Record September quarter revenue with
earnings growth of over 30 percent year-over-year
Expect full year adjusted revenue growth of
20 percent over 2022 with a double-digit operating
margin
Guiding full year adjusted EPS of
$6.00 - $6.25 and free cash flow of $2 billion
Balance sheet progressing toward investment
grade metrics with S&P rating upgraded to BB+
ATLANTA, Oct. 12,
2023 /PRNewswire/ -- Delta Air Lines (NYSE: DAL)
today reported financial results for the September quarter and
provided its outlook for the December quarter 2023.
Highlights of the September quarter, including both GAAP and
adjusted metrics, are on page five and incorporated here.
"Thanks to the outstanding work of our entire team, Delta
delivered record September quarter revenue and a double-digit
operating margin. Our operational reliability continues to
strengthen, thanks to our people, and I'm pleased to recognize
their outstanding efforts with over $1
billion accrued year-to-date towards profit sharing," said
Ed Bastian, Delta's chief executive officer.
"Delta continues to set itself apart as a trusted consumer brand
delivering welcoming, caring and elevated service by the best
people in the industry. Our differentiated position supports our
expectations for full year revenue growth of 20 percent over 2022,
and pre-tax earnings of over $5
billion, a near doubling over prior year earnings."
September Quarter 2023 GAAP Financial
Results
- Operating revenue of $15.5
billion
- Operating income of $2.0 billion
with an operating margin of 12.8 percent
- Pre-tax income of $1.5 billion
with a pre-tax margin of 9.8 percent
- Earnings per share of $1.72
- Operating cash flow of $1.1
billion
- Payments on debt and finance lease obligations of $724 million
- Total debt and finance lease obligations of $19.5 billion at quarter end
September Quarter 2023 Adjusted Financial
Results
- Operating revenue of $14.6
billion, 13 percent higher than the September quarter
2022
- Operating income of $2.0 billion
with an operating margin of 13.5 percent
- Pre-tax income of $1.7 billion
with a pre-tax margin of 11.8 percent
- Earnings per share of $2.03
- Operating cash flow of $1.1
billion
- Adjusted net debt of $20.2
billion at quarter end
December Quarter and Full Year
Outlook1
|
4Q23
Forecast
|
FY 2023
Forecast
|
Total Revenue
YoY
|
Up 9% - 12%
|
Up ~20%
|
Operating
Margin
|
9% - 11%
|
~11.5%
|
Earnings Per
Share
|
$1.05 -
$1.30
|
$6.00 -
$6.25
|
|
|
|
1Non-GAAP
measures; Refer to Non-GAAP reconciliations for 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
"We generated record September quarter revenue, with total
revenues 13 percent higher than the September quarter of 2022. With
this performance, we expect to deliver a record September quarter
unit revenue premium to the industry, reflecting the strength of
Delta's diverse revenue streams and continued brand momentum," said
Glen Hauenstein, Delta's president.
"Robust demand for travel on Delta is continuing into the
December quarter where we expect total revenue growth of 9 percent
to 12 percent compared to the December quarter 2022 with total unit
revenue (TRASM) expected to decline 2.5 percent to 4.5 percent.
Within this outlook, Domestic and Transatlantic trends are
consistent with the September quarter on a year-over-year basis,
while unit revenue trends in the Pacific and Latin America are expected to modestly
decelerate given capacity growth related to China re-opening and
investment in our LATAM JV."
- Demand for travel on Delta remains strong: Unit
revenues in the September quarter were at the high-end of guidance,
with adjusted total unit revenue (TRASM) down 2.5 percent
year-over-year, including approximately one point of pressure from
Cargo and MRO. Passenger unit revenue (PRASM) was down 1.5 percent
year-over-year.
- Domestic demand environment steady: Domestic passenger
revenue increased 6 percent versus 2022 on 11 percent more
capacity, with domestic unit revenue down 4 percent
year-over-year. Coastal hub load factors expanded
year-over-year, driven by growing demand in Boston and New
York. Business travel continues to improve as corporates
announce return to office initiatives. Our recent corporate survey
indicates that a significant majority of companies are expecting
their travel volumes to increase or stay the same in the December
quarter and into 2024.
- International strength extending through
fall: International passenger revenue was 35 percent
higher versus 2022 in the September quarter with record margins
across all regions. Transatlantic revenue grew 34 percent with
record PRASM on its largest schedule in Delta's history.
Latin America revenue grew 20
percent versus 2022 driven by strength in South America as the LATAM JV delivers
increased connectivity and synergies. For the year, we remain
confident in finishing strong with record profitability across all
three international entities.
- Growth in diversified revenue streams
continues: Premium and other diversified revenue streams,
including Loyalty, Cargo and MRO comprised 55 percent of total
revenues year-to-date. Premium revenue growth of 17 percent
year-over-year outpaced main cabin by 5 points, with total Loyalty
revenue up 17 percent on strong co-brand acquisitions and spend
growth. American Express remuneration for the September quarter was
$1.7 billion, approximately 20
percent higher than September quarter 2022.
Cost Performance and Outlook
"For the December quarter, we expect non-fuel unit costs to be
flat to 2% higher year-over-year as we realize the benefits of
scale and efficiency while making investments in our people and
operational reliability," said Dan
Janki, Delta's chief financial officer. "Delivering
operational excellence while driving efficiency remains a top
priority."
September Quarter 2023 Cost
Performance
- Operating expense of $13.5
billion and adjusted operating expense of $12.6 billion
- Adjusted non-fuel costs of $9.2
billion
- Non-fuel CASM was 1.3 percent higher year-over-year
- Adjusted fuel expense of $3.0
billion was down 10 percent year-over-year
- Adjusted fuel price of $2.78 per
gallon declined 21 percent year-over-year and includes a refinery
benefit of 11¢ per gallon
- Fuel efficiency, defined as gallons per 1,000 ASMs, was
14.5, a 1.7 percent improvement year-over-year
Balance Sheet, Cash and Liquidity
"Our financial foundation is continuing to strengthen as we've
reduced our leverage to 3x in the September quarter from 5x at the
end of last year." Janki said. "We have repaid $3.7 billion of debt year-to-date and we expect
to repay over $4 billion for the
year. In recognition of our improving balance sheet, we received a
rating upgrade from S&P in August to BB+ with a positive
outlook."
- Adjusted net debt of $20.2
billion at September quarter end, a reduction of
$2.1 billion from the end of
2022
- Payments on debt and finance lease obligations of $724 million in the September quarter. This
included $424 million
of maturities and the early repayment of $300 million of debt instruments with an average
interest rate of 8 percent
- Weighted average interest rate of 4.5 percent with 89 percent
fixed rate debt and 11 percent variable rate debt
- Adjusted operating cash flow of $1.1
billion, and with gross capital expenditures of $1.4 billion, free cash flow was negative
$250 million
- Air Traffic Liability ended the quarter at $8.7 billion, down mid-teens sequentially from
the end of June quarter, consistent with pre-pandemic seasonal
trends
- Liquidity* of $7.8 billion at
quarter-end, including $2.8 billion
in undrawn revolver capacity
*Includes cash and cash equivalents, short-term investments
and undrawn revolving credit facilities
September Quarter Highlights
Operations, Network and Fleet
- Operated the most on-time airline in the quarter, leading our
competitive set in July through September1
- Took delivery of 28 aircraft year-to-date and 10 this quarter,
including the A321neo, A220-300 and A330-900
- Announced Delta's largest ever Latin
America and Caribbean
winter schedule, adding 35,000 seats
- In partnership with Aeroméxico, Delta codeshare will
support 17 new routes from 7 airports in Mexico to 9 destinations in the U.S. beginning
in January 2024
- Announced a return of nonstop service to Curaçao in
December 2023, for the first time
since 2010
- Beginning summer 2024, Delta will add new routes from JFK
to Naples and Munich, building on its strong Transatlantic
schedule to connect customers to popular European destinations
- Announced a new Minneapolis to
Dublin route beginning in
May 2024, making MSP Delta's
third U.S. hub to offer seasonal service to Dublin in addition to year-round service from
JFK
Culture and People
- Recorded $417 million toward next
year's profit sharing payment in the quarter and over $1 billion year-to-date, which is expected to be
paid to Delta employees in February
2024
- USA Today readers selected
Delta Air Lines as the Best Airline of 2023 due to its on-time
record, extensive route offerings, robust frequent flyer program
and excellent lounges at airports across America
- Ranked No. 12 in TIME Magazine's World's Best Companies of 2023
based on revenue growth, employee satisfaction and sustainability
profile
- Ranked the No. 1 airline in the U.S. for 2023 by readers
of Condé Nast Traveler, who cited the quality of Delta's
in-flight service, amenities on the ground and high-tech
innovations at check-in and boarding
- Named No. 13 on Forbes' list
of America's Best Employers for Women, the highest of any
airline
- Certified by Great Place To Work as a top employer for a fifth
year
- Ranked the No. 1 corporate blood drive sponsor for the American
Red Cross for the sixth consecutive year
- Contributed $250,000 to the
American Red Cross in support of Hawaii wildfire relief efforts
- 200+ Delta people volunteered on 9/11 to assemble meal packs
for Americans at risk of hunger in partnership with 9/11 Day, an
organization created to fight hunger by people who lost loved ones
that day
- Provided 400 scholarships to summer camps for students around
the world for an immersive experience aboard the world's largest
simulated aircraft carrier in partnership with the National Flight
Academy
Customer Experience and Loyalty
- Announced a strategic investment in Wheels Up
with Certares Management LLC, Knighthead Capital Management
LLC and others, combining the experience of Delta with the travel
and tourism expertise of Certares and turnaround and restructuring
expertise of Knighthead
- Delta SkyMiles named as one of the Best Travel Rewards
Programs by U.S. News & World Report for the seventh year in a
row, ranking No. 1 among global airlines
- Fast, free Wi-Fi with Delta Sync is now available on 615
domestic mainline aircraft, representing the largest free Wi-Fi
fleet of any airline in the world
- Debuted Delta Sync seatback in-flight entertainment on
select A321 aircraft in the quarter, with plans to finish the A321
fleet and expand to 757s, 738s, A320s and A319s over the next
several months
- Delta has opened 5 new Sky Clubs
in 2023 including 2 in the September quarter, and added more than
2,300 seats to current Clubs since 2022, with plans for additional
expansions next year
Environmental, Social and Governance
- Announced Amelia DeLuca as Chief Sustainability Officer,
leading the airline on its journey to net-zero greenhouse gas
emissions by 2050 and to delivering a more sustainable and elevated
travel experience along the way
- Established the Minnesota SAF Hub alongside Bank of
America, Ecolab and Xcel Energy through the Greater MSP
Partnership, a first-of-its-kind coalition to help scale
sustainable aviation fuel
- Joined the Zero Impact Aviation Alliance (ZIAA) as a founding
member led by the Massachusetts Institute of
Technology (MIT) to seek
experiments and prototypes for progress in the SAF space
- Federal Reserve Bank of Atlanta president and CEO Raphael Bostic
joined CEO Ed Bastian as part of
Delta's 'Gaining Altitude' series to talk about responsive and
transparent leadership, building an inclusive economy and
overcoming institutional barriers
- Delta's Government Affairs team led important conversations in
the 52nd Annual Legislative Conference of the Congressional Black
Caucus Foundation, the leading policy event on issues impacting the
global Black community
- Held Delta's annual WING Flight ("Women Inspiring our Next
Generation"), operated exclusively by women, flying over 130 girls
from Atlanta to NASA's Kennedy
Space Center for a "Women in STEM" panel discussion and tours
through interactive space exhibits
1Based on
FlightStats preliminary data for Delta flights system wide and for
Delta's competitive set (AA, UA, B6, AS, WN, and DL), from July 1 -
September 30, 2023. On-time is defined as A0.
|
September Quarter Results
September quarter results have been adjusted primarily for
the third-party refinery sales and unrealized losses on
investments as described in the reconciliations in Note A.
|
GAAP
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q23
|
3Q22
|
Operating
income
|
1,984
|
1,456
|
528
|
36 %
|
Operating
margin
|
12.8 %
|
10.4 %
|
2.4 pts
|
23 %
|
Pre-tax
income
|
1,521
|
962
|
559
|
58 %
|
Pre-tax
margin
|
9.8 %
|
6.9 %
|
2.9 pts
|
42 %
|
Net income
|
1,108
|
695
|
413
|
59 %
|
Diluted earnings per
share
|
1.72
|
1.08
|
0.64
|
59 %
|
Operating
revenue
|
15,488
|
13,975
|
1,513
|
11 %
|
Total revenue per
available seat mile (TRASM) (cents)
|
21.15
|
22.18
|
(1.03)
|
(5) %
|
Operating
expense
|
13,504
|
12,519
|
985
|
8 %
|
Cost per available seat
mile (CASM) (cents)
|
18.44
|
19.87
|
(1.43)
|
(7) %
|
Fuel expense
|
2,936
|
3,318
|
(382)
|
(12) %
|
Average fuel price per
gallon
|
2.76
|
3.57
|
(0.81)
|
(23) %
|
Operating cash
flow
|
1,076
|
869
|
207
|
24 %
|
Capital
expenditures
|
1,269
|
1,442
|
(173)
|
(12) %
|
Total debt and finance
lease obligations
|
19,513
|
23,233
|
(3,720)
|
(16) %
|
|
Adjusted
|
$
Change
|
%
Change
|
($ in millions except
per share and unit costs)
|
3Q23
|
3Q22
|
Operating
income
|
1,963
|
1,492
|
471
|
32 %
|
Operating
margin
|
13.5 %
|
11.6 %
|
1.9 pts
|
16 %
|
Pre-tax
income
|
1,719
|
1,276
|
443
|
35 %
|
Pre-tax
margin
|
11.8 %
|
9.9 %
|
1.9 pts
|
19 %
|
Net income
|
1,308
|
966
|
342
|
35 %
|
Diluted earnings per
share
|
2.03
|
1.51
|
0.52
|
35 %
|
Operating
revenue
|
14,553
|
12,840
|
1,713
|
13 %
|
TRASM
(cents)
|
19.87
|
20.38
|
(0.51)
|
(2.5) %
|
Operating
expense
|
12,590
|
11,348
|
1,242
|
11 %
|
Non-fuel
cost
|
9,216
|
7,829
|
1,387
|
18 %
|
Non-fuel unit cost
(CASM-Ex) (cents)
|
12.59
|
12.43
|
0.16
|
1.3 %
|
Fuel expense
|
2,957
|
3,282
|
(325)
|
(10) %
|
Average fuel price per
gallon
|
2.78
|
3.53
|
(0.75)
|
(21) %
|
Operating cash
flow
|
1,127
|
776
|
351
|
45 %
|
Free cash
flow
|
(250)
|
(679)
|
429
|
63 %
|
Gross capital
expenditures
|
1,442
|
1,467
|
(25)
|
(2) %
|
Adjusted net
debt
|
20,155
|
20,541
|
(386)
|
(2) %
|
About Delta Air Lines Through the warmth
and service of the 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. More than 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 expects to serve nearly 200 million customers this year
safely, reliably and with industry-leading customer service
innovation – recognized as North
America's most on-time airline. We're dedicated 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, Boston, Detroit, London-Heathrow, Los
Angeles, Mexico City,
Minneapolis-St. Paul, New York-JFK
and LaGuardia, Paris-Charles de
Gaulle, Salt Lake City,
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
Aeroméxico, 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
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in millions, except
per share data)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
Passenger
|
$ 13,119
|
$ 11,464
|
$
1,655
|
14 %
|
|
$ 36,735
|
$ 29,329
|
$
7,406
|
25 %
|
Cargo
|
154
|
240
|
(86)
|
(36) %
|
|
535
|
801
|
(266)
|
(33) %
|
Other
|
2,215
|
2,271
|
(56)
|
(2) %
|
|
6,555
|
7,017
|
(462)
|
(7) %
|
Total operating
revenue
|
15,488
|
13,975
|
1,513
|
11 %
|
|
43,825
|
37,147
|
6,678
|
18 %
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Salaries and related
costs
|
3,760
|
3,050
|
710
|
23 %
|
|
10,838
|
8,832
|
2,006
|
23 %
|
Aircraft fuel and
related taxes
|
2,936
|
3,318
|
(382)
|
(12) %
|
|
8,128
|
8,633
|
(505)
|
(6) %
|
Ancillary businesses
and refinery
|
1,128
|
1,349
|
(221)
|
(16) %
|
|
3,427
|
4,449
|
(1,022)
|
(23) %
|
Contracted
services
|
1,004
|
881
|
123
|
14 %
|
|
3,009
|
2,425
|
584
|
24 %
|
Landing fees and other
rents
|
679
|
562
|
117
|
21 %
|
|
1,880
|
1,611
|
269
|
17 %
|
Aircraft maintenance
materials and outside repairs
|
661
|
487
|
174
|
36 %
|
|
1,860
|
1,474
|
386
|
26 %
|
Passenger commissions
and other selling expenses
|
618
|
546
|
72
|
13 %
|
|
1,770
|
1,385
|
385
|
28 %
|
Depreciation and
amortization
|
594
|
538
|
56
|
10 %
|
|
1,731
|
1,554
|
177
|
11 %
|
Regional carrier
expense
|
546
|
528
|
18
|
3 %
|
|
1,664
|
1,547
|
117
|
8 %
|
Passenger
service
|
449
|
406
|
43
|
11 %
|
|
1,307
|
1,050
|
257
|
24 %
|
Profit
sharing
|
417
|
237
|
180
|
76 %
|
|
1,084
|
291
|
793
|
NM
|
Pilot agreement and
related expenses
|
—
|
—
|
—
|
— %
|
|
864
|
—
|
864
|
NM
|
Aircraft
rent
|
131
|
131
|
—
|
— %
|
|
395
|
380
|
15
|
4 %
|
Other
|
581
|
486
|
95
|
20 %
|
|
1,669
|
1,325
|
344
|
26 %
|
Total operating
expense
|
13,504
|
12,519
|
985
|
8 %
|
|
39,626
|
34,956
|
4,670
|
13 %
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
1,984
|
1,456
|
528
|
36 %
|
|
4,199
|
2,191
|
2,008
|
92 %
|
|
|
|
|
|
|
|
|
|
|
Non-Operating
Expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(196)
|
(248)
|
52
|
(21) %
|
|
(627)
|
(791)
|
164
|
(21) %
|
Gain/(loss) on
investments, net
|
(206)
|
(245)
|
39
|
(16) %
|
|
45
|
(613)
|
658
|
NM
|
Loss on extinguishment
of debt
|
(13)
|
(34)
|
21
|
(62) %
|
|
(63)
|
(100)
|
37
|
(37) %
|
Pension and related
(expense)/benefit
|
(61)
|
73
|
(134)
|
NM
|
|
(183)
|
218
|
(401)
|
NM
|
Miscellaneous,
net
|
13
|
(40)
|
53
|
NM
|
|
(38)
|
(111)
|
73
|
(66) %
|
Total non-operating
expense, net
|
(463)
|
(494)
|
31
|
(6) %
|
|
(866)
|
(1,397)
|
531
|
(38) %
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
1,521
|
962
|
559
|
58 %
|
|
3,333
|
794
|
2,539
|
NM
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
(413)
|
(267)
|
(146)
|
55 %
|
|
(761)
|
(305)
|
(456)
|
NM
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
1,108
|
$
695
|
$
413
|
59 %
|
|
$
2,572
|
$
489
|
$
2,083
|
NM
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
1.73
|
$
1.09
|
|
|
|
$
4.03
|
$
0.77
|
|
|
Diluted Earnings Per
Share
|
$
1.72
|
$
1.08
|
|
|
|
$
4.00
|
$
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
(in
millions)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Ticket - Main
cabin
|
$
6,620
|
$
5,893
|
$
727
|
12 %
|
|
$ 18,538
|
$ 15,000
|
$
3,538
|
24 %
|
Ticket - Premium
products
|
5,113
|
4,354
|
759
|
17 %
|
|
14,263
|
11,005
|
3,258
|
30 %
|
Loyalty travel
awards
|
902
|
786
|
116
|
15 %
|
|
2,547
|
2,073
|
474
|
23 %
|
Travel-related
services
|
484
|
431
|
53
|
12 %
|
|
1,387
|
1,251
|
136
|
11 %
|
Passenger
revenue
|
$ 13,119
|
$ 11,464
|
$
1,655
|
14 %
|
|
$ 36,735
|
$ 29,329
|
$
7,406
|
25 %
|
DELTA AIR LINES,
INC.
|
Other
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
(in
millions)
|
2023
|
2022
|
$
Change
|
%
Change
|
|
2023
|
2022
|
$
Change
|
%
Change
|
Refinery
|
$
935
|
$
1,134
|
$
(199)
|
(18) %
|
|
$
2,817
|
$
3,835
|
$ (1,018)
|
(27) %
|
Loyalty
program
|
791
|
655
|
136
|
21 %
|
|
2,291
|
1,877
|
414
|
22 %
|
Ancillary
businesses
|
212
|
249
|
(37)
|
(15) %
|
|
657
|
665
|
(8)
|
(1) %
|
Miscellaneous
|
277
|
233
|
44
|
19 %
|
|
790
|
640
|
150
|
23 %
|
Other
revenue
|
$
2,215
|
$
2,271
|
$
(56)
|
(2) %
|
|
$
6,555
|
$
7,017
|
$
(462)
|
(7) %
|
DELTA AIR LINES,
INC.
|
Total
Revenue
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
3Q23 vs
3Q22
|
Revenue
|
|
3Q23
($M)
|
|
Change
|
Unit
Revenue
|
Yield
|
Capacity
|
Domestic
|
$
|
8,662
|
|
6 %
|
(4) %
|
(5) %
|
11 %
|
Atlantic
|
|
3,110
|
|
34 %
|
10 %
|
9 %
|
22 %
|
Latin
America
|
|
788
|
|
20 %
|
— %
|
(3) %
|
19 %
|
Pacific
|
|
559
|
|
65 %
|
(3) %
|
2 %
|
70 %
|
Passenger
Revenue
|
$
|
13,119
|
|
14 %
|
(1) %
|
(2) %
|
16 %
|
Cargo
Revenue
|
|
154
|
|
(36) %
|
|
|
|
Other
Revenue
|
|
2,215
|
|
(2) %
|
|
|
|
Total
Revenue
|
$
|
15,488
|
|
11 %
|
(5) %
|
|
|
Third Party
Refinery Sales
|
|
(935)
|
|
|
|
|
|
Total Revenue,
adjusted
|
$
|
14,553
|
|
13 %
|
(2.5) %
|
|
|
|
|
|
|
|
|
|
|
DELTA AIR LINES,
INC. Statistical
Summary (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2023
|
2022
|
Change
|
|
2023
|
2022
|
Change
|
Revenue passenger miles
(millions)
|
64,095
|
54,786
|
17
|
%
|
|
174,586
|
145,004
|
20
|
%
|
Available seat miles
(millions)
|
73,226
|
63,007
|
16
|
%
|
|
203,571
|
173,720
|
17
|
%
|
Passenger mile yield
(cents)
|
20.47
|
20.93
|
(2)
|
%
|
|
21.04
|
20.23
|
4
|
%
|
Passenger revenue per
available seat mile (cents)
|
17.92
|
18.19
|
(1)
|
%
|
|
18.05
|
16.88
|
7
|
%
|
Total revenue per
available seat mile (cents)
|
21.15
|
22.18
|
(5)
|
%
|
|
21.53
|
21.38
|
1
|
%
|
TRASM, adjusted - see
Note A (cents)
|
19.87
|
20.38
|
(2.5)
|
%
|
|
20.14
|
19.18
|
5
|
%
|
Cost per available seat
mile (cents)
|
18.44
|
19.87
|
(7)
|
%
|
|
19.47
|
20.12
|
(3)
|
%
|
CASM-Ex - see
Note A (cents)
|
12.59
|
12.43
|
1.3
|
%
|
|
13.13
|
12.78
|
3
|
%
|
Passenger load
factor
|
88 %
|
87 %
|
1
|
pt
|
|
86 %
|
83 %
|
3
|
pts
|
Fuel gallons consumed
(millions)
|
1,062
|
930
|
14
|
%
|
|
2,947
|
2,543
|
16
|
%
|
Average price per fuel
gallon
|
$
2.76
|
$
3.57
|
(23)
|
%
|
|
$
2.76
|
$
3.39
|
(19)
|
%
|
Average price per fuel
gallon, adjusted - see Note A
|
$
2.78
|
$
3.53
|
(21)
|
%
|
|
$
2.78
|
$
3.41
|
(18)
|
%
|
DELTA AIR LINES,
INC.
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
Three Months
Ended
|
|
September
30,
|
(in
millions)
|
2023
|
2022
|
Cash Flows From
Operating Activities:
|
|
|
Net Income
|
$
1,108
|
$
695
|
Depreciation and
amortization
|
594
|
538
|
Changes in air traffic
liability
|
(1,683)
|
(817)
|
Changes in profit
sharing
|
417
|
237
|
Changes in balance
sheet and other, net
|
640
|
216
|
Net cash provided by
operating activities
|
1,076
|
869
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
Property and equipment
additions:
|
|
|
Flight equipment,
including advance payments
|
(856)
|
(973)
|
Ground property and
equipment, including technology
|
(413)
|
(469)
|
Purchase of short-term
investments
|
(300)
|
(101)
|
Redemption of
short-term investments
|
1,527
|
295
|
Acquisition of
strategic investments
|
(152)
|
—
|
Other, net
|
63
|
(40)
|
Net cash used in
investing activities
|
(131)
|
(1,288)
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
Cash
dividends
|
(64)
|
—
|
Payments on debt and
finance lease obligations
|
(724)
|
(1,795)
|
Other, net
|
(12)
|
(13)
|
Net cash used in
financing activities
|
(800)
|
(1,808)
|
|
|
|
Net
Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash
Equivalents
|
145
|
(2,227)
|
Cash, cash equivalents
and restricted cash equivalents at beginning of period
|
2,824
|
9,552
|
Cash, cash equivalents
and restricted cash equivalents at end of period
|
$
2,969
|
$
7,325
|
|
|
|
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
|
$
2,835
|
$
7,023
|
Restricted cash included in
prepaid expenses and other
|
134
|
149
|
Other
assets:
|
|
|
Restricted cash included in
other noncurrent assets
|
—
|
153
|
Total cash, cash
equivalents and restricted cash equivalents
|
$
2,969
|
$
7,325
|
|
|
|
DELTA AIR LINES,
INC.
|
Consolidated Balance
Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
(in
millions)
|
2023
|
|
2022
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
2,835
|
|
$
3,266
|
|
Short-term
investments
|
2,170
|
|
3,268
|
|
Accounts receivable,
net
|
3,214
|
|
3,176
|
|
Fuel inventory,
expendable parts and supplies inventories, net
|
1,507
|
|
1,424
|
|
Prepaid expenses and
other
|
2,529
|
|
1,877
|
|
Total current
assets
|
12,255
|
|
13,011
|
|
|
|
|
|
Property and
Equipment, Net:
|
|
|
|
|
Property and equipment,
net
|
34,593
|
|
33,109
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
Operating lease
right-of-use assets
|
6,962
|
|
7,036
|
|
Goodwill
|
9,753
|
|
9,753
|
|
Identifiable
intangibles, net
|
5,985
|
|
5,992
|
|
Equity
investments
|
2,291
|
|
2,128
|
|
Other noncurrent
assets
|
1,408
|
|
1,259
|
|
Total other
assets
|
26,399
|
|
26,168
|
Total assets
|
$
73,247
|
|
$
72,288
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
debt and finance leases
|
$
1,981
|
|
$
2,359
|
|
Current maturities of
operating leases
|
728
|
|
714
|
|
Air traffic
liability
|
8,738
|
|
8,160
|
|
Accounts
payable
|
5,320
|
|
5,106
|
|
Accrued salaries and
related benefits
|
4,003
|
|
3,288
|
|
Loyalty program
deferred revenue
|
3,917
|
|
3,434
|
|
Fuel card
obligation
|
1,100
|
|
1,100
|
|
Other accrued
liabilities
|
1,769
|
|
1,779
|
|
Total current
liabilities
|
27,556
|
|
25,940
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Debt and finance
leases
|
17,532
|
|
20,671
|
|
Pension, postretirement
and related benefits
|
3,618
|
|
3,707
|
|
Loyalty program
deferred revenue
|
4,456
|
|
4,448
|
|
Noncurrent operating
leases
|
6,558
|
|
6,866
|
|
Other noncurrent
liabilities
|
4,301
|
|
4,074
|
|
Total noncurrent
liabilities
|
36,465
|
|
39,766
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
9,226
|
|
6,582
|
Total liabilities and
stockholders' equity
|
$
73,247
|
|
$
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.
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.
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. Adjusting for these gains/losses allows
investors to better understand and analyze our core operational
performance in the periods shown.
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.
Operating Revenue,
adjusted and Revenue Per Available Seat Mile ("TRASM"),
adjusted
|
|
|
|
|
|
Three Months
Ended
|
|
3Q23 vs 3Q22
% Change
|
(in
millions)
|
September 30,
2023
|
December 31,
2022
|
September 30,
2022
|
|
Operating
revenue
|
$
15,488
|
$
13,435
|
$
13,975
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(935)
|
(1,142)
|
(1,134)
|
|
|
Operating revenue,
adjusted
|
$
14,553
|
$
12,292
|
$
12,840
|
|
13 %
|
|
Three Months
Ended
|
|
|
|
September 30,
2023
|
December 31,
2022
|
September 30,
2022
|
|
%
Change
|
TRASM
(cents)
|
21.15
|
22.58
|
22.18
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1.28)
|
(1.92)
|
(1.80)
|
|
|
TRASM,
adjusted
|
19.87
|
20.66
|
20.38
|
|
(2.5) %
|
|
Nine Months
Ended
|
|
September 30,
2023
|
September 30,
2022
|
TRASM
(cents)
|
21.53
|
21.38
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(1.38)
|
(2.20)
|
TRASM,
adjusted
|
20.14
|
19.18
|
|
Year
Ended
|
(in
millions)
|
December 31,
2022
|
Operating
revenue
|
$
50,582
|
Adjusted
for:
|
|
Third-party refinery
sales
|
(4,977)
|
Operating revenue,
adjusted
|
$
45,605
|
Pre-Tax Income, Net
Income, and Diluted Earnings per Share, adjusted
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2023
|
|
September 30,
2023
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
1,521
|
$
(413)
|
$
1,108
|
|
$
1.72
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
(21)
|
|
|
|
|
Loss on extinguishment
of debt
|
13
|
|
|
|
|
MTM adjustments on
investments
|
206
|
|
|
|
|
Non-GAAP
|
$
1,719
|
$
(411)
|
$
1,308
|
|
$
2.03
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September 30,
2022
|
|
September 30,
2022
|
|
Pre-Tax
|
Income
|
Net
|
|
Earnings
|
(in millions, except
per share data)
|
Income
|
Tax
|
Income
|
|
Per Diluted
Share
|
GAAP
|
$
962
|
$
(267)
|
$
695
|
|
$
1.08
|
Adjusted
for:
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
36
|
|
|
|
|
Loss on extinguishment
of debt
|
34
|
|
|
|
|
MTM adjustments on
investments
|
245
|
|
|
|
|
Restructuring
charges
|
1
|
|
|
|
|
Non-GAAP
|
$
1,276
|
$
(311)
|
$
966
|
|
$
1.51
|
|
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
|
|
|
|
|
Loss on extinguishment
of debt
|
100
|
|
|
|
|
MTM adjustments on
investments
|
784
|
|
|
|
|
Restructuring
charges
|
(124)
|
|
|
|
|
Non-GAAP
|
$
2,703
|
$
(650)
|
$
2,053
|
|
$
3.20
|
Operating Margin,
adjusted
|
|
|
Three Months
Ended
|
|
September 30,
2023
|
September 30,
2022
|
Operating
margin
|
12.8 %
|
10.4 %
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
(0.1)
|
0.3
|
Third-party refinery
sales
|
0.8
|
0.9
|
Operating margin,
adjusted
|
13.5 %
|
11.6 %
|
Operating Income,
adjusted
|
|
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Operating
income
|
$
1,984
|
$
1,456
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
(21)
|
36
|
Restructuring
charges
|
—
|
1
|
Operating income,
adjusted
|
$
1,963
|
$
1,492
|
Pre-Tax Margin,
adjusted
|
|
|
Three Months
Ended
|
|
September 30,
2023
|
September 30,
2022
|
Pre-tax
margin
|
9.8 %
|
6.9 %
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
0.7
|
0.8
|
MTM adjustments and
settlements on hedges
|
(0.1)
|
0.3
|
Loss on extinguishment
of debt
|
0.1
|
0.2
|
MTM adjustments on
investments
|
1.3
|
1.8
|
Pre-tax margin,
adjusted
|
11.8 %
|
9.9 %
|
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.
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Net cash provided by
operating activities
|
$
1,076
|
$
869
|
Adjustments:
|
|
|
Net cash flows related
to certain airport construction projects and other
|
51
|
(94)
|
Net cash provided by
operating activities, adjusted
|
$
1,127
|
$
776
|
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.
|
|
|
|
|
3Q23 vs
4Q22
Change
|
(in
millions)
|
September 30,
2023
|
December 31,
2022
|
September 30,
2022
|
|
Debt and finance lease
obligations
|
$
19,513
|
$
23,030
|
$
23,233
|
|
|
Plus: sale-leaseback
financing liabilities
|
1,900
|
2,180
|
2,194
|
|
|
Plus: unamortized
discount/(premium) and debt issue cost,
net and other
|
83
|
138
|
151
|
|
|
Adjusted debt and
finance lease obligations
|
$
21,496
|
$
25,349
|
$
25,578
|
|
|
Plus: 7x last twelve
months' aircraft rent
|
3,664
|
3,558
|
3,485
|
|
|
Adjusted total
debt
|
$
25,160
|
$
28,906
|
$
29,062
|
|
|
Less: cash, cash
equivalents, short-term investments and
LGA restricted cash
|
(5,005)
|
(6,603)
|
(8,521)
|
|
|
Adjusted net
debt
|
$
20,155
|
$
22,303
|
$
20,541
|
|
$
(2,148)
|
Operating revenue,
adjusted related to premium products and diverse revenue
streams
|
|
|
|
Nine Months
Ended
|
(in
millions)
|
September 30,
2023
|
Operating
revenue
|
$
43,825
|
Adjusted
for:
|
|
Third-party refinery
sales
|
(2,817)
|
Operating revenue,
adjusted
|
$
41,009
|
Less: main cabin
revenue
|
(18,538)
|
Operating revenue,
adjusted related to premium products and diverse revenue
streams
|
$
22,471
|
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.
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
includes numerous work rule changes and pay rate increases during
the four-year term, including an initial pay rate increase of 18%.
The agreement also includes 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.
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Operating
Expense
|
$
13,504
|
$
12,519
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(935)
|
(1,134)
|
Aircraft fuel and
related taxes
|
(2,936)
|
(3,318)
|
Profit
sharing
|
(417)
|
(237)
|
Restructuring
charges
|
—
|
(1)
|
Non-Fuel
Cost
|
$
9,216
|
$
7,829
|
|
Three Months
Ended
|
|
3Q23 vs 3Q22
% Change
|
|
September 30,
2023
|
December 31,
2022
|
September 30,
2022
|
|
CASM (cents)
|
18.44
|
20.11
|
19.87
|
|
|
Adjusted
for:
|
|
|
|
|
|
Third-party refinery
sales
|
(1.28)
|
(1.92)
|
(1.80)
|
|
|
Aircraft fuel and
related taxes
|
(4.01)
|
(4.78)
|
(5.26)
|
|
|
Profit
sharing
|
(0.57)
|
(0.46)
|
(0.38)
|
|
|
Restructuring
charges
|
—
|
0.20
|
—
|
|
|
CASM-Ex
|
12.59
|
13.14
|
12.43
|
|
1.3 %
|
|
Nine Months
Ended
|
|
September 30,
2023
|
September 30,
2022
|
CASM (cents)
|
19.47
|
20.12
|
Adjusted
for:
|
|
|
Third-party refinery
sales
|
(1.38)
|
(2.20)
|
Aircraft fuel and
related taxes
|
(4.00)
|
(4.97)
|
Profit
sharing
|
(0.53)
|
(0.17)
|
One-time pilot
agreement expenses
|
(0.42)
|
—
|
CASM-Ex
|
13.13
|
12.78
|
Operating Expense,
adjusted
|
|
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Operating
expense
|
$
13,504
|
$
12,519
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
21
|
(36)
|
Third-party refinery
sales
|
(935)
|
(1,134)
|
Restructuring
charges
|
—
|
(1)
|
Operating expense,
adjusted
|
$
12,590
|
$
11,348
|
Total fuel expense,
adjusted and Average fuel price per gallon, adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Price Per
Gallon
|
|
|
|
Three Months
Ended
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
September
30,
|
|
%
Change
|
|
September
30,
|
September
30,
|
|
%
Change
|
(in millions, except
per gallon data)
|
2023
|
2022
|
|
|
2023
|
2022
|
|
Total fuel
expense
|
$
2,936
|
$
3,318
|
|
|
|
$
2.76
|
$
3.57
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
MTM adjustments and
settlements on hedges
|
21
|
(36)
|
|
|
|
0.02
|
(0.04)
|
|
|
Total fuel expense,
adjusted
|
$
2,957
|
$
3,282
|
|
(10) %
|
|
$
2.78
|
$
3.53
|
|
(21) %
|
|
Average Price Per
Gallon
|
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
(in millions, except
per gallon data)
|
2023
|
2022
|
Total fuel
expense
|
$
2.76
|
$
3.39
|
Adjusted
for:
|
|
|
MTM adjustments and
settlements on hedges
|
0.02
|
0.02
|
Total fuel expense,
adjusted
|
$
2.78
|
$
3.41
|
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)
|
September 30,
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
|
|
Last Twelve Months
Ended
|
|
Year
Ended
|
(in
billions)
|
September 30,
2023
|
|
December 31,
2022
|
GAAP operating
income
|
$
6
|
|
$
4
|
Adjusted
for:
|
|
|
|
One-time pilot
agreement expenses
|
1
|
|
—
|
Operating income,
adjusted
|
7
|
|
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
|
Gross Capital Expenditures. We adjust capital
expenditures for the following items to determine gross capital
expenditures for the reasons described below:
Financed aircraft acquisitions. This
adjusts capital expenditures to reflect aircraft deliveries that
are leased as capital expenditures. The adjustment is based on
their original contractual purchase price or an estimate of the
aircraft's fair value and provides a more meaningful view of our
investing activities.
Net cash flows related to certain airport
construction projects. Cash flows related to certain
airport construction projects are included in capital expenditures.
We have adjusted for these items because management believes
investors should be informed that a portion of these capital
expenditures from airport construction projects are either funded
with restricted cash specific to these projects or reimbursed by a
third party.
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Flight equipment,
including advance payments
|
$
856
|
$
973
|
Ground property and
equipment, including technology
|
413
|
469
|
Adjusted
for:
|
|
|
Financed aircraft
acquisitions
|
162
|
137
|
Net cash flows related
to certain airport construction projects
|
11
|
(112)
|
Gross capital
expenditures
|
$
1,442
|
$
1,467
|
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 and (iv) financed
aircraft acquisitions. 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,
including Wheels Up in the September
2023 quarter, 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.
|
Three Months
Ended
|
(in
millions)
|
September 30,
2023
|
September 30,
2022
|
Net cash provided by
operating activities
|
$
1,076
|
$
869
|
Net cash used in
investing activities
|
(131)
|
(1,288)
|
Adjusted
for:
|
|
|
Net redemptions of
short-term investments
|
(1,226)
|
(194)
|
Strategic investments
and related
|
152
|
53
|
Net cash flows related
to certain airport construction projects and other
|
40
|
18
|
Financed aircraft
acquisitions
|
(162)
|
(137)
|
Free cash
flow
|
$
(250)
|
$
(679)
|
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SOURCE Delta Air Lines