ATLANTA, July 11, 2019 /PRNewswire/ -- Delta Air
Lines (NYSE:DAL) today reported financial results for the June
quarter 2019 and provided its outlook for the September quarter
2019. Highlights of the June quarter 2019 results, including both
GAAP and adjusted metrics, are below and incorporated here.
June Quarter Financial Highlights
- Adjusted earnings per share were $2.35, reflecting a 32 percent increase year over
year with 8.7 percent top-line growth, 2.3 points of operating
margin expansion and $1.8 billion of
free cash flow.
- Total adjusted revenue, which excludes refinery sales, grew
nearly $1 billion to $12.5 billion, a new quarterly record, with 52
percent of adjusted revenue from premium products and non-ticket
sources.
- Total unit revenue, adjusted, increased 3.8 percent driven by
healthy growth in leisure and corporate revenue and an approximate
one point benefit from the amended American Express agreement
announced earlier this year.
- Non-fuel unit cost (CASM-Ex) increased 1.4 percent compared to
the prior year period, driven by better operations, fleet
transformation and efficiency initiatives.
- Generated $5.2 billion of
operating cash flow and $2.5 billion
of free cash flow on a year-to-date basis, after investing
$2.7 billion into the business,
primarily for aircraft purchases and modifications.
- Returned $497 million to
shareholders, comprised of $268
million of share repurchases and $229
million in dividends.
"Our record June quarter financial and operating results
demonstrate that we are translating our powerful brand and
competitive advantages into earnings growth, margin expansion and
solid returns for our owners. Our people are the best in the
business and I'm proud to recognize their hard work and dedication
this quarter with an additional $518
million toward next year's profit sharing," said
Ed Bastian, Delta's chief executive
officer. "With our strong first half performance and building
momentum from our customer-focused initiatives, we are increasing
our full-year earnings guidance to $6.75 to $7.25 per
share."
September Quarter 2019 Outlook
For the September quarter, Delta expects to deliver solid
top-line growth and margin expansion.
|
3Q19
Forecast
|
Earnings per
share
|
$2.10 -
$2.40
|
Pre-tax
margin
|
14.5% -
16.5%
|
Fuel price, including
taxes and refinery impact
|
$1.95 -
$2.15
|
TRASM, adjusted
(year-over-year)
|
Up 1.5% to
3.5%
|
CASM - Ex
(year-over-year)
|
Up 1% - 2%
|
System Capacity
(year-over-year)
|
Up ~4%
|
See Note A for
information about reconciliation of projected non-GAAP financial
measures
|
Total adjusted
revenue and TRASM, adjusted above exclude refinery sales and DAL
Global
Services (due to the sale of DGS in
December 2018)
|
Revenue Environment
Delta's adjusted operating revenue of $12.5 billion for the June quarter improved 8.7
percent, $1 billion higher than prior
year quarter. This revenue result marks a record for the company,
driven by improvements across Delta's business, including a ten
percent increase in premium product ticket revenue and double-digit
percentage increases in loyalty and third-party maintenance
revenue. Cargo revenue during the quarter declined 17 percent
driven by lower volumes and yield. Other revenue declined by
$24 million as growth in loyalty and
third-party maintenance was offset by $176
million lower third-party refinery sales.
Passenger Revenue by Geographic Region:
- Domestic revenues grew 8.8% in the quarter on 3.6% higher
passenger unit revenue (PRASM) and 5.1% higher capacity. Domestic
premium product revenue grew 11% and corporate revenue grew 8%,
similar to the March quarter.
- Atlantic revenues grew 6.1% in the quarter on 4.6% higher
capacity and 1.5% higher PRASM, including a two point headwind from
foreign exchange rates and pressure from the cessation of
operations of our partner in India. Atlantic unit revenue improved from the
March quarter driven by premium cabin performance and strong U.S.
point of sale demand.
- Latin revenues grew 5.2% on a 7.8% increase in unit revenue and
2.4% lower capacity. This revenue improvement was driven by
double-digit unit revenue growth in Brazil and Mexico beach markets.
- Pacific revenues grew 3.2% in the quarter as 9.7% higher
capacity was partially offset by a 5.9% decline in unit revenues.
Unit revenue performance was pressured by a 6% increase in length
of haul, softer than expected demand in Japan and a roughly 1.5 point currency
headwind.
"With record passenger loads, customer satisfaction and
$1 billion in revenue growth for the
June quarter, demand for Delta's customer-focused product and
service has never been stronger. Our third quarter is off to
a great start with a new highest revenue day on record on
July 7th," said Glen Hauenstein, Delta's president. "We
now expect revenue growth of six to seven percent for the year, a
$3 billion increase over 2018, as we
benefit from our multi-year pipeline of fleet, product, and loyalty
initiatives."
Cost Performance
Total adjusted operating expense for the June quarter increased
$559 million versus the prior year
quarter, with approximately 20% due to higher profit sharing
expense. CASM-Ex was up 1.4 percent for the June quarter 2019
compared to the prior year quarter. This performance was
driven by industry-leading operations, savings from the company's
fleet transformation and the One Delta efficiency initiative, which
partially offset investments in our people and product.
During the quarter, the company decided to accelerate retirement of
its MD-90 fleet by two years to the end of 2022, which pressured
CASM-Ex by approximately $60 million
due to higher depreciation expense.
Adjusted fuel expense decreased $35
million, down two percent, relative to June quarter
2018. Delta's adjusted fuel price per gallon for the June
quarter was $2.08, which includes
a $37 million benefit from the refinery.
Adjusted non-operating expense for the quarter was $60 million higher versus the prior year quarter,
driven primarily by lower pension income and lower results from
international equity partners.
Cash Flow and Shareholder Returns
Delta generated $3.3 billion of
operating cash flow and $1.8 billion
of free cash flow during the quarter after the investment of
$1.4 billion into the business
primarily for aircraft purchases and improvements.
Year-to-date, the company has generated $5.2
billion of operating cash flow and $2.5 billion of free cash flow.
For the June quarter, Delta returned $497
million to shareholders, comprised of $268 million of share repurchases and
$229 million in dividends. The
company also completed repayment of the $1
billion short-term loan that was used to accelerate the
repurchase of shares in the March quarter.
The Board of Directors today declared a quarterly dividend of
$0.4025 per share, an increase of 15%
over previous levels. This marks the sixth consecutive increase in
Delta's dividend since it was established in 2013. The
September quarter dividend will be payable to shareholders of
record as of the close of business on July
25, 2019, to be paid on August 15,
2019.
"With efficiency gains from our operations, fleet
transformation, and One Delta initiatives, we have solid line of
sight to achieve our 1% cost growth target for the year," said
Paul Jacobson, Delta's chief
financial officer. "Our strong financial foundation and cash
generation allow us to sustainably invest in the business, while
maintaining our investment grade balance sheet and consistently
returning cash to shareholders. With our cash flow exceeding
original expectations, we are on track to return $3 billion to our owners this year through share
repurchases and our increased dividend."
Strategic Highlights
In the June quarter, Delta achieved a number of milestones
across its five key strategic pillars.
Culture and People
- Accrued an additional $518
million in profit sharing and paid $26 million in Shared Rewards as a testament to
the outstanding performance made possible by Delta's more than
80,000 employees around the world.
- Ranked as the number one corporate blood donor by the American
Red Cross for the second year in a row with 13,064 units of blood,
up 18 percent from the prior year, from 254 Delta sponsored blood
drives.
- Recognized as an honoree of The Civic 50 by Points of Light,
the world's largest volunteer service organization, for a second
consecutive year, a testament to the commitment of the Delta people
to everyday social responsibility by celebrating Pride, building
homes with Habitat for Humanity and giving blood through the
American Red Cross.
- Named to Corporate Responsibility Magazine's annual 100 Best
Corporate Citizens ranking, recognized for outstanding
environmental, social and governance transparency and performance
amongst the 1,000 largest U.S. public companies.
Operational Reliability
- Delivered 148 days of zero mainline cancellations and 78 days
of zero system cancellations for the first half of the year, a 30%
improvement over 2018's record performance.
- Achieved record quarterly system and domestic load factor of
88.0% and 89.0%, up 1.3 points and 2.3 points, respectively, versus
the prior year.
- Reached record completion factor for the first half of the year
on a system and mainline basis, with mainline completion factor of
99.86%.
Network and Partnerships
- Celebrated the one-year anniversary of the joint venture with
Korean Air, building the most comprehensive and reliable network in
the trans-Pacific and providing our customers unparalleled access
to over 80 destinations in Asia
and more than 290 in the U.S.
- Received tentative approval from the U.S. Department of
Transportation for new Delta service between Tokyo-Haneda and five
U.S. cities, a major milestone for Delta that, once finalized, will
increase traveler options and bring more competition to
Tokyo.
- Received clearance for the WestJet-Delta proposed
U.S./Canada transborder joint
venture under Canada's Competition
Act from the Canadian Competition Bureau. The proposed joint
venture is still subject to regulatory approval from the U.S.
Department of Transportation.
Customer Experience and Loyalty
- Took delivery of Delta's first A330-900neo aircraft, featuring
a modern, luxurious interior with all four branded seat products -
Delta One suites, Delta Premium Select, Delta Comfort+ and Main
Cabin - and thoughtful touches like in-seat power ports,
full-spectrum LED ambient lighting, spacious overhead bins and
memory foam cushions throughout the aircraft for added
comfort.
- Launched Reclaim My Status, an industry-leading program
allowing Delta SkyMiles Medallion Members who have experienced a
life event that has temporarily affected their ability to travel to
resume their status. Its launch is an important step in making our
policies more intuitive and customer-friendly and has been
extremely well-received by our Medallion Members.
- Began the use of Apple Business Chat, allowing select
Medallions and an expanded group of customers in the future to
connect with a live Delta representative to receive in-the-moment
assistance, or with a Delta Virtual Assistant, to get quick answers
to frequently asked questions through the Fly Delta app.
- Completed an initial two-week trial of free Wi-Fi to gather
customer feedback from more than 700 flights, a first step toward
making Wi-Fi as accessible in the sky as it is when visiting most
businesses on the ground.
Investment Grade Balance Sheet
- Completed repayment of a $1
billion short-term loan that was used to accelerate the
repurchase of shares in the March quarter, earlier than initially
expected.
- Received a reaffirmed investment-grade rating and Stable
outlook from Fitch Ratings.
- Achieved a 1.7x adjusted debt to EBITDAR ratio, in line with
our long-term leverage ratio target of 1.5x to 2.5x adjusted debt
to EBITDAR, which is expected to allow Delta to maintain investment
grade ratings through a business cycle.
June Quarter Results
Adjusted results primarily exclude the impact of unrealized
gains/losses on investments.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
2Q19
|
2Q18
|
Pre-tax
income
|
1,907
|
|
1,386
|
|
521
|
|
37.6
|
%
|
Net income
|
1,443
|
|
1,036
|
|
407
|
|
39.3
|
%
|
Diluted earnings per
share
|
2.21
|
|
1.49
|
|
0.72
|
|
48.3
|
%
|
Operating
revenue
|
12,536
|
|
11,775
|
|
761
|
|
6.5
|
%
|
Total revenue per
available seat mile (TRASM)
|
17.47
|
|
17.19
|
|
0.28
|
|
1.6
|
%
|
Operating
margin
|
17.0
|
%
|
14.3
|
%
|
2.7
|
|
18.9
|
%
|
Operating cash
flow
|
3,273
|
|
2,898
|
|
375
|
|
12.9
|
%
|
Consolidated unit
cost (CASM)
|
14.51
|
|
14.73
|
|
(0.22)
|
|
(1.5)
|
%
|
Operating
expense
|
10,408
|
|
10,091
|
|
317
|
|
3.1
|
%
|
Fuel
expense
|
2,291
|
|
2,341
|
|
(50)
|
|
(2.1)
|
%
|
Average fuel price
per gallon
|
2.08
|
|
2.19
|
|
(0.11)
|
|
(5.0)
|
%
|
Non-operating
expense
|
221
|
|
298
|
|
(77)
|
|
(25.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
2Q19
|
2Q18
|
Pre-tax
income
|
1,997
|
|
1,617
|
|
379
|
|
23.5
|
%
|
Net income
|
1,532
|
|
1,240
|
|
292
|
|
23.6
|
%
|
Diluted earnings per
share
|
2.35
|
|
1.78
|
|
0.57
|
|
32.1
|
%
|
Operating
revenue
|
12,496
|
|
11,498
|
|
998
|
|
8.7
|
%
|
Total revenue per
available seat mile (TRASM, adjusted)
|
17.42
|
|
16.78
|
|
0.63
|
|
3.8
|
%
|
Operating
margin
|
17.1
|
%
|
14.8
|
%
|
2.3
|
|
15.5
|
%
|
Free cash
flow
|
1,771
|
|
1,392
|
|
379
|
|
27.2
|
%
|
Consolidated unit
cost (CASM-Ex)
|
10.15
|
|
10.00
|
|
0.15
|
|
1.4
|
%
|
Operating
expense
|
10,358
|
|
9,799
|
|
559
|
|
5.7
|
%
|
Fuel
expense
|
2,282
|
|
2,317
|
|
(35)
|
|
(1.5)
|
%
|
Average fuel price
per gallon
|
2.08
|
|
2.17
|
|
(0.10)
|
|
(4.4)
|
%
|
Non-operating
expense
|
141
|
|
81
|
|
60
|
|
74.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Delta
Delta Air Lines (NYSE: DAL) is the U.S. global airline leader in
products, services, innovation, reliability and customer
experience. Powered by its 80,000 people around the world, Delta
continues to invest billions in its people, improving the air
travel experience and generating industry-leading shareholder
returns.
- Delta serves nearly 200 million people every year, taking
customers across its industry-leading global network to more than
300 destinations in over 50 countries.
- Headquartered in Atlanta,
Delta offers more than 5,000 daily departures and as many as 15,000
affiliated departures including the premier SkyTeam alliance, of
which Delta is a founding member.
- Through its innovative alliances with Aeromexico, Air
France-KLM, Alitalia, China Eastern,
GOL, Korean Air, Virgin Atlantic, Virgin Australia and WestJet,
Delta is bringing more choice and competition to customers
worldwide.
- Delta operates significant hubs and key markets at airports in
Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los
Angeles, Mexico City,
Minneapolis/St. Paul, New York-JFK
and LaGuardia, Paris-Charles de
Gaulle, Salt Lake City, São
Paulo, Seattle, Seoul-Incheon and
Tokyo-Narita.
- Delta has been recognized as a Fortune's top 50 Most Admired
Companies in addition to being named the most admired airline for
the eighth time in nine years. Additionally, Delta has ranked No.1
in the Business Travel News Annual Airline survey for an
unprecedented eight consecutive years and named one of Fast
Company's Most Innovative Companies Worldwide for two consecutive
years.
- As an employer, Delta has been regularly awarded top honors
from organizations like Glassdoor and recognized as a top workplace
for women and members of the military. Delta CEO Ed Bastian was named among the "World's Greatest
Leaders" by Fortune magazine in 2018.
- More about Delta can be found on the Delta News Hub as well as
delta.com, via @DeltaNewsHub on Twitter and
Facebook.com/delta.
Forward Looking Statements
Statements in this press release that are not historical facts,
including statements regarding our estimates, expectations,
beliefs, intentions, projections or strategies for the future, may
be "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. All forward-looking
statements involve a number of risks and uncertainties that could
cause actual results to differ materially from the estimates,
expectations, beliefs, intentions, projections and strategies
reflected in or suggested by the forward-looking statements.
These risks and uncertainties include, but are not limited to, the
cost of aircraft fuel; the availability of aircraft fuel; the
impact of fuel hedging activity including rebalancing our hedge
portfolio, recording mark-to-market adjustments or posting
collateral in connection with our fuel hedge contracts; the
performance of our significant investments in airlines in other
parts of the world; the possible effects of accidents involving our
aircraft; breaches or security lapses in our information technology
systems; disruptions in our information technology infrastructure;
our dependence on technology in our operations; the restrictions
that financial covenants in our financing agreements could have on
our financial and business operations; labor issues; the effects of
weather, natural disasters and seasonality on our business; the
effects of an extended disruption in services provided by third
parties; failure or inability of insurance to cover a significant
liability at Monroe's Trainer
refinery; the impact of environmental regulation on the Trainer
refinery, including costs related to renewable fuel standard
regulations; our ability to retain senior management and key
employees; damage to our reputation and brand if we are exposed to
significant adverse publicity through social media; the effects of
terrorist attacks or geopolitical conflict; competitive conditions
in the airline industry; interruptions or disruptions in service at
major airports at which we operate; the effects of extensive
government regulation on our business; the sensitivity of the
airline industry to prolonged periods of stagnant or weak economic
conditions; uncertainty in economic conditions and regulatory
environment in the United Kingdom
related to the exit of the United
Kingdom from the European Union; and the effects of the
rapid spread of contagious illnesses.
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, 2018.
Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our views only as of
July 11, 2019, and which we have no
current intention to update.
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in millions, except
per share data)
|
2019
|
2018
|
$
Change
|
%
Change
|
|
2019
|
2018
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$
|
11,368
|
|
$
|
10,546
|
|
$
|
822
|
|
8
|
%
|
|
$
|
20,622
|
|
$
|
19,311
|
|
$
|
1,311
|
|
7
|
%
|
Cargo
|
186
|
|
223
|
|
(37)
|
|
(17)
|
%
|
|
378
|
|
425
|
|
(47)
|
|
(11)
|
%
|
Other
|
982
|
|
1,006
|
|
(24)
|
|
(2)
|
%
|
|
2,008
|
|
2,007
|
|
1
|
|
—
|
%
|
Total
operating revenue
|
12,536
|
|
11,775
|
|
761
|
|
6
|
%
|
|
23,008
|
|
21,743
|
|
1,265
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
2,752
|
|
2,668
|
|
84
|
|
3
|
%
|
|
5,391
|
|
5,252
|
|
139
|
|
3
|
%
|
Aircraft fuel and
related taxes
|
2,291
|
|
2,341
|
|
(50)
|
|
(2)
|
%
|
|
4,269
|
|
4,195
|
|
74
|
|
2
|
%
|
Regional carriers
expense, excluding fuel
|
905
|
|
863
|
|
42
|
|
5
|
%
|
|
1,798
|
|
1,701
|
|
97
|
|
6
|
%
|
Depreciation and
amortization
|
713
|
|
583
|
|
130
|
|
22
|
%
|
|
1,328
|
|
1,186
|
|
142
|
|
12
|
%
|
Contracted
services
|
657
|
|
540
|
|
117
|
|
22
|
%
|
|
1,288
|
|
1,084
|
|
204
|
|
19
|
%
|
Passenger commissions
and other selling expenses
|
538
|
|
511
|
|
27
|
|
5
|
%
|
|
965
|
|
938
|
|
27
|
|
3
|
%
|
Aircraft maintenance
materials and outside repairs
|
434
|
|
427
|
|
7
|
|
2
|
%
|
|
910
|
|
862
|
|
48
|
|
6
|
%
|
Landing fees and
other rents
|
442
|
|
425
|
|
17
|
|
4
|
%
|
|
861
|
|
814
|
|
47
|
|
6
|
%
|
Profit
sharing
|
518
|
|
404
|
|
114
|
|
28
|
%
|
|
739
|
|
592
|
|
147
|
|
25
|
%
|
Ancillary businesses
and refinery
|
316
|
|
494
|
|
(178)
|
|
(36)
|
%
|
|
667
|
|
987
|
|
(320)
|
|
(32)
|
%
|
Passenger
service
|
322
|
|
300
|
|
22
|
|
7
|
%
|
|
593
|
|
563
|
|
30
|
|
5
|
%
|
Aircraft
rent
|
107
|
|
97
|
|
10
|
|
10
|
%
|
|
209
|
|
191
|
|
18
|
|
9
|
%
|
Other
|
413
|
|
438
|
|
(25)
|
|
(6)
|
%
|
|
842
|
|
850
|
|
(8)
|
|
(1)
|
%
|
Total operating
expense
|
10,408
|
|
10,091
|
|
317
|
|
3
|
%
|
|
19,860
|
|
19,215
|
|
645
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
2,128
|
|
1,684
|
|
444
|
|
26
|
%
|
|
3,148
|
|
2,528
|
|
620
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(75)
|
|
(79)
|
|
4
|
|
(5)
|
%
|
|
(158)
|
|
(170)
|
|
12
|
|
(7)
|
%
|
Unrealized
gain/(loss) on investments, net
|
(82)
|
|
(238)
|
|
156
|
|
(66)
|
%
|
|
18
|
|
(220)
|
|
238
|
|
NM
|
|
Miscellaneous,
net
|
(64)
|
|
19
|
|
(83)
|
|
NM
|
|
|
(155)
|
|
(19)
|
|
(136)
|
|
NM
|
|
Total non-operating
expense, net
|
(221)
|
|
(298)
|
|
77
|
|
(26)
|
%
|
|
(295)
|
|
(409)
|
|
114
|
|
(28)
|
%
|
|
|
|
|
|
|
|
|
|
|
Income Before
Income Taxes
|
1,907
|
|
1,386
|
|
521
|
|
38
|
%
|
|
2,853
|
|
2,119
|
|
734
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
(464)
|
|
(350)
|
|
(114)
|
|
33
|
%
|
|
(680)
|
|
(525)
|
|
(155)
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
|
1,443
|
|
$
|
1,036
|
|
$
|
407
|
|
39
|
%
|
|
$
|
2,173
|
|
$
|
1,594
|
|
$
|
579
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
2.22
|
|
$
|
1.49
|
|
|
|
|
$
|
3.30
|
|
$
|
2.28
|
|
|
|
Diluted Earnings
Per Share
|
$
|
2.21
|
|
$
|
1.49
|
|
|
|
|
$
|
3.29
|
|
$
|
2.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Shares Outstanding
|
650
|
|
695
|
|
|
|
|
658
|
|
699
|
|
|
|
Diluted Weighted
Average Shares Outstanding
|
652
|
|
697
|
|
|
|
|
660
|
|
701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The prior
periods presented here have been recast to reflect adoption of
certain new accounting standards.
|
DELTA AIR LINES,
INC.
|
Passenger
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in
millions)
|
2019
|
2018
|
$
Change
|
%
Change
|
|
2019
|
2018
|
$
Change
|
%
Change
|
Ticket- Main
cabin
|
$
|
5,938
|
|
$
|
5,644
|
|
$
|
294
|
|
5
|
%
|
|
$
|
10,659
|
|
$
|
10,267
|
|
$
|
392
|
|
4
|
%
|
Ticket- Business
cabin and premium products
|
4,031
|
|
3,664
|
|
367
|
|
10
|
%
|
|
7,298
|
|
6,694
|
|
604
|
|
9
|
%
|
Loyalty travel
awards
|
751
|
|
680
|
|
71
|
|
10
|
%
|
|
1,442
|
|
1,298
|
|
144
|
|
11
|
%
|
Travel-related
services
|
648
|
|
558
|
|
90
|
|
16
|
%
|
|
1,223
|
|
1,052
|
|
171
|
|
16
|
%
|
Total passenger
revenue
|
$
|
11,368
|
|
$
|
10,546
|
|
$
|
822
|
|
8
|
%
|
|
$
|
20,622
|
|
$
|
19,311
|
|
$
|
1,311
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
(in
millions)
|
2019
|
2018
|
$
Change
|
%
Change
|
|
2019
|
2018
|
$
Change
|
%
Change
|
Loyalty
program
|
$
|
484
|
|
$
|
358
|
|
$
|
126
|
|
35
|
%
|
|
$
|
958
|
|
$
|
705
|
|
$
|
253
|
|
36
|
%
|
Ancillary businesses
and refinery
|
330
|
|
522
|
|
(192)
|
|
(37)
|
%
|
|
699
|
|
1,042
|
|
(343)
|
|
(33)
|
%
|
Miscellaneous
|
168
|
|
126
|
|
42
|
|
33
|
%
|
|
351
|
|
260
|
|
91
|
|
35
|
%
|
Total other
revenue
|
$
|
982
|
|
$
|
1,006
|
|
$
|
(24)
|
|
(2)
|
%
|
|
$
|
2,008
|
|
$
|
2,007
|
|
$
|
1
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
2Q19 versus
2Q18
|
Revenue
|
|
2Q19
($M)
|
|
Change
YoY
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
8,071
|
|
8.8%
|
3.6%
|
0.9%
|
5.1%
|
Atlantic
|
|
1,880
|
|
6.1%
|
1.5%
|
1.9%
|
4.6%
|
Latin
America
|
|
760
|
|
5.2%
|
7.8%
|
5.6%
|
(2.4)%
|
Pacific
|
|
657
|
|
3.2%
|
(5.9)%
|
(3.9)%
|
9.7%
|
Total
Passenger
|
$
|
11,368
|
|
7.8%
|
2.9%
|
1.4%
|
4.7%
|
Cargo
Revenue
|
|
186
|
|
(16.7)%
|
|
|
|
Other
Revenue
|
|
982
|
|
(2.4)%
|
|
|
|
Total
Revenue
|
$
|
12,536
|
|
6.5%
|
1.6%
|
|
|
Third Party
Refinery Sales
|
|
(40)
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
12,496
|
|
8.7%
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC. Statistical
Summary (Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
|
2019
|
2018
|
Change
|
|
2019
|
2018
|
Change
|
Revenue passenger
miles (millions)
|
63,173
|
|
59,406
|
|
6.3
|
%
|
|
114,790
|
|
108,682
|
|
5.6
|
%
|
Available seat miles
(millions)
|
71,754
|
|
68,514
|
|
4.7
|
%
|
|
134,169
|
|
127,967
|
|
4.8
|
%
|
Passenger mile yield
(cents)
|
18.00
|
|
17.75
|
|
1.4
|
%
|
|
17.96
|
|
17.77
|
|
1.1
|
%
|
Passenger revenue per
available seat mile (cents)
|
15.84
|
|
15.39
|
|
2.9
|
%
|
|
15.37
|
|
15.09
|
|
1.8
|
%
|
Total revenue per
available seat mile (cents)
|
17.47
|
|
17.19
|
|
1.6
|
%
|
|
17.15
|
|
16.99
|
|
0.9
|
%
|
TRASM, adjusted - see
Note A (cents)
|
17.42
|
|
16.78
|
|
3.8
|
%
|
|
17.08
|
|
16.57
|
|
3.1
|
%
|
Operating cost per
available seat mile (cents)
|
14.51
|
|
14.73
|
|
(1.5)
|
%
|
|
14.80
|
|
15.02
|
|
(1.5)
|
%
|
CASM-Ex - see Note A
(cents)
|
10.15
|
|
10.00
|
|
1.4
|
%
|
|
10.57
|
|
10.50
|
|
0.6
|
%
|
Passenger load
factor
|
88.0
|
%
|
86.7
|
%
|
1.3
|
pts
|
|
85.6
|
%
|
84.9
|
%
|
0.6
|
pts
|
Fuel gallons consumed
(millions)
|
1,099
|
|
1,067
|
|
3.0
|
%
|
|
2,061
|
|
2,003
|
|
2.9
|
%
|
Average price per
fuel gallon
|
$
|
2.08
|
|
$
|
2.19
|
|
(5.0)
|
%
|
|
$
|
2.07
|
|
$
|
2.10
|
|
(1.4)
|
%
|
Average price per
fuel gallon, adjusted - see Note A
|
$
|
2.08
|
|
$
|
2.17
|
|
(4.4)
|
%
|
|
$
|
2.06
|
|
$
|
2.10
|
|
(1.6)
|
%
|
Number of aircraft in
fleet, end of period
|
1,060
|
|
1,031
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The prior
periods presented here have been recast to reflect adoption of
certain new accounting standards. Except for number of aircraft in
fleet, consolidated data presented includes operations under
Delta's contract carrier arrangements.
|
DELTA AIR LINES,
INC.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
(in
millions)
|
2019
|
2018
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
1,443
|
|
$
|
1,036
|
|
|
Depreciation and
amortization
|
713
|
|
583
|
|
|
Deferred income
taxes
|
470
|
|
338
|
|
|
Pension,
postretirement and postemployment payments greater than
expense
|
(481)
|
|
(62)
|
|
|
Changes in air
traffic liability
|
17
|
|
127
|
|
|
Changes in profit
sharing
|
518
|
|
400
|
|
|
Other, net
|
593
|
|
476
|
|
|
Net cash provided by
operating activities
|
3,273
|
|
2,898
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Property and
equipment additions:
|
|
|
|
Flight equipment, including
advance payments
|
(1,166)
|
|
(1,272)
|
|
|
Ground property and
equipment, including technology
|
(393)
|
|
(308)
|
|
|
Purchase of equity
investments
|
(89)
|
|
—
|
|
|
Other, net
|
81
|
|
35
|
|
|
Net cash used in
investing activities
|
(1,567)
|
|
(1,545)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Payments on long-term
debt and capital lease obligations
|
(1,165)
|
|
(1,848)
|
|
|
Repurchases of common
stock
|
(268)
|
|
(600)
|
|
|
Cash
dividends
|
(229)
|
|
(213)
|
|
|
Proceeds from
long-term obligations
|
—
|
|
3,124
|
|
|
Other, net
|
—
|
|
(38)
|
|
|
Net cash (used in)
provided by financing activities
|
(1,662)
|
|
425
|
|
|
|
|
|
|
Net Increase in
Cash, Cash Equivalents and Restricted Cash
Equivalents
|
44
|
|
1,778
|
|
|
Cash, cash
equivalents and restricted cash equivalents at beginning of
period
|
2,985
|
|
1,482
|
|
|
Cash, cash
equivalents and restricted cash equivalents at end of
period
|
$
|
3,029
|
|
$
|
3,260
|
|
|
|
|
|
|
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
|
$
|
2,009
|
|
$
|
1,886
|
|
|
Restricted cash included in
prepaid expenses and other
|
127
|
|
48
|
|
|
Other
assets:
|
|
|
|
Cash restricted for airport
construction
|
893
|
|
1,326
|
|
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
|
3,029
|
|
$
|
3,260
|
|
|
|
|
|
|
Note: The prior
periods presented here have been recast to reflect adoption of
certain new accounting standards.
|
|
DELTA AIR LINES,
INC.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
(in
millions)
|
2019
|
|
2018
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,009
|
|
|
$
|
1,565
|
|
|
Accounts receivable,
net
|
2,844
|
|
|
2,314
|
|
|
Fuel
inventory
|
590
|
|
|
592
|
|
|
Expendable parts and
supplies inventories, net
|
493
|
|
|
463
|
|
|
Prepaid expenses and
other
|
1,198
|
|
|
1,406
|
|
|
Total current
assets
|
7,134
|
|
|
6,340
|
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and
equipment, net
|
30,165
|
|
|
28,335
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
5,906
|
|
|
5,994
|
|
|
Goodwill
|
9,781
|
|
|
9,781
|
|
|
Identifiable
intangibles, net
|
4,824
|
|
|
4,830
|
|
|
Cash restricted for
airport construction
|
893
|
|
|
1,136
|
|
|
Other noncurrent
assets
|
3,815
|
|
|
3,850
|
|
|
Total other
assets
|
25,219
|
|
|
25,591
|
|
Total
assets
|
$
|
62,518
|
|
|
$
|
60,266
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
long-term debt and finance leases
|
$
|
2,281
|
|
|
$
|
1,518
|
|
|
Current maturities of
operating leases
|
841
|
|
|
955
|
|
|
Air traffic
liability
|
6,616
|
|
|
4,661
|
|
|
Accounts
payable
|
3,359
|
|
|
2,976
|
|
|
Accrued salaries and
related benefits
|
2,617
|
|
|
3,287
|
|
|
Loyalty program
deferred revenue
|
3,048
|
|
|
2,989
|
|
|
Fuel card
obligation
|
1,067
|
|
|
1,075
|
|
|
Other accrued
liabilities
|
1,335
|
|
|
1,117
|
|
|
Total current
liabilities
|
21,164
|
|
|
18,578
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Long-term debt and
finance leases
|
7,710
|
|
|
8,253
|
|
|
Pension,
postretirement and related benefits
|
8,516
|
|
|
9,163
|
|
|
Loyalty program
deferred revenue
|
3,606
|
|
|
3,652
|
|
|
Noncurrent operating
leases
|
5,539
|
|
|
5,801
|
|
|
Other noncurrent
liabilities
|
2,025
|
|
|
1,132
|
|
|
Total noncurrent
liabilities
|
27,396
|
|
|
28,001
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
13,958
|
|
|
13,687
|
|
Total liabilities and
stockholders' equity
|
$
|
62,518
|
|
|
$
|
60,266
|
|
|
|
|
|
|
|
Note A: The following tables show reconciliations of non-GAAP
financial measures. The reasons Delta uses these measures are
described below. Reconciliations may not calculate due to
rounding.
Delta sometimes uses information ("non-GAAP financial measures")
that is derived from the Consolidated Financial Statements, but
that is not presented in accordance with accounting principles
generally accepted in the U.S. ("GAAP"). Under the U.S. Securities
and Exchange Commission rules, non-GAAP financial measures may be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for or superior to GAAP
results. The tables below show reconciliations of non-GAAP
financial measures used in this release to the most directly
comparable GAAP financial measures.
Forward Looking Projections. The Company is not able to
reconcile forward looking non-GAAP financial measures because the
adjusting items such as those used in the reconciliations below
will not be known until the end of the period and could be
significant.
Pre-tax Income and Net Income, adjusted. We adjust
pre-tax income and net income for the following items to determine
pre-tax income and net income, adjusted for the reasons described
below. We include the income tax effect of adjustments when
presenting net income, adjusted.
MTM adjustments and
settlements. Mark-to-market ("MTM") adjustments are
defined as fair value changes recorded in periods other than the
settlement period. Such fair value changes are not necessarily
indicative of the actual settlement value of the underlying hedge
in the contract settlement period. Settlements represent cash
received or paid on hedge contracts settled during the period
(defined below).
Equity investment MTM
adjustments. We record our proportionate share of
earnings/loss from our equity investments in Virgin Atlantic and
Aeroméxico in non-operating expense. We adjust for our equity
method investees' hedge portfolio MTM adjustments to allow
investors to better understand and analyze our core operational
performance in the periods shown.
Unrealized gain/loss on
investments. We record the unrealized gains/losses on our
equity investments in GOL, China
Eastern, Air France-KLM and Korean, which are accounted for
at fair value in non-operating expense. Adjusting for these
gains/losses allows investors to better understand and analyze our
core operational performance in the periods shown.
DGS sale
adjustment. Because we sold DAL Global Services, LLC
("DGS") in December 2018, we have
excluded the impact of DGS from 2018 results for comparability.
|
Three Months
Ended
|
|
Three Months
Ended
|
|
June 30,
2019
|
|
June 30,
2019
|
|
Pre-Tax
|
|
Income
|
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
|
Tax
|
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
1,907
|
|
|
$
|
(464)
|
|
|
$
|
1,443
|
|
|
$
|
2.21
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
MTM adjustments and
settlements
|
10
|
|
|
(2)
|
|
|
8
|
|
|
|
Equity investment MTM
adjustments
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
|
Unrealized gain/loss on
investments
|
82
|
|
|
1
|
|
|
83
|
|
|
|
Total
adjustments
|
90
|
|
|
(1)
|
|
|
89
|
|
|
0.14
|
|
Non-GAAP
|
$
|
1,997
|
|
|
$
|
(465)
|
|
|
$
|
1,532
|
|
|
$
|
2.35
|
|
Year-over-year
change
|
|
|
|
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
June 30,
2018
|
|
June 30,
2018
|
|
Pre-Tax
|
|
Income
|
|
Net
|
|
Net
Income
|
(in millions, except
per share data)
|
Income
|
|
Tax
|
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
|
1,386
|
|
|
$
|
(350)
|
|
|
$
|
1,036
|
|
|
$
|
1.49
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
MTM adjustments and
settlements
|
24
|
|
|
(6)
|
|
|
18
|
|
|
|
Equity investment MTM
adjustments
|
(22)
|
|
|
5
|
|
|
(17)
|
|
|
|
Unrealized gain/loss on
investments
|
238
|
|
|
(29)
|
|
|
209
|
|
|
|
DGS sale
adjustment
|
(9)
|
|
|
2
|
|
|
(7)
|
|
|
|
Total
adjustments
|
231
|
|
|
(28)
|
|
|
203
|
|
|
0.29
|
|
Non-GAAP
|
$
|
1,617
|
|
|
$
|
(378)
|
|
|
$
|
1,240
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
|
Operating Revenue, adjusted and Total Revenue Per Available
Seat Mile ("TRASM"), adjusted. We adjust operating revenue
and TRASM for refinery sales to third parties to determine
operating revenue, adjusted and TRASM, adjusted because refinery
sales to third parties are not related to our airline segment.
Operating revenue, adjusted and TRASM, adjusted therefore provide a
more meaningful comparison of revenue from our airline operations
to the rest of the airline industry. We adjust for the DGS sale for
the same reason described above under the heading pre-tax income
and net income, adjusted.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
(in
millions)
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
Operating
revenue
|
$
|
12,536
|
|
|
$
|
11,775
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(40)
|
|
|
(216)
|
|
|
|
DGS sale
adjustment
|
—
|
|
|
(61)
|
|
|
|
Operating revenue,
adjusted
|
$
|
12,496
|
|
|
$
|
11,498
|
|
|
8.7
|
%
|
Year-over-year
change
|
$
|
998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
(in
millions)
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
Operating
revenue
|
$
|
23,008
|
|
|
$
|
21,743
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(89)
|
|
|
(429)
|
|
|
|
DGS sale
adjustment
|
—
|
|
|
(121)
|
|
|
|
Operating revenue,
adjusted
|
$
|
22,920
|
|
|
$
|
21,194
|
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
TRASM
(cents)
|
17.47
|
|
|
17.19
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(0.06)
|
|
|
(0.32)
|
|
|
|
DGS sale
adjustment
|
—
|
|
|
(0.09)
|
|
|
|
TRASM,
adjusted
|
17.42
|
|
|
16.78
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
TRASM
(cents)
|
17.15
|
|
|
16.99
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(0.07)
|
|
|
(0.33)
|
|
|
|
DGS sale
adjustment
|
—
|
|
|
(0.09)
|
|
|
|
TRASM,
adjusted
|
17.08
|
|
|
16.57
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
Operating Margin, adjusted. We adjust operating margin
for MTM adjustments and settlements and third-party refinery sales
for the same reasons described above under the headings Pre-tax
income and net income, adjusted and Operating Revenue and TRASM,
adjusted.
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
Operating
margin
|
17.0
|
%
|
|
14.3
|
%
|
|
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements
|
0.1
|
%
|
|
0.2
|
%
|
|
|
Third-party refinery
sales
|
—
|
%
|
|
0.3
|
%
|
|
|
Operating margin,
adjusted
|
17.1
|
%
|
|
14.8
|
%
|
|
2.3
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Adjustments include:
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 free cash flow for this activity to provide investors a
better understanding of the company's free cash flow generated by
our operations.
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 operational performance in the
periods shown.
|
|
|
|
Three Months
Ended
|
(in
millions)
|
|
|
June 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
3,273
|
|
Net cash used in
investing activities
|
|
(1,567)
|
|
Adjustments:
|
|
|
Net cash flows related to
certain airport construction projects and other
|
65
|
|
Total free cash
flow
|
|
$
|
1,771
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
(in
millions)
|
|
|
June 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
5,223
|
|
Net cash used in
investing activities
|
|
(2,671)
|
|
Adjustments:
|
|
|
Net redemptions of
short-term investments
|
|
(206)
|
|
Net cash flows related to
certain airport construction projects and other
|
185
|
|
Total free cash
flow
|
|
$
|
2,531
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
(in
millions)
|
|
|
June 30,
2018
|
Net cash provided by
operating activities
|
|
$
|
2,898
|
|
Net cash used in
investing activities
|
|
(1,545)
|
|
Adjustments:
|
|
|
Net redemptions of
short-term investments
|
|
(4)
|
|
Net cash flows related to
certain airport construction projects and other
|
43
|
|
Total free cash
flow
|
|
$
|
1,392
|
|
Non-Fuel Unit Cost or Cost per Available Seat Mile,
("CASM-Ex"). We adjust CASM for the following items to
determine CASM-Ex for the reasons described below:
Aircraft fuel and related
taxes. The volatility in fuel prices impacts the comparability
of year-over-year financial performance. The adjustment for
aircraft fuel and related taxes allows investors to understand and
analyze our non-fuel costs and year-over-year financial
performance.
Ancillary businesses and
refinery. These expenses include aircraft maintenance we
provide to third parties, our vacation wholesale operations, Delta
Private Jets and refinery cost of sales to third parties. 2018
results also include staffing services performed by DAL Global
Services. Because these businesses are not related to the
generation of a seat mile, we adjust for the costs related to these
areas to provide a more meaningful comparison of the costs of our
airline operations to the rest of the airline industry.
Profit sharing. We
adjust for profit sharing because this adjustment allows investors
to better understand and analyze our recurring cost performance and
provides a more meaningful comparison of our core operating costs
to the airline industry.
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
CASM
(cents)
|
14.51
|
|
|
14.73
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(3.19)
|
|
|
(3.42)
|
|
|
|
Ancillary businesses and
refinery
|
(0.44)
|
|
|
(0.72)
|
|
|
|
Profit sharing
|
(0.72)
|
|
|
(0.59)
|
|
|
|
CASM-Ex
|
10.15
|
|
|
10.00
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
Change
|
CASM
(cents)
|
14.80
|
|
|
15.02
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
Aircraft fuel and related
taxes
|
(3.18)
|
|
|
(3.28)
|
|
|
|
Ancillary businesses and
refinery
|
(0.50)
|
|
|
(0.77)
|
|
|
|
Profit sharing
|
(0.55)
|
|
|
(0.46)
|
|
|
|
CASM-Ex
|
10.57
|
|
|
10.50
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures, net. We present net capital
expenditures because management believes investors should be
informed that a portion of these capital expenditures are
reimbursed by a third party.
|
|
|
Three Months
Ended
|
(in
millions)
|
|
June 30,
2019
|
Flight equipment,
including advance payments
|
|
$
|
1,166
|
|
Ground property and
equipment, including technology
|
|
393
|
|
Net cash flows
related to certain airport construction projects
|
|
(127)
|
|
Capital expenditures,
net
|
|
$
|
1,433
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
(in
millions)
|
|
June 30,
2019
|
Flight equipment,
including advance payments
|
|
$
|
2,226
|
|
Ground property and
equipment, including technology
|
|
694
|
|
Net cash flows
related to certain airport construction projects
|
|
(228)
|
|
Capital expenditures,
net
|
|
$
|
2,692
|
|
|
|
|
|
Operating Expense, adjusted. We adjust operating
expense for MTM adjustments and settlements, third-party refinery
sales and DGS sale adjustment for the same reasons described above
under the headings pre-tax income and net income, adjusted and
operating revenue and TRASM, adjusted to determine operating
expense, adjusted.
|
|
Three Months
Ended
|
|
|
June
30,
|
(in
millions)
|
2019
|
2018
|
Operating
expense
|
$
|
10,408
|
|
$
|
10,091
|
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements
|
(10)
|
|
(24)
|
|
Third-party refinery
sales
|
(40)
|
|
(216)
|
|
DGS sale
adjustment
|
—
|
|
(51)
|
|
Operating expense,
adjusted
|
$
|
10,358
|
|
$
|
9,799
|
|
Year-over-year
change
|
$
|
559
|
|
|
|
|
|
|
Fuel expense, adjusted and Average fuel price per gallon,
adjusted. The tables below show the components of fuel
expense, including the impact of the refinery segment and airline
segment hedging on fuel expense and average price per gallon. We
then adjust for MTM adjustments and settlements for the same reason
described under the heading pre-tax income and net income,
adjusted.
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
|
June
30,
|
(in millions, except
per gallon data)
|
2019
|
2018
|
|
|
2019
|
2018
|
Fuel purchase
cost
|
$
|
2,318
|
|
$
|
2,361
|
|
|
|
$
|
2.11
|
|
$
|
2.21
|
|
Fuel hedge
impact
|
10
|
|
25
|
|
|
|
—
|
|
0.02
|
|
Refinery segment
impact
|
(37)
|
|
(45)
|
|
|
|
(0.03)
|
|
(0.04)
|
|
Total fuel
expense
|
$
|
2,291
|
|
$
|
2,341
|
|
|
|
$
|
2.08
|
|
$
|
2.19
|
|
MTM adjustments and
settlements
|
(10)
|
|
(24)
|
|
|
|
—
|
|
(0.02)
|
|
Total fuel expense,
adjusted
|
$
|
2,282
|
|
$
|
2,317
|
|
|
|
$
|
2.08
|
|
$
|
2.17
|
|
Change
year-over-year
|
$
|
(35)
|
|
|
|
|
|
|
Percent change
year-over-year
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
Six Months
Ended
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
June
30,
|
(in millions, except
per gallon data)
|
2019
|
2018
|
|
|
2019
|
2018
|
Fuel purchase
cost
|
$
|
4,255
|
|
$
|
4,289
|
|
|
|
$
|
2.06
|
|
$
|
2.14
|
|
Airline segment fuel
hedge impact
|
17
|
|
(5)
|
|
|
|
0.01
|
|
—
|
|
Refinery segment
impact
|
(3)
|
|
(89)
|
|
|
|
—
|
|
(0.04)
|
|
Total fuel
expense
|
$
|
4,269
|
|
$
|
4,195
|
|
|
|
$
|
2.07
|
|
$
|
2.10
|
|
MTM adjustments and
settlements
|
(17)
|
|
4
|
|
|
|
(0.01)
|
|
—
|
|
Total fuel expense,
adjusted
|
$
|
4,252
|
|
$
|
4,199
|
|
|
|
$
|
2.06
|
|
$
|
2.10
|
|
Change
year-over-year
|
|
$
|
52
|
|
|
|
|
|
|
Non-operating Expense, adjusted. We adjust for
equity investment MTM adjustments and unrealized gain/loss on
investments to determine non-operating expense, adjusted for the
same reasons described above in the heading pre-tax income and net
income, adjusted.
|
|
Three Months
Ended
|
(in
millions)
|
June 30,
2019
|
June 30,
2018
|
Non-operating
expense
|
$
|
221
|
|
$
|
298
|
|
Adjusted
for:
|
|
|
Equity investment MTM
adjustments
|
2
|
|
22
|
|
Unrealized gain/loss on
investments
|
(82)
|
|
(238)
|
|
Non-operating
expense, adjusted
|
$
|
141
|
|
$
|
81
|
|
Change
year-over-year
|
$
|
60
|
|
|
|
|
|
|
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)
|
|
June 30,
2019
|
Debt and finance
lease obligations
|
|
$
|
10
|
Plus: Operating lease
liability
|
|
6
|
Adjusted
Debt
|
|
$
|
16
|
|
|
|
|
|
|
|
Last Twelve Months
Ended
|
(in
billions)
|
|
June 30,
2019
|
GAAP operating
income
|
|
$
|
6
|
Adjusted
for:
|
|
|
Depreciation and
amortization
|
|
2
|
Fixed portion of operating
lease expense
|
|
1
|
EBITDAR
|
|
|
$
|
9
|
|
|
|
|
Adjusted Debt to
EBITDAR
|
|
|
1.7x
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/delta-air-lines-announces-june-quarter-profit-300883175.html
SOURCE Delta Air Lines