March quarter 2022 GAAP operating loss of
$783 million and loss per share
of $1.48 on total operating revenue
of $9.3 billion
March quarter 2022 adjusted operating loss of
$793 million and adjusted loss
per share of $1.23 on adjusted
operating revenue of $8.2
billion
With an improving demand environment, achieved
a solid operating margin in the month of March
ATLANTA, April 13,
2022 /PRNewswire/ -- Delta Air Lines (NYSE:DAL) today
reported financial results for the March quarter 2022 and provided
its outlook for the June quarter 2022. Highlights of the March
quarter 2022 results, including both GAAP and adjusted metrics, are
on page five and are incorporated here.
"With a strong rebound in demand as omicron faded, we returned
to profitability in the month of March, producing a solid adjusted
operating margin of almost 10 percent. As our brand
preference and demand momentum grow, we are successfully
recapturing higher fuel prices, driving our outlook for a 12 to 14
percent adjusted operating margin and strong free cash flow in the
June quarter," said Ed Bastian,
Delta's chief executive officer. "I would like to thank the
Delta people, who once again enabled our best-in-class operational
performance, provided an unmatched customer experience and continue
to power our industry leadership each and every day."
March Quarter 2022 Financial Results
- Adjusted operating loss of $793
million excludes a net gain of $9
million
- Pre-tax loss of $1.2 billion with
adjusted pre-tax loss of $1.0
billion, excluding a net expense of $164 million
- Adjusted operating revenue of $8.2
billion, which excludes third-party refinery sales, was 79
percent recovered versus March quarter 2019 on capacity that was 83
percent restored
- Total operating expense of $10.1
billion increased $679 million
compared to the March quarter 2019
- Adjusted for costs primarily from third-party refinery sales,
total operating expense of $9.0
billion decreased $400 million
or 4 percent in the March quarter 2022 versus the comparable 2019
period
- Generated $1.8 billion of
operating cash flow and $197 million
of free cash flow, after investing $1.6
billion into the business, primarily related to aircraft
purchases and modifications
- At the end of the March quarter, the company had $12.8 billion in liquidity, including cash and
cash equivalents, short-term investments and undrawn revolving
credit facilities
June Quarter 2022 Outlook
|
2Q22 Forecast
|
Capacity
1
|
~84%
|
Total Revenue 1,
2
|
93% - 97%
|
CASM-Ex 1,
2
|
Up ~17%
|
Fuel Price ($/gal)
2, 3
|
$3.20 -
$3.35
|
Operating Margin
2
|
12% - 14%
|
Gross Capital
Expenditures 2
|
~$1.2
billion
|
Adjusted Net Debt
2
|
~$20
billion
|
1 Compared to June quarter
2019
|
2 Non-GAAP measure; Refer to Non-GAAP
reconciliations for 2Q19 comparison figures
|
3 Fuel
guidance based on prices as of April 8th (Brent at $102,
cracks at $30, $0.20 refinery contribution with RINS at
$1.27)
|
Revenue Environment
"Delta is well-positioned to capitalize on robust consumer
demand and an accelerating return of business and international
travel. The strength of Delta's brand has never been more evident
with record-setting performance for co-brand card acquisitions,
co-brand spend and SkyMiles acquisitions in March," said
Glen Hauenstein, Delta's president.
"In the June quarter, we are successfully recapturing higher fuel
prices and expect our revenue recovery to accelerate to 93 to 97
percent with unit revenue up double digits compared to 2019."
Adjusted operating revenue of $8.2
billion for the March quarter 2022 was 79 percent restored
to March quarter 2019 levels, 5 points ahead of the mid-point of
the company's initial guidance. Compared to the March quarter 2019,
total passenger revenue was 75 percent recovered on system capacity
that was 83 percent restored. Domestic passenger revenue was
83 percent recovered, and international passenger revenue was 54
percent restored in the March quarter.
Consumer demand accelerated through the quarter, highlighted by
strong spring break performance. As omicron faded, offices
reopened and travel restrictions were lifted, resulting in an
improvement in business travel demand and a stronger fare
environment.
Revenue-related Highlights:
- Unit revenue exceeds 2019 levels in March month for the
first time in two years: March quarter adjusted total unit
revenue (TRASM) was 5 percent lower than the same period in 2019.
As demand improved, March month adjusted TRASM inflected to
positive versus 2019, marking the first month of positive unit
revenue versus 2019 since the start of the pandemic. This strength
was led by premium revenue and diversified revenue streams,
including loyalty and cargo.
- Business travel recovery boosted by improvement in
corporate: Domestic corporate sales* for the quarter were ~50
percent recovered, with March improving to ~70 percent versus 2019.
International corporate sales for the quarter were ~35 percent
recovered, with March improving to ~50 percent versus 2019.
Internationally, Transatlantic improved the most as European
countries reopened.
- Premium cabin revenue recovery outpacing Main Cabin:
Premium products continued to lead the recovery with Domestic
premium revenue approximately 100 percent restored to 2019 levels
in the month of March. Domestic and Latin premium product revenue
recovery outpaced Main Cabin by approximately 10 points during the
March quarter.
*Corporate sales include tickets sold to corporate contracted
customers, including tickets for travel during and beyond the
referenced time period
- American Express remuneration 25 percent higher than 2019
levels: American Express remuneration of $1.2 billion in the quarter was up 25 percent
compared to March quarter 2019. Co-brand spend was up 35 percent
compared to March quarter 2019, reflecting a significant increase
in T&E spend, with air travel spend outpacing lodging in the
month of March for the first time since 2019. Co-brand acquisitions
were nearly 95 percent recovered compared to March quarter
2019.
- Cargo strength continues with record revenue month in
March: Cargo revenue was $289
million for the March quarter, a 51 percent increase
compared to the same period in 2019 on strong demand and
yields.
Cost Performance
"Thanks to the team's hard work, we maintained a competitive
cost structure in the March quarter amid a dynamic operating
environment, an important driver of our financial recovery," said
Dan Janki, Delta's chief financial
officer. "As demand continues to recover and we restore
additional capacity in the second half of the year, we expect our
non-fuel unit cost comparisons to 2019 will improve to up
mid-single digits, keeping us within our full year non-fuel unit
cost guidance range. Our intense focus on non-fuel costs will serve
us well moving ahead as we scale the airline and better utilize our
fleet and our facilities."
Total adjusted operating expense of $9.0
billion in the March quarter 2022 increased 11 percent
sequentially, driven by higher fuel prices and costs from the
continued restoration of the airline. Adjusted fuel expense was
$2.1 billion in the March quarter
2022. Adjusted fuel price of $2.79
per gallon was up 33 percent compared to the December quarter 2021
driven by higher market prices, including a 7¢ refinery
contribution.
Adjusted non-fuel cost of $6.9
billion was up 6 percent sequentially. This was primarily
driven by a normalization in maintenance expense. Compared to the
March quarter of 2019, non-fuel unit costs (CASM-Ex) were 15
percent higher on 17 percent less capacity.
Balance Sheet, Cash and Liquidity
"During the March quarter we generated free cash flow, continued
to pay down debt and finished the quarter with nearly $13 billion in liquidity," Janki said. "Reducing
debt is our top financial priority as we target investment-grade
metrics and $15 billion of adjusted
net debt by the end of 2024."
At the end of the March quarter 2022, the company had total debt
and finance lease obligations of $25.6
billion with adjusted net debt of $20.9 billion and a weighted average interest
rate of 4.3 percent. During the quarter, the company repaid
$1.4 billion of gross debt.
Operating cash flow during the March quarter 2022 was
$1.8 billion. Free cash flow was
$197 million for the quarter with
$1.6 billion of gross capital
expenditures reinvested in the business. The company's Air Traffic
Liability was $9.1 billion at March
quarter-end, up $2.8 billion compared
to the end of the December quarter and up $2.5 billion compared to the March quarter
2019.
Delta ended the March quarter with $12.8
billion in liquidity, including $2.9
billion in undrawn revolver capacity.
Fleet and Partner Updates
In the March quarter, Aeroméxico emerged from its bankruptcy
proceedings and in connection with the consummation of the
transaction, Delta now holds a 20 percent equity stake in the
reorganized company. Delta will recognize the 20 percent share of
Aeroméxico's results under the equity accounting method within
non-operating expense in the company's income statement beginning
in the June quarter.
As part of Delta's fleet renewal initiatives, the company took
delivery of its first A321neo aircraft at the end of March 2022 and expects to take delivery of 26
A321neos in total this year. The introduction of these
next-generation aircraft to the fleet contributes to Delta's 2022
goal of using at least 6 percent less fuel per available seat mile
compared to 2019. In total, Delta has committed to purchase 155
A321neos through 2027.
Other Highlights from the March Quarter 2022
Culture and People
- Awarded a special profit-sharing payment of $1,250 to eligible employees in appreciation for
extraordinary efforts resulting in a profitable second half of
2021
- Announced a 4 percent base pay increase for eligible employees
worldwide, effective May 1, 2022
- Recognized by Glassdoor as one of its Best Places to Work for a
6th year in a row. Delta was the highest-ranking U.S.
airline on the list and ranked No. 18 on the 2022 list of 100 large
companies
- Honored by Fortune as one of the World's Most Admired Companies
for the 9th year in a row, and ranked higher than any
other airline on the list
- Hosted celebrations with employees and family of Team
USA Olympic and Paralympic
athletes traveling on Delta planes to and from the 2022 Winter
Olympic Games in Beijing
Customer Experience and Loyalty
- Ranked No. 1 U.S. airline by the Wall Street Journal, including
the best performance in on-time arrivals, completion factor,
preventing extreme delays and the lowest levels of U.S. DOT
complaints
- Unveiled major airport infrastructure milestones at Delta's
Los Angeles and Seattle global hubs, as part of a $12 billion, decade-long effort to modernize and
elevate the customer journey
- Increased flexibility by extending ticket validity through
year-end 2023 and rolling over all Medallion Qualification Miles
from 2021 to 2022
- Enhanced in-flight experience with the return of hot meals on
flights over 900 miles in First Class, and introduced plant-based
and vegetarian menu items
- Reintroduced and refreshed Delta One services with multi-step,
three-course meal service, more pre-departure beverage options, new
cocktail bites and more dessert options
- Announced summer service schedule to Europe, with more than 500 weekly flights to
Europe, including new flights
between New York-JFK and Stockholm, Salt Lake
City and London-Heathrow
and restarting service from New York-JFK to Zurich, Brussels, Edinburgh, Copenhagen and Prague
Environmental, Social and Governance
- Released Diversity, Equity and Inclusion report outlining
progress against the company's commitments to advancing racial
justice and diversity within its business
- Published a Climate Lobbying Report detailing global advocacy
activities and policy engagements that support and complement
Delta's Paris Agreement-aligned climate goals
- Expanded partnership with sustainable aviation fuel (SAF) maker
Gevo to increase supply of SAF and bring Delta closer to the goal
of fueling 10 percent of its airline operation with SAF by the end
of 2030
- Announced collaboration with Airbus on industry-leading
research to accelerate the development of hydrogen-powered
aircraft
- Created first Propel Collegiate Pilot Career Path Program with
Hampton University, the airline's first
such partnership with a historically Black university
- Contributed $1 million to the
American Red Cross and Global Red Cross Movement in support of
humanitarian relief efforts in Ukraine
- Launched new, more sustainable onboard products; together the
new products are expected to reduce single-use plastic onboard by
approximately 4.9 million pounds annually
March Quarter Results
March quarter results have been adjusted primarily for the
unrealized losses on investments, loss on extinguishment of debt
and third-party refinery sales as described in the reconciliations
in Note A.
|
GAAP
|
$ Change
|
% Change
|
($ in millions except
per share and unit costs)
|
1Q22
|
1Q19
|
Operating
(loss)/income
|
(783)
|
1,020
|
(1,803)
|
NM
|
Pre-tax
(loss)/income
|
(1,200)
|
946
|
(2,146)
|
NM
|
Net
(loss)/income
|
(940)
|
730
|
(1,670)
|
NM
|
(Loss)/diluted earnings
per share
|
(1.48)
|
1.09
|
(2.57)
|
NM
|
Operating
revenue
|
9,348
|
10,472
|
(1,124)
|
(11) %
|
Total revenue per
available seat mile (TRASM) (cents)
|
18.04
|
16.78
|
1.26
|
8 %
|
Operating
expense
|
10,131
|
9,452
|
679
|
7 %
|
Operating cash
flow
|
1,771
|
1,942
|
(171)
|
(9) %
|
Capital
expenditures
|
1,766
|
1,360
|
406
|
30 %
|
Cost per available seat
mile (CASM) (cents)
|
19.56
|
15.14
|
4.42
|
29 %
|
Fuel expense
|
2,092
|
1,978
|
114
|
6 %
|
Average fuel price per
gallon
|
2.79
|
2.06
|
0.73
|
35 %
|
Total debt and finance
lease obligations
|
25,557
|
10,764
|
14,793
|
NM
|
|
|
|
|
|
|
Adjusted
|
$ Change
|
% Change
|
($ in millions except
per share and unit costs)
|
1Q22
|
1Q19
|
Operating
(loss)/income
|
(793)
|
1,026
|
(1,819)
|
NM
|
Pre-tax
(loss)/income
|
(1,037)
|
831
|
(1,868)
|
NM
|
Net
(loss)/income
|
(784)
|
639
|
(1,423)
|
NM
|
(Loss)/diluted earnings
per share
|
(1.23)
|
0.96
|
(2.19)
|
NM
|
Operating
revenue
|
8,161
|
10,381
|
(2,219)
|
(21) %
|
TRASM
(cents)
|
15.75
|
16.63
|
(0.88)
|
(5) %
|
Operating
expense
|
8,954
|
9,354
|
(400)
|
(4) %
|
Free cash
flow
|
197
|
751
|
(553)
|
(74) %
|
Gross capital
expenditures
|
1,565
|
1,511
|
54
|
4 %
|
Non-fuel
cost
|
6,858
|
7,171
|
(313)
|
(4) %
|
Consolidated unit cost
(CASM-Ex) (cents)
|
13.24
|
11.49
|
1.75
|
15 %
|
Fuel expense
|
2,097
|
1,963
|
133
|
7 %
|
Average fuel price per
gallon
|
2.79
|
2.04
|
0.75
|
37 %
|
Adjusted net
debt
|
20,863
|
10,198
|
10,664
|
NM
|
About Delta Air Lines More than 4,000
Delta Air Lines (NYSE: DAL) flights take off every day, connecting
people across more than 275 destinations on six continents with
award-winning operational excellence, customer service, safety and
innovation. As the leading global airline, Delta's mission is to
create opportunities, foster understanding and expand horizons by
connecting people and communities to each other and their
potential.
Delta's more than 75,000 employees believe our customers
should never have to choose between seeing the world and saving the
planet. Delta is leading the travel industry in building a
foundation for sustainable aviation with its Flight to Net
ZeroTM and its intention to set science-based targets
for greenhouse gas emissions aligned with the Paris Agreement. And
we are continuing to take action to advance diversity, equity and
inclusion and to reflect the world and the passengers we
serve.
Our people lead the way in delivering a world-class customer
experience, and we're continuing to ensure the future of travel is
personalized, enjoyable and stress-free. Our people's genuine and
enduring motivation is to make every customer feel welcomed and
respected across every point of their journey with us.
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 has had on our business; the
impact of incurring significant debt in response to the pandemic;
failure to comply with the financial and other covenants in our
financing agreements; the possible effects of accidents involving
our aircraft or aircraft of our airline partners; breaches or
lapses in the security of technology systems on which we rely;
disruptions in our information technology infrastructure; our
dependence on technology in our operations; our commercial
relationships with airlines in other parts of the world and the
investments we have in certain of those airlines; the effects of a
significant disruption in the operations or performance of third
parties on which we rely; failure to realize the full value of
intangible or long-lived assets; labor issues; the effects of
weather, natural disasters and seasonality on our business; the
cost of aircraft fuel; the availability of aircraft fuel; failure
or inability of insurance to cover a significant liability at
Monroe's Trainer refinery; failure
to comply with existing and future environmental regulations to
which Monroe's refinery operations
are subject, including costs related to compliance with renewable
fuel standard regulations; our ability to retain senior management
and other key employees, and to maintain our company culture;
significant damage to our reputation and brand, including from
exposure to significant adverse publicity; the effects of terrorist
attacks, geopolitical conflict or security events; competitive
conditions in the airline industry; extended interruptions or
disruptions in service at major airports at which we operate or
significant problems associated with types of aircraft or engines
we operate; the effects of extensive government regulation we are
subject to; the impact of environmental regulation, including
increased regulation to reduce emissions and other risks associated
with climate change, on our business; and unfavorable economic or
political conditions in the markets in which we operate or
volatility in currency exchange rates.
Additional information concerning risks and uncertainties that
could cause differences between actual results and forward-looking
statements is contained in our Securities and Exchange Commission
filings, including our Annual Report on Form 10-K for the fiscal
year ended December 31, 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
|
|
|
|
March 31,
|
|
|
(in millions, except
per share data)
|
2022
|
2019
|
$ Change
|
% Change
|
Operating Revenue:
|
|
|
|
|
Passenger
|
$
6,907
|
$
9,254
|
$
(2,347)
|
(25) %
|
Cargo
|
289
|
192
|
97
|
51 %
|
Other
|
2,152
|
1,026
|
1,126
|
NM
|
Total operating revenue
|
9,348
|
10,472
|
(1,124)
|
(11) %
|
|
|
|
|
|
Operating Expense:
|
|
|
|
|
Salaries and related costs
|
2,826
|
2,732
|
94
|
3 %
|
Aircraft fuel and related taxes
|
2,092
|
1,978
|
114
|
6 %
|
Ancillary businesses and refinery
|
1,382
|
351
|
1,031
|
NM
|
Contracted services
|
753
|
709
|
44
|
6 %
|
Depreciation and amortization
|
506
|
615
|
(109)
|
(18) %
|
Landing fees and other rents
|
504
|
524
|
(20)
|
(4) %
|
Regional carrier expense
|
491
|
538
|
(47)
|
(9) %
|
Aircraft maintenance materials and outside repairs
|
465
|
476
|
(11)
|
(2) %
|
Passenger commissions and other selling expenses
|
312
|
474
|
(162)
|
(34) %
|
Passenger service
|
275
|
288
|
(13)
|
(5) %
|
Aircraft rent
|
122
|
102
|
20
|
20 %
|
Restructuring charges
|
(5)
|
—
|
(5)
|
NM
|
Profit sharing
|
—
|
220
|
(220)
|
(100) %
|
Other
|
408
|
445
|
(37)
|
(8) %
|
Total operating
expense
|
10,131
|
9,452
|
679
|
7 %
|
|
|
|
|
|
Operating (Loss)/Income
|
(783)
|
1,020
|
(1,803)
|
NM
|
|
|
|
|
|
Non-Operating Expense:
|
|
|
|
|
Interest expense, net
|
(274)
|
(83)
|
(191)
|
NM
|
Equity method results
|
—
|
(54)
|
54
|
(100) %
|
Gain/(loss) on investments, net
|
(147)
|
100
|
(247)
|
NM
|
Loss on extinguishment of debt
|
(25)
|
—
|
(25)
|
NM
|
Pension and related benefit/(expense)
|
73
|
(15)
|
88
|
NM
|
Miscellaneous, net
|
(44)
|
(22)
|
(22)
|
100 %
|
Total non-operating expense,
net
|
(417)
|
(74)
|
(343)
|
NM
|
|
|
|
|
|
(Loss)/Income Before Income
Taxes
|
(1,200)
|
946
|
(2,146)
|
NM
|
|
|
|
|
|
Income Tax Benefit/(Provision)
|
260
|
(216)
|
476
|
NM
|
|
|
|
|
|
Net (Loss)/Income
|
$
(940)
|
$
730
|
$
(1,670)
|
NM
|
|
|
|
|
|
Basic (Loss)/Earnings Per Share
|
$
(1.48)
|
$
1.10
|
|
|
Diluted (Loss)/Earnings Per
Share
|
$
(1.48)
|
$
1.09
|
|
|
|
|
|
|
|
Basic Weighted Average Shares
Outstanding
|
637
|
665
|
|
|
Diluted Weighted Average Shares
Outstanding
|
637
|
667
|
|
|
|
|
|
|
|
|
DELTA AIR LINES, INC.
|
Passenger Revenue
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(in
millions)
|
2022
|
2019
|
$ Change
|
% Change
|
Ticket - Main
cabin
|
$
3,448
|
$
4,680
|
$
(1,232)
|
(26)
%
|
Ticket - Premium
products
|
2,538
|
3,308
|
(770)
|
(23)
%
|
Loyalty travel
awards
|
543
|
692
|
(149)
|
(22)
%
|
Travel-related
services
|
378
|
574
|
(196)
|
(34)
%
|
Total passenger revenue
|
$
6,907
|
$
9,254
|
$
(2,347)
|
(25)
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES, INC.
|
Other Revenue
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(in
millions)
|
2022
|
2019
|
$ Change
|
% Change
|
Refinery
|
$
1,187
|
$
48
|
$
1,139
|
NM
|
Loyalty
program
|
571
|
474
|
97
|
20
%
|
Ancillary
businesses
|
209
|
321
|
(112)
|
(35)
%
|
Miscellaneous
|
185
|
183
|
2
|
1
%
|
Total other revenue
|
$
2,152
|
$
1,026
|
$
1,126
|
NM
|
|
|
|
|
|
DELTA AIR LINES, INC.
|
Total Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|
|
|
|
1Q22 vs 1Q19
|
Revenue
|
|
1Q22 ($M)
|
|
Change
|
Unit Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
5,563
|
|
(17)%
|
(12)%
|
(6)%
|
(7)%
|
Atlantic
|
|
539
|
|
(50)%
|
(25)%
|
(9)%
|
(33)%
|
Latin America
|
|
680
|
|
(21)%
|
(10)%
|
(1)%
|
(12)%
|
Pacific
|
|
125
|
|
(78)%
|
(31)%
|
72%
|
(69)%
|
Total Passenger
|
$
|
6,907
|
|
(25)%
|
(10)%
|
—%
|
(17)%
|
Cargo Revenue
|
|
289
|
|
51%
|
|
|
|
Other Revenue
|
|
2,152
|
|
NM
|
|
|
|
Total Revenue
|
$
|
9,348
|
|
(11)%
|
8%
|
|
|
Third Party
Refinery Sales
|
|
(1,187)
|
|
|
|
|
|
Total Revenue, adjusted
|
$
|
8,161
|
|
(21)%
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Statistical
Summary
|
(Unaudited)
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2022
|
2019
|
Change
|
Revenue passenger miles
(millions)
|
38,700
|
51,617
|
(25)
|
%
|
Available seat miles
(millions)
|
51,810
|
62,416
|
(17)
|
%
|
Passenger mile yield
(cents)
|
17.85
|
17.93
|
—
|
%
|
Passenger revenue per
available seat mile (cents)
|
13.33
|
14.83
|
(10)
|
%
|
Total revenue per
available seat mile (cents)
|
18.04
|
16.78
|
8
|
%
|
TRASM, adjusted - see
Note A (cents)
|
15.75
|
16.63
|
(5)
|
%
|
Cost per available seat
mile (cents)
|
19.56
|
15.14
|
29
|
%
|
CASM-Ex - see
Note A (cents)
|
13.24
|
11.49
|
15
|
%
|
Passenger load
factor
|
75 %
|
83 %
|
(8)
|
pts
|
Fuel gallons consumed
(millions)
|
751
|
962
|
(22)
|
%
|
Average price per fuel
gallon
|
$
2.79
|
$
2.06
|
35
|
%
|
Average price per fuel
gallon, adjusted - see Note A
|
$
2.79
|
$
2.04
|
37
|
%
|
DELTA AIR LINES, INC.
|
|
Consolidated Statements of Cash
Flows
|
|
(Unaudited)
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
(in
millions)
|
2022
|
2019
|
|
Cash Flows From Operating
Activities:
|
|
|
|
Net
(loss)/income
|
$
(940)
|
$
730
|
|
Depreciation and
amortization
|
506
|
615
|
|
Changes in air traffic
liability
|
2,751
|
1,938
|
|
Changes in balance
sheet and other, net
|
(546)
|
(1,341)
|
|
Net cash provided by
operating activities
|
1,771
|
1,942
|
|
|
|
|
|
Cash Flows From Investing
Activities:
|
|
|
|
Property and equipment
additions:
|
|
|
|
Flight equipment, including advance payments
|
(1,276)
|
(1,059)
|
|
Ground property and equipment, including
technology
|
(490)
|
(301)
|
|
Purchase of short-term
investments
|
(226)
|
—
|
|
Redemption of
short-term investments
|
1,346
|
206
|
|
Purchase of equity
investments
|
(100)
|
—
|
|
Other, net
|
(3)
|
58
|
|
Net cash used in investing
activities
|
(749)
|
(1,096)
|
|
|
|
|
|
Cash Flows From Financing
Activities:
|
|
|
|
Proceeds from
short-term obligations
|
—
|
1,750
|
|
Proceeds from long-term
obligations
|
—
|
500
|
|
Payments on debt and
finance lease obligations
|
(1,443)
|
(1,285)
|
|
Repurchase of common
stock
|
—
|
(1,325)
|
|
Cash
dividends
|
—
|
(233)
|
|
Other, net
|
(13)
|
(16)
|
|
Net cash used in by
financing activities
|
(1,456)
|
(609)
|
|
|
|
|
|
Net (Decrease)/Increase in Cash, Cash Equivalents and
Restricted Cash Equivalents
|
(434)
|
237
|
|
Cash, cash equivalents
and restricted cash equivalents at beginning of period
|
$
8,569
|
$
2,748
|
|
Cash, cash equivalents
and restricted cash equivalents at end of period
|
$
8,135
|
$
2,985
|
|
|
|
|
|
The following table
provides a reconciliation of cash, cash equivalents and restricted
cash reported within the Consolidated Balance Sheets to the total
of the same such amounts shown above:
|
|
|
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$
7,705
|
$
1,910
|
|
Restricted cash included in
prepaid expenses and other
|
170
|
57
|
|
Other assets:
|
|
|
|
Restricted cash included in
other noncurrent assets
|
260
|
1,018
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
8,135
|
$
2,985
|
|
|
|
|
|
|
DELTA AIR LINES, INC.
|
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
(in
millions)
|
2022
|
|
2021
|
ASSETS
|
Current Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
7,705
|
|
$
7,933
|
|
Short-term
investments
|
2,250
|
|
3,386
|
|
Accounts receivable,
net
|
3,039
|
|
2,404
|
|
Fuel inventory,
expendable parts and supplies inventories, net
|
1,292
|
|
1,098
|
|
Prepaid expenses and
other
|
1,434
|
|
1,119
|
|
Total current
assets
|
15,720
|
|
15,940
|
|
|
|
|
|
Property and Equipment, Net:
|
|
|
|
|
Property and equipment,
net
|
30,042
|
|
28,749
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
7,402
|
|
7,237
|
|
Goodwill
|
9,753
|
|
9,753
|
|
Identifiable
intangibles, net
|
5,999
|
|
6,001
|
|
Equity
investments
|
1,999
|
|
1,712
|
|
Deferred income taxes,
net
|
1,534
|
|
1,294
|
|
Other noncurrent
assets
|
1,299
|
|
1,773
|
|
Total other
assets
|
27,986
|
|
27,770
|
Total assets
|
$
73,748
|
|
$
72,459
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
Current Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
1,116
|
|
$
1,782
|
|
Current maturities of
operating leases
|
744
|
|
703
|
|
Air traffic
liability
|
8,809
|
|
6,228
|
|
Accounts
payable
|
4,810
|
|
4,240
|
|
Accrued salaries and
related benefits
|
2,288
|
|
2,457
|
|
Loyalty program
deferred revenue
|
3,038
|
|
2,710
|
|
Fuel card
obligation
|
1,100
|
|
1,100
|
|
Other accrued
liabilities
|
2,155
|
|
1,746
|
|
Total current
liabilities
|
24,060
|
|
20,966
|
|
|
|
|
|
Noncurrent Liabilities:
|
|
|
|
|
Debt and finance
leases
|
24,441
|
|
25,138
|
|
Noncurrent air traffic
liability
|
300
|
|
130
|
|
Pension, postretirement
and related benefits
|
5,862
|
|
6,035
|
|
Loyalty program
deferred revenue
|
4,606
|
|
4,849
|
|
Noncurrent operating
leases
|
7,199
|
|
7,056
|
|
Other noncurrent
liabilities
|
4,289
|
|
4,398
|
|
Total noncurrent
liabilities
|
46,697
|
|
47,606
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
2,991
|
|
3,887
|
Total liabilities and
stockholders' equity
|
$
73,748
|
|
$
72,459
|
Note A: The following tables show reconciliations of non-GAAP
financial measures. The reasons Delta uses these measures are
described below. Reconciliations may not calculate due to
rounding.
Delta sometimes uses information ("non-GAAP financial measures")
that is derived from the Consolidated Financial Statements, but
that is not presented in accordance with accounting principles
generally accepted in the U.S. ("GAAP"). Under the Securities and
Exchange Commission rules, non-GAAP financial measures may be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for or superior to GAAP
results. The tables below show reconciliations of non-GAAP
financial measures used in this release to the most directly
comparable GAAP financial measures.
Forward Looking Projections. Delta is not able to
reconcile forward looking non-GAAP financial measures without
unreasonable effort because the adjusting items such as those used
in the reconciliations below will not be known until the end of the
period and could be significant.
Adjustments. These reconciliations include certain
adjustments to GAAP measures, which are directly related to the
impact of COVID-19 and our response. These adjustments are made to
provide comparability between the reported periods, if applicable,
as indicated below:
Restructuring charges. During 2020, we
recorded restructuring charges for items such as fleet impairments
and voluntary early retirement and separation programs following
strategic business decisions in response to the COVID-19 pandemic.
In the March quarter 2022 we recognized $5 million of net
adjustments to certain of those restructuring charges, representing
changes in our estimates.
Loss on extinguishment of debt. This
adjustment relates to early termination of a portion of our
debt.
Special profit-sharing payment. This
adjustment is exclusive to 2021. To recognize the extraordinary
efforts of our employees through the pandemic, we made a special
profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax
profit earned during the second half of 2021.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.
We also regularly adjust certain GAAP measures for the following
items, if applicable, for the reasons indicated below:
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, and therefore we remove this impact to allow
investors to better understand and analyze our core performance.
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. 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.
Third-party refinery sales. Refinery
sales to third parties, and related expenses, are not related to
our airline segment. Excluding these sales therefore provides a
more meaningful comparison of our airline operations to the rest of
the airline industry.
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 better 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.
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.
Operating (Loss)/Income, adjusted
|
Three Months
Ended
|
(in
millions)
|
March 31,
2022
|
March 31,
2019
|
Operating
(Loss)/Income
|
$
(783)
|
$
1,020
|
Adjusted
for:
|
|
|
Restructuring charges
|
(5)
|
—
|
MTM
adjustments and settlements on hedges
|
(4)
|
8
|
Delta Private Jets adjustment
|
—
|
(1)
|
Operating
(Loss)/Income, adjusted
|
$
(793)
|
$
1,026
|
|
|
|
|
|
|
Operating Margin, adjusted
|
|
Month
Ended
|
|
|
|
|
March 31,
2022
|
|
|
|
Operating
margin
|
7.9
%
|
|
|
|
Adjusted
for:
|
|
|
|
|
Restructuring charges
|
(0.1)
|
|
|
|
MTM
adjustments and settlements on hedges
|
(0.8)
|
|
|
|
Third-party refinery sales(1)
|
2.4
|
|
|
|
Operating margin,
adjusted
|
9.4
%
|
|
|
|
|
|
|
|
|
|
(1)
Third-party refinery sales in the month of March reconciliations
above represent the total quarterly amount, as this is only
recorded in March.
|
Pre-Tax (Loss)/Income, Net (Loss)/Income, and
(Loss)/Diluted Earnings per Share, adjusted
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2022
|
|
March 31,
2022
|
|
Pre-Tax
|
Income
|
Net
|
|
Loss
|
(in millions, except
per share data)
|
Loss
|
Tax
|
Loss
|
|
Per Diluted
Share
|
GAAP
|
$
(1,200)
|
$
260
|
$
(940)
|
|
$
(1.48)
|
Adjusted
for:
|
|
|
|
|
|
Restructuring charges
|
(5)
|
|
|
|
|
Loss on extinguishment of debt
|
25
|
|
|
|
|
MTM
adjustments and settlements on hedges
|
(4)
|
|
|
|
|
MTM
adjustments on investments
|
148
|
|
|
|
|
Non-GAAP
|
$
(1,037)
|
$
253
|
$
(784)
|
|
$
(1.23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2019
|
|
March 31,
2019
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
946
|
$
(216)
|
$
730
|
|
$
1.09
|
Adjusted
for:
|
|
|
|
|
|
MTM
adjustments and settlements on hedges
|
8
|
|
|
|
|
Equity investment MTM adjustments
|
(21)
|
|
|
|
|
MTM
adjustments on investments
|
(100)
|
|
|
|
|
Delta Private Jets adjustment
|
(1)
|
|
|
|
|
Non-GAAP
|
$
831
|
$
(193)
|
$
639
|
|
$
0.96
|
|
|
|
|
|
|
Operating Revenue, adjusted and Total Revenue Per Available
Seat Mile ("TRASM"), adjusted
|
|
|
Three Months
Ended
|
|
1Q22 vs
1Q19
%
Change
|
(in
millions)
|
|
March 31,
2022
|
June 30,
2019
|
March 31,
2019
|
|
Operating
revenue
|
$
9,348
|
$
12,536
|
$
10,472
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1,187)
|
(40)
|
(48)
|
|
|
Delta Private Jets
adjustment
|
—
|
(49)
|
(43)
|
|
|
Operating revenue,
adjusted
|
$
8,161
|
$
12,448
|
$
10,381
|
|
(21)
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
1Q22 vs
1Q19
%
Change
|
|
|
March 31,
2022
|
June 30,
2019
|
March 31,
2019
|
|
TRASM
(cents)
|
18.04
|
17.47
|
16.78
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(2.29)
|
(0.06)
|
(0.08)
|
|
|
Delta Private Jets
adjustment
|
—
|
(0.07)
|
(0.07)
|
|
|
TRASM,
adjusted
|
15.75
|
17.35
|
16.63
|
|
(5) %
|
|
|
|
|
|
|
|
|
|
|
|
Month
Ended
|
|
|
%
Change
|
|
|
March 31,
2022
|
March 31,
2019
|
|
|
|
TRASM
(cents)
|
24.94
|
18.46
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery sales(1)
|
(6.27)
|
(0.21)
|
|
|
|
Delta Private Jets adjustment
|
—
|
(0.09)
|
|
|
|
TRASM,
adjusted
|
18.68
|
18.16
|
|
|
3
%
|
|
|
|
|
|
|
|
|
(1)
Third-party refinery sales in the month of March reconciliations
above represent the total quarterly amount, as this is only
recorded in March.
|
Operating Expense, adjusted
|
|
Three Months
Ended
|
|
(in
millions)
|
March 31,
2022
|
December 31,
2021
|
March 31,
2019
|
|
Operating
expense
|
$
10,131
|
$
9,207
|
$
9,452
|
|
Adjusted
for:
|
|
|
|
|
Restructuring charges
|
5
|
16
|
—
|
|
Special profit sharing payment
|
—
|
(108)
|
—
|
|
MTM
adjustments and settlements on hedges
|
4
|
11
|
(8)
|
|
Third-party refinery sales
|
(1,187)
|
(1,040)
|
(48)
|
|
Delta Private Jets adjustment
|
—
|
—
|
(42)
|
|
Operating expense,
adjusted
|
$
8,954
|
$
8,086
|
$
9,354
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow. We present free cash flow because
management believes these metrics are helpful to investors to
evaluate the company's ability to generate cash that is available
for use for debt service or general corporate initiatives. Free
cash flow is defined as net cash from operating activities and net
cash from investing activities, adjusted for (i) net
redemptions/purchases of short-term investments, (ii) strategic
investments and related and (iii) net cash flows related to certain
airport construction projects and other. These adjustments are made
for the following reasons:
Net redemptions/purchases of short-term
investments. Net redemptions/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. Certain 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 because management believes investors should be
informed that a portion of these capital expenditures from airport
construction projects are either reimbursed by a third party or
funded with restricted cash specific to these projects.
|
|
|
|
Three Months Ended
|
(in
millions)
|
|
|
March 31, 2022
|
March 31, 2019
|
Net cash provided by
operating activities
|
|
$
1,771
|
$
1,942
|
Net cash used in
investing activities
|
|
(749)
|
(1,096)
|
Adjusted
for:
|
|
|
|
Net
(redemptions)/purchases of short-term investments
|
|
(1,120)
|
(206)
|
Strategic investments and related
|
|
107
|
—
|
Net
cash flows related to certain airport construction projects and
other
|
|
188
|
111
|
Free cash
flow
|
|
$
197
|
$
751
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Capital Expenditures. We adjust capital
expenditures for the following items to determine gross capital
expenditures for the reasons described below:
Financed aircraft acquisitions. This
adjusts capital expenditures to reflect aircraft deliveries that
are leased as capital expenditures. The adjustment is based
on their original contractual purchase price or fair value and
provides a more meaningful view of our investing activities.
Net cash flows related to certain airport
construction projects. Cash flows related to certain
airport construction projects are included in capital expenditures.
We have adjusted for these items because management believes
investors should be informed that a portion of these capital
expenditures from airport construction projects are either funded
with restricted cash specific to these projects or reimbursed by a
third party.
|
|
Three Months
Ended
|
(in
millions)
|
March 31,
2022
|
March 31,
2019
|
Flight equipment,
including advance payments
|
$
1,276
|
$
1,059
|
Ground property and
equipment, including technology
|
490
|
301
|
Adjusted
for:
|
|
|
Financed aircraft acquisitions
|
—
|
243
|
Net
cash flows related to certain airport construction
projects
|
(201)
|
(93)
|
Gross capital
expenditures
|
$
1,565
|
$
1,511
|
|
|
|
|
|
|
|
|
Non-Fuel Cost and Non-Fuel Unit Cost or Cost per Available
Seat Mile, ("CASM-Ex")
|
|
|
|
Three Months Ended
|
|
1Q22 vs 1Q19
% Change
|
|
|
|
|
|
March 31, 2022
|
June 30, 2019
|
March 31, 2019
|
|
|
CASM (cents)
|
19.56
|
14.51
|
15.14
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Restructuring charges
|
0.01
|
—
|
—
|
|
|
|
Aircraft fuel and related
taxes
|
(4.04)
|
(3.19)
|
(3.17)
|
|
|
|
Third-party refinery
sales
|
(2.29)
|
(0.06)
|
(0.08)
|
|
|
|
Profit sharing
|
—
|
(0.72)
|
(0.35)
|
|
|
|
Delta Private Jets
adjustment
|
—
|
(0.06)
|
(0.05)
|
|
|
|
CASM-Ex
|
13.24
|
10.47
|
11.49
|
|
15 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
1Q22 vs 1Q19
% Change
|
|
(in
millions)
|
|
|
March 31, 2022
|
December 31, 2021
|
March 31, 2019
|
|
|
Operating
Expense
|
$
10,131
|
$
9,207
|
$
9,452
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
Restructuring charges
|
5
|
16
|
—
|
|
|
|
Aircraft fuel and related taxes
|
(2,092)
|
(1,577)
|
(1,978)
|
|
|
|
Third-party refinery sales
|
(1,187)
|
(1,040)
|
(48)
|
|
|
|
Special profit sharing payment
|
—
|
(108)
|
—
|
|
|
|
Profit sharing
|
—
|
—
|
(220)
|
|
|
|
Delta Private Jets adjustment
|
—
|
—
|
(35)
|
|
|
|
Non-Fuel
Cost
|
$
6,858
|
$
6,498
|
$
7,171
|
|
(4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel expense, adjusted and Average fuel price per gallon,
adjusted
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
|
March
31,
|
December
31,
|
March
31,
|
(in millions, except
per gallon data)
|
2022
|
2021
|
2019
|
|
|
2022
|
2021
|
2019
|
Total fuel
expense
|
$
2,092
|
$
1,577
|
$
1,978
|
|
|
$
2.79
|
$
2.09
|
$
2.06
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
MTM
adjustments and settlements on hedges
|
4
|
11
|
(8)
|
|
|
0.01
|
0.01
|
(0.01)
|
Delta Private Jets adjustment
|
—
|
—
|
(7)
|
|
|
—
|
—
|
(0.01)
|
Total fuel expense,
adjusted
|
$
2,097
|
$
1,588
|
$
1,963
|
|
|
$
2.79
|
$
2.10
|
$
2.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel expense percent
change 2022 compared to 2019:
|
7%
|
|
|
|
|
|
|
|
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)
|
|
March 31,
2022
|
Debt and finance lease
obligations
|
|
$
25,557
|
Plus: sale-leaseback
financing liabilities
|
|
|
2,221
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
193
|
Adjusted debt and
finance lease obligations
|
|
$
27,971
|
Plus: 7x last twelve
months' aircraft rent
|
|
3,138
|
Adjusted total
debt
|
|
$
31,109
|
Less: cash, cash
equivalents and short-term investments
|
|
(9,955)
|
Less: LGA restricted
cash
|
|
(291)
|
Adjusted net
debt
|
|
$
20,863
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
March 31,
2019
|
Debt and finance lease
obligations
|
|
$
10,764
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
|
(82)
|
Adjusted debt and
finance lease obligations
|
|
$
10,683
|
Plus: 7x last twelve
months' aircraft rent
|
|
2,809
|
Adjusted total
debt
|
|
$
13,492
|
Less: cash, cash
equivalents and short-term investments
|
|
(1,910)
|
Less: LGA restricted
cash
|
|
(1,383)
|
Adjusted net
debt
|
|
$
10,198
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/delta-air-lines-announces-march-quarter-2022-financial-results-301524480.html
SOURCE Delta Air Lines