
|
(1.19)
|
|
1.71
|
|
(2.53)
|
|
1.70
|
|
(19.49)
|
|
7.30
|
|
(10.76)
|
|
7.32
|
|
Operating
revenue
|
3,973
|
|
11,439
|
|
3,532
|
|
11,384
|
|
17,095
|
|
47,007
|
|
15,945
|
|
46,718
|
|
Operating
expense
|
4,831
|
|
10,040
|
|
5,314
|
|
9,961
|
|
29,564
|
|
40,389
|
|
24,130
|
|
40,082
|
|
Total cost per
available seat mile (CASM)
|
13.21
|
|
15.34
|
|
14.53
|
|
15.21
|
|
22.01
|
|
14.67
|
|
17.96
|
|
14.56
|
|
CASM-Ex
|
|
|
12.57
|
|
11.59
|
|
|
|
15.61
|
|
10.88
|
|
Fuel
expense
|
723
|
|
2,012
|
|
717
|
|
1,983
|
|
3,176
|
|
8,519
|
|
3,166
|
|
8,477
|
|
Total debt and
finance lease obligations
|
29,157
|
|
11,160
|
|
18,823
|
|
10,489
|
|
29,157
|
|
11,160
|
|
18,823
|
|
10,489
|
|
Total revenue per
available seat mile (TRASM)
|
10.86
|
|
17.47
|
|
9.66
|
|
17.39
|
|
12.73
|
|
17.07
|
|
11.87
|
|
16.97
|
|
Average fuel price
per gallon
|
1.45
|
|
2.01
|
|
1.44
|
|
1.99
|
|
1.64
|
|
2.02
|
|
1.64
|
|
2.01
|
|
About Delta Air Lines Delta Air Lines
(NYSE: DAL) is the U.S. global airline leader in safety,
innovation, reliability and customer experience. Powered by our
employees around the world, Delta has for a decade led the airline
industry in operational excellence while maintaining our reputation
for award-winning customer service.
Today, and always, nothing is more important than the health
and safety of our customers and employees. Since the onset of the
COVID-19 pandemic, Delta has moved quickly to transform the
industry standard of clean while offering customers more space
across the travel journey. These and numerous other layers of
protection ensure a safe and comfortable travel experience for our
customers and employees.
With our mission of connecting the people and cultures of the
globe, Delta strives to foster understanding across a diverse world
and serve as a force for social good.
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. Risks
and uncertainties that could cause differences between actual
results and forward-looking statements include, but are not limited
to, the material adverse effect that the COVID-19 pandemic is
having on our business; uncertainties with respect to timing of
vaccine distribution and widespread vaccination; the impact of
incurring significant debt in response to the pandemic; the
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 and commercial relationships with, airlines in other
parts of the world; failure to comply with the financial and other
covenants in our financing agreements; 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 and our culture; 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.
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, 2019 and our
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2020. Caution should be
taken not to place undue reliance on our forward-looking
statements, which represent our views only as of January 14, 2021, and which we have no current
intention to update except to the extent required by law.
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
(in millions, except
per share data)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$
|
2,698
|
|
$
|
10,245
|
|
$
|
(7,547)
|
|
(74)
|
%
|
|
$
|
12,883
|
|
$
|
42,277
|
|
$
|
(29,394)
|
|
(70)
|
%
|
Cargo
|
204
|
|
187
|
|
17
|
|
10
|
%
|
|
608
|
|
753
|
|
(145)
|
|
(19)
|
%
|
Other
|
1,071
|
|
1,007
|
|
64
|
|
6
|
%
|
|
3,604
|
|
3,977
|
|
(373)
|
|
(9)
|
%
|
Total operating
revenue
|
3,973
|
|
11,439
|
|
(7,466)
|
|
(65)
|
%
|
|
17,095
|
|
47,007
|
|
(29,912)
|
|
(64)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
1,940
|
|
2,949
|
|
(1,009)
|
|
(34)
|
%
|
|
8,754
|
|
11,225
|
|
(2,471)
|
|
(22)
|
%
|
Aircraft fuel and
related taxes
|
723
|
|
2,012
|
|
(1,289)
|
|
(64)
|
%
|
|
3,176
|
|
8,519
|
|
(5,343)
|
|
(63)
|
%
|
Regional carriers
expense, excluding fuel
|
591
|
|
885
|
|
(294)
|
|
(33)
|
%
|
|
2,479
|
|
3,584
|
|
(1,105)
|
|
(31)
|
%
|
Depreciation and
amortization
|
499
|
|
622
|
|
(123)
|
|
(20)
|
%
|
|
2,312
|
|
2,581
|
|
(269)
|
|
(10)
|
%
|
Ancillary businesses
and refinery
|
604
|
|
299
|
|
305
|
|
NM
|
|
|
1,785
|
|
1,245
|
|
540
|
|
43
|
%
|
Contracted
services
|
381
|
|
668
|
|
(287)
|
|
(43)
|
%
|
|
1,778
|
|
2,641
|
|
(863)
|
|
(33)
|
%
|
Landing fees and other
rents
|
323
|
|
440
|
|
(117)
|
|
(27)
|
%
|
|
1,518
|
|
1,762
|
|
(244)
|
|
(14)
|
%
|
Aircraft maintenance
materials and outside repairs
|
204
|
|
417
|
|
(213)
|
|
(51)
|
%
|
|
822
|
|
1,751
|
|
(929)
|
|
(53)
|
%
|
Passenger commissions
and other selling expenses
|
84
|
|
488
|
|
(404)
|
|
(83)
|
%
|
|
582
|
|
1,993
|
|
(1,411)
|
|
(71)
|
%
|
Passenger
service
|
90
|
|
313
|
|
(223)
|
|
(71)
|
%
|
|
523
|
|
1,251
|
|
(728)
|
|
(58)
|
%
|
Aircraft
rent
|
104
|
|
105
|
|
(1)
|
|
(1)
|
%
|
|
399
|
|
423
|
|
(24)
|
|
(6)
|
%
|
Restructuring
charges
|
421
|
|
—
|
|
421
|
|
NM
|
|
|
8,219
|
|
—
|
|
8,219
|
|
NM
|
|
CARES Act grant
recognition
|
(1,351)
|
|
—
|
|
(1,351)
|
|
NM
|
|
|
(3,946)
|
|
—
|
|
(3,946)
|
|
NM
|
|
Profit
sharing
|
—
|
|
387
|
|
(387)
|
|
(100)
|
%
|
|
—
|
|
1,643
|
|
(1,643)
|
|
(100)
|
%
|
Other
|
218
|
|
455
|
|
(237)
|
|
(52)
|
%
|
|
1,163
|
|
1,771
|
|
(608)
|
|
(34)
|
%
|
Total operating
expense
|
4,831
|
|
10,040
|
|
(5,209)
|
|
(52)
|
%
|
|
29,564
|
|
40,389
|
|
(10,825)
|
|
(27)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
(Loss)/Income
|
(858)
|
|
1,399
|
|
(2,257)
|
|
NM
|
|
|
(12,469)
|
|
6,618
|
|
(19,087)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(365)
|
|
(72)
|
|
(293)
|
|
NM
|
|
|
(929)
|
|
(301)
|
|
(628)
|
|
NM
|
|
Impairments and equity
method (losses)/gains
|
—
|
|
18
|
|
(18)
|
|
(100)
|
%
|
|
(2,432)
|
|
(62)
|
|
(2,370)
|
|
NM
|
|
Gain/(loss) on
investments, net
|
94
|
|
136
|
|
(42)
|
|
(31)
|
%
|
|
(105)
|
|
119
|
|
(224)
|
|
NM
|
|
Miscellaneous,
net
|
21
|
|
(84)
|
|
105
|
|
NM
|
|
|
348
|
|
(176)
|
|
524
|
|
NM
|
|
Total non-operating
expense, net
|
(250)
|
|
(2)
|
|
(248)
|
|
NM
|
|
|
(3,118)
|
|
(420)
|
|
(2,698)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income
Before Income Taxes
|
(1,108)
|
|
1,397
|
|
(2,505)
|
|
NM
|
|
|
(15,587)
|
|
6,198
|
|
(21,785)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Benefit/(Provision)
|
353
|
|
(298)
|
|
651
|
|
NM
|
|
|
3,202
|
|
(1,431)
|
|
4,633
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)/Income
|
$
|
(755)
|
|
$
|
1,099
|
|
$
|
(1,854)
|
|
NM
|
|
|
$
|
(12,385)
|
|
$
|
4,767
|
|
$
|
(17,152)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(Loss)/Earnings Per Share
|
$
|
(1.19)
|
|
$
|
1.71
|
|
|
|
|
$
|
(19.49)
|
|
$
|
7.32
|
|
|
|
Diluted
(Loss)/Earnings Per Share
|
$
|
(1.19)
|
|
$
|
1.71
|
|
|
|
|
$
|
(19.49)
|
|
$
|
7.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
635
|
|
642
|
|
|
|
|
636
|
|
651
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
635
|
|
644
|
|
|
|
|
636
|
|
653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Ticket- Main
cabin
|
$
|
1,447
|
|
$
|
5,238
|
|
$
|
(3,791)
|
|
(72)
|
%
|
|
$
|
6,676
|
|
$
|
21,919
|
|
$
|
(15,243)
|
|
(70)
|
%
|
Ticket- Business
cabin and premium products
|
810
|
|
3,684
|
|
(2,874)
|
|
(78)
|
%
|
|
4,294
|
|
14,989
|
|
(10,695)
|
|
(71)
|
%
|
Loyalty travel
awards
|
204
|
|
726
|
|
(522)
|
|
(72)
|
%
|
|
935
|
|
2,900
|
|
(1,965)
|
|
(68)
|
%
|
Travel-related
services
|
237
|
|
597
|
|
(360)
|
|
(60)
|
%
|
|
978
|
|
2,469
|
|
(1,491)
|
|
(60)
|
%
|
Total passenger
revenue
|
$
|
2,698
|
|
$
|
10,245
|
|
$
|
(7,547)
|
|
(74)
|
%
|
|
$
|
12,883
|
|
$
|
42,277
|
|
$
|
(29,394)
|
|
(70)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
(in
millions)
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Ancillary businesses
and refinery
|
$
|
614
|
|
$
|
307
|
|
$
|
307
|
|
100
|
%
|
|
$
|
1,798
|
|
$
|
1,297
|
|
$
|
501
|
|
39
|
%
|
Loyalty
program
|
372
|
|
519
|
|
(147)
|
|
(28)
|
%
|
|
1,458
|
|
1,962
|
|
(504)
|
|
(26)
|
%
|
Miscellaneous
|
85
|
|
181
|
|
(96)
|
|
(53)
|
%
|
|
348
|
|
718
|
|
(370)
|
|
(52)
|
%
|
Total other
revenue
|
$
|
1,071
|
|
$
|
1,007
|
|
$
|
64
|
|
6
|
%
|
|
$
|
3,604
|
|
$
|
3,977
|
|
$
|
(373)
|
|
(9)
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
Total Revenue
(Unaudited)
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
4Q20 versus
4Q19
|
Revenue
|
|
4Q20
($M)
|
|
Change
YoY
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
2,229
|
|
|
(71)%
|
(55)%
|
(11)%
|
(36)%
|
Atlantic
|
|
157
|
|
|
(88)%
|
(62)%
|
9%
|
(69)%
|
Latin
America
|
|
234
|
|
|
(67)%
|
(52)%
|
(9)%
|
(31)%
|
Pacific
|
|
78
|
|
|
(87)%
|
(55)%
|
97%
|
(70)%
|
Total
Passenger
|
$
|
2,698
|
|
|
(74)%
|
(53)%
|
(3)%
|
(44)%
|
Cargo
Revenue
|
|
204
|
|
|
10%
|
|
|
|
Other
Revenue
|
|
1,071
|
|
|
6%
|
|
|
|
Total
Revenue
|
$
|
3,973
|
|
|
(65)%
|
(38)%
|
|
|
Third Party
Refinery Sales
|
|
(441)
|
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
3,532
|
|
|
(69)%
|
(44)%
|
|
|
DELTA AIR LINES,
INC. Statistical
Summary (Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2020
|
2019
|
Change
|
|
2020
|
2019
|
Change
|
Revenue passenger
miles (millions)
|
15,183
|
|
56,028
|
|
(73)
|
|
%
|
|
73,412
|
|
237,680
|
|
(69)
|
|
%
|
Available seat miles
(millions)
|
36,569
|
|
65,468
|
|
(44)
|
|
%
|
|
134,339
|
|
275,379
|
|
(51)
|
|
%
|
Passenger mile yield
(cents)
|
17.77
|
|
18.29
|
|
(3)
|
|
%
|
|
17.55
|
|
17.79
|
|
(1)
|
|
%
|
Passenger revenue per
available seat mile (cents)
|
7.38
|
|
15.65
|
|
(53)
|
|
%
|
|
9.59
|
|
15.35
|
|
(38)
|
|
%
|
Total revenue per
available seat mile (cents)
|
10.86
|
|
17.47
|
|
(38)
|
|
%
|
|
12.73
|
|
17.07
|
|
(25)
|
|
%
|
TRASM, adjusted - see
Note B (cents)
|
9.66
|
|
17.39
|
|
(44)
|
|
%
|
|
11.87
|
|
16.97
|
|
(30)
|
|
%
|
Total cost per
available seat mile (cents)
|
13.21
|
|
15.34
|
|
(14)
|
|
%
|
|
22.01
|
|
14.67
|
|
50
|
|
%
|
Consolidated CASM,
adjusted - see Note B (cents)
|
14.53
|
|
15.21
|
|
(4)
|
|
%
|
|
17.96
|
|
14.56
|
|
23
|
|
%
|
CASM-Ex - see
Note B (cents)
|
12.57
|
|
11.59
|
|
8
|
|
%
|
|
15.61
|
|
10.88
|
|
43
|
|
%
|
Passenger load
factor
|
42
|
%
|
86
|
%
|
(44)
|
|
pts
|
|
55
|
%
|
86
|
%
|
(32)
|
|
pts
|
Fuel gallons consumed
(millions)
|
498
|
|
999
|
|
(50)
|
|
%
|
|
1,935
|
|
4,214
|
|
(54)
|
|
%
|
Average price per
fuel gallon
|
$
|
1.45
|
|
$
|
2.01
|
|
(28)
|
|
%
|
|
$
|
1.64
|
|
$
|
2.02
|
|
(19)
|
|
%
|
Average price per
fuel gallon, adjusted - see Note B
|
$
|
1.44
|
|
$
|
1.99
|
|
(28)
|
|
%
|
|
$
|
1.64
|
|
$
|
2.01
|
|
(18)
|
|
%
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
(in
millions)
|
2020
|
2019
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net (loss)
income
|
$
|
(755)
|
|
$
|
1,099
|
|
|
Depreciation and
amortization
|
499
|
|
622
|
|
|
Deferred income
taxes
|
(350)
|
|
324
|
|
|
Pension,
postretirement and postemployment payments greater than
expense
|
(87)
|
|
(447)
|
|
|
Change in other
payables, deferred revenue and accrued liabilities
|
692
|
|
(104)
|
|
|
Changes in air
traffic liability
|
(75)
|
|
(647)
|
|
|
Deferred CARES Act
grant recognition
|
(1,351)
|
|
—
|
|
|
Other, net
|
141
|
|
122
|
|
|
Net cash (used
in)/provided by operating activities
|
(1,286)
|
|
969
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and
equipment additions:
|
|
|
|
Flight equipment,
including advance refunds/(payments)
|
(302)
|
|
(570)
|
|
|
Ground property and
equipment, including technology
|
(246)
|
|
(502)
|
|
|
Sale of equity
investments
|
—
|
|
278
|
|
|
Purchase of
short-term investments
|
(4,700)
|
|
—
|
|
|
Redemption of
short-term investments
|
3,955
|
|
—
|
|
|
Proceeds from loans
to others
|
142
|
|
—
|
|
|
Other, net
|
103
|
|
15
|
|
|
Net cash used in
investing activities
|
(1,048)
|
|
(779)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Payments on debt and
finance lease obligations
|
(6,241)
|
|
(516)
|
|
|
Repurchase of common
stock
|
—
|
|
(225)
|
|
|
Cash
dividends
|
—
|
|
(259)
|
|
|
Proceeds from
long-term obligations
|
310
|
|
1,557
|
|
|
Fuel card
obligation
|
—
|
|
297
|
|
|
Other, net
|
(26)
|
|
(12)
|
|
|
Net cash (used
in)/provided by financing activities
|
(5,957)
|
|
842
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash
Equivalents
|
(8,291)
|
|
1,032
|
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
18,346
|
|
2,698
|
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
|
10,055
|
|
$
|
3,730
|
|
|
|
|
|
|
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
|
$
|
8,307
|
|
$
|
2,882
|
|
|
Restricted cash included in
prepaid expenses and other
|
192
|
|
212
|
|
|
Other
assets:
|
|
|
|
Cash restricted for airport
construction
|
1,556
|
|
636
|
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
10,055
|
|
$
|
3,730
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
(in
millions)
|
2020
|
|
2019
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8,307
|
|
|
$
|
2,882
|
|
|
Short-term
investments
|
5,789
|
|
|
—
|
|
|
Accounts receivable,
net
|
1,396
|
|
|
2,854
|
|
|
Fuel
inventory
|
377
|
|
|
730
|
|
|
Expendable parts and
supplies inventories, net
|
355
|
|
|
521
|
|
|
Prepaid expenses and
other
|
1,180
|
|
|
1,262
|
|
|
Total current
assets
|
17,404
|
|
|
8,249
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
26,529
|
|
|
31,310
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,733
|
|
|
5,627
|
|
|
Goodwill
|
9,753
|
|
|
9,781
|
|
|
Identifiable
intangibles, net
|
6,011
|
|
|
5,163
|
|
|
Cash restricted for
airport construction
|
1,556
|
|
|
636
|
|
|
Equity
investments
|
1,665
|
|
|
2,568
|
|
|
Deferred income
taxes, net
|
2,043
|
|
|
120
|
|
|
Other noncurrent
assets
|
1,357
|
|
|
1,078
|
|
|
Total other
assets
|
28,118
|
|
|
24,973
|
|
Total
assets
|
$
|
72,051
|
|
|
$
|
64,532
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
|
1,732
|
|
|
$
|
2,287
|
|
|
Current maturities of
operating leases
|
678
|
|
|
801
|
|
|
Air traffic
liability
|
4,044
|
|
|
5,116
|
|
|
Accounts
payable
|
2,840
|
|
|
3,266
|
|
|
Accrued salaries and
related benefits
|
2,086
|
|
|
3,701
|
|
|
Loyalty program
deferred revenue
|
1,777
|
|
|
3,219
|
|
|
Fuel card
obligation
|
1,100
|
|
|
736
|
|
|
Other accrued
liabilities
|
1,670
|
|
|
1,078
|
|
|
Total current
liabilities
|
15,927
|
|
|
20,204
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
27,425
|
|
|
8,873
|
|
|
Noncurrent air
traffic liability
|
500
|
|
|
—
|
|
|
Pension,
postretirement and related benefits
|
10,865
|
|
|
8,452
|
|
|
Loyalty program
deferred revenue
|
5,405
|
|
|
3,509
|
|
|
Noncurrent operating
leases
|
5,713
|
|
|
5,294
|
|
|
Deferred income
taxes, net
|
—
|
|
|
1,456
|
|
|
Other noncurrent
liabilities
|
4,863
|
|
|
1,386
|
|
|
Total noncurrent
liabilities
|
54,771
|
|
|
28,970
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
1,353
|
|
|
15,358
|
|
Total liabilities and
stockholders' equity
|
$
|
72,051
|
|
|
$
|
64,532
|
|
Note A: Scheduled capacity, also referred to as available
seat miles or ASMs and which we have historically presented as a
capacity measure, equals the total number of seats available for
transporting passengers during a reporting period multiplied by the
total number of miles flown during that period. Sellable capacity
refers to available seat miles after giving effect to load factor
caps and blocked seats. Cost and revenue unit metrics in this
release, including all measures presented in the statistical
summary and in Note B, are calculated on the basis of scheduled
capacity.
Note B: 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 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, Net (Loss)/Income, and Diluted
(Loss)/Earnings per Share, adjusted. In the December 2020 quarter and full year 2020, pre-tax
(loss)/income, net (loss)/income, and diluted (loss)/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. We
recognized restructuring charges following strategic business
decisions in response to the COVID-19 pandemic. For the full year
2020, these charges primarily include impairments and related
charges from retirement decisions related to approximately 400
aircraft and the voluntary early retirement and separation
programs.
CARES Act grant
recognition. We recognized the full grant proceeds
from the CARES Act payroll support program as a contra-expense in
2020. We recognized the grant proceeds based on the periods that
the funds were intended to benefit.
Impairments and equity method
losses. During 2020, we recognized charges and the related
income tax impacts from write-downs of our investments in LATAM and
Grupo Aeroméxico following their financial losses and separate
Chapter 11 bankruptcy filings, and the write-down of our investment
in Virgin Atlantic based on our share of its historical and
projected losses.
Pension settlement
charges. These charges were recognized in connection with
the voluntary early retirement and separation programs.
We also regularly adjust pre-tax (loss)/income, net
(loss)/income, and diluted (loss)/earnings per share for the
following items to determine pre-tax (loss)/income, net
(loss)/income, and diluted (loss)/earnings per share, 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 previously recorded our proportionate
share of losses from our equity investments in Virgin Atlantic,
Grupo Aeroméxico and LATAM in non-operating expense. (As a result
of Grupo Aeroméxico's and LATAM's bankruptcy filings, we no longer
have significant influence with Grupo Aeroméxico or LATAM and have
discontinued accounting for these investments under the equity
method in the June 2020 quarter.) 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 result from our
equity investments that are accounted for at fair value in
non-operating expense. The gains/losses are driven by changes in
stock prices, foreign currency fluctuations and other valuation
techniques for investments in companies without publicly-traded
shares. 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
|
|
December 31,
2020
|
|
December 31,
2020
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Loss
|
(in millions, except
per share data)
|
Loss
|
Tax
|
Loss
|
|
Per Diluted
Share
|
GAAP
|
$
|
(1,108)
|
|
$
|
353
|
|
$
|
(755)
|
|
|
$
|
(1.19)
|
|
Less: Restructuring
charges
|
421
|
|
(99)
|
|
322
|
|
|
|
Less: CARES Act grant
recognition
|
(1,351)
|
|
314
|
|
(1,037)
|
|
|
|
Less: Impairments and
equity method losses
|
—
|
|
(47)
|
|
(47)
|
|
|
|
Less: Pension
settlement charges
|
5
|
|
(1)
|
|
4
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
6
|
|
(2)
|
|
4
|
|
|
|
Equity investment MTM
adjustments
|
—
|
|
—
|
|
—
|
|
|
|
MTM adjustments on
investments
|
(94)
|
|
(1)
|
|
(95)
|
|
|
|
Non-GAAP
|
$
|
(2,121)
|
|
$
|
516
|
|
$
|
(1,604)
|
|
|
$
|
(2.53)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
December 31,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
1,397
|
|
$
|
(298)
|
|
$
|
1,099
|
|
|
$
|
1.71
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
22
|
|
(5)
|
|
17
|
|
|
|
Equity investment MTM
adjustments
|
(1)
|
|
—
|
|
(1)
|
|
|
|
MTM adjustments on
investments
|
(3)
|
|
(16)
|
|
(19)
|
|
|
|
Delta Private Jets
adjustment
|
2
|
|
—
|
|
2
|
|
|
|
Non-GAAP
|
$
|
1,417
|
|
$
|
(319)
|
|
$
|
1,098
|
|
|
$
|
1.70
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2020
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Loss
|
(in millions, except
per share data)
|
Loss
|
Tax
|
Loss
|
|
Per Diluted
Share
|
GAAP
|
$
|
(15,587)
|
|
$
|
3,202
|
|
$
|
(12,385)
|
|
|
$
|
(19.49)
|
|
Less: Restructuring
charges
|
8,219
|
|
(1,910)
|
|
6,309
|
|
|
|
Less: CARES Act grant
recognition
|
(3,946)
|
|
917
|
|
(3,029)
|
|
|
|
Less: Impairments and
equity method losses
|
2,172
|
|
(70)
|
|
2,102
|
|
|
|
Less: Pension
settlement charges
|
36
|
|
(8)
|
|
28
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
10
|
|
(2)
|
|
8
|
|
|
|
Equity investment MTM
adjustments
|
(19)
|
|
4
|
|
(15)
|
|
|
|
MTM adjustments on
investments
|
119
|
|
24
|
|
143
|
|
|
|
Non-GAAP
|
$
|
(8,996)
|
|
$
|
2,156
|
|
$
|
(6,839)
|
|
|
$
|
(10.76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
December 31,
2019
|
|
December 31,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
6,198
|
|
$
|
(1,431)
|
|
$
|
4,767
|
|
|
$
|
7.30
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
14
|
|
(3)
|
|
11
|
|
|
|
Equity investment MTM
adjustments
|
(14)
|
|
3
|
|
(11)
|
|
|
|
MTM adjustments on
investments
|
13
|
|
(7)
|
|
6
|
|
|
|
Delta Private Jets
adjustment
|
3
|
|
—
|
|
3
|
|
|
|
Non-GAAP
|
$
|
6,214
|
|
$
|
(1,438)
|
|
$
|
4,776
|
|
|
$
|
7.32
|
|
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
below. We make an adjustment related to Delta Private Jets for the
same reason described above under the heading pre-tax
(loss)/income, net (loss)/income, and diluted (loss)/earnings per
share, adjusted.
Third-party refinery
sales. We adjust operating revenue and TRASM for refinery
sales to third parties to determine operating revenue, adjusted and
TRASM, adjusted because these revenues are not related to our
airline segment. Operating revenue, adjusted and TRASM, adjusted
therefore provides a more meaningful comparison of revenue from our
airline operations to the rest of the airline industry.
|
|
|
Three Months
Ended
|
|
|
(in
millions)
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
Operating
revenue
|
$
|
3,973
|
|
|
$
|
11,439
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(441)
|
|
|
(2)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(53)
|
|
|
|
Operating revenue,
adjusted
|
$
|
3,532
|
|
|
$
|
11,384
|
|
|
(69)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
(in
millions)
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
Operating
revenue
|
$
|
17,095
|
|
|
$
|
47,007
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1,150)
|
|
|
(97)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(192)
|
|
|
|
Operating revenue,
adjusted
|
$
|
15,945
|
|
|
$
|
46,718
|
|
|
(66)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
TRASM
(cents)
|
10.86
|
|
|
17.47
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1.21)
|
|
|
—
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.08)
|
|
|
|
TRASM,
adjusted
|
9.66
|
|
|
17.39
|
|
|
(44)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
TRASM
(cents)
|
12.73
|
|
|
17.07
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(0.86)
|
|
|
(0.04)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.07)
|
|
|
|
TRASM,
adjusted
|
11.87
|
|
|
16.97
|
|
|
(30)
|
%
|
Operating Expense, adjusted and Consolidated CASM,
adjusted. In the December 2020
quarter and full year 2020, operating expense, adjusted and
consolidated CASM, adjusted exclude the following items directly
related to the impact of COVID-19 and our response: restructuring
charges and CARES Act grant recognition, as discussed above under
the heading pre-tax (loss)/income, net (loss)/income, and diluted
(loss)/earnings per share, adjusted. We also adjust operating
expense and CASM for MTM adjustments and settlements on hedges,
third-party refinery sales and the Delta Private Jets adjustment
for the same reasons described above under the headings pre-tax
(loss)/income, net (loss)/income, and diluted (loss)/earnings per
share, adjusted, and operating revenue, adjusted and TRASM,
adjusted to determine operating expense, adjusted and consolidated
CASM, adjusted.
|
|
Operating
Expense
|
|
Consolidated
CASM
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(operating expense in
millions, CASM in cents)
|
December 31,
2020
|
December 31,
2019
|
|
December 31,
2020
|
December 31,
2019
|
GAAP
|
$
|
4,831
|
|
$
|
10,040
|
|
|
13.21
|
|
15.34
|
|
Less: Restructuring
charges
|
(421)
|
|
—
|
|
|
(1.15)
|
|
—
|
|
Less: CARES Act grant
recognition
|
1,351
|
|
—
|
|
|
3.69
|
|
—
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(6)
|
|
(22)
|
|
|
(0.02)
|
|
(0.03)
|
|
Third-party refinery
sales
|
(441)
|
|
(2)
|
|
|
(1.21)
|
|
(0.01)
|
|
Delta Private Jets
adjustment
|
—
|
|
(55)
|
|
|
—
|
|
(0.08)
|
|
Non-GAAP
|
$
|
5,314
|
|
$
|
9,961
|
|
|
14.53
|
|
15.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense
|
|
Consolidated
CASM
|
|
|
Year
Ended
|
|
Year
Ended
|
(operating expense in
millions, CASM in cents)
|
December 31,
2020
|
December 31,
2019
|
|
December 31,
2020
|
December 31,
2019
|
GAAP
|
$
|
29,564
|
|
$
|
40,389
|
|
|
22.01
|
|
14.67
|
|
Less: Restructuring
charges
|
(8,219)
|
|
—
|
|
|
(6.12)
|
|
—
|
|
Less: CARES Act grant
recognition
|
3,946
|
|
—
|
|
|
2.94
|
|
—
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(10)
|
|
(14)
|
|
|
(0.01)
|
|
(0.01)
|
|
Third-party refinery
sales
|
(1,150)
|
|
(97)
|
|
|
(0.86)
|
|
(0.04)
|
|
Delta Private Jets
adjustment
|
—
|
|
(196)
|
|
|
—
|
|
(0.07)
|
|
Non-GAAP
|
$
|
24,130
|
|
$
|
40,082
|
|
|
17.96
|
|
14.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense
|
|
Consolidated
CASM
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(operating expense in
millions, CASM in cents)
|
September 30,
2020
|
September 30,
2019
|
|
September 30,
2020
|
September 30,
2019
|
GAAP
|
$
|
9,448
|
|
$
|
10,489
|
|
|
33.40
|
|
13.85
|
|
Less: Restructuring
charges
|
(5,345)
|
|
—
|
|
|
(18.89)
|
|
—
|
|
Less: CARES Act grant
recognition
|
1,315
|
|
—
|
|
|
4.65
|
|
—
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
3
|
|
25
|
|
|
0.01
|
|
0.03
|
|
Third-party refinery
sales
|
(417)
|
|
(6)
|
|
|
(1.47)
|
|
(0.01)
|
|
Delta Private Jets
adjustment
|
—
|
|
(49)
|
|
|
—
|
|
(0.06)
|
|
Non-GAAP
|
$
|
5,004
|
|
$
|
10,460
|
|
|
17.69
|
|
13.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense
|
|
Consolidated
CASM
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(operating expense in
millions, CASM in cents)
|
June 30,
2020
|
June 30,
2019
|
|
June 30,
2020
|
June 30,
2019
|
GAAP
|
$
|
6,283
|
|
$
|
10,408
|
|
|
59.30
|
|
14.51
|
|
Less: Restructuring
charges
|
(2,454)
|
|
—
|
|
|
(23.15)
|
|
—
|
|
Less: CARES Act grant
recognition
|
1,280
|
|
—
|
|
|
12.08
|
|
—
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(14)
|
|
(10)
|
|
|
(0.14)
|
|
(0.01)
|
|
Third-party refinery
sales
|
(292)
|
|
(40)
|
|
|
(2.76)
|
|
(0.06)
|
|
Delta Private Jets
adjustment
|
—
|
|
(50)
|
|
|
—
|
|
(0.07)
|
|
Non-GAAP
|
$
|
4,803
|
|
$
|
10,308
|
|
|
45.33
|
|
14.37
|
|
|
|
Operating
Expense
|
|
Consolidated
CASM
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(operating expense in
millions, CASM in cents)
|
March 31,
2019
|
|
March 31,
2019
|
GAAP
|
|
$
|
9,452
|
|
|
15.14
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(8)
|
|
(0.01)
|
|
Third-party refinery
sales
|
(49)
|
|
|
(0.08)
|
|
Delta Private Jets
adjustment
|
(42)
|
|
|
(0.07)
|
|
Non-GAAP
|
|
$
|
9,354
|
|
|
14.99
|
|
Cash Burn. We present cash burn because management
believes this metric is helpful to investors to evaluate the
company's ability to maintain liquidity and return to cash
generation. The company defines cash burn as net cash from
operating activities and net cash used in investing activities,
adjusted for (i) net purchases of short-term investments, (ii)
strategic investments and related, (iii) net cash flows related to
certain airport construction projects, (iv) aircraft financing
arrangements, (v) CARES Act grant proceeds, and (vi) other charges
that are not representative of our core operations, such as charges
associated with our voluntary separation and early retirement
programs. Adjustments include:
Net purchases of short-term
investments. Net purchases 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.
Aircraft financing
arrangements. Cash flows from payments reported within
investing activities related to the purchase of aircraft that are
fully financed in the period are removed from free cash flow in
calculating daily cash burn to better illustrate the cash generated
from our core operations.
CARES Act grant proceeds.
Cash flows related to the CARES act payroll support program grant
proceeds, reported within operating activities in GAAP results. We
adjust free cash flow for this item in calculating daily cash burn
to better illustrate the cash from our core operations.
Voluntary programs. Cash
flows from the voluntary separation and early retirement programs
offered to employees during the September quarter, reported within
operating activities in GAAP results. We adjust free cash flow for
this item in calculating daily cash burn to better illustrate the
cash from our core operations.
|
|
|
|
Three Months
Ended
|
Three Months
Ended
|
(in
millions)
|
|
|
December 31,
2020
|
September 30,
2020
|
Net cash used in
operating activities
|
|
$
|
(1,286)
|
|
$
|
(2,575)
|
|
Net cash used in
investing activities
|
|
(1,048)
|
|
(1,144)
|
|
Adjustments:
|
|
|
|
Net purchases of
short-term investments
|
|
745
|
|
745
|
|
Strategic investments
and related
|
|
(142)
|
|
235
|
|
Net cash flows related
to certain airport construction projects and other
|
|
116
|
|
208
|
|
Total free cash
flow
|
|
$
|
(1,615)
|
|
$
|
(2,531)
|
|
Aircraft financing
arrangements
|
|
310
|
|
37
|
|
CARES Act grant
proceeds
|
|
—
|
|
(491)
|
|
Voluntary
programs
|
|
206
|
|
813
|
|
Adjusted free cash
flow
|
|
$
|
(1,099)
|
|
$
|
(2,173)
|
|
Days in
period
|
|
92
|
|
92
|
|
Average daily cash
burn
|
|
$
|
(12)
|
|
$
|
(24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Fuel Unit Cost or Cost per Available Seat Mile,
("CASM-Ex"). In the December
2020 quarter and full year 2020, CASM-Ex exclude the
following items directly related to the impact of COVID-19 and our
response: restructuring charges and CARES Act grant recognition, as
discussed above under the heading pre-tax (loss)/income, net
(loss)/income, and diluted (loss)/earnings per share, adjusted. We
adjust for refinery sales to third parties for the same reason
described above under the heading operating revenue, adjusted and
TRASM, adjusted. We adjust for Delta Private Jets for the same
reason described above under the heading pre-tax (loss)/income, net
(loss)/income, and diluted (loss)/earnings per share, adjusted. We
also adjust CASM for the following items to determine 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
|
|
|
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
CASM
(cents)
|
13.21
|
|
|
15.34
|
|
|
|
Less: Restructuring
charges
|
(1.15)
|
|
|
—
|
|
|
|
Less: CARES Act grant
recognition
|
3.69
|
|
|
—
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(1.98)
|
|
|
(3.08)
|
|
|
|
Third-party refinery
sales
|
(1.21)
|
|
|
—
|
|
|
|
Profit sharing
|
—
|
|
|
(0.59)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.07)
|
|
|
|
CASM-Ex
|
12.57
|
|
|
11.59
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Change
|
CASM
(cents)
|
22.01
|
|
|
14.67
|
|
|
|
Less: Restructuring
charges
|
(6.12)
|
|
|
—
|
|
|
|
Less: CARES Act grant
recognition
|
2.94
|
|
|
—
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.36)
|
|
|
(3.10)
|
|
|
|
Third-party refinery
sales
|
(0.86)
|
|
|
(0.04)
|
|
|
|
Profit sharing
|
—
|
|
|
(0.60)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
|
(0.06)
|
|
|
|
CASM-Ex
|
15.61
|
|
|
10.88
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Delta Private Jets for
the same reasons described under the heading pre-tax (loss)/income,
net (loss)/ income, and diluted (loss)/earnings per share,
adjusted.
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
December
31,
|
(in millions, except
per gallon data)
|
2020
|
2019
|
|
|
2020
|
2019
|
Fuel purchase
cost
|
$
|
615
|
|
$
|
2,013
|
|
|
|
$
|
1.23
|
|
$
|
2.02
|
|
Fuel hedge
impact
|
6
|
|
23
|
|
|
|
0.01
|
|
0.02
|
|
Refinery segment
impact
|
102
|
|
(24)
|
|
|
|
0.21
|
|
(0.03)
|
|
Total fuel
expense
|
$
|
723
|
|
$
|
2,012
|
|
|
|
$
|
1.45
|
|
$
|
2.01
|
|
MTM adjustments and
settlements on hedges
|
(6)
|
|
(23)
|
|
|
|
(0.01)
|
|
(0.02)
|
|
Delta Private Jets
adjustment
|
—
|
|
(6)
|
|
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
717
|
|
$
|
1,983
|
|
|
|
$
|
1.44
|
|
$
|
1.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
December
31,
|
(in millions, except
per gallon data)
|
2020
|
2019
|
|
|
2020
|
2019
|
Fuel purchase
cost
|
$
|
2,938
|
|
$
|
8,581
|
|
|
|
$
|
1.52
|
|
$
|
2.04
|
|
Fuel hedge
impact
|
22
|
|
14
|
|
|
|
0.01
|
|
—
|
|
Refinery segment
impact
|
216
|
|
(76)
|
|
|
|
0.11
|
|
(0.02)
|
|
Total fuel
expense
|
$
|
3,176
|
|
$
|
8,519
|
|
|
|
$
|
1.64
|
|
$
|
2.02
|
|
MTM adjustments and
settlements on hedges
|
(10)
|
|
(14)
|
|
|
|
(0.01)
|
|
—
|
|
Delta Private Jets
adjustment
|
—
|
|
(28)
|
|
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
3,166
|
|
$
|
8,477
|
|
|
|
$
|
1.64
|
|
$
|
2.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
year-over-year
|
(63)
|
%
|
|
|
|
|
|
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)
|
|
December 31,
2020
|
Debt and finance
lease obligations
|
|
$
|
29,157
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
2,283
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
240
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
31,680
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,794
|
|
Adjusted total
debt
|
|
$
|
34,475
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(14,096)
|
|
Less: LGA restricted
cash
|
|
(1,556)
|
|
Adjusted net
debt
|
|
$
|
18,823
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
December 31,
2019
|
Debt and finance
lease obligations
|
|
$
|
11,160
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
—
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(115)
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
11,044
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,963
|
|
Adjusted total
debt
|
|
$
|
14,007
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(2,882)
|
|
Less: LGA restricted
cash
|
|
(636)
|
|
Adjusted net
debt
|
|
$
|
10,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Delta Air Lines