ATLANTA, July 14, 2021 /PRNewswire/ -- Delta Air
Lines (NYSE:DAL) today reported financial results for the June
quarter 2021 and provided its outlook for the September quarter
2021. Highlights of the June quarter 2021 results, including
both GAAP and adjusted metrics, are on page six and are
incorporated here.
"With the best employees and operation in the industry and an
accelerating demand environment, we achieved significant milestones
in the quarter including a solid pre-tax profit in the month of
June, positive free cash flow for the June quarter, and our people
and our brand being recognized with the top spot in the J.D. Power
2021 Airline Study," said Ed
Bastian, Delta's chief executive officer. "Looking
forward, we are harnessing the power of our differentiated brand
and resilient competitive advantages to drive towards sustainable
profitability in the second half of 2021 and enable long-term value
creation."
"Domestic leisure travel is fully recovered to 2019 levels and
there are encouraging signs of improvement in business and
international travel. With the recovery picking up steam, we
are making investments to support our industry-leading
operation. We are also opportunistically acquiring aircraft
and creating upside flexibility to accelerate our capacity
restoration in 2022 and beyond in a capital-disciplined manner," he
said.
June Quarter Financial Results
- Adjusted pre-tax loss of $881
million excludes $1.5 billion
of benefit related to the first and second payroll support program
extensions (PSP2 and PSP3, respectively) and mark-to-market
adjustments on our investments
- Adjusted operating revenue of $6.3
billion, which excludes refinery sales, declined 49 percent
on 39 percent lower sellable capacity (see Note A) versus June
quarter 2019
- Total operating expense, which includes $1.5 billion of benefit related to PSP2 and PSP3,
decreased $4.1 billion relative to
the June quarter 2019. Adjusted for the benefit related to
the PSP programs and third-party refinery sales, total operating
expense decreased $3.3 billion or 32
percent in the June quarter 2021 versus the comparable 2019
period
- Generated $1.9 billion of
operating cash flow, $1.5 billion of
free cash flow and $195 million of
free cash flow, adjusted in the June quarter
- At the end of the June quarter, the company had $17.8 billion in liquidity, including cash and
cash equivalents, short-term investments and undrawn revolving
credit facilities. The company had total debt and finance
lease obligations of $29.1 billion
with adjusted net debt of $18.3
billion
September Quarter 2021 Outlook
|
3Q21
Forecast
|
Capacity
1
|
Down 28% -
30%
|
Total Revenue 1,
2
|
Down 30% -
35%
|
Fuel Price ($/gal)
2
|
$2.05 -
$2.15
|
CASM-Ex 1,
2
|
Up 11% -
14%
|
Capital
Expenditures
|
~$800
million
|
Adjusted Net Debt
2
|
~$19.0
billion
|
1 Compared to September quarter
2019
|
2 Non-GAAP measure
|
Revenue Environment
"With accelerating demand for air travel and growing affinity
for Delta's best-in-class products, June quarter adjusted operating
revenue improved 76 percent from the March quarter.
Increasing customer engagement is evident with spend on the
American Express co-brand credit card already exceeding 2019 levels
and a record number of new customers signing up for SkyMiles
accounts during the June month," said Glen
Hauenstein, Delta's president. "I am excited to see
this momentum continuing in the September quarter as business
travel rebounds and international markets continue to reopen."
"We have the industry's best domestic and global network, an
increasingly efficient and simplified fleet, a de-commoditized
product, a highly valued brand, and the industry's best employees,"
Hauenstein continued. "Combined with our more efficient cost
structure, we are on a path to improve on pre-pandemic margins and
generate sustainable free cash flow."
Adjusted operating revenue of $6.3
billion for the June quarter improved 76 percent from March
quarter 2021. Compared to the same period in 2019, adjusted
operating revenue declined 49 percent, an improvement from the
company's guidance update in June of down 50 to 52 percent.
Passenger revenue declined 53 percent in the June quarter 2021
compared to June quarter 2019 on 32 percent lower scheduled
capacity and 39 percent lower sellable capacity, which included the
blocking of the middle seat through the month of April 2021.
Total unit revenue, adjusted was 45.4 percent higher than the
March quarter 2021 as adjusted operating revenue grew 76 percent on
a 21 percent increase in scheduled capacity over the same period.
Compared to the March quarter 2021, system yields improved
4.8 percent and load factors improved 24 points.
Revenue-related Highlights:
- Booking curve normalized as customers made future travel
plans: Average daily net cash sales, defined as tickets
purchased less tickets refunded, doubled compared to the March
quarter and were 20 percent higher than our initial internal
forecast. For the month of June, our average daily net cash
sales were 70 percent restored to 2019 levels and roughly 10 points
ahead of revenue recovery as consumers continue to make future
travel plans.
- Premium cabins outperformed main cabin where demand is
strongest: Domestic and short-haul Latin premium revenue
outperformed main cabin revenue recovery by 5 to 10 points during
the quarter. This recovery is expected to be reflected at a
system level as premium revenue in other entities continues to
improve with the return of business and international travel at
scale.
- Pace of corporate recovery accelerated during the
quarter: Corporate volumes experienced steady improvement
through the quarter, doubling from 20 percent recovered in March to
40 percent recovered in June, driven by increased vaccination
rates, the re-opening of offices and improvements in demand in
business-heavy markets like New
York and Boston.
- Non-ticket revenue demonstrated resilience: Non-ticket
revenue continued to demonstrate resilience, with cargo revenue up
35 percent versus the June quarter 2019 and total loyalty revenue
down 30 percent, a 17 percent and 43 percent improvement from the
March quarter 2021, respectively.
- Remuneration from American Express returned to 2019 levels
in June: American Express remuneration in the quarter was
more than 90 percent recovered compared to June quarter 2019 levels
as co-brand card spend surpassed 2019 levels while co-brand card
acquisitions were nearly fully restored. For the month of
June, remuneration exceeded 2019 levels and is expected to remain
at or above 2019 levels in the second half.
Cost Performance
"The cost performance in the first half of the year was strong
as we continue to restore the business efficiently. September
quarter non-fuel CASM is expected to be between 11 percent and 14
percent above the same period in 2019 as the significantly
improving demand environment is driving some welcome cost pressures
with an increase in rebuild and selling-related costs," said
Gary Chase, Delta's interim co-chief
financial officer. "As we continue to leverage our network
restoration, we remain on a path to achieve non-fuel CASM below
2019 levels by the fourth quarter," he said.
Total adjusted operating expense for the June quarter decreased
$3.3 billion excluding $1.5 billion in benefits from PSP2 and
PSP3. Expense performance was driven by an $811 million, or 36 percent reduction in fuel
expense, adjusted versus the June quarter 2019, a 34 percent
reduction in maintenance expense, and lower volume- and
revenue-related expenses. Salaries and related costs and
profit sharing of $2.3 billion were
down 31 percent compared to the June quarter 2019.
Fuel efficiency (see Note A) improved 7.1 percent in the June
quarter versus the same period in 2019, with nearly five points of
the improvement a result of our fleet renewal efforts, with the
remaining improvement temporary in nature due to reduced airport
congestion and lower load factors. Adjusted fuel price of
$2.12 per gallon was up 11.1 percent
compared to the March quarter 2021 and higher than initial guidance
in April on increased market prices and losses at the refinery
equivalent to 23¢ per gallon.
CASM, adjusted was up 0.5 percent compared to June quarter
2019. CASM-Ex was 9.0 percent higher than the June quarter
2019 on 32 percent less capacity. The company saw four points
of CASM-Ex pressure related to rebuild expense, including
accelerated maintenance, training and hiring to prepare for summer
2022 flying. Additionally, the company made the decision to
reward our employees for winning the J.D. Power Award for #1 North
American Airline with travel passes, which drove 1.3 points of
non-cash CASM-Ex expense in the quarter. CASM-Ex declined
12.3 percent sequentially from operating leverage on a 21 percent
increase in scheduled capacity and realized savings from the
employee retention tax credit and third-party rate reductions.
Non-operating expense for the June quarter was down $181 million compared to the June quarter 2019,
driven primarily by mark-to-market gains on certain of our
investments, partially offset by higher interest expense.
Balance Sheet, Cash and Liquidity
"Improving financial performance and a strong liquidity position
enable us to use cash on the balance sheet to reduce leverage, and
restore our financial flexibility," Chase said.
"Strengthening our financial foundation remains a top
priority at Delta as we position for the future and deliver value
to our owners," he said.
At the end of the June quarter, the company had total debt and
finance lease obligations of $29.1
billion with adjusted net debt of $18.3 billion, $7.8
billion higher than December 2019. The company's total
debt had a weighted average interest rate of 4.3 percent at June
quarter-end. In addition to maturities and normal
amortizations of nearly $875 million,
the company prepaid approximately $450
million in aircraft-related debt during the quarter.
As previously announced, Delta voluntarily contributed
$1.5 billion into its pension plans
during the quarter. By year-end 2021, the company expects the
plans to be fully funded on a Pension Protection Act (PPA) basis
based on terms included in the American Rescue Plan Act of 2021 and
to achieve GAAP funding of 90 percent. At this level of
funding, investment returns are expected to satisfy future benefit
payments, which the company believes will eliminate any need for
material cash contributions to the pension plans going
forward. With the plans frozen to new participants, Delta
began to reduce the investment risk of the plans during the quarter
to protect the funded status.
Since October 2020, Delta has
reduced its financial obligations by $11
billion, freeing $6 billion in
collateral and driving $500 million
in annualized pension and interest expense savings.
Cash generated from operations during the quarter was
$1.9 billion, including the benefit
from the payroll support programs. Free cash flow was
$1.5 billion, with free cash flow,
adjusted of $195 million for the
quarter. With consumer travel demand returning at an
accelerated rate, the company's Air Traffic Liability increased
approximately $1.5 billion
quarter-over-quarter to $6.9 billion,
approximately $300 million higher
than at June quarter 2019. Travel credits represent 35
percent of the Air Traffic Liability and represent approximately 5
percent of average daily bookings.
Delta ended the June quarter with $17.8
billion in liquidity, including $2.6
billion in undrawn revolver capacity.
Aircraft Acquisition
The company recently announced it will add seven A350s and 29
737-900ER pre-owned aircraft to its fleet. This follows the
announcement in April to exercise 25 A321neo options. The
A350s and 737-900ERs will enter service over the next 24 months,
starting in summer 2022. These fleet decisions align with the
fleet renewal strategy and will drive improved unit costs going
forward by replacing older, less efficient aircraft. The
company will lease the seven A350s and acquire the 29 737-900ERs,
driving incremental capex of approximately $700 million in the second half of this
year. The company now anticipates full year 2021 total gross
capex of approximately $3.2
billion.
Other Highlights from the June quarter
Culture and People
- Achieved the No. 1 spot in the J.D. Power 2021 North America
Airline Study for customer satisfaction, underscoring the
professionalism, care and humanity Delta people delivered during
one of the most challenging periods for air travel in modern
history
- Honored by Glassdoor's Employees' Choice Awards for Top 10 CEOs
of 2021 – CEO, Ed Bastian received a
97 percent approval rating
- Recognized by Disability:IN and The American Association of
People with Disabilities as a "Best Place to Work for Disability
Inclusion" for the sixth year running
- In keeping with our key priority of protecting employees,
vaccinated more than 70 percent of employees as of June 30, 2021 which allowed the company to fully
reopen its headquarters in June
- Partnered with Georgia to host
the state's largest COVID vaccination site supporting the state's
vaccination efforts
- Accelerated the funding of the pension plans with $1.5 billion in voluntary contributions in the
June quarter, which is now expected to be fully funded on a PPA
basis by year end
- Recognized as the No. 1 corporate blood drive sponsor with the
American Red Cross for the fourth consecutive year
- Named for the fourth year in a row to the Civic 50, an
initiative of Points of Light, which recognizes the 50 most
community-minded companies in the nation
Customer Experience and Loyalty
- Ran an industry-leading operation, ranking No. 1 among our
competitive peer set on all key operating metrics, including
completion factor and on time performance for the month of June and
year to date
- Achieved an all-time record for new SkyMiles member enrollments
in the month of June, outpacing the prior record set in July of
2019. New co-brand credit card acquisitions improved more
than 75 percent sequentially and were nearly 90 percent recovered
to June quarter 2019 levels
- Reintroduced onboard food and beverage service, with L.A. chefs
Jon Shook and Vinny Dotolo headlining the return of fresh
meals to Delta's premium domestic cabins
- Announced the reopening of Delta's full network of Sky Club
lounges in July and the phased return of signature hot food options
at lounges
- Launched the newest Delta Sky Club in Fort Lauderdale and opened a Pop-Up Delta Sky
Club in Anchorage to support Delta's increased service to the
market
- Continued to accelerate expansion and improvements at key hubs,
including LAX and LGA, where new headhouses are expected to open in
early 2022
- Launched first Viasat-equipped A321 into service, delivering
high-speed and streaming-quality connectivity – the first of more
than 300 aircraft planned for installation in 2021
- Announced new routes in response to increasing travel demand,
including:
-
- Nonstop Dubrovnik service from New York-JFK, a market
previously unserved by Delta
- Nonstop Seoul service from
Portland
- Nonstop Athens service from
Atlanta
- Nonstop Reykjavik service from
Boston
- Announced Delta FlyReady, a digital health solution built to
assist with international entry requirements
Environmental, Social and Governance
- Realized 7.1 percent improvement in fuel efficiency during the
June quarter 2021 versus June quarter 2019
- Continued to accelerate fleet renewal efforts, which drives
improved fuel efficiency, with yesterday's announcement of the
addition of 29 737-900ERs and seven A350s along with the exercise
of 25 A321neo options announced in April
2021
- Continued collaboration with a growing list of travel
management companies and corporate partners to purchase sustainable
aviation fuel which is a critically important lever in Delta's
Flight to Net Zero
- Published Delta's inaugural ESG Report in May, which
expands on the Corporate Responsibility Reports issued in the
past, informed by the reporting standards of the Sustainability
Accounting Standards Board and framework established by the Task
Force on Climate-Related Financial Disclosures
- Committed to reporting Delta's progress on the goal of annual
airline carbon-neutrality while planning to closely evaluate the
Science-Based Targets Initiative framework for aviation
- Leveraged partnerships to help drive equity and accountability
with the expansion of a partnership with Operation Hope to support
its One Million Black Business and Entrepreneur Initiative and
internal financial wellness/literacy programs
- Accepted Atlanta city lead
role in the OneTen coalition's overall efforts to
recruit, hire, train and advance 1 million
Black Americans over the next 10 years into sustaining jobs with
opportunities for advancement
- Launched enhanced Inclusion Training experience with nearly
51,000 employees who have completed at least one of four DEI
training classes
Payroll Support Program / Government Grant
Accounting
In the June quarter 2021, the remaining $1.1 billion of PSP2 and $356 million of PSP3 was recognized as a
contra-expense, which is reflected as "government grant
recognition" on the Consolidated Statements of Operations. The
remaining funds under PSP3 are expected to be recognized in the
second half of 2021.
June Quarter Results
June quarter results have been adjusted primarily for the
government grant recognition, unrealized gains on investments, and
third-party refinery sales as described in the reconciliations in
Note B.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
2Q21
|
2Q19
|
Pre-tax
income
|
776
|
|
1,907
|
|
(1,131)
|
|
(59)
|
%
|
Net income
|
652
|
|
1,443
|
|
(791)
|
|
(55)
|
%
|
Diluted earnings per
share
|
1.02
|
|
2.21
|
|
(1.19)
|
|
(54)
|
%
|
Operating
revenue
|
7,126
|
|
12,536
|
|
(5,410)
|
|
(43)
|
%
|
Total revenue per
available seat mile (TRASM) (cents)
|
14.68
|
|
17.47
|
|
(2.79)
|
|
(16)
|
%
|
Operating cash
flow
|
1,866
|
|
3,268
|
|
(1,402)
|
|
(43)
|
%
|
Operating
expense
|
6,310
|
|
10,408
|
|
(4,098)
|
|
(39)
|
%
|
Total debt and
finance lease obligations
|
29,051
|
|
9,990
|
|
19,061
|
|
NM
|
Cost per available
seat mile (CASM) (cents)
|
13.00
|
|
14.51
|
|
(1.51)
|
|
(10)
|
%
|
Fuel
expense
|
1,487
|
|
2,291
|
|
(804)
|
|
(35)
|
%
|
Average fuel price
per gallon
|
2.16
|
|
2.08
|
|
0.08
|
|
4
|
%
|
|
|
|
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
2Q21
|
2Q19
|
Pre-tax
(loss)/income
|
(881)
|
|
1,998
|
|
(2,879)
|
|
NM
|
Net
(loss)/income
|
(678)
|
|
1,533
|
|
(2,211)
|
|
NM
|
(Loss)/diluted
earnings per share
|
(1.07)
|
|
2.35
|
|
(3.42)
|
|
NM
|
Operating
revenue
|
6,349
|
|
12,448
|
|
(6,099)
|
|
(49)
|
%
|
TRASM, adjusted
(cents)
|
13.08
|
|
17.35
|
|
(4.27)
|
|
(25)
|
%
|
Free cash flow,
adjusted
|
195
|
|
2,175
|
|
(1,980)
|
|
(91)
|
%
|
Operating
expense
|
7,005
|
|
10,308
|
|
(3,303)
|
|
(32)
|
%
|
Adjusted net
debt
|
18,282
|
|
9,347
|
|
8,935
|
|
96
|
%
|
CASM, adjusted
(cents)
|
14.43
|
|
14.37
|
|
0.07
|
|
0.5
|
%
|
Consolidated unit
cost (CASM-Ex) (cents)
|
11.42
|
|
10.47
|
|
0.94
|
|
9
|
%
|
Fuel
expense
|
1,463
|
|
2,274
|
|
(811)
|
|
(36)
|
%
|
Average fuel price
per gallon
|
2.12
|
|
2.07
|
|
0.05
|
|
2
|
%
|
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; breaches or security lapses in our information
technology systems; 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; the impact of environmental regulation on the
Trainer refinery, including costs related to renewable fuel
standard regulations; our ability to retain senior management, key
employees and our culture; significant damage to our reputation and
brand, including from exposure 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 or
significant problems associated with types of aircraft or engines
we operate; the effects of extensive government regulation on our
business; the impact of environmental regulation and climate change
risks on our business; and unfavorable economic or political
conditions in the markets in which we operate.
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 March 31, 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
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in millions, except
per share data)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$
|
5,339
|
|
$
|
11,368
|
|
$
|
(6,029)
|
|
(53)
|
%
|
|
$
|
8,087
|
|
$
|
20,622
|
|
$
|
(12,535)
|
|
(61)
|
%
|
Cargo
|
251
|
|
186
|
|
65
|
|
35
|
%
|
|
466
|
|
378
|
|
88
|
|
23
|
%
|
Other
|
1,536
|
|
982
|
|
554
|
|
56
|
%
|
|
2,723
|
|
2,008
|
|
715
|
|
36
|
%
|
Total operating
revenue
|
7,126
|
|
12,536
|
|
(5,410)
|
|
(43)
|
%
|
|
11,276
|
|
23,008
|
|
(11,732)
|
|
(51)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
2,328
|
|
2,847
|
|
(519)
|
|
(18)
|
%
|
|
4,530
|
|
5,579
|
|
(1,049)
|
|
(19)
|
%
|
Aircraft fuel and
related taxes
|
1,487
|
|
2,291
|
|
(804)
|
|
(35)
|
%
|
|
2,504
|
|
4,269
|
|
(1,765)
|
|
(41)
|
%
|
Ancillary businesses
and refinery
|
939
|
|
316
|
|
623
|
|
NM
|
|
1,645
|
|
667
|
|
978
|
|
NM
|
Contracted
services
|
570
|
|
731
|
|
(161)
|
|
(22)
|
%
|
|
1,089
|
|
1,440
|
|
(351)
|
|
(24)
|
%
|
Depreciation and
amortization
|
501
|
|
713
|
|
(212)
|
|
(30)
|
%
|
|
993
|
|
1,328
|
|
(335)
|
|
(25)
|
%
|
Landing fees and other
rents
|
460
|
|
548
|
|
(88)
|
|
(16)
|
%
|
|
953
|
|
1,072
|
|
(119)
|
|
(11)
|
%
|
Regional carrier
expense
|
403
|
|
542
|
|
(139)
|
|
(26)
|
%
|
|
804
|
|
1,079
|
|
(275)
|
|
(25)
|
%
|
Aircraft maintenance
materials and outside repairs
|
287
|
|
434
|
|
(147)
|
|
(34)
|
%
|
|
581
|
|
910
|
|
(329)
|
|
(36)
|
%
|
Passenger commissions
and other selling expenses
|
222
|
|
597
|
|
(375)
|
|
(63)
|
%
|
|
332
|
|
1,071
|
|
(739)
|
|
(69)
|
%
|
Passenger
service
|
175
|
|
340
|
|
(165)
|
|
(49)
|
%
|
|
294
|
|
628
|
|
(334)
|
|
(53)
|
%
|
Aircraft
rent
|
104
|
|
107
|
|
(3)
|
|
(3)
|
%
|
|
208
|
|
209
|
|
(1)
|
|
—
|
%
|
Restructuring
charges
|
8
|
|
—
|
|
8
|
|
NM
|
|
(36)
|
|
—
|
|
(36)
|
|
NM
|
Government grant
recognition
|
(1,504)
|
|
—
|
|
(1,504)
|
|
NM
|
|
(2,689)
|
|
—
|
|
(2,689)
|
|
NM
|
Profit
sharing
|
—
|
|
518
|
|
(518)
|
|
(100)
|
%
|
|
—
|
|
739
|
|
(739)
|
|
(100)
|
%
|
Other
|
330
|
|
424
|
|
(94)
|
|
(22)
|
%
|
|
650
|
|
869
|
|
(219)
|
|
(25)
|
%
|
Total operating
expense
|
6,310
|
|
10,408
|
|
(4,098)
|
|
(39)
|
%
|
|
11,858
|
|
19,860
|
|
(8,002)
|
|
(40)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Income/(Loss)
|
816
|
|
2,128
|
|
(1,312)
|
|
(62)
|
%
|
|
(582)
|
|
3,148
|
|
(3,730)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(338)
|
|
(75)
|
|
(263)
|
|
NM
|
|
(700)
|
|
(158)
|
|
(542)
|
|
NM
|
Impairments and equity
method losses
|
—
|
|
(17)
|
|
17
|
|
(100)
|
%
|
|
(54)
|
|
(71)
|
|
17
|
|
(24)
|
%
|
Gain/(Loss) on
investments, net
|
211
|
|
(82)
|
|
293
|
|
NM
|
|
473
|
|
18
|
|
455
|
|
NM
|
Miscellaneous,
net
|
87
|
|
(47)
|
|
134
|
|
NM
|
|
124
|
|
(84)
|
|
208
|
|
NM
|
Total non-operating
expense, net
|
(40)
|
|
(221)
|
|
181
|
|
(82)
|
%
|
|
(157)
|
|
(295)
|
|
138
|
|
(47)
|
%
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss)
Before Income Taxes
|
776
|
|
1,907
|
|
(1,131)
|
|
(59)
|
%
|
|
(739)
|
|
2,853
|
|
(3,592)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
Income Tax
(Provision)/Benefit
|
(124)
|
|
(464)
|
|
340
|
|
(73)
|
%
|
|
214
|
|
(680)
|
|
894
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss)
|
652
|
|
1,443
|
|
(791)
|
|
(55)
|
%
|
|
$
|
(525)
|
|
$
|
2,173
|
|
$
|
(2,698)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
Basic
Earnings/(Loss) Per Share
|
$
|
1.02
|
|
$
|
2.22
|
|
|
|
|
$
|
(0.82)
|
|
$
|
3.30
|
|
|
|
Diluted
Earnings/(Loss) Per Share
|
$
|
1.02
|
|
$
|
2.21
|
|
|
|
|
$
|
(0.82)
|
|
$
|
3.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
637
|
|
650
|
|
|
|
|
636
|
|
658
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
642
|
|
652
|
|
|
|
|
636
|
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in
millions)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Ticket - Main
cabin
|
$
|
2,797
|
|
$
|
5,938
|
|
$
|
(3,141)
|
|
(53)
|
%
|
|
$
|
4,197
|
|
$
|
10,659
|
|
$
|
(6,462)
|
|
(61)
|
%
|
Ticket - Business
cabin and premium products
|
1,756
|
|
4,031
|
|
(2,275)
|
|
(56)
|
%
|
|
2,633
|
|
7,298
|
|
(4,665)
|
|
(64)
|
%
|
Loyalty travel
awards
|
428
|
|
751
|
|
(323)
|
|
(43)
|
%
|
|
669
|
|
1,442
|
|
(773)
|
|
(54)
|
%
|
Travel-related
services
|
358
|
|
648
|
|
(290)
|
|
(45)
|
%
|
|
588
|
|
1,223
|
|
(635)
|
|
(52)
|
%
|
Total passenger
revenue
|
$
|
5,339
|
|
$
|
11,368
|
|
$
|
(6,029)
|
|
(53)
|
%
|
|
$
|
8,087
|
|
$
|
20,622
|
|
$
|
(12,535)
|
|
(61)
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in
millions)
|
2021
|
2019
|
$
Change
|
%
Change
|
|
2021
|
2019
|
$
Change
|
%
Change
|
Ancillary businesses
and refinery
|
$
|
962
|
|
$
|
330
|
|
$
|
632
|
|
NM
|
|
$
|
1,688
|
|
$
|
699
|
|
$
|
989
|
|
NM
|
Loyalty
program
|
439
|
|
484
|
|
(45)
|
|
(9)
|
%
|
|
807
|
|
958
|
|
(151)
|
|
(16)
|
%
|
Miscellaneous
|
135
|
|
168
|
|
(33)
|
|
(20)
|
%
|
|
228
|
|
351
|
|
(123)
|
|
(35)
|
%
|
Total other
revenue
|
$
|
1,536
|
|
$
|
982
|
|
$
|
554
|
|
56
|
%
|
|
$
|
2,723
|
|
$
|
2,008
|
|
$
|
715
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
2Q21 versus
2Q19
|
Revenue
|
|
2Q21
($M)
|
|
Change
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
4,478
|
|
|
(45)%
|
(32)%
|
(19)%
|
(19)%
|
Atlantic
|
|
288
|
|
|
(85)%
|
(52)%
|
(4)%
|
(68)%
|
Latin
America
|
|
485
|
|
|
(36)%
|
(31)%
|
(12)%
|
(6)%
|
Pacific
|
|
88
|
|
|
(87)%
|
(59)%
|
90%
|
(67)%
|
Total
Passenger
|
$
|
5,339
|
|
|
(53)%
|
(31)%
|
(11)%
|
(32)%
|
Cargo
Revenue
|
|
251
|
|
|
35%
|
|
|
|
Other
Revenue
|
|
1,536
|
|
|
56%
|
|
|
|
Total
Revenue
|
$
|
7,126
|
|
|
(43)%
|
(16)%
|
|
|
Third Party
Refinery Sales
|
|
(777)
|
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
6,349
|
|
|
(49)%
|
(25)%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Statistical
Summary
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
|
2021
|
2019
|
Change
|
|
2021
|
2019
|
Change
|
Revenue passenger
miles (millions)
|
33,285
|
|
63,173
|
|
(47)
|
|
%
|
|
51,233
|
|
114,790
|
|
(55)
|
|
%
|
Available seat miles
(millions)
|
48,529
|
|
71,754
|
|
(32)
|
|
%
|
|
88,647
|
|
134,169
|
|
(34)
|
|
%
|
Passenger mile yield
(cents)
|
16.04
|
|
18.00
|
|
(11)
|
|
%
|
|
15.79
|
|
17.96
|
|
(12)
|
|
%
|
Passenger revenue per
available seat mile (cents)
|
11.00
|
|
15.84
|
|
(31)
|
|
%
|
|
9.12
|
|
15.37
|
|
(41)
|
|
%
|
Total revenue per
available seat mile (cents)
|
14.68
|
|
17.47
|
|
(16)
|
|
%
|
|
12.72
|
|
17.15
|
|
(26)
|
|
%
|
TRASM, adjusted - see
Note B (cents)
|
13.08
|
|
17.35
|
|
(25)
|
|
%
|
|
11.23
|
|
17.01
|
|
(34)
|
|
%
|
Cost per available
seat mile (cents)
|
13.00
|
|
14.51
|
|
(10)
|
|
%
|
|
13.38
|
|
14.80
|
|
(10)
|
|
%
|
CASM-Ex - see
Note B (cents)
|
11.42
|
|
10.47
|
|
9
|
|
%
|
|
12.14
|
|
10.95
|
|
11
|
|
%
|
CASM, adjusted - see
Note B (cents)
|
14.43
|
|
14.37
|
|
0.5
|
|
%
|
|
14.96
|
|
14.65
|
|
2
|
|
%
|
Passenger load
factor
|
69
|
%
|
88
|
%
|
(19)
|
|
pts
|
|
58
|
%
|
86
|
%
|
(28)
|
|
pts
|
Fuel gallons consumed
(millions)
|
690
|
|
1,099
|
|
(37)
|
|
%
|
|
1,235
|
|
2,061
|
|
(40)
|
|
%
|
Average price per
fuel gallon
|
$
|
2.16
|
|
$
|
2.08
|
|
4
|
|
%
|
|
$
|
2.03
|
|
$
|
2.07
|
|
(2)
|
|
%
|
Average price per
fuel gallon, adjusted - see Note B
|
$
|
2.12
|
|
$
|
2.07
|
|
2
|
|
%
|
|
$
|
2.03
|
|
$
|
2.06
|
|
(1)
|
|
%
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
(in
millions)
|
2021
|
2019
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
652
|
|
$
|
1,443
|
|
|
Depreciation and
amortization
|
501
|
|
713
|
|
|
Pension,
postretirement and postemployment payments (greater)/less than
expense
|
(1,651)
|
|
(481)
|
|
|
Changes in air
traffic liability
|
1,545
|
|
17
|
|
|
Changes in profit
sharing
|
—
|
|
518
|
|
|
Deferred government
grant recognition
|
975
|
|
—
|
|
|
Changes in balance
sheet and other, net
|
(156)
|
|
1,058
|
|
|
Net cash provided by
operating activities
|
1,866
|
|
3,268
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and
equipment additions:
|
|
|
|
Flight equipment,
including advance refunds/(payments)
|
(395)
|
|
(1,166)
|
|
|
Ground property and
equipment, including technology
|
(366)
|
|
(393)
|
|
|
Purchase of
short-term investments
|
(2,427)
|
|
—
|
|
|
Redemption of
short-term investments
|
3,123
|
|
—
|
|
|
Other, net
|
91
|
|
(3)
|
|
|
Net cash provided
by/(used in) investing activities
|
26
|
|
(1,562)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from
long-term obligations
|
977
|
|
—
|
|
|
Payments on debt and
finance lease obligations
|
(1,358)
|
|
(1,165)
|
|
|
Repurchase of common
stock
|
—
|
|
(268)
|
|
|
Cash
dividends
|
—
|
|
(229)
|
|
|
Other, net
|
51
|
|
—
|
|
|
Net cash used in
financing activities
|
(330)
|
|
(1,662)
|
|
|
|
|
|
|
Net Increase in
Cash, Cash Equivalents and Restricted Cash
Equivalents
|
1,562
|
|
44
|
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
9,896
|
|
2,985
|
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
|
11,458
|
|
$
|
3,029
|
|
|
|
|
|
|
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
|
$
|
10,357
|
|
$
|
2,009
|
|
|
Restricted cash included in
prepaid expenses and other
|
172
|
|
127
|
|
|
Other
assets:
|
|
|
|
Cash restricted for airport
construction
|
929
|
|
893
|
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
11,458
|
|
$
|
3,029
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
(in
millions)
|
2021
|
|
2020
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
10,357
|
|
|
$
|
8,307
|
|
|
Short-term
investments
|
4,873
|
|
|
5,789
|
|
|
Accounts receivable,
net
|
2,258
|
|
|
1,396
|
|
|
Fuel
inventory
|
641
|
|
|
377
|
|
|
Expendable parts and
supplies inventories, net
|
364
|
|
|
355
|
|
|
Prepaid expenses and
other
|
1,173
|
|
|
1,180
|
|
|
Total current
assets
|
19,666
|
|
|
17,404
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
27,508
|
|
|
26,529
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,653
|
|
|
5,733
|
|
|
Goodwill
|
9,753
|
|
|
9,753
|
|
|
Identifiable
intangibles, net
|
6,006
|
|
|
6,011
|
|
|
Cash restricted for
airport construction
|
929
|
|
|
1,556
|
|
|
Equity
investments
|
2,143
|
|
|
1,665
|
|
|
Deferred income
taxes, net
|
2,158
|
|
|
1,988
|
|
|
Other noncurrent
assets
|
1,493
|
|
|
1,357
|
|
|
Total other
assets
|
28,135
|
|
|
28,063
|
|
Total
assets
|
$
|
75,309
|
|
|
$
|
71,996
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
|
2,372
|
|
|
$
|
1,732
|
|
|
Current maturities of
operating leases
|
638
|
|
|
678
|
|
|
Air traffic
liability
|
6,798
|
|
|
4,044
|
|
|
Accounts
payable
|
3,930
|
|
|
2,840
|
|
|
Accrued salaries and
related benefits
|
2,215
|
|
|
2,086
|
|
|
Loyalty program
deferred revenue
|
2,757
|
|
|
1,777
|
|
|
Fuel card
obligation
|
1,100
|
|
|
1,100
|
|
|
Other accrued
liabilities
|
3,763
|
|
|
1,670
|
|
|
Total current
liabilities
|
23,573
|
|
|
15,927
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
26,679
|
|
|
27,425
|
|
|
Noncurrent air
traffic liability
|
140
|
|
|
500
|
|
|
Pension,
postretirement and related benefits
|
8,644
|
|
|
10,630
|
|
|
Loyalty program
deferred revenue
|
4,644
|
|
|
5,405
|
|
|
Noncurrent operating
leases
|
5,633
|
|
|
5,713
|
|
|
Other noncurrent
liabilities
|
4,715
|
|
|
4,862
|
|
|
Total noncurrent
liabilities
|
50,455
|
|
|
54,535
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
1,281
|
|
|
1,534
|
|
Total liabilities and
stockholders' equity
|
$
|
75,309
|
|
|
$
|
71,996
|
|
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 blocked seats
through April 30, 2021. 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. Fuel efficiency refers to the
percentage change in fuel consumption rate period over period,
which rate is calculated as fuel gallons consumed divided by
ASMs.
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 (Loss)/Diluted
Earnings per Share, adjusted. In the current period, pre-tax
(loss)/income, net (loss)/income, and (loss)/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, including certain
accruals, following strategic business decisions in response to the
COVID-19 pandemic. In the June quarter 2021, we recognized
$8 million of adjustments to certain
of those restructuring charges, representing changes in our
estimates.
Government grant
recognition. We recognized $1.5 billion of the grant
proceeds from the payroll support program extensions as
contra-expense during the June quarter 2021. We are recognizing the
grant proceeds as contra-expense based on the periods that the
funds are intended to compensate and expect to use all
proceeds from the payroll support program extensions in the second
half of 2021.
Loss on extinguishment of
debt. This adjustment relates to early termination of a portion
of our debt.
We also regularly adjust pre-tax income/(loss), net
income/(loss), and diluted earnings per share for the following
items to determine pre-tax (loss)/income, net (loss)/income, and
(loss)/diluted earnings per share, adjusted for the reasons
described below. We include the income tax effect of adjustments
when presenting net (loss)/income, adjusted. j
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
|
|
June 30,
2021
|
|
June 30,
2021
|
|
Pre-Tax
|
Income
|
Net
|
|
Diluted
Earnings/
|
(in millions, except
per share data)
|
Income/(Loss)
|
Tax
|
Income/(Loss)
|
|
(Loss) Per
Share
|
GAAP
|
$
|
776
|
|
$
|
(124)
|
|
$
|
652
|
|
|
$
|
1.02
|
|
Adjusted
for:
|
|
|
|
|
|
Restructuring
charges
|
8
|
|
(2)
|
|
6
|
|
|
|
Government grant
recognition
|
(1,504)
|
|
350
|
|
(1,154)
|
|
|
|
Loss on extinguishment
of debt
|
26
|
|
(6)
|
|
20
|
|
|
|
MTM adjustments and
settlements on hedges
|
24
|
|
(6)
|
|
18
|
|
|
|
MTM adjustments on
investments
|
(211)
|
|
(9)
|
|
(220)
|
|
|
|
Non-GAAP
|
$
|
(881)
|
|
$
|
203
|
|
$
|
(678)
|
|
|
$
|
(1.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
June 30,
2019
|
|
June 30,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Diluted
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per
Share
|
GAAP
|
$
|
1,907
|
|
$
|
(464)
|
|
$
|
1,443
|
|
|
$
|
2.21
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
10
|
|
(2)
|
|
8
|
|
|
|
Equity investment MTM
adjustments
|
(2)
|
|
—
|
|
(2)
|
|
|
|
MTM adjustments on
investments
|
82
|
|
1
|
|
83
|
|
|
|
Delta Private Jets
adjustment
|
1
|
|
—
|
|
1
|
|
|
|
Non-GAAP
|
$
|
1,998
|
|
$
|
(465)
|
|
$
|
1,533
|
|
|
$
|
2.35
|
|
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 for the impact of Delta Private Jets
for the same reason described above under the heading pre-tax
(loss)/income, net (loss)/income, and (loss)/diluted 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 this revenue is 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
|
|
2Q21 vs
2Q19
%
Change
|
(in
millions)
|
|
June 30,
2021
|
March 31,
2021
|
September 30,
2019
|
June 30,
2019
|
|
Operating
revenue
|
$
|
7,126
|
|
$
|
4,150
|
|
$
|
12,560
|
|
$
|
12,536
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(777)
|
|
(540)
|
|
(6)
|
|
(40)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(47)
|
|
(49)
|
|
|
|
Operating revenue,
adjusted
|
$
|
6,349
|
|
$
|
3,610
|
|
$
|
12,507
|
|
$
|
12,448
|
|
|
(49)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
(in
millions)
|
|
June 30,
2021
|
June 30,
2019
|
|
|
|
Change
|
Operating
revenue
|
$
|
11,276
|
|
$
|
23,008
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1,317)
|
|
(89)
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(92)
|
|
|
|
|
|
Operating revenue,
adjusted
|
$
|
9,959
|
|
$
|
22,828
|
|
|
|
|
(56)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
2Q21 vs
2Q19
%
Change
|
|
|
June 30,
2021
|
March 31,
2021
|
June 30,
2019
|
|
|
TRASM
(cents)
|
14.68
|
|
10.34
|
|
17.47
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1.60)
|
|
(1.35)
|
|
(0.06)
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(0.07)
|
|
|
|
|
TRASM,
adjusted
|
13.08
|
|
9.00
|
|
17.35
|
|
|
|
(25)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
2021
|
June 30,
2019
|
|
|
|
Change
|
TRASM
(cents)
|
12.72
|
|
17.15
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1.49)
|
|
(0.07)
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(0.07)
|
|
|
|
|
|
TRASM,
adjusted
|
11.23
|
|
17.01
|
|
|
|
|
(34)
|
%
|
Free Cash Flow and Free Cash Flow, adjusted. We
present free cash flow and free cash flow, adjusted 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, adjusted is also used internally as a component of our
2021 incentive compensation program. 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, while free cash flow, adjusted is further adjusted for (iv)
financed aircraft acquisitions, (v) government grant proceeds and
(vi) other items that are not representative of our core
operations, such as our pension funding. 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.
Financed aircraft
acquisitions. This adjusts free cash flow to reflect aircraft
deliveries that are leased as capital expenditures. The adjustment
is based on their original contractual purchase price or fair
value.
Government grant proceeds.
Cash flows related to the government grant proceeds are reported
within operating activities in GAAP results. We adjust free cash
flow for this item to better illustrate the cash from our core
operations.
Pension funding. Cash flows
from pension funding are reported within operating activities in
GAAP results. We adjust free cash flow for this item to better
illustrate the cash from our core operations.
|
|
|
|
Three Months
Ended
|
Three Months
Ended
|
(in
millions)
|
|
|
June 30,
2021
|
June 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
1,866
|
|
$
|
3,268
|
|
Net cash provided
by/(used in) investing activities
|
|
26
|
|
(1,562)
|
|
Adjustments:
|
|
|
|
Net redemptions of
short-term investments
|
|
(697)
|
|
—
|
|
Strategic investments
and related
|
|
(74)
|
|
89
|
|
Net cash flows related
to certain airport construction projects and other
|
|
329
|
|
54
|
|
Free cash
flow
|
|
$
|
1,450
|
|
$
|
1,849
|
|
Financed aircraft
acquisitions
|
|
(277)
|
|
(174)
|
|
Government grant
proceeds
|
|
(2,479)
|
|
—
|
|
Pension
funding
|
|
1,500
|
|
500
|
|
Free cash flow,
adjusted
|
|
$
|
195
|
|
$
|
2,175
|
|
|
|
|
|
|
|
Operating Expense, adjusted and CASM, adjusted. In the
current period, operating expense, adjusted and CASM, adjusted
exclude 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
(loss)/income, net (loss)/income, and (loss)/diluted earnings per
share, adjusted. We also adjust operating expense and CASM 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 (loss)/income, net (loss)/income,
and (loss)/diluted earnings per share, adjusted, and operating
revenue, adjusted and TRASM, adjusted to determine operating
expense, adjusted and CASM, adjusted.
|
|
Operating
Expense
|
|
CASM
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(operating expense in
millions, CASM in cents)
|
June 30,
2021
|
June 30,
2019
|
|
June 30,
2021
|
June 30,
2019
|
GAAP
|
$
|
6,310
|
|
$
|
10,408
|
|
|
13.00
|
|
14.51
|
|
Adjusted
for:
|
|
|
|
|
|
Restructuring
charges
|
(8)
|
|
—
|
|
|
(0.02)
|
|
—
|
|
Government grant
recognition
|
1,504
|
|
—
|
|
|
3.10
|
|
—
|
|
MTM adjustments and
settlements on hedges
|
(24)
|
|
(10)
|
|
|
(0.05)
|
|
(0.01)
|
|
Third-party refinery
sales
|
(777)
|
|
(40)
|
|
|
(1.60)
|
|
(0.06)
|
|
Delta Private Jets
adjustment
|
—
|
|
(50)
|
|
|
—
|
|
(0.07)
|
|
Non-GAAP
|
$
|
7,005
|
|
$
|
10,308
|
|
|
14.43
|
|
14.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense
|
|
CASM
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(operating expense in
millions, CASM in cents)
|
June 30,
2021
|
June 30,
2019
|
|
June 30,
2021
|
June 30,
2019
|
GAAP
|
$
|
11,858
|
|
$
|
19,860
|
|
|
13.38
|
|
14.80
|
|
Adjusted
for:
|
|
|
|
|
|
Restructuring
charges
|
36
|
|
—
|
|
|
0.04
|
|
—
|
|
Government grant
recognition
|
2,689
|
|
—
|
|
|
3.03
|
|
—
|
|
MTM adjustments and
settlements on hedges
|
(1)
|
|
(17)
|
|
|
—
|
|
(0.01)
|
|
Third-party refinery
sales
|
(1,317)
|
|
(89)
|
|
|
(1.49)
|
|
(0.07)
|
|
Delta Private Jets
adjustment
|
—
|
|
(92)
|
|
|
—
|
|
(0.07)
|
|
Non-GAAP
|
$
|
13,266
|
|
$
|
19,662
|
|
|
14.96
|
|
14.65
|
|
|
|
|
|
|
|
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)
|
|
June 30,
2021
|
Debt and finance
lease obligations
|
|
$
|
29,051
|
|
Plus: sale-leaseback
financing liabilities
|
|
|
2,259
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
257
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
31,567
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,874
|
|
Adjusted total
debt
|
|
$
|
34,441
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(15,230)
|
|
Less: LGA restricted
cash
|
|
(929)
|
|
Adjusted net
debt
|
|
$
|
18,282
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
December 31,
2019
|
Debt and finance
lease obligations
|
|
$
|
11,160
|
|
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
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
June 30,
2019
|
Debt and finance
lease obligations
|
|
$
|
9,990
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(125)
|
|
Adjusted debt and
finance lease obligations
|
|
$
|
9,865
|
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,874
|
|
Adjusted total
debt
|
|
$
|
12,739
|
|
Less: cash, cash
equivalents and short-term investments
|
|
(2,009)
|
|
Less: LGA restricted
cash
|
|
(1,383)
|
|
Adjusted net
debt
|
|
$
|
9,347
|
|
|
|
|
|
Non-Fuel Unit Cost or Cost per Available Seat Mile,
("CASM-Ex"). In the current period, 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 (loss)/income, net
(loss)/income, and (loss)/diluted 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 the impact of Delta Private Jets for
the same reason described above under the heading pre-tax
(loss)/income, net (loss)/income, and (loss)/diluted 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
|
|
2Q21 vs
2Q19
%
Change
|
|
|
|
|
June 30,
2021
|
March 31,
2021
|
December 31,
2019
|
September 30,
2019
|
June 30,
2019
|
|
CASM
(cents)
|
13.00
|
|
13.83
|
|
15.34
|
|
13.85
|
|
14.51
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Restructuring
charges
|
(0.02)
|
|
0.11
|
|
—
|
|
—
|
|
—
|
|
|
|
Government grant
recognition
|
3.10
|
|
2.96
|
|
—
|
|
—
|
|
—
|
|
|
|
Aircraft fuel and related
taxes
|
(3.06)
|
|
(2.54)
|
|
(3.08)
|
|
(2.96)
|
|
(3.19)
|
|
|
|
Third-party refinery
sales
|
(1.60)
|
|
(1.35)
|
|
—
|
|
(0.01)
|
|
(0.06)
|
|
|
|
Profit sharing
|
—
|
|
—
|
|
(0.59)
|
|
(0.68)
|
|
(0.72)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(0.07)
|
|
(0.05)
|
|
(0.06)
|
|
|
|
CASM-Ex
|
11.42
|
|
13.01
|
|
11.59
|
|
10.15
|
|
10.47
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
June 30,
2019
|
|
|
|
|
Change
|
CASM
(cents)
|
13.38
|
|
14.80
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Restructuring
charges
|
0.04
|
|
—
|
|
|
|
|
|
|
Government grant
recognition
|
3.03
|
|
—
|
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(2.82)
|
|
(3.18)
|
|
|
|
|
|
|
Third-party refinery
sales
|
(1.49)
|
|
(0.07)
|
|
|
|
|
|
|
Profit sharing
|
—
|
|
(0.55)
|
|
|
|
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(0.06)
|
|
|
|
|
|
|
CASM-Ex
|
12.14
|
|
10.95
|
|
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
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 (loss)/income, net
(loss)/ income, and (loss)/diluted earnings per share,
adjusted.
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
June
30,
|
March
31,
|
June
30,
|
|
|
June
30,
|
March
31
|
June
30,
|
(in millions, except
per gallon data)
|
2021
|
2021
|
2019
|
|
|
2021
|
2021
|
2019
|
Total fuel
expense
|
$
|
1,487
|
|
$
|
1,017
|
|
$
|
2,291
|
|
|
|
$
|
2.16
|
|
$
|
1.87
|
|
$
|
2.08
|
|
MTM adjustments and
settlements on hedges
|
(24)
|
|
23
|
|
(10)
|
|
|
|
(0.03)
|
|
0.04
|
|
(0.01)
|
|
Delta Private Jets
adjustment
|
—
|
|
—
|
|
(8)
|
|
|
|
—
|
|
—
|
|
(0.01)
|
|
Total fuel expense,
adjusted
|
$
|
1,463
|
|
$
|
1,040
|
|
$
|
2,274
|
|
|
|
$
|
2.12
|
|
$
|
1.91
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
|
Six Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
|
|
June
30,
|
June
30,
|
|
(in millions, except
per gallon data)
|
2021
|
2019
|
|
|
|
2021
|
2019
|
|
Total fuel
expense
|
$
|
2,504
|
|
$
|
4,269
|
|
|
|
|
$
|
2.03
|
|
$
|
2.07
|
|
|
MTM adjustments and
settlements on hedges
|
(1)
|
|
(17)
|
|
|
|
|
—
|
|
(0.01)
|
|
|
Delta Private Jets
adjustment
|
—
|
|
(15)
|
|
|
|
|
—
|
|
(0.01)
|
|
|
Total fuel expense,
adjusted
|
$
|
2,504
|
|
$
|
4,237
|
|
|
|
|
$
|
2.03
|
|
$
|
2.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 2021
YTD compared to 2019 YTD
|
(41)
|
%
|
|
|
|
|
|
|
|
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SOURCE Delta Air Lines