Delivered industry-leading operational
performance and financial results in December
quarter
Generated record full year revenue and over
$5 billion of pre-tax income, a near
doubling over 2022
Guiding to 2024 free cash flow of
$3 to $4
billion, an improvement of up to $2
billion over 2023
Expect record March quarter revenue on
improving domestic environment and continued strength in
international demand, with solid profitability
ATLANTA, Jan. 12,
2024 /PRNewswire/ -- Delta Air Lines (NYSE: DAL)
today reported financial results for the December quarter and full
year 2023 and provided its outlook for the March quarter and full
year 2024. Highlights of the December quarter and full year
2023, including both GAAP and adjusted metrics, are on page six and
incorporated here.
"2023 was a great year for Delta with industry-leading
operational and financial performance. Our people and their
commitment to deliver unmatched service excellence for our
customers is at the foundation of Delta's success. We are
thrilled to recognize their outstanding work with $1.4 billion in profit sharing payments next
month," said Ed Bastian, Delta's
chief executive officer. "In 2024, demand for air travel
remains strong and our customer base is in a healthy financial
position with travel a top priority. We expect to grow full
year earnings to $6 to $7 per share and generate free cash flow of
$3 to $4
billion, further strengthening our financial
foundation."
December Quarter 2023 GAAP Financial
Results
- Operating revenue of $14.2
billion
- Operating income of $1.3 billion
with an operating margin of 9.3 percent
- Pre-tax income of $2.3 billion
with a pre-tax margin of 16.0 percent
- Earnings per share of $3.16
- Operating cash flow of $545
million
- Payments on debt and finance lease obligations of $361 million
December Quarter 2023 Adjusted Financial
Results
- Operating revenue of $13.7
billion, 11 percent higher than the December quarter
2022
- Operating income of $1.3 billion
with an operating margin of 9.7 percent
- Pre-tax income of $1.1 billion
with a pre-tax margin of 7.8 percent
- Earnings per share of $1.28
- Operating cash flow of $499
million
Full Year 2023 GAAP Financial
Results
- Operating revenue of $58.0
billion
- Operating income of $5.5 billion
with an operating margin of 9.5 percent
- Pre-tax income of $5.6 billion
with a pre-tax margin of 9.7 percent
- Earnings per share of $7.17
- Operating cash flow of $6.5
billion
- Payments on debt and finance lease obligations of $4.1 billion
- Total debt and finance lease obligations of $20.1 billion at year end
Full Year 2023 Adjusted Financial Results
- Operating revenue of $54.7
billion, 20 percent higher than the full year 2022
- Operating income of $6.3 billion
with an operating margin of 11.6 percent
- Pre-tax income of $5.2 billion
with a pre-tax margin of 9.5 percent
- Earnings per share of $6.25
- Operating cash flow of $7.2
billion
- Free cash flow of $2.0
billion
- Adjusted debt to EBITDAR of 3.0x, down from 5.0x at the end of
2022
- Return on invested capital of 13.4 percent, up 5 points over
2022
Financial Guidance1
|
FY 2024
Forecast
|
Earnings Per
Share
|
$6 - $7
|
Free Cash Flow
($B)
|
$3 - $4
|
Adjusted Debt to
EBITDAR
|
2x - 3x
|
|
|
|
1Q24
Forecast
|
Total Revenue
YoY
|
Up 3% - 6%
|
Operating
Margin
|
Approx. 5%
|
Earnings Per
Share
|
$0.25 -
$0.50
|
|
1Non-GAAP
measures; Refer to Non-GAAP reconciliations for historical
comparison figures
|
Additional metrics for financial modeling can be found in the
Supplemental Information section under Quarterly Results on
ir.delta.com.
Revenue Environment and Outlook
"With industry-leading operational performance and best-in-class
service delivered by our people, more customers than ever are
choosing Delta. In 2023 we delivered a record $54.7 billion in revenue, 20 percent higher
than 2022. Premium and non-ticket revenue has
reached 55 percent of total revenue, supporting Delta's
differentiated financial results from the industry," said
Glen Hauenstein, Delta's
president. "With strong demand for international travel and a
positive inflection in the domestic environment, we expect March
quarter adjusted revenue to be 3 to 6 percent higher than the prior
year."
"With our outlook for continued revenue growth, we expect March
quarter unit revenues to be flat to down 3 percent over 2023," Glen
said. "The midpoint of this outlook implies a two-point
sequential improvement in unit revenues on a year-over-year basis.
The March quarter includes a headwind from higher
international mix, the normalization of travel credit utilization
and lapping a competitor's operational challenges in the year ago
period."
- Industry-leading operational results with strong leisure and
business demand continuing: Delta delivered record December
quarter revenue with the highest holiday travel volumes in its
history. Operational performance was best-in-class with leading
system-wide completion factor and on-time performance. Corporate
sales accelerated into year end, including double-digit
year-over-year growth in the month of December. Technology and
Financial Services led momentum for the December quarter, with
Media and Auto sectors seeing notable traction following strike
resolutions. Recent corporate survey results indicate that 93
percent of companies surveyed expect their travel volumes to
increase sequentially or stay the same in the March quarter and
into 2024.
- International demand remains strong: International
passenger revenue was 25 percent higher versus the December quarter
2022 with double-digit revenue and capacity growth in the
Transatlantic, Pacific and Latin entities. Transatlantic
performance led with passenger unit revenues up 9 percent versus
the December quarter 2022. Full year results generated record
margins across all three international regions.
- Premium and Loyalty driving revenue diversification:
Premium revenue grew 15 percent versus the December quarter 2022 on
record paid load factors, outperforming Main Cabin. Loyalty revenue
improved 11 percent, driven by strong co-brand spend growth.
Remuneration from American Express for the December quarter was
$1.7 billion, approximately 11
percent higher than the December quarter 2022, and full year
remuneration of $6.8 billion grew 22
percent year-over-year. For the full year, diversified revenue
streams, including Loyalty, Premium, Cargo, and MRO comprised 55
percent of total revenues.
Cost Performance and Outlook
"We closed the year strong, with full-year operating margin
expanding by four points to 11.6 percent." said Dan Janki, Delta's chief financial
officer. "In 2024 we are entering a period of optimization
and expect to unlock efficiencies that will fund continued
investment in our people, our operation and our customers. We
expect to deliver earnings and cash flow growth for the full year,
with non-fuel unit costs up low-single digits over 2023."
December Quarter 2023 Cost
Performance
- Operating expense of $12.9
billion and adjusted operating expense of $12.3 billion
- Adjusted non-fuel costs of $9.1
billion
- Non-fuel CASM was 1.1 percent higher year-over-year
- Adjusted fuel expense of $2.9
billion was up 6 percent year-over-year
- Adjusted fuel price of $3.00 per
gallon declined 6 percent year-over-year with a breakeven refinery
contribution following the planned maintenance at the refinery
facilities
- Fuel efficiency, defined as gallons per 1,000 ASMs, was 14.3, a
2 percent improvement year-over-year
Full Year 2023 Cost Performance
- Operating expense of $52.5
billion and adjusted operating expense of $48.3 billion
- Adjusted non-fuel costs of $35.8
billion
- Non-fuel CASM was 2.3 percent higher year-over-year
- Adjusted fuel expense of $11.1
billion was down 3 percent year-over-year
- Adjusted fuel price of $2.83 per
gallon declined 16 percent year-over-year and includes a refinery
benefit of 10ยข per gallon
- Fuel efficiency, defined as gallons per 1,000 ASMs, was 14.4, a
1.4 percent improvement year-over-year
Balance Sheet, Cash and Liquidity
"Delta delivered $2 billion of
free cash flow in the year, while reinvesting in the business and
repaying $4.1 billion of gross
debt. During the year, we reduced leverage to 3x and
reinstated the quarterly dividend," Janki said. "We expect
2024 free cash flow of $3 to
$4 billion, an up to $2 billion improvement driven by continued
earnings growth, lower capital expenditures and a higher mix of
cash sales. With strong cash generation, we expect to
continue reducing debt and growing our unencumbered asset base,
progressing our balance sheet towards investment grade."
- Adjusted net debt of $21.4
billion at December quarter end, a reduction of $879 million from the end of 2022
- Payments on debt and finance lease obligations for the full
year of $4.1 billion
- Weighted average interest rate of 4.6 percent with 90 percent
fixed rate debt and 10 percent variable rate debt
- Borrowed $878 million in
connection with tax-exempt bond financing to provide a majority of
funding to complete the generational terminal transformation at
LaGuardia airport
- Adjusted operating cash flow in the December quarter of
$499 million and gross capital
expenditures of $1.2 billion
- Full year adjusted operating cash flow of $7.2 billion and gross capital expenditures of
$5.3 billion, resulting in
$2.0 billion free cash flow
- Air Traffic Liability ended the year at $7.0 billion
- Liquidity* of $6.8 billion at
year-end, including $2.9 billion in
undrawn revolver capacity
*Includes cash and cash
equivalents, short-term investments and undrawn revolving credit
facilities
|
Fleet Update
Today, Delta announced it reached an agreement with Airbus to
purchase twenty A350-1000s, with options for twenty additional
widebody aircraft. Deliveries of the aircraft are scheduled
to begin in 2026. In addition to improved fuel efficiency,
these aircraft will add higher gauge, more premium seating and
greater cargo capabilities to the international widebody
fleet. The company also announced a service agreement with
Rolls Royce to service its Trent XWB-97 engines. The order
for the aircraft is within Delta's previously announced capital
expenditure and capacity targets.
December Quarter and Full Year 2023
Highlights
Operations, Network and Fleet
- Earned the Cirium Platinum Award for operational excellence for
the third consecutive year, and named the most on-time airline in
North America, a demonstration of
Delta's commitment to operational performance and minimizing
passenger disruption
- Operated the most reliable airline during the
quarter1 with a completion factor of 99.8%, and for the
full year, Delta's network system ranked first among competitors in
on-time arrivals2
- Took delivery of 15 aircraft in the December quarter, bringing
full year aircraft deliveries to 43, including 27 A321neo, 9
A220-300 and 7 A330-900 aircraft
- Building on Delta's partnership with LATAM, launched new and
returning service to Rio de
Janeiro from Delta's Atlanta and New York-JFK hubs
- Announced daily nonstop service from Seattle to Taipei beginning June
2024
- Launched a long-term codeshare agreement with EL AL
Israel airlines in December with
travel beginning January 1st,
improving connection for customers flying between the Americas and
Tel-Aviv
- Announced the launch of Delta's codeshare relationship with
airBaltic, providing customers with convenient connections and more
flexible booking options between North
America and Latvia
Culture and People
- Delta people earned $1.4 billion
in profit sharing and $53 million in
Shared Rewards for the year, recognizing the outstanding
performance of Delta's 100,000 employees
- Delta ranked No. 13 in the U.S. on Glassdoor's Best Places to
Work list, the 8th year in a row the company has been named a Best
Place to Work by Glassdoor
- Delta volunteers helped build four Habitat for Humanity homes,
bringing the total built or rehabbed by Delta to 283 across 13
countries
- Building on Delta's Propel Program designed to develop the next
generation of pilots, welcomed 61 employees to the program in the
year
- Delta celebrated 19 years in partnership with Marine Toys for
Tots, presenting over 1,200 bikes, 1,200 toys and a $50,000 contribution to the organization at its
annual holiday event at Delta TechOps. Delta has contributed
$700,000 annually to Toys for Tots
system wide.
Customer Experience and Loyalty
- Engagement with Delta and the SkyMiles program reached an
all-time high, with record membership growth, co-brand spend and
revenue from travel-adjacent services
- Named the No. 1 airline in the Business Travel News Airline
survey for the 13th consecutive year, citing Delta's customer
service, distribution channels, expansive network and quality of
communications
- Delta's LAX Sky Club was named North
America's Best Airline Lounge for 2023 by Business
Traveler
- Added Walmart+ to the Delta Sync suite of partners to offer
customers the power and convenience of shopping from the air
- Opened the Window Seat Shop at JFK during the holiday season,
where SkyMiles members can shop artisan gifts from small businesses
across Delta's global network while earning Medallion Qualification
Dollars (MQDs) toward 2025 status
- The Fly Delta App crossed 1 billion in annual visits in 2023,
up 25% year-over-year
Environmental, Social and Governance
- Improved fuel efficiency through fleet renewal and saved more
than 8 million gallons of fuel year-over-year through other
cross-divisional efforts, coordinated through Delta's Carbon
Council. Initiatives include catering service weight reduction and
enhanced aircraft routing
- Delta retired the CRJ-200, its least fuel-efficient aircraft
type, making Delta the only major U.S. airline with premium seating
on every flight
- Began final testing of paper cups onboard, with the opportunity
to eliminate nearly seven million pounds of single-use plastics
onboard annually once fully implemented system wide
- Recognized by Forbes in three
of its annual lists of America's Best Employers for Women,
America's Best Employers for Veterans and America's Best Employers
for Diversity
- Identified by Newsweek as one of America's Greatest Workplaces
for LGBTQ+ and for Veterans
- Delta led the formation of Americans for Clean Aviation Fuels,
a coalition of the largest industrial sectors in America focused on
promoting the economic benefits of building a robust market for
Sustainable Aviation Fuel (SAF)
- Delta continues to make progress increasing representation of
women, Black talent and Latin and Hispanic talent in management
roles across the company, as outlined in the 2023 Close the Gap
update
1FlightStats
preliminary data for Delta flights system wide and for Delta's
competitive set (AA, UA, B6, AS, WN, and DL), from October 1 -
December 31, 2023.
|
2FlightStats
preliminary data for Delta flights system wide and for Delta's
competitive set (AA, UA, B6, AS, WN, and DL), from January 1 -
December 31, 2023. On-time is defined as A0.
|
December Quarter and Full Year 2023
Results
December quarter and full year results have been adjusted
primarily for the third-party refinery sales, unrealized gains
on investments, one-time expenses related to the new pilot
agreement and loss on extinguishment of debt as described in the
reconciliations in Note A.
|
GAAP
|
Adjusted
|
GAAP
|
Adjusted
|
($ in millions except
per share and unit costs)
|
4Q23
|
4Q22
|
4Q23
|
4Q22
|
FY23
|
FY22
|
FY23
|
FY22
|
Operating
income
|
1,323
|
1,470
|
1,330
|
1,422
|
5,521
|
3,661
|
6,334
|
3,566
|
Operating
margin
|
9.3 %
|
10.9 %
|
9.7 %
|
11.6 %
|
9.5 %
|
7.2 %
|
11.6 %
|
7.8 %
|
Pre-tax
income
|
2,275
|
1,120
|
1,064
|
1,242
|
5,608
|
1,914
|
5,220
|
2,703
|
Pre-tax
margin
|
16.0 %
|
8.3 %
|
7.8 %
|
10.1 %
|
9.7 %
|
3.8 %
|
9.5 %
|
5.9 %
|
Net income
|
2,037
|
828
|
826
|
950
|
4,609
|
1,318
|
4,020
|
2,053
|
Diluted earnings per
share
|
3.16
|
1.29
|
1.28
|
1.48
|
7.17
|
2.06
|
6.25
|
3.20
|
Operating
revenue
|
14,223
|
13,435
|
13,661
|
12,292
|
58,048
|
50,582
|
54,669
|
45,605
|
Total revenue per
available seat mile (TRASM) (cents)
|
20.78
|
22.58
|
19.95
|
20.66
|
21.34
|
21.69
|
20.10
|
19.55
|
Operating
expense
|
12,900
|
11,965
|
12,330
|
10,871
|
52,527
|
46,921
|
48,335
|
42,039
|
Cost per available seat
mile (CASM) (cents)
|
18.84
|
20.11
|
13.29
|
13.14
|
19.31
|
20.12
|
13.17
|
12.87
|
Fuel expense
|
2,941
|
2,849
|
2,933
|
2,778
|
11,069
|
11,482
|
11,121
|
11,453
|
Average fuel price per
gallon
|
3.01
|
3.28
|
3.00
|
3.20
|
2.82
|
3.36
|
2.83
|
3.36
|
Operating cash
flow
|
545
|
1,189
|
499
|
1,211
|
6,464
|
6,363
|
7,216
|
6,210
|
Capital
expenditures
|
1,602
|
2,200
|
1,201
|
2,113
|
5,323
|
6,366
|
5,305
|
6,008
|
Total debt and finance
lease obligations
|
20,054
|
23,030
|
|
|
20,054
|
23,030
|
|
|
Adjusted net
debt
|
|
|
21,424
|
22,303
|
|
|
21,424
|
22,303
|
About Delta Air Lines Through the warmth
and service of Delta Air Lines (NYSE: DAL) people and the power of
innovation, Delta never stops looking for ways to make every trip
feel tailored to every customer. 100,000 Delta people lead
the way in delivering a world-class customer experience on over
4,000 daily flights to more than 280 destinations on six
continents, connecting people to places and to each other.
Delta served more than 190 million customers in 2023 --
safely, reliably and with industry-leading customer service
innovation โ and was again recognized as North America's most on-time airline. We
remain committed to ensuring that the future of travel is
connected, personalized and enjoyable. Our people's genuine and
enduring motivation is to make every customer feel welcomed and
respected across every point of their journey with us.
Headquartered in Atlanta,
Delta operates significant hubs and key markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los
Angeles, Mexico City,
Minneapolis-St. Paul, New York-JFK
and LaGuardia, Paris-Charles de
Gaulle, Salt Lake City,
Santiago (Chile), Sao
Paulo, Seattle,
Seoul-Incheon and Tokyo.
As the leading global airline, Delta's mission to connect the
world creates opportunities, fosters understanding and expands
horizons by connecting people and communities to each other and to
their own potential.
Powered by innovative and strategic partnerships with
Aeromexico, Air France-KLM, China
Eastern, Korean Air, LATAM, Virgin Atlantic and WestJet,
Delta brings more choice and competition to customers
worldwide. Delta's premium product line is elevated by its
unique partnership with Wheels Up Experience.
Delta is America's most-awarded airline thanks to the
dedication, passion and professionalism of its people. It has
been recognized by Cirium for operational excellence, as the top
U.S. airline by the Wall Street Journal, among Fast Company's most
innovative companies, the World's Most Admired Airline according to
Fortune, as one of Glassdoor's Best Places to Work, and a top
employer for diversity, veterans and best workplaces for women by
Forbes.
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 impact of
incurring significant debt in response to the COVID-19 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,
which could compromise the data stored within them, as well as
failure to comply with ever-evolving global privacy and security
regulatory obligations or adequately address increasing customer
focus on privacy issues and data security; 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 on our business of seasonality
and other factors beyond our control, including severe weather
conditions, natural disasters or other environmental events,
including from the impact of climate change; changes in the cost of
aircraft fuel; extended disruptions in the supply of aircraft fuel,
including from Monroe Energy, LLC ("Monroe"), a wholly-owned subsidiary of Delta;
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; significant
damage to our reputation and brand, including from exposure to
significant adverse publicity or inability to achieve certain
sustainability goals; our ability to retain senior management and
other key employees, and to maintain our company culture; disease
outbreaks, such as the COVID-19 pandemic or similar public health
threats, and measures implemented to combat them; 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 but not limited to increased regulation to
reduce emissions and other risks associated with climate change,
and the cost of compliance with more stringent environmental
regulations; 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, 2022. 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
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
(in millions, except
per share data)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$ 12,174
|
$ 10,889
|
$
1,285
|
12 %
|
|
$ 48,909
|
$ 40,218
|
$
8,691
|
22 %
|
Cargo
|
188
|
248
|
(60)
|
(24) %
|
|
723
|
1,050
|
(327)
|
(31) %
|
Other
|
1,861
|
2,298
|
(437)
|
(19) %
|
|
8,416
|
9,314
|
(898)
|
(10) %
|
Total operating
revenue
|
14,223
|
13,435
|
788
|
6 %
|
|
58,048
|
50,582
|
7,466
|
15 %
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
3,769
|
3,071
|
698
|
23 %
|
|
14,607
|
11,902
|
2,705
|
23 %
|
Aircraft fuel and
related taxes
|
2,941
|
2,849
|
92
|
3 %
|
|
11,069
|
11,482
|
(413)
|
(4) %
|
Ancillary businesses
and refinery
|
745
|
1,308
|
(563)
|
(43) %
|
|
4,172
|
5,756
|
(1,584)
|
(28) %
|
Contracted
services
|
1,033
|
920
|
113
|
12 %
|
|
4,041
|
3,345
|
696
|
21 %
|
Landing fees and other
rents
|
683
|
570
|
113
|
20 %
|
|
2,563
|
2,181
|
382
|
18 %
|
Aircraft maintenance
materials and outside repairs
|
572
|
508
|
64
|
13 %
|
|
2,432
|
1,982
|
450
|
23 %
|
Depreciation and
amortization
|
610
|
554
|
56
|
10 %
|
|
2,341
|
2,107
|
234
|
11 %
|
Passenger commissions
and other selling expenses
|
563
|
507
|
56
|
11 %
|
|
2,334
|
1,891
|
443
|
23 %
|
Regional carrier
expense
|
537
|
504
|
33
|
7 %
|
|
2,200
|
2,051
|
149
|
7 %
|
Passenger
service
|
442
|
403
|
39
|
10 %
|
|
1,750
|
1,453
|
297
|
20 %
|
Profit
sharing
|
299
|
272
|
27
|
10 %
|
|
1,383
|
563
|
820
|
NM
|
Pilot agreement and
related expenses
|
โ
|
โ
|
โ
|
โ %
|
|
864
|
โ
|
864
|
NM
|
Aircraft
rent
|
137
|
128
|
9
|
7 %
|
|
532
|
508
|
24
|
5 %
|
Other
|
569
|
371
|
198
|
53 %
|
|
2,239
|
1,700
|
539
|
32 %
|
Total operating
expense
|
12,900
|
11,965
|
935
|
8 %
|
|
52,527
|
46,921
|
5,606
|
12 %
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
1,323
|
1,470
|
(147)
|
(10) %
|
|
5,521
|
3,661
|
1,860
|
51 %
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Income/(Expense):
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(207)
|
(238)
|
31
|
(13) %
|
|
(834)
|
(1,029)
|
195
|
(19) %
|
Gain/(loss) on
investments, net
|
1,218
|
(170)
|
1,388
|
NM
|
|
1,263
|
(783)
|
2,046
|
NM
|
Loss on extinguishment
of debt
|
โ
|
โ
|
โ
|
โ %
|
|
(63)
|
(100)
|
37
|
(37) %
|
Pension and related
(expense)/benefit
|
(61)
|
74
|
(135)
|
NM
|
|
(244)
|
292
|
(536)
|
NM
|
Miscellaneous,
net
|
2
|
(16)
|
18
|
NM
|
|
(35)
|
(127)
|
92
|
(72) %
|
Total
non-operating income/(expense), net
|
952
|
(350)
|
1,302
|
NM
|
|
87
|
(1,747)
|
1,834
|
NM
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
2,275
|
1,120
|
1,155
|
NM
|
|
5,608
|
1,914
|
3,694
|
NM
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
(238)
|
(292)
|
54
|
(18) %
|
|
(999)
|
(596)
|
(403)
|
68 %
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
2,037
|
$
828
|
$
1,209
|
NM
|
|
$
4,609
|
$
1,318
|
$
3,291
|
NM
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
3.19
|
$
1.30
|
|
|
|
$
7.21
|
$
2.07
|
|
|
Diluted Earnings Per
Share
|
$
3.16
|
$
1.29
|
|
|
|
$
7.17
|
$
2.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
639
|
638
|
|
|
|
639
|
638
|
|
|
Diluted Weighted
Average Shares Outstanding
|
644
|
641
|
|
|
|
643
|
641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
(in
millions)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Ticket - Main
cabin
|
$
5,939
|
$
5,398
|
$
541
|
10 %
|
|
$ 24,477
|
$ 20,396
|
$
4,081
|
20 %
|
Ticket - Premium
products
|
4,856
|
4,223
|
633
|
15 %
|
|
19,119
|
15,230
|
3,889
|
26 %
|
Loyalty travel
awards
|
915
|
825
|
90
|
11 %
|
|
3,462
|
2,898
|
564
|
19 %
|
Travel-related
services
|
464
|
443
|
21
|
5 %
|
|
1,851
|
1,694
|
157
|
9 %
|
Passenger
revenue
|
$ 12,174
|
$ 10,889
|
$
1,285
|
12 %
|
|
$ 48,909
|
$ 40,218
|
$
8,691
|
22 %
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
(in
millions)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Refinery
|
$
563
|
$
1,142
|
$
(579)
|
(51) %
|
|
$
3,379
|
$
4,977
|
$ (1,598)
|
(32) %
|
Loyalty
program
|
802
|
720
|
82
|
11 %
|
|
3,093
|
2,597
|
496
|
19 %
|
Ancillary
businesses
|
183
|
182
|
1
|
1 %
|
|
840
|
846
|
(6)
|
(1) %
|
Miscellaneous
|
313
|
254
|
59
|
23 %
|
|
1,104
|
894
|
210
|
23 %
|
Other
revenue
|
$
1,861
|
$
2,298
|
$
(437)
|
(19) %
|
|
$
8,416
|
$
9,314
|
$
(898)
|
(10) %
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
4Q23 vs
4Q22
|
Revenue
|
|
4Q23
($M)
|
|
Change
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
8,769
|
|
7 %
|
(4) %
|
(2) %
|
12 %
|
Atlantic
|
|
1,900
|
|
23 %
|
9 %
|
6 %
|
13 %
|
Latin
America
|
|
952
|
|
18 %
|
(7) %
|
(7) %
|
28 %
|
Pacific
|
|
553
|
|
45 %
|
1 %
|
1 %
|
44 %
|
Passenger
Revenue
|
$
|
12,174
|
|
12 %
|
(3) %
|
(2) %
|
15 %
|
Cargo
Revenue
|
|
188
|
|
(24) %
|
|
|
|
Other
Revenue
|
|
1,861
|
|
(19) %
|
|
|
|
Total
Revenue
|
$
|
14,223
|
|
6 %
|
(8) %
|
|
|
Third Party
Refinery Sales
|
|
(563)
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
13,661
|
|
11 %
|
(3) %
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
Statistical
Summary
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2023
|
2022
|
Change
|
|
2023
|
2022
|
Change
|
Revenue passenger miles
(millions)
|
57,655
|
50,476
|
14
|
%
|
|
232,241
|
195,480
|
19
|
%
|
Available seat miles
(millions)
|
68,462
|
59,506
|
15
|
%
|
|
272,033
|
233,226
|
17
|
%
|
Passenger mile yield
(cents)
|
21.12
|
21.57
|
(2)
|
%
|
|
21.06
|
20.57
|
2
|
%
|
Passenger revenue per
available seat mile (cents)
|
17.78
|
18.30
|
(3)
|
%
|
|
17.98
|
17.24
|
4
|
%
|
Total revenue per
available seat mile (cents)
|
20.78
|
22.58
|
(8)
|
%
|
|
21.34
|
21.69
|
(2)
|
%
|
TRASM, adjusted - see
Note A (cents)
|
19.95
|
20.66
|
(3)
|
%
|
|
20.10
|
19.55
|
3
|
%
|
Cost per available seat
mile (cents)
|
18.84
|
20.11
|
(6)
|
%
|
|
19.31
|
20.12
|
(4)
|
%
|
CASM-Ex - see
Note A (cents)
|
13.29
|
13.14
|
1.1
|
%
|
|
13.17
|
12.87
|
2.3
|
%
|
Passenger load
factor
|
84 %
|
85 %
|
(1)
|
pt
|
|
85 %
|
84 %
|
1
|
pt
|
Fuel gallons consumed
(millions)
|
978
|
869
|
13
|
%
|
|
3,926
|
3,412
|
15
|
%
|
Average price per fuel
gallon
|
$
3.01
|
$
3.28
|
(8)
|
%
|
|
$
2.82
|
$
3.36
|
(16)
|
%
|
Average price per fuel
gallon, adjusted - see Note A
|
$
3.00
|
$
3.20
|
(6)
|
%
|
|
$
2.83
|
$
3.36
|
(16)
|
%
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
(in
millions)
|
2023
|
2022
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net Income
|
$
2,037
|
$
828
|
|
Depreciation and
amortization
|
610
|
554
|
|
(Gain) loss on fair
value investments
|
(1,220)
|
165
|
|
Changes in air traffic
liability
|
(1,694)
|
(837)
|
|
Changes in profit
sharing
|
299
|
272
|
|
Changes in balance
sheet and other, net
|
513
|
207
|
|
Net cash provided by
operating activities
|
545
|
1,189
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and equipment
additions:
|
|
|
|
Flight equipment,
including advance payments
|
(1,085)
|
(1,643)
|
|
Ground property and
equipment, including technology
|
(517)
|
(557)
|
|
Purchase of short-term
investments
|
โ
|
(2,129)
|
|
Redemption of
short-term investments
|
1,060
|
221
|
|
Acquisition of
strategic investments
|
โ
|
(717)
|
|
Other, net
|
7
|
89
|
|
Net cash used in
investing activities
|
(535)
|
(4,736)
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from long-term
obligations
|
878
|
โ
|
|
Payments on debt and
finance lease obligations
|
(361)
|
(285)
|
|
Cash
dividends
|
(64)
|
โ
|
|
Other, net
|
(37)
|
(20)
|
|
Net cash provided
by/(used in) financing activities
|
416
|
(305)
|
|
|
|
|
|
Net
Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash
Equivalents
|
426
|
(3,852)
|
|
Cash, cash equivalents
and restricted cash equivalents at beginning of period
|
2,969
|
7,325
|
|
Cash, cash equivalents
and restricted cash equivalents at end of period
|
$
3,395
|
$
3,473
|
|
|
|
|
|
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
|
$
2,741
|
$
3,266
|
|
Restricted cash included in
prepaid expenses and other
|
199
|
138
|
|
Other
assets:
|
|
|
|
Restricted cash included in
other noncurrent assets
|
455
|
69
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
3,395
|
$
3,473
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated Balance
Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
(in
millions)
|
2023
|
|
2022
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
2,741
|
|
$
3,266
|
|
Short-term
investments
|
1,127
|
|
3,268
|
|
Accounts receivable,
net
|
3,130
|
|
3,176
|
|
Fuel inventory,
expendable parts and supplies inventories, net
|
1,314
|
|
1,424
|
|
Prepaid expenses and
other
|
1,847
|
|
1,877
|
|
Total current
assets
|
10,159
|
|
13,011
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and equipment,
net
|
35,486
|
|
33,109
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
6,926
|
|
7,036
|
|
Goodwill
|
9,753
|
|
9,753
|
|
Identifiable
intangibles, net
|
5,983
|
|
5,992
|
|
Equity
investments
|
3,457
|
|
2,128
|
|
Other noncurrent
assets
|
1,734
|
|
1,259
|
|
Total other
assets
|
27,853
|
|
26,168
|
Total assets
|
$
73,498
|
|
$
72,288
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
2,983
|
|
$
2,359
|
|
Current maturities of
operating leases
|
746
|
|
714
|
|
Air traffic
liability
|
7,044
|
|
8,160
|
|
Accounts
payable
|
4,516
|
|
5,106
|
|
Accrued salaries and
related benefits
|
4,564
|
|
3,288
|
|
Loyalty program
deferred revenue
|
3,908
|
|
3,434
|
|
Fuel card
obligation
|
1,100
|
|
1,100
|
|
Other accrued
liabilities
|
1,616
|
|
1,779
|
|
Total current
liabilities
|
26,477
|
|
25,940
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
17,071
|
|
20,671
|
|
Pension, postretirement
and related benefits
|
3,744
|
|
3,707
|
|
Loyalty program
deferred revenue
|
4,512
|
|
4,448
|
|
Noncurrent operating
leases
|
6,404
|
|
6,866
|
|
Deferred income taxes,
net
|
874
|
|
24
|
|
Other noncurrent
liabilities
|
3,440
|
|
4,050
|
|
Total noncurrent
liabilities
|
36,045
|
|
39,766
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
10,976
|
|
6,582
|
Total liabilities and
stockholders' equity
|
$
73,498
|
|
$
72,288
|
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 that are made to provide comparability
between the reported periods, if applicable, and for the reasons
indicated below:
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.
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.
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.
During 2022, we recognized adjustments to certain of those
restructuring charges, representing changes in our estimates.
One-time pilot agreement expenses.
In the March 2023 quarter, Delta
pilots ratified a new four-year Pilot Working Agreement effective
January 1, 2023. The agreement
included a provision for a one-time payment made upon ratification
in the March 2023 quarter of
$735 million. Additionally, we
recorded adjustments to other benefit-related items of
approximately $130 million. Adjusting
for these expenses allows investors to better understand and
analyze our core cost performance.
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 certain companies, particularly those
without publicly-traded shares. During the December 2023 quarter, Delta recorded an
$848 million MTM gain from our
investment in Wheels Up based on the closing price of its shares at
the end of the quarter as traded on the New York Stock Exchange.
Adjusting for these gains/losses allows investors to better
understand and analyze our core operational performance in the
periods shown.
Loss on extinguishment of debt. This
adjustment relates to early termination of a portion of our debt.
Adjusting for these losses allows investors to better understand
and analyze our core operational performance in the periods
shown.
Operating Revenue, adjusted and
Revenue Per Available Seat Mile ("TRASM"),
adjusted
|
|
|
Three Months
Ended
|
|
4Q23 vs 4Q22
% Change
|
(in
millions)
|
December 31,
2023
|
March 31,
2023
|
December 31,
2022
|
|
Operating
revenue
|
$
14,223
|
$
12,759
|
$
13,435
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(563)
|
(916)
|
(1,142)
|
|
|
Operating revenue,
adjusted
|
$
13,661
|
$
11,842
|
$
12,292
|
|
11 %
|
|
Year
Ended
|
|
%
Change
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
|
Operating
revenue
|
$
58,048
|
$
50,582
|
|
|
Adjusted
for:
|
|
|
|
|
Third-party refinery
sales
|
(3,379)
|
(4,977)
|
|
|
Operating revenue,
adjusted
|
$
54,669
|
$
45,605
|
|
20 %
|
|
Three Months
Ended
|
|
4Q23 vs
4Q22
% Change
|
|
December 31,
2023
|
March 31,
2023
|
December 31,
2022
|
|
TRASM
(cents)
|
20.78
|
20.80
|
22.58
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(0.82)
|
(1.49)
|
(1.92)
|
|
|
TRASM,
adjusted
|
19.95
|
19.30
|
20.66
|
|
(3) %
|
|
Year
Ended
|
|
December 31,
2023
|
December 31,
2022
|
TRASM
(cents)
|
21.34
|
21.69
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(1.24)
|
(2.13)
|
TRASM,
adjusted
|
20.10
|
19.55
|
Pre-Tax Income, Net
Income, and Diluted Earnings per Share, adjusted
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
December 31,
2023
|
|
December 31,
2023
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
2,275
|
$
(238)
|
$
2,037
|
|
$
3.16
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
7
|
|
|
|
|
MTM adjustments on
investments
|
(1,218)
|
|
|
|
|
Non-GAAP
|
$
1,064
|
$
(238)
|
$
826
|
|
$
1.28
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
December 31,
2022
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
1,120
|
$
(292)
|
$
828
|
|
$
1.29
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
70
|
|
|
|
|
MTM adjustments on
investments
|
170
|
|
|
|
|
Restructuring
charges
|
(118)
|
|
|
|
|
Non-GAAP
|
$
1,242
|
$
(292)
|
$
950
|
|
$
1.48
|
|
Year
Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2023
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
5,608
|
$
(999)
|
$
4,609
|
|
$
7.17
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(52)
|
|
|
|
|
MTM adjustments on
investments
|
(1,263)
|
|
|
|
|
Loss on extinguishment
of debt
|
63
|
|
|
|
|
One-time pilot
agreement expenses
|
864
|
|
|
|
|
Non-GAAP
|
$
5,220
|
$
(1,200)
|
$
4,020
|
|
$
6.25
|
|
|
|
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2022
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
1,914
|
$
(596)
|
$
1,318
|
|
$
2.06
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
29
|
|
|
|
|
MTM adjustments on
investments
|
784
|
|
|
|
|
Loss on extinguishment
of debt
|
100
|
|
|
|
|
Restructuring
charges
|
(124)
|
|
|
|
|
Non-GAAP
|
$
2,703
|
$
(650)
|
$
2,053
|
|
$
3.20
|
Free Cash Flow. We present free cash flow because
management believes this metric is 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 also used internally as a component of our 2023 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, (iii) net cash flows related to
certain airport construction projects and other, (iv) financed
aircraft acquisitions and (v) pilot agreement payment. 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.
Certain cash flows related to our investments in and related
transactions with other airlines and associated companies 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
adjustment reflects aircraft deliveries that are leased as capital
expenditures. The adjustment is based on their original contractual
purchase price or an estimate of the aircraft's fair value and
provides a more meaningful view of our investing activities.
Pilot agreement payment. In March 2023, Delta pilots ratified a new four-year
Pilot Working Agreement effective January 1,
2023. The agreement includes a provision for a one-time
payment upon ratification in the March
2023 quarter of $735 million.
We adjust for this item to provide investors a better understanding
of our recurring free cash flow generated by our operations.
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
Net cash provided by
operating activities
|
$
6,464
|
Net cash used in
investing activities
|
(3,148)
|
Adjusted
for:
|
|
Net redemptions of
short-term investments
|
(2,235)
|
Strategic investments
and related
|
152
|
Net cash flows related
to certain airport construction projects and other
|
496
|
Financed aircraft
acquisitions
|
(461)
|
Pilot agreement
payment
|
735
|
Free cash
flow
|
$
2,003
|
Operating Income,
adjusted
|
|
|
Three Months
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
income
|
$
1,323
|
$
1,470
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
7
|
70
|
Restructuring
charges
|
โ
|
(118)
|
Operating income,
adjusted
|
$
1,330
|
$
1,422
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
Income
|
$
5,521
|
$
3,661
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
(52)
|
29
|
One-time pilot
agreement expenses
|
864
|
โ
|
Restructuring
charges
|
โ
|
(124)
|
Operating income,
adjusted
|
$
6,334
|
$
3,566
|
Operating Margin,
adjusted
|
|
|
Three Months
Ended
|
|
December 31,
2023
|
December 31,
2022
|
Operating
margin
|
9.3 %
|
10.9 %
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
0.4
|
1.0
|
MTM adjustments and
settlements on hedges
|
0.1
|
0.5
|
Restructuring
charges
|
โ
|
(0.9)
|
Operating margin,
adjusted
|
9.7 %
|
11.6 %
|
|
Year
Ended
|
|
December 31,
2023
|
December 31,
2022
|
Operating
margin
|
9.5 %
|
7.2 %
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
0.7
|
0.8
|
MTM adjustments and
settlements on hedges
|
(0.1)
|
0.1
|
One-time pilot
agreement expenses
|
1.5
|
โ
|
Restructuring
charges
|
โ
|
(0.2)
|
Operating margin,
adjusted
|
11.6 %
|
7.8 %
|
|
Three Months
Ended
|
|
December 31,
2023
|
December 31,
2022
|
Pre-tax
margin
|
16.0 %
|
8.3 %
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
0.3
|
0.9
|
MTM adjustments and
settlements on hedges
|
0.1
|
0.5
|
MTM adjustments on
investments
|
(8.6)
|
1.3
|
Restructuring
charges
|
โ
|
(0.9)
|
Pre-tax margin,
adjusted
|
7.8 %
|
10.1 %
|
|
Year
Ended
|
|
December 31,
2023
|
December 31,
2022
|
Pre-tax
margin
|
9.7 %
|
3.8 %
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
0.6
|
0.6
|
MTM adjustments and
settlements on hedges
|
(0.1)
|
0.1
|
MTM adjustments on
investments
|
(2.2)
|
1.5
|
Loss on extinguishment
of debt
|
0.1
|
0.2
|
One-time pilot
agreement expenses
|
1.5
|
โ
|
Restructuring
charges
|
โ
|
(0.2)
|
Pre-tax margin,
adjusted
|
9.5 %
|
5.9 %
|
Operating Cash Flow, adjusted. We present operating cash
flow, adjusted because management believes adjusting for the
following items provides a more meaningful measure for
investors:
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. 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 operating cash
flow that is core to our operations in the periods shown.
Pilot agreement payment. In March 2023, Delta pilots ratified a new four-year
Pilot Working Agreement effective January 1,
2023. The agreement includes a provision for a one-time
payment upon ratification in the March
2023 quarter of $735 million.
We adjust for this item to provide investors a better understanding
of our recurring free cash flow generated by our operations.
|
Three Months
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Net cash provided by
operating activities
|
$
545
|
$
1,189
|
Adjusted
for:
|
|
|
Net cash flows related
to certain airport construction projects and other
|
(45)
|
22
|
Net cash provided by
operating activities, adjusted
|
$
499
|
$
1,211
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Net cash provided by
operating activities
|
$
6,464
|
$
6,363
|
Adjusted
for:
|
|
|
Net cash flows related
to certain airport construction projects and other
|
17
|
(154)
|
Pilot agreement
payment
|
735
|
โ
|
Net cash provided by
operating activities, adjusted
|
$
7,216
|
$
6,210
|
Adjusted Debt to Earnings Before Interest, Taxes,
Depreciation, Amortization and Rent ("EBITDAR"). We present
adjusted debt to EBITDAR because management believes this metric is
helpful to investors in assessing the company's overall debt
profile. Adjusted debt includes LGA bonds and operating lease
liabilities. We calculate EBITDAR by adding depreciation and
amortization to GAAP operating income and adjusting for the fixed
portion of operating lease expense.
(in
billions)
|
December 31,
2023
|
|
December 31,
2022
|
Debt and finance lease
obligations
|
$
20
|
|
$
23
|
Plus: Operating lease
liability
|
7
|
|
8
|
Plus: Sale leaseback
liability
|
2
|
|
2
|
Adjusted
Debt
|
$
29
|
|
$
33
|
|
Year
Ended
|
(in
billions)
|
December 31,
2023
|
|
December 31,
2022
|
GAAP operating
income
|
$
6
|
|
$
4
|
Adjusted
for:
|
|
|
|
One-time pilot
agreement expenses
|
1
|
|
โ
|
Operating income,
adjusted
|
6
|
|
4
|
Adjusted
for:
|
|
|
|
Depreciation and
amortization
|
2
|
|
2
|
Fixed portion of
operating lease expense
|
1
|
|
1
|
EBITDAR
|
$
10
|
|
$
7
|
|
|
|
|
Adjusted Debt to
EBITDAR
|
3.0x
|
|
5.0x
|
After-tax Return on Invested Capital ("ROIC"). We present
after-tax return on invested capital as management believes this
metric is helpful to investors in assessing the company's ability
to generate returns using its invested capital as a measure against
the industry. Return on invested capital is tax-effected adjusted
total pre-tax income divided by average adjusted invested capital.
Average adjusted invested capital represents the sum of the
adjusted book value of equity at the end of the last five quarters,
adjusted for pension impacts within other comprehensive income.
Average adjusted gross debt is calculated using amounts as of the
end of the last five quarters. All adjustments to calculate ROIC
are intended to provide a more meaningful comparison of our results
to the airline industry.
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Pre-tax
income
|
$
5,608
|
$
1,914
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
(52)
|
29
|
MTM adjustments on
investments
|
(1,263)
|
784
|
Loss on extinguishment
of debt
|
63
|
100
|
One-time pilot
agreement expenses
|
864
|
โ
|
Restructuring
charges
|
โ
|
(124)
|
Amortization of
retirement actuarial loss
|
246
|
305
|
Interest expense, net
and interest expense included in aircraft rent
|
1,176
|
1,366
|
Pre-tax adjusted
income
|
$
6,642
|
$
4,374
|
Tax effect
|
(1,507)
|
(1,052)
|
Tax-effected adjusted
total pre-tax income
|
$
5,135
|
$
3,322
|
|
|
|
Adjusted book value of
equity
|
$
14,606
|
$
12,140
|
Average adjusted gross
debt
|
23,636
|
27,493
|
Averaged adjusted
invested capital
|
$
38,242
|
$
39,633
|
|
|
|
After-tax Return on
Invested Capital
|
13.4 %
|
8.4 %
|
Operating revenue,
adjusted related to premium products and diverse revenue
streams
|
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
Operating
revenue
|
$
58,048
|
Adjusted
for:
|
|
Third-party refinery
sales
|
(3,379)
|
Operating revenue,
adjusted
|
$
54,669
|
Less: main cabin
revenue
|
(24,477)
|
Operating revenue,
adjusted related to premium products and diverse revenue
streams
|
$
30,192
|
Percent of operating
revenue, adjusted related to premium products and diverse revenue
streams
|
55 %
|
Adjusted Non-Fuel Cost and Non-Fuel Unit Cost or Cost per
Available Seat Mile, ("CASM-Ex")
We adjust operating expense and CASM for certain items described
above, as well as the following items and 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 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.
|
Three Months
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
Expense
|
$
12,900
|
$
11,965
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(563)
|
(1,142)
|
Aircraft fuel and
related taxes
|
(2,941)
|
(2,849)
|
Profit
sharing
|
(299)
|
(272)
|
Restructuring
charges
|
โ
|
118
|
Non-Fuel
Cost
|
$
9,098
|
$
7,821
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
Expense
|
$
52,527
|
$
46,921
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(3,379)
|
(4,977)
|
Aircraft fuel and
related taxes
|
(11,069)
|
(11,482)
|
Profit
sharing
|
(1,383)
|
(563)
|
One-time pilot
agreement expenses
|
(864)
|
โ
|
Restructuring
charges
|
โ
|
124
|
Non-Fuel
Cost
|
$
35,831
|
$
30,024
|
|
Three Months
Ended
|
|
%
Change
|
|
December 31,
2023
|
December 31,
2022
|
|
CASM (cents)
|
18.84
|
20.11
|
|
|
Adjusted
for:
|
|
|
|
|
Third-party refinery
sales
|
(0.82)
|
(1.92)
|
|
|
Aircraft fuel and
related taxes
|
(4.30)
|
(4.78)
|
|
|
Profit
sharing
|
(0.44)
|
(0.46)
|
|
|
Restructuring
charges
|
โ
|
0.20
|
|
|
CASM-Ex
|
13.29
|
13.14
|
|
1.1 %
|
|
Year
Ended
|
|
%
Change
|
|
December 31,
2023
|
December 31,
2022
|
|
CASM (cents)
|
19.31
|
20.12
|
|
|
Adjusted
for:
|
|
|
|
|
Third-party refinery
sales
|
(1.24)
|
(2.13)
|
|
|
Aircraft fuel and
related taxes
|
(4.07)
|
(4.92)
|
|
|
Profit
sharing
|
(0.51)
|
(0.24)
|
|
|
One-time pilot
agreement expenses
|
(0.32)
|
โ
|
|
|
Restructuring
charges
|
โ
|
0.05
|
|
|
CASM-Ex
|
13.17
|
12.87
|
|
2.3 %
|
Operating Expense,
adjusted
|
|
|
Three Months
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
expense
|
$
12,900
|
$
11,965
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(563)
|
(1,142)
|
MTM adjustments and
settlements on hedges
|
(7)
|
(70)
|
Restructuring
charges
|
โ
|
118
|
Operating expense,
adjusted
|
$
12,330
|
$
10,871
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Operating
expense
|
$
52,527
|
$
46,921
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(3,379)
|
(4,977)
|
MTM adjustments and
settlements on hedges
|
52
|
(29)
|
One-time pilot
agreement charges
|
(864)
|
โ
|
Restructuring
charges
|
โ
|
124
|
Operating expense,
adjusted
|
$
48,335
|
$
42,039
|
Total fuel expense,
adjusted and Average fuel price per gallon, adjusted
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
|
Three Months
Ended
|
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
December
31,
|
|
%
Change
|
|
December
31,
|
December
31,
|
|
%
Change
|
(in millions, except
per gallon data)
|
2023
|
2022
|
|
|
2023
|
2022
|
|
Total fuel
expense
|
$
2,941
|
$
2,849
|
|
|
|
$
3.01
|
$
3.28
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(7)
|
(70)
|
|
|
|
(0.01)
|
(0.08)
|
|
|
Total fuel expense,
adjusted
|
$
2,933
|
$
2,778
|
|
6 %
|
|
$
3.00
|
$
3.20
|
|
(6) %
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
|
Year
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
December
31,
|
|
%
Change
|
|
December
31,
|
December
31,
|
|
%
Change
|
(in millions, except
per gallon data)
|
2023
|
2022
|
|
|
2023
|
2022
|
|
Total fuel
expense
|
$
11,069
|
$
11,482
|
|
|
|
$
2.82
|
$
3.36
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
52
|
(29)
|
|
|
|
0.01
|
(0.01)
|
|
|
Total fuel expense,
adjusted
|
$
11,121
|
$
11,453
|
|
(3) %
|
|
$
2.83
|
$
3.36
|
|
(16) %
|
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, 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.
|
|
|
|
Change
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
|
Debt and finance lease
obligations
|
$
20,054
|
$
23,030
|
|
|
Plus: sale-leaseback
financing liabilities
|
1,887
|
2,180
|
|
|
Plus: unamortized
discount/(premium) and debt issue cost, net and other
|
83
|
138
|
|
|
Adjusted debt and
finance lease obligations
|
$
22,024
|
$
25,349
|
|
|
Plus: 7x last twelve
months' aircraft rent
|
3,724
|
3,558
|
|
|
Adjusted total
debt
|
$
25,748
|
$
28,906
|
|
|
Less: cash, cash
equivalents and short-term investments
|
(3,869)
|
(6,534)
|
|
|
Less: LGA restricted
cash
|
(455)
|
(69)
|
|
|
Adjusted net
debt
|
$
21,424
|
$
22,303
|
|
$
(879)
|
Gross Capital Expenditures. We adjust capital
expenditures for the following items to determine gross capital
expenditures for the reasons described below:
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.
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 an estimate of the
aircraft's fair value and provides a more meaningful view of our
investing activities.
|
Three Months
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Flight equipment,
including advance payments
|
$
1,085
|
$
1,643
|
Ground property and
equipment, including technology
|
517
|
557
|
Adjusted
for:
|
|
|
Net cash flows related
to certain airport construction projects
|
(400)
|
(87)
|
Gross capital
expenditures
|
$
1,201
|
$
2,113
|
|
|
Year
Ended
|
(in
millions)
|
December 31,
2023
|
December 31,
2022
|
Flight equipment,
including advance payments
|
$
3,645
|
$
4,495
|
Ground property and
equipment, including technology
|
1,678
|
1,871
|
Adjusted
for:
|
|
|
Financed aircraft
acquisitions
|
461
|
206
|
Net cash flows related
to certain airport construction projects
|
(479)
|
(564)
|
Gross capital
expenditures
|
$
5,305
|
$
6,008
|
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SOURCE Delta Air Lines